QUOTE OF THE WEEK
"The smallest minority on earth is the individual. Those who deny individual rights cannot claim to be defenders of minorities."
-- Ayn Rand

The Week in Review

Le Clézio awarded Nobel Prize for literature

-- Paramanund Soobarah  

Amid all the doom and gloom on the electronic media about the economic downturn a piece of news has shot through like a shaft of lightning: Jean-Marie Gustave Le Clézio has been awarded the Nobel Prize for literature. This is a glorious achievement by a fellow citizen the like of which has never been seen nor even hoped for before. May all our bells toll in his honour. All Mauritians should join together in celebration of this victory for weeks. The feat should be carved in stone in our public places for all to see for all time to come.

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Downturn spells end to buccaneering and signals downfall of the West

Until recently, when the United States and European economies caught a light cold, the rest of the world caught pneumonia. Not this time. The rest of the world, led by China, India and Brazil, have been improving their health. When the America caught bronchitis last week, and Britain and Europe followed suit, the rest of the world merely caught a bad bout of influenza from which they will recover quite quickly.

The emerging economies are not yet totally independent of the rest of the world, nor need they be. But the extent of that dependence until recently led to belief that western principles of doing business and of governance generally, which can be summed up as total non-interference by government in market operations and unbridled capitalism, with the working classes having to rely only on trickledown crumbs from the wealthy classes, were superior to those of other countries.

The United States particularly had overbearing influence on the policies of the World Bank and the IMF. Officials from those organisations went around the Third World, insisting that these principles be incorporated in the national systems of governance of the countries they visited before they would extend any assistance. Abolish all subsidies, they would say, and tax all savings – the bastards must not be allowed to grow rich; tax all those who have built themselves homes: beggars must be treated like beggars, and never allowed to get near the caviar of the rich; the world will go upside down if they do. These days are happily coming to an end. We will have to face some tough times in the coming months, but it will be well worth it. But we do hope that our Prime Minister draws the appropriate lessons from the momentous events of the past week.

Margaret Thatcher and Ronald Reagan gave an aura of respectability to buccaneers and unleashed them upon the world, not upon the world's oceans as the first Queen Elizabeth did, but in the world's stock markets. People made millions without doing any work at all. CEOs who took the biggest risks brought in the biggest rewards to their shareholders, and were rewarded in their turn by multi-million dollar salaries and bonuses. In many cases, even when the companies they managed failed (as must happen from time to time), the CEOs walked away with tens of millions of dollars. Such packages are now referred as golden packages, golden parachutes and golden handshakes; and those to benefited from as "fatcats". People's representatives in Parliaments around the world are waking up to the criminal activities of such fatcats, and if their statements are anything to go by, the era of unbridled capitalism is over. We also hope that the World Bank and the IMF will act to reign in the experts they have sent around the world to mess up the lives of normal, hardworking folk.

To give a current example of how fatcats behave, we report the following behaviour of the executives of the famous American Insurance Group, which recently had to be bailed out at the cost of $85 million dollars by the US Treasury. What do they do on receiving the money? Believe it or not, they send their top executives on a $440,000 holiday, complete with spa treatments, banquets and golf outings in an exclusive resort. To make matters worse, it now appears that the Treasury will have to pour thirty or forty million dollars more into AIG to save it. These executives have to be kept under very strict surveillance – even if you have to let all pickpockets in the country run loose. If the people you entrust the keeping of your coffers to engage in plundering it, you have to think hard and do something about it while you are still able to do so – dilly-dallying may spell total disaster for you.

Saving American and European banks from collapse

It will be recalled that in the wake of the credit crunch, namely the unwillingness of banks to provide loans to households for their normal operations and to one another, the Bush Administration had approached Congress with a $700 billion bailout package, and that on Monday 29 September Congress rejected the request. The New York stock market fell heavily in the wake of that decision, and panic gained the other markets around the world as they opened with the rising sun. By all accounts the falls in Asia were not as heavy as they would have been in similar situations in earlier years.

On Tuesday the Market recovered somewhat. The politicians got together, and put some more "pork" into the bill; that is to say, they put in some additional provisions, which certain members regarded as important for their constituents – like extending tax breaks to manufacturers of "wooden arrows" and "Puerto Rican wine". (Pork barrel budgeting is a standard feature of American politics. It is to be hoped that people around the world rise up and tell Americans that the practice is nothing else but rank corruption and that it disqualifies them from publishing corruption indices of the various countries around the world as they do every year).

The Senate passed the revised bill on Wednesday, and the House of Representatives followed suit on Thursday night (i.e. Friday morning our time.) But the Stock Market fell substantially even after that. Just voting the rescue package, as the bailout package is now called, is not enough to solve the economic problems. It will take time to work its way through to the individual banks, which can then ease up on credit. The situation in America is not much improved a full week later; Treasury Secretary Henry Paulson has even warned that some more banks can fail.

The financial tremors in Europe

The American earthquake started with millions of loans being extended to people who could not even afford the repayment of the first instalment, let alone the second and seventy-second ones. All that the agents were concerned with were their commissions; no sooner were the papers signed than they were packaged and sold off to the big banks like Freddie Mac and Fannie May, and to banks around the world. The very serious and respectable Swiss banks UBS and Crédit Suisse lost 40 and 30 billion dollars respectively by investing in these worthless papers. That they have been able to sustain such gigantic losses and still remain afloat says something about their strengths. But the countries of Europe that are involved most closely with the American financial system are Britain and Ireland, and the credit crunch reached their shores very quickly.

Ireland moved to guarantee all bank deposits in the country. The British had to move fast, and they raised the guarantee level from £35,000 to £50,000. President Sarkozy called a meeting of the Big Four of Europe – France, Germany, Italy and Britain -- to decide on a common action, but it is not clear what was decided, for just on the next day, Germany offered a blanket deposit guarantee to the major bank Hypo Real Estate. The Eurozone countries got together and agreed measures to bolster their banks, but each country tends to act separately. Prime Minister Sylvio Berlusconi has famously stated that no Italian bank will fail. What is going on in Europe can only be described as panic.

In Iceland, particularly, all three major banks have failed; the country is being described as "bankrupt". Icelandic banks used to offer very high rates of interest to depositors from Europe, and many were Europeans including many Britons were lured into putting their savings into Icelandic banks. Now that all Icelandic banks have failed and all accounts closed, a situation of cold war has developed between Iceland and the rest of Europe – particularly where Britain is concerned, because, tempted by the high rates of interest, even city councils and other parastatal bodies deposited their millions in Icelandic banks. The total amount owed by the Icelandic banks is several times the GDP of the country. They will have to sell themselves several times over before they can repay their debts.

A whiff of fresh air came from USA, where the Federal Reserve decided to cut interest rates by half a percent. The European Central Bank and the Bank of England followed suit, and on the following day so did the Asian Central Banks. This seems to have slowed the falling trend in the stock markets, but the world still remains deep in the woods, with Iceland particularly so.

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In Politics, smearing and mudslinging the order of the day

Ever since the hockey mom joined the Republican ticket, smearing has become the main method of campaigning by Senator McCain. Commentators say that racism has also entered the campaign as never before. Some say that even if Senator Obama reaches election day with a 6 percentage point advance, he would still be likely to lose because of the race factor. Currently the CNN "poll of polls" stands at 48-44 in favour of Obama. The Democratic Party must work very hard to improve upon that.

It must be reported with disappointment and even sadness that Senator John McCain, who had left us with the impression of being "un chevalier sans peur et sans reproche" is proving himself to be just another one of those white conservatives who have no regard whatever for the dignity of the coloured people. In the second presidential debate, he contemptuously referred to Senator Barack Obama just as "that one." The American nation should rise and punish him for his arrogance and stupidity. It is also becoming clearer that he has little capacity for deep thought; all he can do is recite slogans and sound bites learnt by heart.

The elections are now just over three weeks away, and the campaign promises to get dirtier and dirtier. A final debate is scheduled for October 15; it is to be hoped that it will be carried out in a civilised manner.

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Europe and the Middle East

Russia has withdrawn its military forces away from Georgian territory in accordance with the undertaking it gave to President Sarkozy of France. Not everybody will find this sufficient, for the McCain camp argues that Abkhazia and South Ossetia are still to be considered as Georgian territory.

Concerning Kosovo, Serbia has won a vote in the United Nations permitting it take the matter to the International Court of Justice. This is a development we should all follow carefully.

In Ukraine, the government has been dissolved, because one faction in Parliament is pro-Russian and the other pro-American. Fresh elections will be held in December, but it is doubtful whether the stalemate will be resolved.

The question of missile sites in Poland remain a very sore point with Russia, as do several other actions of the Americans in spite of the promises made to Boris Yelstin that Russia would be welcomed as a friend and even invited to join NATO.

Spain is still struggling to come to terms with its terrible past. Thousands of people were murdered by the Franco regime during the Spanish Civil War. A judge has now decided to open an enquiry into those killings and has ordered all parties, including the Army and the Church, to open their records to his investigators. May justice prevail.

In the Middle East the spate of "suicide" bombings has continued. But one very significant development is that outgoing Prime Minister Ehud Olmert has said, publicly the first time ever for an Israeli politician, that there will be no peace in the area until all territories taken in the 1967 war are returned to the Palestinians. What is the most elementary truth to us all is the worst piece of blasphemy to those who believe in the divine promises made by God Almighty. He was severely criticised and insulted for that statement, but all right-thinking people in Israel, in Palestine and around the world agree with him.

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The Subcontinent
Will change come to Pakistan?

The bombing of the Marriott Hotel has been followed this week by the bombing of the Police headquarters in Islamabad – this time with a box of 'chocolates'. There were only ten or twelve deaths and a slightly larger number of other casualties this time, but the message from Al-Qaeda or the Taliban is equally ominous.

In one highly significant development, President Asif Ali Zardari has stated that India has never been a threat to Pakistan. This pulls the rug from under the Pakistan Army, for the only reason for their existence, and their cornering the totality of the resources of the country, is that they must prepare for an attack from India. The ISI, the secret arm of the Army, spends its entire resources planning the destruction of the Indian State by all means possible: in almost all attacks on India, with the exception of the Hindu-Christian acts of violence, there can be seen signs of the involvement of the ISI. If there is no threat from India, there is no reason for the existence of the ISI, or indeed for spending billions on defence. Defensive equipment is still required, but the sort of equipment required to fight down Al Qaeda or the Taliban is not the same as that required to fight a military power like India.

India
The Indo-US nuclear deal

The immediate result of the deal is that India will be able to purchase nuclear fuel and nuclear technology from the USA for its vast domestic energy requirements, and American companies will be able to make some profit from that. But much deeper reasons and motivations underlie this deal. Ever since Independence, India under Nehru had opted for neutrality in the Cold War, and had always gone to Russia for its military purchases. As far as Americans are concerned, if you are not with them, you are against them. Neutrality is a concept they do not understand. Besides western countries were not agreeable to selling their equipment to India when Pakistan was their solid ally – through membership of the military alliances known as CENTO and SEATO.

Even when these two alliances were abandoned, Pakistan remained the friendly state of the West on all military matters; eventually, when Brezhnev moved into Afghanistan, the country became the linchpin of the Western effort against the Soviet Union. Al Qaeda was financed, and the Taliban was created from scratch and financed to fight the Soviet forces in Afghanistan, leading to defeat of the Soviet Union and the withdrawal by Mihail Gorbachev of their forces from Afghanistan. A military coup in Moscow also hastened the formal end of the Soviet Union and of the Cold War. All this time India remained classified in the minds of most Americans as an "enemy country".

But individual Indians made significant contributions to the development of America in advanced areas of Information Technology, and Bill Gates in particular recruited them in their thousands. Around this time Prime Minister Narasimha Rao of India, supported by then Finance Minister Manmohan Singh, took India out of the slavery of socialist ideology and opened the country to development western-style. The new century brought dictatorship to Pakistan and disaster to America in the form of the Al Qaeda attack on World Trade Centre. All were forced to rethink their strategies. It became evident to all that India, the largest democracy in the world, was not the enemy it was thought to be, and had indeed already been suffering from the sort of terrorism that brought disaster to the World Trade Centre and the Pentagon. In addition to the much-hyped Axis of Evil, an Axis of Democracy was also imagined. In such an axis, America would enlist the cooperation of major maritime nations of the world, like Britain, India, Australia and Japan, and set up to enforce security on the oceans on the world.

But for many Indians, the problem in this arrangement may be the element of hostility, if any, that it may entail towards Russia. The solution for the problems of the world lies in co-operation between NATO and Russia, and not in hostility. But we would like to quickly point out that a multinational force for security over the Indian Ocean is overdue. All traffic between the Red Sea and the Arabian Sea is now threatened by Somali pirates. Hopefully, the signature of the Indo-US nuclear deal has brought us nearer to some multinational security arrangement for the Indian Ocean.