Monday, 25 February 2013


On 24-25 February 2013, the overwhelming majority of Italy's voters cast their ballots to reverse austerity, neoliberal policies and the Eurozone-IMF monetarist route aimed to strenghten finace capital while weakening the middle class and workers. The Italian as well as internatinal media presented the election results as 'gridlock', something that is not very unusual for Italy's multi-party system with a long history of failing to produce single-party election winners and forming coalitions.

The so-called 'gridlock' issue is on the surface, hidden behind a clear message that voters were sending to the political world, a message that neoliebral policies and austerity are impoverishing the middle class and workers, while creating greater socioeconomic polarization in society, without light at the end of the tunnel. The mainstream media dismissed the elections as 'gridlock', because it refuses to recognize that Italian voters are rejecting a political economy perpetually degrading the social fabric and depriving hope for a better future from the current generation of young people.

The election of 2013 is very different from all past elections for the following reasons.

First, all of Southern Europe has been under EU-IMF-imposed austerity that has devastated middle and working class income groups, while driving unemployment to record levels in the postwar era. Italians fear that their fate may be much like that of Greece and Spain, so the election was an opportunity to assert that their country has the potential to emerge from the deep recession instead of sinking lower with austerity and neoliberalism.

Second, prior to the election of 2013, Italy's prime minister was the technocrat Mario Monti who came right out of the world of high finance and collaborated with the IMF and Germany to impose austerity. Voters gave Monti just under 10% of the vote, which is to say that only one in ten approved of austerity under neoliberalism, an sign that Italians strongly disagreed with the course the country had taken.

Third, Italy's vote was a rejection of the new model of integration that Germany has been trying to impose on the rest of Europe. This is a model that does away with the previous interdependence and is based on a patron-client relationship. In short, this model is similar to what the US has under various integration models in dealing with Latin America over which the US historically enjoys economic hegemony. The German model of integration reflects its determination to impose neoliberalism that favors the strongest economy in the EU at the expense of the weaker ones, so that Germany may be able to compete on a world scale.

Fourth, the Italian election is an affirmation of economic nationalism and restoration of social welfare policies. Whether voters cast their ballot for the center-left candidate Bersani, for the rightist-populist candidate Berlusconi, of for the left-populist candidate Beppe Grillo, they were affirming their desire to restore society into some kind of balance where democracy takes precedence over markets.

Fifth, the election in Italy is very significant for the entire EU, because Italy is the EU's fourth largest economy, and the eurozone's third largest. Unlike Greece, Portugal and Spain, Italy is sending a strong signal to the rest of EU and the world that austerity and neoliberalism will not work and must be tempered at the very least. In the past two years, Greece, Portugal and Spain had elections and voted out of power their Socialist governments pursuing neoliberal policies and austerity measures. In all three southern European countries voters brought back to power conservative governments that have been pursuing the exact same policies as the Socialists. The elections in Portugal, Spain and Greece, as well as Cyprus just this month, emboldened the austerity and neoliberal advocates, and especially Germany that is trying to impose a new integration model. Now, Italy's voters come along and challenge that model of integration and development, sending the message that the country's future cannot be determined by large financial interests and Germany that has been steering Europe towars the austerity-neoliberal path.

Sixth, the IMF and EU leadership has been arguing that there is no alternative to austerity and neoliberalism, as though this is religious dogma from which sinners cannot deviate for they will suffer in Hell. In point of fact, the austerity-neoliberal path is the only path designed to transfer income from the middle class and workers in order to strengthen the large capitalist interests, banks, insurance, and multinational corporations, all at the expense of small business and workers, all at the expense of smaller countries suffocating under austerity and neoliberalism. Italians overwhelmingly sent the message to the political class that a new course is necessary. If such a course does not take place, and what emerges from these elections is a coalition that continues with austerity and neloliberalism, I would not be surprised that the next step will be mass protests and social upheaval across Italy.

The "spin" from some analysts is that the message in the Italian election was that voters were rejecting the traditional political parties, invariably incompotent and corrupt. In other words, people were rejecting the traditional political arena, not the financial and economic policies that the IMF-EU have imposed on Italy in order to strengthen large finance capital. The results, however, indicate that Berlusconi, the ultimate insider politician received around 30% of the vote, and Bersani, also a tradfitional politician received another 30% or so. Only Grillo is the protest candidate, the anti-establishment, anti-political arena candidate that won about 25%.

The Italian election did return roughly 30% of the vote for Berlusconi, a billionaire with a very corrupt past and policies that contributed to Italy's economic problems. Moreover, Berlusconi had embraced neoliberal policies in the past, but in 2013 he tried to reemerge as an economic nationalist with a rightist populist message that attracted a sizable percentage of the voters who do not wish to contunue with austerity, but neither do they want a leftist or left-populist government. The response from the mainstream political, business and media establishment is that Italy has responsibility to the markets that did not react well to the election outcome. The suggestion that the only indicator to consider is the markets, and not the people, means that politicians must be accountable to finance capital and not the people who vote. Therefore, market-style accountability suggests that democracy must yield to the markets.

The more intriguing message in Italy's election results, however, was the 25% that Grillo received. More than a year ago, I wrote about the grassroots movement in Italy and Europe ((Messiah Politics, December 2011) and about Grillo who has castiagted corruption in the political arena and the fact that mainstream politicians represent business interests to the detriment of the rest of the people. The grassroots movement is now part of the political arena, and that is a powerful message not just for Italy, but all of Europe. No matter the media propaganda, the Italian election results are not about gridlock, but about massive popular demand for systemic change toward greater social justice.

Unlike Spain, Porugal and Greece that have been in the periphery of the EU economic zone, playing second fiddle to northwest Europe for a very long time, Italy has struggled to retain a position at the political and economic core of the EU. Neoliberalism and austerity are seriously threatening that role Italy has enjoyed, and the election of February 2013 was an indication that the majority of the people will not accept a lesser position in the EU as Germany wishes for Italy. The recognition by the majority of the voters that their country under the newly-shaped EU integration model would have its great power status among the G-7 diminished and placed in the same category as Spain, Portugal, Ireland, and Greece is the underlying dynamic at work in the political arena.


Is there a common understanding about Human rights and religious rights in all countries in the world, or does each country reserve the right to define these concepts as it chooses to suit its national political interests? For example, a number of countries have accused the US for violating the human rights and religious freedoms of Muslims under the guise of the "anti-terrorism" campaign. The US has accused China for not respecting religious rights of minority communities, while China has accused the US of hypocrisy.

Israel defines itself as a democracy and presumably pluralistic society that respects human and religious rights, as long as that does not extend to Palestinians who are a people living in de facto apartheid conditions. A number of African countries, including Mali, Sudan, and Nigeria have been plagued by religious frictions, thus finding themselves accused by Western governments that they are guilty of violating human and religious rights. Meawhile, the same Europeans making accusations against Africans for not respecting human and religious rights engage in subtle and overt discrimination against Muslim minorities.

The UN Declaration of Human Rights is a wonderful document, but how many countries abide by it, especially Western countries that have used it to bring to trial at the International Court of Justice political defedants that are almost entirely from Africa and Eastern Europe, but none from the West. Considering that the US has now confirmed the death of several thousand people, including several hundred civilians, among them children, who will be held accountable for such war crimes? Will the CIA, Congress, the White House, the Defense Department, or some other entity be held accountable, and will anyone be sent to the Hague to be tried for killing hundreds innocent civilians, who happened to be Muslims and victims of a US-NATO war on terrorism aimed at Muslims?

There have been recent efforts by some Muslim and Christian intellectuals to link religious rights (freedoms)
 to human rights. This is partly because the concept of human rights, as governments define it and as it has been determined since the Universal Declaration of Human Rights in 1948, contains a secular definition that supercedes religious rights. The reasons for the interest in connecting human rights to religious conviction are as varied as the proponets of such concepts. For example, some Christian intellectuals want to make certain that the principles of freedom and human rights that go to the heart of how one understands human nature and the relationship of theindividual to society is inexorably linked to religious faith. To avoid making such a link between human rights and religious rights would mean excluding religious institutions from the broader picture. This is mainly a Christian perspective, but the same concept is now used by Muslim intellectuals to combat not just Christian and Jewish prejudice toward Muslims, but Western government biases toward Muslims.

In June 2012, Hillary Clinton, endorsed the free exercise of religion as a First Amendment right, along with the freedoms to speak and associate; thereby linking freedom of speech and association with freedom of religion (and conscience). She added that government's role is to protect such rights, and not to block them, for doing so entails a violation of human rights - a concept that the US has held for decades and used as part of its human rights campaign during the Jimmy Carter administration. Aware that religious freedom is intertwined with human rights and it must necessarily include Muslims, Clinton argued that religious leaders must encourage their followers to embrace the principles of peace and respect of others, thus creating an environment in which everyone’s freedom is more secure.

The American Civil Liberties Union (ACLU) has a long list of how the religious rights of Muslims are systematically violated at the federal, state and local levels. These violations include: courts and state legislatures placing a ban on Sharia law and International law, thus refusing to recognize not just the religious, but human rights of Muslims. Mosuqe and Islamic community centers targeted both by private individuals and groups and by government (zoning laws) in the name of protecting the community from Islamist suspects. US anti-terrorism policies target Muslims, merely on the suspicion of their religious affiliation, denying their religious, human and civil rights. Discrimination on the basis of appearance for both men and women is another area where Muslims have suffered owing to their religious affiliation. The surveillance, infiltration, and no-fly lists that target Muslims is another area of over violation of religious and human rights.  

It is no secret that the war on terror has been described by many on all sides of the debate as a 'holy war', by some as 'clash of civilizations or cultures', by others as a struggle between the Judeo-Christian West and the Muslim East-Middle East. No matter how one defines it, the religious and human rights of Muslims at the receiving end of the Western war against terror have suffered. All of this has taken place by the belicose Western governments that continue to claim moral authority, and continuing to claim that they respect human and religious rights while 'the undemocratic enemy' does not do the same. For their part, the apologists argued that security concerns take precedence over human and religious rights. This raises the question of where are the boundaries that government draws? Does this include covert investigation of citizens as suspects merely because of their faith, wire tapping, covert operations into the private finances of individuals, etc.? If so, does this mean that society is no longer open and democratic but a police state?

Hypocrisy is not the issue, because human beings as well as institutions engage in hypocrisy. Neither is the issue one of linking human rights to religious rights as a way to force the West to be more tolerant and less prejudiced in its practices toward Muslims. The issue here is about Western values and their absolute hollow ring to them because they have become meaningless in the face of what is practiced. Is the West distorting its own proclaimed values rooted in the Enlightenment era, and doing so because its sole purpose is to continue to impose its hegemony over non-Western, predominantly non-caucasian, non-Judeo-Christian people?

Monday, 18 February 2013


The advocates of neo-liberalism in the age of globalization believe that the free market is the panacea for society as much as they believe that political democracy and and neo-liberal policies are one and the same.
As far as apologists of neo-liberalism are concerned. the role of the state is to protect and buttress capital, which they identify with the rights of individuals. This means that collective rights, such as the rights of labor unions, are an anathema for they run counter to free market capitalism and the neo-liberal view that the state must only protect individuals rather than groups.  In essence, however, the state is made up of political elites that represent socioeconomic elites that benefit from neo-liberalism.The question is whether free markets exist, or if they have ever existed, and if free market capitalism is the same thing as democracy.

The assumption is that capitalism fosters the growth of the middle class and that fosters the growth of a representative parliamentary system - a democratic form of government, which could be interpreted as egalitarian at best, or the opportunity for equal political and even institutional participation, at best. Therefore, one could argue that the free market economic system promotes democracy, at least in theory. If that is the case, why has there been a sharp decline of the middle class in the Western World in the past three decades, and why does a substantial percentage of the people no longer believes that democracy works in practice as it proclaims in theory, instead serving the narrow interests of elites that control its institutions?

It is true that the the capitalist system, which evolved from the transition of subsistence to commercial agriculture and gave rise to the Commercial Revolution, has always been dynamic, that is to say, constantly evolving. When people think of capitalism, they imagine something that is closer to the economic philosophy of Adam Smith in the late 18th century when the English Industrial Revolution was unfolding, or they imagine something closer to the doctrinaire position of Milton Friedman and the Chicago School.

Just for the sake of historical accuracy, true free market economic regime has never existed in the history of capitalism from the era of mercantile capitalism to the present era of corporate welfare capitalism. It is also worth noting that England, unlike continental Europe, Japan and the US, did practice free trade in the course of the 19th century (1840-1914), but that was largely because it enjoyed a global hegemonic role and it was not concerned about competition. Moreover, even England amid its free trade regime had passe parliamentary legislation to assist the defense industry in Birmingham. The free trade regime was something that powerful industries advocated to increase their exports. Once Germany and the US entered the global scene as major competitors, London embraced protectionist economic policies.

Today, we have the WTO that advocates trade barrier removals. If one examines the legislation and fiscal policies of the G-20, which make up roughly 80% of the global GDP, one finds that each country practices a form of 'bloc trading' and corporate-welfare economics that is largely planned by the state that controls the central banking operations. That the money supply and fiscal policy are in the hands of the state does not mean that the state pursues policies to advance the interests of all people. On the contrary, monetary and fiscal policy helps to further the interests of finance capital.

If free market rules ought to apply, this must mean that there must be no interference by the state in wage policy, and only the employers and employees are in the position to negotiate labor contracts affecting wages and benefits. Obviously, this is not the case at a time that the state plays a very large role in wage policy. In addition, the IMF-EU austerity enforcement teams are strongly urging countries across Southern and Eastern Europe as well as in other parts of the world to reduce not just wage and benefits in the public sector so that there is a drop in the budgetary deficits, but they are insisting that wages and benefits must also drop between 3 and 15%, excluding annual inflation rates, in the private sector as well. If neo-liberalism is the same as non-interference in the marketplace, why such heavy-handed intervention by the state as well as international institutions?

The question is what are the IMF, European Central Bank and EU doing dictating wage levels in the private sector, when they claim that they are the guardians of "free market forces" and their only concern is equilibrium in the national economies? Why not allow "free market forces" to determine wages, instead of imposing them, why not allow the employers to negotiate their own labor contracts without outside intervention? The answer is that even in the 19th century, after Adam Smith and David Ricardo argued in favor of the marketplace, there was never a free market, and this was brilliantly observed by German economists, among them Friedrich List, who exposed the fraud behind "free market economics."

In the early 21st century, finance capital, which the state as well as international institutions like the IMF serve, has reached the point of partnership with the state on which it relies for bailouts, subsidies and tax breaks. In the absence of the state's supportive role, the so-called 'free market' would collapse; something Theodore Roosevelt, as well as Franklin Roosevelt understood and created big government to support and strengthen big capital. It is still amazing to read or listen to apologists of capitalism argue that the market economy promotes democracy and equality, when in reality it constantly promotes socioeconomic polarization that leads to political polarization. We see evidence of this phenomenon today across the Western World, especially across Europe, but in the US as well.

Both free market capitalism. such as its defenders still like to call it, as well as democracy are undergoing a crisis that has its roots in the absence of social justice that the economic system produces and the political regime protects and defends. It is true, of course, that within a given institutional structure people will do whatever it takes to remain loyal to it because it serves their best self-interest. After all, there are hardly any benefits for people going against institutions they need for their survival, whether those are political, educational, economic, social, cultural, religious, etc. In short, an institutional structure actually remains in place not only because the elites are imposing it and benefit from it, but because there are layers of society beneath the elites whose relative harmonious survival depends on those institutions.

Having said this, a society whose political and socioeconomic elites call itself  'democratic' but under existing polarizing socioeconomic conditions functions like an authoritarian one has no long term future. The reason is that gradually more and more people not served by such a society will come to realize that they have nothing to lose advocating a new social contract. It is difficult to predict how long these societies that are in essence quasi-authoritarian will continue to deceive the majority that they are 'open, free and democratic', but their time is limited.  

Saturday, 9 February 2013


Is democracy, not as a theoretical model but as practiced in Norway for example, the same as neoliberalism, or is neoliberalism a catalyst to diluting democracy and paving the road to socioeconomic authoritarianism? While democracy is based on a broad social contract that takes into account the interests of the general population on a social justice criteria, neoliberalism is a political economic doctrine whose purpose is to justify the accumulation of wealth by a small percentage in society who operate under a regime of free flow of capital across national borders and enjoy the protection and fiscal support of the state to the detriment of the majority.

Why has the West endeavored to identify democracy with neo-liberalism from the Reagan administration to the present? Is it because of the Cold War until 1990 and 'war on terror' since 1990 intended to engender sociopolitical conformity behind the neoliberal regime? Why has there been an effort under globalization in the last three decades to foster the doctrine of neoliberalism that has devastated the middle class and workers in most countries, including the Western World, but very little resistance to an ideology that is diluting democracy and creating quasi-authoritarian conditions?

Why is the West so anxious to impose neoliberalism in Muslim countries, preferring Islamist regimes - Egypt and Tunisia for example- operating under neoliberalism than secular nationalist regimes? And why have Islamist regimes in Egypt and Tunisia embraced neo-liberalism, modeling themselves after Turkey, Indonesia, and Malaysia, instead of a nationalist economic regime like Iran? Not that Iranian nationalist theocratic-style regime is a model to be emulated because it is a panacea for the majority of the people, but why do national capitalists in Arab countries and a segment of their Islamist political representatives opt for global economic integration under neoliberalism? Does this suggest that the national capitalists are realistic in their assessment of the changing political winds moving toward Islamist direction, and it serves their interests just as good because an Islamist regime can engender sociopolitical conformity to promote capitalism more readily than a secular regime?

While it is true that nationalist authoritarian regimes operated in Tunisia, Algeria, Libya and Egypt, it is also true that what replaced those regimes are not much better in terms of commitment to human rights and social justice, largely because of the commitment to a neoliberal direction. Libya where NATO intervened with massive bombings to impose regime change has now adopted policies favoring foreign investment, privatization of public enterprises, foreign ownership of oil that is the base of the economy, special economic zones for multinational corporations to operate under special incentives and protection, and a crackdown of those opposed to such neoliberal policies intended to reduce the national economy into a dependency of the West. The result has been resurgence of resistance as much in Libya as in neighboring countries pursuing the same path, in short, the continuation of Arab Spring.

Why does sociopolitical unrest persist in Egypt, if Arab Spring managed to remove former dictator Mubarak from power in February 2011? Why is there unrest if the popular Muslim Brotherhood's Freedom and Justice Party took power? Were the goals of Arab Spring rebels simply to replace a dictator with a duly-elected president, or to change economic and social policy that would begin to address issues of widespread poverty and inequality? Did Egypt replace crony capitalism under Mubarak with neo-liberalism backed by the US, EU, International Monetary Fund, and World Bank?

Does an Islamist regime represent systemic change in Egypt and Tunisia, or is it used as a veneer to hide neo-liberal policies that were responsible for the structural problems that led to Arab Spring? After all, from the 1980s until Arab Spring, privatization and reductions in trade barriers resulted in even greater wealth concentration in a small politically connected group within Egypt and Tunisia and in foreign corporations that invest through native (comprador) capitalists. This led to sharp rise in inequality and growing poverty in Egypt and Tunisia and was the root cause of Arab Spring.

Throughout 2011 when Arab Spring rebellions where unfolding across North Africa and the Middle East, I argued in several blog articles that the US, Europe, the International Monetary Fund (IMF), World Bank, OECD, multinational corporations, and the large domestic businessmen wanted to make sure that Muslim countries remain well integrated into the global political economy and accommodating toward the Western (NATO) military zone. I noted that it made no sense merely to remove one authoritarian regime that caters to a small domestic elite and a handful of foreign interests and replacing such a regime with another that will continue to cater to a small elite under neo-liberal policies.

Two years after Arab Spring, we have seen that indeed the old regimes are gone, but the new regimes have pursued global economic integration under neo-liberal policies as the IMF, US, and EU demanded during the uprisings in 2011. The result has been sociopolitical turmoil in Egypt and Tunisia, not so much because the new Islamist regimes in those countries have violated civil rights, manipulated the judicial system, suppressed social forces demanding social justice, but because the new regimes are modeled after the Turkish, Malaysian and Indonesian political-economic models where Islamic governments pursue neo-liberalism and global integration, to the detriment of social justice. Trade union and human rights activists played a key role in Arab Spring uprisings, especially in Egypt and Tunisia. However, trade union and human rights continue to be violated under Islamist regimes that see trade union and human rights activists as a threat rather than the basis for society rooted in social justice.

Neo-liberalism under Islamist regimes operating in Turkey, Indonesia and Malaysia are the models that the US, EU, and IMF want for the entire Muslim world, and this has been confirmed by what has been taking place across North Africa in the last two years. Neo-liebralism under globalization is subtle form of infringement on Muslim sovereignty. One would naturally assume that Islamist regime entails economic nationalism, social justice rooted in the religion's doctrines, and above all, solidarity with Muslim countries instead of globalization. In reality, Egypt and Tunisia have not followed such paths and the result in late 2012 and early 2013 has been increased social unrest and demand for a true democratic regime that enjoys national sovereignty and promotes social justice.

The only hope to strengthen national sovereignty and lessen external dependence for the Arabs is to revisit some 21st version of Nasser's dream of promoting social justice at home, an integrated Arab world and regional solidarity at all levels possible as a means of increasing leverage around the world. Given that Arab princes and millionaires are putting their money in global financial markets, expensive real estate in the West, and other businesses around the world, given that the Arabs are pitifully divided, regional economic integration is unlikely. Now under Islamist regimes in Egypt and Tunisia, we have a new economic elite committed to neo-liberalism, while it is using Islamist government as a tool to suppress the aspirations of the middle class and workers for greater political, economic, and social justice. This is what the political opposition in Tunisia and Egypt is claiming, and it is what protesters have been saying in Tunis and Cairo.

The neo-liberal push across the Muslim World and using Turkey (both a NATO member and a candidate for EU membership) as the model for the rest of Islamic nations clashed with the realities of Arab societies that have a huge number of poor people and a rapidly growing population. One would think that after the economic, social and political disasters of Iraq and Afghanistan in the first decade of the 21st century, the US and EU would have learned that trying to superimpose Western institutions rooted  in social injustice does not work because the people on the receiving end will undermine and eventually topple them. Of course, the West does not see it this way because if Turkey is enjoying economic growth under an Islamist regime pursuing neo-liberalism and global integration, why not the rest of the Muslim countries.

In the first term of the Reagan administration, Turkey accepted the US neo-liberal course that the IMF and World Bank were advocating. Turkey’s economic growth in the last decade has average about 5%, in comparison with just a bit over 4% from 1980 to 2000. This astonishing growth has taken place partly because of a burgeoning trade deficit, unemployment rising from from around 8% in the early 1980s to above 11% in 2012, and an overvalued currency amid low wealth creation for the vast majority of the population.
Tragically, Turkey like Egypt and Tunisia has a youthful population, an estimated 50% under the age of 30, that is facing unemployment problems comparable to those of southern Europe currently under IMF-EU austerity measures. Moreover, while the official poverty line for Turkey is comparable to that of Greece, just as in the case of Greece the unofficial rate is roughly half of the population. Inequality statistics for Turkey that the West has as a model for the rest of the Arab countries are comparable to Egypt and Tunisia. Although looking solely at Turkey's phenomenal vertical growth through gross GDP statistics in the last ten years, one would be convinced to advocate the same model for other countries. However, has any of that phenomenal growth 'trickled down' to create a strong and broad middle class, a working class with improved living standards and a farming sector with higher living standards? Is Turkey the next China, or the next Greece, once the bubble bursts?

Under neo-liberalism, Turkey's labor movement has weakened, just as it has in Tunisia and Egypt and recently weakening in Southern Europe operating under austerity that is a front for imposing neo-liberal policies. The United Nations’ (UN) International Labor Organisation (ILO) lists Turkey as one of the least respectful nation for labor rights, classifying it in the same category as Djibouti and Ethiopia, a country currently ranking 122 out of 134 on the World Economic Forum’s Gender Gap Index owing to its unequal treatment of women.

A free-market Islamist neo-liberal, Khairat el-Shater, a multimillionaire businessman, was the financier behind the Muslim Brotherhood in which he served as deputy chair. Backing him is another neo-liberal businessman
 and el-Shater's partner Hassan Malek, advocating free market principles become the ruling party's sole economic ideology without any room for dissent. When the Arab Spring rebels at Tahrir Square cried out for sweeping reforms, they could not have foreseen that one financial elite would be replaced with another. However, the US worked behind the scenes all along during the uprising to make certain that Egypt follow neo-liberal principles under political Islam, something along the lines of Turkey's Islamist political regime fostering free market principles with emphasis on import-substitution in order to improve the balance of trade. Did Egypt and Tunisia remove the structural causes of the rebellion, causes that included crony capitalism, vast network of public-private sector corruption, gross social and gender inequality, external dependence, and lack of hope for the future?

That Egypt under the new regime is following old policies should not come as a surprise, given that Mubarak took power in the same year as Reagan and received a massive aid package in order to pursue diplomatic, defense and economic policies that were in accord with US interests. Most of the aid went for military purposes, allowing Egypt to purchase hardware from US defense companies in  order to keep a strong military needed to keep the regime in power from internal dissent. US, EU, IMF, and World Bank aid and loans were linked to following neo-liberal policies that are continuing today based on an agreement that the Mursi government signed with the IMF in November 2012. One month later Morsi raised indirect taxes that burden the masses and cut subsidies, reduced trade barriers and invited foreign investment; policies that had been the cause of Arab Spring and nearly identical to those the IMF and EU have imposed on Southern Europe as a condition to receive new loans to service the existing debt.

Neo-liberalism increases the socioeconomic gap and reduces national sovereignty and the role of the state in the economy, but it strengthens the national and foreign capitalists who want privatization of public enterprises, weak labor unions, and low-cost assets, especially wages. The defense of the Egyptian regime has been the same as that of Tunisia, namely, the people elected the government, therefore, they must obey it and resolve any issues through the ballot box, not protests, demonstrations, or uprisings that destabilize the regime. When Morsi realized the level of popular resistance, he tried securing extra-judicial powers, a political maneuver to take the focus away from his neo-liberal direction. The Muslim Brotherhood’s neoliberalism must come as a surprise to many people around the world, as much as it did when Morsi announced that he supported regime change in Syria, thus siding with neo-liberal Turkey that is in the front line of the US-EU war against Assad's nationalist regime.

Islamists are the political instrument to preserve the neo-liberal order that has been in place under various phases for the past three to four decades.The ruling Ennahda has moved toward a neoliberal direction, exposing itself as prone to authoritarianism following the assassination of Chokri Belaid. Mr. Belaid on 6 February 2013. A progressive secular politician and human rights activist, Belaid was an Ennahda outspoken critic who demanded investigation into government-backed gang violence against reformists who supported workers and pluralism.

The Ennahda won the elections with 41% of the vote under Prime Minister Hamadi Jebali who has been eager to embrace neoliberalism - attract foreign investment, rather than launching on the massive public works initiative that would lower unemployment and poverty levels. Moreover, the government has been privatizing state-owned enterprises, while gutting public institutions and subsidies for fuel and food as part of its effort to implement neoliberalism Turkish-style, all in line with IMF policy advice. Secular political parties in Tunisia advocate a more nationalist and quasi-socialist route, that runs diametrically opposite neoliberalism whose goal is to destroy any vestiges of statism in Tunisia as indeed throughout the world. The Tunisian government is on record stating that its brand of political Islam is neither the Saudi nor the Taliban model, but the Turkish, Indonesia and Malaysian where economic 'modernity' (neoliberal orientation) coexists under an Islamic regime. 

Until 14 January 2010, when Tunisia's pro-West dictator Bin Ali fled the country, the media had never raised issues of human rights abuses and repressive nature of the regime in Tunisia. On the contrary, the US, EU, IMF, and World Bank held Tunisia as a model of success. The reason for defining Tunisia a success was because the brutal and corrupt dictator followed a neoliberal orientation, which was an underlying cause for Arab Spring. The irony is that the current Tunisian Islamist regime is following a similar orientation, currently confronting massive grassroots opposition just as did Bin Ali.

CONCLUSIONS: Syria, Iran and Beyond

Syria is the current target of the West and neoliberals willing to collaborate with Islamists, including unsavory groups with a record of 'terrorist activities'. That Turkey is the base of military operations to bring down the regime in Syria was bad enough in terms of destablizing the region, but now Israel has been brought into the picture as well. Just as the West was on the same side with Islamist extremists, including al-Qaeda, across North Africa, especially in Libya, it is now on the same side with them in Syria. 

Beyond Syria is Iran, which is Islamist, but nationalist and not integrated with the West as the US and EU demand. The process of bringing down nationalist regimes helps the Wetsern defense industry for the immediate term, and the multinationals for the longer term, thus it is a gamble worth taking to destabilize the entire Middle East. The obvious question is why doesn't the US and its NATO partners go after Saudi Arabia and the Gulf states in the same manner they went after Libya and now Syria? Ther answer is that Saudi Arabia and the Guld states are a major strategic partner - Saudi is a base of CIA drone-war operations. Moreover, the Saudis and Gulf states have massive investments in the US and Europe, thus it is not in the interest of the West to destabilize them, but protect them from advocates of pluralistic reform.  

One could argue that there are obvious contradictions between Islamism and neoliberalism, given the 'war on terror' that has targeted fanatic Muslims for the past two decades or so. One could also argue that political Islamism (national Islamism and pan-Islamism) is at least on the surface a reaction against Western ideologies and institutions, so how there be Islamist regimes not just in Turkey, but across the post-Arab Spring world that have embraced neoliberalism, a doctrine devastating much of Southern and Eastern Europe operating under austerity policies? Besides having collaborated with Islamist elements in the past to fight Communism, and secular nationalists during the Arab Spring uprisings, Western neoliberals, especially the WASHINGTON CONSENSUS, has worked to foster neoliberalism in Indonesia, Turkey, Malaysia and now across the North African continent, all in the name of 'freedom and democracy'. The ultimate goal here is to make sure that statist or quasi-statist (economic nationalist) policies are avoided at all costs because they reduce substantially the role of foreign capital.

The unholy alliance between political Islam and neoliberalism makes sense because Islamism placates the masses because the regime clings to a religious foundation that is the institutional base of  society, while using religious conformity to impose conformity to economic policy, as well as foreign and defense policies that would have to mirror the nature of economic integration with the West. Will this work and pacify the people who demand jobs, better living standards, greater social justice and civil rights, greater national sovereignty and lesser external dependence? My view is that there is no risk here because political Islam advocating neoliberalism and global integration is open to authoritarian methods to engender conformity. Therefore, the cycle of protests and social violence will continue across the Muslim countries

Because the Middle East and Africa are the great frontiers for massive foreign investment in the 21st century when China will be a major global player. Neoliberalism best serves foreign investors for now, and under Islamist regimes that can push through such policies and global integration. Grassroots movements against neoliberalism are global and will continue to grow, no matter the massive propaganda through the media and other insitutional means as well as distraction tactics that the neoliberalism advocates attempt.  

Capitalism in its current phase with so much capital concentrated in so few hands cannot possibly sustain itself as contradictions arise in the age of mass communications and increasingly higher educational levels. Denying social justice to people whether in Islamic countries, in the Hindu and Buddhist East, or in the Christian West will always meet with resistance, the levels which we cannot predict. Therefore, it is premature to argue that the overthrow of capitalism is imminent because neoliberalism is destroying democratic societies rooted in social justice

Saturday, 2 February 2013


The International Monetary Fund (IMF) has a long history of imposing austerity programs on countries,  set of fiscal and monetary policies that contribute to the further impoverishment of the country in general, and within the country of reducing the living standards for the middle class and workers. Those who have studied the history of the IMF's dealings with Latin America, Asia and Africa know that far from creating wealth and prosperity as the IMF promises if its austerity policies are adopted, countries fall into greater poverty and become more economically dependent on the richer nations for the duration.

This was as true in the 1950s as it is today. The only difference is that in January 2013, on three separate occasions, high-level IMF officials have acknowledged that in the case of Greece austerity has not worked to yield the intended results. Two IMF economists recently wrote that:  “Forecasters significantly underestimated the increase in unemployment and the decline in domestic demand associated with fiscal consolidation.” The question is whether the IMF, as well as EU and the Greek government intentionally deceived the public when they introduced austerity in order to make the measures more palatable. Naturally, this is hardly a consolation to millions of people who have suffered as a result of austerity, but it should be a lesson for future politicians thinking of inviting IMF austerity as a solution to debt crises. 

Apologists of austerity argue that the reasons the IMF-EU program has indeed failed in Greece include: public sector corruption, 40% of GDP is produced by the public sector, fiscal mismanagement, lack of economic diversity, and resistance to austerity by labor unions. In the past decades, the IMF and its defenders have argued that the only reason for austerity not working is that government officials do not enforce it well and long enough.

 Let us simply accept all of those arguments without any rebuttal. Has austerity been a resounding success in the rest of Southern Europe in the last two years or in any country to create prosperity as its apologists argue? How can austerity work to create prosperity when its ultimate purpose is to absorb capital from the public sector and funnel it into the private sector, especially into large foreign banks and foreign enterprises at the expense of workers and the middle class?
Greece is now entering the sixth year of recession, and contrary to what the IMF, EU and the conservative-led coalition government promises, more than likely 2014 will be the seventh year of continued recession, with no prospects of growth the will absorb the one-third of the labor force currently our of work. The question is why the continued deception even now against the reality of a country that has proved austerity means impoverishing a substantial percentage of the population - some figures have it at around 30%. What is frightening about all of this is that the IMF and EU, as well as armies of prominent economists and mainstream media followed the lead of European and US politicians that favored austerity as the one and only option, not just for Greece, but all of Southern Europe and indeed any country with a large public debt.

The IMF now admits that its prescription has not yielded the results it promised, namely reduction in unemployment through economic growth, and private domestic and foreign investment to fill the gap that the weakened public sector was leaving behind. People from all ideological and political fields are understandably very angry that they were misled into believing austerity was the panacea when in reality it was the road to chronic impoverishment of a society.

In the last two years, the IMF, European Central Bank and European Union have imposed an austerity program on Greece as a condition for providing $325 billion in loans, of which most of it was devoted to servicing past debt and a portion to strengthening the banks. The austerity program that the EU-IMF imposed included:
1. raising taxes, especially property and indirect taxes across the board;
2. slashing government spending, especially subsidies and social programs;
3. slashing public employees jobs, public salaries and pensions;
4. slashing education and public health budgets;
5. raising the costs for public services, everything from public utilities to transportation;

Austerity Results:

1.statistical unemployment at 27%, unofficial unemployment at 32%, with youth unemployment at 57%.
2. drop of income f
3. an estimated 68,000 businesses have closed since 2010 and there are figures that place the number of closings much higher. Moreover, there will be tens of thousands small business closings in the next two years as the deep austerity-induced recession  continues. Given that small businesses are labor intensive, this means that Greece will not see unemployment reduced to pre-recession levels of 8% until at least ten years from now.
4. massive exodus of college-educated people seeking jobs in Europe, North America, Australia and other countries.
5. massive public debt that went from 120% of GDP before austerity to an estimated 190% in 2013, and it is not likely to come down to 120% until 2022 or so.
6. social fabric dismantled: sharp rise in protests and labor strikes; rise in crime and suicides;0 rise in extreme right-wing, racist activities backed by a neo-Nazi party represented in Parliament.

Will austerity go away simply because it is working to impoverish the middle class not just in Greece but across Southern and Eastern Europe? The answer is that austerity serves financial institutions and large enterprises that want to reduce labor costs and a weak state structure that focuses on catering to large business interests and spends as little as possible on social welfare benefits. If there is a common denominator across all countries that have adopted austerity in the last sixty years it is that they have weakened the middle class and workers and strengthened large domestic and foreign capital.