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Why Venezuela’s People Are Suffering

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The case that will be documented here is that Venezuela’s people are suffering from a tragic national situation which actually cannot be reversed by anything that’s within the power of Venezuela’s Government to do or to block. In order to understand this very unfortunate reality (if one wants to understand it), one must first understand the relevant parts of the broader situation in the world that affects Venezuela. What’s dooming the country isn’t merely a local situation, but instead is global and environmental. It also is economic, pertaining to the role that Venezuela is playing in the global economy. But the economic factor is definitely not  of the kind that it’s commonly assumed and alleged to be. It is instead very different.

Here, this very different reality will be both described and documented (instead of just founded upon assumptions — many of which are false — such as the standard, basically local, economic ‘explanation’ of Venezuela’s troubles is, which focuses on Venezuela’s socialism, or the economy’s being not sufficiently capitalist).

What it all comes down to, stated in its briefest terms, is that no nation can do anything but lose money by selling the world’s dirtiest oil, tar-sands oil, which costs $100+ to clean and produce, into a global oil market that’s paying less than $100 (currently around $65) per barrel. Venezuela was able to sell it profitably when oil-prices were high, but is getting crushed now, because its oil is no longer profitable to produce and sell. But 95% of Venezuela’s export-earnings come from oil. Unless and until oil-prices are again above $100 (which probably won’t happen again, except perhaps for very brief periods), Venezuela is doomed. Venezuela’s only chance to diversify its economy away from “the natural resources curse” (from which it especially suffers) was long ago, decades before the current Government came into power. That chance was missed. This ship is now sinking, and no one can save it. (And the U.S. Government and its allies have no actual interest in saving it, but only in exploiting it, parasitically.)

So, here the real history and context for what is happening in and to Venezuela will be presented, and the reader will be able easily to verify any detail of it (by means of the links) — on one’s own, (not accepting anything on mere ‘authority’, which, in such a politically charged matter as this, is almost invariably propaganda). The reader can verify any allegation here simply by clicking onto the given link, at any point in the presentation that might seem to be questionable.

These links are directly to the items of evidence, in the specific case of: why Venezuela’s people are suffering.

Here is that case — the realistic case, without any propaganda, but with only  credible news reports and source-documents as constituting its basis — regarding this question.

THE CASE

The two lands that produce the world’s highest-cost-to-produce oil are Canada and Venezuela. Both extract their oil overwhelmingly from tar-sands, which is the dirtiest of all oil and thus (by far) the costliest to refine. (Thus, it’s called “extra-heavy crude”, and that is the least desirable type. It’s also the type that, in a global-warming world, should remain in the ground, never be burned at all, as will also be explained here.)

An accurate summary statement in Wikipedia is that, “With present technology, the extraction and refining of heavy oils and oil sands generates as much as three times the total CO2 emissions compared to conventional oil,[20] primarily driven by the extra energy consumption of the extraction process.” That reference at “[20]” also states: “As the price of oil rises and as conventional hydrocarbon resources become scarcer, increased exploration and production activity is occurring in heavy oil, tar sands, and bitumen deposits. While these contribute significantly to the global energy …, they also contribute a greater share to … the detriment of the global environment.” (That’s referring to “a greater share” of “detriment” than normal crude does.) As another source phrased this matter in more explicit terms: “85 gallons of water, two tons of soil, 700-1200 cubic feet of natural gas, and 170 pounds of greenhouse gases make one barrel of crude oil” from tar-sands. That oil is simply not usable as-is to go into refining, like, for example, the standard Brent crude is. Furthermore, to produce that barrel of tar-sands-derived oil requires also the production of tons of sheer waste, none of which is left behind from producing normal oil. The cost of dealing with that waste is not factored into the cost of the barrels of oil. For examples, the future “impact upon water supplies,” and that “this water is polluted by toxic substances,” are not counted in. Therefore, the full cost of such oil has never been calculated. And yet, even so, everyone recognizes that tar-sands-derived oils are the costliest to produce.

On 25 January 2013, HSBC Global Research issued a landmark report, “Oil & Carbon Revisited: Value at risk from ‘unburnable’ reserves”. It defined the key concept of  “Unburnable reserves: The IEA’s World Energy Outlook (2012 edition) estimated that in order to have a 50% chance of limiting the rise in global temperatures to 2ºC, only a third of current fossil fuel reserves can be burned before 2050. The balance could be regarded as ‘unburnable’.”

The oil in Canada and in Venezuela is the world’s least  burnable, the most “heavy,” and therefore it’s not only the costliest to produce, but it’s also the worst environmentally. There is consequently increasing pressure upon large investment funds such as Harvard’s 39-billion-dollar endowment fund, to disinvest in fossil fuels. Because of interlocked boards of directors or trustees, and the needs that such ‘charities’ have to appeal to wealthy donors, these public pressures are often (as in Harvard’s case) ignored, but the movement toward divestment is gradually gaining strength in the less corrupt investment funds.

On 13 December 2018, the environmental organization 350.org headlined “Landmark fossil fuel divestment reached! 1000+ institutions are withdrawing investments from coal, oil and gas companies”, and announced:

The 1000th institution to divest was the Caisse des dépôts et consignations (CDC), which manages France’s public sector pensions, savings, and investments worth €173 billion (USD$196 billion). It recently announced that from 2019 it will no longer invest in companies that make more than 10% of their business from coal – this implies that the top 200 companies in the coal-industry are now effectively blacklisted. …

On the momentum for divestment since 2013 – Nicolas Haeringer, an organiser who supports divestment groups globally, at 350.org said:

“This is a moral movement as well as a financial one. Just five years ago we had 181 divestment commitments and USD$50 billion shifted away from polluting industries and today we’re over 1000 and approaching USD$8 trillion dollars.”

This has already helped to drive many coal companies out of business. Though coal-mine owners and employees might lose from that, the entire world gains vastly more from it. Such a transition is called “progress.” Transition in the opposite direction — toward more bad than good — is called “regress,” or, simply, “harm.” Some people call it “conservatism,” but whatever it is, certainly isn’t  progress. Not in any way. But that’s what the U.S. Government and the Canadian Government want: extreme conservatism — not conservation. And they view Venezuela’s tar-sands oil as being a prize that they could profit from if Venezuela’s Government could be ‘persuaded’ to reduce their environmental regulations on extracting it. However, in 2012, Venezuela strengthened, instead of weakened, its environmental laws. That strengthened the motivation for the U.S. and Canada to take over Venezuela. Hugo Chavez died in 2013, and Nicolás Maduro replaced him. Then, in 2016, Maduro instituted a new policy, to weaken environmental enforcement in Venezuela. Perhaps he was hoping that this would reduce the U.S.-and-allied efforts to overthrow him. Venezuela’s economy was already on the ropes. The U.S. continued its efforts to overthrow Maduro. Now desperate, he started selling off 12% of the land to international mining companies. Environmental enforcement at PDVSA also plunged, and on 24 November 2018, Bloomberg News bannered “Venezuela Is Leaking Oil Everywhere”. Apparently, the weaker Maduro gets, the worse he becomes. He had entered a doomed office as the president, and seems willing to do anything not to drown in it. Apparently, the weaker he gets, the more that U.S.-allied billionaires want to take over the country, entirely on their own terms. It’ll be like what had already happened in Greece, when the Syriza Party there capitulated to the international financial firms in 2015, and the Government stripped pensions, education, social services, etc., and privatized the infrastructure. But the path toward that end is quite different in Venezuela.

With the world’s increasing move toward renewables, the disinvestment in oil companies will increasingly be targeted toward selling the stock in the ones that have invested the most in oil fields in Canada and Venezuela. However, the situation is radically different for Venezuela than it is for Canada. Here is why:

The biggest market for Canadian oil is just next door, the United States. Most of the oil that’s imported into the U.S. comes from Canada. And, because most of the oil companies that are producing oil in Canada are U.S. owned or allied (such as in UK), the U.S. Government isn’t sanctioning Canada and trying to bring its Government down by reducing Canada’s oil-sales via sanctions, such as is the case with regard to Venezuela’s oil-sales. The U.S. Government doesn’t need to do that in order for America’s corporations to become enabled to sell the oil that comes from Canada: they’re already selling that oil, and Canada’s Government (as well as America’s Government) is already helping America’s companies to do this. America’s and Canada’s aristocracies are allied — not only with Venezuela’s aristocracy (which wants to replace Venezuela’s existing Government), but also with each others’ aristocracy.

Furthermore, unlike Venezuela, Canada isn’t nearly 100% dependent upon its oil-sales in order to support its economy, such as Venezuela tragically is. Venezuela receives around 95% of its export-income from its oil. That’s ridiculous and, for geostrategic and geoeconomic reasons, should never have been tolerated by Venezuela’s Government, but it nonetheless has been tolerated by them — and, for many decades, not only by Venezuela’s present Government. Indeed, Oil&Gas Journal headlined on 8 February 2010, “All about Orinoco” and reported that there had been “early efforts to produce heavy crude from the [Orinoco] belt” and these efforts “led PDVSA predecessors to output by the early 1980s of 93,000 b/d.” Furthermore, “Petroleos de Venezuela SA estimated 1.18 trillion bbl of oil in place in the Orinoco in 1987 and revised that in 2006 to a median of 1.3 trillion bbl, a maximum of 1.4 trillion bbl, and a minimum of 900 billion bbl.”

At that time, Richard Turcotte, of Peak Oil Matters, warned about this report, by headlining “A Look at Venezuela”, and pointing out that:

Unlike the light sweet crude oil produced by the U.S. and the light oil which has made Saudi Arabia such a force, the Orinoco oil is “heavy oil” found in oil sands — similar in characteristics to the tar sands bitumen found in Alberta, Canada. (See my prior post here.) The Venezuela oil is thus much harder to extract and refine, making it more costly. Significant investments of time and money are required to provide adequate refinery capabilities. Needless to say, extracting this heavy oil is a much more energy-and time-intensive effort than is the process for extracting the more familiar light crude. It is not anyone’s answer in the next few years.

Lead researcher and USGS geologist Chris Schenk admitted that their report is not asserting that the “technically recoverable” oil is in fact “economically recoverable.” That’s a significant distinction, and one that needs to be emphasized. All the presumed underground reserves in the world won’t mean much if it makes no sense to invest the time, effort, and money to try and extract them.

The USGS nonetheless estimates that a stunning 40 – 45% of that resource will be ultimately recoverable. One prominent geologist (and a former board member of Petroleos de Venezuela SA — Venezuela’s state oil company) is already on record as doubting anywhere near that amount can be recovered, and stated that much of what might actually be recoverable would in fact be too expensive to produce. 

Perhaps Venezuela’s President Hugo Chavez and his predecessors were thinking that if the U.S. Government says that this oil is an asset, then it is reasonable to consider it to be an asset; but if the U.S. Government was instead merely aiming to get Venezuelans to think that it’s an asset so as to keep that country accepting its existing oil-monoeconomy (its over-dependence upon oil), then ultimately as the disappointment hits when the Venezuelan people experience the poverty after having hoped and tried to develop that ‘asset’, the U.S. Government will become welcomed in, to take over Venezuela’s failing Government. Anyway, that would be a conceivable reason why the U.S. Government would be promoting the ‘economic potential’ of the Orinoco belt. The aristocracy’s agents (in this case the petroleum industry) tend to be very clear-eyed about what’s of benefit to their paymasters. For whatever reason, the actual fact — that this oil was no asset — has remained hidden from the Venezuelan public. It still isn’t publicly acknowledged by Venezuela’s Government. Nor is it publicly recognized by America’s.

So, this tragic error (of presuming that tar-sands oil should be developed) goes back even to well before the time of Hugo Chavez. Moreover, it’s worth pointing out that the actual source of the ‘error’ is the petroleum industry itself, which, like the tobacco companies before it, constantly propagandized for increased production and sales, regardless of what the science says. A good example of that propaganda is the Editorial in Oil&Gas Journal on 24 January 2019, headlining “Costs, energy needs discredit ‘keep it in the ground’ agenda”. It says: “Preemptive opposition to oil and gas projects by ‘keep it in the ground’ activists promises needless hardship in two broad areas.” This is a denial of the entire concept of “unburnable reserves.” They want, instead, to burn it all — and even to keep prospecting to find yet more  oil and gas (at this time of already greatly excessive inventories of cleaner reserves that should be burned before any of Canada’s or Venezuela’s filth is). They could lay off their entire teams of oil-explorers, who are wasting their time to find yet more dirty energy sources that won’t ever need to be used by anybody. Either these people are stupid and insane, or else they are psychopaths who care only about keeping their existing jobs and don’t care at all about the world that future generations will be experiencing. If their children knew, then what would they think of what their parents had done to the world that they will be living in?

Consequently (perhaps after — for whatever reason — listening too much to self-interested advisors), Venezuela’s Government has allowed itself to become trapped by its addiction to selling its extraordinarily filthy oil. There was no Governmental demand, no sufficient priority placed upon Venezuelan firms, for them to diversify the economy away from petroleum. Neither the present Government, nor any previous Government of Venezuela, did.

Hugo Chavez and Nicolás Maduro didn’t create this problem; but, now, and especially on Maduro’s watch, the oil-market transformations that result from the global-warming phenomenon are accelerating; and, unlike Canada, which is part of the U.S. empire, Venezuela isn’t receiving U.S. Government protection of its investors, and so there is no helping hand from the U.S. Government (i.e., from America’s aristocracy) to assist Venezuela’s oil sales (such as the U.S. does provide regarding Canada). There is, instead, to the contrary — as Venezuela’s Government has become weaker and weaker, and has less and less public support while global oil prices have plummeted — the grabbing hand, of both the U.S. and Canadian Governments, to take over Venezuela’s Government, whose biggest sin, actually, was to have left itself open to such a take-over, by its having failed to diversify its economy away from the country’s doomed, and dooming, extraordinarily costly-to-refine, and undesirable to refine, oil. It’s now just a coffin in the ground, but it’s nonetheless still the source of virtually all of Venezuela’s export sales. No government could sustain supporting such a zombie. It’s a deadweight that’s dragging Venezuela down and economically suffocating all Venezuelans. And the documentation that this situation exists is incontrovertible:

The current WTO report on Venezuela indicates that 96.9% of the country’s exports are of “Fuels and mining products,” and that over 98% of this 96.9% consists of oils. Also shown is that the biggest five importers from Venezuela account for only 1.9% of Venezuela’s exports, and therefore all other countries account for 98.1%. So, when Venezuela loses its U.S. market, that would mean loss of only 0.6% of its total export market.

However, America’s sanctions will additionally cause some U.S. vassal nations such as in Europe to stop importing from Venezuela. So, Maduro is very vulnerable, indeed. Diversifying the markets (to that 98.1%) isn’t what was needed by Venezuelans; diversifying the economy was; and neither he nor his predecessors did any of that.

On February 2018, Petroleum Science headlined “Analysis of Venezuela’s oil-oriented economy: from the perspective of entropy” and reported that, “the current breakeven price has achieved to over $100/bbl in Venezuela.” Right now, oil is selling at around $65 per barrel. So, how can Venezuela make money selling its $100+ oil into the global $65 oil market? It’s just not possible, at least not sustainably. The Petroleum Science article therefore said that “it is unwise for Venezuela to count on selling raw oil to support the country’s economy,” because any per-barrel price that’s lower than Venezuela’s $100+ per barrel production cost will produce a loss on the sale of that barrel of oil, and because there will be very few if any future days when the per-barrel oil-price will again be above $100. The more that the world cuts back on petroleum and increases non-carbon energy-sources, the lower that the price of oil will become. And the more that investment funds steer clear of high-carbon firms, the lower the corporate stock of those companies will sink in value. Both investors and consumers are therefore going to be turning away from them.

When global oil prices were high, Venezuela could sell even its costly-to-refine oil profitably, but those times are now long gone and probably will never return, as the world increasingly switches away from fossil fuels. Especially tar-sands oils, such as from Canada and from Venezuela, should stay in the ground, and not only because today’s oil prices are too low to sustain selling them, but also because those extra-heavy oils are the worst to burn, from the standpoint of causing global warming.

As an example of this economic reality, a major U.S. corporate investor in Venezuelan oil is Chevron Corporation, and Zacks Investment Research headlined on 5 October 2011, “Chevron Sees Carabobo Oil in 2012”. It stated:

According to a company executive, U.S. energy behemoth Chevron Corp. (NYSE: CVX – News) may see the start-up of an oil field in Venezuela’s Orinoco Belt next year. The super-major is confident that it can commence production from Orinoco’s Carabobo Project 3 – which has estimated reserves of 66 billion barrels – in the third quarter of 2012. …

Chevron holds a 34% interest in Carabobo Project 3, while Venezuela’s national oil company Petroleos de Venezuela S.A. (or PDVSA) controls 60%. The remaining stake is owned by Venezuelan and Japanese firms.

Following the first production of 50,000 barrels per day, … [Chevron] is looking to boost volumes by an additional 50,000-100,000 barrels per day every two years. Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.

There is no public indication, at least not online, that even the “first production of 50,000 barrels per day” has been yet achieved, though it had been expected to occur within a year. Chevron’s 2017 Annual Report (covering the year 2016) is the latest online, and it doesn’t so much as even mention “Carabobo.” And this was after  the 5 October 2011 prediction that “Carabobo 3, one of several Orinoco projects, is estimated to reach a maximum output of approximately 400,000-480,000 barrels of crude oil per day by 2016.” Clearly, that’s a poorly performing investment. Chevron’s current web-page on “Venezuela” says “Chevron has a 34 percent interest in Petroindependencia, S.A., which includes the Carabobo 3 Project,” but it provides no number of barrels of oil being produced there (if any) — not even now, in 2019. Bad investments die in silence and in obscurity, but good investments get trumpeted everywhere — and this one is being trumpeted nowhere.

Any oil sales from those fields will not only be delayed until when oil prices are again high enough to sell those dirty oils at a profit (which is increasingly unlikely ever to happen again). The investment values of those companies will likewise be especially hard hit as the problem of unburnable reserves becomes increasingly widely recognized and understood by the public. The public won’t remain ignorant and deceived about these matters forever. This is like a Ponzi scheme.

Russia’s Government seems determined never to accept this U.S. coup imposing America’s “regime-change” upon the sovereign nation of Venezuela, and has made the decision to send military assets, and to invest both in Venezuela’s Government and in the oil company. On January 29th, Russia’s Interfax News Agency headlined in Russian, “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela”. The neoconservative Jamestown Foundation remarked about that on January 31st by saying that “These debts may eventually be written off by a new opposition Venezuelan government led by the self-proclaimed interim president, Juan Guaido, if it manages to push Maduro out (see EDM, January 28, 2019). Yet, even if Maduro somehow succeeds in clinging to power with Russian help, he will hardly have the resources to service the loans.” That, unfortunately, happens to be true. The only sensible reason why Russia would be committing itself to protecting Venezuela’s sovereignty would be in order to say to Washington that America’s long string of foreign regime-changes (Iraq, Libya, Syria, Honduras, Ukraine, etc.) has now ended — to establish the principle (as Russia has recently done in Syria) that no longer will Washington’s invasions and coups be tolerated, no more conquests (additions to its empire) will be allowed. Somebody has to draw the line, finally, and the other nuclear superpower could be the one to do it. Other than that, however, Russia, like other investors, can only experience losses from investments in Venezuela. Venezuela is now an asset only in “The Great Game”. Russia’s protecting in Venezuela the principle of national sovereignty — no coups, no conquests, at all — is as moral as America’s repeatedly rejecting that principle is immoral; but, as an investment, Venezuela simply is a loss. If “The Ministry of Finance of the Russian Federation hopes to get external debt payments from Venezuela,” then Russia’s Ministry of Finance should be expecting to be disappointed in that “hope.” But that hope wouldn’t, in any case, be a sound reason for what Russia is doing there. The only “asset” to be won in Venezuela is protection of the most basic principle of international law: the independence and sovereignty of each nation. Hitler and his fascist allies, and Stalin and his communist allies, violated that principle; but now fascist America and its allies routinely violate it. Venezuela’s allies (unlike Neville Chamberlain) are supporting the foundation-stone of international law: national sovereignty and independence. For the U.S. and its allies to reject the results of Venezuela’s (or of Syria’s or of Iran’s) elections is no basis for invalidating those results, and the U.S. Government’s stooge Juan Guaido is simply a Venezuelan traitor, and should be treated as such, by an appropriate trial for treason. Certainly, there is no Constitutional basis for Guaido’s power-grab, despite the lies to the contrary by the putchists such as in America and its allied regimes.

All oil-exploration should therefore now stop, and existing tar-sands oil fields should simply be abandoned altogether. Only the easiest-to-refine (the “lighter”) oils should be sold and burnt right now. There is going to be a rush for the exits in the stocks of those “extra-heavy oil” companies, and the only question is when it will happen. Regarding that rush, the situation is very different in Venezuela than it is in Canada, because the U.S. Government will delay as long as possible the collapse of Canada’s oil-sales, but the U.S. (and Canada) want to expedite the collapse of Venezuela’s — at least until and unless the current Venezuelan coup succeeds. (And Canada’s Foreign Minister, Chrystia Freeland, did the key preparatory work for U.S. President Trump to pull the plug on Venezuela’s Government; so, both of those governments have actually led in overthrowing and replacing Venezuela’s non-U.S.-allied Government.)

Venezuela became addicted to selling its filthy oil, but now can only lose money with every barrel it sells of its oil. Each day of the company’s operations is simply eating the company’s seed-corn — and there is nothing like Canada has, to soften the blow. That’s not only unsustainable, it has already become a crisis, and Washington is exploiting it.

PDVSA’s latest online financial report is for 2016 and it shows that “Profit before income tax” was $16,317,000 in 2014, then $1,469,000 in 2015, and then $955,000 — less than a million dollars — in 2016. During the three-year period, “Current assets” declined from $55.2 billion to $54.6 billion, and “Current liabilities” declined from $55.7 billion to $50.0 billion. “Financial debt” declined from $40.0 billion to $33.9 billion. “Total assets” declined from $217.4 billion to $189.7 billion; and “Total liabilities” declined from $127.7 billion to $102.6 billion. Probably the company is already operating in the red now, but with every year of deteriorating infrastructure, just wearing out, with more and more and longer deferred maintenance, and with a bad long-term prospect for profitability, could the Government even sell the company? If Trump succeeds and PDVSA and every other state-owned asset in Venezuela becomes privatized, Venezuela’s citizens will be left with nothing, and the only beneficiaries will be the international bankers, even as international investors will need to take haircuts on their existing Venezuelan loans. The oil that PDVSA sells shouldn’t even be bought; it should simply remain in the ground.

According to the latest public information, PDVSA showed less than a million dollars of profit in 2016 — and the trend was downward. Anyone in Venezuela who thinks that the country can be sustained in the future, as it was in the past, from the sale of Venezuela’s exceptionally costly-to-produce oil, isn’t taking into account the broader picture, and the impact that the global-warming phenomenon will inevitably have upon the fossil-fuels industries.

There may be ways to jiggle the books to make PDVSA fool some investors into buying the company, but only the international bankers would be profiting from a sale of that firm.

Foreign Policy magazine, which represents America’s aristocracy, headlined on 5 June 2018, “It’s Time for a Coup in Venezuela”, but even if that turns out to be the final solution to the Venezuelan problem for America’s aristocrats, it won’t solve anything for the Venezuelan public — basically like Hitler’s “final solution” did nothing to benefit Germany’s Jews. Germany’s aristocracy did nothing for Jews then, and America’s aristocracy will do nothing for Venezuelans now. They’re all on their own. The leaders of the U.S.-allied nations don’t want to save them, and instead follow in the fascist and Nazi tradition. The leaders in Venezuela’s current Government, who want to save them, simply can’t save them. It’s far too late for them to start now, to do what needed to start back in “the early 1980s of 93,000 b/d” from Venezuela’s Orinoco belt — which would have been for them to stop what ought never even to have been started there: extraction of that oil.

CONCLUSION

The poverty and violence that now rack Venezuela result from a broader situation in which selling what shouldn’t even be bought has run its miserable course until the final act, which is a Government that has reached the stage where it can produce income only for international bankers and for the aristocrats who control them. Any oil company now that would want to buy those assets would merely be adding to its assets — chiefly the dirty oil in the ground — ‘assets’ (oil reserves) that can never even be used (unless the propaganda becomes even more effective in the future than it has always been until now, which might be impossible to achieve). Oil companies already have lots more of that dangerous filth than anyone except people in finance will ever be able to benefit from buying or selling.

For Venezuelans, this is a great tragedy. The U.S. and its allies are (and have been) doing everything they can to exploit the tragedy.

It’s like a hungry lion chasing a fleeing exhausted deer, who now is finally trapped.

That’s the ugly reality.

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

Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010

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The U.S. Might Finally Be Ready to Back Down, to Avoid WW III

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Recently, tensions have been rising between, on the one hand, America, and on the other, both Russia and China. A nuclear war that includes the United States would destroy the entire world, because it would be not only nuclear, but major-power nuclear, which would entail so many nuclear explosions (perhaps all within less than an hour), so that nuclear winter would extend over not only all of the northern hemisphere, but probably also over all of the southern hemisphere (though more slowly there). Unfortunately, no scientific study has been published analyzing what the result would be of such a war, but studies have been published of likely outcomes from minor-power nuclear wars, and the results have indicated nearly as catastrophic outcomes as I’ve summarily indicated here for a major-power nuclear war.

The culminating public event displaying that a U.S. backdown has occurred would be Biden’s granting Putin’s bottom-line red line (which, if not granted but instead crossed, would precipitate a Russian attack against the U.S.), committing the U.S. to never crossing that line, and this back-down would consist of a mutually accepted and implemented agreement regarding Ukraine and its two break-away regions (the currently independent Donbas, and Russian Crimea). In the case of China, Biden would also need to grant Xi’s bottom-line red line, which would be for Biden publicly to accept the 28 February 1972 U.S.-China agreement called the “Shanghai Communique”, in which the U.S. Government agreed with China to the promise and commitment that “The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves.” However, there would also need to be an addendum made to the Shanghai Communique, to the effect that if the Government of Taiwan refuses to publicly and officially acknowledge that it is part of China — no longer a colony of Japan, such as it had been during 1895-1945 (and it had been a province of China during 1683-1895), and also not a separate (i.e., independent) nation — then the United States will not oppose a militarily imposed restoration of Taiwan as being a Chinese province.

The Shanghai Communique goes considerably further than that, however, to commit the U.S. Government to never doing some other things that, during the past decade, the U.S. Government has increasingly blatantly violated (done); and, so, the three most crucial Shanghai Communique commitments regarding Taiwan will be specifically quoted here (and one of them has just been quoted but will be quoted again, in the context of the other two, so that readers may more clearly recognize the blatancy with which the U.S. Government has recently been violating the Shanghai Communique):

“the two sides agreed that countries, regardless of their social systems, should conduct their relations on the principles of respect for the sovereignty and territorial integrity of all states, nonaggression against other states, noninterference in the internal affairs of other states, equality and mutual benefit, and peaceful coexistence.”

“Both sides are of the view that it would be against the interests of the peoples of the world for any major country to collude with another against other countries, or for major countries to divide up the world into spheres of interest.”

“The U.S. side declared: The United States acknowledges that all Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States Government does not challenge that position. It reaffirms its interest in a peaceful settlement of the Taiwan question by the Chinese themselves. With this prospect in mind, it affirms the ultimate objective of the withdrawal of all U.S. forces and military installations from Taiwan.”

For the United States to accept either of those two red lines — Russia’s and/or China’s — (i.e., to agree that the U.S. accepts it, and will not oppose it), would be for the U.S. to back down in order to avoid a WW III. In other words: it would display the U.S. Government’s current decision that its #1 national-security goal isn’t to expand its current empire, but to avoid any WW III (avoid any U.S. war against either Russia or China).

This now seems likely to happen regarding Russia’s red line, as was indicated by Russia’s RT News on October 13th, under the headline “Kremlin says US & Russia agree Ukraine must give Donbass special autonomous status”. That would be Biden’s granting compliance with Putin’s bottom-line red line regarding Donbass. The next day, RT headlined “Strained relations between US & Russia could soon be on mend, Moscow says”. It stated that, after meeting with Kremlin officials in Moscow, “Victoria [Nuland] took with her to Washington a rather long list of those issues that were identified by the Russian side for the need to resolve them as soon as possible.” Nuland is the queen of the neoconservatives (or U.S. imperialists, or “super-hawks,” or “MIC darlings”), and had been sent to Moscow in order to push as hard as possible to get concessions from Russia. She was previously instrumental in the 2014 U.S. coup against Ukraine that captured Ukraine for military training and aid, and potential inclusion in the EU and in NATO — which coup (that she principally organized) actually sparked the current active restoration of the U.S.-Russia Cold War. This is probably why Biden chose her for that assignment. (It’s like sending a victim’s torturerer to find out what what the victim needs.) Whether Biden will decide in accord with her recommendations is unknown. If he does, then he will be continuing with President Obama’s plan (that she had designed) to ultimately place U.S. missiles on Ukraine’s border with Russia, so as to achieve “Nuclear Primacy”: the ability for the U.S. to destroy Moscow within less than ten minutes — too short a time for Russia to launch any retaliation. This would also indicate that China likewise is in severe jeopardy; it would warn China that it needs to presume the worst about the U.S. Government’s intentions.

If the United States will not comply, then one possible result would be that Russia and China will, then, jointly, and publicly, announce that any invasion against either, will be dealt with as constituting an invasion against both.

On the other hand, if Biden caves regarding Russia, then China, too, would likewise be much safer. For him to cave would be for him to accept not only that Ukraine must comply with the Minsk accords regarding Donbass, and that Crimea (which the Soviet Union’s dictator had arbitrarily transferred from Russia to Ukraine in 1954) is a province of Russia, but also that Taiwan is a province of China. (If Biden were to comply with Russia’s demand but not with China’s, then his subsequently invading China would almost certainly be met by Russian forces, and not only by Chinese ones, and thus America will likely experience yet another defeat — or else the entire world will, by means of a nuclear war between superpowers.) If he won’t agree with at least those three requirements (red lines), then avoiding WW III will be unlikely, if not impossible. That refusal would indicate the U.S. Government’s placing higher priority upon expanding yet further its empire, than upon avoiding a global nuclear war. 

Neither Russia nor China will accept being a part of the U.S. empire. The question now is whether or not the U.S. Government will finally accept that fact. For it to do so would violate all U.S. international policy since FDR died on 12 April 1945. This would be a turning-point in world history — the apogee of the American empire, which was first imposed by Truman and Eisenhower (mainly via coups). But, so, too, would Biden’s continuing forward with the Nuland-led Obama policy on Ukraine produce the apogee, which then would mean WW III (effectively, the end of human history). The American empire might end by the U.S. Government’s accepting that it’s downhill from here on, and the empire’s gradually fading away. Or else, it will end with WW III. This is the choice that now faces Biden. That decision will probably come under this President — and maybe very soon.

On October 15th, the highly informed and extraordinarily honest analyst of geostrategic diplomatic affairs, Alexander Mercouris, headlined “Nuland’s Moscow Trip Ends with Disagreement on All issues, Russia Considers Freezing Relations with US”, and he provided an extensive description of the results from Nuland’s negotiations this past week in Moscow with the Kremlin (and of the U.S. news-media’s virtual blacking-out of even the fact that she was there — and the little U.S. coverage that there was, was mocking Russia, and presented nothing of what the Russian negotiators had said, but only what Russia’s enemies were saying, such as “Apparently, Moscow’s misogynists would rather not deal with a woman at all”). Mercouris’s take on the matter was that Biden will likely continue doing what Nuland and other extreme neoconservatives against Russia want to be done. If Mercouris is correct, then we’re now at the brink of WW III. But whether that war would start against Russia, or against China, one can only guess.

If this sounds crazy, WW I also started as being crazy, and the publics in the respective combatting countries were kept in the dark about everything except the propaganda. The publics overwhelmingly believe the propaganda, no matter how consistently it has subsequently become documented to have been based on lies. For example: this news-report is being simultaneously submitted to virtually all news-media in the U.S. and allied countries. Let’s see how many of them publish it. After all: it’s definitely not propaganda. Everything in it is documented via the links, all of which are to extraordinarily relevant and reliable sources. Propaganda does not do that. But few people even notice this. That’s how imperialists routinely get away with mass-murders, such as in Iraq, Syria, and Ukraine.

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How The West Subdue Us: An Approach of Colonial and Development Discourse

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Talking about development and colonial discourse, I am reminded the story of John Perkins in his book “Confessions of an Economic Hit Man”. This book was written in 1982 when the tension between the west and east blocks is heating up. Two blocks are vigorously fighting to get influence over third world countries. The book contains a dramatic confession. He told how the financial donors institutions together with America conspired, regulated, and designed in order to control the resource in third world countries. John Perkins himself worked at one of these institutions. He was tasked with seducing leaders to accept debt loans through the World Bank, USAID, and other foreign aid organizations. This mission was carried out with a group called as the Economic Hit Man.

Further, the Economic Hit Man (EHM) have to ensure the targeted countries fall into the debt trap. After they owed were no longer able to pay the debts, it were obliged to surrender the concession of their natural resources. The trap which EHM uses to capture prey include: by making misleading financial reports through economic calculations and predictions, manipulating fraudulent elections by supporting candidates Pro-American interests, bribery, extortion, sex, and even murder. The last case happened to Jaime Roldos, the former President of Ecuador who was nicknamed “Castro” in his country. He was killed in a helicopter accident that he was riding. The helicopter crashed and caught fire on May 24, 1981. Many media at that time accused the CIA behind the murder.

Besides Ecuador, other countries that finally entered America’s debt trap were Indonesia. After the crisis hit Indonesia’s finances between 1997-1998, inevitably it signed a new IMF debt pact with various provisions and conditions were detrimental to the country. The pact which reflected on the Washington Consensus is an American strategy to subjugate troubled economic countries.

Ecuador and Indonesia case is only a small example of how the world condition after colonialism ended. It does not mean they reached independence as a whole since the occupation is no longer focused on exploitation and physical violence rather through structural hegemony and various infiltration. To understand how hegemony works comprehensively, there are two discourses framing the history of subjection namely colonial and development discourse.

Understanding Discourse

Discourse is a term created by Foucault. Foucault defines it as a way and means to uncover what is not visible with the naked eye. In the discourse, there are knowledge and strength which form a shared power. The hidden power in it was unconscious to hegemony the subject for how they act as expected. Discourse itself does not come from a vacuum, it exists and is produced, organized, deliberately controlled by the authorities and disseminated as an instrument of subjugation (Arturo Escobar, 1984). It was spread by the west to the third world countries through forced civilization. Western try to place the third world as a slave over their prevails values and knowledge imposed since the colonialism period. So that many countries in the third world fall into the western grip. Then its image becomes an elegant illustration in the mind people of the third world. From here, discourse appears as a tool for hegemony and it was intensively launched along with the colonial and post-colonial period.

How Do Colonial and Developmet Discourse Run

Gradually, discourse topic was inspired many scholars to examine and uncover the hidden interests of such submission processes. One of them is Edwar Said. Edwar Said wrote about what he called in the colonial discourse as Orientalism. For him, Orientalism is a study about eastern world carried out by western people (Europe) with a focus not only on their history and culture but also to a phenomenon political epistemology that contains broader historical consequences ( Eiman Osman, Postcoloniality and Development: Development as a Colonial Discourse). In short, colonial discourse is an extension of the narrow meaning of oppression. Colonial is not just physical exploitation rather attacks and deprivation of the cultural, political, economic and institutional values towards the colonized countries where local values are replaced by the new one brought and instilled by western. They lose their identity. Then they were born with a new “western” identity. It was considered as a strategy to perpetuate the power relations of western state over third world countries. This is clearly illustrated for example in the process of institutionalizing English language education in India and South Africa and it was a part of colonial government politics, as examined by Gauri Viswanathan (1990) and David Johnson (1996).

While colonial discourse emphasizes aspects of attack on culture, ideas, value systems in society – which go hand and become an inseparable part of physical violence, development discourse is a prolongation of new style of occupation beyond physical coercion. It was a new form of conquest. The expansion of this kind of discourse is rife after the cold war in which the West turned to focus on providing economic stimulus to third world countries, as well as a counter to communism.

Explicitly, development discourse is a western manipulation strategy that frames their good intentions by pretending to participate and help the third world in post-colonialism. The debt bondage which occurred in Ecuador and Indonesia that described above is a simple model of how development discourse works. It is a new imperialism under development guise.

Therefore, to understand a whole about development discourse is the best way to realize how western perceives the third world or vice versa. In fact, the perception as most civilized country had encouraged western to be a patron to control economic, political, social, and cultural systems within these countries. Its aim is not only to degrade the progress of development but also to shape the reality and self-image of the third world according to western will. Escobar neatly defines development discourse as follows: In this way, development will be seen, not as a matter of scientific knowledge, a body of theories and programs concerned with the achievement of true progress, but rather as a series of political technologies intended to manage and give shape to the reality of the Third World (Arturo Escobar, 1984).

Dismantling Development Discourse

According to Escobar, there are three important factors to analyze and dismantle development discourse in third world countries. First, through historical conditions, second, restructure of discourse, and third, the deployment of development.

Historical conditions lead us to the portrait of the world at the end of the cold war where capitalism holds control of the course of the global economy. The third countries which are now adopting the same political system (imposed by the west) were initially given the hope that they would be assisted by international institutions that would deal with development issues in their country. Economic studies in newly independent countries are actively carried out. This is the initial phase of transition control in a more subtle direction. In this stage, many of them volunteered to receive program and debt assistance offered by international financial institutions before finally entering the trap of their power.

While restructure of discourse is operated not only to change the old structure that applies in third world countries as well as to focus on the economic structure but to touch all aspects, including social and politics so that these aspects will become institutionalized which perpetuate and sustain western domination over the lives of third world. This happens at all levels, from rural to urban, local-regional, national-international.

In the deployment of development, there are several main strategies. First, through a variety of labeling. Initially by perceiving that the third world is backward, uneducated, abnormal, and embedding other negative terms. Second,  through the formation of professional fields. Here various types of specialization are formed which are directed at their respective fields. Specialization in the field of science, including economics, politics, is intended to make science look neutral so the course of development which is much assisted by elements of science is not deemed politically. The third is through the institutionalization of development. As Escobar calls it “This process took place at various levels, ranging from the international organizations and national planning bodies to local level development agencies. These institutions became the agents of the deployment of development, the network of new sites of power which, taken as a whole, constituted the apparatus of development “(Arturo Escobar, 1984).

In short, everything that we believe so far is the fruit of our past and the cultivation of western values. So do not be surprised if some of us still consider the west as the center of civilization orientation.

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How Trump can beat Kamala Harris in 2024

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The hopes for Vice President Kamala Harris were big, but as the months of her first year in office progressed, they evaporated quickly.

As Vice President, Mike Pence negotiated ceasefire agreements with Turkey in Syria and did a lot of diplomatic work. So the VP’s role is not exactly about sitting on the sidelines, waiting to be President. But this seems to be Kamala’s game at the moment. She does videos with girls who should dream big but when it comes to her actual responsibilities she is nowhere to be seen. It’s not enough to be the first black woman VP. That doesn’t guarantee your “historic legacy”. It’s what you do that counts.

Biden tasked Kamala with the southern border, that horny issue that Trump wanted to take up and which Democrats are not interested in.

The truth here is a geographical one: simply in geographic terms, the US southern border is so vast that it can’t be secured unless something changes in US policy. Not everyone that wants to enter a country should be able to do that. The same goes for Americans who would be stopped at the border if they tried to enter illegally Bulgaria, just to name an example. The rules of legal entry still apply across the world, and for people escaping dire circumstances such as refugees we have a separate set of rules where they can apply for asylum. That doesn’t include anyone from any country that wants to enter any country, but surely a guiding principle should be humane treatment even for those that are not allowed to enter or that have to leave. The situation on the southern border were children were separated from their parents and were kept in cages was absolutely horrific, so one hoped that with her legal experience, child of immigrants-origin, and black, Indian, female leadership, Kamala would be better suited at finding humane solutions than Trump.

But Kamala did not even wish to visit the border, and nothing changed when the Haitian immigrants’ crisis hit either. She is just not interested; she just wants to be President. Kamala was expected to deliver a more sensitive approach because this is why she was elected – for issues such as these. Leaders of diversity are not elected just to be there, because it’s great to look at all kinds of people, but because the political system and decision-making supposedly becomes more representative and better.

People elect leaders on platforms to help workers, such as veteran Senator Sherrod Brown, exactly for that – to help workers. That’s why he is on the right committees such as agriculture, forestry, nutrition. You won’t see him all of a sudden interested in big tech and the finance industry, not willing to touch his original issues. That would be strange, right?

Women leaders whose platform is being a woman and breaking glass ceilings to lead the way, are expected to deliver on that. Not all women leaders have that line and this line should not be expected from all women, but the ones that do run on being black women leaders for the community should deliver on that. That’s their thing, that’s what they ran on.

Black Lives Matter congressmen who run on that platform are expected to be like that once they get elected, too. Similarly, if a politician runs on being rich, successful and someone who understand big corporate America and will drive big business forward, you expect them to be exactly that way.

If you run for office as the migrants’ Congresswoman you better be doing that. I remember Congressman Grijalva of Arizona whom I met previously. His had was a Mexican immigrant and the Congressman was someone feeling and supporting Mexican immigrants; that was his thing, his selling point and his driving issue. You wouldn’t see him go: “Oh yeah, the migrants. No thanks!” The Congressman was well-aware that he was elected in that identity out of all the identities he could have decided to bring to the fore.

My point is that if you’re selected for specific views and characteristic and you are putting that as your headline motto which defines you, that means that people will be expecting that from you because that’s why you got elected to begin with. So there are very clear and reasonable expectations that Kamala has to be better towards refugees if she ran on being a child of immigrants.  She has to be more sensitive towards the pains of what she was elected to represent. If you are running for office as a mother, wife and a child of immigrants, then family issues and gentle, humane treatment towards immigrant children should be a priority.  It’s only fair in the political contract of being an elected official.

Politicians choose very carefully what identities they flash and show to the whole world to see. That’s a very conscious choice. The story would be different if Kamala ran on being a top legal mind that will fix many issues in the justice system, while not wanting to bring her origin, female-ness and race as selling points. That would have been an equally valid political approach. Then people would have expected that identity to come to the fore, once she stepped in office. My hopes and prescriptions for Kamala, for example, was that she could reform the FBI and the way the FBI treats progressive protests. I wrote about it right at the start of the Biden-Harris administration all over the left media in Salon, Raw Story and AlterNet, urging VP Harris to take a look at the FBI. This would have included indiscriminate surveillance, for example, and the legal standards and thresholds to open investigations for serious crimes like terrorism. What we are witnessing now is that the same way the FBI and the repressive apparatus treated reasonable voices on the left clumping them together with violent groups on the far left, is happening to the right, where Trump supporters and regular people on the right are spied on and put in the same group as armed, violent men. This is what the FBI generally does to the new big enemy. Who that is changes with the fashion trends. My hope was that Kamala could stop the FBI from running wild, using her extensive legal experience. That was a long shot. She is not interested even in top-of-the-line emergency issues such as the border that Biden assigned to her.

This is why I think that Trump can beat Kamala in 2024, if she becomes the Democratic nominee. I won’t be surprised if she runs on a platform of becoming the first woman president and first woman black president. But for that you need to have demonstrated that you are for women and have supported women, and you are for black people and have supported the black issues.

I think it’s only fair. I am asking people to actually start holding politicians accountable to the identities that politicians themselves have chosen to flash out. If you’re neither for women, nor for people of color’s problems, then the identity presented is fake and we are better off with someone whose identity matches their actions.

It’s not enough to stage videos with little girls who should “dream big” because “everything is possible” in a world where “women can be anything they want to be”. The role of the chief political executive is not to be an “inspirational” celebrity, someone that people look up to for philosophical and motivational inspiration like the Dalai Lama. The role of a President or VP is to solve problems. I know it doesn’t sound very glamorous because it’s not.

I think Trump can win 2024 if he drops the far-right movements. The rights to protest and free speech are no longer protected, as soon as there is violence involved. Trump can also drop some of the offensive language and still be Trump. If he keeps what was good from his policies, such as the economy pre-Covid, he can convince a lot of Americans who are already chanting against Joe Biden. America already hates Biden and Kamala – if I can hear it all the way here in Bulgaria.

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