just commentary august 2011

Vol 11, No. 8 August 2011

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.MALAYSIA-VATICAN TIES....Malaysia now joins

the majority of the world’s nation-states that have

forged diplomatic relations with the Vatican...........P 4

STATEMENTS

ORGANIZED POLITICALTERRORISM: THE NORWEGIAN

MASSACREBy James Petras

“ So let us fight together with Israel,

with our Zionist brothers against all

anti-Zionists, against all cultural

Marxists/Multiculturalists”.

-Anders Behring Breivik’s Manifesto

“. . . two more cells exist in my

organization”. . .

-Ander Behring Breivik in police

custody (Reuters 25/7/2011)

INTRODUCTION

The July 22, 2011, bombing of the

office of the Norwegian Prime Minister,

Labor Party Jen Stoltenberg, which

killed 8 civilians, and the subsequent

political assassination of 68 unarmed

activists of the Labor Party Youth on

Utoeya Island, just 20 minutes from

Oslo, by militant neo-fascist Christian-

Zionists, raises fundamental questions

about the growing links between the

legal Far-Right, the ‘mainstream

media’, the Norwegian police, Israel

and rightwing terrorism.

THE MASS MEDIA AND THE RISE

OF RIGHTWING TERRORISM

The leading English language

newspapers, The New York Times

(NYT), the Washington Post (WP), the

Wall Street Journal (WSJ) and the

Financial Times (FT), as well as

President Obama, blamed “Islamic

extremists”, upon the first police

reports of the killings, publishing a

series of incendiary (and false)

headlines and reports, labeling the event

as ‘Norway’s 9-11’,in terms, which

echoed the ideological motivation and

justifications cited by the Norwegian

Christian-Zionist political assassin,

Anders Behring Breivik himself. The

July 23/24 front page of the Financial

Times (of London), read “Islamist

extremism fears: Worst Europe strike

since 2005”.

Obama immediately cited the terrorist

attack in Norway to further justify his

overseas wars against Muslim

countries. The FT, NYT, WP and WSJ

trotted out their self-styled “experts”

who debated over which Arab/Islamic

leaders or movements were

responsible – despite Norwegian press

reports of ‘the arrest of a Nordic man

in police uniform’.

ARTICLES

.FLOTILLA 2 DESERVES OUR APPLAUSE ...It isa shame that the Greek authorities have gone all out

to prevent Freedom Flotilla 2 from sailing from Greece

to Gaza..............................................................P 4

.MURDOCH EMPIRE SINKS BENEATH THE

SANDS....................................................P 5

.WATER CHALLENGES IN THE DEVELOPING

WORLD................................................P 10

.WHAT THE AMERICAN PUBLIC SHOULDN’T

KNOW.................................................... P 9

.CAPITAL FLIGHT IN INDIA.............................P 8

.TEN REASONS WHY CHINA IS

DIFFERENT..............................................P 7

I N T E R N A T I O N A L M O V E M E N T F O R A J U S T W O R L D

2

continued from page 1

L E A D A R T I C L E

Clearly, the US mass media and political

elite were eager to use the bombing and

assassinations to justify ongoing

overseas imperial wars, ignoring the

burgeoning domestic extremist

rightwing organizations and violent

individuals who are the outgrowth of

official Islamophobic hate propaganda.

When Anders Breivik, a known neo-

fascist extremist, handed his weapons

over to Norwegian police without

resistance and claimed credit for the

bombing and massacre, the second

phase of the official cover-up took

place: He was immediately described

as “a lone wolf assassin”, who “acted

alone” (BBC July 24, 2011) or as

mentally deranged, downplaying his

political networks, his American,

European and Israeli ideological

mentors and commitments, which led

to his acts of terrorism. Even more

outrageous, the media and officials

ignored the fact that this complex,

multiphase terrorist attack was beyond

the capacity of one ‘deranged’ person.

Anders Behring Breivik had been a

dues-paying member of a Far-Right

political party, The Progress Party and

a collaborator and contributor to an

overtly neo-Nazi web site. He

frequently focused his hatred on the

ruling Labor Party for its relative

tolerance of immigrants. He despised

immigrants especially, Muslims, and

was an ardent Christian-Zionist

supporter of Israeli repression and

terror against the Palestinian people. His

criminal action was political in essence

and embedded in a much wider political

network.

The political elite and media have

scrambled to deny the overlapping links

between ‘legal’ ideological

Islamophobes, like the American

Zionists Daniel Pipes, David Horowitz,

Robert Spencer and Pamela Geller, the

Dutch far-right Party of Freedom led

by the hate-monger Geert Wilders and

their counterparts in the Norwegian

Progress Party who rail against the

“Muslim threat”. The “direct action”

terrorists take their cues from electoral

parties, like the Progress Party, who

recruit and indoctrinate activists, like

Behring Breivik, who then leave the

‘electoral road’ to carry out their

bloody carnage, allowing the

‘respectable’ hate-mongers to

hypocritically condemn him… after the

outrage.

THE LONE ASSASSIN : A FASCIST

SUPERMAN TRAVELS FASTER

THAN A SPEEDING BULLET VERSUS

THE POLICE MOVING SLOWER

THAN AN ARTHRITIC TURTLE

The case for the “lone wolf terrorist”

defies credence. It is a tissue of lies

used to cover up state complicity,

intelligence malfeasance, and the sharp

right-turn in the domestic and foreign

policies of NATO countries.

There is no basis to accept Breivik’s

initial claim that he acted alone for

several outstanding reasons: First, the

car bomb, which devastated

downtown Oslo, was a highly complex

weapon requiring expertise and

coordination – the kind available to state

or intelligence services, like the

Mossad, which specialize in

devastating car bombs. Amateurs, like

Breivik, with no training in explosives,

usually blow themselves up or lack the

skill required to connect the electronic

timing devices or remote detonators

(like the unsuccessful ‘shoe’,

‘underpants’ and ‘Times Square’

bombers have proved) . Secondly, the

details of:

(a) moving the bomb

(b) obtaining (stealing) a vehicle

(c) placing the device at the strategic

site

(d) successfully detonating it

(e) then gowning up in an elaborate

special police uniform with an arsenal

of hundreds of rounds of ammunition

and driving off in another vehicle to

Utoeya Island

(f) waiting patiently while armed to the

teeth for a ferry boat

(g) crossing with other passengers in

his police uniform

(h) rounding up the Labor youth

activists and commencing the massacre

of scores of unarmed youth and finally,

(i) finishing off the wounded and

hunting for those trying to hide or

swim away - cannot accord with the

activity of a lone zealot. Even the

combination of Superman, Einstein and

a world class marksman could not

perform those tasks.

The media and NATO leaders must

view the public as passive morons to

expect them to believe that Anders

Behring Breivik “acted alone”. He is

willing to take a 20 year prison

sentence if it means, as he maintains,

that their collective action is the spark

that ignites his comrades and advances

the agenda of the violent and legal far

rightwing parties. Facing a Norwegian

judge on July 25, he publically declared

the existence of “two more cells in my

organization”. According to witness

testimony on Utoeya Island shots from

two distinct weapons were heard from

different directions during the

massacre. The police say they are…

“investigating”. Needless to say the

police have found nothing; instead they

put on a “show” to cover their inaction

by raiding two houses far from the

massacre and quickly released the

suspects.

The most serious political implication

of the terrorist action, however, is the

conspicuous complicity of top police

officials. The police took 90 minutes

to arrive at Utoeya Island, located less

than 20 kilometers from Oslo, 12

minutes by helicopter and 25 to 30

minutes by car and boat. The delay

allowed the right wing assassins to use

up the ammunition, maximizing the

death toll of young, anti-fascist activists

and devastating the Labor youth

movement.

continued next page


3


L E A D A R T I C L E

The police chief, Sveinung Sponheim,

made the feeblest excuse and cover-

up, claiming “problems with

transport”. Sponheim argued that a

helicopter “wasn’t on standby” and

they “could not find a boat”

(Associated Press, July 24, 2011). Yet

a helicopter was available; it managed

to fly to Utoeya and film the ongoing

slaughter, and over half of

Norwegians, a seafaring people for

millennia, own or have access to a

boat.

A police force, faced with what the

Prime Minister calls the ‘worst atrocity

since the Nazi occupation’, moving at

the pace of an arthritic turtle to rescue

youth activists, raises the suspicion of

some level of complicity. The obvious

question arises as to the degree to

which the ideology of right wing

extremism – neo-fascism – has

penetrated the police and security

forces, especially the upper echelons?

This level of “inactivity” raises more

questions than it answers.

What it suggests is that the Social

Democrats only control part of the

Government – the legislative, while the

neo-fascists influence the state

apparatus.

The plain fact is that the police did not

save a single life. When they finally

arrived, Anders Behring Breivik had run

out of ammunition and surrendered

turning himself over to the police. The

police literally did not fire a single shot;

they did not even have to hunt or

capture the assassin. An almost

choreographed scenario: Hundreds

wounded, 68 unarmed, peaceful

activists killed and the Labor youth

movement decimated.

The police can claim “crime solved”

while the mass media prattles about a

“lone assassin”. The far right has a

“martyr” to mask a further advance in

their anti-Muslim, pro Israel crusade.

(It is reminiscent of the celebrated

Israeli-American fascist mass

murderer, Dr. Baruch Goldstein, who

slaughtered dozens of unarmed

Palestinian men and boys at prayer in

1994).

Only two days before the political

murders, the head of the Labor Party

Youth Movement, Eskil Pederson, gave

an interview to the Dagbladet ,

Norway’s second largest tabloid, in

which he announced a “unilateral

economic embargo of Israel from the

Norwegian side” (Gilad Atzmon, July

24, 2011).

The fact of the matter is that the

Norwegian military has no problem

promptly dispatching 500 troops to

Afghanistan, half way around the

world and providing six Norwegian Air

Force jets and pilots to bomb and

terrorize Libya. And yet they can’t find

a helicopter or a row boat to transport

their police a couple hundred yards to

stop a domestic right wing terrorist –

whose murderous rampage was being

described second by second by the

terrorized young victims on their cell

phones to their frantic parents?

THE IMPERIAL ROOTS OF

DOMESTIC FASCISM :

CONCLUSION

Clearly, the decisions of Norway and

other Scandinavian nations to

participate in the US imperial crusades

against Muslim and especially Arab

people in the Middle East have aroused

and energized the neo-fascist right.

They now want to “bring the war

home”; they want Norway to go

further, to ‘cleanse the nation’ by

expelling Muslims. They want to “send

a message” to the Labor Party: Either

it must accept a full neo-fascist pro-

Israeli agenda or expect more

massacres, more elected fascists, more

followers of Anders Behring Breivik.

The “Progress Party” is now the

second largest political party in

Norway. If a “conservative” coalition

defeats Labor, neo-fascists will

probably sit in the Government. Who

knows, after a few years of good

behavior, they might find an excuse to

commute their ex-comrades sentence

or proclaim him mentally rehabilitated

and freed.

Clearly what is needed is the immediate

withdrawal of all troops from imperial

wars and a systematic, coherent and

organized fight against domestic right-

wing terrorists and their intellectual

godparents, in America, Israel and

Europe. Labor youth must go press on

with their demand that the Labor

Government, under Prime Minister Jen

Stoltenberg, recognize the nation of

Palestine and implement a total boycott

of Israeli goods and services. A national

and international political-educational

campaign must be organized to expose

the links between respectable electoral

fascists and violent terrorists. The

Labor Youth martyrs of Utoeya Island

should be cherished and their ideals

taught in all the schools. Their far-right

enemies and supporters whether overt,

covert or directly complicit, should be

exposed and condemned. The best

weapon against the renewed neo-

fascist onslaught is a political and

educational offensive, taking up the

anti-fascist, anti-Quisling (Norway’s

notorious Nazi collaborator) fighting

traditions of their grandparents’ era. It’s

not too late – if the Labor Party, the

Norwegian trade unions and the anti-

fascist youth act now before the flood

of resurgent fascism.

31 July, 2011

Professor James Petras is the author of

more than 62 books published in 29 languages,

and over 600 articles in professional journals.

Source: Countercurrents.org


4

MALAYSIA - VATICAN TIES

STATEMENTS

The International Movement for a Just

World (JUST) warmly welcomes the

establishment of formal diplomatic ties

between Malaysia and the Vatican.

Malaysia now joins the majority of the

world’s nation-states that have forged

diplomatic relations with the Vatican.

This includes a large number of Muslim

majority states.

Ties with the Vatican, it is hoped, will

enhance relations between the Muslim

majority and the Christian minority in

Malaysia. Muslims and Christians

share many common values ranging

from a belief in God and respect for

the individual person to a strong

commitment to the well-being of the

weak and disadvantaged and a deep

attachment to just and honest

governance. These shared values

should be given greater emphasis

within Muslim and Christian religious

circles, in the education system and in

the media in Malaysia.

Diplomatic relations between Malaysia

and the Vatican should also spur both

Muslims and Christians in Malaysia to

combat extremist attitudes within the

two communities and to overcome

religious prejudices and biases. Other

hurdles pertaining to the

misinterpretation and misapplication of

certain laws should also be addressed

with sincerity and honesty.

At the global level, Malaysia and the

Vatican should not only fight violence

and terrorism perpetrated in the name

of religion but also cooperate with one

another in trying to overcome the

underlying causes of various global

injustices which are mainly responsible

for much of the current global turmoil.

Religious elites should not distort and

pervert religious teachings to justify

and legitimise any form of global

injustice.

Dominance and control over global

politics and the global economy has

sometimes been rationalised through

religion. Malaysian Muslims, Christians

and people of other faiths expect the

Vatican to adopt a principled position

against any such perversion and

prostitution of religion.

It is our prayer that with the

establishment of diplomatic relations,

Malaysia and the Vatican will renew

their quest for a just and peaceful

world.

Dr. Chandra Muzaffar,

President,

International Movement for a Just

World (JUST).

20 July 2011

FLOTILLA 2 DESERVES OUR APPLAUSE

continued next page

It is a shame that the Greek authorities

have gone all out to prevent Freedom

Flotilla 2 from sailing from Greece to

Gaza. In the latest incident, a French

motor yacht, the Dignite al Karama

that managed to slip out of Greek

waters on 5 July, 2011 has been

stopped by Greek coast guards.

Earlier, the captain of a US boat, the

Audacity of Hope, was detained after

the boat was intercepted while

attempting to break the Greek ban. The

captain, John Klusmer, was released

on 5 July. A Canadian ship, Tahrir, with

activists from Canada, Belgium, Italy,

Switzerland and Turkey, was also

prevented from leaving for Gaza on 4

July, 2011.

The Greek government, it is alleged,

has succumbed to tremendous pressure

from not only the Israeli regime but also

certain governments in Europe and the

United States. It has sworn to “prevent

breach of Israel’s naval blockade.”

Greece’s current economic woes have

made it even more vulnerable to

external pressures.

Turkey, it appears, has also yielded to

pressure from the US and Israel. The

Mavi Marmara, which was at the

forefront of Flotilla 1 in May 2010,was

supposed to join Flotilla 2. At the

eleventh hour, it cancelled its

participation.

It is not just pressure upon

governments that has hobbled Flotilla

2. Two of the ships berthed at Piraeus,

the port of Athens, were damaged, it

is believed, by saboteurs. A law suit

filed in a Manhattan Court in the US

by a father and son claiming to be

victims of a Palestinian terrorist attack

in 2002 sought to delay the flotilla from

sailing. A warning letter was also sent

to maritime insurance companies that

had provided insurance to the flotilla.

Another warning letter was sent to the

giant communications firm, Immarsat,

not to provide communication services

to the flotilla.

The US Secretary of State, Hilary

Clinton, accused the flotilla of

provocation. United Nations Secretary-

General, Ban Ki-moon, tried to

persuade governments to stop the

delivery of humanitarian aid via the

S T A T E M E N T S


5

A R T I C L E S

continued next page


MURDOCH EMPIRE SINKING BENEATH THE SANDS

Freedom Flotilla 2. Leading US media

outlets criticised the flotilla for allegedly

threatening Israel’s security.

In spite of all this, we would regard

Flotilla 2 as a relative success for a

variety of reasons—even if it has not

been able to deliver its much needed

aid to the besieged people of Gaza. The

flotilla drew 300 over activists from

22 countries which in itself is an

achievement. The passengers on the

US ship, the Audacity of Hope,

included a notable holocaust survivor,

Hedy Epstein, among other Jews. It is

significant that on 4 July, 2011—US

Independence Day—the American

passengers on the boat called for the

independence of the US from Israel.

The flotilla also elicited the support of

Nobel Peace laureates. Four of them,

all women—Mairead Maguire,

Rigoberta Menchu Tum, Jody Williams

and Shirin Ebadi— in an open letter to

the UN Secretary-General called upon

him to “ support this non-violent,

international humanitarian effort.” A

number of NGOs from all over the

world have expressed support for, and

solidarity with, Flotilla 2. Even a

segment of the mainstream media—

not always sympathetic to the

Palestinian cause—was appreciative of

the flotilla’s attempt to help the

Palestinians.

The men and women who were part of

Flotilla 2 and all the others who made it

possible deserve our applause for their

commitment and their courage. Today,

more than at any other time in the past,

we have reason to be optimistic about

their struggle and the valiant struggle

of the Palestinian people and all those

who champion their noble cause.

What is important is to ensure that this

struggle remains peaceful and non-

violent—and perseveres till it triumphs.

Chandra Muzaffar.

8 July, 2011

ARTICLES

By George Galloway

“Look on my works, ye mighty; and

despair!” So said the base of the statue

of Ozymandias of Egypt - Ramasses

the Great, Pharaoh of the 19th Dynasty

of Ancient Egypt - discovered deep

under the desert sands in Shelley’s epic

poem Ozymandias.

The poet’s point being of course that

though undoubtedly great, in his day,

ultimately Ozymandias and his empire

went the way of all flesh, and all

empires. So it seems is going the empire

of Rupert Murdoch, once the greatest

media conglomerate the world has ever

known.

Absolute carnage is currently being

caused in British public life by the fall-

out from the illegal phone hacking

carried out by Murdoch’s servants. In

a story transfixing the country, there

are often developments several times

daily including arrests of powerful

people and resignations from some of

the best known public figures in the land.

Like all good scandals follow the money

is the maxim. And the question made

famous by Watergate - “What did he

know and when did he know it?” is

the one on everybody’s lips. The “he”

in question is, increasingly, the prime

minister himself.

David Cameron is slowly sinking into

the Murdoch quicksands for several

reasons. His relations with Murdoch’s

top-brass, now under investigation,

have turned out to be almost comically

close. He was a “riding partner” of

Rebekah Brooks, Murdoch’s British

CEO, who was arrested by police on

Sunday.

Since becoming prime minister just

fifteen months ago, Cameron has had

26 meetings with Murdoch’s

executives. Cameron’s wife was likely

the only person to get more meetings

with the PM than Murdoch’s

executives.

Cameron, against the advice of his

deputy prime minister, employed

former News of the World editor Andy

Coulson as his communications

director. Coulson, who has been at the

centre of the hacking probe, was

arrested on 8 July, while his deputy was

detained last week.

This has snowballed, causing the

resignation of Britain’s top two

policemen and several other senior

Murdoch executives.

Two months after Coulson was finally


6

A R T I C L E S


pushed out of his official position as

communications director, and was

under criminal investigation for phone

hacking, Cameron invited him to spend

the weekend at Chequers, the British

prime minister’s country home.

Such is the turmoil in London that

respected commentators - on Monday

for example Professor Roy Greenslade,

the pre-eminent media pundit - are

calling on Cameron’s deputy Nick

Clegg to table a motion of no confidence

in the PM.

Last week, that would have been a joke.

Today it doesn’t seem so funny, or

unlikely.

I declare an interest. I was one of the

first people to be informed by Scotland

Yard - London’s Metropolitan Police -

that my phone was being hacked by a

private investigator working for Mr

Murdoch. They visited me in my office

in parliament and told me this, so I

began a legal action which is set to

come before the courts in December.

It didn’t surprise me all that much in

the light of my role as a leader of

Britain’s anti-war movement, a

champion of the Palestinian cause for

over 35 years, and a defender of

Muslims both at home and abroad.

Even Mr Murdoch wouldn’t dispute

the fact that these are causes far from

his own heart. This throws up a

contradiction now coming more clearly

into focus.

Prince Walid bin Talal bin Abdelaziz Al-

Saud, the second biggest shareholder

in News Corporation after Murdoch,

recently gave an interview, on his yacht,

to the BBC flagship programme

Newsnight. The Saudi prince declared

himself “a good friend” of Rupert

Murdoch and his son James Murdoch

(probably the next executive to be

charged by the police in the scandal).

He defended both men briskly, but in

doing so drew attention to the fact that

he is the second biggest shareholder in

the Murdoch empire, and that the

Murdochs were major shareholders in

his own Rotana media empire in the

Middle East.

An unholy alliance, surely? Mr

Murdoch is the co-owner, with Prince

Walid, of Fox News - one of the most

virulently anti-Muslim television

stations in the world. The station gives

a megaphone to the likes of Glenn Beck,

Bill O’Reilly and Sarah Palin. In the US,

Fox’s role was to throw gallons of

petrol on the flames Islamophobia

which were leading to the burning of

the Holy Quran by vigilantes.

Then there is the so-called “Ground

Zero Mosque” controversy. The

planned building was, of course, not

at Ground Zero. It was not a mosque

but an Islamic centre. The centre was

partially funded by Prince Walid, the

co-owner with Murdoch of

Islamophobic media fire-raisers

including Fox News and the New York

Post.

Prince Walid it will be recalled was

roundly insulted by the government of

New York City when they returned the

cheque he donated to the victims of

the 9/11 attacks. A glutton for

punishment no doubt.

Murdoch’s newspapers in Britain are

little better than their US-counterparts

and include photographs and sexualised

images which would never see the light

of day in Riyadh, the Saudi capital. As

a whole it is safe to say that Murdoch’s

nearly 200 newspapers-and his

television stations in so far as he can

compel the latter which are more tightly

regulated-are bastions of fanatically

pro-Israel, anti-Muslim bigotry.

Yet they are co-owned by a member

of the Saudi Royal family who not only

approves of these practices, but

regards the mogul Murdoch as his

“good friend”.

Murdoch’s plans to take 100 per cent

ownership of British Sky Broadcasting

now lie in ruins like Ozymandias’s

broken statue. Aged 80, he may, at the

pace we are moving, be ousted by his

own shareholders before long.

His dream of a Sky Arabia, however,

remains a clear and present danger.

Like the tobacco manufacturers, the

more they are run out of towns in the

west the more they concentrate on

selling their addictive poison in the east.

NewsCorp, with Prince Walid, may be

sailing your way. Beware of pirates ye

Arabs.

18 July, 2011

George Galloway is a British politician,

author, journalist and broadcaster who was a

Member of Parliament in the UK from 1987

to 2010.

Source:Al Jazeera

The views expressed in this article are

the author’s own and do not necessarily

reflect Al Jazeera’s editorial policy.

I N T E R N A T I O N A L M O V E M E N T F O R A J U S T W O R L D A R T I C L E S

7

TEN REASONS WHY CHINA IS DIFFERENT

By Stephen S. Roach

The China doubters are back in force.

They seem to come in waves - every

few years, or so. Yet, year in and year

out, China has defied the naysayers and

stayed the course, perpetuating the

most spectacular development miracle

of modern times. That seems likely to

continue.

Today’s feverish hand-wringing

reflects a confluence of worries -

especially concerns about inflation,

excess investment, soaring wages, and

bad bank loans. Prominent academics

warn that China could fall victim to the

dreaded “middle-income trap”, which

has derailed many a developing nation.

There is a kernel of truth to many of

the concerns cited above, especially

with respect to the current inflation

problem. But they stem largely from

misplaced generalisations. Here are ten

reasons why it doesn’t pay to diagnose

the Chinese economy by drawing

inferences from the experiences of others:

STRATEGY

Since 1953, China has framed its

macro bjectives in the context of five-

year plans, with clearly defined targets

and policy initiatives designed to hit

those targets. The recently enacted

12th Five-Year Plan could well be a

strategic turning point - ushering in a

shift from the highly successful

producer model of the past 30 years

to a flourishing consumer society.

COMMITMENT

Seared by memories of turmoil,

reinforced by the Cultural Revolution

of the 1970s, China’s leadership places

the highest priority on stability. Such a

commitment served China extremely

well in avoiding collateral damage from

the crisis of 2008-2009. It stands to

play an equally important role in driving

the fight against inflation, asset bubbles,

and deteriorating loan quality.

WHEREWITHAL TO DELIVER

China’s commitment to stability has

teeth. More than 30 years of reform

have unlocked its economic dynamism.

Enterprise and financial market reforms

have been key, and many more reforms

are coming. Moreover, China has

shown itself to be a good learner from

past crises, and shifts course when

necessary.

SAVING

A domestic saving rate in excess of 50

per cent has served China well. It

funded the investment imperatives of

economic development and boosted the

cushion of foreign exchange reserves

that has shielded China from external

shocks. China now stands ready to

absorb some of that surplus saving to

promote a shift toward internal

demand.

RURAL-URBAN MIGRATION

Over the past 30 years, the urban share

of the Chinese population has risen

from 20 per cent to 46 per cent.

According to OECD estimates, another

316 million people should move from

the countryside to China’s cities over

the next 20 years. Such an

unprecedented wave of urbanisation

provides solid support for

infrastructure investment and

commercial and residential

construction activity. Fears of excess

investment and “ghost cities” fixate on

the supply side, without giving due

weight to burgeoning demand.

LOW-HANGING FRUITS:

CONSUMPTION

Private consumption accounts for only

about 37 per cent of China’s GDP -

the smallest share of any major

economy. By focusing on job creation,

wage increases, and the social safety

net, the 12th Five-Year Plan could spark

a major increase in discretionary

consumer purchasing power. That

could lead to as much as a five per

cent point increase in China’s

consumption share by 2015.

LOW-HANGING FRUITS: SERVICES

Services account for just 43 per cent

of Chinese GDP - well below global

norms. Services are an important piece

of China’s pro-consumption strategy

- especially large-scale transactions-

based industries such as distribution

(wholesale and retail), domestic

transportation, supply-chain logistics,

and hospitality and leisure. Over the

next five years, the services share of

Chinese GDP could rise above the

currently targeted four per cent point

increase. This is a labour-intensive,

resource-efficient, environmentally

friendly growth recipe - precisely what

China needs in the next phase of its

development.

FOREIGN DIRECT INVESTMENT

Modern China has long been a magnet

for global multinational corporations

seeking both efficiency and a toehold

in the world’s most populous market.

Such investments provide China with

access to modern technologies and

management systems - a catalyst to

economic development. China’s

upcoming pro-consumption

rebalancing implies a potential shift in

foreign direct investment - away from

manufacturing toward services - that

could propel growth further.

EDUCATION

China has taken enormous strides in

building human capital. The adult

literacy rate is now almost 95 per cent,

and secondary school enrolment rates

are up to 80 per cent. Shanghai’s 15-

year-old students were recently ranked

first globally in mathematics and

reading as per the standardised PISA

metric. Chinese universities now

continued next page


8

A R T I C L E S


CAPITAL FLIGHT IN INDIABy AFP

Rich Indians and companies hold about

$2.5 billion in Swiss accounts,

according to a report quoting the Swiss

central bank, amid anger in India about

the stashing of illicit funds abroad.

Walter Meier, spokesman for the Swiss

National Bank, said Indian deposits

stood at 1.95 billion Swiss francs ($2.5

billion) at the end of 2010, according

to the Press Trust of India news

agency in a Sunday dispatch from

Geneva.

The sum included $2.1 billion in

savings and deposits by individuals,

financial institutions and companies.

The remaining $400 million represented

deposits in Swiss accounts held by

wealth managers on behalf of

Indian clients.

India’s Supreme Court earlier this

month ordered a probe into undeclared

money in foreign bank accounts, while

accusing the government of “serious

lapses” in handling the issue.

Opposition parties have been quick to

pick up on public anger over the so-

called “black money” issue, accusing

the Congress-led government of

seeking to cover up the scale of the

problem.

The issue of so-called “black money”

—funds not reported to the

government for tax purposes or parked

abroad to avoid tax — is one of the

latest problems to engulf Prime Minister

Manmohan Singh’s administration.

Indians had moved out some $500

million from Swiss banks since 2008,

according to the Swiss central bank’s

figures, While the Swiss bank did not

reveal the reasons behind the flight of

money, Indian regulatory officials

believe Indians may be moving funds

to harder-to-trace accounts in places

such as Singapore and Dubai.

Meier was quoted as saying the vast

majority of deposits from India were

held in two of Switzerland’s

biggest banks, UBS and Credit Suisse.

The US-based think-tank Global

Financial Integrity last November

estimated that from 2004 to 2008, India

lost $19 billion per year in illicit financial

flows out of the country.

Last year, India said a tax pact signed

with Switzerland should help the

government track illicit Indian funds

in Swiss bank accounts but Finance

Minister Pranab Mukherjee said the

measure would not be

retroactive.

25 July, 2011

AFP (Agency France Presse) is France’s

biggest news agency.

Source: AFP

graduate more than 1.5 million

engineers and scientists annually. The

country is well on its way to a

knowledge-based economy.

INNOVATION

In 2009, about 280,000 domestic

patent applications were filed in China,

placing it third globally, behind Japan

and the United States. China is fourth

and rising in terms of international

patent applications. At the same time,

China is targeting a research-and-

development share of GDP of 2.2 per

cent by 2015 - double the ratio in 2002.

This fits with the 12th Five-Year Plan’s

new focus on innovation-based

“strategic emerging industries” - energy

conservation, new-generation

information technology, biotechnology,

high-end equipment manufacturing,

renewable energy, alternative materials,

and autos running on alternative fuels.

Currently, these seven industries

account for three per cent of Chinese

GDP; the government is targeting a 15

per cent share by 2020, a significant

move up the value chain.

Yale historian Jonathan Spence has long

cautioned that the West tends to view

China through the same lens as it sees

itself. Today’s cottage industry of

China doubters is a case in point. Yes,

by our standards, China’s imbalances

are unstable and unsustainable. Chinese

Premier Wen Jiabao has, in fact, gone

public with a similar critique.

But that’s why China is so different. It

actually takes these concerns seriously.

Unlike the West, where the very

concept of strategy has become an

oxymoron, China has embraced a

transitional framework aimed at

resolving its sustainability constraints.

Moreover, unlike the West, which is

trapped in a dysfunctional political

quagmire, China has both the

commitment and the wherewithal to

deliver on that strategy. This is not a

time to bet against China.

31 May, 2011

Stephen S Roach, a member of the faculty

at Yale University, is Non-Executive

Chairman of Morgan Stanley Asia and author

of The Next Asia.

Source: Project Syndicate

A version of this article first appeared on

Project Syndicate.

A R T I C L E SI N T E R N A T I O N A L M O V E M E N T F O R A J U S T W O R L D

9

continued next page

WHAT THE AMERICAN PUBLIC SHOULDN’T KNOW

By Kourush Ziabari

Many people around the world might

have credulously or perhaps naively

fallen in the trap of believing the

tempting claims of the U.S. statesmen

and politicians who say that their

country is a “beacon of freedom” and

a “pioneer of democracy.”

It’s a bitter reality that many of us have

been defeated and overwhelmed by the

propaganda of the U.S. mainstream

media who incessantly attempt to make

their audiences believe that democracy

and freedom are originally American

values and cannot be found anywhere

else in the world, that all of the world

nations need the United States to

achieve these values and that the United

States must resort to every instrument

to export these home-made values to

the rest of the world, including frequent

military expeditions.

But what’s the reality on the ground?

Who really knows about what’s taking

place behind the scenes? How much

difference is there between the United

States which is trimmed and made neat

to be put before the eyes of the

international community and the United

States which mercilessly and

inexcusably deprives its own people of

getting informed about the latest

developments in the world? Isn’t it

ironic that the same United States

whose leaders always boast of

democracy, freedom and equal

opportunities set off media outlets to

direct black propaganda against

countries such as Iran while preventing

its people from having access to the

content of such media?

If you’re familiar with the conventional

double standards and hypocrisy of the

American type, you might have heard

about the US Information and

Educational Exchange Act of 1948,

popularly known as the Smith-Mundt

Act.

This discriminatory and indefensible

act which was first signed into law by

President Harry S. Truman on January

27, 1948 after getting approval by the

80th Congress is, in a nutshell, a

regulation which allows the United

States to establish and initiate media

outlets which are aimed at non-

American audiences in order to further

the diplomatic and political objectives

and interests of the U.S. overseas;

however, these media outlets, including

radio and TV stations, are unavailable

to the U.S. citizens, and to put it more

succinctly, it’s forbidden for them to

have access to these media channels.

The legislation which was introduced

in the House of Representatives

Committee on Foreign Affairs at the

request of State Department,

authorizes the U.S. State Department

to communicate to audiences outside

of the borders of the United States

through broadcasting, face to face

contacts, exchanges, online activities,

the publishing of books, magazines,

and other media of communication and

engagement. Funding for these

activities comes from other legislation

passed by the U.S. Congress called

appropriations.

According to this law, the materials

which are produced to be broadcast

through certain American media outlets

cannot and should not be disseminated

and publicized domestically and can

only be available to the members of

Congress and academicians. With the

concerted efforts of several U.S.

Congressmen, the Act was amended

to read: “no program material prepared

by the United States Information

Agency shall be distributed within the

United States.”

However, it’s interesting to note that at

the time of working on the compilation

of the Smith-Mundt Act, fierce

controversies had arisen among the

congressmen, including a quarrel over

how to “remove the stigma of

propaganda” from this law, because

even the U.S. lawmakers had come to

the conclusion that it was an all-out

replica of the propaganda machinery

of the former Soviet Union and Nazi

regime.

Seven radio and TV stations are

covered by the Act, two of which are

exclusively dedicated to Iran: Radio

Farda and Voice of America. It means

that the American citizens cannot watch

the TV programs which VOA airs and

listen to what the Radio Farda

broadcasts. This clearly shows that the

U.S. statesmen and politicians have

predetermined and programmed plans

for the nationals of Iran and it’s on their

agenda to sow the seeds of discord

between different groups of Iranian

nation by airing programs in which

nothing can be traced but is mere

propaganda, falsification and

fabrication.

A quick look at the performance of

media outlets such as VOA and Radio

Farda helps us comprehend that

making the Iranian nation worried about

the current situation of the country,

spreading falsehoods and untruths

about the course of events and

developments in the country and

advertising the large-scale policies of

the White House and the Israeli regime


10

continued next page

state government and often self

regulating. Under the circumstances,

political decisions are often made with

little regard to the sustainability of the

water services industry in the long

term. Rising cost with limited tariff

adjustment and poor services will

eventually lead to high indebtedness that

future generations may be left to pay.

The cost of consuming water is not

confined to the treatment and

distribution of water. Every drop of

water that we consume produces a

drop of wastewater that we need to

treat before discharging back to the

environment. The cost of treating

wastewater is inevitably higher than the

cost of treating raw water for

consumption. If we do not treat

wastewater well, we pollute the rivers

that carry the wastewater discharges,

killing the source of our future

generation.

With the rising population and growing

affluence of the people, the quick fix

to meet the rising demand for treated

water is privatization and more

recently, public private partnership

(PPP). The water services value chain

is typically dichotomized to privatize

out water treatment (and in some cases

with water distribution) or ceded out

in the form of PPP. In a number of

cases, the water services industry is

growth trend worldwide, the water

services industry in the developing

world will face major challenges in

keeping with the demand of the already

challenging times that the water

industry is currently facing in

developing countries. Not surprisingly,

the population growth is particularly

significant in Asia.

The challenges facing the water

services industry in the developing

world are manifold and chief of which

is the systemic issue of transparency

and accountability arising from the

procurement processes and their

performance. The lack of transparency

and accountability have often led to

bloated capital expenditure and

operating expenditure that the

consumers and taxpayers are left

paying.

Typically, the water supply and

sewerage services are under the

control and management of the local

councils, municipalities, provincial or

Water is a gift from heaven— indeed

if you can harvest the rain. The bulk

of the rain runs off on the surface to

the streams and rivers and eventually

to the sea. Some evaporate back to

nature. The rest dissipates to the

ground. The treated water that you get

when you turn on the tap goes beyond

the gift of nature. It comes with cost

of treatment, research and distribution.

Some have argued that water is a

human right. Accessibility to clean

water is the right of human dignity.

Someone has to bear the cost. The right

to consume clean water comes with

responsibility for the environment and

for cost. In most parts of the

developing world, that cost is left to

be borne by the coffers of the

government, which is funded by the

minority – the taxpayers. With limited

funds and low water tariff, the water

utility sector in the developing world

has remained underdeveloped and in

dire straits. The low quality of service

in turn leads to unwillingness of

consumers to pay for water tariff

increase. The lack of funds stifle the

development of the water infrastructure

system, leading to leakages, clogged

pipes, low pressure and poor quality

service resulting in a downward

spiraling vicious cycle of the water

services sector.

Based on the projected population

By Chin Yoong Kheong

WATER - CHALLENGES IN THE DEVELOPING WORLD

with regards to Iran are the main

objectives of these state-run media

which are sumptuously funded and

excessively supported by the U.S.

government.

According to the statistics released by

Washington Post, the U.S. Congress

has allocated an annual budget of $7

million to Radio Farda and by using this

profuse amount of money, this soft

war machine unremittingly produces

and disseminates falsehood and

mendacious propaganda against the

nation of Iran.

Maybe, it might be necessary for the

people of the United States to know

where their taxes go and how their

government spends on its unrelenting

wars with the countries which don’t

want to fall under the umbrella of U.S.

hegemony.

The American people are deprived of

listening to the propaganda of Radio

Farda and VOA; however, it is vital for

them to know that their government

does not really represent a “beacon of

freedom” nor does it have the features

of a “pioneer of democracy” but is

more of a propaganda machine

programmed to wage wars and win

profits.

11 June, 2011

Kourosh Ziabari is an Iranian journalist

Source: Countercurrents.org



11


then split into water treatment, water

distribution and sewerage services;

with each service rendered by different

entities with different economic

interest. Given the fast rising demand

for water services and the risk

associated with the challenges faced

by the industry as a whole, private

sector participation has often come in

with some form of assurance of

returns. With the great need to meet

the fast rising demands of the

population, the government cedes to

the private sector’s term of returns

assurance. The assurance may be in

the form of guaranteed internal rate of

return (IRR) or guaranteed tariff

increase or both. The associated risk

essentially pushes up the funding cost

of infrastructure development.

Privatization or PPP seems the natural

mode of funding infrastructure given

that the breath and depth of the capital

markets in the developing countries are

fairly undeveloped. PPP, if not well

regulated, can do more harm than

good for developing countries in the

long run.

There is no uniformity in privatized

arrangements made across different

states/province in a country. This leads

to different levels of performance

between private operators and uneven

management of water services across

a country. Given a self regulating

structure, the inherent industry

structure does not provide a proper

mechanism for proper feedback to

National, and State/Provincial

government on their level of satisfaction

on service delivery. The lack of an

effective structure gradually increases

inefficiency of water distribution,

leading to flawed cost structures for

water operators and poorly determined

tariff rates for consumers.

There is a great need to reform the

water services industry in the

developing countries. The fundamental

keys to the reforms lie in addressing

both efficiency and effectiveness on

one hand and funding on the other. A

self regulatory structure does not work

in the water services industry which

is deeply entrenched in a myriad of

local councils, provinces or states.

There is a need to establish a strong

and largely independent national

regulator that can promote and drive

efficiency to the industry operators

whilst recognizing the interest of

various stakeholders. Given the

developing status of these economies,

the national regulator needs to define

clearly the socio-economic objectives.

The industry reform must derive a

sustainable business model in the long

term that adequately addresses the long

term funding issue.

With the industry operating at below

full cost recovery, it is imperative that

the funding solution must address the

needs of the industry to fund

infrastructure development in the long

term. The capital markets in the

developing world cannot match such

needs. The tenure of funding is

relatively short and given the risk of

below full cost recovery, the funding

cost is high. Often a privatized water

services operator would borrow short

to finance long resulting in an unstable

funding regime. The key lies in

developing a PPP model that leverages

the strengths of both the private sector

as well as the public sector for the

industry as a whole. The model needs

to address the different risk profile of

each country to carve out an

appropriate model specific to that

country.

Malaysia has taken a bold move in the

water services industry reform. It has

changed the Federal Constitution to

take the power of regulating the

industry to the Federal level, a politically

mammoth task that was successfully

done with substantial buy-ins. An

economic model was then designed to

achieve full cost recovery taking into

account the need to settle existing

debts, driving efficiency and

effectiveness, raising long term cheap

financing whilst balancing the social

objectives and raising the customer

service levels. In 2004, the then

Ministry of Energy, Water and

Communication led by the Minister

with the backing of the Cabinet

managed to table and pass two

important pieces of legislation, the

Water Services Industry Act that sets

out the reforms and power of regulation

and the National Water Services

Commission Act that establishes the

national socio-economic regulator. The

reforms set out to establish the

following initiatives:

1. Bridge the funding gap

2. Widen breadth and depth of the

capital market

3. Comparative regulatory structure

4. Consumer focus with transparency

and accountability

In embarking on the reforms, Malaysia

studied the various regulatory models

in various developed countries and

recognized that the challenges of these

developed countries are significantly

different. Recognizing the differences,

Malaysia has managed to carve out a

model that is more suited to the

challenges of the developing world. It

has mapped out the direction forward

for a holistic water services industry

that encompasses water abstraction,

treatment, distribution and wastewater

treatment in the long term. Confucius

once said, the journey of a thousand

miles starts with the first step.

Malaysia has taken a giant leap and has

begun the journey up the mountain of

long term sustainability.

18 July, 2011

Dr. Chin Yoong Kheong is a chartered

accountant and partner of KPMG. He is also

an Executive Committee member of the

International Movement for a Just World

(JUST)

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The International Movement for a Just World isa nonprofit international citizens’ organisationwhich seeks to create public awareness aboutinjustices within the existing global system.It also attempts to develop a deeperunderstanding of the struggle for social justiceand human dignity at the global level, guided byuniversal spiritual and moral values.

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