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The Collapse of Venezuela and Its Impact on the Region

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In May 2017, as the number killed during protests against the regime of Nicolás Maduro in Venezuela climbed toward 40, and with more than 130 injured and over 1,300 arrests, many in the United States and the region asked, “How much longer could it go on?”

In addition to the crisis within Venezuela, the collapse of its economy and the escalating criminal and political violence have also produced a massive outflow of refugees to neighboring Colombia and Brazil, to the nearby Caribbean islands of Trinidad and Tobago, Aruba, and Curaçao, and to other locales throughout the region. In total, an estimated 1.5 million of Venezuela’s 32 million people have left the country since the government of Hugo Chávez came to power in 1999. Venezuela’s neighbors watch the unfolding drama not only with concern for the Venezuelan people but also from the perspective of how that crisis could affect them as it deepens and possibly becomes more violent.

The situation in Venezuela is often mistakenly diagnosed as principally a political or economic crisis. It is better understood as a criminal act without precedent in Latin America: the capture and systematic looting of a state, achieved by first capturing its institutions through mass mobilization and bureaucratic machinations, then increasing control of the state through military force, as the criminal nature of the act and its consequences become apparent to the nation’s citizens. Former Venezuelan government officials have suggested that as much as $300 billion may have been diverted over the last decade from national coffers to private accounts through the currency control system alone.

The crisis in Venezuela is a problem for the country and the region that neither international law nor existing multilateral institutions are well equipped to handle. For neighboring states, politically acceptable alternatives appear to be few. For example, it is unlikely that the United States, or organizations such as the United Nations or the Organization of American States (OAS), will choose to physically intervene or be able to act in a manner sufficiently impactful to alter the current trajectory of Venezuela toward a broader and more violent internal crisis. Yet, both the United States and multilateral institutions do have plausible alternatives and may yet have the ability to play a decisive role in managing the consequences of that crisis for the region without direct intervention.

The Situation in Venezuela

It is difficult to anticipate when or how the Maduro regime in Venezuela will collapse, yet it is clear that its current course is both economically and politically unsustainable. In economic terms, destructive government policies, including expropriations, price controls, and currency controls, in combination with rampant corruption and mismanagement in government enterprises, have progressively eliminated the capacity of the Venezuelan economy to produce even the most basic goods required by the people of the country to survive. Additionally, declining petroleum output, high production costs, debt service obligations, an accumulation of adverse legal judgements from past expropriations, and increasing reluctance of creditors (even politically supportive China and Russia) to lend new money are shutting off Venezuela’s access to hard currency to buy goods from abroad, even though international oil prices have recently trended upward.

Defaulting on the loan obligations of Petróleos de Venezuela, S.A. (Venezuela’s state-owned oil company, PDVSA) to use the hard currency to import more goods (to ease political pressures) would trigger legal consequences that could bring about the seizure of the company’s assets, even oil shipments abroad, aggravating the regime’s liquidity crisis in a way that could endanger its ability to maintain power. The Venezuelan government has thus engaged in an increasingly desperate series of delays, legal actions, and fund shifting to make bond payments, while making a minimum quantity of foreign currency available to state organs and friends of the regime for the purpose of importing goods to maintain the support of the military and other key regime support groups.

These measures have included drawing down remaining international reserves (largely in gold), continuing to expropriate companies such as General Motors, rolling over bond payments, mortgaging assets such as the petroleum refiner and distributor CITGO, seeking new loans from state partners such as China and trusted companies such as Rosneft, and filing creative legal actions to delay decisions and awards against the government. Yet, little new credit is coming in, and the government is running out of assets to mortgage and legal options to postpone payments.

Venezuela is unable to produce needed goods domestically and lacks the cash to import them. The result, as increasingly evidenced in reports coming out of Venezuela, is ever greater scarcity of everything from food and medicine to toilet paper. Store shelves are empty, and people are spending significant portions of their day seeking food and other necessities. Seventy-two percent of Venezuelans report having lost weight in the past year because of such shortages. As Wall Street Journal reporter John Forero put it, “Venezuela is starving.”

The Maduro government has attempted to address the political implications of such shortages by appointing the military to distribute scarce food. As a result, the system mainly channels the little available food to those who support the regime while also ensuring the military both has reliable access to food for itself as well as opportunities for earning money by selling food on the black market.

With respect to political dynamics, the maneuvers adopted by the Maduro regime have demonstrated its determination to maintain power at any cost and its unwillingness to pursue a sincere political compromise or a constitutional solution that could result in its loss of power. A string of events and U.S. government actions in recent years against leaders in the current Venezuelan regime has highlighted that there are likely solid criminal cases against a significant number of persons in that government, thus signaling to them that a loss of political power could lead to their extradition and imprisonment in the United States. Indicative events include the July 2014 arrest of former Venezuelan security chief Hugo Carbajal when he left the country to become his country’s ambassador to Aruba, the November 2015 arrest in Haiti (and subsequent conviction on narcotrafficking charges) of Maduro’s nephews, and the U.S. Treasury Department’s February 2017 designation of Venezuelan Vice President Tareck El Aissami as a foreign narcotrafficking kingpin.

Reflecting such incentives to maintain power, Maduro and his fellow Chavista elites have violated Venezuela’s constitutional order in increasingly egregious ways, demonstrating that a resolution of Venezuela’s political and economic crisis through democratic processes is increasingly improbable. Key actions in this regard include dubious rulings by the pro-Maduro National Electoral Council and the Venezuelan Supreme Court

  • preventing the opposition from using the supermajority it won in December 2015 elections (by blocking the seating of three opposition congressmen, giving pro-Maduro legislators two-thirds of the chamber);
  • blocking a constitutionally stipulated recall referendum against the president;
  • stripping the opposition-dominated congress of budgetary and other authority;
  • ruling unconstitutional virtually all of the initiatives passed by that congress;
  • postponing state and local elections; and
  • eliminating key opposition leaders, including jailing Leopoldo López and disqualifying Henrique Capriles.

The Maduro regime has further begun a process of “renewing” the nation’s political parties, likely designed to disqualify parties and leaders hostile to the regime if currently delayed local elections or future presidential elections are held. Its boldest step to date, however, was its May 2017 initiative to form a constituent assembly and rewrite the constitution, a process almost certain to eliminate the elected opposition-dominated parliament.

If such actions demonstrate the unwillingness of the Maduro regime to respect constitutional processes and limits that could lead to their loss of power, the Venezuelan military has equally demonstrated its unwillingness to intervene to restore the democratic order or to avert a further economic and political meltdown in the country. While Venezuela’s armed forces have traditionally acted as guarantors of the nation’s constitutional order, during the eighteen years of rule by populist leader Hugo Chávez and his successor, Maduro, the military has been politicized and heavily indoctrinated with pro-regime ideology. In addition, virtually the entire cadre of its senior leaders has been replaced by regime loyalists.

Further decreasing the likelihood that the armed forces would act to restore Venezuela’s constitutional order, the military leadership (and particularly the National Guard) has become too deeply involved in drug trafficking, contraband, and other illicit activities to risk allowing or bringing about such change. Furthermore, the regime has embedded Cuban intelligence and counterintelligence agents throughout the military to keep an eye out for defectors.

While the United States has been highly critical of the actions of the Maduro regime, it has not, to date, indicated a disposition to move beyond the imposition of economic sanctions. And, while the OAS under Secretary Luis Almagro has strongly denounced the interruption of the democratic order in Venezuela, the organization principally functions on consensus, and the block of left-leaning anti-U.S. governments represented by the Bolivarian Alliance for the People of Our Americas (ALBA) continues to oppose any anti-Venezuela action by the OAS. Venezuela’s fellow ALBA countries may not agree with Maduro’s decisions in governing Venezuela, but, arguably, they do not find it in their strategic interest for the OAS (in which the United States is an important actor) to condemn Venezuela or play a significant role in the region’s politics in general. Even if the OAS were to expel Venezuela from the organization for violation of its democratic charter, the Maduro regime already gave its notice in April of its intention to leave the body.

Similarly, while the United Nations Security Council, in theory, could authorize an intervention in Venezuela, permanent members Russia and China would likely veto such action, insofar as each has significant business interests in the country, as well as strategic interest in the persistence of a Venezuelan regime that actively resists the expansion of U.S. influence in the region.

Adding to Venezuela’s problems, the probability that violence will escalate is increased by the government’s creation and deployment throughout the country of collectivos, relatively undisciplined armed bands of civilians, to enforce its will. This will ensure a high cost in lives of Venezuela’s own military or of a foreign military if anyone attempts to change the regime by force.

Potential Scenarios for Venezuela

The plausible scenarios for Venezuela (all negative) loosely fall into three groups, based on assumptions regarding which side prevails and whether violence is sustained or dissipates: (1) resistance burnout and consolidation of the criminal state, (2) escalating violence resolved by imposition of a pseudodemocratic compromise regime, and (3) prolonged criminality, repression, and insurgency.

Resistance burnout and consolidation of the criminal state. In this scenario, the military and the government maintain cohesion, and there is no foreign intervention. Eventually, through the regime’s control of resources and brutal repression (including violence by the collectivos), the majority of civil resistance is suppressed or flees the country. Millions depart the country as economic or political refugees, or to escape the criminal violence. With the diminishing of resistance, the regime consolidates its totalitarian order, probably imposing a new constitution and legislative body. Following the imposition of stability, Maduro is killed or pressured to step down, and power passes to a new leader, similarly committed to the populist ideology and the criminal enterprise, but with more rational economic policies and improved managerial capabilities.

With some stability and improved leadership, key anti-United States statist investors such as the Chinese and the Russians begin loaning new money to the regime, further expanding their access to Venezuela’s oil resources. New credit from these allies, possibly assisted by rising petroleum prices, supports further consolidation of power by the regime.

Escalating violence resolved by imposition of a compromise regime. In this scenario, violence increases significantly over that manifested in May 2017, possibly involving sporadic major confrontations between collectivos and Venezuelans identifying with the opposition and demanding the restoration of the previous constitutional order. Armed, self-interested groups are involved on all sides.

Violence exceeds the ability of Venezuela’s National Guard to control; the regular military, already reluctant to participate in the repression of civilians, is deployed but refuses to act, possibly with some units dissolving or declaring themselves loyal to the opposition. Key extrahemispheric players, including the Chinese and the Russians, make a tacit agreement with the opposition in return for guarantees of the protection of their businesses and other interests in the country. Maduro and other key regime leaders are killed or leave the country, while others cut a deal for a power transition, with the support of key military leaders, in return for limited immunity and protection from extraditions.

Prolonged criminality, repression, and insurgency. In this scenario, like the prior one, violence increases significantly, and the regular military splinters or is too unreliable to be employed. Some key figures possibly flee the country. By contrast to the previous scenario, however, a deal involving a power transition cannot be achieved. Key external players such as Russia and China maintain a “wait-and-see” posture. Protest-based violence, including selective attacks against protesters by collectivos, deteriorates into broader, bloodier efforts by pro-regime forces to intimidate or silence regime opponents through large-scale violence, sparking reprisals by anti-Maduro groups, and occasionally drawing the National Guard and regular military forces into the conflict.

Continuing violence, including possible sabotage of oil installations and other government assets, leads to a broad economic collapse and the highest outflow of refugees of the three contemplated scenarios. In this scenario, major foreign actors, including China, would likely coordinate to evacuate their workers. Depending on the risk posed to Russian, Chinese, and other oil installations, United Nations Security Council agreement to a peacekeeping or peace enforcement mission could be possible, presuming that Chavista forces would see permitting such deployments as advantageous, or would no longer be able to block them.

There is no inherent limit to the deepening of suffering, violence, and criminality that could occur. Indeed, the economic plight and abuses by the regimes in Zimbabwe and North Korea serve as reminders of how much a people can suffer at the hands of a totalitarian regime that pursues irrational policies but is determined to maintain itself in power with the acquiescence of its military.

Implications for Venezuela’s Neighbors

Each scenario discussed implies an expansion of the already significant outflow of refugees to neighboring Colombia and Brazil, nearby Caribbean islands such as Aruba, Curaçao, and Trinidad and Tobago, and the rest of the region, as well as the export of arms and broader impacts on the criminal and political landscape.

Colombia. Historically, people and goods have always moved relatively freely across the Venezuela-Colombia border; the mother of Maduro was born in Colombia, and possibly the president himself was as well. Nonetheless, the influx of Venezuelans into Cúcuta and other Colombian border towns has created some resentment among Colombians. Some perceive the new arrivals as competing with them for jobs, particularly in the informal sector, and some believe the refugees have undermined security.

In 2016 alone, over 150,000 people entered Colombia from Venezuela. Some enter on a temporary basis to earn money in the informal or illicit economy and purchase goods not available in their home country, while others choose to remain indefinitely. The Colombian border town of Cúcuta has been the focus of this movement, with significant increases in the population of Venezuelans in the city, including those who work in the informal sector as prostitutes and street vendors, and in other activities. A portion of those crossing the border from Venezuela into Colombia are actually Colombians by birth who had immigrated to Venezuela years or decades prior in search of economic opportunity or to escape violence.

Colombia’s major cities such as Bogotá, Medellín, and Cali have also registered significant increases in Venezuelans. However, because two major roads from Venezuela’s capital, Caracas, converge on the Colombian border near Cúcuta, an expanded flow of migrants from a deteriorating situation in Venezuela would probably concentrate there and, to a lesser extent, to the north in La Guajira department, including the town of Riohacha, and Valledupar in Cesar department. Nonetheless, some of those leaving Venezuela will also enter Colombia at more southerly points, including Arauca, Puerto Carreño, and Inírida, where controls are weaker.

Of those who initially migrated to Venezuela from Colombia, many now returning are expected to settle in the border region, since they have family or other contacts in the region. Of those arriving from cities on Venezuela’s Caribbean coast, such as Caracas, Puerto Cabello, Maracay, and Valencia, many will likely migrate toward Colombia’s own Caribbean coast, to cities such as Maicao, Barranquilla, and Sincelejo, where the climate and culture are familiar. By contrast, Venezuelans coming from more rural areas to the south of the nation’s principal mountain range will likely gravitate toward cities in the interior of Colombia on the other side of its flatlands, such as Villavicencio and Bogotá.

Other migration routes notwithstanding, the focus of migration on Cúcuta and La Guajira raises particular concerns for Colombia since the area, particularly Catatumbo and other parts of the province of Norte de Santander, is a hotbed of criminal and terrorist activity, with Colombia’s notorious Gulf Clan and the National Liberation Army (ELN) vying to fill in areas being vacated by the Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia, or FARC). In this complex dynamic, the newly arriving immigrants are both potential victims of and recruits for those organizations. Indeed, given the established history of cross-border smuggling, Colombian security officials believe that some people crossing the border are moving drugs and contraband, among other illicit activities.

Venezuela and Neighboring Countries

Further to the south, in border towns such as Arica, Puerto Carreño, and Inírida, although the current and expected volume of immigration from Venezuela is less of a problem, the area is the center of the illicit mining for coltan, a strategic mineral used in a wide array of advanced batteries and electronics products.

In addition to the potentially destabilizing impact of refugee flows on both the Colombian economy and centers of organized crime in the country, Colombian security experts worry that some of Venezuela’s collectivos and other groups will sell their FN FAL (light automatic) rifles and other military equipment to help maintain themselves, flooding contested criminal areas such as Catatumbo with arms as well as people in economic need.

As the Venezuelan crisis deepens and the flow of refugees grows, de facto encampments are likely to form, particularly around Cúcuta. It will be in the interest of Colombia to formally manage such camps to alleviate suffering and to prevent them from becoming centers of criminal recruitment and victimization, given the challenging environment of the zone.

In preparation for a refugee crisis, the Colombian government has an established system, the “national entity for the management of the risk of disasters,” that was used when Venezuela expelled more than six thousand Colombians from the country in August 2015. Nonetheless, security experts in Colombia are concerned that the resource requirements and the complexity of a massive flood of refugees from Venezuela would likely overwhelm the system’s capacity.

For Colombia, such challenges come at a time in which its military’s resources for operations and maintenance are declining significantly, while the government is searching for the resources to fund the substantial obligations that it incurred in the agreement that it signed with the FARC in November 2016. Colombia must also deal with the upsurge of criminal and other violence between the ELN and criminal bands as the FARC demobilizes and withdraws from its former territory.

Beyond outflows of people and guns, as the position of the Maduro leadership in Venezuela becomes more uncertain, Colombian security and defense professionals also worry that Venezuela could seek to provoke a war; this would serve to divert the attention of the Venezuelan people and the international community as well as maintain the unity of the Venezuelan military. Indeed, Venezuela has a long history of aggressive posturing toward Colombia, including territorial claims over La Guajira and substantial parts of Colombia’s eastern plains in Venezuela’s 1999 constitution. In March 2008, then President Chávez called to move ten Venezuelan armored brigades to the Colombian border in response to Colombia’s signing of a base status agreement with the United States. It further conducted a war game that year, Guaicaipuro, focused on a preemptive Venezuelan invasion of the Guajira. More recently, provocative Venezuelan actions include its conduct of a nationwide mobilization exercise, Zamora 200; its deployment of a small military force across the Arauca River into Colombia in March 2017; and the increasingly bellicose rhetoric of the Maduro regime toward Colombia, calling the nation a “failed state.”

Brazil and Guyana. While Colombia has, to date, borne the brunt of the spillover effects of the Venezuela crisis, Venezuelans have also crossed into the Brazilian state of Roraima. On one weekend in June 2016 alone, an estimated 150,000 Venezuelans crossed into Brazil, although only a portion stayed, while others came to purchase food and other goods. In May 2017, the mayor of the Brazilian city of Manaus declared an emergency after more than 350 Venezuelan refugees appeared on its streets, while more Venezuelan refugees have also been seen in the provincial capital of Boa Vista.

With respect to Venezuela’s other neighbor, Guyana, although the two countries share a land border, the relative lack of infrastructure connecting the two across Guyana’s Essequibo region and the lack of population in the area has limited the migration of Venezuelans to Guyana to date. As with Colombia, however, Guyanese worry that in a moment of crisis, the Maduro regime could provoke a military crisis with Guyana as a diversionary tactic, based on a historical dispute over the Essequibo region. The Maduro regime attempted to resurrect the dispute in September 2015, just months after ExxonMobil discovered significant oil deposits off the coast of the disputed area.

Island nations. In addition to the countries that share a land border with Venezuela, instability in the country is affecting its neighbors in the Caribbean. Venezuelans looking to obtain supplies or to escape economic and other hardship in the country are crossing the relatively narrow expanse of Caribbean water to the nearby islands of Aruba, Curaçao, and Trinidad and Tobago. In Trinidad and Tobago, Venezuelans reportedly take a ferry or hire local boats to cross the seven kilometers of water separating the two countries in order to buy goods in Trinidadian stores. In some cases, they bring guns from Venezuela to trade for food and other basic goods. And, the interchange between Venezuela and its island neighbors, exacerbated by the combination of sheer economic need and the breakdown of law and order, has also contributed to piracy off its coast.

In Trinidad and Tobago, as in the La Guajira region on the Caribbean coast of Colombia, an additional risk is created by the possible migration of persons with ties to radical Islamic groups such as Hezbollah. During recent years, Iran reportedly used Venezuela as a point of entry for its Qods forces (religious paramilitary agents), while Venezuelan authorities sold government-issued passports to refugees from Syria and other parts of the Middle East.While there has been little evidence of the outflow of such migrants to date, the established Muslim communities in Trinidad and Tobago and La Guajira make both a logical destination if the crisis in Venezuela deepens. Given that Trinidad and Tobago is already a leading source on a per capita basis for foreign fighters to the Middle East, migration from Venezuela of those affiliated with radical Islamic groups would have a potentially radicalizing and destabilizing effect on the Islamic communities in those areas.

Recommendations for the United States

Despite the systemic looting of Venezuela by the Maduro regime, U.S. intervention in Venezuela would be strategically unwise. While such action could topple Venezuela’s Bolivarian socialist government, it would reinforce the historic perception of the United States in the region as interventionist, sowing distrust and other anti-U.S. sentiment. In addition, in the short-term, it would leave behind an economically decimated, highly corrupted and politically polarized state. Following intervention, the United States would face the dilemma of allowing the newly “liberated” but broken Venezuelan state to continue as a source of criminality and instability in the region or engaging in the lengthy, expensive effort of trying to rebuild the country. In the process, as in the Middle East, the U.S. presence in Venezuela would likely become the focal point for rallying anti-U.S. sentiment, and U.S. forces in Venezuela would present a tempting target for the Chavista “resistance” and leftist terrorist groups posturing as resistors of the “yanqui invasion.”

While it would be unwise for the United States to intervene in Venezuela and unrealistic for the international community to do so, both nonetheless have an important role in shaping the evolution of the situation in a positive direction, and in managing the consequences of the crisis in Venezuela on its neighbors. With respect to Venezuela itself, the United States should give the fullest support possible to the OAS, currently under Secretary Almagro, in condemning the departure from the democratic order established by Venezuela’s constitution, and it should support the OAS and other multilateral and bilateral efforts pressuring the Chavista elite to restore that order. Also, it is imperative that the United States continue to highlight publicly the illegitimacy of the Maduro regime as a criminal elite that has, through administrative machinations, stolen control of the resource-rich state from its people, and which is increasingly relying on the force of arms to continue looting the state with an eye to making good a “getaway” with the money.

As part of such efforts, the United States must lead the international community in isolating the Chavista leadership through individually targeted economic sanctions, cooperating with other players in the international community to deny the Chavistas sanctuary in other countries after their rule. The U.S. State Department, Treasury Department, and other appropriate organizations should particularly focus on the legal and financial arenas, supporting Venezuela’s National Assembly as it invalidates contracts made by the Chavista elite outside the constitutional order. This approach may have only limited short-term impacts in Venezuela itself, but it may help change the calculations of key Maduro regime benefactors such as China and Russia, convincing them that their best strategy for securing their oil holdings and other interests in the country is by working through the constitutionally legitimate National Assembly rather than the executive branch, whose operation outside the constitution leaves its commitments of Venezuelan resources to others without legal validity.

Beyond addressing the crisis in Venezuela itself, the United States should actively work with the country’s neighbors to prevent the byproducts of the crisis, including the outflow of refugees and arms, from destabilizing the region. Venezuela’s neighbor, Colombia, confronts the double challenge of being the country most impacted by the flow of Venezuelan refugees and arms (and possible military provocations), while dealing with the enormous resource and internal security challenges arising from its government’s peace agreement with the FARC. While the Colombians take pride in their own capabilities, they will need more (and different) support from the United States, not less, in the months ahead.

In the short term, the United States should coordinate with Colombia, as well as Aruba, Curaçao, Trinidad and Tobago, and other states, in conjunction with the International Committee of the Red Cross and other nongovernmental organizations, to support the needs of the refugees. It should collaborate with the governments of the region to provide logistics, intelligence, and other support as permitted by national laws to help protect those refugees from victimization and criminal recruitment, as well as to monitor who is coming in, where they are going, and how they are affecting the local criminal environment. Particularly in Colombia, the United States should consider increased intelligence, training, and material support to police, prosecutors, and special military units combatting organized crime, which will likely expand through the refugee and arms flows.

In the unlikely, but not inconceivable, event that the Maduro administration attempts to provoke a military conflict with Colombia or Guyana, the United States should be prepared to provide military and other support to defend the territorial sovereignty of each. However, it should avoid direct military intervention in Venezuelan territory aside from possible selective removal of offensive capabilities being used against Venezuela’s neighbors, such as combat aircraft and helicopters in their bases, or forward-deployed armored vehicles.

As the United States supports the countries of the region in their response to the Venezuelan crisis, it should, wherever possible, work through the OAS and other multilateral institutions of the Inter-American System, including a coordinated response to the handling of refugees. The United States should also look for ways to leverage the events of the Conference of American Armies, of which it is head during the current two-year cycle, as a vehicle for such coordination in military affairs. Finally, the United States should be prepared to work with the United Nations to deploy a peacekeeping or peace enforcement force into the region when the evolution of the crisis and the positions of the permanent members of the United Nations Security Council make such action feasible.

Conclusion

The crisis in Venezuela is a tragedy with grave implications for its neighbors and the region. Yet, in that tragedy, there is also opportunity for the United States to strengthen its relationship with countries in the region by tangibly demonstrating its commitment to work with them to mitigate the effects of the crisis. It is also an opportunity to do so in a way that strengthens the OAS and Inter-American System (in whose functionality the United States has a strategic interest) as the principal multilateral vehicle for addressing regional security issues.

The Venezuela crisis may be the first opportunity of the Trump administration to define its vision for democracy, security, and good governance in the region, and to demonstrate its commitment to the partner nations with which the United States shares the Western Hemisphere. Given U.S. connectedness to the region through geography, commerce, and family ties, doing so is critical not only for the Trump administration and Venezuela’s neighbors but also for the United States and the region as a whole.

First published in the Journal “Military Review” July-August 2017, Republished by Author’s permission

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Americas

Confronting the Shadow of Colonialism in Trump’s America

Nozomi Hayase

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August 2018 marked the anniversary of civil unrest in Charlottesville, Virginia where white nationalists clashed with counter-protesters. Then, President Donald Trump in his response to this event empowered ultra-right and racist groups by blurring the line of responsibility with the rhetoric of “blame on both sides.” Now, in condemning the horrific tragedy that took place last year, he maintained his stance with wording of “all types of racism and acts of violence.”

The victory of Trump in the 2016 presidential election brought a demise of the U.S. political establishment. As the legitimacy of institutions weakened, the veil of reality has now been lifted. Like the scenery kept hidden in the darkness of night, what was condemned, denied and kept secret in this society was now freed, entering the light of day.

Trump’s campaign slogan ‘make America great again’ captured the minds of many who are disenfranchised by the system. Patriotism that was quickly harnessed is now summoned for all to obey the rules of patriarchy and worship the glory of military might. As Trump administration carries on the legacy of U.S. imperialism, American exceptionalism of the Obama era appeared to gain another meaning.

The rhetoric of ‘putting the nation first’ also struck a chord with white supremacist groups that till now were more on the fringe. With Trump’s xenophobia and racism manifested in the Muslim ban as well as transgender military exclusion and deportation of Mexicans with a policy of separating families at a border, the notion of American superiority in the world became white exceptionalism.

Barbarians inside civilization

How did we get here? While many people were caught by surprise by the growing power of extremists that try to regress America into a pre-Civil War era, this return of European identity was not created overnight.

White supremacy has been a fabric of the political, economic and cultural system of the U.S., woven into every aspect of our lives. In fact, it has been a dominant force that shaped the world of past centuries. Since the Age of Discovery, civilization of the earth has become synonymous with European colonization of the world. Frantz Fanon, who studied the black psyche in the white world in the context of the Algerian resistance to French colonialism shared his own experience of colonial identification. In Black Skin, White Masks he made a sad predicament, saying “There is but one destiny for the black man. And it is white.”

The law of conquest of the Old World crept its way into the New World. As early settlers of North America were trying to free themselves from Great Britain and its king, Europe’s ambition to enlighten ignorance and bring order to an archaic force of nature became a new mission of Manifest Destiny to master the American continent.

The history of America carries contradictions manifested in hypocrisies of the original framers of country. Here we find the seed for Trump’s America that tries to create a republic for a few, who are deemed superior to humanity. On one hand, the U.S. Constitution laid the foundation for the rights of individuals, halting the rule of monarchy of that time. On the other hand, this new nation of law, with democratic principles contained the darkness of genocide of Native Americans, slavery of blacks and the oppression of women and minorities.

The idea of equality in the Declaration of Independence that inspired the hearts of many, has remained as empty words and for some appeared as blunt lies. The light-skinned men asserting themselves as God’s chosen race crusaded to civilize Turtle Island. In their self-righteousness, they were blind to their own barbarian within that slaughtered natives, enslaved blacks by treating them as subhumans, while subjugating women as objects.

American dream and the myth of equality

The savage beast inside America has been made invisible, covered up by a symbol of flags and legends that turned European colonists into pioneers, heroes and patriots. In the post-industrial era, the primitive man within civilization seemed to have found its vehicle in the new brand of national identity.

Psychologist Philip Cushman observed the emergence of a particular configuration of self in the post WWII United States. He characterized it as a self that “has specific psychological boundaries, a sense of personal agency that is located interiorly, and a wish to manipulate the external world for its own personal ends.”

He defined it “a kind of masterful, bounded self: the empty self” and described it as a psychological condition “that experiences a significant absence of community, tradition, and shared meaning” and that “embodies the absence, loneliness, and disappointments of life as a chronic, undifferentiated emotional hunger.” Then, he pointed out how this internal emptiness was used to fuel “the mindless, wasteful consumerism of the late twentieth century.”

The beast entered a vacuum at the core of individual identity, channeling people’ desires into the consumer economy to feed itself. Through beautiful images of affluent life displayed in ads, TV commercials and Hollywood movies, the glamour of American upper-middle class was created. This life style image was sold like a new product promised to make us whole. The narrative of the American dream was used as a sales pitch. It was the idea that with basic hard work and talent, anyone can succeed economically, regardless of their class or race. Enticed by this promise of social meritocracy, people entered into a market to compete in the pursuit of happiness defined by material wealth.

Individual’s urge to fulfill endless personal desires now merged with the unbridled greed of capitalism. Many began chasing after status, careers, and money to climb up the ladder of success that preserves the colonial hierarchy in a form of an economic class.

Crumbling illusion of democracy

The American dream and its myth of equal opportunity further erased awareness of racial injustice and colonial oppression. The virtue of liberty that is now uprooted from its foundation of equality became an ideology of neoliberalism. Along with it came the birth of corporate America that enshrines white supremacy through radical deregulation and expands its power under a façade of democracy.

In Empire of Illusion: The End of Literacy and the Triumph of Spectacle, journalist and author Chris Hedges described how “the America we celebrate is an illusion” where “the words consent of the governed have become an empty phrase.”Hiding behind the anonymity of a corporate state, a master oligarchic class orchestrates the lesser of two evil politics to control citizens who are now turned into obedient consumers. They make sure with both Democrat or Republican presidents, that no matter who gets elected, white privilege always remains as a Washington consensus.

Obama, the first black president was installed as a symbol of progress and racial equality to make people entangle with empire’s illusion and keep the status quo of white color domination.Consumed by their own desires, Americans became self-absorbed, not being able to see the oppression created by their own government around the world. They became blind to colonization enacted under the name of globalization with exploitative economic practice of sweatshop labor, trade agreements like WTO and NAFTA and military intervention for resource grabs. By not being able to see the empire’s predation, people no longer feel burdened with the suffering of others. Silence becomes complacency and the sense of morality becomes dull.

Now, economic stagnation is shrinking the middle class. This consumer nation has begun to starve, losing means to soothe its internal emptiness. As the illusion of democracy starts to crumble, many people are gradually waking up from the American dream to see the ugliness that surrounds them. James Baldwin said, “I imagine one of the reasons people cling to their hates so stubbornly is because they sense, once hate is gone, they will be forced to deal with pain.” Some react to Trump’s rhetoric of hate with similar hate. They direct anger to others, blaming each other for sabotaging the supposed beautiful life that they once thought they had.

Transforming outrage into courage

Trump and the resurgence of white supremacy opened eyes to the forbidden scenery that has long remained unseen, by keeping all in a fantasy of illusory light. We are now beginning to see ourselves surrounded by a corporate wasteland where depravity of conscience fails to tame unruly cowboys, who under the banner of profit at any cost continue this plunder.

In this moral desert, we are visited by phantoms of our own shadow. The new face of this American leader presents a mirror through which we see our culture’s own nothingness, masking insecurity and inadequacy in a façade of a ‘masterful self’. Reflected in this is our unknown self, forgotten and denied. It is that which compels us to grab power, while demanding and demeaning others in order to fulfill our narcissistic desire, promoted by this consuming corporate capitalism.

From refugees, gays, blacks and the poor, we begin to hear cries of those who have been exiled from an American middle class bubble of insulated reality. Standing next to victims of systemic oppression is the colonizer within each of us. Enslaved by internal hunger, they acquiesce to a system of patriarchy that binds all to shadows from the past.

For so long, we have been made to feel powerless and conditioned to seek approval from outside authority. Instead of finding answers within, many look to teachers and politicians who pretend to offer solutions to problems. We succumb to the orders of corporate masters for financial security and try to find value and meaning in commercial goods, seeking for validation in expert opinion. By doing so, we lose touch with our authentic selves and give away our own power.

The Trump presidency unsealed the demon inside the history of America that has been devouring the heart that remembers our intrinsic connection. The darkness we face now challenges all to find strength to fill the void inside ourselves that predators have been latching onto. Austrian philosopher Rudolf Steiner elucidated the role of evil and how it helps educate us to freedom and love:

“Love would be impossible for man and freedom would be impossible for man without the possibility of sailing down into the abyss. A man unable of his own free decision to choose good or evil, would be a being only led on a leading string to a good which must be attained of necessity and who had no power to choose the good of his own fully purified will, by the love which springs from freedom.”

Within days of Trump’s inauguration, people took to the streets to protest against this new commander in chief. While fear spreads across U.S. cities, people’s will to stand united against his hateful ideology is creating a nationwide movement. With slogans of ‘love’, people march arm in arm, trying to defeat hatred. Yet in order for this solidarity to become real resistance, our love has to go beyond passion, indignation and even compassion for the oppressed. Love that overcomes hate is an act of courage, chosen by each of us out of our own free resolution, to eradicate all terror that tries to freeze our hearts and govern our actions under the dictate of the mind. Courage is not an absence of fear, but is an act carried out despite that fear.

This love resuscitates the breath of life that inspired the truth held to be self-evident by the founders. We discover the wisdom that has always been there, guarded by the First Nations. It is supremacy of the heart—the love for our brothers and sisters that can overcome the love of power.

This transition to new political power brings us to a time of decision. We now have a choice. Outrage toward injustice can become the fire to destroy, fueling civil wars between one another. Or, it can be transformed into courage to dethrone the corporate aristocracy and restore the reign of the heart. A new light emerges that could truly enlighten the world. It is a light drawn from the darkness, dissolving the illusion of colonial hierarchy and illuminating the way for all to come home.

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Americas

Why Trump Cancelled the Iran Deal

Eric Zuesse

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The following is entirely from open online sources that I have been finding to be trustworthy on these matters in the past. These sources will be linked-to here; none of this information is secret, even though some details in my resulting analysis of it will be entirely new.

It explains how and why the bottom-line difference between Donald Trump and Barack Obama, regarding U.S. national security policies, turns out to be their different respective estimations of the biggest danger threatening the maintenance of the U.S. dollar as the world’s leading or reserve currency. This has been the overriding foreign-policy concern for both Presidents.

Obama placed as being the top threat to the dollar, a breakaway of the EU (America’s largest market both for exports and for imports) from alliance with the United States. He was internationally a Europhile. Trump, however, places as being the top threat to the dollar, a breakaway of Saudi Arabia and of the other Gulf Arab oil monarchies from the United States. Trump is internationally a Sunni-phile: specifically a protector of fundamentalist Sunni monarchs — but especially of the Sauds themselves — and they hate Shia and especially the main Shia nation, Iran.

Here’s how that change, to Saudi Arabia as being America’s main ally, has happened — actually it’s a culmination of decades. Trump is merely the latest part of that process of change. Here is from the U.S. State Department’s official historian, regarding this history: By the 1960s, a surplus of U.S. dollars caused by foreign aid, military spending, and foreign investment threatened this system [the FDR-established 1944 Bretton Woods gold-based U.S. dollar as the world’s reserve currency], as the United States did not have enough gold to cover the volume of dollars in worldwide circulation at the rate of $35 per ounce; as a result, the dollar was overvalued. Presidents John F. Kennedy and Lyndon B. Johnson adopted a series of measures to support the dollar and sustain Bretton Woods: foreign investment disincentives; restrictions on foreign lending; efforts to stem the official outflow of dollars; international monetary reform; and cooperation with other countries. Nothing worked. Meanwhile, traders in foreign exchange markets, believing that the dollar’s overvaluation would one day compel the U.S. government to devalue it, proved increasingly inclined to sell dollars. This resulted in periodic runs on the dollar.

It was just such a run on the dollar, along with mounting evidence that the overvalued dollar was undermining the nation’s foreign trading position, which prompted President Richard M. Nixon to act, on August 13, 1971 [to end the convertibility of dollars to gold].

When Nixon ended the gold-basis of the dollar and then in 1974 secretly switched to the current oil-basis, this transformation of the dollar’s backing, from gold to oil, was intended to enable the debt-financing (as opposed to the tax-financing, which is less acceptable to voters) of whatever military expenditure would be necessary in order to satisfy the profit-needs of Lockheed Corporation and of the other U.S. manufacturers whose only markets are the U.S. Government and its allied governments, as well as of U.S. extractive industries such as oil and mining firms, which rely heavily upon access to foreign natural resources, as well as of Wall Street and its need for selling debt and keeping interest-rates down (and stock-prices — and therefore aristocrats’ wealth — high and rising). This 1974 secret agreement between Nixon and King Saud lasts to the present day, and has worked well for both aristocracies. It met the needs of the very same “military-industrial complex” (the big U.S. Government contractors) that the prior Republican President, Dwight Eisenhower, had warned might take control of U.S. foreign policies. As Bloomberg’s Andrea Wong on 30 May 2016 explained the Nixon system that replaced the FDR system, “The basic framework was strikingly simple. The U.S. would buy oil from Saudi Arabia and provide the kingdom military aid and equipment. In return, the Saudis would plow billions of their petrodollar revenue back into Treasuries and finance America’s spending.”

This new system didn’t only supply a constant flow of Saudi tax-money to the U.S. Government; it supplied a constant flow of new sales-orders and profits to the military firms that were increasingly coming to control the U.S. Government — for the benefit of both aristocracies: the Sauds, and America’s billionaires.

That was near the end of the FDR-produced 37-year period of U.S. democratic leadership of the world, the era that had started at Bretton Woods in 1944. It came crashing to an end not in 1974 (which was step two after the 1971 step one had ended the 1944 system) but on the day when Ronald Reagan entered the White House in 1981. The shockingly sudden ascent, from that moment on, of U.S. federal Government debt (to be paid-off by future generations instead of by current taxpayers) is shown, right here, in a graph of “U.S. Federal Debt as Percent of GDP, 1940-2015”, where you can see that the debt had peaked above 90% of GDP late in WW II between 1944-1948, and then plunged during Bretton Woods, but in 1981 it started ascending yet again, until reaching that WW II peak for a second time, as it has been ever since 2010, when Obama bailed-out the mega-banks and their mega-clients, but didn’t bail out the American public, whose finances had been destroyed by those banksters’ frauds, which Obama refused to prosecute; and, so, economic inequality in America got even more extreme after the 2008 George W. Bush crash, instead of less extreme afterward (as had always happened in the past).

Above 90% debt/GDP during and immediately following WW II was sound policy, but America’s going again above 90% since 2010 has reflected simply an aristocratic heist of America, for only the aristocracy’s benefit — all of the benefits going only to the super-rich.

Another, and more-current U.S. graph shows that, as of the first quarter of 2018, this percentage (debt/GDP) is, yet again, back now to its previous all-time record high of 105-120%%, which had been reached only in 1945-1947 (when it was justified by the war).

Currently, companies such as Lockheed Martin are thriving as they had done during WW II, but the sheer corruption in America’s military spending is this time the reason, no World War (yet); so, this time, America is spending like in an all-out-war situation, even before the Congress has issued any declaration of war at all. Everybody except the American public knows that the intense corruptness of the U.S. military is the reason for this restoration of astronomical ‘defense’ spending, even during peace-time. A major poll even showed that ‘defense’ spending was the only spending by the federal Government which Americans in 2017 wanted increased; they wanted all other federal spending to be reduced (though there was actually vastly more corruption in military spending than in any other type — the public have simply been hoodwinked).

But can the U.S. Government’s extreme misallocation of wealth, from the public to the insiders, continue without turning this country into a much bigger version of today’s Greece? More and more people around the world are worrying about that. Of course, Greece didn’t have the world’s reserve currency, but what would happen to the net worths of America’s billionaires if billionaires worldwide were to lose faith in the dollar? Consequently, there’s intensified Presidential worrying about how much longer foreign investors will continue to trust the oil-based dollar.

America’s political class now have two competing ideas to deal with this danger, Obama’s versus Trump’s, both being about how to preserve the dollar in a way that best serves the needs of ‘defense’ contractors, extractive firms, and Wall Street. Obama chose Europe (America’s largest market) as America’s chief ally (he was Euro-centric against Russia); Trump chose the owner of Saudi Arabia (he’s Saudi-Israeli centric against Iran) — that’s the world’s largest weapons-purchaser, as well as the world’s largest producer of oil (as well as the largest lobbies).

The Saudi King owns Saudi Arabia, including the world’s largest and most valuable oil company, Aramco, whose oil is the “sweetest” — the least expensive to extract and refine — and is also the most abundant, in all of the world, and so he can sell petroleum at a profit even when his competitors cannot. Oil-prices that are so low as to cause economic losses for other oil companies, can still be generating profits — albeit lowered ones — for King Saud; and this is the reason why his decisions determine how much the global oil-spigot will be turned on, and how low the global oil-price will be, at any given time. He controls the value of the U.S. dollar. He controls it far more directly, and far more effectively, than the EU can. It would be like, under the old FDR-era Bretton Woods system, controlling the exchange-rates of the dollar, by raising or lowering the amount of gold produced. But this is liquid gold, and King Saud determines its price.

Furthermore, King Saud also leads the Gulf Cooperation Council of all other Arab oil monarchs, such as those who own UAE — all of them are likewise U.S. allies and major weapons-buyers.

In an extraordinarily fine recent article by Pepe Escobar at Asia Times, “Oil and gas geopolitics: no shelter from the storm”, he quotes from his not-for-attribution interviews with “EU diplomats,” and reports:

After the Trump administration’s unilateral pull-out from the Iran nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), European Union diplomats in Brussels, off the record, and still in shock, admit that they blundered by not “configuring the eurozone as distinct and separate to the dollar hegemony”. Now they may be made to pay the price of their impotence via their “outlawed” trade with Iran. …

As admitted, never on the record, by experts in Brussels; the EU has got to reevaluate its strategic alliance with an essentially energy independent US, as “we are risking all our energy resources over their Halford Mackinder geopolitical analysis that they must break up [the alliance between] Russia and China.”

That’s a direct reference to the late Mackinder epigone Zbigniew “Grand Chessboard” Brzezinski, who died dreaming of turning China against Russia.

In Brussels, there’s increased recognition that US pressure on Iran, Russia and China is out of geopolitical fear the entire Eurasian land mass, organized as a super-trading bloc via the Belt and Road Initiative (BRI), the Eurasia Economic Union (EAEU), the Shanghai Cooperation Organization (SCO), [and] the Asia Infrastructure Investment Bank (AIIB), is slipping away from Washington’s influence.

This analysis gets closer to how the three key nodes of 21st century Eurasia integration – Russia, China and Iran – have identified the key issue; both the euro and the yuan must bypass the petrodollar, the ideal means, as the Chinese stress, to “end the oscillation between strong and weak dollar cycles, which has been so profitable for US financial institutions, but lethal to emerging markets.” …

It’s also no secret among Persian Gulf traders that in the – hopefully unlikely – event of a US-Saudi-Israeli war in Southwest Asia against Iran, a real scenario war-gamed by the Pentagon would be “the destruction of oil wells in the GCC [Gulf Cooperation Council]. The Strait of Hormuz does not have to be blocked, as destroying the oil wells would be far more effective.”

And what the potential loss of over 20% of the world’s oil supply would mean is terrifying; the implosion, with unforeseen consequences, of the quadrillion derivatives pyramid, and consequentially [consequently] of the entire Western financial casino superstructure.

In other words: it’s not the ‘threat’ that perhaps, some day, Iran will have nuclear warheads, that is actually driving Trump’s concern here (despite what Israel’s concerns are about that matter), but instead, it is his concerns about Iran’s missiles, which constitute the delivery-system for any Iranian warheads: that their flight-range be short enough so that the Sauds will be outside their range. (The main way Iran intends to respond to an invasion backed by the U.S., is to attack Saudi Arabia — Iran’s leaders know that the U.S. Government is more dependent upon the Sauds than upon Israel — so, Iran’s top targets would be Saudi capital Riyadh, and also the Ghawar oil field, which holds over half of Saudi oil. If U.S. bases have been used in the invasion, then all U.S. bases in the Middle East are also be within the range of Iran’s missiles and therefore would also probably be targeted.)

Obama’s deal with Iran had focused solely upon preventing Iran from developing nuclear warheads — which Obama perhaps thought (mistakenly) would dampen Israel’s (and its billionaire U.S. financial backers’) ardor for the U.S. to conquer Iran. Israel had publicly said that their concern was Iran’s possibility to become a nuclear power like Israel became; those possible future warheads were supposed to be the issue; but, apparently, that wasn’t actually the issue which really drove Israel. Obama seems to have thought that it was, but it wasn’t, actually. Israel, like the Sauds, want Iran conquered. Simple. The nuclear matter was more an excuse than an explanation.

With Trump now in the White House, overwhelmingly by money from the Israel lobbies (proxies also for the Sauds) — and with no equivalently organized Jewish opposition to the pro-Israel lobbies (and so in the United States, for a person to be anti-Israel is viewed as being anti-Semitic, which is not at all true, but Israel’s lies say it’s true and many Americans unfortunately believe it) — Trump has not only the Sauds and their allies requiring him to be against Iran and its allies, but he has also got this pressure coming from Israel: both the Big-Oil and the Jewish lobbies drive him. Unlike Obama, who wasn’t as indebted to the Jewish lobbies, Trump needs to walk the plank for both the Sauds and Israel.

In other words: Trump aims to keep the dollar as the reserve currency by suppressing not only China but also the two main competitors of King Saud: Iran and Russia. That’s why America’s main ‘enemies’ now are those three countries and their respective allies.

Obama was likewise targeting them, but in a different priority-order, with Russia being the main one (thus Obama’s takeover of Ukraine in February 2014 turning it against Russia, next door); and that difference was due to Obama’s desire to be favorably viewed by the residents in America’s biggest export and import market, the EU, and so his bringing another member (Ukraine) into the EU (which still hasn’t yet been culminated).

Trump is instead building on his alliance with King Saud and the other GCC monarchs, a group who can more directly cooperate to control the value of the U.S. dollar than the EU can. Furthermore, both conservative (including Orthodox) Jews in the United States, and also white evangelical Protestants in the U.S., are strongly supportive of Israel, which likewise sides with the Arab oil monarchs against Iran and its allies. Trump needs these people’s votes.

Trump also sides with the Sauds against Canada. That’s a matter which the theorists who assert that Israel controls the U.S., instead of that the Sauds (allied with America’s and Israel’s billionaires) control the U.S., ignore; they ignore whatever doesn’t fit their theory. Of course, a lot doesn’t fit their theory (which equates “Jews” with “Israelis” and alleges that “they” control the world), but people whose prejudices are that deep-seated, can’t be reached by any facts which contradict their self-defining prejudice. Since it defines themselves, it’s a part of them, and they can never deny it, because to do so would be to deny who and what they are, and they refuse to change that. The Sauds control the dollar; Israel does not, but Israel does the lobbying, and both the Sauds and Israel want Iran destroyed. Trump gets this pressure not only from the billionaires but from his voters.

And, of course, Democratic Party billionaires push the narrative that Russia controls America. It used to be the Republican Joseph R. McCarthy’s accusation, that the “commies” had “infiltrated”, especially at the State Department. So: Trump kicked out Russia’s diplomats, to satisfy those neocons — the neoconservatives of all Parties and persuasions, both conservative and liberal.

To satisfy the Sauds, despite the EU, Trump has dumped the Iran deal. And he did it also to satisfy Israel, the main U.S. lobbyists for the Sauds. (Americans are far more sympathetic to Jews than to Arabs; the Sauds are aware of this; Israel handles their front-office.) For Trump, the Sauds are higher priority than Europe; even Israel (who are an expense instead of a moneybag for the U.S. Government) are higher priority than Europe. Both the Sauds and Israel together are vastly higher. And the Sauds alone are higher priority for Trump than are even Canada and Europe combined. Under Trump, anything will be done in order to keep the Sauds and their proxy-lobbyists (Israel) ‘on America’s side’.

Consequently, Trump’s political base is mainly against Iran and for Israel, but Obama’s was mainly against Russia and for the EU. Obama’s Democratic Party still are controlled by the same billionaires as before; and, so, Democrats continue demonizing Russia, and are trying to make as impossible as they can, any rapprochement with Russia — and, therefore, they smear Trump for anything he might try to do along those lines.

Both Obama and Trump have been aiming to extend America’s aristocracy’s dominance around the world, but they employ different strategies toward that politically bipartisan American-aristocratic objective: the U.S. Government’s global control, for the benefit of the U.S. aristocracy, at everyone else’s expense. Obama and Trump were placed into the White House by different groups of U.S. billionaires, and each nominee serves his/her respective sponsors, no public anywhere — not even their voters’ welfare.

An analogous example is that, whereas Fox News, Forbes, National Review, The Weekly Standard, American Spectator, Wall Street Journal, Investors Business Daily, Breitbart News, InfoWars, Reuters, and AP, are propagandists for the Republican Party; NPR, CNN, NBC, CBS, ABC, Mother Jones, The Atlantic, The New Republic, New Yorker, New York Magazine, New York Times, Washington Post, USA Today, Huffington Post, The Daily Beast, and Salon, are propagandists for the Democratic Party; but, they all draw their chief sponsors from the same small list of donors who are America’s billionaires, since these few people control the top advertisers, investors, and charities, and thus control nearly all of the nation’s propaganda. The same people who control the Government control the public; but, America isn’t a one-Party dictatorship. America is, instead, a multi-Party dictatorship. And this is how it functions.

Trump cancelled the Iran deal because a different group of billionaires are now in control of the White House, and of the rest of the U.S. Government. Trump’s group demonize especially Iran; Obama’s group demonize especially Russia. That’s it, short. That’s America’s aristocratic tug-of-war; but both sides of it are for invasion, and for war.  Thus, we’re in the condition of ‘permanent war for permanent peace’ — to satisfy the military contractors and the billionaires who control them. Any U.S. President who would resist that, would invite assassination; but, perhaps in Trump’s case, impeachment, or other removal-from-office, would be likelier. In any case, the sponsors need to be satisfied — or else — and Trump knows this.

Trump is doing what he thinks he has to be doing, for his own safety. He’s just a figurehead for a different faction of the U.S. aristocracy, than Obama was. He’s doing what he thinks he needs to be doing, for his survival. Political leadership is an extremely dangerous business. Trump is playing a slightly different game of it than Obama did, because he represents a different faction than Obama did. These two factions of the U.S. aristocracy are also now battling each other for political control over Europe.

Author’s note: article first published at strategic-culture.org

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The Future of Small Caribbean States

H.E. Datu Matthew Pajares Yngson

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Barely weeks apart, two major announcements in the citizenship by investment world rocked the boat. Two countries from the Eastern side of Europe, who both want to join the EU, officially made their leap to compete with Antigua & Barbuda, Cyprus, Dominica, Grenada, Malta, Saint Kitts & Nevis, Saint Lucia and Vanuatu, the eight (8) major players of the citizenship by investment industry. This is good news for those wanting to give better migrating opportunities for their families but bad news for the countries running these programs. Some may say that “competition is better for the consumer”, but this is not the same as buying milk at the corner store.

With the Organisation for Economic Co-operation and Development (OECD) rallying for worldwide compliance of the common reporting standards and the prevention of tax evasion, these citizenship by investment (CBI) programs are under regular scrutiny making these small states consistently vulnerable. There is no doubt that these countries need the programs to survive. They are essential lifelines for Caribbean   nations   who   have   been   impacted   by   the   existential   threat   of   climate   change. Unfortunately, CBI income is not an infinite resource and highly volatile. Saint Kitts & Nevis and Dominica may have enjoyed dominance for decades, but because of the global economic downturn, other countries launched their own programs resulting in a rapid market growth just in the last five years. This aggressive competition has left a dangerous “race to the bottom” in the Caribbean region. And with Moldova and Montenegro joining the bandwagon, who knows what further direction this industry will take.

It’s now time for these Small Island Developing States to purposely strengthen their competitive edge in the digital space. Who doesn’t want to work in the next “Silicon Valley” on the beach? Maybe use their e- Residency to perform business remotely? Or have some cryptocurrency together with their citizenship?

Sometime ago, tech companies would not even consider far off New Zealand to be their regional hub or headquarters but thanks to enticing government offers, many tech professionals have boarded that 13-hour flight from San Francisco to Auckland exactly to do this.

When Estonia publicized its e-Residency program over the internet 4 years ago, no one really knew how it would go, not even the Estonians. Three years later, Deloitte says that the program has infused €14.4 million into the economy and estimates that the program will bring in €31 million in income and €194 million in indirect socio-economic benefits by 2021 . Estonia was the first country to offer internet voting in 2005 and is now leading the rest of the world in e-Governance with Tallinn fast becoming a favorite go- to place for global tech expats.

There has been so much talk about cryptocurrency for several years all over the Caribbean region while the “Sovereign” was quietly being launched on the other side of the globe. The Marshall Islands imprinted themselves in history books when they passed the Sovereign Currency Act 2018 last February thereby creating and recognizing the “Sovereign” (SOV) cryptocurrency as its legal tender. This legislation officially allows banks and credit card companies in the country and around the world to start accepting it.

The hospitality industry will always play a major role in the economies of small Caribbean states but because of climate change, every hurricane season is like playing a game of Russian roulette. The movement towards sustainable tourism will take some time. In comparison, taking part in the digital economy requires a much smaller carbon footprint.

There are several elements needed to make this happen such as a welcoming local environment, proper government policies, good internet infrastructure, sustainable power such as solar and wind and a capable workforce. Fortunately, all these islands already have these innate qualities just waiting to be explored. The recent World Bank report fully solidifies this concept.

Small Caribbean states can really take the lead in this arena if they so desire, but often there is more talk than action. It should start securing the future of its biggest resource, its younger generation, if it is to survive. Members of the younger workforce fall prey to overseas migration due to the lack of local opportunities. The 21st century needs keyboard warriors and unconventional thinkers and the islands can greatly contribute.

Innovation and ingenuity is the key to the Caribbean’s future. Engagement in the digital economy must be done today because tomorrow is already too late.

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