Only a matter of time before the hand grenade explodes

[Paul (Pepe) Freemantle]

MOELETSI MBEKI: Wealth creation


I CAN predict when SA's "Tunisia Day" will arrive. Tunisia Day is when the masses rise against the powers that be, as happened recently in Tunisia. The year will be 2020, give or take a couple of years. The year 2020 is when China estimates that its current minerals-intensive industrialisation phase will be concluded.

For SA, this will mean the African National Congress (ANC) government will have to cut back on social grants, which it uses to placate the black poor and to get their votes. China's current industrialisation phase has forced up the prices of SA's minerals, which has enabled the government to finance social welfare programmes.

The ANC inherited a flawed, complex society it barely understood; its tinkering s with it are turning it into an explosive cocktail. The ANC leaders are like a group of children playing with a hand grenade. One day one of them will figure out how to pull out the pin and everyone will be killed.

A famous African liberation movement, the National Liberation Front of Algeria, after tinkering for 30 years, pulled the grenade pin by cancelling an election in 1991 that was won by the opposition Islamic Salvation Front. In the civil war that ensued, 200000 people were killed.

The former British prime minister, Margaret Thatcher, once commented that whoever thought that the ANC could rule SA was living in Cloud Cuckoo Land. Why was Thatcher right? In the 16 years of ANC rule, all the symptoms of a government out of its depth have grown worse.

- Life expectancy has declined from 65 years to 53 years since the ANC came to power;

- In 2007, SA became a net food importer for the first time in its history;

- The elimination of agricultural subsidies by the government led to the loss of 600000 farm workers' jobs and the eviction from the commercial farming sector of about 2,4-million people between 1997 and 2007; and

- The ANC stopped controlling the borders, leading to a flood of poor people into SA, which has led to conflicts between SA's poor and foreign African migrants.

What should the ANC have done, or be doing? The answer is quite straightforward. When they took control of the government in 1994, ANC leaders should have: identified what SA's strengths were; identified what SA's weaknesses were; and decided how to use the strengths to minimise and/or rectify the weaknesses.

A wise government would have persuaded the skilled white and Indian population to devote some of their time — even an hour a week — to train the black and coloured population to raise their skill levels.

What the ANC did instead when it came to power was to identify what its leaders and supporters wanted. It then used SA's strengths to satisfy the short-term consumption demands of its supporters. In essence, this is what is called black economic empowerment (BEE).

BEE promotes a number of extremely negative socioeconomic trends in our country. It promotes a class of politicians dependent on big business and therefore promotes big business's interests in the upper echelons of government. Second, BEE promotes an anti-entrepreneurial culture among the black middle class by legitimising an environment of entitlement. Third, affirmative action, a subset of BEE, promotes incompetence and corruption in the public sector by using ruling party allegiance and connections as the criteria for entry and promotion in the public service, instead of having tough public service entry examinations.

Let's see where BEE, as we know it today, actually comes from. I first came across the concept of BEE from a company, which no longer exists, called Sankor. Sankor was the industrial division of Sanlam and it invented the concept of BEE.

The first purpose of BEE was to create a buffer group among the black political class that would become an ally of big business in SA. This buffer group would use its newfound power as controllers of the government to protect the assets of big business.

The buffer group would also protect the modus operandi of big business and thereby maintain the status quo in which South African business operates. That was the design of the big conglomerates.

Sanlam was soon followed by Anglo American. Sanlam established BEE vehicle Nail; Anglo established Real Africa, Johnnic and so forth. The conglomerates took their marginal assets, and gave them to politically influential black people, with the purpose, in my view, not to transform the economy but to create a black political class that is in alliance with the conglomerates and therefore wants to maintain the status quo of our economy and the way in which it operates.

But what is wrong with protecting SA's conglomerates? Well, there are many things wrong with how conglomerates operate and how they have structured our economy.

- The economy has a strong built- in dependence on cheap labour;

- It has a strong built-in dependence on the exploitation of primary resources;

- It is strongly unfavourable to the development of skills in our general population;

- It has a strong bias towards importing technology and economic solutions; and

- It promotes inequality between citizens by creating a large, marginalised underclass.

Conglomerates are a vehicle, not for creating development in SA but for exploiting natural resources without creating in-depth, inclusive social and economic development, which is what SA needs. That is what is wrong with protecting conglomerates.

The second problem with the formula of BEE is that it does not create entrepreneurs. You are taking political leaders and politically connected people and giving them assets which, in the first instance, they don't know how to manage. So you are not adding value. You are faced with the threat of undermining value by taking assets from people who were managing them and giving them to people who cannot manage them. BEE thus creates a class of idle rich ANC politicos.

My quarrel with BEE is that what the conglomerates are doing is developing a new culture in SA — not a culture of entrepreneurship, but an entitlement culture, whereby black people who want to go into business think that they should acquire assets free, and that somebody is there to make them rich, rather than that they should build enterprises from the ground.

But we cannot build black companies if what black entrepreneurs look forward to is the distribution of already existing assets from the conglomerates in return for becoming lobbyists for the conglomerates.

The third worrying trend is that the ANC- controlled state has now internalised the BEE model. We are now seeing the state trying to implement the same model that the conglomerates developed.

What is the state distributing? It is distributing jobs to party faithful and social welfare to the poor. This is a recipe for incompetence and corruption, both of which are endemic in SA. This is what explains the service delivery upheavals that are becoming a normal part of our environment.

So what is the correct road SA should be travelling? We all accept that a socialist model, along the lines of the Soviet Union, is not workable for SA today. The creation of a state-owned economy is not a formula that is an option for SA or for many parts of the world. Therefore, if we want to develop SA instead of shuffling pre-existing wealth, we have to create new entrepreneurs, and we need to support existing entrepreneurs to diversify into new economic sectors.

- Mbeki is the author of Architects of Poverty: Why African Capitalism Needs Changing. This article forms part of a series on transformation supplied by the Centre for Development and Enterprise.

[Bob Molloy]

Quote: "What should the ANC have done, or be doing? The answer is quite straightforward. When they took control of the government in 1994, ANC leaders should have: identified what SA's strengths were; identified what SA's weaknesses were; and decided how to use the strengths to minimise and/or rectify the weaknesses."

Why didn't that happen? Here is the answer. The material is taken from a chapter in Naomi Klein's book "The Shock Doctrine", available on line. It's a bit of a read, but well worth the effort if you want to get a grasp of what is happening to your life, your job, your family and your future. 

DEMOCRACY: BORN IN CHAINS
The talks that hashed out the terms of apartheid's end took place on two parallel tracks that often intersected: one was political, the other economic. Most of the attention, naturally, focused on the high-profile political summits between Nelson Mandela and F.W. de Klerk, leader of the National Party.

De Klerk's strategy in these negotiations was to preserve as much power as possible. He tried everything—breaking the country into a federation, guaranteeing veto power for minority parties, reserving a certain percentage of the seats in government structures for each ethnic group—anything to prevent simple majority rule, which he was sure would lead to mass land expropriations and the nationalizing of corporations. As Mandela later put it, "What the National Party was trying to do was to maintain white supremacy with our consent." De Klerk had guns and money behind him, but his opponent had a movement of millions. Mandela and his chief negotiator, Cyril Ramaphosa, won on almost every count.9

Running alongside these often explosive summits were the much lower profile economic negotiations, primarily managed on the ANC side by Thabo Mbeki, then a rising star in the party, now South Africa's president. As the political talks progressed, and it became clear to the National Party that Parliament would soon be firmly in the hands of the ANC, the party of South Africa's elites began pouring its energy and creativity into the economic negotiations. South Africa's whites had failed to keep blacks from taking over the government, but when it came to safeguarding the wealth they had amassed under apartheid, they would not give up so easily.

In these talks, the de Klerk government had a twofold strategy. First, drawing on the ascendant Washington Consensus that there was now only one way to run an economy, it portrayed key sectors of economic decision making—such as trade policy and the central bank—as "technical" or "administrative." Then it used a wide range of new policy tools—international trade agreements, innovations in constitutional law and structural adjustment programs—to hand control of those power centres to supposedly impartial experts, economists and officials from the IMF, the World Bank, the General Agreement on Tariffs and Trade (GATT) and the National Party—anyone except the liberation fighters from the ANC. It was a strategy of balkanization, not of the country's geography (as de Klerk had originally attempted) but of its economy.

This plan was successfully executed under the noses of ANC leaders, who were naturally preoccupied with winning the battle to control Parliament. In the process, the ANC failed to protect itself against a far more insidious strategy—in essence, an elaborate insurance plan against the economic clauses in the Freedom Charter ever becoming law in South Africa. "The people shall govern!" would soon become a reality, but the sphere over which they would govern was shrinking fast.

While these tense negotiations between adversaries were unfolding, the ANC was also busily preparing within its own ranks for the day when it would take office. Teams of ANC economists and lawyers formed working groups charged with figuring out exactly how to turn the general promises of the Freedom Charter—for housing amenities and health care—into practical policies. The most ambitious of these plans was Make Democracy Work, an economic blueprint for South Africa's post-apartheid future, written while the high-level negotiations were taking place.
What the party loyalists didn't know at the time was that while they were hatching their ambitious plans, the negotiating team was accepting concessions at the bargaining table that would make their implementation a practical impossibility. "It was dead before it was even launched," the economist Vishnu Padayachee said of Make Democracy Work. By the time the draft was complete, "there was a new ball game."

He first suspected it, he said, in late 1993, when he and a colleague from the Make Democracy Work group got a call from the negotiating team who were in the final stages of haggling with the National Party. The call was a request for them to write a position paper on the pros and cons of making South Africa's central bank an independent entity, run with total autonomy from the elected government—oh, and the negotiators needed it by morning.

"We were caught completely off guard," recalled Padayachee, now in his early fifties. He had done his graduate studies at Johns Hopkins University in Baltimore. He knew that at the time, even among free-market economists in the U.S., central bank independence was considered a fringe idea, a pet policy of a handful of Chicago School ideologues who believed that central banks should be run as sovereign republics within states, out of reach of the meddling hands of elected lawmakers.*,10 For Padayachee and his colleagues, who strongly believed that monetary policy needed to serve the new government's "big goals of growth, employment and redistribution," the ANC's position was a no-brainer: "There was not going to be an independent central bank in South Africa."

Padayachee and a colleague stayed up all night writing a paper that gave the negotiating team the arguments it needed to resist this curveball from the National Party. If the central bank (in South Africa called the Reserve Bank) was run separately from the rest of the government, it could restrict the ANC's ability to keep the promises in the Freedom Charter. Besides, if the central bank was not accountable to the ANC government, to whom, exactly, would it be accountable? The IMF? The Johannesburg Stock Exchange? Obviously, the National Party was trying to find a backdoor way to hold on to power even after it lost the elections—a strategy that needed to be resisted at all costs. "They were locking in as much as possible," Padayachee recalled. "That was a clear part of the agenda."

Padayachee faxed the paper in the morning and didn't hear back for weeks. "Then, when we asked what happened, we were told, 'Well, we gave that one up.'" Not only would the central bank be run as an autonomous entity within the South African state, with its independence enshrined in the new constitution, but it would be headed by the same man who ran it under apartheid, Chris Stals. It wasn't just the central bank that the ANC had given up: in another major concession, Derek Keyes, the white finance minister under apartheid, would also remain in his post—much as the finance ministers and central bank heads from Argentina's dictatorship somehow managed to get their jobs back under democracy. The New York Times praised Keyes as "the country's ranking apostle of low-spending business-friendly government."11
From Padayachee's point of view, none of this happened because of some grand betrayal on the part of ANC leaders but simply because they were outmanoeuvred on a series of issues that seemed less than crucial at the time—but turned out to hold South Africa's lasting liberation in the balance.
What happened in those negotiations is that the ANC found itself caught in a new kind of web, one made of arcane rules and regulations, all designed to confine and constrain the power of elected leaders. As the web descended on the country, only a few people even noticed it was there, but when the new government came to power and tried to move freely, to give its voters the tangible benefits of liberation they expected and thought they had voted for, the strands of the web tightened and the administration discovered that its powers were tightly bound. Patrick Bond, who worked as an economic adviser in Mandela's office during the first years of ANC rule, recalls that the in-house quip was "Hey, we've got the state, where's the power?" As the new government attempted to make tangible the dreams of the Freedom Charter, it discovered that the power was elsewhere.

Want to redistribute land? Impossible—at the last minute, the negotiators agreed to add a clause to the new constitution that protects all private property, making land reform virtually impossible. Want to create jobs for millions of unemployed workers? Can't—hundreds of factories were actually about to close because the ANC had signed on to the GATT, the precursor to the World Trade Organization, which made it illegal to subsidize the auto plants and textile factories.
Want to get free AIDS drugs to the townships, where the disease is spreading with terrifying speed? That violates an intellectual property rights commitment under the WTO, which the ANC joined with no public debate as a continuation of the GATT. Need money to build more and larger houses for the poor and to bring free electricity to the townships? Sorry—the budget is being eaten up servicing the massive debt, passed on quietly by the apartheid government.
Free water for all? Not likely. The World Bank, with its large in-country contingent of economists, researchers and trainers (a self-proclaimed "Knowledge Bank"), is making private-sector partnerships the service norm. Want to impose currency controls to guard against wild speculation? That would violate the $850 million IMF deal, signed, conveniently enough, right before the elections.
Raise the minimum wage to close the apartheid income gap? Nope. The IMF deal promises "wage restraint."12 And don't even think about ignoring these commitments— any change will be regarded as evidence of dangerous national untrustworthiness, a lack of commitment to "reform," an absence of a "rules-based system." All of which will lead to currency crashes, aid cuts and capital flight. The bottom line was that South Africa was free but simultaneously captured; each one of these arcane acronyms represented a different thread in the web that pinned down the limbs of the new government.

A long-time anti-apartheid activist, Rassool Snyman, described the trap to me in stark terms. "They never freed us. They only took the chain from around our neck and put it on our ankles." Yasmin Sooka, a prominent South African human rights activist, told me that the transition "was business saying, 'We'll keep everything and you [the ANC] will rule in name. . . . You can have political power, you can have the façade of governing, but the real governance will take place somewhere else.'" †, 13 It was a process of infantilization that is common to so-called transitional countries—new governments are, in effect, given the keys to the house but not the combination to the safe.

The question as to how it happened was put to William Gumede, a third-generation ANC activist who, as a leader of the student movement during the transition, was on the streets in those tumultuous years. "Everyone was watching the political negotiations," he recalled, referring to the de Klerk–Mandela summits. "And if people felt it wasn't going well there would be mass protests. But when the economic negotiators would report back, people thought it was technical; no one was interested." This perception, he said, was encouraged by Mbeki, who portrayed the talks as "administrative" and of no popular concern (much like the Chileans with their "technified democracy"). As a result, he said with great exasperation, "We missed it! We missed the real story."

Gumede, who today is one of South Africa's most respected investigative journalists, says he came to understand that it was in those "technical" meetings that the true future of his country was being decided—though few understood it at the time. Since then, Gumede has been making up for lost time and has since written Thabo Mbeki and the Battle for the Soul of the ANC, an expose that raised something of a national firestorm. It is an exhaustive account of precisely how the ANC negotiated away the country's economic sovereignty in those meetings he was too busy to pay attention to at the time. "I wrote the book out of anger," Gumede said. "Anger at myself and at the party."

What ANC activists didn't understand at the time was that it was the nature of democracy itself that was being altered in those negotiations; changed so that once the web of constraints had descended on their country there would effectively no going back. 
-------------------------------------------------------

In the first two years of ANC rule, the party still tried to use the limited resources it had to make good on the promise of redistribution. There was a flurry of public investment—more than a hundred thousand homes were built for the poor, and millions were hooked up to water, electricity and phone lines.14 But, in a familiar story, weighed down by debt and under international pressure to privatize these services, the government soon began raising prices.
After a decade of ANC rule, millions of people had been cut off from newly connected water and electricity because they couldn't pay the bills. ‡ At least 40 percent of the new phones lines were no longer in service by 2003.15 As for the "banks, mines and monopoly industry" that Mandela had pledged to nationalize, they remained firmly in the hands of the same four white-owned mega-conglomerates that also control 80 percent of the Johannesburg Stock Exchange.16
In 2005, only 4 percent of the companies listed on the exchange were owned or controlled by blacks.17 Seventy percent of South Africa's land, in 2006, was still monopolized by whites, who are just 10 percent of the population.18 Most distressingly, the ANC government has spent far more time denying the severity of the AIDS crisis than getting lifesaving drugs to the approximately 5 million people infected with HIV, though there were, by early 2007, some positive signs of progress.19 Perhaps the most striking statistic is this one: since 1990, the year Mandela left prison, the average life expectancy for South Africans has dropped by thirteen years.20


There's a full chapter on this in Naomi Klein's book "The Shock Doctrine". Google it up for a fuller account.

<http://www.naomiklein.org/articles/2011/02/democracy-born-chains>

[SandyB]

Mmm interesting reading  , some balance  some from the ANC perspective ,, but there are  words there that make my skin crawl ,, free  water , free electricity  , free  housing ... Grrr there is nothing free  in this world ,, how can one create a society where some pay nothing and others have to pay ??  totally unrealistic, secondly taking the history of africa , I believe the economic " protectors " that were put in place were necessary ,, given free rein the economic powerhouse of our economy would more than likely have been plundered left in ruins with the rest of the world not wanting to invest anymore ,,  a simplistic viewpoint but yes  after  so many years this bunch who  have the political power  mess up tuime and time again and still  blame it on apartheid ...

[Bob Molloy]

Hi Sandy,
               I think your sense of humour is too deep for me. Quote: "free water, free electricity, free housing, grrrrrr."
And this on a website where every single member has at some stage in his or her Oranjemund sojourn benefited from not only free water, electricity and housing but also free furniture, extending to some hundreds of families over some 70 years. Even to this day some people don't pay for those utilities in Oranjemund. And I'm sure I've come across a sense of entitlement and even protest in some posts on this website at the looming prospect of perhaps having to pay at any stage in the future.
Okay, it was all part of the wage and salary package but, hey, only for us white outjies. Oh, almost forgot: income tax was a laugh for most of that time.
It was all good high on the hog stuff and a great time was had by all while it lasted. But right now, sparked off by Paul, we are having a discussion about why we have such a growing underclass. An underclass morever responsible for crime and all those other nasties we claim are wrecking our little paradise. And since we have nobody else to point the finger at it must be the fault of the gummit, that awful corrupt gummit that spends all the money on itself when it should be spending on fixing those things "everybody knows" need to be fixed.
We can live forever benighted in ignorance and prejudice or we can learn and perhaps move on. To do that we have to give up some long cherished notions, one of them being that the poor are responsible for their poverty.
Whether we like it or not the old biblical question "Am I my brother's keeper? has long been answered. Okay, we don't have to like the answer but ignoring it leads to the development of an underclass. And, hey guys, guess what, an underclass is the most expensive thing you can have in any society. You don't need to have an astute business brain to know that ignoring expenses is an attitude that will eventually sneak up and bite you on the bum.
It did that in Egypt quite recently and sent Ben Ali packing. Now Mubarak is on his bicycle and it looks as if Libya will soon put the skids under Gaddaffi. 
The issue in this discussion was that the ANC-led government is responsible for this mess. The point I made in a recent post is that the ANC government, like all captive governments not only in Africa but in most of the West, is tied to the IMF and World Bank agendas (those nice people who gave you globalism). For that reason the ANC doesn't have a hope in hell of finding the capital to put things right. They did once have an agenda to do so but it was too socialist and left wing for those Wall Street okes who like to keep the dollars in their own pockets.
Nor will the government ever achieve any of its stirring promises of a fair go for everyone until it repudiates all the artificial debts loaded on by the IMF, ensure the big corporates pay their fair whack of costs, nationalise all the utilities such as water, power and transport, put more money into housing, education, health and welfare and generally clean the stables.

Sadly, it ain't going to happen guys, not until the underclass rises up and bites the relevant bums. And that's when things really start to get pricey. If you thought a few millions in free water, power, housing etc was too expensive, you ain't seen nuthin' yet. At that stage we move from chaos to disaster as the self-righteous free marketers and their IMF and World Bank cronies cut off trade and impose sanctions to make the starving poor come to heel, thus creating more starving poor and making it even more expensive to put right.
The Romans had the answer: the formula was bread and circuses for the slave population that did all the work, millions of them by the way, largely outnumbering the ordinary Roman population (déjà vu, anyone?). Hence the Collosseums and theatres all over the Roman empire and the fun they all had feeding Christians to the lions, crucifying people upside down and watching gladiators kill each other. The mob loved it and yelled for more. The slave revolution under the gladiator Spartacus, so beloved by Hollywood, didn't take place until somebody cut the bread ration. May be it was an early version of the World Bank; as Woody Allen would say: "Who the hell knows?"   
Today we have television which feeds us just the same crap and doesn't do too bad a job of keeping the population dumbed down. While you are staring at the tube you can't have a logical thought in your head. But the mob in SA lacks bread and housing, not to mention the electricity to run a TV set supposing they had one, and is now restive so it takes what it hasn't got, which is just about anything the haves possess including life itself. We call it crime. They think of it as restitution. We call for more jails. That costs you R50,000 a head annually, money if properly applied could have staunched the rot in the first place. 
Maybe, just maybe, if we aimed at the right target we might come up with a plan for basic amenities for all (yes, Sandy, even if we have to dip into taxes to pay for it) and build from there. Judging from what happened during the French revolution - the one in which they invented the guillotine - bum-biting isn't for sissies.
I think I'm taking up too much space here so I'll stop and let somebody else get on the soap box. C'mon Sandy, I can hear you muttering in the background.

[SandyB]

Hi Bob ,, mm a deep sense of humour ,, thought you would  grab on the Oranjemund  free housing water  power etc ...  Strangely enough once i was employed on the mine  and  became  more aware of myself i  realised Oranjemund was the  ultimate fools paradise hence my eventually leaving  , there was no better pleasure  when i moved to CT  than turning every rand over twice before  spending it  as i knew i had bills to pay ...  Interesting reading and yes good debate of issues , diffs  is  we live here  and  yes work very hard for  our  tax rands  only to see them squandered  and not  utilised as they should be  leading to the  current situations  of  riots and  dissatisfaction ,,  I dont mind my tax money being used for  upliftment  and  creating a better society but  No No to  squandering ..
Sad fact is  they with the political power  have not grown up from  their old  liberation cadre mentality   and its been years now so  they should  be governing  in a fair and equitable manner , growing the economy to provide more employment , taking  care in a fair manner of  those less fortunate   , instead  they coninue   spouting old tired  cliches and covering up for the   ineffciency  of their politically appointed  cadres . They are power hungry  and its a  weak link in their armour ( not that the  shenanigans of  the  'supposed  growing  opposition  party
( COPE  ) that cant COPE   with their own issues of leadership infighting  are any shining light ...
Sad fact  is  it gets in the way  of  service delivery and good governance ethic , already there is trouble  with their  electing Marius  Fransman  as their new saviour to try  claw away the western cape from  DA  governance .. do some  search on that ... as example  I attach a few articles one about  the Johanessburg  billing crisis  and  yes read the one  comment  about impeccable  struggle DNA  ,, what the  frikkadel  has that got  to do with good governance  and to even say  its a system we have inherited from apartheid , now almost  15 years on .. they hire enough useless consultants  with the right " credentials "  but no delivery  ,  No No   they have had enough time  and enough resources and advice to draw  from  ,,  its  inexusable ...  simply put  mutter  mutter   

[SandyB]

PS    ..  THOU SHALT NOT  BE SMITTEN WITH  ANY  MINUS KARMA POINTS ,, 

[Paul (Pepe) Freemantle]

I am in total agreement with you Sandy.

[SandyB]

Err Uhm  Pepe ,, please  .. no race card ,,, take note , I refer to  the party in power   or at worst  a  problem associated with the continent ,,, no more ..

[Paul (Pepe) Freemantle]

Thanks Sandy, point taken. I am just very frustrated.

[SandyB]

No  prob Pepe ..  frustrated  indeed we all  are and get ... I think back to the  words given to me by an old wise woman
"  you are passionate when you get your teeth into  something , you dont tolerate fools easily , you dont like to see  injustice  in any form ( which covers  a lot  of what this is  about  ) and yes you put  your  words out in the public arena  which is not always  good for  you ..    by all means   carry on , the voices are needed  but  do not carry that message  with hatred  instead each time bless its content and hope it has some effect "

Not  an easy  credo to follow   as we are only human ... 

[Bob Molloy]

I'm with both you guys in your concern for fellow humans. But I'd feel a lot happier if I could just get the idea across that the picture is not always clear. Most of the things we've been fed about how things are is pernicious propaganda, aimed at keeping us obediently in line while the real looters are at work.
The following is a long read, not very well written but very topical. It addresses that very point.
I'd like to hear your views.
Regards,
Bob.

KISS EGYPT'S REVOLUTION GOODBYE
By Dick Eastman
2-24-11


The European Bank for Reconstruction and Development (EBRD) is ready to lend a billion Euros a year to Egypt for reconstruction and free-market reform. And this just as Egypt's Minister of Finance Samir Radwan has gone begging to the City of London bankers and the British Ministry of Trade and Investment for relief on debt payments. Payments that are about to throw Egypt into bankruptcy since Egypt has been such a good boy in privatization and austerity to give Egypt a 7 percent growth rate, mostly in investments that will end up in international hands as ventures fail to pay out because of the ever diminishing Egyptian domestic purchasing power.

First EBRD will lend at interest and build what they want backed by Egyptian collateral and the value of the projects themselves. Then when it turns out the Egyptians can't make the debt payments because of all the interest we have sucked from them, we take over all of the assets we have developed. That's freedom, that's how it works and has worked in every debt-burdened third world country since the international financiers shaped up their game after WW2.

EBRD is experienced at this. In 1991 the EBRD was organized to financially lead Russia and Eastern Europe in their transition from paternalistic socialism to sustainable free-market economies open to international investment.

The U.S. is the EBRD's largest shareholder, although the combined stakes of European Union nations give that bloc the greatest say in how it operates.

EBRD President Thomas Mirow in a speech at Oxford University declared, "Twenty years ago, the EBRD rose to the challenge posed by the collapse of communism. Today, in the Middle East..we are ready to act again, championing the values that we hold dear. . . . We have the ability to deliver the development of the private sector, particularly the small and medium sized enterprises which drive job creation and thus supplement the efforts of other international financial institutions which focus on public infrastructure."

European Union foreign policy chief Catherine Ashton told Egyptian Foreign Minister Ahmed Aboul Gheit that the EU will permit new loans and provide "expertise" if Egypt is willing to make the necessary economic reforms to get them.

Meanwhile new parties are being formed through Facebook to counter and crowd out the Muslim Brotherhood which is one of the few Egyptian groups that have a clear-eyed view of international finance. New Parties such as the "25th of January Party" -- no indication of what it stands for in the name -- has garnered hundreds of thousands of "likes". Another party, the "Freedom and Justice Party" is a magnet for secular pro-free-market Egyptians looking for power and position in the new Egypt. But a hundred other parties are being financed, each directed at peeling away one or more demographic groupings from the Muslim Brotherhood.
This important work is proceeding as the world is distracted by the violence in Libya. By the time the world is ready to look at Egypt again, the nation will show an entirely different political landscape.

It will be one in which the little people have lost again, one in which the Egyptians have lost their revolution and the people simply not well enough informed to raise up their own alternatives to domination by International Finance.

[SandyB]

Oi !! Bob  I want a retraction of the minus  1  you  smote me wif   

[SandyB]

Thanks  for  + to neutralise Bobs  -  Pepe     

[Bob Molloy]

Much puzzled. I never use the karma rating. I'm looking for someone's opinion, not an excuse to clobber them. Every scrap of input is grist to the mill.
Sorry Sandy, it weren't me, not never, not nohow. Perhaps the moderator tossed it in.
Regards.

[SandyB]

Hi  Bob ,
               was just playing the fool a bit to lighten things up  , had a tough two days  with a HACCP / BRC  audit at work , the auditor steely willed and we had to continualy steer her toward pragmatism  ie we dont make food , we make packaging  for  packing fresh produce and  we are a business and not a hospital  ...problem is they keep onshifting the goalposts ,, Grrr  ..  anyhow we got through again as an A  rating  supplier which guarantees us  export fruit packaging orders  ...
I have read your last article and when I have the energy will pull together response ..  now got to work  on  tying up month end  for the restaurant  and we got  Eddy and  11 guests  at the  shop for a booked  sunday lunch tomorrow ...
till later   Sandy