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Revolutions in North Africa/ Intervention in Libya: Economic Backgrounds

In the public debate, the economic root causes for the impoverishment  of North African countries and for the resulting revolts are barely discussed. We talked to the Canadian economist Michel Chossudovsky, head of the Centre for Research on Globalization, Samir Amin of the Third World Forum und Mamdouh Habashi of the International Forum for Alternatives about the role of the International Monetary Fund, the demands of the protest movements and the influence of the U.S. We also asked M. Chossudovsky about the possible motives behind the military intervention in Libya.


Samir Amin (Third World Forum, Kairo/Dakar), Michel Chossudovsky (Autor von "Global Brutal", Research Centre on Globalization, Kanada), Mamdouh Habashi (International Forum for Alternatives, Kairo)



David Goeßmann: Welcome to Kontext TV. In our broadcast we will be focussing on the poverty crisis in Africa.

Fabian Scheidler: Poverty in Africa is already indicated by two figures: EU citizens earn 26 times more on average than citizens of African countries. The Gross National Product of the whole African continent is only one third of the economic performance of Germany, although Africa has 12 times as many inhabitants as Germany: around one billion. The root causes for this inequality are manifold, reaching from European colonialism to the economic structural adjustment programmes imposed by the International Monetary Fund since the 1980s.The situation in many African countries is currently exacerbated by what has become known as Land Grabbing, the massive buying-up of land by foreign investors, and by aggressive EU trade policies. But before we turn to these issues, we want to focus on the background of the revolutionary movements in North Africa. In the public debate, economic root causes for impoverishment and the resulting revolts are barely discussed yet. We talked to Michel Chossudovsky in Montreal/Canada via Videostream. Chossudovsky is professor emeritus at Ottawa University. He worked for the United Nations Development Programme and as a consultant for governments of developping countries around the world. He is now director of the Centre for Research on Globalization. One of his best known books is „The Globalization of Poverty: Impacts of IMF and World Bank Reforms“

David Goeßmann: Welcome to Kontext TV, Mr. Chossudovsky. It's good to have you with us. Before we start, we want to play a statement of Samir Amin of the Third World Forum in Dakar to you.

Samir Amin: Since the beginning of Sadat that is before Mubarak, Egypt has moved to just accepting these so called adjustment to the global system and the alignment on the U.S. And it is the World Bank, USAid, the IMF and so on who have taken over dictating the economic policy of Egypt. Which has been what should have been expected a disaster in terms of social effects. Massive pauperisation in a country where the poor are already poor. Massive acceleration of expropriation of small poor peasants. And massive unemployment and growing unemployment of even educated people. Massive deterioration of the conditions of the lower strata of the middle classes. All that massive. So when it is said by the World Bank that Egypt is not doing bad, five percent of growth blablabla, and that is even coming close to an emerging country blablabal, the people have not only not benefited but have been the victims of that. So therefore there is no possibility, no alternative to say no and to decide independently of another policy and to compel the global system to adjust and not the reverse.

Fabian Scheidler: Which role have the International Monetary Fund and other international organisations played in impoverishing North Africa?

Michel Chossudovsky: The countries of North Africa have been subjected to the same IMF programs applied worldwide in countries across the globe essentially in developing countries. It's the standard set of measures which consists of destabilizing the national economy opening it up to free trade which often leads to the destabilisation of agriculture. It consists in currency devaluation which then results in inflationary pressures leading to supression of real wages, cuts in social services. It's a standard package. And essentially it leads to the impoberishment of millions of people, it destroys people's lives and it also creates a vacuum in the entire economic process internally within the countries. It destroys the capabilities of the governments to finance its own development. The important shift came in the hight of the Gulf War which involved the participation of Egypt in the war along side several other Arab states. One of the conditions of Egypts participation was the cancelation of a rather sizable military debt with the United States as well as the adoption of sweeping IMF reforms which were imposed pretty much at the time of the Gulf War. I happen to be in Egypt at the very moment when the reforms were being negotiated. In fact I was the guest of the Ministery of Finance. I spoke to people in the Central Bank, the Ministery of Finance. I met several Ministers. I also addressed an audience of civil servants, advisors to the presidency. And the consensus was: Everybody was against this. I'm talking about the officials. Everybody was against this program at all levels of government including the advisors to the presidency, that was Mubarak. And they said: "We can not do anything. Our hands are tied." So that in effect none of these people within the Mubarak government decided on anything. It is the foreign advisors, people from the IMF, from the U.S. state department. The decisions are not taken in Cairo, they are taken in Washington. And those circumstances from my standpoint reflect circumstances which prevailed in Egypt at the time which again prevail today. And the impacts of this program, the 1991 program, are devastating. First of all it was the first stage in the deregulation of food prices. From there on the prices of food started to go up. It was heavily subsidies in the outset. It was also the beginning of the destabilisation of agriculture. The IMF and the World Bank are bureacracies. I'm not saying that they necessarily call the shots. But they act on behalf of Wall Street. We should in fact be describing this as the Wall Street Consensus rather than the Washington Consensus. And I should mention - and this is very important - the protest movement was not directed against the IMF and the United States and its interference in the affairs of the Egyptian state. In fact quite the opposite. Why is it that the U.S. embassy, all the delegations of the European Union, all the IMF and the World Bank were not the target of the protest movement? In other words it was the replacement of an individual, of a president, of a puppet. It was not directed against the puppet masters, the people who pull the strings behind the scenes. So that this a fundament issu. That protest movement from the outset did not really address the main issue which was the cause of impoverishment namely the fact that foreign powers controll the Egyptian state apparatus. And the reason for that is it maybe based on a misunderstanding. There were a number of opposion groups, civil society organisations which are supported by U.S. foundations, which were brought to Washington to meet with the state department and so on and so forth. We have evidence of high level meetings between the opposition movement and Hillary Clinton and previously with Condolezza Rice. Why is it that they bring the representatives of the opposition party, opposition civil society groups to Washington to meet members of Congress, to meet the National Security Advisor, to meet with the Senat foreign Relations Committee and so on. It is clear that the United States wants to controll the opposition which may at some future day form a government. The April 6 movement, Kifaha, they are supported by U.S. foundations. And consequently the hands are tied when the issue of addressing the relationship of their country to U.S. influence and U.S. demands or the demands of international financial institutions, banks and so on. That is something you don't talk about. And consequently that protest movement is at an impasse. I think that a number of the leaders of that movement have in effect betrayed the grassroots. And now the protest movement is continuing and is addressing some of these issues but it's no longer an object of media coverage because now people are more concerned in assuring that there will be some kind of meaningful change in the government of Egypt rather than replacing one individual by another and maintaining the continuity of the military regime.

David Goeßmann: The U.S. and EU are thinking about military interventions in Libya. Which interests are behind this?

Michel Chossudovsky: I can assure you that this is not a humanitarian undertaking. It is part of what we would describe as a battle for oil. It is intended to ultimately confiscate and take control of 3.5 percent of world's oil and gas reserves. Almost twice of those of the United States of America. Libya is the largest oil economy in Africa. It has the highest reserves. It produces a large percentage of the oil requirements of the European Union perticularily France and Italy. The hidden agenda of this proposed military intervention is ultimately to destabilize a government, to establish a framework whereby the national oil company of Libya, the national oil corporation would be privatized and eventually foreign oil companies will take control of Libya's oil wells. That is the scenario. It's the same scenaria as in Iraq essentially and it's using a humanitarian pretext to implement a major military operation which I think will have devastating consequences not only for the Libyan people but also for the world as a whole. And why? At present we have three areas of conflict in the Middle East and Central Asia. Afghanistan, Iraq and Palastine. If there is a military intervention in North Africa this will lead to the creation of the fourth war theatre with the possibility of escalation. The objectives of the United States are strategic. This is a country which has not being untill recently under the brand of IMF-World Bank reforms.

Fabian Scheidler: That was Michel Chossudovsky, via video stream from Montreal, Canada. In Berlin, we talked to Mamdouh Habashi from the International Forum for Alternatives, Cairo, about the situation in Egypt and the perspectives for the democracy movements.

Mamdouh Habashi: People in Egypt are looking at democracy as a means and not as a goal in itself. They immediately want to see improvements in terms of minimum wages, health care, education. housing, pensions and so on. These are urgent demands, they have been urgent for years becoming more and more crucial. And if there is no quick improvement for the large population, for the lowest strata of society, we are seriously in trouble. Democracy for us is not only elections. We understand democracy as a system leading also to social progress for the poor. Otherwise it is not a real democracy but only a fake democracy – a democracy for corporations. And that is not the type of democracy we want to have.