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Yemen: The Covert Apparatus of the American Empire
Global Research, October 5, 2010
In 1967, Dr. Martin Luther King, Jr. delivered one of his least known and ultimately one of his most important speeches ever, “Beyond Vietnam,” in which he spoke out against the American war in Vietnam and against American empire in all its political, military and economic forms. In his speech, King endorsed the notion that America “was on the wrong side of a world revolution.” Dr. King explained:
This is the nature of war of today: during King’s time, the pretext for war was to stop the spread of Communism; today, it’s done in the name of stopping the spread of terrorism. Terror has since time immemorial been a tactic used by states and governments to control populations. Al-Qaeda is no exception, as it was created and continues to largely function as a geopolitical extension of the covert apparatus of American empire. In short, al-Qaeda is an arm of the covert world of American intelligence agencies. In particular, the CIA, DIA [Defense Intelligence Agency], US Special Forces, and multinational mercenary companies such as Blackwater [now Xe Services]. Where they go, al-Qaeda goes; where al-Qaeda goes, they accumulate; where they lay the groundwork, the American empire stands behind.
Yemen is perhaps an excellent example of America being on the “wrong side of a world revolution,” as the secret war in Yemen being exacerbated in the name of “fighting al-Qaeda” is in actuality, about the expansion and supremacy of American power in the region. It is about the suppression of natural democratic, local, revolutionary elements throughout the country seeking self-autonomy in changing the nation from its current despotic, authoritarian rule sympathetic to American interests, into a nation of their own choosing. It is about repressing struggles for liberation.
This brings in the involvement of Saudi Arabia, itself interested in ensuring Yemen is a loyal neighbour; so they too must suppress indigenous movements within Yemen seeking autonomy, especially those that are Shi’a Muslims, as the Saudi state is a strict Wahhabist Sunni Muslim regime. Shi’as are primarily represented in the region through the state of Iran, Saudi Arabia’s “natural” enemy; both vying for influence in Iraq and both vying for influence in Yemen. Through this we see another key American imperial aim in this war, that of seeking to stir up a conflict with Iran, perhaps through a proxy-war within Yemen, or perhaps in hopes that the proxy war would expand into a regional war between Saudi Arabia and Iran, naturally drawing in Israel, Egypt and the United States. Finally, we have the strategic location of Yemen to consider, bridging one of the largest oil transport routes in the world, parallel to Somalia and the Horn of Africa (where America is waging another war, again on the “wrong side of a world revolution”).
Just as American geopolitical strategists had chosen to favour Tutsis over Hutus in Central Africa in an effort to expand the American presence and business interests in the region; so too have American strategists chosen to favour a brand of radical Sunni Islam over the Shi’a or moderate Sunnis, and thus they support oppressive Sunni governments (such as Saudi Arabia), and denounce Shi’a governments as oppressive (such as Iran). Not to say that there is no oppression within Iran (there is oppression within all states everywhere in the world, Iran is no exception), but compared to Saudi Arabia, Iran is a bastion of freedom. Al-Qaeda is manifestly a significant facet of the pro-Wahhabist fundamentalist Sunni strategy of American imperialists. If they finance, train and arm the Sunni rebels or send in already-trained, armed and well-funded terrorists (commonly known as ‘al-Qaeda’ – the “database”), then they create a counter to any other domestic opposition or regional Shi’a dominance.
This essay examines the American war in Yemen as a war of empire, as a war against the rising tide of people’s movements and the “global political awakening” that is taking place around the world.
Yemen, Saudi Arabia, Egypt and the Art of Empire
To understand the current conflict in Yemen, as with all conflicts, we must go to history. To simply cast the conflict aside in the light of “fighting al-Qaeda” is a gross misrepresentation. Yemen’s history is deeply entwined with that of Arab nationalist politics in the Middle East, adding to that a balance of imperial power in the region.
The location of modern Yemen is vital in the notion of Yemen’s significance to imperial powers. Millennia ago, a settled civilization was established in the fertile south-west region of Arabia, and was “comprised by the kingdoms of Ma’in, Saba, and Himyar.” These kingdoms “were significant in the broader history of the Middle East, in part because of the long-distance trade links to India and the states at the top of the Red Sea.” When Islam arose:
When the Ottomans left in 1918, following their defeat in World War I, Zeidi Imam took over North Yemen, which was run by the Imams, while South Yemen was controlled by the British. From the late eighteenth century, the British being the dominant power in the Arabian Peninsula, “sought to protect its imperial communications by entering into a series of treaties with the ruling shaykhs of Kuwait, Bahrain, Qatar, and Oman and by bringing the strategic southern tip of the peninsula under direct British control as the Aden Protectorate [South Yemen].”
Various families competed for power in Arabia, with Abd al-Aziz Ibn Sa’ud emerging victorious when in 1924 he exiled the previously imposed leader (supported by the British, but highly unpopular), Sharif Husayn. Britain quickly negotiated an agreement with Ibn Sa’ud in 1927, called the Treaty of Jeddah, which “recognized Ibn Sa’ud as the sovereign king of the Hijaz and sultan of Najd and its dependencies; he, in turn, acknowledged Britain’s special relationships with the coastal rulers [of the Arabian Peninsula] and pledged to respect their domains.” In 1932, the state became known as the Kingdom of Saudi Arabia.
Following World War II, the United States became the single greatest superpower and it overtook the colonial possessions of the old European empires that collapsed prior to, during, and following World War II. In the Middle East:
The Imams in North Yemen had begun laying claim to all of “natural Yemen,” directly challenging British rule in the south. In the 1940s, “there began to develop political oppositions, to both the Imams in the North and the British in the South.” The “Free Yemeni” movement in the North staged a failed coup in 1948 to free the North from the authoritarian rule of the Imams.
Egypt saw the most significant upheavals in the immediate post-War years. In 1952, a group of junior military officers in the Egyptian Army orchestrated a bloodless coup in which they overthrew the Egyptian Monarchy and Colonel Abd al-Nasser took power, forming the Revolutionary Command Council (RCC). The RCC’s primary political rival in Egypt was the Muslim Brotherhood, so when an assassination attempt on Nasser took place in 1954, the RCC outlawed the Brotherhood, arrested thousands of its members and executed several of its leaders. Nasser was not only the primary progenitor of nationalism in the region, but he was considered the exalted leader of the pan-Arab movement for unity.
Nasser set up a Soviet arms deal in 1955, in which Egypt exchanged cotton for Soviet military equipment, which dealt Nasser an impressive propaganda effect among Arab peoples who saw it as a rebuff of the Anglo-American grip on Egypt. Nasser, meanwhile, had been attempting to construct a dam at Aswan, and sought funds to do so from the World Bank in 1955. The World Bank approved a loan package (designed by the British and Americans), which would have required Egypt to accept particular conditions of the loan. Nasser had not made a decision on the package, when, in July of 1956, America announced it was withdrawing the offer.
On July 26, 1956, days following the loan withdrawal, Nasser announced the nationalization of the Suez Canal, giving Nasser incredible support across the Muslim and Arab worlds, as the Canal, “built with Egyptian labour but operated by a French company and used as the lifeline of the British Empire, had stood as a symbol of Western exploitation.” On October 29, 1956, Israel, Britain and France attacked Egypt, and a UN-sponsored cease-fire was signed by Britain and France on November 6, following the condemnation of the attack by both the USSR and America. The Suez Crisis, an Egyptian military defeat, had become a political success for Nasser.
In Yemen, the struggle of the Free Yemenis in the North waged on against both the rule of the Imams in the North and the British in the South. The Free Yemenis were largely influenced by the Muslim Brotherhood in Egypt initially, but changed the rhetoric as the 1950s changed the dynamic of politics in the region, with the rise of Arab nationalism, and thus, “the predominant politics of the oppositions in North and South was nationalistic, involving support not only for the general goal of ‘Arab unity’ but also for ‘Yemeni’ unity.” Following the failed coup in 1948, the opposition in the North was split between intellectuals and groups of officers. In 1962, the officers overthrew the Imams and proclaimed the “Yemen Arab Republic.”
When this took place in the North, opposition spread to the countryside in the South where a guerilla movement developed. Between 1963 and 1967, the guerilla movement became a powerful force competing for power in Aden and the countryside, and was split into two: a Nasser-influenced group and a more radical Marxist “National Liberation Front” (NLF). Nasser inserted himself into the Yemeni civil war in 1962. The deposed Imam of Yemen had escaped to the mountains and rallied tribesmen to his cause, with significant support from powerful regional monarchs (and staunch American allies), Saudi Arabia and Jordan. So the new Yemeni regime turned to Nasser for assistance, and by 1965, close to 70,000 Egyptian troops were in Yemen fighting for the military regime in power. After several years of fighting rebels and traversing harsh terrain, Egypt withdrew in 1968.
During the civil war, the British were still holding onto their protectorate in the South, and were still very much politically bruised by Nasser since the Suez Crisis. Thus, the British “devised a scheme with Israel’s secret service, the Mossad, to aid the anti-Nasser forces in Yemen by supplying them with arms and financial help.” This effort was aided by the CIA, as well as Saudi intelligence and the Iranian SAVAK. Throughout the 1960s, the United States rapidly accelerated a program of military support for Saudi Arabia, which included a $400 million Anglo-American air defense program, military bases, infrastructure, “and a $100 million U.S. program to supply Saudi Arabia with trucks and military transport vehicles.” The aim was to weaken Egypt and Nasser through a civil war in Yemen, with each side using various groups for their own geopolitical ambitions.
In 1967, the National Liberation Front (NLF) came to power in South Yemen, as the British left, and South Yemen became an independent state. Subsequently, North and South Yemen supported opposition movements within each other’s territory. In 1972, the two sides briefly went to war with one another, when the North attempted to conquer the South with Saudi and Libyan support. While Yemen’s civil war had seen Yemen divided among itself, it had also become a regional conflict between Egypt and Saudi Arabia. Yet, when the radical Marxist NLF government came to power in South Yemen in 1967, the NLF had “pledged its support for the overthrow of all the traditional monarchies in the Arabian Peninsula”:
The situation Saudi Arabia faced to its south created an impetus for the acceleration and growth of the Saudi armed forces. Thus, in the 1970s, “the Saudis allocated between 35 and 40 percent of their total annual revenues to defense and security expenditures.” In 1970, the defense budget had increased to $2 billion; by 1976 it was $36 billion.
In North Yemen, the radical left fought a guerilla war against the government from 1978 until 1982, with support from South Yemen. This movement in the North “saw itself as the vanguard of a mass movement that would bring about unity through overthrowing the military and tribal forces dominating the country.” The North Yemen government was not centralized, and so lacked a strong measure of legitimacy. During the 1970s, the President “promoted closer ties with the South as part of an attempt to strengthen the central government.” Throughout the 1980s, closer ties between the two nations were sought, and “unity” committees were established, but with little if any success. Not until the collapse of the Soviet Union and end of the Cold War in 1989-1990 was progress on unity made, when “the internal weaknesses of both regimes led them to agree to enter a provisional unification,” which occurred in May 1990.
Each state thought that they could exploit the process of unification to exert their own authority over the other region. Thus, unity was “not a policy aimed at fusion but an instrument for inter-regime competition.” The North, in particular, “believed it could impose its will on the South,” following the 1993 elections and through the process of misleading negotiations. Eventually, this goal started to be realized, and “Yemeni unity was thus achieved by the successful imposition of the Northern regime’s power on the South, in alliance with both Islamists in the North, and with dissident exiles from the South.”
However, these disagreements and problems “led to a de facto split in the country in early 1994, followed at the end of April by an outright Northern attack on the South. On 7 July 1994 Northern forces entered Aden, thus effectively unifying the country under one regime for the first time in several centuries.”
Operation Scorched Earth
During the 1994 civil war in Yemen, the North was aided in its war against the south by Wahhabist Sunni rebels (practicing the strict branch of Islam common to Saudi Arabia as well as al-Qaeda). Following the war and the success of the North, the government had granted the Wahhabis a stronger voice in the government. This is a major complaint of the Zaydis, a Shi’a branch of Islam. The Zaydis had Saada as their main stronghold in the North, but were driven from power in the 1962 revolution, left to a region that remained undeveloped. Saudi Arabia drew increasingly worried about having a rebellious group of Shi’a Islam fighters (the Houthi) so close to their border, with the potential to stir up groups within Saudi Arabia itself.
In 2004, the Yemen government tried to arrest the leader, Hussein al-Houthi, a Zaydi religious leader, which sparked fighting and the leader was subsequently killed in an air strike, leaving the movement to be run by his brothers. In 2004, between 500-1000 people were killed in the fighting. In 2005, the fighting continued, and an estimated 1,500 people were killed. Fighting broke out again in 2007 between the government and the rebels, in which hundreds of people were killed. In 2008, a Shi’a mosque was bombed during prayer in the Northern stronghold of Saada, with the Yemen government blaming the Shi’a rebels, who both denied responsibility and denounced the attack. This spurred on further clashes between the government and the rebels, so that by late 2008, since the outbreak of fighting in 2004, between 3,700 and 5,500 “militants and civilians” had been killed in the fighting.
In June of 2009, nine foreigners were kidnapped while having a picnic in Saada, “the bodies of three of them, a South Korean teacher and two German nurses were discovered. Five Germans, including three children and a Briton, are still missing and their status is unknown.” It was never determined who was behind the kidnappings and murders, but the government blamed the Houthi rebels. The Houthis in turn blamed drug cartels in the region for the murders. Yemen was faced simultaneously with a secessionist movement in both the North and the South, and was reportedly facing a “greater threat from al-Qaeda,” which had been a “growing concern” of the United States. In July of 2009, Gen. David Petraeus, CENTCOM Commander, “and an accompanying delegation, flew to Yemen and met with [President] Saleh,” at which one of the topics of discussion was “how to better combat terrorism.” In August of 2009, Yemen launched a military offensive against Houthi rebels in the North.
This was Operation Scorched Earth, launched by the Yemen military on August 11, 2009. Troops, tanks and fighter aircraft were used in this Yemeni blitzkrieg against the Houthi and Zaydi in the North, with the President vowing to crack down with an “iron fist.”
This led to a refugee crisis in which, by October 2009, over 55,000 people fled their homes due to the conflict. In November, the rebels had a border fight with Saudi Arabia, killing a Saudi officer and injuring several others. Saudi Arabian “warplanes and artillery bombarded a Shiite rebel stronghold,” and Saudi Arabia and Yemen were “cooperating and sharing intelligence in the fight.” Moroccan special forces trained in guerilla warfare were accompanying Saudi soldiers, and Morocco cut off relations with Iran, which was being accused of arming the Houthi rebels. Jordan also reportedly sent 2,000 of its own special forces to help Saudi Arabia.
The American Empire in the Gulf of Aden and Africa
What is America’s particular interest in Yemen, and more broadly, in the region that encompasses the Gulf of Aden, over which Yemen rests at the pinnacle? The Gulf of Aden connects the Red Sea to the Arabian Sea, with Yemen positioned directly across the water from Somalia, Djibouti and Eritrea. The Gulf of Aden is a vital transport route for the shipment of Persian Gulf oil, forming “an essential oil transport route between Europe and the Far East.” Clearly, control of the major oil transport routes is a key strategic imperative of any global power; in this case, America. Yemen, situated beneath Saudi Arabia, positions itself as even more significant to American strategic initiatives, in securing their interests in the world’s most oil-rich nation and key US ally. An American-friendly government in Yemen is a Saudi-friendly government.
Another key facet of American imperial strategy in the Gulf of Aden and Yemen regards the American imperial strategy in Africa. In 2005, the Council on Foreign Relations (CFR), the main policy-planning group of the US elite, published a Task Force Report on US strategy in Africa called, “More Than Humanitarianism: A Strategic U.S. Approach Toward Africa.” In the report, it was stated that:
The report stated that, “The United States is facing intense competition for energy and other natural resources in Africa,” identifying India and primarily China as its main competitors “in the search for these resources and for both economic and political influence on the continent.” In particular, “China presents a particularly important challenge to U.S. interests.”
Further, “To compete more effectively with China, the United States must provide more encouragement and support to well-performing African states, develop innovative means for U.S. companies to compete, give high-level attention to Africa, and engage China on those practices that conflict with U.S. interests.” In analyzing how the War on Terror had been brought to Africa, the report stated:
As the Guardian reported in June of 2005, “a new ‘scramble for Africa’ is taking place among the world’s big powers, who are tapping into the continent for its oil and diamonds.” A key facet of this is that “corporations from the US, France, Britain and China are competing to profit from the rulers of often chaotic and corrupt regimes.” In May of 2006, the Washington Post reported that in Somalia, the US has been “secretly supporting secular warlords who have been waging fierce battles against Islamic groups for control of the capital, Mogadishu.”
In December of 2006, Ethiopia, heavily backed and supported by the US, invaded and occupied Somalia, ousting the Islamist government. The US support for the operations was based upon the claims of Somalia being a breeding ground for terrorists and Al-Qaeda. However, this was has now turned into an insurgency. Wired Magazine reported in December of 2008 that, “for several years the U.S. military has fought a covert war in Somalia, using gunships, drones and Special Forces to break up suspected terror networks – and enlisting Ethiopia’s aid in propping up a pro-U.S. ‘transitional’ government.” Again, another case of America being on the “wrong side of a world revolution.”
The Ethiopian troops occupied Somalia for a couple years, and in January of 2009, the last Ethiopian troops left the capital city of Mogadishu. In 2007, the UN authorized an African Union (AU) peacekeeping mission in Somalia. In March of 2007, Ugandan military officials landed in Somalia. Essentially, what this has done is that the more overt Ethiopian occupation of Somalia has been replaced with a UN-mandated African Union occupation of the country, in which Ugandan troops make up the majority. Since Uganda is a proxy military state for the US in the region, the more overt US supported Ethiopian troops have been replaced by a more covert US-supported Ugandan contingent.
In 2007, Newsweek reported that, “America is quietly expanding its fight against terror on the African front. Two years ago the United States set up the Trans-Sahara Counterterrorism Partnership with nine countries in central and western Africa. There is no permanent presence, but the hope is to generate support and suppress radicalism by both sharing U.S. weapons and tactics with friendly regimes and winning friends through a vast humanitarian program assembled by USAID, including well building and vocational training.” The Pentagon announced the formation of a new military strategic command called “Africom” (Africa Command), which “will integrate existing diplomatic, economic and humanitarian programs into a single strategic vision for Africa, bring more attention to long-ignored American intelligence-gathering and energy concerns on the continent, and elevate African interests to the same level of importance as those of Asia and the Middle East.”
The article gave brief mention to critics, saying that, “not surprisingly, the establishment of a major American base in Africa is inspiring new criticism from European and African critics of U.S. imperial overreach.” Some claim it represents a “militarization of U.S. Africa policy,” which is not a stretch of the imagination, as the article pointed out, “the United States has identified the Sahel, a region stretching west from Eritrea across the broadest part of Africa, as the next critical zone in the War on Terror and started working with repressive governments in Chad and Algeria, among others, to further American interests there.” The article continued:
Ever since the 2007 US-supported air strikes and invasion of Somalia, piracy has been a significant issue in the waters off of Somalia and the Gulf of Aden. In 2009, several major nations, including America, Britain and China, sent navy ships into Somali waters to combat the pirates who were negatively impacting trade through the region. As Johann Hari explained in the Independent:
In 2009, an American Navy commander suggested that the Somali pirates were in receivership of not only a great amount of sympathy from Yemeni people (while the government would help combat the piracy), but that “private citizens in Yemen are selling weapons, fuel and supplies to Somali pirates. And maritime experts worry that pirates are increasingly able to find refuge along Yemen’s vast coast.” Some Yemeni officials “suggest the extensive international attention to piracy is just a pretext for big powers like the U.S. to gain control of the Gulf of Aden, a waterway through which millions of barrels of oil pass every day.” One member of the Yemeni Parliament suggested that, “Western powers are allowing piracy to continue as a way to serve their own interests.”
Al-Qaeda in Yemen
The current war in Yemen and US support for it is predicated on the basis of aiding Yemen in the fight against al-Qaeda. Said Ali al-Shihri was arrested by the Americans in 2001 in Afghanistan, and was promptly taken to Guantanamo Bay. The Americans released him into Saudi custody in 2007, and he “passed through a Saudi rehabilitation program for former jihadists before resurfacing with Al Qaeda in Yemen.” In other words, the US handed him over to Saudi Arabia, who enrolled him in a program for ‘former jihadists’, and then he became the second in command in Al-Qaeda in Yemen. As one American intelligence official stated, “he returned to Saudi Arabia in 2007, but his movements to Yemen remain unclear.” One Saudi security official had reported (on condition of anonymity) that, “Mr. Shihri had disappeared from his home in Saudi Arabia [in 2008] after finishing the rehabilitation program.”
In June of 2009, US officials were reporting that Al-Qaeda fighters were leaving Pakistan to go fight in Somalia and Yemen. The CIA, the Pentagon and the White House reported that Al-Qaeda groups in Pakistan, Yemen and Somalia were “communicating more frequently, and apparently trying to coordinate their actions.” The CIA Director, Leon Panetta, said that, “the United States must prevent Al Qaeda from creating a new sanctuary in Yemen or Somalia.” Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, told the Brookings Institution, a major US policy think tank, “I am very worried about growing safe havens in both Somalia and Yemen, specifically because we have seen Al Qaeda leadership, some leaders, start to flow to Yemen.” So the American national security establishment had refocused its efforts on Yemen. War seemed inevitable.
In the 1980s, millions of Yemeni men had worked in the Kingdom of Saudi Arabia, sending remittances back home to Yemen. In 1991, in the lead-up to the Gulf War, Saudi Arabia viewed these migrant workers as a potential security threat, so they expelled 800,000 Yemeni workers back to Yemen, and henceforth, Yemeni labour was banned in Saudi Arabia. Saudi financed Wahhabi madrasas sprung up across Yemen, providing a place for the disenchanted and unemployed Yemeni Sunni population to find an outlet for their political and economic dislocation. President Saleh of Yemen had often used Yemeni Wahhabis “to fight his domestic opponents – first the communists, then the Zaidis, and then the H[o]uthis.”
In August of 2009, as the Saudi assault on the Houthi rebels in the North was underway, a Houthi leader and brother to the slain former leader, Yahya al-Houthi, spoke to a Middle Eastern news agency. He was a former Yemeni Member of Parliament, who had fled to Libya, and subsequently sought political asylum in Germany. He told Press TV:
In other words, according to al-Houthi, Yemen (along with Saudi Arabia) are directly supporting the al-Qaeda contingent in Yemen in an effort to sow chaos (thus providing a pretext for the military assault), as well as aiding in the fight against the Houthis. In October, as the fighting raged on, it was reported that the Yemeni governor in the northern province had “signed a deal” with al-Qaeda, in which the government “would provide the militants with arms, budget and other military requirements to assist the Yemeni army against the Shia fighters.” Saudi Arabia remains, as it did throughout the entire history of the movement (since the 1980s), as the principle financier of al-Qaeda.
In fact, in 2009, it was revealed that members of the Saudi royal family directly provide “extensive financial support for al-Qaeda and other extremist groups.” The documents were revealed in a court case in which families of victims of the September 11th attacks were seeking to bring legal action against the Saudis for their financial support. The documents were leaked to their lawyers, and the US Justice Department stepped in (on behalf of the Saudis), and “had the lawyers’ copies destroyed and now wants to prevent a judge from even looking at the material.” Clearly, al-Qaeda is not an organization autonomous of Saudi financing.
The Southern Secessionist Movement
Apart from simply the Houthis, the Saleh dictatorship seeks to suppress a Southern Yemeni secessionist movement seeking autonomy and liberation against the illegitimate central government. Since 2007, “southern Yemenis have been staging mass protests calling for reinstatement of southerners dismissed from the civil service and army, higher pensions, a fairer share of the country’s dwindling national wealth, and an end to corruption.” The protests were met with “severe repression by the security services, which seemed to only spur on the demand for secession by the south, where most of the country’s oil is located.” One Yemeni analyst stated that, “If there is one thing that will break the country, it’s going to be the southern secession.” One southern secessionist activist stated that Saleh’s government was using the pretext of al-Qaeda and it’s war on terror “for the liquidation of the southern movement,” and that, “the southern movement is trying to continue the peaceful struggle. But the powers in Yemen have used excessive violence against peaceful protests.” The government, for its part, has attempted to propagate the baseless claim that the southern secessionists have links with al-Qaeda.
Interestingly, al-Qaeda’s leader in Yemen, in a recorded statement, “declared support for the Southern Movement, but Southern leaders have thus far rejected his endorsement.” In an interview with France24, former South Yemen President, Ali Salem al-Beidh, explained that, “We have nothing to do with al Qaeda, we have never been in contact with this organization. Our movement rejects terrorism, which in contrast thrives in the north of the country. President Ali Abdallah Saleh uses al Qaeda to scare westerners and the United States.” Saleh’s government has committed several human rights abuses against the movement in the South, unlawfully and unjustly killing innocents during protests, with the military surrounding peaceful protests and opening fire.
The “rapidly spreading” protest movement in the South, explained the New York Times, “now threatens to turn into a violent insurgency if its demands are not met.” While the leaders of the movement favour peaceful protest, the government’s violent repression has made it so that “their ability to control younger and more violent supporters is fraying.” One southern leader stated, “We demand an independent southern republic, and we have the right to defend ourselves if they continue to kill us and imprison us.” Again refuting claims that the movement is tried to al-Qaeda, the leaders “say that they stand for law, tolerance and democracy, and that it is the north that has a history of using jihadists as proxy warriors.” A major problem arises within the Southern movement in that it remains deeply divided, with no clear singular leadership, drawing from an array of people, from socialists to Islamists, “with wildly different goals and unresolved disputes.”
The Underwear Bomber
On December 25, 2009, a 23-year old Nigerian-born man named Umar Farouk Abdulmutallab boarded Northwest Airlines Flight 253, en route from Amsterdam to Detroit, Michigan, when he tried to detonate plastic explosives hidden in his underwear. This incident, still shrouded in mystery, provided the excuse for American involvement in the conflict in Yemen, as it was reported that Farouk had been trained by Al-Qaeda in the Arabian Peninsula (AQAP), the newly-formed Saudi and Yemeni al-Qaeda group.
However, how Farouk managed to get on the plane, let alone past security with explosives on his person, is still an important question. After all, America knew about Farouk for up to two years prior to the incident, and even had him “on a list that includes people with known or suspected contact or ties to a terrorist or terrorist organization.” Britain’s MI5 knew three years prior to the incident that Umar had connections with Islamic extremists in Britain. Umar’s father, a former Nigerian government minister and successful banker, had even warned the US Embassy in Nigeria of his son’s extremist beliefs. Umar even had a US entry visa, and when the State Department stepped in to have his visa revoked, “intelligence officials asked [the State Department] not to deny a visa to the suspected terrorist over concerns that a denial would’ve foiled a larger investigation into al-Qaida threats against the United States.”
Suddenly, there was a flurry of reports from “respected” newspapers (such as the Washington Post and New York Times propaganda rags), that this “failure” of following through with the intelligence that was available on Umar meant that a review of security was needed, both in terms of possibly expanding the “watch lists” and in terms of expanding airport security, and proposing the use of body-scanners. Several politicians and news-rags were also calling for expanded military operations in Afghanistan, Pakistan, Yemen and Somalia.
Interestingly, there were several reports of eyewitnesses on board the plane who contradict the official account of Umar’s attempted terrorist act. An attorney on board the plane said that, “he saw another man come to the assistance of accused bomber Umar Farouk Abdulmutallab when he tried to board the airplane in Amsterdam without a passport.” The attorney and his wife had both seen this incident. The wife, also a lawyer, stated, “My husband noticed two men walk up to the ticket counter lady. The only reason he noticed them is that he thought they were really a mismatched pair.” She said that Umar “wore older, scraggly clothing, but the man who was assisting him, who appeared to be of Indian descent, was dressed in what looked like an expensive suit and shoes.” She recounted that the well-dressed man had told the ticket agent, “We need to get this man on the plane,” and that, “He doesn’t have a passport.” The ticket agent responded that no one was allowed to board the plane without a passport, to which the Indian man replied, “We do this all the time; he’s from Sudan.” Yet no further information has come forward about this mysterious ‘second man’ who helped Umar board the plane. Nevertheless, the propaganda of this attempted terrorist ‘attack’ had taken effect, as people were again afraid of the menace of “Islamic terror” and “al-Qaeda,” and the U.S. got the pretext to justify its intervention in Yemen.
American Imperialism in Yemen
While the ‘Underwear Bomber’ was used as a propaganda vehicle for supporting direct US military intervention in Yemen, covert US military involvement in Yemen had already been underway for some time (as well as British). In 2002, a mere six months following 9/11, President Bush authorized the deployment of 100 US troop to Yemen “to help train that nation’s military to fight terrorists.” The troops “would consist predominantly of Special Forces, but could also include intelligence experts and other specialists. The main target would be Al Qaeda fighters who are hiding in Yemen.” In September of 2002, it was reported that the United States was deploying Special Forces and CIA agents into the Horn of Africa in an effort to combat al-Qaeda in Yemen, and “800 US special forces have been moved to Djibouti, which faces Yemen.” In November of 2002, a CIA Predator drone (Unmanned Aerial Vehicle – UAV) launched an attack on an al-Qaeda target within Yemen, killing six suspected al-Qaeda members, one of whom was an American citizen.
Prior to the ‘Underwear Bomber’ (as he has come to be known), the conflict in Yemen was primarily viewed as a civil war, and then with the participation of Saudi Arabia, as a regional Arab conflict. In September of 2009, it was reported that while the Yemeni government attempted to subdue a rebel Shi’a army in the north (Houthi), a refugee crisis was emerging, and a wider conflict was erupting, which could “suck the US into another sensitive conflict zone.” Many observed that if the US manages to stay out of the war, “the conflict might be subsumed in a regional war by proxy,” as in, through Saudi Arabia. Saudi Arabia, further, was accusing Iran of supporting the Shi’a rebels in northern Yemen, with both money and arms, but Saudi Arabia “has produced no hard evidence.” From the time the Saudi assault on northern Yemen began in August of 2009, between 25,000 and 100,000 Yemeni refugees were displaced. One top official with the World Food Program (WFP) stated that, “We’re not confronted with a humanitarian crisis, it’s becoming a humanitarian tragedy.”
A member of the International Crisis Group (ICG) said, “that the United States might be forced to intervene as the security situation worsened to prevent Yemen becoming a ‘failed state’.” Further, “the country has been used as an al-Qaeda base before, and its strategic location between the oil supply routes of the Gulf and the piracy haven of Somalia means its stability is regarded as a key western interest.” Thus, said the ICG analyst, “You might well see American advisers, maybe even some special troops, go in for special operations.” President Obama declared in September of 2009 that, “the security of Yemen is vital for the security of the United States.”
In November of 2009, it was reported that a “delegation of military officers from Yemen arrived in the United States recently” for training, of which the purpose “was to familiarize the Yemeni military officers with formal training programs currently in use by the United States Marine Corps. Support to Yemeni military officer training is likely to increase the effectiveness of [Yemen’s] military force.” On December 13, 2009, (less than two weeks prior to the “Underwear Bomber” incident), it was reported that, “US special forces have been sent to Yemen to train its army amid fears the unstable Arab state is becoming a strategically important base for al-Qaeda.”
It would appear, then, that the “Underwear Bomber” incident arrived just in time for the United States to have an excuse to expand its war in the region. Without the propagandized attempted terrorist attack, the American public would not readily accept America’s entry into yet another war. Questions might be asked about the nature of the war, such as the US supporting the government of Yemen in its suppression and oppression of its own people and the autonomous movements developing within Yemen seeking change. Whereas with a terrorist attack (or attempted, rather), and the convenient link to al-Qaeda, which suddenly was reported to be heavily represented in Yemen, Americans see their involvement in Yemen as a war against al-Qaeda, and a necessary one at that.
Two days after the “Underwear Bomber” incident took place, the New York Times reported that, “in the midst of two unfinished major wars, the United States has quietly opened a third, largely covert front against Al Qaeda in Yemen.” In 2008, “the Central Intelligence Agency sent several of its top field operatives with counterterrorism experience to the country,” and simultaneously, “some of the most secretive Special Operations commandos have begun training Yemeni security forces in counterterrorism tactics.” Further:
It was even reported that the US had been providing both intelligence and “fire power” to Yemen in its air strikes against “suspected al-Qaeda targets” throughout December, prior to the “Underwear Bomber.” The New York Times did its part to propagandize the al-Qaeda issue by stating that, “al Qaeda in the Arabian Peninsula has rapidly evolved into an expanding and ambitious regional terrorist network thanks in part to a weakened, impoverished and distracted Yemeni government.” Naturally, the British were not far behind in supporting an imperialist campaign to crush indigenous movements for autonomy, directed against western-supported dictators. After all, the British have been doing this for centuries. Roughly one week following the attempted Detroit plane bomber story broke, it was reported that the UK sent counter-terrorist forces to Yemen, where they will train the Yemeni military “and will assist in planning operations against al-Qaeda in the Arabian Peninsula.” The British media referred to Yemen as “the ancestral homeland of Osama bin Laden,” and had revealed, perhaps unsurprisingly, that:
There further seems to be an effort to not only use al-Qaeda to advance US interests in the region, but also to draw a link to Iran, so as to further demonize Iran and even draw it into a regional war.
Pushing for a Proxy War With Iran
Government officials in Yemen had been declaring that the greatest threat to Yemen’s security comes not from al-Qaeda, but Iran, as they blame Iran “for fermenting the Shia rebellion,” and the chairman of Yemen’s national security agency stated that, “there are indeed signs, proof of Iranian interference.” While these allegations are made without any proof, “Western diplomats claim it is probable that Iran is providing money or materiel to the group, as it has to Hizbollah in Lebanon.”
In November of 2009, when Saudi Arabia had stepped up its military campaign in Yemen, the New York Times reported that, “the border skirmish could lead to the realization of Saudi Arabia’s worst fear: a proxy conflict with its archrival, Iran, on its doorstep.” Quoting a Yemeni professor as saying that the Iran link to the Houthis was “a myth,” the Saudi assault against the Shi’a group could provoke Iran to “turn myth into reality”:
However, even as the New York Times acknowledged, the idea that the Houthis are more religiously aligned to Iran than the Arab Gulf nations is a misnomer, as the Houthi religion of Zaydism “is doctrinally closer to Sunnism than to mainstream Shiism.” However, facts take a back seat to war propaganda.
On December 18, 2009, roughly one week before the “Underwear Bomber,” Time Magazine ran an article in which they reported on the claims of Yemen and Saudi Arabia that the Houthis “are receiving their funding, weapons and training from Iran in a bid to destabilize the region.” While acknowledging that there is no evidence of Iranian involvement, the Time article was entitled, “Yemen’s Hidden War: Is Iran Causing Trouble?” and the last sentence in the article wrote, “As for Iran — the only party that doesn’t seem to have any real involvement just yet — the time may soon be ripe to jump in.” The Washington Post carried an article entitled, “Yemen denounces Iran’s ‘interference’,” yet only in the final paragraph of the article did they report, “Yemen has accused Iran of funneling arms and providing financial backing to the rebels, but the Yemeni government has not provided evidence to support the assertions. The rebels have insisted that they receive no support from Iran or any other foreign powers.”
Saudi and Yemeni media and government propaganda presented a view that Iran was extensively involved in the internal conflict in Yemen. Yemen had seized an Iranian ship which it claimed was transporting weapons to Houthi rebels, while Saudi papers reported that the Iranian Revolutionary Guards Corps was training the Houthi rebels. Another Saudi media outlet “reported that a dozen Hezbollah fighters from Lebanon were killed during battles in October,” and Saudi Arabia placed blame for the conflict on Iran, saying that “the insurgents are working for Tehran and [are] wanting to take their front to the Saudi border.”
While there has been no actual evidence of Iranian involvement put forward, the situation could become a self-fulfilling prophecy of the Saudis and Yemenis, in the sense that the more they accuse Iran of involvement, the more they demonize and publicly lambaste Iran, the more likely it is that Iran will be drawn into the conflict. If they are already the target of a campaign aimed at blaming their alleged involvement for creating the crisis, what do they have to lose from entering the conflict? Thus, Yemen could “possibly become a battleground for a proxy war between Iran and Saudi Arabia.” Regardless of whether or not the Iranians are or will be physically involved in the conflict, it has resulted in a war of rhetoric between both Saudi Arabia and Iran, further inflaming tensions between the two nations.
In January of 2010, General David Petraeus, commander of US Forces in the Middle East, said that, “the domestic conflict in Yemen could become a proxy war between Iran and Saudi Arabia.” He explained that, “it is not a proxy war now, but has the potential to become one, and there may already have been some movement in that direction.”
There was even a pathetic attempt on the part of the Washington Times to link Iran to al-Qaeda. Obviously, the Washington Times seemed to be blithely unaware of the fact that Iran is a Shi’a dominated state, which is religiously and ideologically opposed to al-Qaeda, which practices a strict Wahhabist Sunni brand of Islam, as propagated and practiced by Saudi Arabia, a major regional antagonist of Iran’s. To claim that there would be a link between Iran and al-Qaeda is simply to proclaim one’s own ignorance. No wonder then, that Senator John McCain, while on the campaign trail for President in 2008, so often ‘proclaimed his ignorance’ by several times making the claim that Iran was supporting al-Qaeda.
Could the United States be seeking to foment a wider war in the region? Could the civil war in Yemen be expanded into a proxy-war against Iran? Well, the United States (with the participation of several other NATO partners) fueled the proxy war in the last civil war, where the target was Nasserist Egypt. Could the US simply be employing the same strategy today as they were then, with simply a change of target? To understand this answer, we must look to the direct role played by the United States in the Yemeni civil war.
America Wages War on Yemen
Over a week prior to the “underwear bomber” fiasco, on December 16, 2009, the United States reportedly “perpetrated an appalling massacre against citizens in the north of Yemen as it launched air raids on various populated areas, markets, refugee camps and villages along with Saudi warplane,” according to the Houthi fighters. Over 120 people were reported to have been killed in the US bombing. The Houthi rebels have even reported that U.S. fighter jets “have launched 28 attacks on the northwestern province of Sa’ada.”
On December 21, 2009, days before the “underwear bomber” pretext, ABC news reported that the US had begun launching cruise missile attacks in Yemen under the authorization of President Obama, and the French media reported on one such strike having massacred “49 civilians, among them 23 children and 17 women.” While the air strikes were reportedly undertaken to target al-Qaeda in Yemen, they took place in the south near where some of the leaders of the secessionist movement were reportedly living. These raids had been increasingly taking place, and as the New York Times reported, “the United States provided firepower, intelligence and other support to the government of Yemen as it carried out raids.”
Over 2009, the Pentagon supplied the Yemeni military with $70 million, effectively subsidizing their military (as they do with a plethora of nations worldwide, most notably Colombia, Israel, Egypt and Saudi Arabia), in order for Yemen’s military to be more able to crush the secessionist uprising in the South, the rebels in the North, and that pesky al-Qaeda which rears its head in any nation America seeks to conduct military operations in. As Newsweek reported in late December of 2009:
In other words, as the US brought in key Pakistani and Saudi assets (who themselves make up both the financial and operational arms of al-Qaeda), al-Qaeda militants began to emerge and launch strikes against Yemen. Suddenly, then, a pretext for US military involvement in the nation is delivered in the guise of fighting the “War on Terror.” Just as during the Cold War, the threat of ‘Communism’ was used to rally support for suppressing and waging war against national liberation movements all across the world, so now these movements are suppressed and waged war against under the guise of “fighting terror.” An odd ‘irony’ of history, then, that in order to “fight terror,” the West simply spreads it.
On December 29th, 2009, the Australian reported that, “the Americans have quietly opened a third, largely covert front against the al-Qa’ida terror network in Yemen, to combat a new generation of militants keen on transforming the country into a launching pad for jihad against the US, its Arab allies and Israel.” Besides the blatant propagandizing in the opening sentence, the first part reveals the fact of a new ‘secret war’ that America is waging. The article explained that a year previous, “CIA sent many of its top field operatives with counter-terrorism experience to the country, while some of the most secretive US special operations commandos began training Yemeni security forces in counter-terrorism tactics.”
As US Senator Joe Lieberman proclaimed, “Iraq was yesterday’s war. Afghanistan is today’s war. If we don’t act pre-emptively, Yemen will be tomorrow’s war.” Barbara Bodine, the former US Ambassador to Yemen, said that, “I think it would be a major mistake to turn this into a third front, if Iraq and Afghanistan are somehow front number one and number two.” She explained, “If we try to deal with this as an American security problem and dealt with by American military, we risk exacerbating the problem.” She astutely observed the nature of occupational forces when she warned, “If we go in and make this our war … it is suddenly going to become a war against us and we will lose it.”
The United States took it upon itself to “press” the Yemeni government – a hard-line oppressive dictatorship – to “toughen its approach.” In February of 2010, U.S. Secretary of Defense Robert Gates approved “more than doubling U.S. funding to train and equip Yemeni security forces to combat al Qaeda” at a figure of $150 million, up from $67 million the previous year. However, “the sum does not include covert U.S. assistance for Yemen, which has quietly increased in recent months.” U.S. CIA Director Leon Panetta, however, raised doubts as to whether Washington can count on Yemen in the long-term to fight al-Qaeda. Covertly, the United States had increased ‘assistance’ to Yemen through U.S. Special Forces, the CIA and the National Security Agency, “sharing satellite and surveillance imagery, intercepted communications and other sensitive information to help Yemen pinpoint strikes against al Qaeda targets,” or at least what are said to be al-Qaeda targets, but usually end up as civilian casualties.
In April of 2010, it was announced that the Pentagon had implemented plans to “boost U.S. military assistance to Yemen’s special operations forces to lead an offensive targeting al-Qaeda in the Arabian Peninsula,” AQAP, providing roughly $34 million in “tactical assistance” to Yemen’s special forces. A further $38 million will provide Yemen with military transport aircraft.
As the United States has dramatically increased CIA drone attacks in Pakistan, killing thousands of innocent civilians, in May of 2010, the United States announced that it had deployed drones to Yemen to target al-Qaeda. In June of 2010, it was leaked that the U.S. “secret war” has expanded globally, as “Special Operations forces have grown both in number and budget, and are deployed in 75 countries, compared with about 60” at the beginning of 2009. As the Washington Post reported:
The British are also involved in supporting the conflict in Yemen. In July of 2010, the head of Yemen’s Special Forces met with a British military delegation, in which “aspects of bilateral military cooperation between Yemen and the UK were discussed in addition to training, and ways to benefit from British military expertise to bolster the military and security capabilities of Yemen’s armed forces.”
In May of 2010, an air strike took place, which was reported to have killed al-Qaeda militants, in “a secret mission by the U.S. military.” However, “the strike, it turned out, had also killed the province’s deputy governor, a respected local leader who Yemeni officials said had been trying to talk al-Qaida members into giving up their fight.” As the Pittsburgh Post-Gazette reported, “that would be the equivalent of some foreign military force killing the lieutenant governor of an American state in an air strike.” Further, the “U.S. attacks have had no apparent impact on al-Qaida or on anyone else in Yemen, apart from its civilian population who have taken casualties in badly targeted attacks.” Commenting on the fact that US Special Forces operations in Afghanistan, Algeria, Iran, Kenya, Lebanon, Morocco, Pakistan, Saudi Arabia, Somalia, Sudan, Tajikistan and Yemen, the reporter asks some important questions:
The questions are surprising to see being asked in the American media, as the rest of the corporate controlled media outlets simply report (without questioning) the government line, and explain that the U.S. has decided to expand the drone attacks in Yemen, which “would likely be modeled after the CIA’s covert drone campaign in Pakistan,” and that the Obama “administration will mount a more intense targeted killing program in Yemen,” without questioning who they are killing. As Glenn Greenwald of Salon Magazine pointed out:
In September of 2010, it was reported that the Pentagon was considering expanding Yemen’s military ‘assistance’ to $1.2 billion over the next five years, but don’t worry, “the US is also providing significant development and humanitarian assistance” to Yemen.
The ‘Cleansing’ of a Liberation Movement
In September 2010, while the Obama administration’s top counter-terrorism official, John Brennan, was in Yemen for talks with President Saleh, Yemeni security forces “laid siege” to a town in the South, Hawta, “where several dozen Qaeda militants were said to be holed up,” which led to thousands of civilians being forced to flee, while the military, as the New York Times reported, “was intermittently shelling the town with tanks and artillery and firing on the jihadists from attack helicopters.” As the article explained:
In other words, the Yemeni government, under intense pressure and support from the United States, is laying siege to a town in the South – in the midst of a massive and growing secessionist movement – which represents the greatest threat to the stability of the staunch U.S.-ally, and which also happens to be home to natural gas reserves. But we are told that the siege is a fight against ‘al-Qaeda’. Meanwhile, civilians were being killed, and one fleeing family said that, “the troops did not spare any one from their fire over the past two days.” The reality of what is going on in the village is “hard to know,” as NPR points out, “because the government is banning any independent observers from going in there.” As a reporter with NPR explained:
Yemen’s government is not new to media censorship and obfuscation, as there have been “dozens of extralegal abductions, politicised trials, illegal confiscations, writing bans, and censorship over the years. What’s particularly alarming is a recent legislative push to erect an elaborate legal facade to obscure repressive tactics.” The government is also attempting to pass “a repressive bill designed to regulate television, radio and online media. If passed, these changes would significantly reduce an already narrow margin for free expression.” The government has even arrested, tortured and tried critical journalists as “supporting al-Qaeda” with absolutely no evidence.
The “Friends” of Yemen: ‘Democratic Imperialism’ and NGOs as Modern Missionaries
In January of 2010, a group of nations and organizations met in London to form the “Friends of Yemen,” which includes the United States, U.K., 20 other countries, as well as the UN, EU, Gulf Cooperation Council (GCC), Arab League, World Bank and IMF. The purpose of the group was to coordinate foreign aid to Yemen, so that it coincides with military, economic and civil assistance aid programs, including forcing Yemen to cooperate with the conditions set by the IMF in order to receive foreign aid. The overall aid would be used to combat what the ‘Friends’ refer to as “appalling indicators,” which include “a growing population, dwindling oil reserves, water shortages and political instability as the government battles Houthi insurgents in the north and secessionists in the south.”
In September of 2010, the Friends of Yemen met in New York to organize a plan for Yemen’s foreign aid. As part of the package, Yemen has been forced to accept an IMF plan to increase taxes by 10% and to eliminate fuel subsidies. At the meeting in New York, the UN reported that there are “168,000 Somali refugees in Yemen, as well as 304,000 Yemeni civilians who continue to be displaced by the seven-month conflict between government forces and Houthis rebels which ended with a shaky truce in February.” The ‘Friends’ further encouraged “progress in the negotiations towards Yemen’s accession to the World Trade Organisation, which they hoped would be concluded by the end of 2010,” and while acknowledging that the proposed economic reforms would have an “adverse impact on the poor,” the Friends thus “committed to provide additional support for social protection,” as well as supporting the formation of national multi-party elections.
At the ‘Friends’ meeting, the United States vowed to commit $67 million for the United States Agency for International Development (USAID), “to work in partnership with communities to directly address local needs. This includes health, education, and water projects; mobile health and veterinary clinics; and support for increasing the capacity of local governments to deliver essential services.” Further plans include funneling millions of dollars through NGOs aimed at providing social services and ‘poverty alleviation’ programs.
While sounding very pleasant and helpful, we must place the concept of promoting ‘democratization’ and the spread of NGOs in their proper geopolitical context. The fact that NGOs, ‘democratization’, economic programs under the direction of the IMF, and military assistance from the West are taking place at the same time is very significant, and not as contradictory as it might seem.
In Africa, the IMF and World Bank’s “Structural Adjustment Programs” that deconstructed society to service illegitimate debts to Western banks had the effect of spreading poverty and effectively induced “social genocide.” The national leaders became very rich, creating a tiny elite which was subservient to Western imperial interests. Western nations would arm the nation and use it as a proxy force in the region when necessary or help it in the oppression of its own people, in order to ensure the stability of their interests. The people of these various nations would protest, demonstrate, riot and rebel, so much so that between 1976 and 1992, there were 146 protests against IMF ‘austerity measures’ in 39 countries around the world. Governments, in response, would generally resort to violence to suppress these demonstrations, with “strikes declared illegal, universities were closed, and trade unions, student organizations, popular organizations and political parties also became the target of repressive legislation or actions.” This essentially created a “crisis of legitimacy,” where the economic ‘reforms’ were seen as destructive, where the political process was seen as corrupt, where the state oppressed and foreigners profited, while the people suffered. It didn’t help the situation that it was often authoritarian governments introducing these economic reforms.
In 1989, the World Bank concluded that the reason for the failure of ‘structural adjustment’ across Africa was not due to the destructive poverty-inducing nature of the reforms, but was do to the corrupt governments implementing them. Thus, it was a “crisis of governance.” The solution, in this sense, was to promote ‘democratization’, as in, a neoliberal concept of democracy. Africa had been experiencing a growth of democratic movements around the continent during the time of Structural Adjustment, which led the IFIs (International Financial Institutions) and Western nations to conclude that democratization and economic liberalization go hand-in-hand. In short, Structural Adjustment is ‘inherently’ democratic. The failure of this analysis was quite obvious: the pro-democracy movements that had arisen across Africa “reflect, to a significant extent, a popular reaction against the socially painful effects of structural adjustment.”
The ‘democratization’ movement is largely an effort to maintain ‘stability’ in the hegemony of the IMF/World Bank and Western interests over Africa and other regions, as instead of rotating from one coup to another, there is a parliamentary democracy where you go from one party to another (who all accept the dominance of the West and the ‘advice’ of the IFIs), which produces a more ‘stable’ environment for Western interests, as it also has the effect of pacifying popular opposition under the guise of promoting democratic accountability. However, these are not true democracies (nor are those in the West), where you simply vote between competing factions of elites who are collectively co-opted by the same international financial elites. They impose the institutions of democracy (legislatures, political parties, judiciaries) “without combining political democracy and social reform.” Thus, these democracies are essentially stillborn (dead before they even exited), as “formal democracy without social reform increases economic inequality and thereby intensifies unequal distribution of power in society.” As Noam Chomsky has argued, “the guardians of world order have sought to establish democracy in one sense of the term, while blocking it in a different sense.” He argued that “power holders use democracy as justification for their power and as an ideological instrument for keeping the public quiescent and out of decision-making processes.”
Alison Ayers analyzes ‘democratization’ as a multi-faceted approach in Africa, entailing: multiparty elections, constitutionalism, the rule of law, a “particular conception of human rights,” ‘good governance’, and an “independent civil society.” Multiparty elections comprise an occasional election in which people choose between competing factions of elites, while constitutionalism implies establishing a “set of rules securing property rights, governing civil and commercial behaviour, and limiting the power of the state.” In promoting ‘multiparty systems’, “the dominant agents of the democratization project have established a veritable ‘elections industry’ comprising voter and civic education campaigns, party-building activities, and electoral assistance and monitoring.” The “engineering of civil society” has taken on an explicitly neo-liberal form, in which it focuses on the “liberation of civil society” from the state, and of which NGOs (non-governmental organizations) have come to play a decisive role. Western aid agencies heavily finance international and local NGOs (thus often negating the notion that they are non-governmental), with the World Bank exponentially increasing its support of NGOs (often through governments).
In fact, NGOs have come to play a pivotal role in the modern imperial project, as they have been co-opted into a program of “welfare provision, a social initiative that could be more accurately described as a programme of social control.” The NGOs were used to respond to the social upheaval brought about by the age of ‘Structural Adjustment’, to provide a degree of social services that were formerly provided by the state. Thus, as the spread of Structural Adjustment increased throughout Africa, so too did the spread of Western NGOs. Western nations heavily support these supposed non-governmental organizations, with the U.S. transferring nearly 40 percent of its aid through NGOs. They have become an essential aspect of the ‘development’ agenda in Africa, itself based upon a colonial mindset. Whereas in the formal colonial period at the end of the 19th and beginning of the 20th century, Africans were considered “uncivilized,” and so colonialism in Africa was not about oppression and economic exploitation, but was rather a ‘civilizing mission.’ Today, Africa is not ‘uncivilized’ but rather, ‘undeveloped’, and so, just as the missionaries of the formal colonial period played a role in ‘civilizing’ Africa – in the vision of the West (akin to how God created man in ‘his own image’) – the NGOs of the new imperial era have come to Africa in a ‘developing mission’. The ‘development’ paradigm had the effect of sterilizing popular opposition, as it framed the problem in Africa not as one of ‘emancipation’ (from colonial and oppressive powers), but as a problem of ‘poverty’ and ‘basic needs’. The role of NGOs in ‘development’:
There are further concerns to take into account in regards to ‘democratization’ and ‘aid’ through NGOs, not simply in the establishment of a system of lobotomizing resistance – preventing emancipation – and promoting the legitimization of the status quo powers (by treating the symptoms of poverty and oppression rather than the causes), but NGOs and ‘democratization’ often play a very covert role in imperialism, particularly through USAID (United States Agency for International Development) as well as a host of so-called Non-Governmental Organizations (which happen to be funded by the government), such as the National Endowment for Democracy. These organizations are effectively able to organize opposition to a national ruler, create a parallel media system, provide activist training and funding to covertly orchestrate a “soft power” coup, in which it is seen as a “democratic revolution” or a “peaceful revolution,” often following contested elections. This is done to create the illusion that these are popular people’s movements elevating leaders of “change”, but which simply are leaders that are subservient to Western imperial interests. Often, the CIA itself operates through such agencies covertly.
In South Vietnam for example, USAID provided cover for the CIA so extensively, “that the two became almost synonymous.” In the 1980s, during the largest CIA covert operation in history, funding the Afghan Mujahideen to fight the Soviet Union, the CIA and USAID worked very closely, coordinating their efforts, as “the United States spent millions of dollars to supply Afghan schoolchildren with textbooks filled with violent images and militant Islamic teachings, part of covert attempts to spur resistance to the Soviet occupation.” The textbooks, made in America at the University of Nebraska with tens of millions of dollars of financing from USAID, taught children “to count with illustrations showing tanks, missiles and land mines,” and while USAID dropped funding for the program in 1994, the books continued in circulation, even after the Taliban came to power in 1996, and “private humanitarian groups paid for continued re-printings during the Taliban years. Today, the books remain widely available in schools and shops.” The entire program was coordinated with the CIA.
The National Endowment for Democracy (NED) is another particularly covert imperial force, a NGO that gets all it’s funding from the US government, and about which U.S. Congressman Ron Paul explained eloquently:
The NED and a host of other NGOs (backed by government funding), as well as private foundations, have implemented a “soft power” approach to implementing “democratic regime change” in countries in Eastern Europe and Central Asia, often aimed at replacing former Western puppet leaders with new puppet leaders to better promote imperial interests in the nations where they take place. This has occurred in Serbia, Georgia, Ukraine, Kyrgyzstan and many other countries. An effort was undertaken to impose a similar “democratic regime change” with the CIA funneling $400 million for implementing this “soft power” strategy in Iran, resulting in the Iranian elections protests in the summer of 2009. While the strategy failed in its aims of “regime change” it mounted an incredibly successful international propaganda campaign, so much so that the world was lashing out against Iran for what the West claimed were fraudulent elections (but turned out to be free and fair elections), and at the same time, the Western media failed to cover a successful military coup in Honduras, in which the democratically elected President was kidnapped and sent to a foreign country, while the subsequent dictatorship brutally repressed people’s protests and demonstrations, with the new regime all the while being supported by the United States.
From this we can see that the “Friends of Yemen” promoting democratization and “good governance” in Yemen serves Western imperial ambitions. In the very least, it is designed to stifle and ultimately lobotomize organic, indigenous liberation, self-determination, and autonomy movements, while the same Western nations militarily arm and support the oppressive government in its repression of these people. It seems that for the time being, America has chosen to support the current Yemeni dictatorship, propping it up to crush its own people and their struggles for liberation. Simultaneously, America and the West are preparing themselves for a long-term strategy of “democratization,” in which they may have to replace Saleh and the current regime with a new client regime to secure American interests and hegemony in the region.
In this context we may view the Middle East Partnership Initiative (MEPI), a program of the U.S. State Department aimed at supporting “reforms” in the Middle East and North Africa, in which they support international and local NGOs, educational institutions, local governments and private businesses to implement projects designed to directly engage and invest in the people of the region. MEPI has completed roughly 28 programs in Yemen alone, with roughly seven grants ongoing, aimed at organizing journalists, ‘human rights’ activists, improving the Parliamentary process, improving political participation, promoting women’s ‘empowerment’, and “raising democratic awareness.”
The National Endowment for Democracy (NED) is also active in Yemen, funding and running programs aimed at promoting “civic and human rights awareness,” facilitating “the free flow of independent news information to Yemenis on issues related to social, political, and economic growth of the country and to build the capacity of journalists to effectively monitor and report on human rights issues,” as well as identifying “the political needs and concerns of women, and to push political parties to adopt women’s issues in their party platforms.” One program of the NED includes nearly $200,000 of funding for the Center for International Private Enterprise (CIPE). According to their website, CIPE “strengthens democracy around the globe through private enterprise and market-oriented reform. CIPE is one of the four core institutes of the National Endowment for Democracy,” and is also an affiliate of the U.S. Chamber of Commerce. The $184,000 grant to CIPE from the NED is to “facilitate access to information and analysis about economic reform,” which will include producing “thirty 20-30 minute radio programs on economic reform in Yemen and sponsor economic reform pages in two independent newspapers,” in order to “empower Yemenis to participate in the democratic and economic reform process.” However, considering the group promotes “private enterprise” and is affiliated with the U.S. Chamber of Commerce, the “information and analysis” about economic reform is more likely to be misinformation and propaganda. In total, the NED is operating roughly 13 programs in Yemen at the moment.
USAID’s programs in Yemen aim at taking the “missionary position” in addressing some of the symptoms of conflict, deprivation, disenfranchisement, and oppression, without allowing the people to seek emancipation and liberation. These programs includes a “new three-year Responsive Governance Project [which] aims to strengthen government institutions, support reforms including decentralization, and improve the delivery of public services while encouraging more citizen participation in the political process,” as well as “the Community Livelihoods Project that is focusing on improving agriculture and increasing employment opportunities in highly vulnerable communities, especially for youth.” Other programs aim at promoting education, health care, and ‘peace and security.’
So, while the U.S. government uses the IMF to wreck the economy of Yemen, spreading poverty and dismantling health care, social services and education; the U.S. simultaneously funds and arms the Yemeni dictatorship to repress the people rising up against their economic, social and political conditions; yet, again simultaneously, the United States – through USAID and various other “democratization” programs – aims to alleviate some of the social repercussions to maintain stability of their interests. Imperialism has an economic facet (the IMF), a political facet (military-intelligence support), and a social facet (NGOs and ‘democratization’).
Thus we also see the significance in that while the CIA expands its operations in Yemen (in support of the dictatorship), the current CIA Director holds doubts about “whether Washington can count on Yemen in the long-term to fight al Qaeda, citing internal unrest that threatens to destabilize the government and break up the country, along with growing anti-American sentiment.” This is made all the more interesting to take into account that the CIA Director announced that the CIA will be expanding its use of under-cover assets through a variety of unofficial organizations – such as corporations or other organizations.
War, Empire, and “Perception Management”: Propaganda Creates ‘Cultural Schizophrenia’
So who exactly is the US supporting in Yemen? Ali Abdullah Saleh has been in power since 1978, first ruling North Yemen, and subsequently ruling all of Yemen. Saleh has managed to remain the ruler of a ‘united’ Yemen by “clamping down on the press, concentrating military and economic power in the hands of friends and family and winning elections by suspiciously high margins.” Time Magazine reported that Saleh described ruling Yemen as “dancing on the heads of snakes.” Saleh, however, can hardly act as if he rules a ‘united’ Yemen, when “two-thirds of the country is in the hands of either separatist groups or local tribes.” Further:
The significance of this piece of information, located in the Time article, which was otherwise propagandistic of the “fight against al-Qaeda,” is that it acknowledges that the key to Yemen’s issues today is the legitimacy of the central government’s rule over the people of Yemen. The essential issue is that this is about people’s rights to govern themselves, to not be oppressed, not be murdered, nor economically devoured by international capital and national industrial interests. Our nations and our media call these people “terrorists”; our intelligence agencies sponsor ‘terrorists’ in these nations, who kill these people, and then we use that as an excuse to send in the military to kill more of these people. We support an illegitimate government, an oppressive and brutal dictator who vowed to crack down with an “iron fist” in August of 2009. His subsequent “iron fist” created “a humanitarian tragedy,” where by September over 25,000 people had become refugees, by October 2009, over 55,000 people fled their homes due to the conflict. These are the people the West is helping the Yemeni dictator kill. And not only him, but Saudi Arabia is helping, as are Pakistan and Jordan, three other nations subservient to American interests, and whose militaries are ‘American made’. Saudi Arabia especially, as it seeks to prevent the spread of the Shi’a resistance, which to the illegitimate state of the Kingdom of Saudi Arabia, combined with several other resistant and oppressed groups, could create the political, economic and social conditions for revolution. No wonder then, that the United States is planning to undertake the largest arms deal in American history with Saudi Arabia, valued at $60 billion, which “is aimed at establishing air superiority over rival Iran while also addressing weaknesses bared in border fighting with Yemeni rebels.”
A state seeks only its own survival and growth in power; that is the nature of all states. This is why nation-states are naturally inclined to forgo competition for power with the economic sphere, and simply merge interests and elite social structures. It is in their interest for both survival and growth in power.
Our oppressive and illegitimate nation-states seek to aid in the oppression of other peoples in other places, and increasingly so at home. However, it is through the media that this massive collective wave of ignorance and ‘cultural schizophrenia’ takes place. This is why most in the west see the world, blissfully unaware of its realities. The media leads the people through that old wardrobe into the land of Narnia: the media’s ‘perception management’ of the world is nothing but a ‘fantasy’. A good example of this ‘fantasy world’ is located in a Time Magazine article. It wrote:
The attack, in reality, killed 52 people, more than half of them being women and children, in which a US missile armed with cluster ammunition was used, with both the Yemeni and American governments claiming the target was an al-Qaeda training camp. The cruise missile was designed to be fired from a warship or submarine, and was filled with “cluster munitions which spray steel fragments for 150 meters along with burning zirconium for igniting buildings.” However, “the Yemeni government does not possess cruise missiles, which are part of the arsenal of US Navy vessels patrolling off the Horn of Africa and in the Arabian Sea.” The missiles were “launched on direct presidential orders.”
Our governments kill these people and call them “militants” and “terrorists,” our media repeat the accusation with no dissent. War is like no other situation that can lead to the growth of the state. War is the ultimate organizing principle in society, for with war powers, a nation can build, destroy, grow, oppress, control, expand, consume, corrupt and continue. As this power grows, so too does the power of all the other various major spheres of influence over humanity, such as the media and the academics. We can add to that the scientific and technological elite, who help to create the conditions, understanding, technology, and means of expanding power and controlling the masses so that today we have unmanned aerial vehicles called “Predator Drones” flying over Yemen killing innocent civilians, while the drones are operated from American military bases in Florida. America has been doing the exact same thing in Pakistan at a much more significant rate and for a much longer period of time (and most rapidly accelerated under the Obama administration of ‘change’).
This ‘invisible empire’ is managed through ‘perception management’ – propaganda – which infects all spheres of social power structures, but which is arguably most prominent and powerful in the media. This creates among western citizens, and most particularly among Americans, a type of ‘cultural schizophrenia’ in which the ‘mind of the nation’ (how the majority of people view their nation and their world) is so contrary to the reality of that nation and the world around it, that it creates a nation or a people ‘of two minds’, holding both the fantasy world of those who encompass it, and the hard-bitten reality of global power structures and systems.
This ‘cultural schizophrenia’ is most emblematic in the United States, where the majority of those within it view it as a force for good in the world, spreading freedom, democracy and ‘free markets’ around the world; while the reality is so different, that the majority of the rest of the world view the United States as a force for spreading fear, war, economic exploitation and power. This is the view, especially, of those to whom the United States has attempted to spread “freedom and democracy.”
This has slightly changed in the context of the “war on terror”, which has allowed for flowery rhetoric about democratic rights and liberty to subside beside the urgency of “fighting terror.” Around the world, people were rejecting the “liberal democratic” project in replacing the dictatorships of the 70s – 90s with [neo]liberal democratic governments, which were democratic only so much as they created political powers and held usually corrupt elections in which various power factions would compete for the authority to plunder the nation in cooperation with international corporations, financial institutions and western governments. Democracy in the ‘Third World’ had essentially proven itself a farce, and people’s movements were increasing. The “war on terror” has subsequently fiercely mobilized the American military (and its NATO cohorts), vastly increased its scope, operations, abilities and entanglements; and created the political conditions for the nation to rapidly accelerate the use of its military apparatus around the world, something which the American people would not support without what is perceived to be a good reason. After all, they will largely be the ones forced to fight and partake in these wars.
And so we come back to Yemen. As Martin Luther King said in 1967, “We are on the wrong side of a world revolution.”
 Rev. Martin Luther King, Beyond Vietnam: A Time to Break Silence. Speech delivered by Dr. Martin Luther King, Jr., on April 4, 1967, at a meeting of Clergy and Laity Concerned at Riverside Church in New York City:
 Andrew Gavin Marshall, The Imperial Anatomy of Al-Qaeda. The CIA’s Drug-Running Terrorists and the “Arc of Crisis”, Global Research, 5 September 2010:
 James Jankowski and Israel Gershoni, eds., Rethinking Arab Nationalism in the Arab Middle East. (New York: Columbia University Press, 1997), page 30
 Ibid, page 31.
 William L Cleveland, A History of the Modern Middle East, 3rd ed. (Oxford: Westview Press, 2004), page 231
 Ibid, pages 231-232
 Zachary Lockman, Contending Visions of the Middle East: The History and Politics of Orientalism. (New York: Cambridge University Press, 2004), page 116
 James Jankowski and Israel Gershoni, Op Cit, page 31
 William L. Cleveland, op cit, pages 310-311
 Ibid, page 311.
 Ibid, page 312.
 James Jankowski and Israel Gershoni, op cit, page 31.
 William L. Cleveland, op cit, page 315
 Robert Dreyfuss, Devil’s Game: How the United States Helped Unleash Fundamentalist Islam. (New York: Owl Books, 2005), pages 140-141
 Ibid, page 142.
 James Jankowski and Israel Gershoni, op cit, page 32.
 William L Cleveland, op cit, page 455.
 Ibid, pages 455-456.
 James Jankowski and Israel Gershoni, op cit, page 40.
 Ibid, page 39.
 Ibid, page 32.
 Ibid, page 38.
 Ibid, page 39.
 Ibid, page 32.
 Profile: Yemen’s Houthi fighters, Al Jazeera, August 12, 2009:
 Ploughshares, Armed Conflicts Report: Yemen, January 2009:
 Deadly blast strikes Yemen mosque, BBC, May 2, 2008:
 Ploughshares, Armed Conflicts Report: Yemen, January 2009:
 Mohammed Jamjoom, Yemen lays out truce terms to rebel fighters, CNN, August 13, 2009:
 Yemen targets northern fighters, Al-Jazeera, August 12, 2009:
 Yemen denies warplane shot down, Al-Jazeera, October 2, 2009:
 Yemen rebels ‘seize Saudi area’, BBC, November 4, 2009:
 Saudis still bombing us, Yemen rebels say, MSNBC, November 7, 2009:
 Mohammed Al-Amrani, Moroccan, Jordanian Soldiers Fight along Saudi Troops, Yemen Gazette, December 5, 2009:
 ESA, Earth from Space: The Gulf of Aden – the gateway to Persian oil. European Space Agency: April 13, 2006:
 Anthony Lake and Christine Todd Whitman, More Than Humanitarianism: A Strategic U.S. Approach Toward Africa. The Council on Foreign Relations, 2005: page 32
 Ibid, page 33.
 Ibid, page 48.
 Ibid, page 81.
 David Leigh and David Pallister, Revealed: the new scramble for Africa. The Guardian: June 1, 2005:
 Emily Wax and Karen DeYoung, U.S. Secretly Backing Warlords in Somalia. The Washington Post: May 17, 2006:
 David Axe, U.S. Losing ‘Secret’ War in Somalia. Wired, December 30, 2008:
 Scott Johnson, The Next Battlefront. Newsweek: September 17, 2007:
 Johann Hari, You are being lied to about pirates. The Independent, January 5, 2009:
 Kelly McEvers, In Anti-Piracy Fight, Yemen May Be Part Of Problem. NPR, May 8, 2009:
 ROBERT F. WORTH, Freed by the U.S., Saudi Becomes a Qaeda Chief. The New York Times: January 22, 2009:
 ERIC SCHMITT and DAVID E. SANGER, Some in Qaeda Leave Pakistan for Somalia and Yemen. The New York Times, June 11, 2009: http://www.nytimes.com/2009/06/12/world/12terror.html
 Mai Yamani, Yemen, haven for jihadis. The Guardian, May 25, 2009:
 Saudi, al-Qaeda support Yemen crackdown on Shias, Press TV, August 29, 2009:
 Yemeni gov,deal with al-Qaeda to crush Shia fighters, Shebastan News Agency, October 28, 2009:
 Josh Meyer, Saudis faulted for funding terror. The Los Angeles Times, April 2, 2008:
 ERIC LICHTBLAU, Documents Back Saudi Link to Extremists. The New York Times: June 23, 2009:
 Daniel Schwartz, Al-Qaeda is almost the least of Yemen’s problems, CBC News, 29 January 2010:
 Andrew England, Gunmen attack Yemen security office, The Financial Times, 14 July 2010:
 Stephen Day, The Political Challenge of Yemen’s Southern Movement, The Carnegie Endowment for International Peace, March 2010: http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=40411
 ‘The Southern Movement has nothing to do with al Qaeda’, France24, 3 August 2010:
 Human Rights Watch alert over Yemen ‘climate of fear’, BBC News, 15 December 2009:
 Robert F. Worth, In Yemen’s South, Protests Could Cause More Instability, The New York Times, 27 February 2010: http://www.nytimes.com/2010/02/28/world/middleeast/28yemen.html
 Eileen Sullivan, US officials knew name of terror suspect who tried to blow up airliner in Detroit. AP, December 26, 2009:
 David Leppard and Dan McDougall, MI5 knew of Umar Farouk Abdulmutallab’s UK extremist links. The Times, 3 January 2010: http://www.timesonline.co.uk/tol/news/uk/article6973954.ece
 Father of Terror Suspect Reportedly Warned U.S. About Son. Fox News, December 26, 2009:
 Current TV, Terror suspect kept visa to avoid tipping off larger investigation. The Detroit News, February 3, 2010:
 Karen DeYoung and Michael Leahy, Uninvestigated terrorism warning about Detroit suspect called not unusual. The Washington Post, December 28, 2009: http://www.washingtonpost.com/wp-dyn/content/article/2009/12/27/AR2009122700279.html; ERIC LIPTON and SCOTT SHANE, Questions on Why Suspect Wasn’t Stopped. The New York Times, December 27, 2009:
 Paul Egan, Atty. Says He Saw Man Try to Help Nigerian on Flight Without a Passport. The Detroit News, December 29, 2009:
 MICHAEL R. GORDON and JAMES DAO, U.S. Broadens Terror Fight, Readying Troops for Yemen. The New York Times, March 2, 2002: http://www.nytimes.com/2002/03/02/world/nation-challenged-military-us-broadens-terror-fight-readying-troops-for-yemen.html
 Duncan Campbell and Brian Whitaker, US elite force gets ready for Yemen raid. The Guardian, 19 September 2002: http://www.guardian.co.uk/world/2002/sep/19/duncancampbell.brianwhitaker
 Dana Priest, U.S. Citizen Among Those Killed In Yemen Predator Missile Strike. The Washington Post, November 8, 2002:
 Richard Spencer, US risks being sucked into Yemen civil war. The Telegraph, 10 September 2009:
 Richard Spencer, US risks being sucked into Yemen civil war. The Telegraph, 10 September 2009:
 Gunnery Sgt. Christian Harding, Yemen military observes Marine training. United States Central Command, 3 November 2009:
 Damien McElroy, US special forces train Yemen army as Arab state becomes al-Qaeda ‘reserve base’. The Telegraph, 13 December 2009: http://www.telegraph.co.uk/news/worldnews/middleeast/yemen/6803120/US-special-forces-train-Yemen-army-as-Arab-state-becomes-al-Qaeda-reserve-base.html
 ERIC SCHMITT and ROBERT F. WORTH, U.S. Widens Terror War to Yemen, a Qaeda Bastion. The New York Times, 27 December 2009: http://www.nytimes.com/2009/12/28/world/middleeast/28yemen.html?_r=1
 Steven Erlanger, Yemen’s Chaos Aids the Evolution of a Qaeda Cell. The New York Times, 2 January 2010:
 Sean Rayment, et. al., Detroit terror attack: Britain sends counter-terrorist forces to Yemen. The Telegraph, 3 January 2010: http://www.telegraph.co.uk/news/worldnews/middleeast/yemen/6924502/Detroit-terror-attack-Britain-sends-counter-terrorist-forces-to-Yemen.html
 Damien McElroy, US special forces train Yemen army as Arab state becomes al-Qaeda ‘reserve base’. The Telegraph, 13 December 2009: http://www.telegraph.co.uk/news/worldnews/middleeast/yemen/6803120/US-special-forces-train-Yemen-army-as-Arab-state-becomes-al-Qaeda-reserve-base.html
 Robert F. Worth, Saudis’ Efforts to Swat Rebels From Yemen Risk Inflaming Larger Conflict. The New York Times, 12 November 2009: http://www.nytimes.com/2009/11/13/world/middleeast/13saudi.html
 Abigail Hauslohner, Yemen’s Hidden War: Is Iran Causing Trouble? Time Magazine, 18 December 2009:
 Sudarsan Raghavan, Yemen denounces Iran’s ‘interference’. The Washington Post, 12 November 2009:
 Olivier Guitta, Iran and Saudi Arabia drawn to Yemen. Asia Times Online, 11 November 2009:
 Meris Lutz, YEMEN: Raging insurgency exacerbates tensions between Saudi Arabia and Iran. Los Angeles Times Blog, 13 November 2009: http://latimesblogs.latimes.com/babylonbeyond/2009/11/yemen-internal-fighting-threatens-to-descend-into-regional-conflict.html
 Al Pessin, US General Says Yemen Could Become Iran-Saudi Proxy War. VoA, 22 January 2010:
 EDITORIAL: Iran’s al Qaeda connection in Yemen, The Washington Times, 6 January 2010:
 Sam Stein, McCain Repeats Iran-Al Qaeda Gaffe Yet Again. Huffington Post, 19 March 2008:
 Robert Taylor, US bombs Yemen, kills 120, just another day in the life of an empire. The Examiner, 16 December 2009:
 ‘US fighter jets attack Yemeni fighters’, Press TV, 14 December 2009:
 Paul Woodward, US-backed raid killed 49 Yemeni civilians, officials said. The National, 21 December 2009:
 Kevin Peraino, Friends for Now. Newsweek, 29 December 2009:
 Agencies, US fighting covert war against terror in Yemen. The Australian, 29 December 2009:
 Michelle Shephard, Yemen: Terror threat? U.S. ally? Nearly failed state? Toronto Star, 2 January 2010:
 Karen DeYoung and Greg Jaffe, U.S. increases efforts to boost security in Yemen amid increasing terror threat, The Washington post, 20 January 2010: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/19/AR2010011904604.html
 Adam Entous, Gates backs big boost in U.S. military aid to Yemen, 22 February 2010:
 Adam Entous, U.S. gives Yemen key intelligence to strike al Qaeda, Reuters, 27 January 2010:
 Adam Entous, Pentagon to boost Yemen’s special operations forces, Reuters, 20 April 2010:
 Salman Siddiqui, Drone attacks hit all-time high, The Express Tribune, 27 September 2010:
 Con Coughlin and Philip Sherwell, American drones deployed to target Yemeni terrorist, The Telegraph, 2 May 2010: http://www.telegraph.co.uk/news/worldnews/middleeast/yemen/7663661/American-drones-deployed-to-target-Yemeni-terrorist.html
 Karen DeYoung and Greg Jaffe, U.S. ‘secret war’ expands globally as Special Operations forces take larger role, The Washington Post, 4 June 2010: http://www.washingtonpost.com/wp-dyn/content/article/2010/06/03/AR2010060304965.html
 Mohammed Al-Amrani, Special Forces Commander Meets UK Military Delegation, Yemen Gazette, 10 July 2010:
 SCOTT SHANE, MARK MAZZETTI AND ROBERT F. WORTH, Veil lifts on covert action in Yemen, The New York Times, 14 August 2010: http://seattletimes.nwsource.com/html/nationworld/2012625717_covertwar15.html
 Dan Simpson, The U.S. spreads the misery to Yemen, The Pittsburgh Post-Gazette, 18 August 2010:
 Glenn Greenwald, An exciting new Muslim country to drone attack, Salon, 25 August 2010:
 AFP, US looks at bolstering funding for Yemeni military, The Jordan Times, 3 September 2010:
 Robert F. Worth, Yemen Military Attacks Town It Says Is Militant Hide-Out, The New York Times, 21 September 2010: http://www.nytimes.com/2010/09/22/world/middleeast/22yemen.html
 Yemen civilians killed in ‘al-Qaeda hunt’, Press TV, 21 September 2010:
 Soraya Sarhaddi Nelson and Steve Inskeep, Civilians Flee From Battle In Southern Yemen, NPR, 24 September 2010:
 Mohamed Abdel Dayem, Yemen’s veneer of legality, The Guardian, 29 September 2010:
 Mark Landler, As Nations Meet, Clinton Urges Yemen to Prove Itself Worthy of Aid, The New York Times, 27 January 2010: http://www.nytimes.com/2010/01/28/world/asia/28diplo.html
 Brian Whitaker, Can Yemen’s friends really help? The Guardian, 20 September 2010:
 James Reinl, Friends of Yemen discuss extremist threat, The National, 26 September 2010:
 Ministerial Meeting of Friends of Yemen, Joint statement from the Ministerial Meeting of the Friends of Yemen, British Commonwealth Office, 24 September 2010: http://www.fco.gov.uk/en/news/latest-news/?view=PressS&id=22916622
 Aaron W. Jost, A Comprehensive Approach to Yemen, The White House Blog, 24 September 2010:
 Firoze Manji and Carl O’Coill, “The Missionary Position: NGOs and Development in Africa,” International Affairs, Vol. 78, No. 3, (2002), p. 578
 Ernest Harsch, “Structural Adjustment and Africa’s Democracy Movements,” Africa Today, Vol. 40, No. 4, (1993), p. 14
 Ibid, page 10.
 Ibid, page 12.
 Barry Gills and Joel Rocamora, “Low Intensity Democracy,” Third World Quarterly, Vol. 13, No. 3, (1992), p. 502
 Ibid, page 503.
 Alison J. Ayers, “Demystifying Democratisation: The Global Constitution of (Neo)liberal Polities in Africa,” Third World Quarterly, Vol. 27, No. 2, (2006), p. 323
 Ibid, page 325.
 Ibid, page 326.
 Ibid, page 329-331.
 Firoze Manji and Carl O’Coill, op cit, page 579.
 Ibid, page 580.
 Ibid, pages 574-575.
 Ibid, page 568.
 Jeff Stein, CIA chief promises spies ‘new cover’ for secret ops, Washington Post Blog – SpyTalk, 26 April 2010:
 Joe Stephens and David B. Ottaway, From U.S., the ABC’s of Jihad, The Washington Post, 23 March 2002:
 Carol Off, Back to school in Afghanistan, CBC, 6 May 2002:
 Harley Sorensen, NED’s feel-good name belies its corrupt intent, The San Francisco Chronicle, 17 November 2003:
 Andrew Gavin Marshall, Colour-Coded Revolutions and the Origins of World War III, Global Research, 3 November 2009:
 Andrew Gavin Marshall, A New World War for a New World Order, Global Research, 17 December 2009:
 MEPI, Ongoing MEPI Local Grants – Yemen, Middle East Partnership Initiative, Accessed October 2010:
 CIPE, Who We Are, Center for International Private Enterprise:
 NED, Country Profile – Yemen, The National Endowment for Democracy, Accessed October 2010:
 USAID, Yemen, United States Agency for International Development:
 Adam Entous, Gates backs big boost in U.S. military aid to Yemen, Reuters, 22 February 2010:
 Jeff Stein, CIA chief promises spies ‘new cover’ for secret ops, Washington Post Blog – SpyTalk, 26 April 2010:
 Andrew Lee Butters, Yemen: The Most Fragile Ally. Time Magazine, 7 January 2010:
 Richard Spencer, US risks being sucked into Yemen civil war. The Telegraph, 10 September 2009:
 Yemen denies warplane shot down, Al-Jazeera, October 2, 2009:
 Paul Handley, Huge Saudi arms deal aimed at Iran, Yemen troubles: analysts, AFP, 12 September 2010: http://www.google.com/hostednews/afp/article/ALeqM5jxlLTtu2Ccx7EsT_qH_tPhukgKCA
 Andrew Lee Butters, Yemen: The Most Fragile Ally. Time Magazine, 7 January 2010:
 Kim Sengupta, US cruise missile parts found in Yemeni village where 52 died, The Independent, 7 June 2010:
 Gilbert Mercier, Yemen: US Strikes Used Cluster Bombs And Killed 41 Civilians. NewsJunkiePost, 7 June 2010:
Debt Dynamite Dominoes: The Coming Financial Catastrophe
Assessing the Illusion of Recovery
Global Research, February 22, 2010
Understanding the Nature of the Global Economic Crisis
The people have been lulled into a false sense of safety under the ruse of a perceived “economic recovery.” Unfortunately, what the majority of people think does not make it so, especially when the people making the key decisions think and act to the contrary. The sovereign debt crises that have been unfolding in the past couple years and more recently in Greece, are canaries in the coal mine for the rest of Western “civilization.” The crisis threatens to spread to Spain, Portugal and Ireland; like dominoes, one country after another will collapse into a debt and currency crisis, all the way to America.
In October 2008, the mainstream media and politicians of the Western world were warning of an impending depression if actions were not taken to quickly prevent this. The problem was that this crisis had been a long-time coming, and what’s worse, is that the actions governments took did not address any of the core, systemic issues and problems with the global economy; they merely set out to save the banking industry from collapse. To do this, governments around the world implemented massive “stimulus” and “bailout” packages, plunging their countries deeper into debt to save the banks from themselves, while charging it to people of the world.
Then an uproar of stock market speculation followed, as money was pumped into the stocks, but not the real economy. This recovery has been nothing but a complete and utter illusion, and within the next two years, the illusion will likely come to a complete collapse.
The governments gave the banks a blank check, charged it to the public, and now it’s time to pay; through drastic tax increases, social spending cuts, privatization of state industries and services, dismantling of any protective tariffs and trade regulations, and raising interest rates. The effect that this will have is to rapidly accelerate, both in the speed and volume, the unemployment rate, globally. The stock market would crash to record lows, where governments would be forced to freeze them altogether.
When the crisis is over, the middle classes of the western world will have been liquidated of their economic, political and social status. The global economy will have gone through the greatest consolidation of industry and banking in world history leading to a system in which only a few corporations and banks control the global economy and its resources; governments will have lost that right. The people of the western world will be treated by the financial oligarchs as they have treated the ‘global South’ and in particular, Africa; they will remove our social structures and foundations so that we become entirely subservient to their dominance over the economic and political structures of our society.
This is where we stand today, and is the road on which we travel.
The western world has been plundered into poverty, a process long underway, but with the unfolding of the crisis, will be rapidly accelerated. As our societies collapse in on themselves, the governments will protect the banks and multinationals. When the people go out into the streets, as they invariably do and will, the government will not come to their aid, but will come with police and military forces to crush the protests and oppress the people. The social foundations will collapse with the economy, and the state will clamp down to prevent the people from constructing a new one.
The road to recovery is far from here. When the crisis has come to an end, the world we know will have changed dramatically. No one ever grows up in the world they were born into; everything is always changing. Now is no exception. The only difference is, that we are about to go through the most rapid changes the world has seen thus far.
Assessing the Illusion of Recovery
In August of 2009, I wrote an article, Entering the Greatest Depression in History, in which I analyzed how there is a deep systemic crisis in the Capitalist system in which we have gone through merely one burst bubble thus far, the housing bubble, but there remains a great many others.
There remains as a significantly larger threat than the housing collapse, a commercial real estate bubble. As the Deutsche Bank CEO said in May of 2009, “It’s either the beginning of the end or the end of the beginning.”
Of even greater significance is what has been termed the “bailout bubble” in which governments have superficially inflated the economies through massive debt-inducing bailout packages. As of July of 2009, the government watchdog and investigator of the US bailout program stated that the U.S. may have put itself at risk of up to $23.7 trillion dollars.
In October of 2009, approximately one year following the “great panic” of 2008, I wrote an article titled, The Economic Recovery is an Illusion, in which I analyzed what the most prestigious and powerful financial institution in the world, the Bank for International Settlements (BIS), had to say about the crisis and “recovery.”
The BIS, as well as its former chief economist, who had both correctly predicted the crisis that unfolded in 2008, were warning of a future crisis in the global economy, citing the fact that none of the key issues and structural problems with the economy had been changed, and that government bailouts may do more harm than good in the long run.
William White, former Chief Economist of the BIS, warned:
Crying Wolf or Castigating Cassandra?
While people were being lulled into a false sense of security, prominent voices warning of the harsh bite of reality to come were, instead of being listened to, berated and pushed aside by the mainstream media. Gerald Celente, who accurately predicted the economic crisis of 2008 and who had been warning of a much larger crisis to come, had been accused by the mainstream media of pushing “pessimism porn.” Celente’s response has been that he isn’t pushing “pessimism porn,” but that he refuses to push “optimism opium” of which the mainstream media does so outstandingly.
So, are these voices of criticism merely “crying wolf” or is it that the media is out to “castigate Cassandra”? Cassandra, in Greek mythology, was the daughter of King Priam and Queen Hecuba of Troy, who was granted by the God Apollo the gift of prophecy. She prophesied and warned the Trojans of the Trojan Horse, the death of Agamemnon and the destruction of Troy. When she warned the Trojans, they simply cast her aside as “mad” and did not heed her warnings.
While those who warn of a future economic crisis may not have been granted the gift of prophecy from Apollo, they certainly have the ability of comprehension.
So what do the Cassandras of the world have to say today? Should we listen?
Empire and Economics
To understand the global economic crisis, we must understand the global causes of the economic crisis. We must first determine how we got to the initial crisis, from there, we can critically assess how governments responded to the outbreak of the crisis, and thus, we can determine where we currently stand, and where we are likely headed.
Africa and much of the developing world was released from the socio-political-economic restraints of the European empires throughout the 1950s and into the 60s. Africans began to try to take their nations into their own hands. At the end of World War II, the United States was the greatest power in the world. It had command of the United Nations, the World Bank and the IMF, as well as setting up the NATO military alliance. The US dollar reigned supreme, and its value was tied to gold.
In 1954, Western European elites worked together to form an international think tank called the Bilderberg Group, which would seek to link the political economies of Western Europe and North America. Every year, roughly 130 of the most powerful people in academia, media, military, industry, banking, and politics would meet to debate and discuss key issues related to the expansion of Western hegemony over the world and the re-shaping of world order. They undertook, as one of their key agendas, the formation of the European Union and the Euro currency unit.
In 1971, Nixon abandoned the dollar’s link to gold, which meant that the dollar no longer had a fixed exchange rate, but would change according to the whims and choices of the Federal Reserve (the central bank of the United States). One key individual that was responsible for this choice was the third highest official in the U.S. Treasury Department at the time, Paul Volcker.
Volcker got his start as a staff economist at the New York Federal Reserve Bank in the early 50s. After five years there, “David Rockefeller’s Chase Bank lured him away.” So in 1957, Volcker went to work at Chase, where Rockefeller “recruited him as his special assistant on a congressional commission on money and credit in America and for help, later, on an advisory commission to the Treasury Department.” In the early 60s, Volcker went to work in the Treasury Department, and returned to Chase in 1965 “as an aide to Rockefeller, this time as vice president dealing with international business.” With Nixon entering the White House, Volcker got the third highest job in the Treasury Department. This put him at the center of the decision making process behind the dissolution of the Bretton Woods agreement by abandoning the dollar’s link to gold in 1971.
In 1973, David Rockefeller, the then-Chairman of Chase Manhattan Bank and President of the Council on Foreign Relations, created the Trilateral Commission, which sought to expand upon the Bilderberg Group. It was an international think tank, which would include elites from Western Europe, North America, and Japan, and was to align a “trilateral” political economic partnership between these regions. It was to further the interests and hegemony of the Western controlled world order.
That same year, the Petri-dish experiment of neoliberalism was undertaken in Chile. While a leftist government was coming to power in Chile, threatening the economic interests of not only David Rockefeller’s bank, but a number of American corporations, David Rockefeller set up meetings between Henry Kissinger, Nixon’s National Security Adviser, and a number of leading corporate industrialists. Kissinger in turn, set up meetings between these individuals and the CIA chief and Nixon himself. Within a short while, the CIA had begun an operation to topple the government of Chile.
On September 11, 1973, a Chilean General, with the help of the CIA, overthrew the government of Chile and installed a military dictatorship that killed thousands. The day following the coup, a plan for an economic restructuring of Chile was on the president’s desk. The economic advisers from the University of Chicago, where the ideas of Milton Freidman poured out, designed the restructuring of Chile along neoliberal lines.
Neoliberalism was thus born in violence.
In 1973, a global oil crisis hit the world. This was the result of the Yom Kippur War, which took place in the Middle East in 1973. However, much more covertly, it was an American strategem. Right when the US dropped the dollar’s peg to gold, the State Department had quietly begun pressuring Saudi Arabia and other OPEC nations to increase the price of oil. At the 1973 Bilderberg meeting, held six months before the oil price rises, a 400% increase in the price of oil was discussed. The discussion was over what to do with the large influx of what would come to be called “petrodollars,” the oil revenues of the OPEC nations.
Henry Kissinger worked behind the scenes in 1973 to ensure a war would take place in the Middle East, which happened in October. Then, the OPEC nations drastically increased the price of oil. Many newly industrializing nations of the developing world, free from the shackles of overt political and economic imperialism, suddenly faced a problem: oil is the lifeblood of an industrial society and it is imperative in the process of development and industrialization. If they were to continue to develop and industrialize, they would need the money to afford to do so.
Concurrently, the oil producing nations of the world were awash with petrodollars, bringing in record surpluses. However, to make a profit, the money would need to be invested. This is where the Western banking system came to the scene. With the loss of the dollar’s link to cold, the US currency could flow around the world at a much faster rate. The price of oil was tied to the price of the US dollar, and so oil was traded in US dollars. OPEC nations thus invested their oil money into Western banks, which in turn, would “recycle” that money by loaning it to the developing nations of the world in need of financing industrialization. It seemed like a win-win situation: the oil nations make money, invest it in the West, which loans it to the South, to be able to develop and build “western” societies.
However, all things do not end as fairy tales, especially when those in power are threatened. An industrialized and developed ‘Global South’ (Latin America, Africa, and parts of Asia) would not be a good thing for the established Western elites. If they wanted to maintain their hegemony over the world, they must prevent the rise of potential rivals, especially in regions so rich in natural resources and the global supplies of energy.
It was at this time that the United States initiated talks with China. The “opening” of China was to be a Western project of expanding Western capital into China. China will be allowed to rise only so much as the West allows it. The Chinese elite were happy to oblige with the prospect of their own growth in political and economic power. India and Brazil also followed suit, but to a smaller degree than that of China. China and India were to brought within the framework of the Trilateral partnership, and in time, both China and India would have officials attending meetings of the Trilateral Commission.
So money flowed around the world, primarily in the form of the US dollar. Foreign central banks would buy US Treasuries (debts) as an investment, which would also show faith in the strength of the US dollar and economy. The hegemony of the US dollar reached around the world.
The Hegemony of Neoliberalism
In 1977, however, a new US administration came to power under the Presidency of Jimmy Carter, who was himself a member of the Trilateral Commission. With his administration, came another roughly two-dozen members of the Trilateral Commission to fill key positions within his government. In 1973, Paul Volcker, the rising star through Chase Manhattan and the Treasury Department became a member of the Trilateral Commission. In 1975, he was made President of the Federal Reserve Bank of New York, the most powerful of the 12 regional Fed banks. In 1979, Jimmy Carter gave the job of Treasury Secretary to the former Governor of the Federal Reserve System, and in turn, David Rockefeller recommended Jimmy Carter appoint Paul Volcker as Governor of the Federal Reserve Board, which Carter quickly did.
In 1979, the price of oil skyrocketed again. This time, Paul Volcker at the Fed was to take a different approach. His response was to drastically increase interest rates. Interest rates went from 2% in the late 70s to 18% in the early 1980s. The effect this had was that the US economy went into recession, and greatly reduced its imports from developing nations. A the same time, developing nations, who had taken on heavy debt burdens to finance industrialization, suddenly found themselves having to pay 18% interest payments on their loans. The idea that they could borrow heavily to build an industrial society, which would in turn pay off their loans, had suddenly come to a halt. As the US dollar had spread around the world in the forms of petrodollars and loans, the decisions that the Fed made would affect the entire world. In 1982, Mexico announced that it could no longer service its debt, and defaulted on its loans. This marked the spread of the 1980s debt crisis, which spread throughout Latin America and across the continent of Africa.
Suddenly, much of the developing world was plunged into crisis. Thus, the IMF and World Bank entered the scene with their newly developed “Structural Adjustment Programs” (SAPs), which would encompass a country in need signing an agreement, the SAP, which would provide the country with a loan from the IMF, as well as “development” projects by the World Bank. In turn, the country would have to undergo a neoliberal restructuring of its country.
Neoliberalism spread out of America and Britain in the 1980s; through their financial empires and instruments – including the World Bank and IMF – they spread the neoliberal ideology around the globe. Countries that resisted neoliberalism were subjected to “regime change”. This would occur through financial manipulation, via currency speculation or the hegemonic monetary policies of the Western nations, primarily the United States; economic sanctions, via the United Nations or simply done on a bilateral basis; covert regime change, through “colour revolutions” or coups, assassinations; and sometimes overt military campaigns and war.
The neoliberal ideology consisted in what has often been termed “free market fundamentalism.” This would entail a massive wave of privatization, in which state assets and industries are privatized in order to become economically “more productive and efficient.” This would have the social effect of leading to the firing of entire areas of the public sector, especially health and education as well as any specially protected national industries, which for many poor nations meant vital natural resources.
Then, the market would be “liberalized” which meant that restrictions and impediments to foreign investments in the nation would diminish by reducing or eliminating trade barriers and tariffs (taxes), and thus foreign capital (Western corporations and banks) would be able to invest in the country easily, while national industries that grow and “compete” would be able to more easily invest in other nations and industries around the world. The Central Bank of the nation would then keep interest rates artificially low, to allow for the easier movement of money in and out of the country. The effect of this would be that foreign multinational corporations and international banks would be able to easily buy up the privatized industries, and thus, buy up the national economy. Simultaneously major national industries may be allowed to grow and work with the global banks and corporations. This would essentially oligopolize the national economy, and bring it within the sphere of influence of the “global economy” controlled by and for the Western elites.
The European empires had imposed upon Africa and many other colonized peoples around the world a system of ‘indirect rule’, in which local governance structures were restructured and reorganized into a system where the local population is governed by locals, but for the western colonial powers. Thus, a local elite is created, and they enrich themselves through the colonial system, so they have no interest in challenging the colonial powers, but instead seek to protect their own interests, which happen to be the interests of the empire.
In the era of globalization, the leaders of the ‘Third World’ have been co-opted and their societies reorganized by and for the interests of the globalized elites. This is a system of indirect rule, and the local elites becoming ‘indirect globalists’; they have been brought within the global system and structures of empire.
Following a Structural Adjustment Program, masses of people would be left unemployed; the prices of essential commodities such as food and fuel would increase, sometimes by hundreds of percentiles, while the currency lost its value. Poverty would spread and entire sectors of the economy would be shut down. In the “developing” world of Asia, Latin America and Africa, these policies were especially damaging. With no social safety nets to fall into, the people would go hungry; the public state was dismantled.
When it came to Africa, the continent so rapidly de-industrialized throughout the 1980s and into the 1990s that poverty increased by incredible degrees. With that, conflict would spread. In the 1990s, as the harsh effects of neoliberal policies were easily and quickly seen on the African continent, the main notion pushed through academia, the media, and policy circles was that the state of Africa was due to the “mismanagement” by Africans. The blame was put solely on the national governments. While national political and economic elites did become complicit in the problems, the problems were imposed from beyond the continent, not from within.
Thus, in the 1990s, the notion of “good governance” became prominent. This was the idea that in return for loans and “help” from the IMF and World Bank, nations would need to undertake reforms not only of the economic sector, but also to create the conditions of what the west perceived as “good governance.” However, in neoliberal parlance, “good governance” implies “minimal governance”, and governments still had to dismantle their public sectors. They simply had to begin applying the illusion of democracy, through the holding of elections and allowing for the formation of a civil society. “Freedom” however, was still to maintain simply an economic concept, in that the nation would be “free” for Western capital to enter into.
While massive poverty and violence spread across the continent, people were given the “gift” of elections. They would elect one leader, who would then be locked into an already pre-determined economic and political structure. The political leaders would enrich themselves at the expense of others, and then be thrown out at the next election, or simply fix the elections. This would continue, back and forth, all the while no real change would be allowed to take place. Western imposed “democracy” had thus failed.
An article in a 2002 edition of International Affairs, the journal of the Royal Institute of International Affairs (the British counter-part to the Council on Foreign Relations), wrote that:
The authors then explained that NGOs have a peculiar evolution in Africa:
The authors examined how with the spread of neoliberalism, the notion of a “minimalist state” spread across the world and across Africa. Thus, they explain, the IMF and World Bank “became the new commanders of post-colonial economies.” However, these efforts were not imposed without resistance, as, “Between 1976 and 1992 there were 146 protests against IMF-supported austerity measures [SAPs] in 39 countries around the world.” Usually, however, governments responded with brute force, violently oppressing demonstrations. However, the widespread opposition to these “reforms” needed to be addressed by major organizations and “aid” agencies in re-evaluating their approach to ‘development’:
The outcome of these deliberations was the ‘good governance’ agenda in the 1990s and the decision to co-opt NGOs and other civil society organizations to a repackaged programme of welfare provision, a social initiative that could be more accurately described as a programme of social control.
The result was to implement the notion of ‘pluralism’ in the form of ‘multipartyism’, which only ended up in bringing “into the public domain the seething divisions between sections of the ruling class competing for control of the state.” As for the ‘welfare initiatives’, the bilateral and multilateral aid agencies set aside significant funds for addressing the “social dimensions of adjustment,” which would “minimize the more glaring inequalities that their policies perpetuated.” This is where the growth of NGOs in Africa rapidly accelerated.
Africa had again, become firmly enraptured in the cold grip of imperialism. Conflicts in Africa would be stirred up by imperial foreign powers, often using ethnic divides to turn the people against each other, using the political leaders of African nations as vassals submissive to Western hegemony. War and conflict would spread, and with it, so too would Western capital and the multinational corporation.
Building a ‘New’ Economy
While the developing world fell under the heavy sword of Western neoliberal hegemony, the Western industrialized societies experienced a rapid growth of their own economic strength. It was the Western banks and multinational corporations that spread into and took control of the economies of Africa, Latin America, Asia, and with the fall of the Soviet Union in 1991, Eastern Europe and Central Asia.
Russia opened itself up to Western finance, and the IMF and World Bank swept in and imposed neoliberal restructuring, which led to a collapse of the Russian economy, and enrichment of a few billionaire oligarchs who own the Russian economy, and who are intricately connected with Western economic interests; again, ‘indirect globalists’.
As the Western financial and commercial sectors took control of the vast majority of the world’s resources and productive industries, amassing incredible profits, they needed new avenues in which to invest. Out of this need for a new road to capital accumulation (making money), the US Federal Reserve stepped in to help out.
The Federal Reserve in the 1990s began to ease interest rates lower and lower to again allow for the easier spread of money. This was the era of ‘globalization,’ where proclamations of a “New World Order” emerged. Regional trading blocs and “free trade” agreements spread rapidly, as world systems of political and economic structure increasingly grew out of the national structure and into a supra-national form. The North American Free Trade Agreement (NAFTA) was implemented in an “economic constitution for North America” as Reagan referred to it.
Regionalism had emerged as the next major phase in the construction of the New World Order, with the European Union being at the forefront. The world economy was ‘globalized’ and so too, would the political structure follow, on both regional and global levels. The World Trade Organization (WTO) was formed to maintain and enshrine global neoliberal constitution for trade. All through this time, a truly global ruling class emerged, the Transnational Capitalist Class (TCC), or global elite, which constituted a singular international class.
However, as the wealth and power of elites grew, everyone else suffered. The middle class had been subjected to a quiet dismantling. In the Western developed nations, industries and factories closed down, relocating to cheap Third World countries to exploit their labour, then sell the products in the Western world cheaply. Our living standards in the West began to fall, but because we could buy products for cheaper, no one seemed to complain. We continued to consume, and we used credit and debt to do so. The middle class existed only in theory, but was in fact, beholden to the shackles of debt.
The Clinton administration used ‘globalization’ as its grand strategy throughout the 1990s, facilitating the decline of productive capital (as in, money that flows into production of goods and services), and implemented the rise finance capital (money made on money). Thus, financial speculation became one of the key tools of economic expansion. This is what was termed the “financialization” of the economy. To allow this to occur, the Clinton administration actively worked to deregulate the banking sector. The Glass-Steagle Act, put in place by FDR in 1933 to prevent commercial banks from merging with investment banks and engaging in speculation, (which in large part caused the Great Depression), was slowly dismantled through the coordinated efforts of America’s largest banks, the Federal Reserve, and the US Treasury Department.
Thus, a massive wave of consolidation took place, as large banks ate smaller banks, corporations merged, where banks and corporations stopped being American or European and became truly global. Some of the key individuals that took part in the dismantling of Glass-Steagle and the expansion of ‘financialization’ were Alan Greenspan at the Federal Reserve and Robert Rubin and Lawrence Summers at the Treasury Department, now key officials in Obama’s economic team.
This era saw the rise of ‘derivatives’ which are ‘complex financial instruments’ that essentially act as short-term insurance policies, betting and speculating that an asset price or commodity would go up or go down in value, allowing money to be made on whether stocks or prices go up or down. However, it wasn’t called ‘insurance’ because ‘insurance’ has to be regulated. Thus, it was referred to as derivatives trade, and organizations called Hedge Funds entered the picture in managing the global trade in derivatives.
The stock market would go up as speculation on future profits drove stocks higher and higher, inflating a massive bubble in what was termed a ‘virtual economy.’ The Federal Reserve facilitated this, as it had previously done in the lead-up to the Great Depression, by keeping interest rates artificially low, and allowing for easy-flowing money into the financial sector. The Federal Reserve thus inflated the ‘dot-com’ bubble of the technology sector. When this bubble burst, the Federal Reserve, with Allen Greenspan at the helm, created the “housing bubble.”
The Federal Reserve maintained low interest rates and actively encouraged and facilitated the flow of money into the housing sector. Banks were given free reign and actually encouraged to make loans to high-risk individuals who would never be able to pay back their debt. Again, the middle class existed only in the myth of the ‘free market’.
Concurrently, throughout the 1990s and into the early 2000s, the role of speculation as a financial instrument of war became apparent. Within the neoliberal global economy, money could flow easily into and out of countries. Thus, when confidence weakens in the prospect of one nation’s economy, there can be a case of ‘capital flight’ where foreign investors sell their assets in that nation’s currency and remove their capital from that country. This results in an inevitable collapse of the nations economy.
This happened to Mexico in 1994, in the midst of joining NAFTA, where international investors speculated against the Mexican peso, betting that it would collapse; they cashed in their pesos for dollars, which devalued the peso and collapsed the Mexican economy. This was followed by the East Asian financial crisis in 1997, where throughout the 1990s, Western capital had penetrated East Asian economies speculating in real estate and the stock markets. However, this resulted in over-investment, as the real economy, (production, manufacturing, etc.) could not keep up with speculative capital. Thus, Western capital feared a crisis, and began speculating against the national currencies of East Asian economies, which triggered devaluation and a financial panic as capital fled from East Asia into Western banking sectors. The economies collapsed and then the IMF came in to ‘restructure’ them accordingly. The same strategy was undertaken with Russia in 1998, and Argentina in 2001.
Throughout the 2000s, the housing bubble was inflated beyond measure, and around the middle of the decade, when the indicators emerged of a crisis in the housing market a commercial real estate bubble was formed. This bubble has yet to burst.
The 2007-2008 Financial Crisis
In 2007, the Bank for International Settlements (BIS), the most prestigious financial institution in the world and the central bank to the world’s central banks, issued a warning that the world is on the verge of another Great Depression, “citing mass issuance of new-fangled credit instruments, soaring levels of household debt, extreme appetite for risk shown by investors, and entrenched imbalances in the world currency system.”
As the housing bubble began to collapse, the commodity bubble was inflated, where money went increasingly into speculation, the stock market, and the price of commodities soared, such as with the massive increases in the price of oil between 2007 and 2008. In September of 2007, a medium-sized British Bank called Northern Rock, a major partaker in the loans of bad mortgages which turned out to be worthless, sought help from the Bank of England, which led to a run on the bank and investor panic. In February of 2008, the British government bought and nationalized Northern Rock.
In March of 2008, Bear Stearns, an American bank that had been a heavy lender in the mortgage real estate market, went into crisis. On March 14, 2008, the Federal Reserve Bank of New York worked with J.P. Morgan Chase (whose CEO is a board member of the NY Fed) to provide Bear Stearns with an emergency loan. However, they quickly changed their mind, and the CEO of JP Morgan Chase, working with the President of the New York Fed, Timothy Geithner, and the Treasury Secretary Henry Paulson (former CEO of Goldman Sachs), forced Bear Stearns to sell itself to JP Morgan Chase for $2 a share, which had previously traded at $172 a share in January of 2007. The merger was paid for by the Federal Reserve of New York, and charged to the US taxpayer.
In June of 2008, the BIS again warned of an impending Great Depression.
In September of 2008, the US government took over Fannie Mae and Freddie Mac, the two major home mortgage corporations. The same month, the global bank Lehman Brothers declared bankruptcy, giving the signal that no one is safe and that the entire economy was on the verge of collapse. Lehman was a major dealer in the US Treasury Securities market and was heavily invested in home mortgages. Lehman filed for bankruptcy on September 15, 2008, marking the largest bankruptcy in US history. A wave of bank consolidation spread across the United States and internationally. The big banks became much bigger as Bank of America swallowed Merrill Lynch, JP Morgan ate Washington Mutual, and Wells Fargo took over Wachovia.
In November of 2008, the US government bailed out the largest insurance company in the world, AIG. The Federal Reserve Bank of New York, with Timothy Geithner at the helm:
As Bloomberg reported, since the New York Fed is quasi-governmental, as in, it is given government authority, but not subject to government oversight, and is owned by the banks that make up its board (such as JP Morgan Chase), “It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.”
In the fall of 2008, the Bush administration sought to implement a bailout package for the economy, designed to save the US banking system. The leaders of the nation went into rabid fear mongering. The President warned:
The head of the Federal Reserve Board, Ben Bernanke, as well as Treasury Secretary Paulson, in late September warned of “recession, layoffs and lost homes if Congress doesn’t quickly approve the Bush administration’s emergency $700 billion financial bailout plan.” Seven months prior, in February of 2008, prior to the collapse of Bear Stearns, both Bernanke and Paulson said “the nation will avoid falling into recession.” In September of 2008, Paulson was saying that people “should be scared.”
The bailout package was made into a massive financial scam, which would plunge the United States into unprecedented levels of debt, while pumping incredible amounts of money into major global banks.
The public was told, as was the Congress, that the bailout was worth $700 billion dollars. However, this was extremely misleading, and a closer reading of the fine print would reveal much more, in that $700 billion is the amount that could be spent “at any one time.” As Chris Martenson wrote:
Further, the proposed bill would “raise the nation’s debt ceiling to $11.315 trillion from $10.615 trillion,” and that the actions taken as a result of the passage of the bill would not be subject to investigation by the nation’s court system, as it would “bar courts from reviewing actions taken under its authority”:
Larisa Alexandrovna, writing with the Huffington Post, warned that the passage of the bailout bill will be the final nails in the coffin of the fascist coup over America, in the form of financial fascists:
At the same time, the US Federal Reserve was bailing out foreign banks of hundreds of billions of dollars, “that are desperate for dollars and can’t access America’s frozen credit markets – a move co-ordinated with central banks in Japan, the Eurozone, Switzerland, Canada and here in the UK.” The moves would have been coordinated through the Bank for International Settlements (BIS) in Basle, Switzerland. As Politico reported, “foreign-based banks with big U.S. operations could qualify for the Treasury Department’s mortgage bailout.” A Treasury Fact Sheet released by the US Department of Treasury stated that:
So, the bailout package would not only allow for the rescue of American banks, but any banks internationally, whether public or private, if the Treasury Secretary deemed it “necessary”, and that none of the Secretary’s decisions could be reviewed or subjected to oversight of any kind. Further, it would mean that the Treasury Secretary would have a blank check, but simply wouldn’t be able to hand out more than $700 billion “at any one time.” In short, the bailout is in fact, a coup d’état by the banks over the government.
Many Congressmen were told that if they failed to pass the bailout package, they were threatened with martial law. Sure enough, Congress passed the bill, and the financial coup had been a profound success.
No wonder then, in early 2009, one Congressman reported that the banks “are still the most powerful lobby on Capitol Hill. And they frankly own the place.” Another Congressman said that “The banks run the place,” and explained, “I will tell you what the problem is – they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”
The Collapse of Iceland
On October 9th, 2008, the government of Iceland took control of the nation’s largest bank, nationalizing it, and halted trading on the Icelandic stock market. Within a single week, “the vast majority of Iceland’s once-proud banking sector has been nationalized.” In early October, it was reported that:
An article in BusinessWeek explained:
This was the grueling situation that faced the government at the time of the global economic crisis. The causes, however, were not Icelandic; they were international. Iceland owed “more than $60 billion overseas, about six times the value of its annual economic output. As a professor at London School of Economics said, ‘No Western country in peacetime has crashed so quickly and so badly’.”
What went wrong?
Iceland followed the path of neoliberalism, deregulated banking and financial sectors and aided in the spread and ease of flow for international capital. When times got tough, Iceland went into crisis, as the Observer reported in early October 2008:
In 2007, the UN had awarded Iceland the “best country to live in”:
As the third of Iceland’s large banks was in trouble, following the government takeover of the previous two, the UK responded by freezing Icelandic assets in the UK. Kaupthing, the last of the three banks standing in early October, had many assets in the UK.
On October 7th, Iceland’s Central Bank governor told the media, “We will not pay for irresponsible debtors and…not for banks who have behaved irresponsibly.” The following day, UK Chancellor of the Exchequer, Alistair Darling, claimed that, “The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here,” although, Arni Mathiesen, the Icelandic minister of finance, said, “nothing in this telephone conversation can support the conclusion that Iceland would not honor its obligation.”
On October 10, 2008, UK Prime Minister Gordon Brown said, “We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money.” Thus:
The UK had more than £840m invested in Icelandic banks, and they were moving in to save their investments, which just so happened to help spur on the collapse of the Icelandic economy.
On October 24, 2008, an agreement between Iceland and the IMF was signed. In late November, the IMF approved a loan to Iceland of $2.1 billion, with an additional $3 billion in loans from Denmark, Finland, Norway, Sweden, Russia, and Poland. Why the agreement to the loan took so long, was because the UK pressured the IMF to delay the loan “until a dispute over the compensation Iceland owes savers in Icesave, one of its collapsed banks, is resolved.”
In January of 2009, the entire Icelandic government was “formally dissolved” as the government collapsed when the Prime Minister and his entire cabinet resigned. This put the opposition part in charge of an interim government. In July of 2009, the new government formally applied for European Union membership, however, “Icelanders have traditionally been skeptical of the benefits of full EU membership, fearing that they would lose some of their independence as a small state within a larger political entity.”
In August of 2009, Iceland’s parliament passed a bill “to repay Britain and the Netherlands more than $5 billion lost in Icelandic deposit accounts”:
Iceland is now in the service of the IMF and its international creditors. The small independent nation that for so long had prided itself on a strong economy and strong sense of independence had been brought to its knees.
In mid-January of 2010, the IMF and Sweden together delayed their loans to Iceland, due to Iceland’s “failure to reach a £2.3bn compensation deal with Britain and the Netherlands over its collapsed Icesave accounts.” Sweden, the UK and the IMF were blackmailing Iceland to save UK assets in return for loans.
In February of 2010, it was reported that the EU would begin negotiations with Iceland to secure Icelandic membership in the EU by 2012. However, Iceland’s “aspirations are now tied partially to a dispute with the Netherlands and Britain over $5 billion in debts lost in the country’s banking collapse in late 2008.”
Iceland stood as a sign of what was to come. The sovereign debt crisis that brought Iceland to its knees had new targets on the horizon.
Dubai Hit By Financial Storm
In February of 2009, the Guardian reported that, “A six-year boom that turned sand dunes into a glittering metropolis, creating the world’s tallest building, its biggest shopping mall and, some say, a shrine to unbridled capitalism, is grinding to a halt,” as Dubai, one of six states that form the United Arab Emirates (UAE), went into crisis. Further, “the real estate bubble that propelled the frenetic expansion of Dubai on the back of borrowed cash and speculative investment, has burst.”
Months later, in November of 2009, Dubai was plunged into a debt crisis, prompting fears of sparking a double-dip recession and the next wave of the financial crisis. As the Guardian reported:
The neighboring oil-rich state of Abu Dhabi, however, came to the rescue of Dubai with a $10 billion bailout package, leading the Foreign Minister of the UAE to declare Dubai’s financial crisis as over.
In mid-February of 2010, however, renewed fears of a debt crisis in Dubai resurfaced; Morgan Stanley reported that, “the cost to insure against a Dubai default [in mid-February] shot up to the level it was at during the peak of the city-state’s debt crisis in November.” These fears resurfaced as:
Again, the aims that governments seek in the unfolding debt crisis is not to save their people from a collapsing economy and inflated currency, but to save the ‘interests’ of their major banks and corporations within each collapsing economy.
A Sovereign Debt Crisis Hits Greece
In October of 2009, a new Socialist government came to power in Greece on the promise of injecting 3 billion euros to reinvigorate the Greek economy. Greece had suffered particularly hard during the economic crisis; it experienced riots and protests. In December of 2009, Greece said it would not default on its debt, but the government added, “Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts. We did not come to power to tear down the social state.” As Ambrose Evans-Pritchard wrote for the Telegraph in December of 2009:
Evans-Pritchard wrote that the crisis in Greece had much to do with the European Monetary Union (EMU), which created the Euro, and made all member states subject to the decisions of the European Central Bank, as “Interest rates were too low for Greece, Portugal, Spain, and Ireland, causing them all to be engulfed in a destructive property and wage boom.” Further:
Greece’s debt had soared, by early December 2009, to a spiraling 300-billion euros, as its “financial woes have also weighed on the euro currency, whose long-term value depends on member countries keeping their finances in order.” Further, Ireland, Spain and Portugal were all facing problems with their debt. As it turned out, the previous Greek government had been cooking the books, and when the new government came to power, it inherited twice the federal deficit it had anticipated.
In February of 2010, the New York Times revealed that:
Even back in 2001, when Greece joined the Euro-bloc, Goldman Sachs helped the country “quietly borrow billions” in a deal “hidden from public view because it was treated as a currency trade rather than a loan, [and] helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.” Further, “Greece owes the world $300 billion, and major banks are on the hook for much of that debt. A default would reverberate around the globe.” Both Goldman Sachs and JP Morgan Chase had undertaken similar efforts in Italy and other countries in Europe as well.
In early February, EU nations led by France and Germany met to discuss a rescue package for Greece, likely with the help of the European Central Bank and possibly the IMF. The issue had plunged the Eurozone into a crisis, as confidence in the Euro fell across the board, and “Germans have become so disillusioned with the euro, many will not accept notes produced outside their homeland.”
Germany was expected to bail out the Greek economy, much to the dismay of the German people. As one German politician stated, “We cannot expect the citizens, whose taxes are already too high, to go along with supporting the erroneous financial and budget policy of other states of the eurozone.” One economist warned that the collapse of Greece could lead to a collapse of the Euro:
However, the Lisbon Treaty had been passed over 2009, which put into effect a European Constitution, giving Brussels enormous powers over its member states. As the Telegraph reported on February 16, 2010, the EU stripped Greece of its right to vote at a crucial meeting to take place in March:
It would appear that the EU is in a troubling position. If they allow the IMF to rescue Greece, it would be a blow to the faith in the Euro currency, whereas if they bailout Greece, it will encourage internal pressures within European countries to abandon the Euro.
In early February, Ambrose Evans-Pritchard wrote in the Telegraph that, “The Greek debt crisis has spread to Spain and Portugal in a dangerous escalation as global markets test whether Europe is willing to shore up monetary union with muscle rather than mere words”:
Fear began to spread in regards to a growing sovereign debt crisis, stretching across Greece, Spain and Portugal, and likely much wider and larger than that.
A Global Debt Crisis
In 2007, the Bank for International Settlements (BIS), “the world’s most prestigious financial body,” warned of a coming great depression, and stated that while in a crisis, central banks may cut interest rates (which they subsequently did). However, as the BIS pointed out, while cutting interest rates may help, in the long run it has the effect of “sowing the seeds for more serious problems further ahead.”
In the summer of 2008, prior to the apex of the 2008 financial crisis in September and October, the BIS again warned of the inherent dangers of a new Great Depression. As Ambrose Evans-Pritchard wrote, “the ultimate bank of central bankers” warned that central banks, such as the Federal Reserve, would not find it so easy to “clean up” the messes they had made in asset-price bubbles.
The BIS report stated that, “It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels.” As Evans-Pritchard explained, “this amounts to a warning that monetary overkill by the Fed, the Bank of England, and above all the European Central Bank could prove dangerous at this juncture.” The BIS report warned that, “Global banks – with loans of $37 trillion in 2007, or 70pc of world GDP – are still in the eye of the storm.” Ultimately, the actions of central banks were designed “to put off the day of reckoning,” not to prevent it.
Seeing how the BIS is not simply a casual observer, but is in fact the most important financial institution in the world, as it is where the world’s central bankers meet and, in secret, decide monetary policy for the world. As central banks have acted as the architects of the financial crisis, the BIS warning of a Great Depression is not simply a case of Cassandra prophesying the Trojan Horse, but is a case where she prophesied the horse, then opened the gates of Troy and pulled the horse in.
It was within this context that the governments of the world took on massive amounts of debt and bailed out the financial sectors from their accumulated risk by buying their bad debts.
In late June of 2009, several months following Western governments implementing bailouts and stimulus packages, the world was in the euphoria of “recovery.” At this time, however, the Bank for International Settlements released another report warning against such complacency in believing in the “recovery.” The BIS warned of only “limited progress” in fixing the financial system. The article is worth quoting at length:
The BIS had thus endorsed the bailout and stimulus packages, which is no surprise, considering that the BIS is owned by the central banks of the world, which in turn are owned by the major global banks that were “bailed out” by the governments. However, the BIS warned that these rescue efforts, “while necessary” for the banks, will likely have deleterious effects for national governments.
The BIS warned that, “there’s a risk central banks will raise interest rates and withdraw emergency liquidity too late, triggering inflation”:
Of enormous significance was the warning from the BIS that, “fiscal stimulus packages may provide no more than a temporary boost to growth, and be followed by an extended period of economic stagnation.” As the Australian reported in late June:
Further, major western countries such as Australia “faced the possibility of a run on the currency, which would force interest rates to rise,” and “Particularly in smaller and more open economies, pressure on the currency could force central banks to follow a tighter policy than would be warranted by domestic economic conditions.” Not surprisingly, the BIS stated that, “government guarantees and asset insurance have exposed taxpayers to potentially large losses,” through the bailouts and stimulus packages, and “stimulus programs will drive up real interest rates and inflation expectations,” as inflation “would intensify as the downturn abated.”
In May of 2009, Simon Johnson, former chief economist of the International Monetary Fund (IMF), warned that Britain faces a major struggle in the next phase of the economic crisis:
However, as dire as things look for Britain, “The UK is likely to be joined by other countries as the full scale of the downturn becomes apparent and more financial skeletons are pulled from the sub-prime closet.”
In September of 2009, the former Chief Economist of the Bank for International Settlements (BIS), William White, who had accurately predicted the previous crisis, warned that, “The world has not tackled the problems at the heart of the economic downturn and is likely to slip back into recession.” He “also warned that government actions to help the economy in the short run may be sowing the seeds for future crises.” An article in the Financial Times elaborated:
In late September of 2009, the General Manager of the BIS warned governments against complacency, saying that, “the market rebound should not be misinterpreted,” and that, “The profile of the recovery is not clear.”
In September, the Financial Times further reported that William White, former Chief Economist at the BIS, also “argued that after two years of government support for the financial system, we now have a set of banks that are even bigger – and more dangerous – than ever before,” which also, “has been argued by Simon Johnson, former chief economist at the International Monetary Fund,” who “says that the finance industry has in effect captured the US government,” and pointedly stated: “recovery will fail unless we break the financial oligarchy that is blocking essential reform.”
In mid-September, the BIS released a warning about the global financial system, as “The global market for derivatives rebounded to $426 trillion in the second quarter [of 2009] as risk appetite returned, but the system remains unstable and prone to crises.” The derivatives rose by 16% “mostly due to a surge in futures and options contracts on three-month interest rates.” In other words, speculation is back in full force as bailout money to banks in turn fed speculative practices that have not been subjected to reform or regulation. Thus, the problems that created the previous crisis are still present and growing:
In late November of 2009, Morgan Stanley warned that, “Britain risks becoming the first country in the G10 bloc of major economies to risk capital flight and a full-blown debt crisis over coming months.” The Bank of England may have to raise interest rates “before it is ready — risking a double-dip recession, and an incipient compound-debt spiral.” Further:
As Ambrose Evans-Pritchard wrote for the Telegraph, this “is a reminder that countries merely bought time during the crisis by resorting to fiscal stimulus and shunting private losses onto public books,” and, while he endorsed the stimulus packages claiming it was “necessary,” he admitted that the stimulus packages “have not resolved the underlying debt problem. They have storied up a second set of difficulties by degrading sovereign debt across much of the world.” Morgan Stanley said another surprise in 2010 could be a surge in the dollar. However, this would be due to capital flight out of Europe as its economies crumble under their debt burdens and capital seeks a “safe haven” in the US dollar.
In December of 2009, the Wall Street Journal reported on the warnings of some of the nation’s top economists, who feared that following a financial crisis such as the one experienced in the previous two years, “there’s typically a wave of sovereign default crises.” As economist Kenneth Rogoff explained, “If you want to know what’s next on the menu, that’s a good bet,” as “Spiraling government debts around the world, from Washington to Berlin to Tokyo, could set the scene for years of financial troubles.” Apart from the obvious example of Greece, other countries are at risk, as the author of the article wrote:
Rogoff predicted that, “We’re going to be raising taxes sky high,” and that, “we’re probably going to see a lot of inflation, eventually. We will have to. It’s the easiest way to reduce the value of those liabilities in real terms.” Rogoff stated, “The way rich countries default is through inflation.” Further, “even U.S. municipal bonds won’t be safe from trouble. California could be among those facing a default crisis.” Rogoff elaborated, “It wouldn’t surprise me to see the Federal Reserve buying California debt at some point, or some form of bailout.”
The bailouts, particularly that of the United States, handed a blank check to the world’s largest banks. As another favour, the US government put those same banks in charge of ‘reform’ and ‘regulation’ of the banking industry. Naturally, no reform or regulation took place. Thus, the money given to banks by the government can be used in financial speculation. As the sovereign debt crisis unfolds and spreads around the globe, the major international banks will be able to create enormous wealth in speculation, rapidly pulling their money out of one nation in debt crisis, precipitating a collapse, and moving to another, until all the dominoes have fallen, and the banks stand larger, wealthier, and more powerful than any nation or institution on earth (assuming they already aren’t). This is why the bankers were so eager to undertake a financial coup of the United States, to ensure that no actual reform took place, that they could loot the nation of all it has, and profit off of its eventual collapse and the collapse of the global economy. The banks have been saved! Now everyone else must pay.
Edmund Conway, the Economics Editor of the Telegraph, reported in early January of 2010, that throughout the year:
In other words, the ‘recovery’ is an illusion. In mid-January of 2010, the World Economic Forum released a report in which it warned that, “There is now more than a one-in-five chance of another asset price bubble implosion costing the world more than £1 trillion, and similar odds of a full-scale sovereign fiscal crisis.” The report warned of a simultaneous second financial crisis coupled with a major fiscal crisis as countries default on their debts. The report “also warned of the possibility of China’s economy overheating and, instead of helping support global economic growth, preventing a fully-fledged recovery from developing.” Further:
Nouriel Roubini, one of America’s top economists who predicted the financial crisis, wrote an article in Forbes in January of 2010 explaining that, “the severe recession, combined with a financial crisis during 2008-09, worsened the fiscal positions of developed countries due to stimulus spending, lower tax revenues and support to the financial sector.” He warned that the debt burden of major economies, including the US, Japan and Britain, would likely increase. With this, investors will become wary of the sustainability of fiscal markets and will begin to withdraw from debt markets, long considered “safe havens.” Further:
As interest rates rise, which they will have to in a tightening of monetary policy, (which up until now have been kept artificially low so as to encourage the spread of liquidity around the world), interest payments on the debt will increase dramatically. Roubini warned:
Governments will thus need to drastically increase taxes and cut spending. Essentially, this will amount to a global “Structural Adjustment Program” (SAP) in the developed, industrialized nations of the West.
Where SAPs imposed upon ‘Third World’ debtor nations would provide a loan in return for the dismantling of the public state, higher taxes, growing unemployment, total privatization of state industries and deregulation of trade and investment, the loans provided by the IMF and World Bank would ultimately benefit Western multinational corporations and banks. This is what the Western world now faces: we bailed out the banks, and now we must pay for it, through massive unemployment, increased taxes, and the dismantling of the public sphere.
In February of 2010, Niall Ferguson, a prominent British economic historian, wrote an article for the Financial Times entitled, “A Greek Crisis Coming to America.” He starts by explaining that, “It began in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to assume that the sovereign debt crisis that is unfolding will remain confined to the weaker eurozone economies.” He explained that this is not a crisis confined to one region, “It is a fiscal crisis of the western world,” and “Its ramifications are far more profound than most investors currently appreciate.” Ferguson writes that, “the problem is essentially the same from Iceland to Ireland to Britain to the US. It just comes in widely differing sizes,” and the US is no small risk:
Ferguson points out that, “The long-run projections of the Congressional Budget Office suggest that the US will never again run a balanced budget. That’s right, never.” Ferguson explains that debt will hurt major economies:
In late February of 2010, the warning signs were flashing red that interest rates were going to have to rise, taxes increase, and the burden of debt would need to be addressed.
China Begins to Dump US Treasuries
US Treasuries are US government debt that is issued by the US Treasury Department, which are bought by foreign governments as an investment. It is a show of faith in the US economy to buy their debt (i.e., Treasuries). In buying a US Treasury, you are lending money to the US government for a certain period of time.
However, as the United States has taken on excessive debt loads to save the banks from crisis, the prospect of buying US Treasuries has become less appealing, and the threat that they are an unsafe investment is ever-growing. In February of 2009, Hilary Clinton urged China to continue buying US Treasuries in order to finance Obama’s stimulus package. As an article in Bloomberg pointed out:
The following month, the Chinese central bank announced that they would continue buying US Treasuries.
However, in February of 2009, Warren Buffet, one of the world’s richest individuals, warned against buying US Treasuries:
In September of 2009, an article on CNN reported of the dangers if China were to start dumping US Treasuries, which “could cause longer-term interest rates to shoot up since bond prices and yields move in opposite directions,” as a weakening US currency could lead to inflation, which would in turn, reduce the value and worth of China’s holdings in US Treasuries.
It has become a waiting game; an economic catch-22: China holds US debt (Treasuries) which allows the US to spend to “save the economy” (or more accurately, the banks), but all the spending has plunged the US into such abysmal debt from which it will never be able to emerge. The result is that inflation will likely occur, with a possibility of hyperinflation, thus reducing the value of the US currency. China’s economy is entirely dependent upon the US as a consumer economy, while the US is dependent upon China as a buyer and holder of US debt. Both countries are delaying the inevitable. If China doesn’t want to hold worthless investments (US debt) it must stop buying US Treasuries, and then international faith in the US currency would begin to fall, forcing interest rates to rise, which could even precipitate a speculative assault against the US dollar. At the same time, a collapsing US currency and economy would not help China’s economy, which would tumble with it. So, it has become a waiting game.
In February of 2010, the Financial Times reported that China had begun in December of 2009, the process of dumping US Treasuries, and thus falling behind Japan as the largest holder of US debt, selling approximately $38.8 billion of US Treasuries, as “Foreign demand for US Treasury bonds fell by a record amount”:
So, China has given the US a vote of non-confidence. This is evident of the slippery-slide down the road to a collapse of the US economy, and possibly, the US dollar, itself.
Is a Debt Crisis Coming to America?
All the warning signs are there: America is in dire straights when it comes to its total debt, proper actions have not been taken to reform the monetary or financial systems, the same problems remain prevalent, and the bailout and stimulus packages have further exposed the United States to astronomical debt levels. While the dollar will likely continue to go up as confidence in the Eurozone economies tumbles, this is not because the dollar is a good investment, but because the dollar is simply a better investment (for now) than the Euro, which isn’t saying much.
The Chinese moves to begin dumping US Treasuries is a signal that the issue of American debt has already weighed in on the functions and movements of the global financial system. While the day of reckoning may be months if not years away, it is coming nonetheless.
On February 15, it was reported that the Federal Reserve, having pumped $2.2 trillion into the economy, “must start pulling that money back.” As the Fed reportedly bought roughly $2 trillion in bad assets, it is now debating “how and when to sell those assets.” As the Korea Times reported, “The problem: Do it too quickly and the Fed might cut off or curtail the recovery. Wait too long and risk setting off a punishing round of inflation.”
In mid-February, there were reports of dissent within the Federal Reserve System, as Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned that, “The US must fix its growing debt problems or risk a new financial crisis.” He explained, “that rising debt was infringing on the central bank’s ability to fulfill its goals of maintaining price stability and long-term economic growth.” In January, he was the lone voice at a Fed meeting that said interest rates should not remain near zero for an “extended period.” He said the worst case scenario would be for the US government to have to again ask the Fed to print more money, and instead suggested that, “the administration must find ways to cut spending and generate revenue,” admitting that it would be a “painful and politically inconvenient” process.
However, these reports are largely disingenuous, as it has placed focus on a superficial debt level. The United States, even prior to the onset of the economic crisis in 2007 and 2008, had long been a reckless spender. The cost of maintaining an empire is astronomical and beyond the actual means of any nation. Historically, the collapse of empires has as much or more to do with a collapse in their currency and fiscal system than their military defeat or collapse in war. Also important to note is that these processes are not mutually exclusive, but are, in fact, intricately interconnected.
As empires decline, the world order is increasingly marred in economic crises and international conflict. As the crisis in the economy worsens, international conflict and wars spread. As I have amply documented elsewhere, the United States, since the end of World War II, has been the global hegemon: maintaining the largest military force in the world, and not shying away from using it, as well as running the global monetary system. Since the 1970s, the US dollar has acted as a world reserve currency. Following the collapse of the USSR, the grand imperial strategy of America was to dominate Eurasia and control the world militarily and economically.
Throughout the years of the Bush administration, the imperial strategy was given immense new life under the guise of the “war on terror.” Under this banner, the United States declared war on the world and all who oppose its hegemony. All the while, the administration colluded with the big banks and the Federal Reserve to artificially maintain the economic system. In the latter years of the Bush administration, this illusion began to come tumbling down. Never before in history has such a large nation wages multiple major theatre wars around the world without the public at home being fiscally restrained in some manner, either through higher taxes or interest rates. In fact, it was quite the opposite. The trillion dollar wars plunged the United States deeper into debt.
By 2007, the year that Northern Rock collapsed in the UK, signaling the start of the collapse of 2008, the total debt – domestic, commercial and consumer debt – of the United States stood at a shocking $51 trillion.
As if this debt burden was not enough, considering it would be impossible to ever pay back, the past two years has seen the most expansive and rapid debt expansion ever seen in world history – in the form of stimulus and bailout packages around the world. In July of 2009, it was reported that, “U.S. taxpayers may be on the hook for as much as $23.7 trillion to bolster the economy and bail out financial companies, said Neil Barofsky, special inspector general for the Treasury’s Troubled Asset Relief Program.”
That is worth noting once again: the “bailout” bill implemented under Bush, and fully supported and sponsored by President-elect Obama, has possibly bailed out the financial sector of up to $23.7 trillion. How could this be? After all, the public was told that the “bailout” was $700 billion.
In fact, the fine print in the bailout bill revealed that $700 billion was not a ceiling, as in, $700 billion was not the maximum amount of money that could be injected into the banks; it was the maximum that could be injected into the financial system “at any one time.” Thus, it became a “rolling amount.” It essentially created a back-door loophole for the major global banks, both domestic and foreign, to plunder the nation and loot it entirely. There was no limit to the money banks could get from the Fed. And none of the actions would be subject to review or oversight by Congress or the Judiciary, i.e., the people.
This is why, as Obama became President in late January of 2009, his administration fully implemented the financial coup over the United States. The man who had been responsible for orchestrating the bailout of AIG, the buyout of Bear Stearns as a gift for JP Morgan Chase, and had been elected to run the Federal Reserve Bank of New York by the major global banks in New York (chief among them, JP Morgan Chase), had suddenly become Treasury Secretary under Obama. The Fed, and thus, the banks were now put directly in charge of the looting.
Obama then took on a team of economic advisers that made any astute economic observer flinch in terror. The titans of economic crisis and catastrophe had become the fox in charge of the chicken coop. Those who were instrumental in creating and constructing the economic crises of the previous decades and building the instruments and infrastructure that led to the current crisis, were with Obama, brought in to “solve” the crisis they created. Paul Volcker, former Chairman of the Federal Reserve and architect of the 1980s debt crisis, was now a top economic adviser to Obama. As well as this, Lawrence Summers joined Obama’s economic team, who had previously been instrumental in Bill Clinton’s Treasury Department in dismantling all banking regulations and creating the market for speculation and derivatives which directly led to the current crisis.
In short, the financial oligarchy is in absolute control of the United States government. Concurrently, the military structure of the American empire has firmly established its grip over foreign policy, as America’s wars are expanded into Pakistan, Yemen, and potentially Iran.
Make no mistake, a crisis is coming to America, it is only a question of when, and how severe.
Imperial Decline and the Rise of the New World Order
The decline of the American empire, an inevitable result of its half-century of exerting its political and economic hegemony around the world, is not an isolated event in the global political economy. The US declines concurrently with the rise of what is termed the “New World Order.”
America has been used by powerful western banking and corporate interests as an engine of empire, expanding their influence across the globe. Banks have no armies, so they must control nations; banks have no products, so they must control industries; banks have only money, and interest earned on it. Thus, they must ensure that industry and governments alike borrow money en masse to the point where they are so indebted, they can never emerge. As a result, governments and industries become subservient to the banking interests. Banks achieved this masterful feat through the construction of the global central banking system.
Bankers took control first of Great Britain through the Bank of England, building up the massive might of the British Empire, and spread into the rest of Europe, creating central banks in the major European empires. In the 20th Century, the central bankers took control of the United States through the creation of the Federal Reserve in 1913, prior to the outbreak of World War I.
Following World War I, a restructuring of the world order was undertaken. In part, these actions paved the way to the Great Depression, which struck in 1929. The Great Depression was created as a result of the major banks engaging in speculation, which was actively encouraged and financed by the Federal Reserve and other major central banks.
As a result of the Great Depression, a new institution was formed, the Bank for International Settlements (BIS), based in Basle, Switzerland. As historian Carroll Quigley explained, the BIS was formed to “remedy the decline of London as the world’s financial center by providing a mechanism by which a world with three chief financial centers in London, New York, and Paris could still operate as one.” He explained:
The new order that is being constructed is not one in which there is another single global power, as many commentators suggest China may become, but rather that a multi-polar world order is constructed, in which the global political economy is restructured into a global governance structure: in short, the new world order is to be marked by the construction of a world government.
This is the context in which the solutions to the global economic crisis are being implemented. In April of 2009, the G20 set into motion the plans to form a global currency, which would presumably replace the US dollar as the world reserve currency. This new currency would either be operated through the IMF or the BIS, and would be a reserve currency whose value is determined as a basket of currencies (such as the dollar, yen, euro, etc), which would play off of one another, and whose value would be fixed to the global currency.
This process is being implemented, through long-term planning, simultaneously as we see the further emergence of regional currencies, as not only the Euro, but plans and discussions for other regional currencies are underway in North America, South America, the Gulf states, Africa and East Asia.
A 1988 article in the Economist foretold of a coming global currency by 2018, in which the author wrote that countries would have to give up monetary and economic sovereignty, however:
To create a global currency, and thus a global system of economic governance, the world would have to be plunged into economic and currency crises to force governments to take the necessary actions in moving towards a global currency.
From 1998 onwards, there have been several calls for the formation of a global central bank, and in the midst of the global economic crisis of 2008, renewed calls and actual actions and efforts undertaken by the G20 have sped up the development of a “global Fed” and world currency. A global central bank is being offered as a solution to prevent a future global economic crisis from occurring.
In March of 2008, closely following the collapse of Bear Stearns, a major financial firm released a report stating that, “Financial firms face a ‘new world order’,” and that major banks would become much larger through mergers and acquisitions. There would be a new world order of banking consolidation.
In November of 2008, The National, a prominent United Arab Emirate newspaper, reported on Baron David de Rothschild accompanying Prime Minister Gordon Brown on a visit to the Middle East, although not as a “part of the official party” accompanying Brown. Following an interview with the Baron, it was reported that, “Rothschild shares most people’s view that there is a new world order. In his opinion, banks will deleverage and there will be a new form of global governance.”
In February of 2009, the Times Online reported that a “New world order in banking [is] necessary,” and that, “It is increasingly evident that the world needs a new banking system and that it should not bear much resemblance to the one that has failed so spectacularly.” However, what the article fails to point out is that the ‘new world order in banking’ is to be constructed by the bankers.
This process is going hand-in-hand with the formation of a new world order in global political structures, following the economic trends. As regionalism was spurred by economic initiatives, such as regional trading blocs and currency groupings, the political structure of a regional government followed closely behind. Europe was the first to undertake this initiative, with the formation of a European trading bloc, which became an economic union and eventually a currency union, and which, as a result of the recently passed Lisbon Treaty, is being formally established into a political union.
The new world order consists of the formation of regional governance structures, which are themselves submissive to a global governance structure, both economically and politically.
In the construction of a ‘New World Order’, the capitalist system is under intense reform. Capitalism has, since its inception, altered its nature and forms. In the midst of the current global economic crisis, the construction of the ‘New Capitalism’ is based upon the ‘China model’; that is, ‘Totalitarian Capitalism’.
Governments will no longer stand behind the ‘public relations’ – propagandized illusion of ‘protecting the people’. When an economy collapses, the governments throw away their public obligations, and act for the interests of their private owners. Governments will come to the aid of the powerful banks and corporations, not the people, as “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.” During a large economic crisis:
Those who proclaim the actions of western governments ‘socialist’ are misled, as the ‘solutions’ are of a different nature. Daniel Guerin wrote in Fascism and Big Business about the nature of the fascist economies of Italy and Germany in the lead up to World War II. Guerin wrote of the actions of Italian and German governments to bail out big businesses and banks in an economic crisis:
Fascist economic policy:
The bureaucracy of the fascist state becomes much more powerful in directing the economy, and is advised by the ‘capitalist magnates’, who “become the economic high command – no longer concealed, as previously, but official – of the state. Permanent contact is established between them and the bureaucratic apparatus. They dictate, and the bureaucracy executes.” This is exactly the nature of the Treasury Department and Federal Reserve, most especially since the Obama administration took office.
In November of 2008, the National Intelligence Council (NIC) issued a report in collaboration between all sixteen US intelligence agencies and major international foundations and think tanks, in which they assessed and analyzed general trends in the world until 2025. When it reported on trends in ‘democratization’, discussing the spread and nature of democracy in the world, the report warned:
The warning from Daniel Guerin is vital to understanding this trend: “The bourgeoisie resorts to fascism less in response to disturbances in the street than in response to disturbances in their own economic system.” Totalitarianism is on the rise, as David Lyon wrote:
In 2007, the British Defense Ministry released a report in which they analyzed future trends in the world. It stated in regards to social problems, “The middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx.” Interestingly:
The general trend has thus become the reformation of the capitalist system into a system based upon the ‘China model’ of totalitarian capitalism. The capitalist class fear potential revolutionary sentiment among the middle and lower classes of the world. Obama was a well-packaged Wall Street product, sold to the American people and the people of the world on the promise of ‘Hope’ and ‘Change.’ Obama was put in place to pacify resistance.
Prior to Obama becoming President, the American people were becoming united in their opposition against not only the Bush administration, but Congress and the government in general. Both the president and Congress were equally hated; the people were uniting. Since Obama became President, the people have been turned against one another: ‘conservatives’ blame the ‘liberals’ and ‘socialists’ for all the problems, pointing fingers at Obama (who is nothing more than a figurehead), while those on the left point at the Republicans and ‘conservatives’ and Bush, placing all the blame on them. The right defends the Republicans; the left defends Obama. The people have been divided, arguably more so than at any time in recent history.
In dividing the people against each other, those in power have been able to quell resistance against them, and have continued to loot and plunder the nation and people, while using its military might to loot and plunder foreign nations and people. Obama is not to provide hope and change for the American people; his purpose was to provide the illusion of ‘change’ and provide ‘hope’ to the elites in preventing a purposeful and powerful opposition or rebellion among the people. Meanwhile, the government has been preparing for the potentiality of great social and civil unrest following a future collapse or crisis. Instead of coming to the aid of the people, the government is preparing to control and oppress the people.
Could Martial Law Come to America?
Processes undertaken in the American political establishment in previous decades, and rapidly accelerated under the Bush administration and carried on by the Obama administration, have set the course for the imposition of a military government in America. Readily armed with an oppressive state apparatus and backed by the heavy surveillance state apparatus, the ‘Homeland Security’ state is about controlling the population, not protecting them.
In January of 2006, KBR, a subsidiary of the then-Vice President Cheney’s former corporation, Halliburton, received a contract from the Department of Homeland Security:
Put simply, the contract is to develop a system of ‘internment camps’ inside the United States to be used in times of ‘emergency’. Further, as Peter Dale Scott revealed in his book, The Road to 9/11:
As Scott previously wrote, “the contract evoked ominous memories of Oliver North’s controversial Rex-84 ‘readiness exercise’ in 1984. This called for the Federal Emergency Management Agency (FEMA) to round up and detain 400,000 imaginary ‘refugees,’ in the context of ‘uncontrolled population movements’ over the Mexican border into the United States.” However, it was to be a cover for the rounding up of ‘subversives’ and ‘dissenters’. Daniel Ellsberg, who leaked the ‘Pentagon papers’ in 1971, stated that, “Almost certainly this [new contract] is preparation for a roundup after the next 9/11 for Mid-Easterners, Muslims and possibly dissenters.”
In February of 2008, an article in the San Francisco Chronicle, co-authored by a former US Congressman, reported that, “Beginning in 1999, the government has entered into a series of single-bid contracts with Halliburton subsidiary Kellogg, Brown and Root (KBR) to build detention camps at undisclosed locations within the United States. The government has also contracted with several companies to build thousands of railcars, some reportedly equipped with shackles, ostensibly to transport detainees.”
Further, in February of 2008, the Vancouver Sun reported that:
Commenting on the Military Commissions Act of 2006, Yale law and political science professor Bruce Ackerman wrote in the Los Angeles Times that the legislation “authorizes the president to seize American citizens as enemy combatants, even if they have never left the United States. And once thrown into military prison, they cannot expect a trial by their peers or any other of the normal protections of the Bill of Rights.” Further, it states that the legislation “grants the president enormous power over citizens and legal residents. They can be designated as enemy combatants if they have contributed money to a Middle Eastern charity, and they can be held indefinitely in a military prison.” Not only that, but, “ordinary Americans would be required to defend themselves before a military tribunal without the constitutional guarantees provided in criminal trials.” Startlingly, “Legal residents who aren’t citizens are treated even more harshly. The bill entirely cuts off their access to federal habeas corpus, leaving them at the mercy of the president’s suspicions.”
Senator Patrick Leahey made a statement on February 2007 in which he discussed the John Warner Defense Authorization Act of 2007, saying:
He added that, “posse comitatus [is] the legal doctrine that bars the use of the military for law enforcement directed at the American people here at home.” The Bill is an amendment to the Insurrection Act, of which Leahey further commented:
On May 9, 2007, the White House issued a press release about the National Security Presidential Directive (NSPD) 51, also known as the “National Security and Homeland Security Presidential Directive.” This directive:
The document defines “catastrophic emergency” as, “any incident, regardless of location, that results in extraordinary levels of mass casualties, damage, or disruption severely affecting the U.S. population, infrastructure, environment, economy, or government functions.” It explains “Continuity of Government” (COG), as “a coordinated effort within the Federal Government’s executive branch to ensure that National Essential Functions continue to be performed during a Catastrophic Emergency.” [emphasis added]
The directive states that, “The President shall lead the activities of the Federal Government for ensuring constitutional government. In order to advise and assist the President in that function, the Assistant to the President for Homeland Security and Counterterrorism (APHS/CT) is hereby designated as the National Continuity Coordinator.”
Essentially, in time of a “catastrophic emergency”, the President takes over total control of the executive, legislative and judicial branches of government in order to secure “continuity”. In essence, the Presidency would become an “Executive Dictatorship”.
In late September of 2008, in the midst of the financial crisis, the Army Times, an official media outlet of the Pentagon, reported that, “Helping ‘people at home’ may become a permanent part of the active Army,” as the 3rd Infantry Division’s 1st Brigade Combat Team, having spent years patrolling Iraq, are now “training for the same mission — with a twist — at home.” Further:
None of the authorizations, bills, executive orders, or contracts related to the declaration of marital law and suspension of democracy in the event of an ‘emergency’ have been repealed by the Obama administration.
In fact, as the New York Times revealed in July 2009, the Obama administration has decidedly left in place the Bush administration decisions regarding the government response to a national emergency in ‘Continuity of Government’ (COG) plans in establishing a ‘shadow government’:
The Obama administration announced that their continuity plans were ‘settled’ and they “drew no distance between their own policies and those left behind by the Bush administration.” In July of 2009, it was also reported on moves by the Obama administration to implement a system of ‘preventive detention’. With this, any semblance of democratic accountability and freedom have been utterly gutted and disemboweled; the Republic is officially dead:
Society, and with it, any remaining ‘democracy’ is being closed down. In this economic crisis, as Daniel Guerin warned decades ago, the financial oligarchy have chosen to ‘throw democracy overboard’, and have opted for the other option: totalitarian capitalism; fascism.
The current crisis is not merely a failure of the US housing bubble, that is but a symptom of a much wider and far-reaching problem. The nations of the world are mired in exorbitant debt loads, as the sovereign debt crisis spreads across the globe, entire economies will crumble, and currencies will collapse while the banks consolidate and grow. The result will be to properly implement and construct the apparatus of a global government structure. A central facet of this is the formation of a global central bank and a global currency.
The people of the world have been lulled into a false sense of security and complacency, living under the illusion of an economic recovery. The fact remains: it is only an illusion, and eventually, it will come tumbling down. The people have been conned into handing their governments over to the banks, and the banks have been looting and pillaging the treasuries and wealth of nations, and all the while, and making the people pay for it.
There never was a story of more woe, than that of human kind, and their monied foe.
Truly, the people of the world do need a new world order, but not one determined and constructed by and for those who have created the past failed world orders. It must be a world order directed and determined by the people of the world, not the powerful. But to do this, the people must take back the power.
The way to achieving a stable economy is along the path of peace. War and economic crises play off of one another, and are systematically linked. Imperialism is the driver of this system, and behind it, the banking establishment as the financier.
Peace is the only way forward, in both political and economic realms. Peace is the pre-requisite for social sustainability and for a truly great civilization.
The people of the world must pursue and work for peace and justice on a global scale: economically, politically, socially, scientifically, artistically, and personally. It’s asking a lot, but it’s our only option. We need to have ‘hope’, a word often strewn around with little intent to the point where it has come to represent failed expectations. We need hope in ourselves, in our ability to throw off the shackles that bind us and in our diversity and creativity construct a new world that will benefit all.
No one knows what this world would look like, or how exactly to get there, least of all myself. What we do know is what it doesn’t look like, and what road to steer clear of. The time has come to retake our rightful place as the commanders of our own lives. It must be freedom for all, or freedom for none. This is our world, and we have been given the gift of the human mind and critical thought, which no other living being can rightfully boast; what a shame it would be to waste it.
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From Global Crisis to “Global Government”
US Intelligence: A Review of Global Trends 2025
Global Research, December 19, 2008
The United States’ National Intelligence Council has released a report, entitled “Global Trends 2025: A Transformed World“. This declassified document is the fourth report of the Global Trends 2025: The National Intelligence Council’s 2025 Project,
The report outlines the paths that current geopolitical and economic trends may reach by the year 2025, in order to guide strategic thinking over the next few decades. The National Intelligence Council describes itself as the US Intelligence Community’s “center for midterm and long-term strategic thinking,” with the tasks of supporting the Director of National Intelligence, reaching out to non-governmental experts in academia and the private sector and it leads in the effort of providing National Intelligence Estimates.
The report was written with the active participation of not only the US intelligence community, but also numerous think tanks, consulting firms, academic institutions and hundreds of other experts. Among the participating organizations were the Atlantic Council of the United States, the Wilson Center, RAND Corporation, the Brookings Institution, American Enterprise Institute, Texas A&M University, the Council on Foreign Relations and Chatham House in London, which is the British equivalent of the CFR.
Among the many things envisioned in this report to either be completed or under way by 2025 are the formation of a global multipolar international system, the possibility of a return of mercantilism by great powers in which they go to war over dwindling resources, the growth of China as a great world power, the position of India as a strong pole in the new multipolar system, a decline of capitalism in the form of more state-capitalism, exponential population growth in the developing world, continuing instability in Africa, a decline in food availability, partly due to climate change, continued terrorism, the possibility of nuclear war, the emergence of regionalism in the form of strong regional blocks in North America, Europe, and Asia, and the decline of US power and with that, the superiority of the dollar.
The Economics of Change
The discussion of global economics begins with analyzing the potential repercussions of the current global financial crisis. It states that the crisis “is accelerating the global economic rebalancing. Developing countries have been hurt; several, such as Pakistan with its large current account deficit, are at considerable risk. Even those with cash reserves—such as South Korea and Russia—have been severely buffeted; steep rises in unemployment and inflation could trigger widespread political instability and throw emerging powers off course.” However, it states, “if China, Russia, and Mideast oil exporters can avoid internal crises,” they may be able to buy foreign assets, provide financial assistance to struggling countries and “seed new regional initiatives.” It says that the biggest change for the West will be “the increase in state power. Western governments now own large swaths of their financial sectors and must manage them, potentially politicizing markets.” It continues in saying that there is a prospect for a new “Bretton Woods,” to “regulate the global economy,” however, “Failure to construct a new all-embracing architecture could lead countries to seek security through competitive monetary policies and new investment barriers, increasing the potential for market segmentation.”
The report states that as a result of the major financial disruptions under-way and those still to come, there is a need to rebalance the global economy. However, “this rebalancing will require long-term efforts to establish a new international system.” It states that major problem to overcome will be a possible backlash against foreign trade and investment by corporations, particularly in “emerging economies,” with the potential of fueling “protectionist forces” in the US; an increasing competition for resources between emerging economies such as Russia, China, India and even Gulf states; a decline in democratization, as the China-model for development becomes attractive to other emerging economies, authoritarian regimes and even “weak democracies frustrated by years of economic underperformance”; the role of Sovereign Wealth Funds (SWFs) in providing more financial assistance to developing countries than the World Bank and IMF, which could lead to “diplomatic realignments and new relationships” between China, Russia, India and Gulf states with the developing world; the loss of the dollar as the “global reserve currency,” as “foreign policy actions might bring exposure to currency shock and higher interest rates for Americans,” and a “move away from the dollar” which would be precipitated by “uncertainties and instabilities in the international financial system.”
The dollar’s decline as a “global reserve currency” will be relegated to “something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis, or gradually with global rebalancing.”
It states that for the first time in history, the financial landscape will be “genuinely global and multipolar,” and that, “redirection toward regional financial centers could soon spill over into other areas of power.” It states that there is potential for a divide within the West between the US and EU, so long as they continue divergent economic policies, where Europe is more state-centric and with the US as more market-based. However, “the enhanced role of the state in Western economies may also lessen the contrast between the two models.” This enhanced role of the state in economic matters is largely due to the current financial crisis.
In outlining Latin America’s path for the next two decades, the report states that many countries will have become middle income powers, however, “those that have embraced populist policies, will lag behind—and some, such as Haiti, will have become even poorer and still less governable.” It says Brazil will become the major power of the region, but that, “efforts to promote South American integration will be realized only in part. Venezuela and Cuba will have some form of vestigial influence in the region in 2025, but their economic problems will limit their appeal.” However, it said that many parts of Latin America will remain among “the world’s most violent areas,” and that, “US influence in the region will diminish somewhat, in part because of Latin America’s broadening economic and commercial relations with Asia, Europe, and other blocs.”
In discussing the issue of Muslim immigration into the European Union, the report states that, “Countries with growing numbers of Muslims will experience a rapid shift in ethnic composition, particularly around urban areas, potentially complicating efforts to facilitate assimilation and integration.” Further, “the increasing concentration could lead to more tense and unstable situations, such as occurred with the 2005 Paris suburban riots.” This mass immigration and reactions of Europeans, among other factors, “are likely to confine many Muslims to low-status, low-wage jobs, deepening ethnic cleavages. Despite a sizeable stratum of integrated Muslims, a growing number—driven by a sense of alienation, grievance, and injustice—are increasingly likely to value separation in areas with Muslim-specific cultural and religious practices.”
The report also states that by 2025, Europe “will have made slow progress toward achieving the vision of current leaders and elites: a cohesive, integrated, and influential global actor able to employ independently a full spectrum of political, economic, and military tools in support of European and Western interests and universal ideals. The European Union would need to resolve a perceived democracy gap dividing Brussels from European voters and move past protracted debate about its institutional structures.” In other words, the move toward a European superstate will revolve around convincing the public that it is not a threat to democracy or sovereignty.
It further states that Europe should and likely will take in “new members in the Balkans, and perhaps Ukraine and Turkey. However, continued failure to convince skeptical publics of the benefits of deeper economic, political, and social integration and to grasp the nettle of a shrinking and aging population by enacting painful reforms could leave the EU a hobbled giant.”
Russia: Boom or Bust?
The report’s focus on Russia stresses two possible scenarios. One in which Russia triumphs as an international player in the new international system, with the “potential to be richer, more powerful, and more self-assured in 2025 if it invests in human capital, expands and diversifies its economy, and integrates with global markets. [Emphasis added]” However, Russia could also take another path, where “multiple constraints could limit Russia’s ability to achieve its full economic potential,” such as a shortfall in energy investment, an underdeveloped banking sector, and crime and corruption. It also points out that a “sustained plunge in global energy prices before Russia has the chance to develop a more diversified economy probably would constrain economic growth.” Could this be a veiled threat to Russia to either join into and merge with the international system, which is directed by Western elites, or face a possible economic backlash, perhaps in the form of manipulating oil prices? This strategy has not by any means been unheard of, as a look at the 1973 oil crisis and the lead up to the first Gulf War in 1991 have proven.
In contemplating Russia’s likely future, the report states that with a more “proactive and influential foreign policy” Russia could become an “important partner for Western, Asian, and Middle East capitals; and a leading force in opposition to US global dominance.” However, it states that, “shared perceptions regarding threats from terrorism and Islamic radicalism could align Russian and Western security policies more tightly.” In other words, perhaps increased incidents of terrorist activity in or near Russian territory can force it to align more closely with the West, if only at first in security integration. It also elaborates on the other potentiality for Russia, saying that it is “impossible to exclude alternative futures such as a nationalistic, authoritarian petro-state or even a full dictatorship.”
The report states that there are alternatives with Iran. In one instance, “political and economic reform in addition to a stable investment climate could fundamentally redraw both the way the world perceives the country and also the way in which Iranians view themselves.” This could move Iran away from “decades of being mired in the Arab conflicts of the Middle East.” Or the other option is Iran starts a nuclear arms race, continues to become the object of Western alienation, and may even become unstable and mired in conflict.
A Post-Petroleum World?
The report states that by 2025 there will likely be a “technological breakthrough that will provide an alternative to oil and gas, but implementation will lag because of the necessary infrastructure costs and need for longer replacement time.” In this instance, it states that “Saudi Arabia will absorb the biggest shock,” and “In Iran, the drop in oil and gas prices will undermine any populist economic policies,” and that, “Incentives to open up to the West in a bid for greater foreign investment, establishing or strengthening ties with Western partners – including the US – will increase.” The report also states that, “Outside the Middle East, Russia will potentially be the biggest loser, particularly if its economy remains heavily tied to energy exports, and could be reduced to middle power status. Venezuela, Bolivia, and other petro-populist regimes could unravel completely, if that has not occurred beforehand because of already growing discontent and decreasing production.” Again, this raises the issue of the manipulation or control of oil prices for political purposes, as the states all likely to be affected negatively by a plunge in oil prices also happen to be the states most at odds with the West, and specifically, the United States.
Africa: More of the Same
The report starts off by saying that “Sub-Saharan Africa will remain the most vulnerable region on Earth in terms of economic challenges, population stresses, civil conflict, and political instability. The weakness of states and troubled relations between states and societies probably will slow major improvements in the region’s prospects over the next 20 years unless there is sustained international engagement and, at times, intervention. Southern Africa will continue to be the most stable and promising sub-region politically and economically.” This seems to suggest that there will be many more cases of “humanitarian intervention,” likely under the auspices of a Western dominated international organization, such as the UN.
Further, the region will “continue to be a major supplier of oil, gas, and metals to world markets and increasingly will attract the attention of Asian states seeking access to commodities, including China and India.” However, “Poor economic policies—rooted in patrimonial interests and incomplete economic reform—will likely exacerbate ethnic and religious divides as well as crime and corruption in many countries.”
It also states that there will likely be a democratic “backslide” in the most populous African countries, and that, “the region will be vulnerable to civil conflict and complex forms of interstate conflict—with militaries fragmented along ethnic or other divides, limited control of border areas, and insurgents and criminal groups preying on unarmed civilians in neighboring countries. Central Africa contains the most troubling of these cases, including Congo-Kinshasa, Congo-Brazzaville, Central African Republic, and Chad.”
Resurgent Mercantilism and the “Arc of Instability”
The report states that there is a likely possibility of the resurgence on the world stage of mercantilist foreign policies of great powers, as access to resources becomes more limited. Perceptions of energy scarcity “could lead to interstate conflicts if government leaders deem assured access to energy resources to be essential to maintaining domestic stability and the survival of their regime.” In particular, “Central Asia has become an area of intense international competition for access to energy.”
The report also states that, “The Middle East and North Africa (MENA) will remain a geopolitically significant region in 2025, based on the importance of oil to the world economy and the threat of instability.” It gives a positive and negative scenario. In the positive, where economic growth becomes “rooted and sustained,” regional leaders will ensure stability both economic and political. However, “in a more negative scenario, leaders will fail to prepare their growing populations to participate productively in the global economy, authoritarian regimes will hold tightly to power and become more repressive, and regional conflicts will remain unresolved as population growth strains resources.”
The report elaborates that, “youth bulges, deeply rooted conflicts, and limited economic prospects are likely to keep Palestine, Yemen, Afghanistan, Pakistan, and others in the high-risk category. Spillover from turmoil in these states and potentially others increases the chance that moves elsewhere in the region toward greater prosperity and political stability will be rocky. The success of efforts to manage and resolve regional conflicts and to develop security architectures that help stabilize the region will be a major determinant of the ability of states to grow their economies and pursue political reform.” In other words, expect continued destabilization of the region.
It states of Iran, that its “fractious regime, nationalist identity, and ambivalence toward the United States will make any transition from regional dissenter toward stakeholder perilous and uneven. Although Iran’s aims for regional leadership—including its nuclear ambitions—are unlikely to abate, its regional orientation will have difficulty discounting external and internal pressures for reform.”
In relation to Afghanistan, the report states that, “Western-driven infrastructure, economic assistance, and construction are likely to provide new stakes for local rivalries rather than the basis for a cohesive Western-style economic and social unity.” Further, as “Globalization has made opium Afghanistan’s major cash crop; the country will have difficulty developing alternatives, particularly as long as economic links for trade with Central Asia, Pakistan, and India are not further developed.” It states that sectarian conflicts will continue and increase.
The report describes Pakistan as a “wildcard,” especially in relation to conflict in Afghanistan. It states that its Northwest Frontier Province and tribal areas “will continue to be poorly governed and the source or supporter of cross-border instability.” It states that, “If Pakistan is unable to hold together until 2025, a broader coalescence of Pashtun tribes is likely to emerge and act together to erase the Durand Line,” and fractionalize Pakistan into ethnic divides. Essentially, expect Pakistan to be broken up into ethnically divided countries and territories.
It also stipulates that Iraq will continue to be plagued by sectarian and ethnic conflicts, which will spillover into other countries of the region, as “Iran, Syria, Turkey, and Saudi Arabia will have increasing difficulty staying aloof. An Iraq unable to maintain internal stability could continue to roil the region. If conflict there breaks into civil war, Iraq could continue to provide a strong demonstration of the adverse consequences of sectarianism to other countries in the region.” Put another way, Iraq will collapse into civil war, break up and become an example to the rest of the region regarding what happens to countries that pursue divergent policies from those of the West.
The report states that there is a likely increase in the risk of a nuclear war, or in the very least, the use of a nuclear weapon by 2025. “Ongoing low-intensity clashes between India and Pakistan continue to raise the specter that such events could escalate to a broader conflict between those nuclear powers.” Further, “The prospect of a nuclear-armed Iran spawning a nuclear arms race in the greater Middle East will bring new security challenges to an already conflict-prone region, particularly in conjunction with the proliferation of long-range missile systems.” The report also brings up the prospect of nuclear terrorism as an increased risk.
The report states that terrorism will by no means disappear from the international stage by 2025. It interestingly postulates that there is a possibility of Al-Qaeda’s influence as a terrorist group greatly diminishing, or all together disappearing, being replaced with new terrorist threats.
It discusses the actions that will likely be pursued by countries in reaction to terrorist threats, saying that many governments will be “expanding domestic security forces, surveillance capabilities, and the employment of special operations-type forces.” Counterterrorism measures will increasingly “involve urban operations as a result of greater urbanization,” and governments “may increasingly erect barricades and fences around their territories to inhibit access. Gated communities will continue to spring up within many societies as elites seek to insulate themselves from domestic threats.” Essentially, expect a continued move towards and internationalization of domestic police state measures to control populations.
The report states that there is a distinct possibility of a global pandemic emerging by 2025. In this case, “internal and cross-border tension and conflict will become more likely as nations struggle—with degraded capabilities—to control the movement of populations seeking to avoid infection or maintain access to resources.” It states that such a likely candidate for a pandemic would be the H5N1 avian flu.
It states that in the event of a global pandemic, likely originating in a country such as China, “tens to hundreds of millions of Americans within the US Homeland would become ill and deaths would mount into the tens of millions,” and “Outside the US, critical infrastructure degradation and economic loss on a global scale would result as approximately a third of the worldwide population became ill and hundreds of millions died.”
A New International System Is Formed
In discussing the structure and nature of a new international system, the report states that, “By 2025, nation-states will no longer be the only – and often not the most important – actors on the world stage and the ‘international system’ will have morphed to accommodate the new reality. But the transformation will be incomplete and uneven.”
The report states that under a situation in which there are many poles of power in the world, yet little coordination and cooperation between them all, it would be “unlikely to see an overarching, comprehensive, unitary approach to global governance. Current trends suggest that global governance in 2025 will be a patchwork of overlapping, often ad hoc and fragmented efforts, with shifting coalitions of member nations, international organizations, social movements, NGOs, philanthropic foundations, and companies.” In other words, by 2025, there won’t be an established global government, but rather an acceleration of the processes and mechanisms that have been and currently are underway in efforts to create a world government.
The report also interestingly points out that, “Most of the pressing transnational problems – including climate change, regulation of globalized financial markets, migration, failing states, crime networks, etc. – are unlikely to be effectively resolved by the actions of individual nation-states. The need for effective global governance will increase faster than existing mechanisms can respond [Emphasis added].” In other words, due to the growing threat of international problems, which are essentially the result of Western political-economic-intelligence activities and policies, the solution is a move toward international governance, which will be overseen and run by those same Western interests.
In discussing the rise of the emerging powers, particularly China and India, the report observes that their economic progress has been “achieved with an economic model that is at odds with the West’s traditional laissez faire recipe for economic development.” So the question is, “whether the new players – and their alternative approaches – can be melded with the traditional Western ones to form a cohesive international system able to tackle the increasing number of transnational issues.” It continues, saying that “the national interests of the emerging powers are diverse enough, and their dependence on globalization compelling enough, that there appears little chance of an alternative bloc forming among them to directly confront the more established Western order. The existing international organizations – such as the UN, WTO, IMF, and World Bank – may prove sufficiently responsive and adaptive to accommodate the views of emerging powers, but whether the emerging powers will be given – or will want – additional power and responsibilities is a separate question.” So, as the new powers emerge, as a result of Western elite-directed globalization, they will likely merge with the Western controlled world order as opposed to becoming an alternative or opposition force to it.
The report discusses the topic of regionalism in different areas of the world: “Greater Asian integration, if it occurs, could fill the vacuum left by a weakening multilaterally based international order but could also further undermine that order. In the aftermath of the 1997 Asian financial crisis, a remarkable series of pan-Asian ventures—the most significant being ASEAN + 3—began to take root. Although few would argue that an Asian counterpart to the EU is a likely outcome even by 2025, if 1997 is taken as a starting point, Asia arguably has evolved more rapidly over the last decade than the European integration did in its first decade(s).” It further states that, “movement over the next 15 years toward an Asian basket of currencies—if not an Asian currency unit as a third reserve—is more than a theoretical possibility.”
The report elaborates on the concept of regionalism, stating that, “Asian regionalism would have global implications, possibly sparking or reinforcing a trend toward three trade and financial clusters that could become quasi-blocs (North America, Europe, and East Asia).” Such blocs “would have implications for the ability to achieve future global World Trade Organization agreements and regional clusters could compete in the setting of trans-regional product standards for IT, biotech, nanotech, intellectual property rights, and other “new economy” products.” So these three main regional blocs will make up the initial structure of international governance by 2025, progressing toward the ultimate goal of a global government.
The Decline of Democracy
The report states that with democratization around the world, “advances are likely to slow and globalization will subject many recently democratized countries to increasing social and economic pressures that could undermine liberal institutions.” Part of this reasoning is that “the better economic performance of many authoritarian governments could sow doubts among some about democracy as the best form of government. The surveys we consulted indicated that many East Asians put greater emphasis on good management, including increasing standards of livings, than democracy.” Of great significance, the report also states that, “even in many well-established democracies, surveys show growing frustration with the current workings of democratic government and questioning among elites over the ability of democratic governments to take the bold actions necessary to deal rapidly and effectively with the growing number of transnational challenges.”
This is a very important point, as among many “well-established democracies” are the United States, which is already experiencing a massive shift away from democracy. China, which has been able to emerge rapidly as a result of Western-controlled globalization, and which remains authoritarian, can essentially be viewed as a model for the international system being shaped, as democracies take a turn toward authoritarianism and other rising powers choose to pursue development in the same manner. Essentially, the new international system will mark a move away from democracy and towards international authoritarianism.
It is important, when reviewing the above information provided by the report, to understand the perspective of the authors. The US intelligence community worked closely with businesses, prominent academic institutions and powerful think tanks, all of which play extremely significant roles in shaping our current world order. Thus, the perspectives outlined in the report come with an inherent bias, and so it is important to “read in between the lines.” The report does NOT state what the objectives of the US intelligence community, academic institutions, businesses or think tanks will be in this future 2025 scenario, but you can be assured that they will not play backseat roles and merely observe situations. These are among the most powerful players in the international arena, and this vision of 2025 is the world they are shaping.
So when the report suggests the likely fractionalization of Pakistan, they do not say that it is a US objective to do so, but rather that it is a likely possibility that such a scenario will occur. Thus, it is important to comprehend this information with an understanding that those who wrote the report, have been, are currently, and will in all likelihood, continue to be among the most powerful actors shaping the world order and the new international system. They have been behind the great “transnational issues” and are now proposing their “international solutions.”
 NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: Acknowledgements
 NIC, Global Trends 2025: A Transformed World. The National Intelligence Council’s 2025 Project: November, 2008: 10
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