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World Economic Forum 2015: Global Governance In a World of Resistance
By: Andrew Gavin Marshall
26 January 2015
This article and its accompanying infographic have been jointly published by the Transnational Institute and Occupy.com.
The annual meetings of the World Economic Forum (WEF) in Davos, Switzerland, bring together thousands of the world’s top corporate executives, bankers and financiers with leading heads of state, finance and trade ministers, central bankers and policymakers from dozens of the world’s largest economies; the heads of all major international organizations including the IMF, World Bank, World Trade Organization, Bank for International Settlements, UN, OECD and others, as well as hundreds of academics, economists, political scientists, journalists, cultural elites and occasional celebrities.
The WEF states that it is “committed to improving the state of the world through public-private cooperation,” collaborating with corporate, political, academic and other influential groups and sectors “to shape global, regional and industry agendas” and to “define challenges, solutions and actions.” Apart from the annual forum meeting in Davos, the WEF hosts regional and sometimes even country-specific meetings multiple times a year in Asia, Latin America, Africa and elsewhere. The Forum is host to dozens of different projects bringing together academics with corporate representatives and policy-makers to promote particular issues and positions on a wide array of subjects, from investment to the environment, employment, technology and inequality. From these projects and others, the Forum publishes dozens of reports annually, identifying key issues of importance, risks, opportunities, investments and reforms.
The WEF has survived by adapting to the times. Following the surge of so-called anti-globalization protests in 1999, the Forum began to invite non-governmental organizations representing constituencies that were more frequently found in the streets protesting against meetings of the WTO, IMF and Group of Seven. In the 2000 meeting at Davos, the Forum invited leaders from 15 NGOs to debate the heads of the WTO and the President of Mexico on the subject of globalization. The participation of NGOs and non-profit organizations has increased over time, and not without reason. According to a poll conducted on behalf of the WEF just prior to the 2011 meeting, while global trust in bankers, governments and business was significantly low, NGOs had the highest rate of trust among the public.
In an interview with the Wall Street Journal last September, the founder and executive chairman of the WEF, Klaus Schwab, was asked about the prospects of “youth frustration over high levels of underemployment and unemployment” as expressed in the Arab Spring and Occupy Wall Street movements, noting that the Forum was frequently criticized for promoting policies and ideologies that contribute to those very problems. Schwab replied that the Forum tries “to have everybody in the boat.” Davos, he explained, “is about heads of state and big corporations, but it’s also civil society – so all of the heads of the major NGOs are at the table in Davos.” In reaction to the Occupy Wall Street movement, Schwab said, “We also try… to put more emphasis on integrating the youth into what we are doing.”
So, what exactly has the World Economic Forum been doing, and how did it emerge in the first place?
It began in 1971 as the European Management Forum, inviting roughly 400 of Europe’s top CEOs to promote American forms of business management. Created by Schwab, a Swiss national who studied in the U.S. and who still heads the event today, the Forum changed its name in 1987 to the World Economic Forum after growing into an annual get together of global elites who promoted and profited off of the expansion of “global markets.” It is the gathering place for the titans of corporate and financial power.
Despite the globalizing economy, politics at the Forum have remained surprisingly national. The annual meetings are a means to promote social connections between key global power players and national leaders along with the plutocratic class of corporate and financial oligarchs. The WEF has been a consistent forum for advanced “networking” and deal-making between companies, occasional geopolitical announcements and agreements, and for the promotion of “global governance” in a world governed of global markets.
Writing in the Financial Times, Gideon Rachman noted that more than anything else, “the true significance of the World Economic Forum lies in the realm of ideas and ideology,” noting that it was where the world’s leaders gathered “to set aside their differences and to speak a common language… they restate their commitment to a single, global economy and to the capitalist values that underpin it.” This reflected the “globalization consensus” which was embraced not simply by the powerful Group of Seven nations, but by many of the prominent emerging markets such as China, Russia, India and Brazil.
Indeed, the World Economic Forum’s main purpose is to function as a socializing institution for the emerging global elite, globalization’s “Mafiocracy” of bankers, industrialists, oligarchs, technocrats and politicians. They promote common ideas, and serve common interests: their own.
Geopolitics, Global Governance and the Arrival of the “Davos Class”
The World Economic Forum has been shaped by – and has in turn, shaped – the course and changes in geopolitics, or “world order,” over the past several decades. Created amidst the rise of West Germany and Japan as prominent economic powers competing with the United States, the oil shocks of the 1970s also produced immense new powers for the Arab oil dictatorships and the large global banks that recycled that oil money, loaning it to Third World countries.
New forums for “global governance” began to emerge, such as the meetings of the Group of Seven: the heads of state, finance ministers and central bank governors of the seven leading industrial powers including the U.S., West Germany, Japan, U.K., France, Italy and Canada, starting in 1975. When the debt crisis of the 1980s hit, the International Monetary Fund and the World Bank achieved immense new powers over entire economies and regions, reshaping the structure of societies to promote “market economies” and advance the interests of domestic and international corporate and financial oligarchs.
Between 1989 and 1991, the global power structure changed dramatically with the fall of the Berlin Wall and the collapse of the Soviet Union. With that came President George H.W. Bush’s announcement of a “New World Order” in which America claimed “victory” in the Cold War, and a unipolar world took shape under the hegemony of the United States. The ideological war between the West and the Soviet Union was declared victorious in favor of Western Capitalist Democracy. The “market system” was to become globalized as never before, especially under the presidency of Bill Clinton who led the U.S. during its largest ever economic expansion between 1993 and 2001.
During this time, the annual meetings of the World Economic Forum became more important than ever, and the role of the WEF in establishing a “Davos Class” became widely acknowledged. At the 1990 meeting, the focus was on Eastern Europe and the Soviet Union’s transition to “market-oriented economies.” Political leaders from Eastern Europe and Western Europe met in private meetings, with West German Chancellor Helmut Kohl articulating his desire to reunify Germany and cement Germany’s growing power within the European Community and NATO.
Helmut Kohl laid out his strategy for shaping the “security and economic structure of Europe” within a unified Germany. Kohl’s “grand design” for Europe envisioned a unified Germany as being “firmly anchored” in the expanding European Community, the main objective of which was to establish an “internal market” by 1992 and to advance toward an economic and monetary union, with potential to expand eastward. Kohl presented this as a peaceful way for German power to grow while assuaging fears of Eastern Europeans and others about the economically resurgent country at the heart of Europe.
At the 1992 WEF meeting, the United States and reunified Germany encouraged “drastic steps to insure a liberalization of world trade,” and furthered efforts to support the growth of market economies in Eastern Europe. The German Economics Minister called for the Group of Seven to meet and restart global trade talks through the 105-nation General Agreement on Tariffs and Trade (GATT). At that same meeting, the Chinese delegation included Prime Minister Li Peng, who was the highest-level Chinese official to travel internationally since the 1989 Tiananmen Square crackdown.
Of great significance also was the attendance of Nelson Mandela, the new president of South Africa. When Mandela was released from prison in 1990, he declared the policy of the African National Congress (ANC) was to implement “the nationalization of the mines, banks and monopoly industries.” When Mandela attended the January 1992 meeting of the WEF just after becoming president, he changed his views and embraced “capitalism and globalization.” Mandela attended the meeting alongside the governor of the central bank of South Africa, Tito Mboweni, who explained that Mandela arrived with a speech written by ANC officials focusing on nationalization. As the week’s meetings continued, Mandela met with leaders from Communist Parties in China and Vietnam, who told him, “We are currently striving to privatize state enterprises and invite private enterprise into our economies. We are Communist Party governments, and you are a leader of a national liberation movement. Why are you talking about nationalization?”
As a result, Mandela changed his views, telling the Davos crowd that he would open South Africa up as a market economy and encourage investment. South Africa subsequently became the continent’s fastest growing economy, though inequality today is greater than it was during apartheid. As Mandela explained to his official biographer, he came home from the 1992 WEF meeting and told other top officials that they had to choose: “We either keep nationalization and get no investment, or we modify our own attitude and get investment.”
At the 1993 meeting, the main consensus that had emerged called for the U.S. to maintain its position as a global economic and military power, and for it to take the lead encouraging greater “co-operation” between powerful nations. The major fear among Davos participants was that while economies were becoming globalized, politics was turning inward and becoming “renationalized.”
Later that year, Anthony Lake, Bill Clinton’s National Security Adviser, articulated the “Clinton Doctrine” for the world, explaining: “The successor to a doctrine of containment must be a strategy of enlargement – enlargement of the world’s free community of market democracies.” Lake explained that the United States “must combine our broad goals of fostering democracy and markets with our more traditional geostrategic interests.” No doubt, the Davos crowd welcomed such news.
At the 1994 meeting, the director-general of GATT, Peter D. Sutherland, declared that world leaders needed to establish “a new high-level forum for international economic co-operation,” moving beyond the Group of Seven to become more inclusive of the major “emerging market” economies. Sutherland told the assembled plutocrats that “we cannot continue with the majority of the world’s people excluded from participation in global economic management.” Eventually, the organization Sutherland described was formed, as the Group of 20, bringing the leading 20 industrial and economic powers together in one setting. Formed in 1999, the G20 didn’t become a major forum for global governance until the 2008 financial crisis.
In 1995, the Financial Times noted that the new “buzzword” for international policymakers was “global governance,” articulating a desire and strategy for updating and expanding the institutions and efforts of international co-operation. The January 1995 World Economic Forum meeting was the venue for the presentation of an official UN report on global governance. President Clinton addressed the Davos crowd by satellite, stressing that he would continue to push for the construction of a new “economic architecture,” notably at meetings of the Group of Seven.
In 1997, the highly influential U.S. political scientist Samuel Huntington coined the term “Davos Man,” which he described as a group of elite individuals who “have little need for national loyalty, view national boundaries as obstacles that are thankfully vanishing, and see national governments as residues from the past whose only useful function is to facilitate the elite’s global operations.” An article that year in The Economist came to the defense of the “Davos Man,” declaring that he was replacing traditional diplomacy which was “more likely to bring peoples together than to force them apart,” noting that the WEF was “paid for by companies and run in their interests.”
Samuel Huntington presented a thesis, summarized in a 1997 Financial Times article, that outlined a world that “would be divided into spheres of influence,” within which “one or two core states would rule the roost.” Huntington noted that the “Davos culture people,” while extremely powerful, were only a tiny fraction of the world’s population, and the leaders of this faction “do not necessarily have a secure grip on power in their own societies.” The Financial Times, however, noted that while the “Davos culture people” did not constitute a “universal civilization” being such a tiny minority of the world’s population, “they could be the vanguard of one.”
Russian Oligarchs and the Rise of China
In fact, at the previous year’s meeting in Davos, the World Economic Forum functioned precisely as the vanguard for seven Russian oligarchs to take control of Russia and shape its future. At the 1996 meeting of the WEF, the Russian delegation was made up largely of the country’s new oligarchs who had amassed great fortunes in the transition to a market economy. Their great worry was that Russian President Boris Yeltsin would lose his re-election later that year to the resurgence of the Communists. At the WEF meeting, seven Russian oligarchs, led by Boris Berezovsky, formed an alliance during private meetings, where they decided to fund Yeltsin’s re-election and work together to “reshape their country’s future.” This alliance (or cartel, as some may refer to it), was the key to Yeltsin’s re-election victory later that year, as they held weekly meetings with Yeltsin’s chief of staff, Anatoly Chubais, the architect of Russia’s privatization program that made them all so rich.
Berezovsky explained that if the oligarchs did not work together to promote common ends, it would be impossible to have a transition to a market economy “automatically.” Instead, he explained, “We need to use all our power to realize this transformation.” As the Financial Times noted, the oligarchs “assembled a remarkable political machine to entrench and promote the market economy – as well as their own financial interests,” as the seven men collectively controlled roughly half the entire Russian economy.
Anatoly Chubais commented on this development and the role of the oligarchs, saying: “They steal and steal and steal. They are stealing absolutely everything and it is impossible to stop them… But let them steal and take their property. They will then become owners and decent administrators of this property.”
In the 1990s, with the spread of global markets came the spread of major financial crises: in Mexico, across Africa, East Asia, Russia and then back to Latin America. At the WEF meeting in 1999, the key issue was “reform of the international financial system.” As the economic crises spread, the Group of Seven nations, and the Davos Class, told the countries in crisis that in order “to restore confidence [of the markets], they should adopt politically unpopular policies of radical structural reform,” promoting further liberalization and deregulation of markets to open themselves up to Western corporate and financial interests and ‘investment.’
The major emerging markets have been frequent participants in annual Davos meetings, providing a forum in which national elites may become acquainted with the global ruling class, with whom they then cooperate and do business. China has been a major feature at Davos meetings. China started sending more high-level delegations to the WEF in the mid-1980s. During the 2009 meeting, two prominent speakers were President Putin of Russia and the Chinese Prime Minister Wen Jiabao. Both leaders painted a picture of the crisis as emanating from the centers of finance and globalization in the United States and elsewhere, with the “blind pursuit of profit” and “the failure of financial supervision” – in Wen’s words – and bringing about what Putin described as a “perfect storm.” Both Wen and Putin, however, declared their intentions to work with the major industrial powers “on solving common economic problems.”
In 2010, China’s presence at Davos was a significant one. Prime Minister Wen Jiabao, who attended the previous year, was not to return. In his stead, his chosen successor, Li Keqiang, attended. China’s economy was performing better than expected as its government was coming under increases pressure from major global corporations.
Kristin Forbes, a former member of the White House Council of Economic Advisers and an attendee at Davos, commented, “China is the West’s greatest hope and greatest fear… No one was quite ready for how fast China has emerged… Now everyone is trying to understand what sort of China they will be dealing with.” China sent its largest delegation to date to the World Economic Forum, with a total of 54 executives and government officials, many of whom were intending to “go shopping” for clients among the world’s elite.
Li Keqiang, the future Chinese prime minister, told the Davos audience that China was going to shift from its previous focus on exports and turn to “boosting domestic demand,” which would “not only drive growth in China but also provide greater markets for the world.” Li explained that China would “allow the market to play a primary role in the allocation of resources.”
In 2011, The New York Times declared that the World Economic Forum represented “the emergence of an international economic elite” that took place at the same time as unprecedented increases in inequality between the rich and poor, particularly in the powerful countries but also in the fast-emerging economies. Chrystia Freeland wrote that “the rise of government-connected plutocrats is not just a phenomenon in places like Russia, India and China,” but that the major Western bailouts reflected what the former chief economist at the IMF, Simon Johnson, referred to as a “quiet coup” by bankers in the United States and elsewhere.
Davos and the Financial Oligarchy
The power of global finance – and in particular, banks and oligarchs – has grown with each successive financial crisis. As the financial crisis tore through the world in 2008, the January 2009 meeting of the World Economic Forum featured less of the Wall Street titans and more top politicians. Schwab declared, “The pendulum has swung and power has moved back to governments,” adding that “this is the biggest economic crisis since Davos began.” Goldman Sachs, which in past years was “renowned for hosting one of the hottest parties at the World Economic Forum’s glittering annual meeting in Davos,” had cancelled its 2009 party. Nonetheless, Jamie Dimon, CEO of JPMorgan Chase, decided to continue with his plans to host a Davos party.
In 2010, thousands of delegates assembled to discuss the “important’ issues of the day. And despite the reputation of banks and bankers being at all-time lows, top executives of the world’s largest financial institutions showed up in full force. The week before the meeting, President Obama called for the establishment of laws to deal with the “too big to fail” banks, and European leaders were responding to the anger of their domestic populations for having to pay for the massive bailouts of financial institutions during the financial crisis.
Britain and France were discussing the prospect of taxing banker bonuses, and Mervyn King, governor of the Bank of England, suggested the possibility of breaking up the big banks. Several panels at the WEF meeting were devoted to discussing the financial system and its possible regulation, as bankers like Josef Ackermann of Deutsche Bank suggested that they would agree to limited regulations (at least on “capital requirements”).
More important, however, were plans for a series of private meetings of government representatives and bank chiefs, who would meet separately, and then together, in Davos. Roughly 235 bankers were to attend the summit – a 23% increase from the previous year. Global bankers and other corporate leaders were worried, and warned the major governments in attendance against the financial repercussions of pursuing “a populist crackdown” against banks and financial markets. French President Nicolas Sarkozy spoke to the Forum’s guests about a need for a “revolution” in global financial regulation, and for “reform of the international monetary system.”
The heads of roughly 30 of the world’s largest banks held a private meeting at Davos “to plot how to reassert their influence with regulators and governments,” noted a report on Bloomberg. The “private meeting” was a precursor to a later meeting at Davos involving top policymakers and regulators. Brian Moynihan, CEO of Bank of America, said of the assembled bankers, “We’re trying to figure out ways that we can be more engaged.” According to Moynihan, a good deal of the closed-door discussion “was about tactics, such as who the executives should approach and when.” The CEO of UBS, a major Swiss bank, commented that “it was a positive meeting, we’re in consensus.” The bankers said they were aware that some new rules were inevitable, but they wanted to encourage regulators and countries to coordinate the rules through the Group of 20, revived in 2009 as the premier forum for international cooperation and “global governance.”
Josef Ackermann, CEO of Deutsche Bank, suggested that “we should stop the bank bashing,” and affirmed that banks had a “noble role” to play in managing the economic recovery. Christine Lagarde, France’s Finance Minister and current Managing Director of the IMF, encouraged a “dialogue” between governments and banks, saying, “That’s the only way we’re going to get out of it.” Later that week, the bankers met “behind closed doors with finance ministers, central bankers and regulators from major economies.”
The key message from finance ministers, regulators and central bankers was a political one: “They [the banks] should accept more stringent regulation, or face more draconian curbs from politicians responding to an angry public.” Guillermo Ortiz, who had just left his post as governor of the central bank of Mexico, said, “I think banks have misjudged the deep feelings of the public regarding the devastating effects of the crisis.” French President Sarkozy stated that “there is indecent behavior that will no longer be tolerated by public opinion in any country of the world,” and that bankers giving themselves excessive bonuses as they were “destroying jobs and wealth” was “morally indefensible.”
As the 2011 Davos meeting began, Edelman, a major communications consultancy, released a report that revealed a poll conducted among 5,000 wealthy and educated individuals in 23 countries, considered to be “well-informed.” The results of the poll showed there to be a massive decline in trust for major institutions, with banks taking the biggest hit. Prior to the financial crisis in 2007, 71% of those polled expressed trust in banks compared with a new low of 25 percent in 2011.
Despite the lack of public trust in banks and financial institutions, Davos remains devoted to protecting and expanding the interests of the financial elite. In fact, the Foundation Board of the World Economic Forum (its top governing body) includes many representatives of the world of finance and global financial governance. Among them are Mukesh Ambani, who sits on advisory boards to Citigroup, Bank of America and the National Bank of Kuwait; and Herman Gref, the CEO of Sberbank, a large Russian bank. Ernesto Zedillo, the former President of Mexico who is also a member of the board, currently serves as a director on the boards of Rolls Royce and JPMorgan Chase, international advisory boards to BP and Credit Suisse, an adviser to the Bill & Melinda Gates Foundation, and is a member of the Group of Thirty and the Trilateral Commission as well as sitting on the board of one of the world’s most influential economic think tanks, the Peterson Institute for International Economics.
Also notable, Mark Carney, the governor of the Bank of England, is a member of the Foundation Board of the World Economic Forum. Carney started his career working for Goldman Sachs for 13 years, after which he was appointed as Deputy Governor of the Bank of Canada. After a subsequent stint in Canada’s Ministry of Finance, Carney returned to the Bank of Canada as governor from 2008 to 2013, when he became the first non-Briton to be appointed as head of the Bank of England in its 330-year history. From 2011 to present, Carney has also been the Chairman of the Financial Stability Board, run out of the Bank for International Settlements in Basel, Switzerland.
Apart from heading the FSB, Mark Carney is also a board member of the BIS, which serves as the central bank for the world’s major central banks. He is also a member of the Group of Thirty, a private and highly influential think tank and lobby group that brings together dozens of the most influential economists, central bankers, commercial bankers and finance ministers. Carney has also been a regular attendee at annual meetings of the Bilderberg Group, an even more-exclusive “invite only” global conference than the WEF.
Though there are few women among the WEF’s membership – let alone its leadership – Christine Lagarde has made the list, while simultaneously serving as the managing director of the IMF. She previously served as the French finance minister throughout the course of the financial crisis. Lagarde also attends occasional Bilderberg meetings, and is one of the most powerful technocrats in the world. Min Zhu, the deputy managing director of the IMF, also sits on the WEF’s board.
Further, the World Economic Forum has another governing body, the International Business Council, first established in 2002 and composed of 100 “highly respected and influential chief executives from all industries,” which “acts as an advisory body providing intellectual stewardship to the World Economic Forum and makes active contributions to the Annual Meeting agenda.”
The membership of the WEF is divided into three categories: Regional Partners, Industry Partner Groups, and the most esteemed, the Strategic Partners. Membership fees paid by corporations and industry groups finance the Forum and its activities and provide the member company with extra access to meet delegates, hold private meetings and set the agenda. In 2015, the cost of an annual Strategic Partner status with the WEF had increased to nearly $700,000. Among the WEF’s current strategic partners are Bank of America, Barclays, BlackRock, BP, Chevron, Citi, Coca-Cola, Credit Suisse, Deutsche Bank, Dow Chemical, Facebook, GE, Goldman Sachs, Google, HSBC, JPMorgan Chase, Morgan Stanley, PepsiCo, Siemens, Total, and UBS, among others.
Depending on its finances from these sources, as well as being governed by individuals from these and others institutions, it is no surprise that Davos promotes the interests of financial and corporate power above all else. This is further evident on matters related to trade.
Davos and “Trade”
Trade has been another consistent, major issue at Davos meetings – which is to say, the promotion of powerful corporate and financial interests has been central to the functions of the WEF. As the Wall Street Journal noted, “it is pretty much a tradition that trade ministers meet at Davos with an informal meeting.” At the 2013 meeting, U.S. Trade Representative Ron Kirk explained at Davos that the Obama administration was “committed to reaching an agreement to smooth trade with the European Union,” saying in an interview that “we greatly value the trans-Atlantic relationship.” The week’s meetings suggested that there “were signs of progress toward a trade accord.” Thomas J. Donohue, the president of the U.S. Chamber of Commerce, who was present at Davos, commented that “half a dozen senior leaders in Europe are ready to move forward.”
In fact, at the previous Davos meeting in January 2012, high level U.S. and EU officials met behind closed doors with the Transatlantic Business Dialogue (TABD), a major corporate grouping that promotes a U.S.-E.U. “free trade” agreement. The TABD was represented at the meeting by 21 top corporate executives, and was attended by U.S. Trade Representative Kirk, WTO Director-General Pascal Lamy, the European Commissioner for Trade, Karel De Gucht, other top technocrats, and Obama’s Deputy National Security Adviser for International Economic Affairs, Michael Froman (who is now the U.S. Trade Representative). The result of the meeting was the release of a report on a “Vision for the Future of EU-US Economic Relations,” which called “to press for urgent action on a visionary and ambitious agenda.” The meeting also recommended the establishment of a “CEO Task Force” to work directly with the “High Level Working Group” of trade ministers and technocrats to chart a way forward.
Just prior to the 2013 meeting in Davos, the TABD corporate group merged with another corporate network to form the Transatlantic Business Council (TBC), a group of top CEOs and chairmen of major corporations, representing roughly 70 major corporations. The purpose of the TBC was to hold “semi-annual meetings with U.S. Cabinet Secretaries and European Commissioners (in Davos and elsewhere).” At the Davos 2013 meeting, the TBC met behind closed doors with high level officials from the U.S. and EU. Michael Froman, who would replace Ron Kirk as the U.S. Trade Rep, spoke at the meeting, declaring that “the transatlantic economy is to become the global benchmark for standards in a globalized world.”
The following month, the U.S. and EU “High Level Working Group” released its final report in which it recommended “a comprehensive trade and investment agreement” between the two regions. Two days after the publication of this report, President Obama issued a joint statement with European Council President Herman Van Rompuy and European Commission President José Manuel Barroso, in which they announced that “the United States and the European Union will each initiate the internal procedures necessary to launch negotiations on a Transatlantic Trade and Investment Partnership,” or TTIP. At the announcement, Kirk declared the sectors that will fall under the proposed agreement, stating that, “for us, everything is on the table, across all sectors, including the agricultural sector.”
The World Economic Forum in a World of Unrest
Perhaps most interestingly, the World Economic Forum has been consistently interested in the prospects of social unrest, protests and resistance movements, particularly those that directly confront the interests of corporate and financial power. This became particularly true following the mass protests in 1999 against the World Trade Organization, which disrupted the major trade talks taking place in Seattle and marked the ascendency of what Davos called the “anti-globalization movement.”
These issues were foremost on the minds of the Davos Class as they met less than two months later in Switzerland for the annual WEF meeting in 2000. The New York Times noted that as President Clinton attempted to address the issue of restoring “confidence in trade and globalization” at the WEF, global leaders – particularly those assembled at Davos – were increasingly aware of the new reality that “popular impressions of globalization seem to have shifted” with growing numbers of people, including the protesters in Seattle, voicing criticism of the growing inequality between rich and poor, environmental degradation and financial instability. The head of the WTO declared that “globalism is the new ‘ism’ that everyone loves to hate… There is nothing that our critics will not blame on globalization and, yes, it is hurting us.”
The guests included President Clinton, British Prime Minister Tony Blair and Mexican President Ernesto Zedillo, along with the leaders of South Africa, Indonesia, Malaysia and Finland, among others. The head of the WTO and many of the world’s trade ministers were also set to attend, hoping to try to re-start negotiations, though protesters were also declaring their intention to disrupt the Forum’s meeting. With these worries in mind, the Swiss Army was deployed to protect the 2,000 members of the Davos Class from being confronted by protesters.
As the World Economic Forum met again in January of 2001 in Davos, “unprecedented security measures” were taken to prevent “hooligans” from disrupting the meeting. On the other side of the world, in Porto Alegre, Brazil, roughly 10,000 activists were expected to converge for the newly-formed World Social Forum, a counter-forum to Davos that represented the interests of activist groups and the Third World. As the Davos Class met quietly behind closed doors, comforted by the concrete blocks and razor wire that surrounded the small town, police on the other side of the fence beat back protesters.
In the wake of the financial crisis, the WEF meeting in 2009 drew hundreds of protesters to Davos and Geneva where they were met by riot police using tear gas and water cannons. Inside the Forum meeting, French Finance Minister Christine Lagarde warned the assembled leaders, “We’re facing two major risks: one is social unrest and the second is protectionism.” She noted that the task before the Davos Class was “to restore confidence in the systems and confidence at large.” Protesters assembled outside held signs reading, “You are the Crisis.”
The January 2012 WEF meeting took place following a year of tumultuous and violent upheavals across the Arab world, large anti-austerity movements across much of Europe, notably with the Indignados in Spain, and the Occupy Wall Street movement just months prior in the United States and across much of the world. As the meeting approached, the WEF announced in a report that the top two risks facing business leaders and policy makers were “severe income disparity and chronic fiscal imbalances.” The report warned that if these issues were not addressed it could result in a “dystopian future for much of humanity.” The Occupy Movement had taken the issue of inequality directly to Davos, and there was even a small Occupy protest camp constructed at Davos.
As the Financial Times noted, “Until this year  the issue of inequality never appeared on the risk list at all, let alone topped it.” At the heart of it was “the question of social stability,” with many Davos attendees wondering “where else unrest might appear.” Beth Brooke, the global vice chair of Ernst & Young, noted that “countries which have disappearing middle classes face risks – history shows that.”
With citizens taking to city streets and protesting in public squares from Cairo to Athens and New York, the Financial Times noted that discontent was “rampant,” and that “the only consistent messages seem to be that leaders around the world are failing to deliver on their citizens’ expectations and that Facebook and Twitter allows crowds to coalesce in an instant to let them know it.” For the 40 government leaders assembling in Davos, “this is not a comforting picture.”
In Europe, democratically elected leaders in Italy and Greece had been removed and replaced with economists and central bankers in a technocratic coup only months earlier, largely at the behest of Germany. Mario Draghi, the head of the European Central Bank (ECB), was perhaps “the most powerful leader in Europe,” though an Occupy movement had sprung up at the headquarters of the ECB in Frankfurt as well.
During the Forum, Occupy protesters outside clashed with police. Stephen Roach, a member of the faculty at Yale University and a chairman of Morgan Stanley Asia, wrote an article in the Financial Times describing his experiences as a panelist at the “Open Forum,” held on the last day of the Davos gathering, in which citizens from the local community could participate along with students and Occupy protesters. The topic he discussed was “remodeling capitalism,” which, Roach wrote, “was a chance to open up this debate to the seething masses.” But the results were “disturbing” as “chaos erupted immediately” with chants from Occupy protesters denouncing the forum and calling for more to join them. Roach wrote that it was “unruly and unsettling” and he “started thinking more about an escape route than opening comments.”
Once the discussions began, Roach found himself listening to the first panelist, a 24-year-old Occupy protester named Maria who expressed anger at “the system” and that there was a “need to construct a new one based on equality, dignity and respect.” Other panelists from the WEF included Ed Miliband from the U.K., a UN Commissioner, a Czech academic and a minister from the Jordanian dictatorship. Roach noted that compared to Maria from Occupy, “the rest of us on the panel spoke a different language.”
Having spent decades as a banker on Wall Street, Roach confessed that “it as unsettling to engage a hostile crowd whose main complaint is rooted in Occupy Wall Street,” explaining that he attempted to focus on his expertise as an economist, “speaking over hisses.” He explained that all of his “expert” insights on economics “hardly moved this crowd.” Maria from Occupy, Roach wrote, got the last word as she stated, “The aim of Occupy is to think for yourself. We don’t focus on solutions. We want to change the process of finding solutions.” As “the crowd roared its approval,” Roach “made a hasty exit through a secret door in the kitchen and out into the night.” Davos, he wrote, “will never again be the same for me. There can be no retreat in the battle for big ideas.”
In October of 2013, The Economist reported that “from anti-austerity movements to middle-class revolts, in rich countries and in poor, social unrest has been on the rise around the world.” A World Economic Forum report from November 2013 warned of the dangers of a “lost generation” that would “be more prone to populist politics,” and that “we will see an escalation in social unrest.” Over the course of 2013, major financial institutions such as JPMorgan Chase, UBS, HSBC, AXA and others were issuing reports warning of the dangers of social unrest and rebellion. JPMorgan Chase, in its May 2013 report, stated that Europe’s “adjustment” to its new economic order was only “halfway done on average,” warning of major challenges ahead. The report complained about laws hindering the advancement of its agenda, such as “constitutional protection of labor rights… and the right to protest if unwelcome changes are made to the political status quo.”
The 2014 meeting of the World Economic Forum drew more than 40 heads of state, including then-president of Ukraine, Viktor Yanukovich, as well as Mexico’s Enrique Pena Nieto, Japanese Prime Minister Shinzo Abe, British Prime Minister David Cameron, Brazilian Presient Dilma Rousseff, Iranian President Hassan Rouhani, Israeli Prime Minister Benjamin Netanyahu and Nigeria’s Goodluck Jonathan. U.S. Treasury Secretary Jacob Lew and prominent central bankers such as Mario Draghi and Mark Carney also attended alongside IMF Managing Director Christine Lagarde and World Bank president Jim Yong Kim.
As the meeting began, a major report by the World Economic Forum was published, declaring that the “single biggest risk to the world in 2014” was the widening “gap between rich and poor.” Thus, income inequality and “social unrest are the issue[s] most likely to have a big impact on the world economy in the next decade.” The report warned that the world was witnessing the “lost generation” of youth around the world who lack jobs and opportunities, which “could easily boil over into social upheaval,” citing recent examples in Brazil and Thailand.
Brazilian President Dilma Rousseff is due to attend the annual Davos meeting this week. But just prior to that meeting, violent protests erupted in the streets of Brazil in opposition to austerity measures imposed by President Rousseff, recalling “the beginnings of the mass street demonstrations that rocked Brazil in June 2013.” One wonders whether Rousseff will be attending next year’s meeting of the WEF, or whether she will still even be president.
Indeed, the growth and power of the Davos Class has grown with – and spurred – the development of global unrest, protests, resistance movements and revolution. As Davos welcomes the global plutocrats to 2015, no doubt they’ll be reminded of the repercussions of the “market system” as populations around the world remind their leaders of the power of people.
The West Marches East, Part 1: The U.S.-NATO Strategy to Isolate Russia
By: Andrew Gavin Marshall
17 April 2014
Originally posted at The Hampton Institute
In early March of 2014, following Russia’s invasion of Crimea in Ukraine, the New York Times editorial board declared that Russian President Vladimir Putin had “stepped far outside the bounds of civilized behavior,” suggesting that Russia should be isolated politically and economically in the face of “continued aggression.”
John Kerry, the U.S. Secretary of State, lashed out at Russia’s ” incredible act of aggression,” stating that: “You just don’t in the 21st century behave in 19th century fashion by invading another country on [a] completely trumped up pre-text.” Indeed, invading foreign nations on “trumped up pre-texts” is something only the United States and its allies are allowed to do, not Russia! What audacity!
Even Canada’s Prime Minister, Stephen Harper, proclaimed Russia’s actions in Ukraine to be “aggressive, militaristic and imperialistic ,” threatening “the peace and stability of the world.” This is, of course, despite the fact that Russia’s invasion and occupation of Crimea took place without a single shot fired, and “faced no real opposition and has been greeted with joy by many citizens in the only region of Ukraine with a clear majority of ethnic Russians.”
Indeed, Russia can only be said to be an “aggressive” and “imperial” power so long as one accepts the unrelenting hypocrisy of U.S. and Western leaders. After all, it was not Russia that invaded and occupied Afghanistan and Iraq, killing millions. It is not Putin, but rather Barack Obama, who has waged a “global terror campaign,” compiling “kill lists” and using flying killer robots to bomb countries like Afghanistan, Pakistan, Iraq, Yemen, Libya, Somalia, and even the Philippines, killing thousands of people around the world. It is not Putin, but rather, Barack Obama, who has been sending highly-trained killers into over 100 countries around the world at any given time, waging a “secret war” in most of the world’s nations. It was not Russia, but rather the United States, that has supported the creation of “death squads” in Iraq, contributing to the mass violence, civil war and genocide that resulted; or that has been destabilizing Pakistan, a nuclear-armed nation, increasing the possibility of nuclear war.
All of these actions are considered to be a part of America’s strategy to secure ‘stability,’ to promote ‘peace’ and ‘democracy.’ It’s Russia that threatens “the peace and stability of the world,” not America or its NATO and Western allies. That is, of course, if you believe the verbal excretions from Western political leaders. The reality is that the West, with the United States as the uncontested global superpower, engages the rest of the world on the basis of ‘Mafia Principles’ of international relations: the United States is the global ‘Godfather’ of the Mafia crime family of Western industrial nations (the NATO powers). Countries like Russia and China are reasonably-sized crime families in their own right, but largely dependent upon the Godfather, with whom they both cooperate and compete for influence.
When the Mafia – and the Godfather – are disobeyed, whether by small nations (such as Iraq, Syria, Libya, et. al.), or by larger gangster states like China or Russia, the Godfather will seek to punish them. Disobedience cannot be tolerated. If a small country can defy the Godfather, then any country can. If a larger gangster state like Russia can defy the Godfather and get away with it, they might continue to challenge the authority of the Godfather.
For the U.S. and its NATO-capo Mafia allies, Ukraine and Russia have presented a complex challenge: how does one punish Russia and control Ukraine without pushing Russia too far outside the influence of the Mafia, itself? In other words, the West seeks to punish Russia for its “defiance” and “aggression,” but, if the West pushes too hard, it might find a Russia that pushes back even harder. That is, after all, how we got into this situation in the first place.
A little historical context helps elucidate the current clash of gangster states. Put aside the rhetoric of “democracy” and let’s deal with reality.
The Cold War Legacy
The end of the Cold War and the collapse of the Soviet Union between 1989 and 1991 witnessed the emergence of what was termed by President George H.W. Bush a ‘new world order’ in which the United States reigned as the world’s sole superpower, proclaiming ‘victory’ over the Soviet Union and ‘Communism’: the age of ‘free markets’ and ‘democracy’ was at hand.
The fall of the Berlin Wall in 1989 prompted the negotiated withdrawal of the Soviet Union from Eastern Europe. The ‘old order’ of Europe was at an end, and a new one “needed to be established quickly,” noted Mary Elise Sarotte in the New York Times. This ‘new order’ was to begin with “the rapid reunification of Germany.” Negotiations took place in 1990 between Soviet president Gorbachev, German Chancellor Helmut Kohl, and President Bush’s Secretary of State, James A. Baker 3rd. The negotiations sought to have the Soviets remove their 380,000 troops from East Germany. In return, both James Baker and Helmut Kohl promised Gorbachev that the Western military alliance of NATO would not expand eastwards. West Germany’s foreign minister, Hans-Dietrich Genscher, promised Gorbachev that, ” NATO will not expand itself to the East.” Gorbachev agreed, though asked – and did not receive – the promise in writing, remaining a “gentlemen’s agreement.”
The U.S. Ambassador to the USSR from 1987 to 1991, John F. Matlock Jr., later noted that the end of the Cold War was not ‘won’ by the West, but was brought about “by negotiation to the advantage of both sides.” Yet, he noted, “the United States insisted on treating Russia as the loser .” The United States almost immediately violated the agreement established in 1990, and NATO began moving eastwards, much to the dismay of the Russians. The new Russian President, Boris Yeltsin, warned that NATO’s expansion to the East threatened a ‘cold peace’ and was a violation of the ” spirit of conversations ” that took place in February of 1990 between Soviet, West German and American leaders.
In 1990, President Bush’s National Security Strategy for the United States acknowledged that, “even as East-West tensions diminish, American strategic concerns remain,” noting that previous U.S. military interventions which were justified as a response to Soviet ‘threats’, were – in actuality – “in response to threats to U.S. interests that could not be laid at the Kremlin’s door,” and that, “the necessity to defend our interests will continue.” In other words, decades of justifications for war by the United States – blaming ‘Soviet imperialism’ and ‘Communism’ – were lies, and now that the Soviet Union no longer existed as a threat, American imperialism will still have to continue.
Former National Security Adviser – and arch-imperial strategist – Zbigniew Brzezinski noted in 1992 that the Cold War strategy of the United States in advocating “liberation” against the USSR and Communism (thus justifying military interventions all over the world), ” was a strategic sham, designed to a significant degree for domestic political reasons… the policy was basically rhetorical, at most tactical.”
The Pentagon drafted a strategy in 1992 for the United States to manage the post-Cold War world, where the primary mission of the U.S. was “to ensure that no rival superpower is allowed to emerge in Western Europe, Asia or the territories of the former Soviet Union.” As the New York Times noted, the document – largely drafted by Pentagon officials Paul Wolfowitz and Dick Cheney – “makes the case fora world dominated by one superpower whose position can be perpetuated by constructive behavior and sufficient military might to deter any nation or group of nations from challenging American primacy.”
This strategy was further enshrined with the Clinton administration, whose National Security Adviser, Anthony Lake, articulated the ‘Clinton doctrine’ in 1993 when he stated that: “The successor to a doctrine of containment must be a strategy of enlargement – enlargement of the world’s free community of market democracies,” which “must combine our broad goals of fostering democracy and marketswith our more traditional geostrategic interests.”
Under Bill Clinton’s imperial presidency, the United States and NATO went to war against Serbia, ultimately tore Yugoslavia to pieces (itself representative of a ‘third way’ of organizing society, different than both the West and the USSR), and NATO commenced its Eastward expansion . In the late 1990s, Poland, Hungary and the Czech Republic entered the NATO alliance, and in 2004, seven former Soviet republics joined the alliance.
In 1991, roughly 80% of Russians had a ‘favorable’ view of the United States; by 1999, roughly 80% had an unfavorable view of America. Vladimir Putin, who was elected in 2000, initially followed a pro-Western strategy for Russia, supporting NATO’s invasion and occupation of Afghanistan, receiving only praise from President George W. Bush, who then proceeded to expand NATO further east .
The Color Revolutions
Throughout the 2000s, the United States and other NATO powers, allied with billionaires like George Soros and his foundations scattered throughout the world, worked together to fund and organize opposition groups in multiple countries across Eastern and Central Europe, promoting ‘democratic regime change’ which would ultimately bring to power more pro-Western leaders. It began in 2000 in Serbia with the removal of Slobodan Milosevic.
The United States had undertaken a $41 million “democracy-building campaign” in Serbia to remove Milosevic from power, which included funding polls, training thousands of opposition activists, which the Washington Post referred to as “the first poll-driven, focus group-tested revolution,” which was “a carefully researched strategy put together by Serbian democracy activists with the active assistance of Western advisers and pollsters.” Utilizing U.S.-government funded organizations aligned with major political parties, like the National Democratic Institute and the International Republican Institute, the U.S. State Department and the U.S. Agency for International Development (USAID) channeled money, assistance and training to activists (Michael Dobbs, Washington Post, 11 December 2000).
Mark Almond wrote in the Guardian in 2004 that, “throughout the 1980s, in the build-up to 1989’s velvet revolutions, a small army of volunteers – and, let’s be frank, spies – co-operated to promote what became People Power.” This was represented by “a network of interlocking foundations and charities [which] mushroomed to organize the logistics of transferring millions of dollars to dissidents.” The money itself ” came overwhelmingly from NATO states and covert allies such as ‘neutral’ Sweden,” as well as through the billionaire George Soros’ Open Society Foundation. Almond noted that these “modern market revolutionaries” would bring people into office “with the power to privatize.” Activists and populations are mobilized with “a multimedia vision of Euro-Atlantic prosperity by Western-funded ‘independent’ media to get them on the streets.” After successful Western-backed ‘revolutions’ comes the usual economic ‘shock therapy’ which brings with it “mass unemployment, rampant insider dealing, growth of organized crime, prostitution and soaring death rates.” Ah, democracy!
Following Serbia in 2000, the activists, Western ‘aid agencies’, foundations and funders moved their resources to the former Soviet republic of Georgia, where in 2003, the ‘Rose Revolution’ replaced the president with a more pro-Western (and Western-educated) leader, Mikheil Saakashvili, a protégé of George Soros, who played a significant role in funding so-called ‘pro-democracy’ groups in Georgia that the country has often been referred to as ‘Sorosistan’. In 2004, Ukraine became the next target of Western-backed ‘democratic’ regime change in what became known as the ‘Orange Revolution’. Russia viewed these ‘color revolutions’ as “U.S.-sponsored plots using local dupes to overthrow governments unfriendly to Washington and install American vassals.”
Mark MacKinnon, who was the Globe and Mail‘s Moscow bureau chief between 2002 and 2005, covered these Western-funded protests and has since written extensively on the subject of the ‘color revolutions.’ Reviewing a book of his on the subject, the Montreal Gazette noted that these so-called revolutions were not “spontaneous popular uprisings, but in fact were planned and financed either directly by American diplomats or through a collection of NGOs acting as fronts for the United States government,” and that while there was a great deal of dissatisfaction with the ruling, corrupt elites in each country, the ‘democratic opposition’ within these countries received their “marching orders and cash from American and European officials, whose intentions often had to do more with securing access to energy resources and pipeline routes than genuine interest in democracy.”
The ‘Orange Revolution’ in Ukraine in 2004 was – as Ian Traynor wrote in the Guardian – ” an American creation, a sophisticated and brilliantly conceived exercise in western branding and mass marketing,” with funding and organizing from the U.S. government, “deploying US consultancies, pollsters, diplomats, the two big American parties and US non-governmental organizations.”
In Ukraine, the contested elections which spurred the ‘Orange Revolution’ saw accusations of election fraud leveled against Viktor Yanukovich by his main opponent, Viktor Yuschenko. Despite claims of upholding democracy, Yuschenko had ties to the previous regime, having served as Prime Minister in the government of Leonid Kuchma, and with that, had close ties to the oligarchs who led and profited from the mass privatizations of the post-Soviet era. Yuschenko, however, “got the western nod, and floods of money poured into groups which support[ed] him.” As Jonathan Steele noted in the Guardian, “Ukraine has been turned into a geostrategic matter not by Moscow but by the US, which refuses to abandon its cold war policy of encircling Russia and seeking to pull every former Soviet republic to its side.”
As Mark McKinnon wrote in the Globe and Mail some years later, the uprisings in both Georgia and Ukraine “had many things in common, among them the fall of autocrats who ran semi-independent governments that deferred to Moscow when the chips were down,” as well as being “spurred by organizations that received funding from the U.S. National Endowment for Democracy,” reflecting a view held by Western governments that “promoting democracy” in places like the Middle East and Eastern Europe was in fact “a code word for supporting pro-Western politicians .” These Western-sponsored uprisings erupted alongside the ever-expanding march of NATO to Russia’s borders.
The following year – in 2005 – the Western-supported ‘colour revolutions’ hit the Central Asian republic of Kyrgyzstan in what was known as the ‘Tulip Revolution’. Once again, contested elections saw the mobilization of Western-backed civil society groups, “independent” media, and NGOs – drawing in the usual funding sources of the National Endowment for Democracy, the NDI, IRI, Freedom House, and George Soros, among others. The New York Times reported that the “democratically inspired revolution” western governments were praising began to look ” more like a garden-variety coup .” Efforts not only by the U.S., but also Britain, Norway and the Netherlands were pivotal in preparing the way for the 2005 uprising in Kyrgyzstan. The then-President of Kyrgyzstan blamed the West for the unrest experienced in his country.
The U.S. NGOs that sponsored the ‘color revolutions’ were run by former top government and national security officials, including Freedom House, which was chaired by former CIA Director James Woolsey, and other “pro-democracy” groups funding these revolts were led by figures such as Senator John McCain or Bill Clinton’s former National Security Adviser Anthony Lake, who had articulated the national security strategy of the Clinton administration as being one of “enlargement of the world’s free community of market democracies.” These organizations effectively act as an extension of the U.S. government apparatus, advancing U.S. imperial interests under the veneer of “pro-democracy” work and institutionalized in purportedly “non”-governmental groups.
By 2010, however, most of the gains of the ‘color revolutions’ that spread across Eastern Europe and Central Asia had taken several steps back. While the “political center of gravity was tilting towards the West,” noted Time Magazine in April of 2010, “now that tend has reversed,” with the pro-Western leadership of both Ukraine and Kyrgyzstan both having once again been replaced with leaders ” far friendlier to Russia.” The “good guys” that the West supported in these countries, “proved to be as power hungry and greedy as their predecessors, disregarding democratic principles… in order to cling to power, and exploiting American diplomatic and economic support as part of [an] effort to contain domestic and outside threats and win financial assistance.” Typical behavior for vassal states to any empire.
The ‘Enlargement’ of the European Union: An Empire of Economics
The process of European integration and growth of the European Union has – over the past three decades – been largely driven by powerful European corporate and financial interests, notably by the European Round Table of Industrialists (ERT), an influential group of roughly 50 of Europe’s top CEOs who lobby and work directly with Europe’s political elites to design the goals and methods of European integration and enlargement of the EU, advancing the EU to promote and institutionalize neoliberal economic reforms: austerity, privatizations, liberalization of markets and the destruction of labour power.
The enlargement of the European Union into Eastern Europe reflected a process of Eastern European nations having to implement neoliberal reforms in order to join the EU, including mass privatizations, deregulation, liberalization of markets and harsh austerity measures. The enlargement of the EU into Central and Eastern Europe advanced in 2004 and 2007, when new states were admitted into EU membership, including Bulgaria, Romania, Poland, the Czech Republic, Hungary, Slovakia, Latvia, Estonia and Lithuania.
These new EU members were hit hard by the global financial crisis in 2008 and 2009, and subsequently forced to impose harsh austerity measures. They have been slower to ‘recover’ than other nations, increasingly having to deal with “political instability and mass unemployment and human suffering.” The exception to this is Poland, which did not implement austerity measures, which has left the Polish economy in a better position than the rest of the new EU members. The financial publication Forbeswarned in 2013 that “the prospect of endless economic stagnation in the newest EU members… will, sooner or later, bring extremely deleterious political consequences .”
In the words of a senior British diplomat, Robert Cooper, the European Union represents a type of “cooperative empire.” The expansion of the EU into Central and Eastern Europe brought increased corporate profits, with new investments and cheap labour to exploit. Further, the newer EU members were more explicitly pro-market than the older EU members that continued to promote a different social market economy than those promoted by the Americans and British. With these states joining the EU, noted the Financial Times in 2008, “the new member states have reinforced the ranks of the free marketeers and free traders,” as they increasingly “team up with northern states to vote for deregulation and liberalization of the market.”
The West Marches East
For the past quarter-century, Russia has stood and watched as the United States, NATO, and the European Union have advanced their borders and sphere of influence eastwards to Russia’s borders. As the West has marched East, Russia has consistently complained of encroachment and its views of this process as being a direct threat to Russia. The protests of the former superpower have largely gone ignored or dismissed. After all, in the view of the Americans, they “won” the Cold War, and therefore, Russia has no say in the post-Cold War global order being shaped by the West.
The West’s continued march East to Russia’s borders will continue to be examined in future parts of this series. For Russia, the problem is clear: the Godfather and its NATO-Mafia partners are ever-expanding to its borders, viewed (rightly so) as a threat to the Russian gangster state itself. Russia’s invasion of Crimea – much like its 2008 invasion of Georgia – are the first examples of Russia’s push back against the Western imperial expansion Eastwards. This, then, is not a case of “Russian aggression,” but rather, Russian reaction to the West’s ever-expanding imperialism and global aggression.
The West may think that it has domesticated and beaten down the bear, chained it up, make it dance and whip it into obedience. But every once in a while, the bear will take a swipe back at the one holding the whip. This is inevitable. And so long as the West continued with its current strategy, the reactions will only get worse in time.
Andrew Gavin Marshall is a 26-year old researcher and writer based in Montreal, Canada. He is Project Manager of The People’s Book Project, chair of the Geopolitics Division of The Hampton Institute, research director for Occupy.com’s Global Power Project, and hosts a weekly podcast show with BoilingFrogsPost.
Divide and Conquer: The Anglo-American Imperial Project
Global Research, July 10, 2008
Establishing an “Arc of Crisis”
Many would be skeptical that the Anglo-Americans would be behind terrorist acts in Iraq, such as with the British in Basra, when two British SAS soldiers were caught dressed as Arabs, with explosives and massive arsenal of weapons. Why would the British be complicit in orchestrating terror in the very city in which they are to provide security? What would be the purpose behind this? That question leads us to an even more important question to ask, the question of why Iraq was occupied; what is the purpose of the war on Iraq? If the answer is, as we are often told with our daily dose of CNN, SkyNews and the statements of public officials, to spread democracy and freedom and rid the world of tyranny and terror, then it doesn’t make sense that the British or Americans would orchestrate terror.
However, if the answer to the question of why the Anglo-American invasion of Iraq occurred was not to spread democracy and freedom, but to spread fear and chaos, plunge the country into civil war, balkanize Iraq into several countries, and create an “arc of crisis” across the Middle East, enveloping neighboring countries, notably Iran, then terror is a very efficient and effective means to an end.
An Imperial Strategy
In 1982, Oded Yinon, an Israeli journalist with links to the Israeli Foreign Ministry wrote an article for a publication of the World Zionist Organization in which he outlined a “strategy for Israel in the 1980s.” In this article, he stated, “The dissolution of Syria and Iraq into ethnically or religiously unique areas such as in Lebanon is Israel’s primary target on the Eastern front. Iraq, rich in oil on the one hand and internally torn on the other is guaranteed as a candidate for Israel’s targets. Its dissolution is even more important for us than that of Syria. Iraq is stronger than Syria. In the short run, it is Iraqi power which constitutes the greatest threat to Israel.” He continued, “An Iraqi-Iranian war will tear Iraq apart and cause its downfall at home even before it is able to organize a struggle on a wide front against us. Every kind of inter-Arab confrontation will assist us in the short run and will shorten the way to the more important aim of breaking up Iraq into denominations as in Syria and Lebanon.” He continues, “In Iraq, a division into provinces along ethnic/religious lines as in Syria during Ottoman times is possible. So, three (or more) states will exist around the three major cities: Basra, Baghdad and Mosul and Shiite areas in the South will separate from the Sunni and Kurdish north.”
The Iran-Iraq War, which lasted until 1988, did not result in Oded Yinon’s desired break-up of Iraq into ethnically based provinces. Nor did the subsequent Gulf War of 1991 in which the US destroyed Iraq’s infrastructure, as well as the following decade-plus of devastating sanctions and aerial bombardments by the Clinton administration. What did occur during these decades, however, were the deaths of millions of Iraqis and Iranians.
A Clean Break for a New American Century
In 1996, an Israeli think tank, the Institute for Advanced Strategic and Political Studies, issued a report under the think tank’s Study Group on a New Israeli Strategy Toward 2000, entitled, “A Clean Break: A New Strategy for Securing the Realm.” In this paper, which laid out recommendations for Israel’s Prime Minister Benjamin Netanyahu, they state that Israel can, “Work closely with Turkey and Jordan to contain, destabilize, and roll-back some of its most dangerous threats,” as well as, “Change the nature of its relations with the Palestinians, including upholding the right of hot pursuit for self defense into all Palestinian areas,” and to, “Forge a new basis for relations with the United States—stressing self-reliance, maturity, strategic cooperation on areas of mutual concern, and furthering values inherent to the West.”
The report recommended Israel to seize “the strategic initiative along its northern borders by engaging Hizballah, Syria, and Iran, as the principal agents of aggression in Lebanon,” and to use “Lebanese opposition elements to destabilize Syrian control of Lebanon.” It also states, “Israel can shape its strategic environment, in cooperation with Turkey and Jordan, by weakening, containing, and even rolling back Syria. This effort can focus on removing Saddam Hussein from power in Iraq — an important Israeli strategic objective in its own right — as a means of foiling Syria’s regional ambitions.”
The authors of the report include Douglas Feith, an ardent neoconservative who went on to become George W. Bush’s Under Secretary of Defense for Policy from 2001 to 2005; David Wurmser, who was appointed by Douglas Feith after 9/11 to be part of a secret Pentagon intelligence unit and served as a Mideast Adviser to Dick Cheney from 2003 to 2007; and Meyrav Wurmser, David’s wife, who is now an official with the American think tank, the Hudson Institute.
Richard Perle headed the study, and worked on the Pentagon’s Defense Policy Board Advisory Committee from 1987 to 2004, and was Chairman of the Board from 2001 to 2004, where he played a key role in the lead-up to the Iraq war. He was also a member of several US think tanks, including the American Enterprise Institute and the Project for the New American Century.
The Project for the New American Century, or PNAC, is an American neoconservative think tank, whose membership and affiliations included many people who were associated with the present Bush administration, such as Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, John Bolton, Richard Armitage, Jeb Bush, Elliott Abrams, Eliot A. Cohen, Paula Dobriansky, Francis Fukuyama, Zalmay Khalilzad, I. Lewis “Scooter” Libby, Peter Rodman, Dov Zakheim and Robert B. Zoellick.
PNAC produced a report in September of 2000, entitled, “Rebuilding America’s Defenses: Strategy, Forces and Resources for a New Century,” in which they outlined a blueprint for a Pax Americana, or American Empire. The report puts much focus on Iraq and Iran, stating, “Over the long term, Iran may well prove as large a threat to US interests in the Gulf as Iraq has.” Stating that, “the United States has for decades sought to play a more permanent role in Gulf regional security,” the report suggests that, “the unresolved conflict with Iraq provides the immediate justification,” however, “the need for a substantial American force presence in the Gulf transcends the issue of the regime change of Saddam Hussein.”
Engineer a Civil War for the “Three State Solution”
Shortly after the initial 2003 invasion and occupation of Iraq, the New York Times ran an op-ed piece by Leslie Gelb, President Emeritus and Board Member of the US-based Council on Foreign Relations, the most influential and powerful think tank in the United States. The op-ed, titled, “The Three State Solution,” published in November of 2003, stated that the “only viable strategy” for Iraq, “may be to correct the historical defect and move in stages toward a three-state solution: Kurds in the north, Sunnis in the center and Shiites in the south.” Citing the example of the break up of Yugoslavia, Gelb stated that the Americans and Europeans “gave the Bosnian Muslims and Croats the means to fight back, and the Serbs accepted separation.” Explaining the strategy, Gelb states that, “The first step would be to make the north and south into self-governing regions, with boundaries drawn as closely as possible along ethnic lines,” and to “require democratic elections within each region.” Further, “at the same time, draw down American troops in the Sunni Triangle and ask the United Nations to oversee the transition to self-government there.” Gelb then states that this policy “would be both difficult and dangerous. Washington would have to be very hard-headed, and hard-hearted, to engineer this breakup.”
Following the example of Yugoslavia, as Gelb cited, would require an engineered civil war between the various ethnic groups. The US supported and funded Muslim forces in Bosnia in the early 1990s, under the leadership of the CIA-trained Afghan Mujahideen, infamous for their CIA-directed war against the Soviet Union from 1979-1989. In Bosnia, the Mujahideen were “accompanied by US Special Forces,” and Bill Clinton personally approved of collaboration with “several Islamic fundamentalist organisations including Osama bin Laden’s al Qaeda.” In Kosovo, years later, “Mujahideen mercenaries from the Middle East and Central Asia were recruited to fight in the ranks of the Kosovo Liberation Army (KLA) in 1998-99, largely supporting NATO’s war effort.” The US Defense Intelligence Agency (DIA), the British Secret Intelligence Services (MI6), British SAS soldiers and American and British private security companies had the job of arming and training the KLA. Further, “The U.S. State Department listed the KLA as a terrorist organization, indicating that it was financing its operations with money from the international heroin trade and loans from Islamic countries and individuals, among them allegedly Usama bin Laden,” and as well as that, “the brother of a leader in an Egyptian Jihad organization and also a military commander of Usama bin Laden, was leading an elite KLA unit during the Kosovo conflict.”
Could this be the same strategy being deployed in Iraq in order to break up the country for similar geopolitical reasons?
The Asia Times Online reported in 2005, that the plan of “balkanizing” Iraq into several smaller states, “is an exact replica of an extreme right-wing Israeli plan to balkanize Iraq – an essential part of the balkanization of the whole Middle East. Curiously, Henry Kissinger was selling the same idea even before the 2003 invasion of Iraq.” It continued, “this is classic divide and rule: the objective is the perpetuation of Arab disunity. Call it Iraqification; what it actually means is sectarian fever translated into civil war.”
In 2006, an “independent commission set up by Congress with the approval of President George W Bush,” termed the “Baker Commission” after former Secretary of State, James Baker, “has grown increasingly interested in the idea of splitting the Shi’ite, Sunni and Kurdish regions of Iraq as the only alternative to what Baker calls ‘cutting and running’ or ‘staying the course’.”
It was also reported in 2006 that, “Iraq’s federal future is already enshrined within its constitution, allowing regions to form, if not actually prescribing how this should happen,” and that, “the Iraqi parliament (dominated by Shi’a and Kurds) passed a bill earlier this month [October, 2006] allowing federal regions to form (by majority vote in the provinces seeking merger).” Further, “The law, which unsurprisingly failed to win Sunni support, will be reviewed over the next 18 months in a bid to bring its opponents round.” The article, however, stated that instead of a three state solution, “a system based upon five regions would seem to have more chance of succeeding. A five-region model could see two regions in the south, one based around Basra and one around the holy cities. Kurdistan and the Sunni region would remain, but Baghdad and its environs would form a fifth, metropolitan, region.” The author of the article was Gareth Stansfield, an Associate Fellow at Chatham House think tank in London, which preceded, works with and is the British equivalent of the Council on Foreign Relations.
“Ethnic Cleansing Works”
In 2006, the Armed Forces Journal published an article by retired Lieutenant-Colonel Ralph Peters, titled, “Blood Borders: How a better Middle East would look.” In the article, Peters explains that the best plan for the Middle East would be to “readjust” the borders of the countries. “Accepting that international statecraft has never developed effective tools — short of war — for readjusting faulty borders, a mental effort to grasp the Middle East’s “organic” frontiers nonetheless helps us understand the extent of the difficulties we face and will continue to face. We are dealing with colossal, man-made deformities that will not stop generating hatred and violence until they are corrected.” He states that after the 2003 invasion, “Iraq should have been divided into three smaller states immediately.” However, Iraq is not the only country to fall victim to “Balkanization” in Peters’ eyes, as, “Saudi Arabia would suffer as great a dismantling as Pakistan,” and “Iran, a state with madcap boundaries, would lose a great deal of territory to Unified Azerbaijan, Free Kurdistan, the Arab Shia State and Free Baluchistan, but would gain the provinces around Herat in today’s Afghanistan.” Further, “What Afghanistan would lose to Persia in the west, it would gain in the east, as Pakistan’s Northwest Frontier tribes would be reunited with their Afghan brethren.” Peters states that “correcting borders” may be impossible, “For now. But given time — and the inevitable attendant bloodshed — new and natural borders will emerge. Babylon has fallen more than once.” He further makes the astonishing statement that, “Oh, and one other dirty little secret from 5,000 years of history: Ethnic cleansing works.”
The map of the re-drawn Middle East, initially published alongside Peters’ article, but no longer present, “has been used in a training program at NATO’s Defense College for senior military officers. This map, as well as other similar maps, has most probably been used at the National War Academy as well as in military planning circles.” Nafeez Mossadeq Ahmed wrote of Peters’ proposal, that “the sweeping reconfiguration of borders he proposes would necessarily involve massive ethnic cleansing and accompanying bloodshed on perhaps a genocidal scale.”
Federalism or Incremental Balkanization?
A month before Peters’ article was published, Leslie Gelb of the Council on Foreign Relations, and Joseph Biden, a Democratic member of the Senate Foreign Relations Committee, wrote an op-ed for the New York Times, in which they stated, “America must get beyond the present false choice between “staying the course” and “bringing the troops home now” and choose a third way that would wind down our military presence responsibly while preventing chaos and preserving our key security goals.” What is this third option? “The idea, as in Bosnia, is to maintain a united Iraq by decentralizing it, giving each ethno-religious group—Kurd, Sunni Arab and Shiite Arab—room to run its own affairs, while leaving the central government in charge of common interests.”
They describe a few aspects of this plan. “The first is to establish three largely autonomous regions with a viable central government in Baghdad. The Kurdish, Sunni and Shiite regions would each be responsible for their own domestic laws, administration and internal security. The central government would control border defense, foreign affairs and oil revenues.” Then, “The second element would be to entice the Sunnis into joining the federal system with an offer they couldn’t refuse. To begin with, running their own region should be far preferable to the alternatives: being dominated by Kurds and Shiites in a central government or being the main victims of a civil war.”
In testimony before the Senate Foreign Relations Committee in 2007, Leslie Gelb stated that his plan for “federalizing” Iraq, “would look like this: The central government would be based on the areas where there are genuine common interests among the different Iraqi parties. That is, foreign affairs, border defense, currency and, above all, oil and gas production and revenues.” And, “As for the regions, whether they be three or four or five, whatever it may be, it’s up to—all this is up to the Iraqis to decide, would be responsible for legislation, administration and internal security.”
The Senate subsequently passed a nonbinding resolution supporting a federal system for Iraq, which has still yet to be enacted upon, because it stated that this resolution was something that had to be enacted upon by the Iraqis, so as not to be viewed as “something that the United States was going to force down their throats.” Further, “when Ambassador Ryan Crocker appeared before the Senate Foreign Relations Committee, he testified in favor of federalism. In his private conversations with senators, he also supported the idea,” yet, while in Baghdad, the Ambassador “blasted the resolution.” Could this be a method of manipulation? If the American Embassy in Baghdad promotes a particular solution for Iraq, it would likely be viewed by Iraqis as a bad choice and in the interest of the Americans. So, if the Ambassador publicly bashes the resolution from Iraq, which he did, it conveys the idea that the current administration is not behind it, which could make Iraqis see it as a viable alternative, and perhaps in their interests. For Iraqi politicians, embracing the American view on major issues is political (and often actual) suicide. The American Embassy in Baghdad publicly denouncing a particular strategy gives Iraqi politicians public legitimacy to pursue it.
This resolution has still not gone through all the processes in Congress, and may, in fact, have been slipped into another bill, such as a Defense Authorization Act. However, the efforts behind this bill are larger than the increasingly irrelevant US Congress.
Also in 2007, another think tank called for the managed “break-up of Iraq into three separate states with their own governments and representatives to the United Nations, but continued economic cooperation in a larger entity modeled on the European Union.” In a startling admission by former US Ambassador to the United Nations, John Bolton, stated in 2007 that the “United States has “no strategic interest” in a united Iraq,” and he also suggested “that the United States shouldn’t necessarily keep Iraq from splitting up.”
Clearly, whatever the excuse, or whatever the means of dividing Iraq, it is without a doubt in the Anglo-American strategy for Iraq to balkanize the country. Saying that what is being proposed is not balkanization, but federalism, is a moot point. This is because reverting to a more federal system where provinces have greater autonomy would naturally separate the country along ethno-religious boundaries. The Kurds would be in the north, the Sunnis in the centre, and the Shi’ites in the south, with all the oil. The disproportionate provincial resources will create animosity between provinces, and the long-manipulated ethnic differences will spill from the streets into the political sphere. As tensions grow, as they undoubtedly would, between the provinces, there would be a natural slide to eventual separation. Disagreements over power sharing in the federal government would lead to its eventual collapse, and the strategy of balkanization would have been achieved with the appearance of no outside involvement.
 Global Research, Iraqi MP accuses British Forces in Basra of “Terrorism”. Al Jazeera: September 20, 2005: http://www.globalresearch.ca/index.php?context=viewArticle&code=20050920&articleId=983
 Linda S. Heard, The Prophecy of Oded Yinon. Counter Punch: April 25, 2006: http://www.counterpunch.org/heard04252006.html
 Richard Perle, et. al., A Clean Break: A New Strategy for Securing the Realm. The Institute for Advanced Strategic and Political Studies: June 1996: http://www.iasps.org/strat1.htm
 PNAC, Rebuilding America’s Defenses. Project for the New American Century: September 2000: Page 17
 PNAC, Rebuilding America’s Defenses. Project for the New American Century: September 2000: Page 14
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 Sarah Baxter, America ponders cutting Iraq in three. The Times: October 8, 2006: http://www.timesonline.co.uk/tol/news/world/article664974.ece
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 Ralph Peters, Blood Borders: How a better Middle East would look. Armed Forces Journal: June 2006: http://www.armedforcesjournal.com/2006/06/1833899
 Mahdi Darius Nazemroaya, Plans for Redrawing the Middle East: The Project for a “New Middle East”. Global Research: November 18, 2006: http://www.globalresearch.ca/index.php?context=va&aid=3882
 Nafeez Mossadeq Ahmed, US Army Contemplates Redrawing Middle East Map
to Stave Off Looming Global Meltdown. Dissident Voice: September 1, 2006: http://www.dissidentvoice.org/Sept06/Ahmed01.htm
 Leslie Gelb and Joseph Biden, Jr., Unity Through Autonomy in Iraq. The New York Times: May 1, 2006: http://www.cfr.org/publication/10569/unity_through_autonomy_in_iraq.html?breadcrumb=%2Fbios%2F3325%2Fleslie_h_gelb%3Fpage%3D2
 Leslie Gelb, Leslie Gelb before the Senate Foreign Relations Committee. The CFR: January 23, 2007: http://www.cfr.org/publication/12489/leslie_gelb_before_the_senate_foreign_relations_committee.html?breadcrumb=%2Fbios%2F3325%2Fleslie_h_gelb
 Bernard Gwertzman, Gelb: Federalism Is Most Promising Way to End Civil War in Iraq. CFR: October 16, 2007: http://www.cfr.org/publication/14531/gelb.html?breadcrumb=%2Fbios%2F3325%2Fleslie_h_gelb
 Robin Wright, Nonpartisan Group Calls for Three-State Split in Iraq. The Washington Post: August 17, 2007: http://www.washingtonpost.com/wp-dyn/content/article/2007/08/17/AR2007081700918.html
 AP, French report: Former U.N. envoy Bolton says U.S. has ‘no strategic interest’ in united Iraq. International Herald Tribune: January 29, 2007: http://www.iht.com/articles/ap/2007/01/29/europe/EU-GEN-France-US-Iraq.php