FacebookTwitterGoogle+RedditEmail

The State of Land Grabs in Africa

What’s the Matter with the Global Financial System?

As torrential water cannons, stones, and tear gas canisters pounded the thousands of protestors gathered outside, the European Central Bank managers met in the sumptuous Museo di Capodimonte yesterday to discuss the future of the faltering Eurozone. Only about two miles from the Piazza Dante, the ECB remained mired in miasmatic economic purgatory, producing an even more conservative than analysts anticipated.

Paul Carrel with Reuters explained the maneuvers expected over the next two years: “The ECB plans to buy asset-backed securities (ABS)—packages of reparcelled loans—with a view to spurring the market for such credit and supporting lending to the small- and mid-sized firms that form the backbone of the euro zone economy.” As to what these ABS will comprise, much remains opaque. Some speculate that ECB will pick up high-risk loans from banks in Greece and Cyprus in attempts to buoy up the most crisis-ridden region while buttressing their ability to print more money.

It is risky business, as Germany and France have declined to guarantee the purchase of junk loans in failing economies, with Hans-Werner Sinn of the German think tank IFO stating bluntly, “the ECB will finally be turned into a bail-out authority and a European bad bank.” At the same time as the declining value of the euro seems to translate into higher export revenue, the EU will begin to rely increasingly on Eastern Europe for its energy needs, while developing entrepreneurial sectors of the domestic economy.

If the plan sounds familiar, that’s because it’s a modified version of the US-style qualitative easing (aka “credit easing”), which swept through the entire global financial system after the bloated systems of mortgage-backed securities, junk loans, and credit default swaps spilled out into the repo market. While the IMF lauds quantitative easing as the savior of the world economy after 2007, it remains a high-risk strategy with immediate implications with regards to political society. Investor confidence slips as banks refuse to lend to small businesses and homeowners, while speculation emerges at the top of a precarious market. With the incoming Transatlantic Trade and Investment Partnership, the North Atlantic economic system could be totally reconfigured in a few short years, focusing on extraction, export, and expropriation.

Financial Risks and Land Grabs

In July 2013, a critical report surfaced stemming from a debate between Senior Economist in the Trade and Markets Division at FAO Pascal Liu and the Policy Coordinator on EU Agrofuels Policy Roman Herre and produced through the Madariaga College of Europe Foundation. The Madariaga Report declared, “Fuelled by the interaction of the financial and environmental crises and by the re-creation of global liquidity through quantitative easing, transnational transactions involving large portions of land in the Global South are on the rise, posing new threats to the financial, political, and environmental stability at the global and local levels.” Because of the increased liquidity created through quantitative easing, Liu argues, the financial allure of a concomitant expansion of land expropriations in the Global South and speculation in the futures markets creates a vacuum of investment within Europe, itself. The shadow of this vacuum etiolates the Eurozone’s domestic economy, making it increasingly dependent on the global land grab.

The European Commission has attempted to parlay anxiety over risk into rational centralization by distinguishing the financial crisis of 2007 from the current model of exchange trading. Their statement from last year claims, “exchange-trading of credit derivatives improves transparency and market stability. But the banks acted collectively to prevent this from happening. They delayed the emergence of exchange trading of these financial products because they feared that it would reduce their revenues.” The EC still believes it was the collusion of banks that destabilized the world economy rather than generalized exchange-trading of junk loans.

However, the EC also states, “Among other factors, this crisis was due to systemic risks. Risks of this type are intrinsic to over-the-counter trading: if one bank defaults, others are quickly affected.” Over-the-counter trading is currently the name of the game for the global futures market, which is the playground for big banks, equity funds, and other players who want to get rich quick off of agricultural commodity prices as land grabs become a major factor in geopolitical rivalries.

World Bank in Kenya

Herre argues that land grabs should be called “control grabs,” seeking not merely land, but “the power to control land and other associated resources such as water in order to derive benefit from such control.” It is increasingly true that without any sort of global accountability, speculation and land grabs in the Global South is becoming the insurance policy for anxiety over a pending European financial collapse. At the same time, both ecological crisis and human rights catastrophes have exposed the underbelly of the financial “great game.”

In Kenya, for example, the World Bank has funded the displacement of thousands of Indigenous Sengwer people in order to pursue a development regime that includes the environmental conservation of the Cherangany Hills, the Sengwer’s homeland, as a kind of indulgence for the sins of deforestation, industrial pollution, and other environmental problems. According to the World Bank, the conservation would build “institutional capacity to manage water and forest resources, reduce the incidence and severity of water shocks such as drought, floods, and water shortage in river catchments, and improve the livelihoods of communities participating in the co-management of water and forest resources.”

After restructuring the project in 2011, the World Bank acknowledged that they “would not be able to implement the land related commitments,” effectively shirking responsibility to the Sengwer, even in the extremely modest form of land-titling. The UN identified numerous issues with the dispossession, but according to the Forest Peoples Program, a management response from the World Bank leaked earlier this week is rife with denial, proposing a basic training for staff in Kenya rather than forwarding a rational response plan.

Europe in Trouble

Far from bringing the ECB out of purgatory, the indulgences of land grabs and carbon trading schemes have led Europe to the doors of the Inferno. By virtue of its Cerberus-like nature, the systemic risks of quantitative easement are only reified through the ECB’s latest meeting, as a cycle of low domestic investor confidence and extremely low interest rates combine to shape a future of austerity and income inequality.

In the US, the big five banks own a vast amount of property because of quantitative easing, which enables them to use increasing deposits to purchase property (houses, developments, infrastructure points, stocks of resources) from the repo market at cut-rate deals. With quantitative easing, banks can purchase numerous junk loans, which will pay for themselves if a certain percentage follow through, while maintaining the potential for larger dividends after foreclosing on those junk loans that cannot be paid off. To maintain dividends, banks work with developers to transform home ownership into a rentier economy.

If the ECB is looking to deploy these asset-backed securities in Greece, it evidences a greater trajectory towards capitalist accumulation rather than delivery from crisis. In June, Alexis Tsipras, head of Greece’s Coalition of the Radical Left (SYRIZA), told ECB president Mario Draghi that Greece needs reprieve from its $327 billion debt to the EU-IMF-ECB Cerberus. In 2012, Greece’s financial crisis virtually annihilated the government’s bond market making it apparent that the ECB can either forgive Greece’s debt, or intervene in the economy by purchasing assets. Draghi and his bank seem to have chosen the latter.

The ECB, IMF, and the EU seem to believe that the collusion of the major banks created the crisis of 2007, but, to quote the EC antitrust report, “when trading occurs through an exchange, counterparty risk is managed more strictly, especially because transactions are automatically settled in a central clearing house.” As the three-headed Cerberus chases its own tail in search of an incentive to develop that doesn’t begin with raw neocolonialism, Europe strides briskly through the teargas-saturated gates of the Inferno and into the clutches of a fascist revival, an emergence of right-wing populism more powerful now than the last 40 years, which threatens to suck “Fortress Europe” further into a demonstrably more xenophobic and anti-Semitic nightmare.

Alexander Reid Ross is a contributing moderator of the Earth First! Newswire. He is the editor of Grabbing Back: Essays Against the Global Land Grab (AK Press 2014) and a contributor to Life During Wartime (AK Press 2013). This article is also being published at earthfirstjournal.org/newswire.

More articles by:
April 19, 2018
Ramzy Baroud
Media Cover-up: Shielding Israel is a Matter of Policy
Vijay Prashad
Undermining Brazilian Democracy: the Curious Saga of Lula
Steve Fraser
Class Dismissed: Class Conflict in Red State America
John W. Whitehead
Crimes of a Monster: Your Tax Dollars at Work
Kenn Orphan
Whistling Past the Graveyard
Karl Grossman - TJ Coles
Opening Pandora’s Box: Karl Grossman on Trump and the Weaponization of Space
Colin Todhunter
Behind Theresa May’s ‘Humanitarian Hysterics’: The Ideology of Empire and Conquest
Jesse Jackson
Syrian Strikes is One More step Toward a Lawless Presidency
Michael Welton
Confronting Militarism is Early Twentieth Century Canada: the Woman’s International League for Peace and Freedom
Alycee Lane
On David S. Buckel and Setting Ourselves on Fire
Jennifer Matsui
Our Overlords Reveal Their Top ‘To Do’s: Are YOU Next On Their Kill List?
George Ochenski
Jive Talkin’: On the Campaign Trail With Montana Republicans
Kary Love
Is It Time for A Nice, “Little” Nuclear War?
April 18, 2018
Alan Nasser
Could Student Loans Lead to Debt Prison? The Handwriting on the Wall
Susan Roberts
Uses for the Poor
Alvaro Huerta
I Am Not Your “Wetback”
Jonah Raskin
Napa County, California: the Clash of Oligarchy & Democracy
Robert Hunziker
America’s Dystopian Future
Geoffrey McDonald
“America First!” as Economic War
Jonathan Cook
Robert Fisk’s Douma Report Rips Away Excuses for Air Strike on Syria
Jeff Berg
WW III This Ain’t
Binoy Kampmark
Macron’s Syria Game
Linn Washington Jr.
Philadelphia’s Top Cop Defends Indefensible Prejudice in Starbucks Arrest Incident
Katie Fite
Chaos in Urban Canyons – Air Force Efforts to Carve a Civilian Population War Game Range across Southern Idaho
Robby Sherwin
Facebook: This Is Where I Leave You
April 17, 2018
Paul Street
Eight Takeaways on Boss Tweet’s Latest Syrian Missile Spasm
Robert Fisk
The Search for the Truth in Douma
Eric Mann
The Historic 1968 Struggle Against Columbia University
Roy Eidelson
The 1%’s Mind Games: Psychology Gone Bad
John Steppling
The Sleep of Civilization
Patrick Cockburn
Syria Bombing Reveals Weakness of Theresa May
Dave Lindorff
No Indication in the US That the Country is at War Again
W. T. Whitney
Colombia and Cuba:  a Tale of Two Countries
Dean Baker
Why Isn’t the Median Wage for Black Workers Rising?
Linn Washington Jr.
Philadelphia’s Top Cop Defends Indefensible Prejudice in Starbucks Arrest Incident
C. L. Cook
Man in the Glass
Kary Love
“The Mob Boss Orders a Hit and a Pardon”
Lawrence Wittner
Which Nations Are the Happiest―and Why
Dr. Hakim
Where on Earth is the Just Economy that Works for All, Including Afghan Children?
April 16, 2018
Dave Lindorff
President Trump’s War Crime is Worse than the One He Accuses Assad of
Ron Jacobs
War is Just F**kin’ Wrong
John Laforge
Nuclear Keeps on Polluting, Long After Shutdown
Norman Solomon
Missile Attack on Syria Is a Salute to “Russiagate” Enthusiasts, Whether They Like It or Not
Uri Avnery
Eyeless in Gaza   
Barbara Nimri Aziz
Iraq Then, Syria Now
FacebookTwitterGoogle+RedditEmail