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Amazing Plan Surfaces: "We Need Ethno-Weapons!" David Price tells how top-flight US anthropologists eagerly obeyed US government's mandate to "think in a-moral terms". One scheme of OSS's willing executioners: target Japanese physical "weak spot", the respiratory tract, with anthrax germs. Gabriel Kolko asks What's so New About the Neo-Cons? If they had not existed, would the policies have been the same? Jeffrey St Clair digs up more dirt on Halliburton's secret history. Alexander Cockburn on why we need more "celebrity justice". Get the answers you're looking for in the latest subscriber-only edition of CounterPunch ... CounterPunch Online is read by millions of viewers each month! But remember, we are funded solely by the subscribers to the print edition of CounterPunch. Please support this website by buying a subscription to our newsletter, which contains fresh material you won't find anywhere else, or by making a donation for the online edition. Remember contributions are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! or write CounterPunch, PO BOX 228, Petrolia, CA 95558 |
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Other Lands Have Dreams: From Baghdad to Pekin Prison by KATHY KELLY  Today's Stories July 2 / 4, 2005 Laura
Carlsen
July 1, 2005 Christopher
Brauchli Pat
Williams Gary
Leupp John
Stauber John
Chuckman Justicia
y Paz Cockburn
/ St. Clair
June 30, 2005 Kathy
Kelly John
Stauber Virginia
Rodino Jason
Leopold Dave
Lindorff Greg
Moses Norman
Solomon Joshua
Frank Alexander
Cockburn
June 29, 2005 Mike
Schaefer Roger
Burbach / Paul Cantor Sharon
Smith Sam
Husseini John
Stauber Ahmad
Faruqui Linda
S. Heard Stew
Albert Ray
McGovern
June 28, 2005 Paul
Craig Roberts Landau
/ Hassen John
A. Murphy Mike
Whitney CounterPunch
News Service Dave
Zirin Dave
Lindorff Patrick
Cockburn
June 27, 2005 Paul
Craig Roberts Mike
Marqusee Mark
Scaramella Leigh
Saavedra Kathy
Kelly
June 25 / 26, 2005 Alexander
Cockburn Jennifer
Van Bergen George
Corsetti Mark
Chmiel / Andrew Wimmer Kevin
Zeese P.
Sainath John
Stauber Scott
Handleman Tom
Barry John
Walsh Justin
E.H. Smith Alan
Wallis Ben
Tripp Frederick
B. Hudson Poets'
Basement
June 24, 2005 Ray
McGovern Jorge
Mariscal Desiree
Hellegers Zeynep
Toufe Joshua
Frank David
Lindorff Michael
Neumann Website
of the Day
June 23, 2005 Christopher
Brauchli Clay
Conrad Standard
Schaefer P.
Sainath Mark
Engler Norman
Solomon Cockburn
/ St. Clair Kathy
Kelly
June 22, 2005 Kevin
Zeese William
S. Lind Arsalan
Iftikhar Dan
Nagengast David
Krieger Kathleen
& Bill Christison
June 21, 2005 Brian Cloughley Mike Whitney Dave Lindorff Mark Weisbrot Matthew R.
Simmons Dave Zirin Virginia Rodino Paul Craig
Roberts
June 20, 2005 Alan Maass Tariq Ali Mickey Z. William Blum Gary Leupp Jason Leopold Dave Lindorff Alan Maass Uri Avnery Website of
the Day
June 18 / 19, 2005 Alexander Cockburn Greg Moses Benjamin Shepard Stan Goff Lee Sustar Jude Wanniski Diana Barahona Brian Concannon, Jr. Fred Gardner Mike Whitney Ahmad Faruqui Manuel García, Jr. Roger Howard Ron Jacobs Ben Tripp Poets' Basement Website of
the Weekend
June 17, 2005 Ricardo Alarcón Clay Conrad Marc Estrin Colin Brown Christopher
Brauchli Joshua Frank Norman Solomon Mary Rizzo Bond / Brutus
/ Setshedi
June 16, 2005 John Walsh Dave Lindorff Adrian Lomax Tom Crumpacker Jeffrey Kolakowski Julene Bair Michael Dickinson Francois Houtart / Isabel Parra,
et al. Tom Barry
June 15, 2005 Stan Goff Daniel Wolff Tim Wise Ricardo Alarcón Joshua Frank John Hilary Norman Solomon Alexander Cockburn
/ Jeffrey St. Clair Website of the Day
June 14, 2005 Paul Craig
Roberts Forrest Hylton Richard Gott Fred Gardner Steve Breyman Dave Zirin Robert Kent Paul Craig
Roberts
June 13, 2005 Gary Leupp Dave Lindorff John Stauber Fred Gardner Evelyn J. Pringle Norman Solomon Winslow T.
Wheeler
June 10 / 12, 2005 Alexander
Cockburn Sharon
Smith Brian
Cloughley Chris
Kromm Heather
Gray Kevin
Zeese Mickey
Z. Gary
Leupp Eli
Stephens Nick
Dearden Oscar
Olivera Robert
Fisk Michael
Dickinson Poets'
Basement Website
of the Weekend
Len
Colodny Christopher
Brauchli Ron
Jacobs Dave
Lindorff Katrina
Yeaw / Alex Schmaus Alan
Farago Saul
Landau
June 8, 2005 Jim
Hougan Alan
Maass Jason
Leopold Niranjan
Ramakrishnan Dave
Zirin Derrick
O'Keefe Diana
Johnstone Website
of the Day
June 7, 2005 Forrest
Hylton Greg
Moses / Susan van Haitsma Lenni
Brenner Col.
Dan Smith Joshua
Frank Dave
Lindorff Margot
Veranes / Adrian Navarro Michael
Neumann
June 6, 2005 Stew
Albert Paul
Craig Roberts Nicole
Colson Ali
Khan Jason
Leopold Charles
Walker Poff Ramzy
Baroud Rep.
John Conyers Evelyn
Pringle Gary
Corseri Website
of the Day
June 4 / 5, 2005 Alexander
Cockburn James
Petras Robert
Fisk Patrick
Cockburn Rev.
William Alberts Saul
Landau Mario
Lamo Jimenez Dave
Lindorff Lance
Selfa Tom
Crumpacker Joshua
Frank Fred
Gardner Michael
Dickinson Roger
Martin Reza
Fiyouzat Ben
Tripp Graeme
Greenback Poets'
Basement
June 3, 2005 Paul
Craig Roberts Joseph
Massad Jeff
Halper Tom
Barry Bruce
K. Gagnon Joshua
Frank Mickey
Z. Gary
Leupp Website
of the Day
June 2, 2005 Paul
Craig Roberts Forrest
Hylton Mike
Whitney Brian
Cloughley Mazin
Qumsiyeh Russell
D. Hoffman Norman
Madarasz Norman
Solomon David
Price Website
of the Day
June 1, 2005 James
Petras Justin
Delacour Edward
Jay Epstein Omar
Barghouti / Lisa Taraki Dave
Lindorff Kevin
Zeese Jason
Leopold William
S. Lind
May 31, 2005 Sen.
Mike Gravel David
Krieger Tad
Daley Joshua
Frank Richard
Gott Norman
Solomon Tom
Segev Walter
Brasch Diana
Johnstone
May 28 / 30, 2005 Alexander
Cockburn Richard
Lichtman Sharon
Smith Paul
Craig Roberts Dave
Lindorff Ramzy
Baroud Brian
Cloughley Fred
Gardner Lee
Sustar Joshua
Frank Justin
E.H. Smith Jackie
Corr Michael
Kimaid Toufic
Haddad Justin
Taylor Amir
Butler Ben
Tripp Poets'
Basement
May 27, 2005 Gary
Leupp Daniel
Estulin Kevin
Zeese Robert
Fisk Dave
Zirin Website
of the Day
Hot Stories Alexander Cockburn Subcomandante
Marcos Norman Finkelstein Steve Niva Dardagan,
Slobodo and Williams Steve
J.B. Sheldon
Rampton and John Stauber Wendell
Berry CounterPunch
Wire Cindy
Corrie Gore Vidal Francis Boyle
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Independence Day Weekend Edition Six Myths About the Benefits of Foreign InvestmentThe Pretensions of NeoliberalismBy JAMES PETRAS There are several myths about foreign investment propounded by orthodox economists, publicists for multinational corporations, and the press: Myth #1 - Foreign Investment (FI) creates new enterprises, gains or expands markets and stimulates new research and development of local technological 'know-how'. In fact most FI is directed toward buying privatized and profitable existing public enterprises and private firms, taking over existing markets and selling or renting technology designed and developed at the "home office". Since the late 1980's over half of foreign investment in Latin America was directed toward purchasing existing enterprises, usually at below market valuation. Instead of complementing local public or private capital, FI "crowds out" local capital and public initiative and undermines emerging technological research centers. With regard to market expansion, the record is mixed: in some sectors where public enterprises were starved for funds, like telecommunications, the new foreign owners may have expanded the number of users and enlarged the market. In other cases, like water, electricity and transportation, the new foreign owners have reduced the market, especially to low-income classes, by raising charges beyond the means of most consumers. The experience with foreign invesment and technological transfers is largely negative: over 80% of research and development is carried out in the main office. The "transfers of technology" is the rental of sale of techniques developed elsewhere, rather than local design. The multinationals usually charge subsidiaries excess royalty fees, service and management costs, to artificially or fraudulently lower profits and taxes to local governments. Myth #2 Foreign invesement increases the export competitiveness of an industry, and stimulates the local economy via secondary and tertiary purchases and sales. In reality foreign investors buy up lucrative mineral resources and export them with little or no value added. Most of the minerals are converted into semi-finished or finished value added goods - processed, refined, manufactured - in home countries or elsewhere, creating jobs, diversified economies and skills. The privatization of the lucrative giant iron mine Vale del Doce in Brazil in the 1990's has led to huge profits for the new owners and the sale of raw ore overseas, particularly to China in the 21st century. China converts iron ore to steel for transport, machine industries and a host of job-generating metallurgical enterprises. In Bolivia, the privatization of the gas and petrol industry in the mid 1990's has led to billions in profits in the 21st century and the loss of hundreds of thousands of jobs in processing and conversion of petroleum and gas into value added goods, plus failure to supply local low-income consumers. The extraction of raw materials is capital intensive using few workers. Processing and manufacture is more labor intensive and job creating. Myth # 3 Foreign investors provide tax revenue to bolster the local treasury and hard currency earnings to finance imports. The reality is foreign investors engage in tax frauds, swindles in purchasing public enterprises, and large scale money laundering. In May 2005, the Venezuelan government has announced billion-dollar tax evasions and frauds committed by major overseas petroleum companies which signed on to service contracts since the 1990's. The entire Russian petroleum and gas sector was stolen by a new class of billionaire robber oligarchs, associated with foreign investors, who subsequently evaded taxes, as illustrated by the trial and conviction of two oligarchs, Platon Lebedev and Mikhail Khodorkovsky for $29 billion in tax evasion facilitated by US and European banks. The impact of the multinational corporations on the balance of payments over the long run is negative. For example, most assembly plants in export zones import all their inputs machinery, design and know-how and export the semi-finished or finished product. The resulting trade balance depends on the cost of the inputs relative to the value of exports. In many cases the imported components charged to the local economy are greater than the value added in the export zone. Secondly most of the revenues from the export platform accrue to the capitalists since the key to success is low wages leading to the creation of personal empires. The Brazilian experience over the past decade and a half illustratives the negative external balances resulting from foreign investment and externally funded investment. In 2004 Brazil paid foreign bankers $46 billion (USD) in interest and principle while receiving only $16 billion dollars in new loans, leading to a net outflow of $30 billion dollars. (2) Between January and April 2005 Brazil was bled for $4.6 billion (USD) in interest payments, $3.7 billion in profit remittances by multinational corporations, $1.7 billion for 'external services' and $7.3 billion in payments of principle in the debt. (3) The total drain of $17.3 billion dollars far exceeded the positive commercial trade balance of $12.2 billion dollars. (4) In other words, the FI-led export model led to new indebtedness to pay for the shortfall, the loss of employment by small and medium farmers at the mercy of the agro-business elites and the destruction of the environment. Myth #4 - Maintaining debt payments is essential to securing financial good standing in international markets and maintaining the integrity of the financial system. Both are crucial to sound development. The historical record reveals that incurring debt under dubious circumstances and paying back illegally contracted loans by non-representative governments jeopardized the long-term financial standing and integrity of the domestic financial system and led to a financial collapse, as displayed in he Argentine experience between 1976-2001. A substantial part of the public external and internal debt was illegally contracted and had little development utility. A lawsuit launched by an Argentine economist, Olmos, against payment of the Argentine foreign debt revealed that the foreign private debts of Citibank, First National Bank of Boston, Deutsch Bank, Chase Manhattan Bank and Bank of America were taken over by the Argentine government. (5) The same is true of debts of subsidiaries of overseas banks. The Olmos lawsuit also documented how the Argentine dictatorship and subsequent regimes borrowed to secure hard currency to facilitate capital flight in dollars. The foreign loans went directly to the Central Bank, which made the dollars available to the rich who recycled the dollars to their overseas accounts. Between 1978-1981 over $38 billion USD fled the country. Most of the foreign loans were used to finance the "economic" openings, luxury imports and non-productive goods, especially military equipment. The Olmos case pointed to a perverse source of greater indebtedness: the Argentine regime borrowed at high interest rates and then deposited the funds with the same lender banks at lower interest rates leaving a net loss of several billion dollars, added to the foreign debt. Myth # 5 Most Third World countries depend on foreign investment to provide needed capital for development since local sources are not available or inadequate. Contrary to the opinion of most neo-liberal economists, most of what is called foreign investment is really foreign borrowing of national savings to buy local enterprises and finance investments. Foreign investors and MNCs secure overseas loans backed by local governments, or directly receive loans from local pension funds and banks drawing on the local deposits and worker pension payments. Recent reports on pension fund financing of US MNCs in Mexico shows that Banamex (purchased in the 21st century) secured a 28.9 billion peso (about $2.6 billion USD) loan, American Movil (Telcel) 13 billion pesos ($1.2 billion USD), Ford Motor (in long-term loans) (9.556 billion pesos) and one billion pesos (in short term loans), and General Motors (financial sector) received 6.555 billion pesos. (6) This pattern of foreign borrowing to take over local markets and productive facilities is common practice, dispelling the notion that foreign investors bring "fresh capital" into a country. Equally important, it refutes the notion that Third World countries "need" FI because of capital scarcity. Invitations to FI divert local savings from local public and private investors, crowd out local borrowers and force them to seek 'informal' money lenders charging higher interest rates. Instead of complementing local investors FI compete for local savings from a privileged position in the credit market, bringing to bear their greater (overseas) assets and political influence in securing loans from local lending agencies. Myth #6 The proponents of foreign investment argue that its entry serves as an anchor for attracting further investment and serves as a 'pole of development'. Nothing could be further from the truth. The experiences of foreign-owned assembly plants in the Caribbean, Central America and Mexico speak to the great instability and insecurity with the emergence of new sources of cheaper labor in Asia, especially China and Viet Nam. Foreign investors are more likely than local manufacturers to relocate to new low-wage areas, creating a "boom and bust" economy. The practice of FI, in Mexico, the Caribbean and Central America, faced with competition from Asia, is to relocate, not to upgrade technology and skills or to move up to quality products. Finally a long-term study of the impact of foreign investment on development in India has found no correlation between this foreign investment and growth. (7) In sum, reliance on foreign investment is a risky, costly and limiting development strategy. The benefits and costs are unevenly distributed between the "sender" and receiver. In the larger historical picture it is not surprising that none of the early, late or latest developing countries put foreign investment into the center of their development scheme. Neither the US, Germany and Japan in the 19th and 20th century, nor Russia, China, Korea and Taiwan in the 20th century depended on it to advance their industrial and financial institutions. Given the disadvantages cited in the text, it is clear that the way ahead for developing countries is throughminimizing it and maximizing national ownership and investment of local financial resources, skills and enlarging and deepening local and overseas markets through a diversified economy. Because the negative economic, social and political costs of foreign investment are evident to increasing numbers of people in the Third World, particularly in Latin America, it is a major detonator of mass social movements, and even revolutionary struggles, as is the case in Bolivia during 2005. Since FI is a direct result of political decisions adopted at the highest level of government, mass social struggles are as much or even more so directed against the incumbent political regime responsible for promoting and mollycoddling foreign investment. The increasing turn of social movements toward political struggles for state power is directly related to the increasing recognition that political power and foreign investment are intimately connected. In the 21st century, at least in Latin America, all of the electoral regimes, which have been overthrown by popular majorities, had deep structural links to foreign investment: Gutierrez in Ecuador, Sanchez de Losada and Mesa in Bolivia and Fujimori in Peru. The leader with the greatest sustained support in Latin America, President Chavez in Venezuela, is precisely the only one who has increased regulations and taxes on foreign investment and redistributed the increased revenues to the poor, working class and peasants. The question still remains whether this new infusion of energy and class awareness can go beyond defeating pro-FI regimes to constructing a state based on a broad alliance of class forces, which goes beyond 'nationalization' and toward a socialist economy. James Petras, a former Professor of Sociology at Binghamton University, New York, owns a 50 year membership in the class struggle, is an adviser to the landless and jobless in brazil and argentina and is co-author of Globalization Unmasked (Zed). His new book with Henry Veltmeyer, Social Movements and the State: Brazil, Ecuador, Bolivia and Argentina, will be published in October 2005. He can be reached at: jpetras@binghamton.edu
Notes (1) Paul Doremus et al, Myth
of the Global Corporation, Princeton: Princeton University Press
1998
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