Nadeem Malik

Tuesday, March 31, 2009

World Depression: Regional Wars and the Decline of the US Empire Part I by Prof. James Petras

Introduction

            All the idols of capitalism over the past three decades crashed.  The assumptions and presumptions, paradigm and prognosis of indefinite progress under liberal free market capitalism have been tested and have failed. We are living the end of an entire epoch:  Experts everywhere witness the collapse of the US and world financial system, the absence of credit for trade and the lack of financing for investment.  A world depression, in which upward of a quarter of the world's labor force will be unemployed, is looming.  The biggest decline in trade in recent world history – down 40% year to year – defines the future.  The immanent bankruptcies of the biggest manufacturing companies in the capitalist world haunt Western political leaders.  The 'market' as a mechanism for allocating resources and the government of the US as the 'leader' of the global economy have been discredited. (Financial Times, March 9, 2009)  All the assumptions about 'self-stabilizing markets' are demonstrably false and outmoded.  The rejection of public intervention in the market and the advocacy of supply-side economics have been discredited even in the eyes of their practitioners.  Even official circles recognize that 'inequality of income' contributed to the onset of the economic crash and should be corrected.  Planning, public ownership, nationalization are on the agenda while socialist alternatives have become almost respectable. 

            With the onset of the depression, all the shibboleths of the past decade are discarded:  As export-oriented growth strategies fail, import substitution policies emerge.  As the world economy 'de-globalizes' and capital is 'repatriated' to save near bankrupt head offices – national ownership is proposed.  As trillions of dollars/Euros/yen in assets are destroyed and devalued, massive layoffs extend unemployment everywhere.  Fear, anxiety and uncertainty stalk the offices of state, financial directorships, the office suites the factories, and the streets…

            We enter a time of upheaval, when the foundations of the world political and economic order are deeply fractured, to the point that no one can imagine any restoration of the political-economic order of the recent past. The future promises economic chaos, political upheavals and mass impoverishment.  Once again, the specter of socialism hovers over the ruins of the former giants of finance.  As free market capital collapses, its ideological advocates jump ship, abandon their line and verse of the virtues of the market and sing a new chorus: the State as Savior of the System - a dubious proposition, whose only outcome will be to prolong the pillage of the public treasury and postpone the death agony of capitalism as we have known it.

Theory of Capital Crisis: The Demise of the Economic Expert

            The failed economic policies of political and economic leaders are rooted in the operation of markets – capitalism.  To avoid a critique of the capitalist system, writers are blaming the leaders and financial experts for their incompetence, 'greed' and individual defects.

            Psychobabble has replaced reasoned analysis of structures, material forces and objective reality, which drive, motivate and provide incentives to investors, policy makers and bankers.  When capitalist economies collapse, the gods drive the politicians and editorial columnists crazy, depriving them of any capacity to reason about objective processes and sending them into the wilderness of subjective speculation.

            Instead of examining the opportunity structures created by enormous surplus capital and the real existing profit margins, which in drive capitalists into financial activity, we are told it was 'the failure of leadership'.  Instead of examining the power and influence of the capitalist class over the state, in particular the selection of economic policy-makers and regulators who would maximize their profits, we are told there was a 'lack of understanding' or 'willful ignorance of what markets need'.  Instead of looking at the real social classes and class relations – specifically the historically existing capitalist classes operating in real existing markets - the psycho-babblers posit an abstract 'market' populated by imaginary ('rational') capitalists.  Instead of examining how rising profits, expanding markets, cheap credit, docile labor, and control over state policies and budgets, create 'investor confidence', and, in their absence, destroy 'confidence', the psychobabblers claim that the 'loss of confidence' is a cause for the economic debacle.  The objective problem of loss of specific conditions, which produce profits, as leading to the crisis, is turned into a 'perception' of this loss.

            Confidence, faith, hope, trust in capitalist economies derive from economic relations and structures which produce profits.  These psychological states are derivative from successful outcomes:  Economic transactions, investments and market shares that raise value, multiply present and future gains.  When investments go sour, firms lose money, enterprises go bankrupt, and those prejudiced 'lose confidence' in the owners and brokers.  When entire economic sectors severely prejudice the entire class of investors, depositors and borrowers, there is a loss of 'systemic confidence.' 

            Psychobabble is the last resort of capitalist ideologues, academics, experts and financial page editorialists. Unwilling to face the breakdown of real existing capitalist markets, they write and resort to vague utopias such as 'proper markets' distorted by 'certain mindsets'.  In other words, to save their failed ideology based on capitalist markets, they invent a moral ideal the 'proper capitalist mind and market', divorced from real behavior, economic imperatives and contradictions embedded in class warfare.

            The inadequate and shoddy economic arguments, which pervade the writing of capitalist ideologues parallels the bankruptcy of the social system in which they are embedded.  The intellectual and moral failures of the capitalist class and their political followers are not personal defects; they reflect the economic failure of the capitalist market.

The crash of the US financial system is symptomatic of a deeper and more profound collapse of the capitalist system that has its roots in the dynamic development of capitalism in the previous three decades.  In its broadest terms, the current world depression results from the classic formulation outlined by Karl Marx over 150 years ago:  the contradiction between the development of the forces and relations of production. 

Contrary to the theorists who argue that 'finance' and 'post-industrial' capitalism have 'destroyed' or de-industrialized the world economy and put in its place a kind of "casino" or speculative capital, in fact, we have witnessed the most spectacular long-term growth of industrial capital employing more industrial and salaried workers than ever in history.  Driven by rising rates of profit, large scale and long-term investments have been the motor force for the penetration by industrial and related capital of the most remote underdeveloped regions of the world. New and old capitalist countries spawned enormous economic empires, breaking down political and cultural barriers to incorporating and exploiting billions of new and old workers in a relentless process.  As competition from the newly industrialized countries intensified, and as the rising mass of profits exceeded the capacity to reinvest them most profitably in the older capitalist centers, masses of capital migrated to Asia, Latin America, Eastern Europe, and to a lesser degree, into the Middle East, Southern Africa.

            Huge surplus profits spilled over into services, including finance, real estate, insurance, large-scale real estate and urban lands.

            The dynamic growth of capitalism's technological innovations found expression in greater social and political power – dwarfing the organization of labor, limiting its bargaining power and multiplying its profits.  With the growth of world markets, workers were seen merely as 'costs of production' not as final consumers.  Wages stagnated; social benefits were limited, curtailed or shifted onto workers.  Under conditions of dynamic capitalist growth, the state and state policy became their absolute instrument: restrictions, controls, regulation were weakened.  What was dubbed "neo-liberalism" opened new areas for investment of surplus profits:  public enterprises, land, resources and banks were privatized.

            As competition intensified, as new industrial powers emerged in Asia, US capital increasingly invested in financial activity.  Within the financial circuits it elaborated a whole series of financial instruments, which drew on the growing wealth and profits from the productive sectors.

            US capital did not 'de-industrialize' – it relocated to China, Korea and other centers of growth, not because of "falling profits" but because of surplus profits and greater profits overseas.

            Capital's opening in China provided hundreds of millions of workers with jobs subject to the most brutal exploitation at subsistence wages, no social benefits, little or no organized social power.  A new class of Asian capitalist collaborators, nurtured and facilitated by Asian state capitalism, increased the enormous volume of profits. Rates of investments reached dizzying proportions, given the vast inequalities between income/property owning class and wageworkers.  Huge surpluses accrued but internal demand was sharply constrained.  Exports, export growth and overseas consumers became the driving force of the Asian economies.  US and European manufacturers invested in Asia to export back to their home markets – shifting the structure of internal capital toward commerce and finance.  Diminished wages paid to the workers led to a vast expansion in credit.  Financial activity grew in proportion to the entrance of commodities from the dynamic, newly industrialized countries.  Industrial profits were re-invested in financial services.  Profits and liquidity grew in proportion to the relative decline in real value generated by the shift from industrial to financial/commercial capital.

            Super profits from world production, trade, finances and the recycling of overseas earnings back to the US through both state and private financial circuits created enormous liquidity.  It was far beyond the historical capacity of the US and European economies to absorb such profits in productive sectors.

            The dynamic and voracious exploitation of the huge surplus labor forces in China, India, and elsewhere and the absolute pillage and transfer of hundreds of billions from ex-communist Russia and 'neo-liberalized' Latin America filled the coffers of new and old financial institutions.

            Over-exploitation of labor in Asia, and the over-accumulation of financial liquidity in the US led to the magnification of the paper economy and what liberal economist later called "global disequilibrium" between savers/industrial investors/ exporters (in Asia) and consumers/financiers/importers(in the US).  Huge trade surpluses in the East were papered over by the purchase of US T-notes.  The US economy was precariously backed by an increasingly inflated paper economy.

  The expansion of the financial sector resulted from the high rates of return, taking advantage of the 'liberalized' economy imposed by the power of diversified investment capital in previous decades.  The internationalization of capital, its dynamic growth and the enormous growth of trade outran the stagnant wages, declining social payments, the huge surplus labor force.  Temporarily, capital sought to bolster its profits via inflated real estate based on expanded credit, highly leveraged debt and outright massive fraudulent 'financial instruments' (invisible assets without value).  The collapse of the paper economy exposed the overdeveloped financial system and forced its demise.  The loss of finance, credit and markets, reverberated to all the export-oriented industrial manufacturing powers.  The lack of social consumption, the weakness of the internal market and the huge inequalities denied the industrial countries any compensatory markets to stabilize or limit their fall into recession and depression.  The dynamic growth of the productive forces based on the over-exploitation of labor, led to the overdevelopment of the financial circuits, which set in motion the process of 'feeding off' industry and subordinating and undermining the accumulation process to highly speculative capital.

            Cheap labor, the source of profits, investment, trade and export growth on a world scale, could no longer sustain both the pillage by finance capital and provide a market for the dynamic industrial sector.  What was erroneously dubbed a financial crisis or even more narrowly a "mortgage" or housing crisis, was merely the "trigger" for the collapse of the overdeveloped financial sector.  The financial sector, which grew out of the dynamic expansion of 'productive' capitalism, later 'rebounded' against it.  The historic links and global ties between industry and financial capital led inevitably to a systemic capitalist crisis, embedded in the contradiction between impoverished labor and concentrated capital.  The current world depression is a product of the 'over-accumulation' process of the capitalist system in which the crash of the financial system was the 'detonator' but not the structural determinant. This is demonstrated by the fact that industrial Japan and Germany experienced a bigger fall in exports, investments and growth than 'financial' US and England.

The capitalist system in crisis destroys capital in order to 'purge itself' of the least efficient, least competitive and most indebted enterprises and sectors, in order to re-concentrate capital and reconstruct the powers of accumulation – political conditions permitting.  The re-composition of capital grows out of the pillage of state resources – so-called bailouts and other massive transfers from the public treasury (read 'taxpayers'), which results from the savage reduction of social transfers (read 'public services') and the cheapening of labor through firings, massive unemployment, wage, pension and health reductions and the general reduction of living standards in order to increase the rate of profit.

The World Depression:  Class Analysis

The aggregate economic indicators of the rise and fall of the world capitalist system are of limited value in understanding the causes, trajectory and impact of the world depression.  At best, they describe the economic carnage; at worst, they obfuscate the leading (ruling) social classes, with their complex networks and transformations, which directed the expansion and economic collapse and the wage and salaried (working) classes, which produced the wealth to fuel the expansive phase and now pay the cost of the economic collapse.

It is a well-known truism that those who caused the crisis are also the greatest beneficiaries of government largesse.  The crude and simple everyday observations that the ruling class 'made' the crisis and the working class 'pays' the cost, at a minimum, is a recognition of the utility of class analyses in deciphering the social reality behind the aggregate economic data.  Following the recession of the early 1970s, the Western industrial capitalist class secured financing to launch a period of extensive and deep growth covering the entire globe.  German, Japanese and Southeast Asian capitalists flourished, competed and collaborated with their US counterpart.  Throughout this period the social power, organization and political influence of the working class witnessed a relative and absolute decline in their share of material income.  Technological innovations, including the re-organization of work, compensated for wage increases by reducing the 'mass of workers' and in, particular, their capacity to pressure the prerogatives of management.  The capitalist strategic position in production was strengthened:  they were able to exercise near absolute control over the location and movements of capital. 

The established capitalist powers – especially in England and the US -- with large accumulations of capital and facing increasing competition from the fully recovered German and Japanese capitalists, sought to expand their rates of return by moving capital investments into finance and services.  At first, this move was linked and directed towards promoting the sale of their manufactured products by providing credit and financing toward the purchases of automobiles or 'white goods'.   Less dynamic industrial capitalists relocated their assembly plants to low-wage regions and countries.  The results were that industrial capitalists took on more the appearance of 'financiers' in the US even as they retained their industrial character in the operation of their overseas manufacturing subsidiaries and satellite suppliers.  Both overseas manufacturing and local financial returns swelled the aggregate profits of the capitalist class.  While capital accumulation expanded in the 'home country', domestic wages and social costs were under pressure as capitalists imposed the costs of competition on the backs of wage earners via the collaboration of the trade unions in the US and social democratic political parties in Europe.  Wage constraints, tying wages to productivity in an asymmetrical way and labor-capital pacts increased profits.  US workers were 'compensated' by the cheap consumer imports produced by the low-wage labor force in the newly industrializing countries and access to easy credit at home.

The Western pillage of the former-USSR, with the collaboration of gangster-oligarchs, led to the massive flow of looted capital into Western banks throughout the 1990s.  The Chinese transition to capitalism in the 1980s, which accelerated in the 1990s, expanded the accumulation of industrial profits via the intensive exploitation of tens of millions of wageworkers employed at subsistence levels.  While the trillion-dollar pillage of Russia and the entire former Soviet Union bloated the West European and US financial sector, the massive growth of billions of dollars in illegal transfers and money laundering toward US and UK banks added to the overdevelopment of the financial sector.  The rise in oil prices and 'rents' among 'rentier' capitalists added a vast new source of financial profits and liquidity.  Pillage, rents, and contraband capital provided a vast accumulation of financial wealth disconnected from industrial production.  On the other hand, the rapid industrialization of China and other Asian countries provided a vast market for German and Japanese high-end manufacturers:  they supplied the high quality machines and technology to the Chinese and Vietnamese factories.

US capitalists did not 'de-industrialize' – the country did.  By relocating production overseas and importing finished products and focusing on credit and financing, the US capitalist class and its members became diversified and multi-sectoral.  They multiplied their profits and intensified the accumulation of capital.

On the other hand, workers were subject to multiple forms of exploitation: wages stagnated, creditors squeezed interest, and the conversion from high wage/high skill manufacturing jobs to lower-paid service jobs steadily reduced living standards.

The basic process leading up to the breakdown was clearly present:  the dynamic growth of western capitalist wealth was based, in part, on the brutal pillage of the USSR and Latin America, which profoundly lowered living standards throughout the 1990s.  The intensified and savage exploitation of hundreds of millions of low-paid Chinese, Mexican, Indonesian and Indochinese workers, and the forced exodus of former peasants as migrant laborers to manufacturing centers led to high rates of accumulation.  The relative decline of wages in the US and Western Europe also added to the accumulation of capital.  The German, Chinese, Japanese, Latin American and Eastern European emphasis on export-driven growth added to the mounting 'imbalance' or contradiction between concentrated capitalist wealth and ownership and the growing mass of low-paid workers.  Inequalities on a world scale grew geometrically.  The dynamic accumulation process exceeded the capacity of the highly polarized capitalist system to absorb capital in productive activity at existing high rates of profit.  This led to the large scale and multiform growth of speculator capital inflating prices and investing in real estate, commodities, hedge funds, securities, debt-financing, mergers and acquisitions -- all divorced from real value-producing activity.  The industrial boom and the class constraints imposed on workers wages undermined domestic demand and intensified competition in world markets.  Speculator-financial activity with massive liquidity offered a 'short-term solution': profits based on debt financing.  Competition among lenders fueled the availability of cheap credit.  Real estate speculation was extended into the working class, as wage and salaried workers, without personal savings or assets, took advantage of their access to easy loans to join the speculator-induced frenzy - based on an ideology of irreversible rising home values.  The inevitable collapse reverberated throughout the system – detonated at the bottom of the speculative chain.   From the latest entrants to the real estate sub-prime mortgage holders, the crisis moved up the ladder affecting the biggest banks and corporations, who engaged in leveraged buyouts and acquisitions.  All 'sectors', which had 'diversified' from manufacturing to finance, trade and commodities speculation, were downgraded.  The entire panoply of capitalists faced bankruptcy.  German, Japanese and Chinese industrial exporters who exploited labor witnessed the collapse of their export markets. 

The 'bursting' financial bubble was the product of the 'over-accumulation' of industrial capital and the pillage of wealth on a world scale.  Over-accumulation is rooted in the most fundamental capitalist relation:  the contradictions between private ownership and social production, the simultaneous concentration of capital and sharp decline of living standards.         

Obama and the Capitalist Crisis: A Class Analysis

Indicators of the deepening depression in 2009 are found everywhere:

Bankruptcies rose by 14% in 2008 and are set to rise another 20% in 2009 (Financial Times, Feb. 25, 2009; p27). 

The write-down of the Western big banks is running at 1 Trillion dollars and growing (according to the Institute for International Financing, the banking groups Washington lobby). (Financial Times , March 10, 2009 p.9).

            And according to the Financial Times (ibid) the losses arising from banks having to mark their investments down to market prices stand at 3 Trillion dollars – equivalent to a year's worth of British economic production.  In the same report, the Asian Development Bank is quoted as having estimated that financial assets worldwide havefallen by more than $50 trillion – a figure of the same order as annual global output.  For 2009, the US will run a budget deficit of 12.3% of gross domestic product…giant fiscal deficits…that will ultimately ruin public finances.

The world markets have been in a vertical fall: 

The TOPIX has fallen from 1800 in mid-2007 to 700 in early 2009;

Standard and Poor from 1380 in early 2008 to below 700 in 2009;

FTSE 100 from 6600 to 3600 in early 2009; 

Hang Seng from 32,000 in early 2008 to 13,000 at the start of 2009 (Financial Times, Feb 25, 2009; p27).

In the fourth quarter of 2008, GDP shrank at annualized rate of 20.8% in South Korea, 12.7% in Japan, 8.2% in Germany, 2.9% in the UK and 3.8% in the US (FT, Feb.25, 2009; p9).

The Dow Jones Industrial Average has declined from 14,164 in October 2007 to 6500 in March 2009. 

Year on year declines in industrial output were 21% in Japan, 19% in South Korea, 12% in Germany, 10% in the US, and 9% in the UK (Financial Times, Feb.25, 2009; p.9.)

Net private capital flows to less developed capitalist countries from the imperial countries were predicted to shrink by 82% and credit flows by $30 billion USD (Financial Times, Feb. 25, 2009; p9). 

The US economy declined by 6.2% in the last three months of 2008 and fell further in the first quarter of 2009 as a result of a sharp decline in exports (23.6%) and consumer spending (4.3%) in the final quarter of 2008 (British Broadcasting Corporation, Feb. 27, 2009). 

With over 600,000 workers losing their jobs monthly in the first three months of 2009, and many more on short hours and scheduled for axing throughout 2009, real and disguised unemployment may reach 25% by the end of the year.  All of the signs point to a deep and prolonged depression:

Automobile sales of General Motors, Chrysler and Ford were down nearly 50% year to year (2007-2008).  The first quarter of 2009 saw a further decline of 50%.

 Foreign markets are drying up as the depression spreads overseas. 

In the US domestic market, durable goods sales are declining by 22% (BBC, Feb. 27, 2009). 

Residential investments fell by 23.6% and business investment was down 19.1%, led by a 27.8% drop in equipment and software.

The rising tide of depression is driven by private business led disinvestment.  Rising business inventories, declining investment, bankruptcies, foreclosures, insolvent banks, massive accumulative losses, restricted access to credit, falling asset values and a 20% reduction in household wealth (over 3 trillion dollars) are cause and consequence of the depression.  As a result of collapse of the industrial, mining, real estate and trade sectors, there are at least $2.2 trillion USD of "toxic" (defaulting) bank debt worldwide, far beyond the bailout funds allocated by the White House in October 2008 and February and March 2009.

The depression is diminishing the worldwide economic presence of imperial countries and undermining the foreign capital-financed export strategies of Latin American, Eastern European, Asian and African regions. 

Among almost all conventional economists, pundits, investment advisors and various and sundry experts and economic historians, there is a common faith that "in the long-run", the stock market will recover, the recession will end and the government will withdraw from the economy.  Fixed on notions of past cyclical patterns, historical 'trends', these analysts lose sight of the present realities which have no precedent:  the world nature of the economic depression, the unprecedented speed of the fall, and the levels of debt incurred by governments to sustain insolvent banks and industries and the unprecedented public deficits, which will drain resources for many generations to come.

The academic prophets of 'long-term developments" arbitrarily select trend markers from the past, which were established on the basis of a political-economic context radically different from today.  The idle chatter of 'post crisis' economists overlooks the open-ended and constantly shifting parameters therefore missing the true 'trend markers' of the current depression.  As one analyst noted, "any starting conditions we select in the historical data cannot replicate the starting conditions at any other moment because the preceding events in the two cases are never identical" (Financial Times, Feb. 26, 2009; p24).  The current US depression takes place in the context of a de-industrialized economy, an insolvent financial system, record fiscal deficits, record trade deficits, unprecedented public debt, multi-trillion dollar foreign debt and well over $800 billion dollars committed in military expenditures for several ongoing wars and occupations.  All of these variables defy the contexts in which previous depressions occurred.  Nothing in previous contexts leading up to a crisis of capitalism resembles the present situation.  The present configuration of economic, political and social structures of capitalism include astronomical levels of state pillage of the public treasury in order to prop up insolvent banks and factories, involving unprecedented transfers of income from wage and salaried taxpayers to non-productive 'rent earners' and to failed industrial capitalists, dividend collectors and creditors.  The rate and levels of appropriation and reduction of savings, pensions and health plans, all without any compensation, has led to the most rapid and widespread reduction of living standards and mass impoverishment in recent US history. 

Never in the history of capitalism has a deep economic crisis occurred without any alternative socialist movement, party or state present to pose an alternative.  Never have states and regimes been under such absolute control by the capitalist class  -- especially in the allocation of public resources.  Never in the history of an economic depression has so much of government expenditures been so one-sidedly directed towards compensating a failed capitalist class with so little going to wage and salaried workers.

The Obama regime's economic appointments and policies clearly reflect the total control by the capitalist class over state expenditures and economic planning.

Obama and the Capitalist Crisis:  A Class Analysis

The programs put forth by the US and West Europeans and other capitalist regions do not even begin to recognize the structural bases of the depression.

            First, Obama is allocating $1 trillion dollars to buy worthless bank assets and over 40% of his $787 billion stimulus package to insolvent banks and tax breaks, rather than to the productive sector, in order to save stock and bond holders, while over 600,000 workers lose their jobs monthly. 

Secondly, the Obama regime is channeling over $800 billion dollars to fund the wars in Iraq and Afghanistan to sustain military-driven empire building.  This constitutes a massive transfer of public funds from the civilian economy to the military sector forcing tens of thousands of unemployed young people to enlist in the military (Boston Globe, March 1, 2009). 

Thirdly, Obama's commission to oversee the "restructuring" of the US auto industry has backed their plans to close scores of factories, eliminate company-financed health plans for retirees and force tens of thousands of workers to accept brutal reductions in employee health care and pensions.  The entire burden for returning the privately owned auto industry to profits is placed on the shoulders of the wage, salaried and retired workers, and the US taxpayers. 

The entire economic strategy of the Obama regime is to save the bondholders by pouring endless trillions of dollars into insolvent corporations and buying the worthless debts and failed assets of financial enterprises.  At the same time his regime avoids any direct state investments in publicly owned productive enterprises, which would provide employment for the 10 million unemployed workers.  While Obama's budget allocates over 40% to military expenditures and debt payments, 1 out of every 10 Americans have been evicted from their homes, the number of Americans without jobs is rising to double digits, and the number of Americans on 'food stamps' to provide basic food needs is rising by the millions throughout 2009.

            Obama's 'job creation' scheme channels billions toward the privately owned telecommunication, construction, environmental and energy corporations, where the bulk of the government funds go to senior management and staff and provide profits to stock holders, while a lesser part will go to wage workers.  Moreover, the bulk of the unemployed workers in the manufacturing and service areas are not remotely employable in the 'recipient' sectors.  Only a fraction of the 'stimulus package' will be allocated in 2009.  Its purpose and impact will be to sustain the income of the financial and industrial ruling class and to postpone their long-overdue demise.  Its effect will be to heighten the socioeconomic inequalities between the ruling class and the wage and salaried workers. The tax increases on the rich are incremental, while the massive debts resulting from the fiscal deficits are imposed on present and future wage and salaried taxpayers.

            Obama's wholehearted embrace and promotion of military-driven empire building even in the midst of record-breaking budget deficits, huge trade deficits and an advancing depression defines a militarist without peer in modern history.  Despite promises to the contrary, the military budget for 2009-2010 exceeds the Bush Administration by at least 4%.  The numbers of US military forces will increase by several hundred thousands.  The number of US troops in Iraq will remain close to its peak and increase by tens of thousands in Afghanistan, at least through 2009 (despite promises to the contrary).  US-based miliary air and ground attacks in Pakistan have multiplied geometrically.  Obama's top foreign policy appointees in the State Department, Pentagon, Treasury and the National Security Council, especially in any capacity involving the Middle East, are predominantly militarist Zionists with a long history of advocacy of war against Iran and with close ties with the Israeli high command.

            In summary, the highest priorities of the Obama regime are evidenced by his allocation of financial and material resources, his appointments of top economic and foreign policy-makers and in terms of which classes benefit and which lose under his administration.  Obama's policies demonstrate that his regime is totally committed to saving the capitalist class and the US empire.  To do so, he is willing to sacrifice the most basic immediate needs and future interests, as well as the living standards, of the vast majority of working and home-owning Americans who are most directly affected by the domestic economic depression.  Obama has increased the scope of military-driven empire building and enhanced the power position of the pro-Israeli warmongers in his administration. Obama's 'economic recovery' and military escalation strategies are financially and fiscally incompatible; the cost of one undermines the impact of the other and leaves a tremendous hole in any efforts to counteract the collapse of social services, rising home foreclosures, business bankruptcies and massive layoffs.

            The horizontal transfers of public wealth from the Obama governing elite to the economic ruling class does not "trickle down" into jobs, credit and social services.  Attempting to turn insolvent banks into credit-lending, profitable enterprises is an oxymoron.  The central dilemma for Obama is how to create conditions to restore profitability to the failed sectors of the existing US economy. 

There are several fundamental problems with his strategy:

First, the US economic structure, which once generated employment, profits and growth, no longer exists.  It has been dismantled in the course of diverting capital overseas and into financial instruments and other non-productive economic sectors.

            Secondly, the Obama 'stimulus' policies reinforce the financial stranglehold over the economy by channeling great resources to that sector instead of 'rebalancing' the economy toward the productive sector.  Even within the 'productive sector' state resources are directed toward subsiding capitalist elites who have demonstrated their incapacity to generate sustained employment, foster market competitiveness and innovate in line with consumer preferences and interests.

            Thirdly, the Obama economic strategy of 'top-down' recovery squanders most of its impact in subsidizing failed capitalists instead of raising working class income by doubling the minimum wage and unemployment benefits, which is the only real basis for increasing demand and stimulating economic recovery.  Given the declining living standards resulting from domestic decay and the expansion of military-driven empire, both embedded in the institutional foundation of the state, there are no chances for the kind of structural transformation that can reverse the 'top-down', empire-absorbing policies promoted by the Obama regime.

            Recovery from the deepening depression does not reside in running a multi-trillion dollar printing operation, which only creates conditions for hyperinflation and the debasement of the dollar.  The root cause is the over-accumulation of capital resulting from over-exploitation of labor, leading to rising rates of profit and the collapse of demand.  The vast disparity between capital expansion and decline of worker consumption set the stage for the financial bubble.

            The 'rebalancing' of the economy means creating demand (not from an utterly prostrate private productive sector or an insolvent financial system) via direct state ownership and long-term, large-scale investment in the production of goods and social services.  The entire speculative 'superstructure', which grew to enormous proportions by feeding off of the value created by labor, multiplied itself in a myriad of 'paper instruments' divorced from any use value.  The entire paper economy needs to be dismantled in order to free the productive forces from the shackles and constraints of unproductive capitalists and their entourage.  A vast re-training program needs to be established to convert stockbrokers into engineers and productive workers.  The reconstruction of the domestic market and the invention and the application of innovations to raise productivity require the massive dismantling of the worldwide empire.  Costly and unproductive military bases, the essential elements for military-driven empire building, should be closed and replaced by overseas trade networks, markets, and economic transactions linked to producers operating out of their home markets.  Reversing domestic decay requires the end of empire and the construction of a democratic socialist republic.  Fundamental to the dismantling of empire is the end of political alliances with overseas militarist powers, in particular with the state of Israel and uprooting its entire domestic power configuration, which undermine efforts to create an open democratic society serving the interests of the American people.


James Petras is a frequent contributor to Global Research.  

Regions with constitutional drawbacks



 

Regions with constitutional drawbacks
Part I

Tuesday, March 24, 2009

Dr Tariq Hassan

While the legal community is pleased that the lawyers' movement has culminated in getting the judiciary fully restored, it is conscious of the fact that the journey for much needed judicial reforms in the country has just begun. But for now, the legal community's attention needs to be diverted to the more pressing issues raised by the civil strife brewing in the tribal and northern regions of Pakistan. The troubled tribal areas and northern regions of Pakistan are what I call the constitutionally disadvantaged areas. These areas are fast sinking into a state of anarchy with the continuing deterioration of the law and order situation there. While the government seeks to re-establish its writ through the strategic use of force, the civil society considers increased economic aid as a possible means of establishing peace in these areas. Both these are short-term superficial solutions. What is needed is a preliminary diagnosis of the underlying issues in order to find a durable long-term prescription for the problem. The starting point should be a constitutional analysis of the status of these areas. 1. The tribal areas The tribal areas, where the "great game" was played out amongst the imperial powers in the nineteenth century, are mostly situated in the north-western part of Pakistan. These areas enjoyed the status of "tribal areas" at the time of the independence of Pakistan from colonial rule in 1947. After independence, various tribal areas acceded to Pakistan through instruments of accession executed by them in favour of Pakistan. While acceding, however, these areas sought to retain their political autonomy. The instruments of accession granted the administration of the tribal areas to Pakistan but allowed these areas to retain their semi-autonomous status for the management of their other affairs. There is no reference to the instruments of accession in the Constitution but the Peshawar High Court has deemed the obligations thereunder to have been "merged into the jurisprudential fabric of the polity of Pakistan" (1990 CLC 560). Pakistan is a Federal Republic whose territories include the Federally Administered Tribal Areas (FATA) and such states and territories as are or may be included in Pakistan, whether by accession or otherwise. In addition to FATA, the tribal areas include the Provincially Administered Tribal Areas (PATA) of Balochistan and the North-West Frontier Province. While the tribal areas are an integral part of Pakistan, they retain their confederate status partly because of historical reasons and partly because of Pakistan's lack of vision and its failure to integrate them fully in its federal structure. These areas remain administered territories and are likely to remain so perpetually because the Constitution does not grant them the same rights and privileges as the four provinces, even though it does, in certain respects, protect the interests of FATA at par with the interests of the provinces and the Federal Capital Territory. The Constitution does not envisage the graduation of FATA to a full federating unit of the country through a gradual process of integration. Pakistan, having inherited the colonial legacy, continues its paternalistic rule over these territories through executive fiat.

 

Part-2

March 28, 2008

In addition to tribal areas there are other constitutionally disadvantaged territories in Pakistan. These comprise the Northern Areas comprising the Gilgit Agency, the Baltistan district of the Ladakh Wazarat, and the states of Hunza and Nagar, which are not even mentioned in the Pakistan Constitution. These territories do not have their own constitution like the state of Azad Jammu and Kashmir, which although an integral part of the country, is also not mentioned in the Pakistan Constitution. Furthermore, unlike Federally Administered Tribal Areas or Provincially Administered Tribal Areas these territories are not even autonomous or semi-autonomous. But like the tribal areas, most of these territories are under the administrative control of Pakistan. Northern Areas are administered by Pakistan under the Northern Areas Council Legal Framework Order, 1994 (LFO) and are for this reason also referred to as the Federally Administered Northern Areas (FANA). No government in Pakistan to date has ever taken any meaningful steps to address the wider issues of constitutional disregard and political deprivation of the Northern Areas. This lingering neglect has evoked judicial intervention at the highest level. In 1999, the Supreme Court of Pakistan in a landmark case entitled Al-Jehad Trust vs. Federation of Pakistan, held that the people of Northern Areas are citizens of Pakistan for all intents and purposes and like other citizens have the right to invoke any of the fundamental rights, and liable to pay taxes and other competently imposed levies. It further observed that these people are also entitled to participate in the governance of their area and to have an independent judiciary to enforce, inter alia, the fundamental rights guaranteed by the Pakistan Constitution. The Supreme Court, therefore, directed the Federation of Pakistan to initiate appropriate administrative and legislative measures within a period of six months from May 28, 1999, to make necessary amendments in the Pakistan Constitution and relevant statutes, orders, rules, and notifications to ensure that the people of Northern Areas enjoy their fundamental rights to be governed through their chosen representatives and to have access to justice through an independent judiciary, inter alia, for enforcement of their fundamental rights guaranteed under the Pakistan Constitution. Notwithstanding the Supreme Court judgment, the Northern Areas are still ruled by executive fiat from the Federal Capital Territory, Islamabad, through the Federal Ministry for Kashmir Affairs and Northern Areas (KANA), whose minister is its unelected chief executive. The Northern Areas Legislative Council (NALC), the region's elected legislature, is powerless, and its affairs are run by civil and military bureaucrats. It is this shared sense of constitutional neglect and political deprivation that may be a major contributing factor to the present civil strife in the tribal and Northern Areas of Pakistan. According to a recent Human Rights Commission of Pakistan report: "One way or the other, all problems are linked to the issue of the uncertain constitutional status of the Northern Areas" (HRCP Mission Report, 2005). This report also points out the glaring dichotomy and double standard in the treatment of Northern Areas in comparison to Tribal Areas: "… on the one hand Tribal Areas are not annexed completely to the territory of Pakistan and most of the laws of Pakistan are not enforced there, still the people of the Tribal Areas have been given representation in the Federal Parliament, Provincial Assemblies. On top of it the number of their representatives is much higher than any other area of Pakistan, in comparison to the ratio of population. On the other hand, the people of Northern Areas who claim to be Pakistani for all intents and purposes, are denied any constitutional status, rights or representation in any houses of Parliament or any Provincial Assembly. The greater injustice is that the so-called 'Legislative Council,' though a body elected by the local people, but their elected representative is still denied the right to the Chief Executive of the area or to preside over the sessions of this Council." The Supreme Court judgment in the Al-Jehad Trust case has cleared the path for remedying this wrong. All that is required is political will to implement the judgment of the court in respect of Northern Areas. The underlying principle of the judgment should be made the basis for initiating reform measures in the tribal areas as well. What is required is not just the strategic use of force or economic development as a possible means of establishing peace in the troubled tribal and Northern Areas of Pakistan. What is required is an integration of these areas into the body politic of Pakistan through a multi-faceted approach involving constitutional, legal,


 
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Donors Should Link Aid to Governance Reforms


Donors Should Link Aid to Governance Reforms

 

By Abid Hasan

Former Operations Advisor, World Bank

 

Pakistan is being promised billions of dollars in aid, from bilateral and multilateral donors.  Donors would be well advised to incorporate global and Pakistan-specific lessons of failure and success of development assistance, to ensure aid helps and not hurts Pakistan.

 

Foreign Aid in different times and in different places has been highly effective, totally ineffective and everything in between. It has been a spectacular success in a few countries, mostly in East Asia. On the flip side, it has been an unmitigated failure, especially for most of Sub-Sahara Africa where  aid has permitted poorly governed countries to pursue development that has been wasteful, ill-conceived and unproductive.  Several key lessons have emerged from past 50 years of development assistance.

First, and the most important lesson,  aid has only been effective  in an environment where there is Good Governance, Effective and Accountable Public Institutions, and Good Policies. Failures in policy making and institution building, and poor governance, are more severe constraints to development, than lack of aid.

 

Second, it is unambiguously clear that "Money alone can neither buy sustained Development nor sustained Stability".  The abysmal development outcomes  in Sub-Sahara Africa and most of South Asia  is a classic example  where  billions of dollars have neither sustained growth nor led to any noticeable improvements in human and social indicators. Third, spending more resources alone does not guarantee improvement in services for the poor, for the effectiveness of spending—and well functioning and accountable service delivery institutions-- is more important.

 

Pakistan's own recent experience is no different in respect of aid effectiveness. Thus, during the decade of the 90s, donors poured over $30 billion. Regrettably there is  not much to show for this aid. This was Pakistan's 'lost decade' where governance was poor, growth was  low, and human indicators remained mostly static at unconscionably low levels. 

 

During this period, the experience of major multilateral donors –World Bank, IMF and Asian Bank-- was also equally unsatisfactory.  Between them, they provided almost $10 billion of project and fast disbursing loans. And for the most part this lending had limited, if any, impact  on improving either the lives of ordinary folks or their access to education, health, justice or economic opportunities. The World Bank's own evaluation rated the impact of Bank's assistance program, during this period, as Unsatisfactory.

 

Pakistan used aid reasonably effectively during the first few years of this decade— when governance was somewhat better than in the 90s, sound policies were pursued and some institutional reforms initiated. However this success was short lived, because fundamental governance and institutional reforms –critical to nation building and rule of law --were either ignored, or glossed over, both by government and by the donors. And therefore, the success quickly evaporated a few years latter, when the  personalized  system collapsed, and Pakistan fell into the same political and economic quagmire where it was at the end of 90s.

 

Good governance environment is  especially important for  success of budget support and balance of payment loans. In the last decade donors provided close to $ 8-10 billion of such support. Clearly this type of assistance  enabled Pakistan to avoid a default after the nuclear test, and in recent months, and expanded the country's import capacity  to sustain higher growth, but the key question remains as to its usefulness and effectiveness. Because fundamentals were largely ignored, the implementation of reforms supported by these loans were always a case of "glass half full". Therefore, Pakistan is no better today—either in terms of performance of key institutions or state of the economy—then a decade back.  Of course there are more cars, more air conditioners, more mobile phones, but the lives of ordinary folks has hardly improved and permanent change for good in policies and institutions have been few and far between.  Budget support lending in an environment of poor governance and political instability is a disservice to the country, as it simply continues to prop up a  flawed system and in the end there is not much to show for it  except foreign liabilities which future generations would have to bear.

 

For the sake Pakistan and  the 100 million Pakistanis who are living on the edge,  it is important that donors must incorporate lessons of history as they ratchet up their programs. Aid must be linked to Good Governance. Bilateral donors ( especially the US, UK and Japan) need to pro-actively support civil society's movement for good governance and rule of law, and not simply pay lip service or avoid taking a public stand. These "mega-buck" donors must link their aid to practice of good governance and rule of law that are corner stones of their own governance and political systems. These donors are  doing themselves ( and their tax payers) , and ordinary Pakistanis, a big disservice by remaining silent on egregious actions--- NRO, removal of Chief Justice, elitist capture of political institutions and the state, moribund anti-corruption framework and institutions --- all of which undermine good governance and democracy.

 

 

Donors must require a credible Good Governance strategy and implementation plans , comprising at least, the following : rescinding aspects of NRO relating to the corrupt , and establishment of an Independent Anti-Corruption Commission which has jurisdiction over all branches of government, legislature and the judiciary;  independent audit of tax returns of all elected legislators, and government and judicial  officials above a certain rank, to ensure that declared personal income  matches the life style of these officials; strengthening accountability and incentives to improve performance of institutions providing services to the poor; making the Election Commission independent and powerful; and  restoring the moral authority , integrity and professional quality of judiciary by re-appointing all judges through the COD prescribed mechanism.

 

All the above  actions will strengthen Pakistan's governance and institutional foundations and democracy , thereby avoiding a systemic collapse every few years . Also this will ensure sustainable pro-poor development,  so that benefits of aid reach the vast majority of citizens and they have a stake in nurturing and protecting both an open and pluralistic democratic system of governance and a market based economic structure. Importantly this will usher a political system that  nurtures hundreds of  Obamas rather than being stacked with thousands of  CCCs ( Corrupt, Crooks and Criminals).

 

External pressure for good governance  would be welcomed by civil society and the poor who are clamoring for fundamental governance reforms, but are weak in relation to vested interests benefiting from bad governance. Donor pressure  can be instrumental in a country which is so dependent on external assistance. Civil society would get emboldend if donors openly espoused what is "Right", and not be shy to speak up and 'walk the talk'. Donors should not worry too much from the backlash of the interest groups  who are likely to lose. Donors must recognize that as long as bad governance continues, winning the war on terror will be an uphill task and ordinary folks will  ultimately get disenchanted with the status quo ( as happened in Swat) and support radicalism and violent means for change.  Therefore, except for humanitarian aid and targeted pro-poor assistance through  non-government agencies , all other aid should be linked to  implementation of credible governance improvement reforms, starting with the actions noted above.

 

 

Pouring money into dysfunctional government institutions, in a poor governance setting, will neither guarantee development nor stability. Nor will it reduce the frustrations and temptations that lead young people to choose the path of confrontation and opt for groups that preach hate and terror. Wasteful  aid  hurts the country's reputation, but worse preserves an elitist system –government of the elite, for the elite and by the elite-- and sham democracy which will crash every few years.

 

Donors must realize  that 'doing the right thing' must take precedence over expediency, that promoting Good Governance will also promote democracy and sustainable pro-poor  growth. Donors should be part of the solution and not become a main contributor to the problem. For Pakistan's sake, key donors must link aid to fundamental governance and institutional  reforms which ensure a stable , democratic, prosperous and inclusive Pakistan, and not support the status quo which will continue Pakistan's slide into a dysfunctional state.

 

Abid Hasan, Former Operations Advisor, World Bank

 


 
 
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N A D E E M   M A L I K
Director Programme
AAJ TV
ISLAMABAD
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Monday, March 30, 2009

Obama's 'New' Afghanistan Strategy


Obama's 'New' Afghanistan Strategy

Monday, March 30, 2009
By Sean Hannity

A quick trip around Hannity's America...

"New" Afghan Plan?

Friday, with his national security team by his side, President Obama unveiled what he called a new strategy for fighting the war in Afghanistan. But, he ended up sounding a lot like somebody else I know.

(BEGIN VIDEO CLIP)

FORMER PRESIDENT GEORGE W. BUSH: Protecting America from another attack is the most important responsibility of the federal government, the most solemn obligation that a president undertakes.

PRESIDENT BARACK OBAMA: As president, my greatest responsibility is to protect the American people.

BUSH: This is not, however, just America's fight and what is at stake is not just America's freedom. This is the world's fight.

OBAMA: This is not simply an American problem, far from it. The safety of people around the world is at stake.

BUSH: Our offensive against the terrorists includes far more than military might.

OBAMA: A campaign against extremism will not succeed with bullets or bombs alone.

BUSH: Afghanistan's success is critical to the security of America and our partners in the free world.

OBAMA: And what's at stake at this time is not just our own security, it's the very idea that free nations can come together on behalf of our common security.

BUSH: There will be difficult moments in the work ahead. Yet, we can be confident in the outcome.

OBAMA: So I understand the road ahead will be long and there will be difficult days ahead.

 
 
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Friday, March 27, 2009

US President Obama’s Remarks on New Strategy for Afghanistan and Pakistan

March 27, 2009
Text

President Obama's Remarks on New Strategy for Afghanistan and Pakistan

Washington, DC
March 27, 2009
Good morning. Today, I am announcing a comprehensive, new strategy for Afghanistan and Pakistan.
This marks the conclusion of a careful policy review that I ordered as soon as I took office. My Administration has heard from our military commanders and diplomats. We have consulted with the Afghan and Pakistani governments; with our partners and NATO allies; and with other donors and international organizations. And we have also worked closely with members of Congress here at home. Now, I'd like to speak clearly and candidly to the American people.
The situation is increasingly perilous. It has been more than seven years since the Taliban was removed from power, yet war rages on, and insurgents control parts of Afghanistan and Pakistan. Attacks against our troops, our NATO allies, and the Afghan government have risen steadily. Most painfully, 2008 was the deadliest year of the war for American forces.
Many people in the United States – and many in partner countries that have sacrificed so much – have a simple question: What is our purpose in Afghanistan? After so many years, they ask, why do our men and women still fight and die there? They deserve a straightforward answer.
So let me be clear: al Qaeda and its allies – the terrorists who planned and supported the 9/11 attacks – are in Pakistan and Afghanistan. Multiple intelligence estimates have warned that al Qaeda is actively planning attacks on the U.S. homeland from its safe-haven in Pakistan. And if the Afghan government falls to the Taliban – or allows al Qaeda to go unchallenged – that country will again be a base for terrorists who want to kill as many of our people as they possibly can.
The future of Afghanistan is inextricably linked to the future of its neighbor, Pakistan. In the nearly eight years since 9/11, al Qaeda and its extremist allies have moved across the border to the remote areas of the Pakistani frontier. This almost certainly includes al Qaeda's leadership: Osama bin Laden and Ayman al-Zawahiri. They have used this mountainous terrain as a safe-haven to hide, train terrorists, communicate with followers, plot attacks, and send fighters to support the insurgency in Afghanistan. For the American people, this border region has become the most dangerous place in the world.
But this is not simply an American problem – far from it. It is, instead, an international security challenge of the highest order. Terrorist attacks in London and Bali were tied to al Qaeda and its allies in Pakistan, as were attacks in North Africa and the Middle East, in Islamabad and Kabul. If there is a major attack on an Asian, European, or African city, it – too – is likely to have ties to al Qaeda's leadership in Pakistan. The safety of people around the world is at stake.
For the Afghan people, a return to Taliban rule would condemn their country to brutal governance, international isolation, a paralyzed economy, and the denial of basic human rights to the Afghan people – especially women and girls. The return in force of al Qaeda terrorists who would accompany the core Taliban leadership would cast Afghanistan under the shadow of perpetual violence.
As President, my greatest responsibility is to protect the American people. We are not in Afghanistan to control that country or to dictate its future. We are in Afghanistan to confront a common enemy that threatens the United States, our friends and allies, and the people of Afghanistan and Pakistan who have suffered the most at the hands of violent extremists.
So I want the American people to understand that we have a clear and focused goal: to disrupt, dismantle, and defeat al Qaeda in Pakistan and Afghanistan, and to prevent their return to either country in the future. That is the goal that must be achieved. That is a cause that could not be more just. And to the terrorists who oppose us, my message is the same: we will defeat you.
To achieve our goals, we need a stronger, smarter and comprehensive strategy. To focus on the greatest threat to our people, America must no longer deny resources to Afghanistan because of the war in Iraq. To enhance the military, governance, and economic capacity of Afghanistan and Pakistan, we have to marshal international support. And to defeat an enemy that heeds no borders or laws of war, we must recognize the fundamental connection between the future of Afghanistan and Pakistan – which is why I've appointed Ambassador Richard Holbrooke to serve as Special Representative for both countries, and to work closely with General David Petraeus to integrate our civilian and military efforts.
Let me start by addressing the way forward in Pakistan.
The United States has great respect for the Pakistani people. They have a rich history, and have struggled against long odds to sustain their democracy. The people of Pakistan want the same things that we want: an end to terror, access to basic services, the opportunity to live their dreams, and the security that can only come with the rule of law. The single greatest threat to that future comes from al Qaeda and their extremist allies, and that is why we must stand together.
The terrorists within Pakistan's borders are not simply enemies of America or Afghanistan – they are a grave and urgent danger to the people of Pakistan. Al Qaeda and other violent extremists have killed several thousand Pakistanis since 9/11. They have killed many Pakistani soldiers and police. They assassinated Benazir Bhutto. They have blown up buildings, derailed foreign investment, and threatened the stability of the state. Make no mistake: al Qaeda and its extremist allies are a cancer that risks killing Pakistan from within.
It is important for the American people to understand that Pakistan needs our help in going after al Qaeda. This is no simple task. The tribal regions are vast, rugged, and often ungoverned. That is why we must focus our military assistance on the tools, training and support that Pakistan needs to root out the terrorists. And after years of mixed results, we will not provide a blank check. Pakistan must demonstrate its commitment to rooting out al Qaeda and the violent extremists within its borders. And we will insist that action be taken – one way or another – when we have intelligence about high-level terrorist targets.
The government's ability to destroy these safe-havens is tied to its own strength and security. To help Pakistan weather the economic crisis, we must continue to work with the IMF, the World Bank and other international partners. To lessen tensions between two nuclear-armed nations that too often teeter on the edge of escalation and confrontation, we must pursue constructive diplomacy with both India and Pakistan. To avoid the mistakes of the past, we must make clear that our relationship with Pakistan is grounded in support for Pakistan's democratic institutions and the Pakistani people. And to demonstrate through deeds as well as words a commitment that is enduring, we must stand for lasting opportunity.
A campaign against extremism will not succeed with bullets or bombs alone. Al Qaeda offers the people of Pakistan nothing but destruction. We stand for something different. So today, I am calling upon Congress to pass a bipartisan bill co-sponsored by John Kerry and Richard Lugar that authorizes $1.5 billion in direct support to the Pakistani people every year over the next five years – resources that will build schools, roads, and hospitals, and strengthen Pakistan's democracy. I'm also calling on Congress to pass a bipartisan bill co-sponsored by Maria Cantwell, Chris Van Hollen and Peter Hoekstra that creates opportunity zones in the border region to develop the economy and bring hope to places plagued by violence. And we will ask our friends and allies to do their part – including at the donors conference in Tokyo next month.
I do not ask for this support lightly. These are challenging times, and resources are stretched. But the American people must understand that this is a down payment on our own future – because the security of our two countries is shared. Pakistan's government must be a stronger partner in destroying these safe-havens, and we must isolate al Qaeda from the Pakistani people.
These steps in Pakistan are also indispensable to our effort in Afghanistan, which will see no end to violence if insurgents move freely back and forth across the border.
Security demands a new sense of shared responsibility. That is why we will launch a standing, trilateral dialogue among the United States, Afghanistan and Pakistan. Our nations will meet regularly, with Secretary Clinton and Secretary Gates leading our effort. Together, we must enhance intelligence sharing and military cooperation along the border, while addressing issues of common concern like trade, energy, and economic development.
This is just one part of a comprehensive strategy to prevent Afghanistan from becoming the al Qaeda safe-haven that it was before 9/11. To succeed, we and our friends and allies must reverse the Taliban's gains, and promote a more capable and accountable Afghan government.
Our troops have fought bravely against a ruthless enemy. Our civilians have made great sacrifices. Our allies have borne a heavy burden. Afghans have suffered and sacrificed for their future. But for six years, Afghanistan has been denied the resources that it demands because of the war in Iraq. Now, we must make a commitment that can accomplish our goals.
I have already ordered the deployment of 17,000 troops that had been requested by General McKiernan for many months. These soldiers and Marines will take the fight to the Taliban in the south and east, and give us a greater capacity to partner with Afghan Security Forces and to go after insurgents along the border. This push will also help provide security in advance of the important presidential election in August.
At the same time, we will shift the emphasis of our mission to training and increasing the size of Afghan Security Forces, so that they can eventually take the lead in securing their country. That is how we will prepare Afghans to take responsibility for their security, and how we will ultimately be able to bring our troops home.
For three years, our commanders have been clear about the resources they need for training. Those resources have been denied because of the war in Iraq. Now, that will change. The additional troops that we deployed have already increased our training capacity. Later this spring we will deploy approximately 4,000 U.S. troops to train Afghan Security Forces. For the first time, this will fully resource our effort to train and support the Afghan Army and Police. Every American unit in Afghanistan will be partnered with an Afghan unit, and we will seek additional trainers from our NATO allies to ensure that every Afghan unit has a coalition partner. We will accelerate our efforts to build an Afghan Army of 134,000 and a police force of 82,000 so that we can meet these goals by 2011 – and increases in Afghan forces may very well be needed as our plans to turn over security responsibility to the Afghans go forward.
This push must be joined by a dramatic increase in our civilian effort. Afghanistan has an elected government, but it is undermined by corruption and has difficulty delivering basic services to its people. The economy is undercut by a booming narcotics trade that encourages criminality and funds the insurgency. The people of Afghanistan seek the promise of a better future. Yet once again, have seen the hope of a new day darkened by violence and uncertainty.
To advance security, opportunity, and justice – not just in Kabul, but from the bottom up in the provinces – we need agricultural specialists and educators; engineers and lawyers. That is how we can help the Afghan government serve its people, and develop an economy that isn't dominated by illicit drugs. That is why I am ordering a substantial increase in our civilians on the ground. And that is why we must seek civilian support from our partners and allies, from the United Nations and international aid organizations – an effort that Secretary Clinton will carry forward next week in the Hague.
At a time of economic crisis, it is tempting to believe that we can short-change this civilian effort. But make no mistake: our efforts will fail in Afghanistan and Pakistan if we don't invest in their future. That is why my budget includes indispensable investments in our State Department and foreign assistance programs. These investments relieve the burden on our troops. They contribute directly to security. They make the American people safer. And they save us an enormous amount of money in the long run – because it is far cheaper to train a policeman to secure their village or to help a farmer seed a crop, than it is to send our troops to fight tour after tour of duty with no transition to Afghan responsibility.
As we provide these resources, the days of unaccountable spending, no-bid contracts, and wasteful reconstruction must end. So my budget will increase funding for a strong Inspector General at both the State Department and USAID, and include robust funding for the Special Inspector General for Afghan Reconstruction.
And I want to be clear: we cannot turn a blind eye to the corruption that causes Afghans to lose faith in their own leaders. Instead, we will seek a new compact with the Afghan government that cracks down on corrupt behavior, and sets clear benchmarks for international assistance so that it is used to provide for the needs of the Afghan people.
In a country with extreme poverty that has been at war for decades, there will also be no peace without reconciliation among former enemies. I have no illusions that this will be easy. In Iraq, we had success in reaching out to former adversaries to isolate and target al Qaeda. We must pursue a similar process in Afghanistan, while understanding that it is a very different country.
There is an uncompromising core of the Taliban. They must be met with force, and they must be defeated. But there are also those who have taken up arms because of coercion, or simply for a price. These Afghans must have the option to choose a different course. That is why we will work with local leaders, the Afghan government, and international partners to have a reconciliation process in every province. As their ranks dwindle, an enemy that has nothing to offer the Afghan people but terror and repression must be further isolated. And we will continue to support the basic human rights of all Afghans – including women and girls.
Going forward, we will not blindly stay the course. Instead, we will set clear metrics to measure progress and hold ourselves accountable. We'll consistently assess our efforts to train Afghan Security Forces, and our progress in combating insurgents. We will measure the growth of Afghanistan's economy, and its illicit narcotics production. And we will review whether we are using the right tools and tactics to make progress towards accomplishing our goals.
None of the steps that I have outlined will be easy, and none should be taken by America alone. The world cannot afford the price that will come due if Afghanistan slides back into chaos or al Qaeda operates unchecked. We have a shared responsibility to act – not because we seek to project power for its own sake, but because our own peace and security depends upon it. And what's at stake now is not just our own security – it is the very idea that free nations can come together on behalf of our common security. That was the founding cause of NATO six decades ago. That must be our common purpose today.
My Administration is committed to strengthening international organizations and collective action, and that will be my message next week in Europe. As America does more, we will ask others to join us in doing their part. From our partners and NATO allies, we seek not simply troops, but rather clearly defined capabilities: supporting the Afghan elections, training Afghan Security Forces, and a greater civilian commitment to the Afghan people. For the United Nations, we seek greater progress for its mandate to coordinate international action and assistance, and to strengthen Afghan institutions.
And finally, together with the United Nations, we will forge a new Contact Group for Afghanistan and Pakistan that brings together all who should have a stake in the security of the region – our NATO allies and other partners, but also the Central Asian states, the Gulf nations and Iran; Russia, India and China. None of these nations benefit from a base for al Qaeda terrorists, and a region that descends into chaos. All have a stake in the promise of lasting peace and security and development.
That is true, above all, for the coalition that has fought together in Afghanistan, side by side with Afghans. The sacrifices have been enormous. Nearly 700 Americans have lost their lives. Troops from over twenty other countries have also paid the ultimate price. All Americans honor the service and cherish the friendship of those who have fought, and worked, and bled by our side. And all Americans are awed by the service of our own men and women in uniform, who have borne a burden as great as any other generation's. They and their families embody the example of selfless sacrifice.
The United States of America did not choose to fight a war in Afghanistan. Nearly 3,000 of our people were killed on September 11, 2001, for doing nothing more than going about their daily lives. Al Qaeda and its allies have since killed thousands of people in many countries. Most of the blood on their hands is the blood of Muslims, who al Qaeda has killed and maimed in far greater numbers than any other people. That is the future that al Qaeda is offering to the people of Pakistan and Afghanistan – a future without opportunity or hope; a future without justice or peace.
The road ahead will be long. There will be difficult days. But we will seek lasting partnerships with Afghanistan and Pakistan that serve the promise of a new day for their people. And we will use all elements of our national power to defeat al Qaeda, and to defend America, our allies, and all who seek a better future. Because the United States of America stands for peace and security, justice and opportunity. That is who we are, and that is what history calls on us to do once more.
Thank you, God Bless You, and God Bless the United States of America.



 
 
-----------------------------------------------------------
N A D E E M   M A L I K
Director Programme
AAJ TV
ISLAMABAD
00-92-321-5117511

nadeem.malik@hotmail.com 




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NADEEM MALIK LIVE

NADEEM MALIK LIVE

Nadeem Malik Live is the flagship current affairs programme of Pakistan. The programme gives independent news analysis of the key events shaping future of Pakistan. A fast paced, well rounded programme covers almost every aspect, which should be a core element of a current affairs programme. Discussion with the most influential personalities in the federal capital and other leading lights of the country provides something to audience to help them come out with their own hard hitting opinions.

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