The 7th Session of the Permanent Forum on Indigenous Issues (UNPFII) started today its meetings at the UN in New York.

The topic is: CLIMATE CHANGE, BIO-CULTURAL DIVERSITY AND LIVELIHOODS: THE STEWARDSHIP ROLE OF INDIGENOUS PEOPLES AND NEW CHALLENGES.”

 And on CLIMATE CHANGE: I am sure that in many countries there is a way to live together. I always wanted to see land that is just of the community. Our cattle is on the common land.

We lived in comity with Mother Earth. We must understand that Planet Earth is not a commodity, a business. Some people think only about money - not the future. It is important to think about life and humanity and equality and justice - not to concentration of land in the hand of a few. We will not get away if the environment gets so bad. Let us use the money for saving the land.

 

And then on BIOFUELS: “A very serious Impact.” At the conference of MarcoSul I lstened to what some were saying. So What do they mean by “BIOFUELS?” THEY TOLD ME IT IS AGRO-FUELS.

For who? These are agricultural products - if mother earth is to feed engines? Cars come ahead of people? The machines are more important then life-form?

For us it is clear - life is first. But these policies already have negative imputs. The price of wheat, internationally has caused inflation in our country. This is extremely serious These policies are very harmful to poor people - even in the US.

BASIC PROBLEMS OF JUSTICE AND LIFE AEW THE CONCENTRATION OF MONEY IN THE HANDS OF A FEW - PRESIDENT MORALES SAID.

 

Columbia Business School, March 28, 2008, Hosted LABA (Latin American Business Association) Conference 2008.

The Topic - “LATIN AMERICA: Growth Perspectives in a Shifting Political Landscape.”

www.SustainabiliTank.info posted the announcement as we received it from YPIC - the UN affiliated “Young Professionals for International Cooperation.”

The meeting had 5 Sessions - serious business advice - Growth Oriented - and networking.
I will restrict the reporting to a star studded Fifth-Session actually titled: “THE SHIFTING LATIN AMERICAN POLITICAL LANDSCAPE.” This was indeed the special thing about this year’s meeting.

Interestingly, the two stars of the panel were both “Have-Beens” of sorts - Ex-Presidents of their countries. But - and watch this - they actually were those that put things in motion that are part of the present developments in their respective countries - though the emergence of the China factor came after them. From their “freedom to analyse” now - their presentations were enlightening indeed.

The Former Presidents were - President Cesar Gaviria of Colombia, and President Alexandro Toledo of Peru.

Further, President Gaviria is also Former Secretary-General of the Organization of American States (OAS).

The Chairman was also an important “EX-” and now Professor of Professional Practice in International and Public Affairs, School of International and Public Affairs (SIPA), Columbia University. Jose Antonio Ocampo, who was put in place of the previously announced Mr. Andres Oppenheimer, 1978 Graduate of The Columbia School of Journalism, now Latin American editor and syndicated foreign affairs columnist, The Miami Herald - The Newspaper for the Americas in the city that calls itself the capital of Latin America.

Professor Jose Antonio Ocampo, a Colombian national, teaches now courses in the Ph.D. program in Sustainable Development and has an active role in the Columbia’s Committee on Global Thought. He came to Columbia from the UN where he was UN Under-Secretary-General for Economic and Social Affairs (UN-DESA) under UN Secretary-General Kofi Annan - appointed September 1, 2003 to suceed Mr. Nitin Dessai of India. He was replaced by the new UN Secretary-General, Ban Ki-moon, as the rumors are at the UN, because he had to promise that slot to China. So - Ocampo went from Colombia to UN and from there to Columbia (the “U” changed to “u” but we are glad he still will be involved in Sustainable Development - as the UN Commission on Sustainable Development was part of his domain at the UN - who knows - he might be able to do more good in his new job then in the previous job).

Professor Ocampo, prior to his coming to the UN, served in various positions in the government of Colombia as Minister of nearly every economic topic, and head of agrarian banks. He was also Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC) 1998 - 2003, before coming to the UN, and that position gave him the overview of all of Latin America. His recent publications include “Stability with Growth: Macroeconomics, Liberalization and Development,” with Joseph E. Stiglitz, Shari Spiegel, Ricardo French-Davis and Deepak Nayyar, (New York: Oxford University Press, 2006).

Professor Ocampo was also a Professor in the Advanced Programme on Rethinking Development Economics at Cambridge University, a Professor of Economics at Universidad de los Andes of Bogota, a Professor of Economic History at the National University of Colombia, as well as a Visiting Fellow at Yale and Oxford.

Introducing the Session, Ocampo said that Gaviria was his boss. Ocampo said that both men had successful periods even though there were controversies in Toledo’s days at helm. There is now a shifting Political Landscape and people talk of two different lefts in Latin America. Ocampo would like to hear from the two Presidents what they think of these changes, and what they think the US elections would imply for Latin America?

President CESAR GAVIRIA TRUJILLO is currently National Director of the Colombian Liberal Party, and is a member of the Advisory Commission of External Relations of Colombia, where, it is said, he recently contributed mediation in the diplomatic incidents between the Colombian Government and the States of Ecuador and Venezuela.

He studied at Universidad de los Andes in the 1960’s and established there AIESEC (the local chapter of the International Association of the Students of Economics), and then in 1968 he was elected President of AIESEC in Colombia. This began his public service career. { Personally I found this interesting, because sometime in the begining of the 80’s I came to Medellin, Antioquia, as a speaker at a Global AIESEC meeting, and most probably had then the chance to meet him.} At 23 he was elected councilman of his hometown in Pereira, in the Coffee famous Risaralda State. 4 years later he became Mayor. In 1974 he was elected into the House of Representatives, before rising to the top in 1983. Three years later he became co-chair of the Colombian Liberal Party.

He was first elected to Congress in 1974; 1986 - 1990 he served in Virgilio Barco’s government, first as Minister of Finance and later as Minister of the Interior, then when Liberal Candidate Senator Gallant was assassinated, he became the Presidential Candidate, and President, August 7, 1990 - August 7, 1994. The period of Presidents Barco and Gaviria was marked by a process of trying peace with the M-19 and other rebells.

As President he did economic reforms to bring Colombia into the International economy; his time saw growth, the convocation of a Constituent Assembly to fortify Colombian Democracy, Human Rights laws, he made the Central Bank independent, and privatized many public service and infrastructure institutions.

He was followed in offfice by Ernesto Samper Pizano also from the Liberal Party who had a difficult campaign against Andrés Pastrana Arango, the candidate of the Colombian Conservative Party. Opinion polls were sharply divided. The elections for President took place on 29 May 1994. Ernesto Samper was elected president by a very narrow margin. Strangely eventually Ernesto Samper became also 16th Secretary General of the Non-Aligned Movement (October 20, 1995 – August 7, 1998). Andres Pastrana and the Conservatives won the Presidency in 1998.

But, there is another parallel story here. Samper was accused shortly after his presidential victory by his opponent and future successor, Andrés Pastrana Arango, of having received campaign donations from the Cali drug cartel in an excess of $6 million US dollars. Samper initially denied the allegations and deemed his political adversary as a sore loser, but soon afterwards a series of tape recordings were released to the public, the so called narco-cassettes. The Prosecutor General at the time, Alfonso Valdivieso, personally led the investigation. Valdivieso was cousin of the late Luis Carlos Galán Sarmiento, a charismatic presidential candidate assassinated by the Medellín Cartel in 1989 for his political views, particularly for favoring the extradition of drug dealers to the United States. Soon, the investigations led by Valdivieso unveiled a more than evident connection between the Cali drug cartel and top figures of Colombia’s society including politicians, journalists, athletes, army and police officers, and artists, among others.

A corollary to the Samper story: As a consequence of the political turmoil, the U.S. government withdrew any political assistance to Samper’s government. For consecutive years, Samper’s administration was lambasted by the US for its supposed failure to make every effort to effectively fight the war against cocaine and the Cali Cartel. Additionally, the US revoked Samper’s visa and thereby effectively banned him from entering the country. Then in July 2006, the present Colombia President, Álvaro Uribe, offered Samper Colombia’s ambassadorship to France. This led to the resignation of Former President and Colombian ambassador to the U.S., Andrés Pastrana, who criticized the decision. Opposition was also expressed by the media, political groups and other parts of Colombian society. In the end, Samper did not accept the offer.

Andres Pastrana was President August 7, 1998 – August 7, 2002, and 17th Secretary General of Non-Aligned Movement only between August 7, 1998 – September 3, 1998 when he was succeeded by Nelson Mandela. In 2002 he was succeeded as President by Álvaro Uribe Vélez who started out as a Liberal Party member, and is now in his second term (till August 7, 2010) as President, seemingly as an Independent.

The International Herald Tribune of May 29, 2006 wrote: “Colombian president wins 2nd term.”
By Juan Forero, BOGOTÁ, Colombia: “President Álvaro Uribe, considered by the Bush administration to be an unswerving caretaker for Washington’s drug war in Latin America, was re-elected Sunday in a landslide to a second four-year term. Colombians gave Uribe 62 percent of the vote, with nearly all of the votes counted. Voters were apparently satisfied that he had made headway during his first term in wresting control of this country from Marxist rebels and drug traffickers. He overwhelmed the second-place finisher, Carlos Gaviria, a left-of-center former Constitutional Court justice who received 22 percent of the vote, and Horacio Serpa, the Liberal Party’s standard-bearer, who garnered less than 12 percent. “

We wrote this lengthy introduction in order to be able to say that seemingly - the Branco-Gaviria times in Colombian recent history were probably the best days the country has seen for a long time - though, it is now the tough hand of President Uribe that is most appreciated by Washington.

Dr. ALEXANDRO TOLEDO was democratically elected President of Peru from July 2001-July 2006. He was elected by narrowly defeating former President Alan García. It was Toledo’s second presidential race in just 13 months. A year earlier he ran against incumbent Alberto K. Fujimori. Toledo dropped out of the runoff election amid widespread allegations that the election was rigged in Fujimori’s favor. Months after being reelected, Fujimori fled to his native Japan and resigned via fax after the broadcast of Fujimori’s chief spy, Vladimiro Montesinos, evidently bribing an opposition congressman to switch parties.

Toledo was born in a small and remote village in the Peruvian Andes, 12,000 feet above sea level. He is one of sixteen brothers and sisters from a family of extreme poverty. His father was a bricklayer and his mother sold fish at markets. At the age of six, he worked as a street shoe shiner and simultaneously sold newspapers and lotteries to supplement the family income.

At age 16, with the guidance of members of the Peace Corps, Toledo enrolled at the University of San Francisco on a one-year scholarship. He continued his education, obtaining a partial soccer scholarship and making up the difference by pumping gas.

In addition to two masters degrees, he earned a Ph.D. in economics from Stanford, where he met his wife, Elaine Karp, a Belgian-born American anthropologist. Dr. Toledo was able to go from extreme poverty to the most prestigious academic centers of the world, later becoming one of the most prominent democratic leaders of Latin America. He is the first Peruvian president of indigenous descent to be democratically elected in five hundred years.

Dr. Toledo attributes his academic and political accomplishments as being the result of a statistical error. His most precious dream and work now is that other men and women of the large socially excluded Peruvian and Latin American population can also become presidents of their respective countries by having access to quality health care and education.

On the stump, like the most experienced politicians, Toledo knows how to work a crowd, whether addressing peasants or potential foreign investors. Seamlessly transitioning from a buttoned-down, eloquent economist to a rebel outfitted in jeans, a t-shirt, and a bandana, Toledo is well versed in international trade and promises to give voice to the labor movement.

Mostly, though, Toledo has preached a centrist platform, pledging to award small-business loans to farmers, balance the budget, lure foreign investment, and create jobs. Toledo’s moderate campaign and carefully selected issues have found broad appeal.

President Toledo first appeared on the international political scene in 1996 when he formed and led a broad democratic coalition in the streets of Peru to bring down the autocratic regime of Alberto Fujimori. This coalition had the support of the international democratic community.

During the five years of Dr. Toledo’s presidency, the Peruvian economy grew at an average rate of 6 percent, registering as one of the fastest growing economies in Latin America. Inflation averaged 1.5 percent and fiscal deficit went as low as 0.2 percent. While markets in China and Thailand were opened, free trade agreement negotiations with the United States, Chile, Mexico and Singapore were about to conclude. These markets were generating new investments and jobs for the most poverty-stricken Peruvians.

The fight against poverty through health and educational investment was the central aim of Dr. Toledo’s presidency. As a result of sustained economic growth and deliberate social policies directed to the most poor, extreme poverty was reduced by 25 percent in five years. Employment grew at an average rate of 6 percent from 2004-2006.


Before becoming President, Dr. Toledo worked for the World Bank, the Inter-American Development Bank in Washington, and the United Nations in New York.

During his academic years, Professor Toledo was a visiting scholar and a research associate at Harvard University and Waseda University in Tokyo. He is currently an economics professor (on leave) at the University of ESAN in Peru.

1986-1991: Director, Economic Development Institute (IDE/ESAN), Lima, Peru.

1989: Leader of the PNUD/OIT mission for the evaluation of: “Impact of Macroeconomic Policies on Growth, Employment and Salaries” in six Central American countries, UNDP/ New York.

1981- 1983: Chairman of the Economic Advisory Committee to the President of the Central Reserve Bank and the Labor Minister in Peru under President Fernando Belaunde.

1981-1983: General Director, Institute of Economic and Labor Studies, Ministry of Labor and Social Development. Lima, Peru.

Current Activities:

-Payne Distinguished Visiting Lecturer at the Freeman Spogli Institute of International Studies (FSI - Stanford University) and Visiting Scholar at the Center on Democracy, Development, and the Rule of Law (CDDRL) for the 2007-2008 academic year.

-Distinguished Fellow in residency at the Center for Advanced Studies and Behavioral Science (CASBS) at Stanford for the 2006-2008 academic years.

-Founder and President of the Global Center for Development and Democracy (GCDD), which studies the interrelationship between poverty, inequality, and the future of democratic governance.

To read more about this amazing man who is an unusual giant hidden in a diminutive figure - see please: http://fsi.stanford.edu/people/alejandro…
Gaviria was the first to make an introductory speech. He said he was happy to be here with Toledo, because of Toledo’s attempt to bring back democracy to Peru. This is needed now in Colombia. Toledo, was first of the great number of the mestizo/Indio people to be able to head an administration that will be recognized in time as successful.

Latin American governments are - some say are from the right others from the left - but this is an oversimplification - this is true also in the US. The solutions are not only in the programs they say but in the markets.

(1) We had failed the race for growth - we had a lost decade then we saw optimism in the 90’s with 7-8% growth/year - then down to 2%. We still have many problems - do not think we are OK. A main problem is structural - the rate of saving. We had the Argentina crisis - started there - we did not solve it. The Financial Globalization - it is critical in LA.

Financial, Trade Globalization - it is useful as trade but the vulnerability in LA is from the Financial Globalization.We are all citizens of the World. The way NGOs work and bring up issues like child labor, discrimination against women - this changes us. A Colombian decision in Ecuador has disturbed the whole region.

(2) We need to understand that the political problems in LA are not just economic - they are social problems. The Quality of the Institutions - i.e. education - that is what is important - in order to enable to deal with the problems from globalization.

The US Ambassador in 1971 ( we assume he was talking about the Ambassador to Bogota) thought markets will solve the problems of LA - but political problems are more important. In India people organized themselves to supply the services that the government did not supply.

Toledo followed by saying that he had not the privilege to belong to Gaviria’s party, but he had the chance to study his leadership in Colombia and at the OAS. Now he said: “You have described the history, I will start with this as a base to build for the future.” He said upon himself that he feels he was intelligent before he got into politics, and will now take the five years of experience in his job (that is his five years as President), to look for the future.

LA has an opportunity to make a “qualitative jump” in the World Economy in the next 10-15 years. This is cautious optimism. He saw a growth of 6% LA average for 6 consecutive years . Peru had 9.1%/year. We are changing in relation to the internal composition of growth. WE SELL MANGOES TO CHINA. That is much better then the mineral commodities we used to export. These exports are much better because they are less dependent on the fluctuations of the market. We now have China & India of 2.3 billion people. The EU 500 million, our region 500 million. WE HAVE DIVERSIFIED FROM THE DEPENDENCE ON THE US.

Addressing the students - In the last 60 years we got a stock of human capital dispersed in the diaspora -if you do not lose your heart to Merrill-Lynch or JP Morgan. All we need is intelligent policy to recuperate. In the next 10 -15 years the region could become a player in the economy.

Today the G8 talk BRICs (Brazil Russia, India, China). I disagree: May be LARIC (Latin America, Russia, India, China). It is our responsibility to take in our hands the construction of the investments.

1. if we are capable we do not have to see 110 million people trying to survive on $1/day. This is not the environment that assists investment for growth and we do not reduce poverty.

2. Poverty and inequality of institutions - democratic government is in danger.

3. Cheap empty populism is the danger - it can emerge.

Toledo said that he has too much respect for the left to believe that Hugo Chaves is on the left. These types (the populists) were not able to obtain Sustainable Growth and distribute the gains to build up the countries.

Lack of access to clean water, medication, education … are the indicators. 122 million people included in the production cycle will buy more bread, socks and more yahoo - make a market. This besides the inclusion.

INVESTING IN REDUCING INEQUALITY IS GOOD FOR BUSINESS AND PROFITABLE FOR THE MARKET. You in the business school are tempted by Wall Street. A modest suggestion - don’t lose the opportunity, the region is waiting for you. Colombia, Peru are waiting for you. It is a regional opportunity - if you don’t do it - nobody else will do it.

Toledo, before politics he was teaching econometrics. Don’t stay in the US - he repeated. I know you will forgo 20-30% of salary if you made a difference in your country.

Free Trade Agreements are of enormous importance. I sent a letter of Congratulation. I decided to work for the Colombia, Panama FTAs. This all makes sense if you integrate this with the medium and small companies - not only the big ones.

The busines of inclusion is god for democracy and business. Toledo goes now to Kiev to talk about democracy.

LATIN AMERICA HAS THE SIZE OF THE US MARKET.

Answering to a question from Ocampo about the US in LA?

Toledo said that there is check & balances in Venezuela. True - there was significant set-back in the country.

On Bolivia - yes it had a good economic policy for years, but it collapsed because of lack of representation of indigenous people. Morales was very important in Bolivia.

When the Argentinian crisis came - the devaluation - the US was disengaged. The Argentinians never got a visit from the US treasury, IMF. They got an Anti-Americanism that was not there before.

The American government supported the coup in Venezuela.

The crisis in Brazil came from the Asia Crisis. The US did not show interest.

There were great mistakes on the US side. Mistakes in US foreign policy.

On the US elections?

We Need A New Relationship Based On Respect Of LA Governments And Public Opinion.

This is not a question of left - but of mistakes.

I think NAFTA was good. But Mexico is going bankrupt even with NAFTA. It should grow 6%. It is like Portugal, Greece, Spain.

Brazil had last year the first good year 5%. Colombia had 7%, Peru 8%.

Globalization & Trade do not check with distribution of income. One must look into that. We need to do a lot more about these people.

Ocampo summing up:

(1) Hugo Chaves? He is not a problem - he is a consequence. Try to confront poverty by giving official aid.

(2) Professionally, going back to Colombia is a great opportunity.

(3) The need for strong democratic institutions and a just judiciary institution, Freedom of the Press, a strong curriculum - and these strong democratic institutions will solve the accountability problem. Lack of democracy thus lack of accountability.

Clean Water is strongly associated with poverty and democracy.

WE NEED MORE LEADERS THEN PREDICTIONS. Leaders that have the capacity to do investments.

The difference between leaders and politicians? Politicians make a decision for next election and profitability is not in the next 3-4 years. In LA one must make decisions so that accountancy is not dependent from selling mineral commodities.

We need an economy of knowledge that depends on other products.

THE EMERGENCE OF POLITICAL PARTICIPATION OF INDIGENOUS LEADERS IN THE LAST 25 YEARS IN LA.

TOLEDO WAS THE FIRST DEMOCRATICALLY ELECTED INDIGENOUS PRESIDENT IN 500 YEARS.

Peruvian President Alejandro Toledo.

Colombian President César Gaviria

Columbia University Professor José Antonio Ocampo, Former USG at UNDESA

Why some reserves are going untapped
SHAWN MCCARTHY, Globe and Mail, March 26, 2008.
OTTAWA — Under the original optimistic plans, nearly half a million barrels a day of crude oil should now be flowing from Kazakhstan’s Kashagan field, which contains the world’s largest untapped reserves.

Despite record crude prices, however, not a single barrel has made it out of the ground. Rather than stimulate production, the rising price of oil has actually contributed to lengthy delays with the Kashagan project.

Already facing extremely hostile physical conditions, the companies developing the project watched as skyrocketing oil prices fuelled inflation in construction costs and prompted the Kazakh government to revisit the production agreement.

A project that was supposed to come on stream in 2005 is now slated to start up in 2011, assuming no further delays by its much-criticized operator, Italy’s Eni SpA, which is partnering with Western giants such as Exxon Mobil Corp. and Royal Dutch Shell PLC.

The problems facing the Kashagan project are increasingly common in today’s global oil industry. Despite a six-year runup in crude prices, which hit a record $110 (U.S.) a barrel last week, oil companies – both publicly traded and state-owned – are having difficulty keeping up with rising world demand.

There are myriad reasons for the surprisingly weak supply response to high prices: a paucity of major discoveries in the past several decades; the more costly and complicated nature of developing resources from unconventional sources like oil sands and deep-water fields; the rise of nationalism in resource-rich countries; and the innate conservatism of oil industry executives, who have been burned by oil price collapses in the past.

But higher prices themselves may actually discourage the addition of new supply in some circumstances, analysts at Swiss investment bank UBS Ltd. say in a study released yesterday.

“Price inflation has created new obstacles as companies and governments try to make sense of project costs,” they said.

“With the temptation for governments to tighten fiscal terms with rising prices, the task of identifying appropriate returns has become tougher.”

The UBS team, led by London-based analyst Jon Rigby, compiled a roster of major projects – those with expected production of more than 100,000 barrels a day – due to come on stream through 2015.

With rising demand, plus declining production from existing fields, the industry needs to add at least 4.5 million barrels a day of new supply each year.

But relying on major projects won’t meet that target. In the current year, the UBS analysts estimate new supply sources will produce 4.4 million barrels a day, but that figure drops to 2.9 million in 2009 and a paltry 1.7 million in 2010.

That suggests prices could ease this year, as new additions in Saudi Arabia and the former Soviet Union provide a cushion in the face of demand weakened by the global economic slowdown.

Thereafter, the market will tighten again as new production is unable to keep up with demand growth.

Leading members of the Organization of Petroleum Exporting Countries, like Venezuela and Iran, are underinvesting in their oil fields.

Instead, they are using revenue to provide social subsidies to large and restive populations.

Among OPEC members, only Saudi Arabia – and new members such as Angola – have a large slate of new crude oil projects coming on stream in the near future.

Canada is well represented in the UBS list, with some two-dozen oil sands projects forecast to add 2.3 million barrels a day by 2016.

Despite the increasing power of national oil companies in places like Russia, Venezuela and the Middle East, the international majors have not lost their clout. But they are being careful with their cash.

Corporations like Exxon Mobil are returning cash to shareholders rather than invest in projects that don’t meet their high profitability standards.

Analyst David Kirsch of PFC Energy Group said companies tend to use extremely conservative price assumptions to determine which projects will proceed.

“You just see some deeply ingrained conservatism in what oil price forecast you use when you are pursuing future projects,” Mr. Kirsch said. “And I don’t see that culture changing over night.”

News from James Howard Kunstler, March 24, 2008.            Black Swans Everywhere.

After a one-day reprieve from total meltdown in the financial markets, news media cheerleaders for the most reckless gang of bankers in world history declared the crisis over on Good Friday (with the markets safely closed). Whew, that’s a relief. Problem solved. And just in time for baseball season, too, so none of the Banker Boyz have to sell their sky box leases.

Commodities Drop, Rally in Dollar, Stocks Vindicate Bernanke.      http://www.kunstler.com/

What is meant by “meltdown,” by the way, since the word is used so promiscuously by myself and others. I’d define it as the shock of recognition that many big institutions are worse than flat broke and are therefore powerless to conduct normal operations. By “worse than flat broke” I mean they are so deep in hock that all the accountants who ever lived, in the life of this universe and several others like it, using the fastest parallel processing computers ever built, could not keep up with their compounding accelerating losses (now approaching the speed of light).
The current vacation from reality on Wall Street may last a few more days, or even a couple weeks, but it seems as though a whole flock of black swan events is circling the sky over Financial-land and is about to blot out the sun. By black swan, I refer to the concept popularized by Nassim Nicholas Taleb in his recent book of that name, namely unexpected events of great power that tend to change the course of history.
For the moment, with the crisis “contained,” and the Boyz getting ready to air out their Hampton villas for the coming season, we are once again primed to be blindsided by potent random events that nobody saw coming. The trouble is, there are enough potent potential fiascos already visible on the horizon.
The mortgage fiasco is still just gathering steam as it moves from the non-payment stage to the default and repossession level on the grand scale. Even the political wish to bail out feckless mortgage holders will stumble on the mammoth clerical task of administrating the process, especially since we’ve barely begun to sort out who actually holds the mortgages after they’ve been minced into a fine mirepoix of securities off-loaded onto countless dupe “investors” ranging from municipal funds in obscure corners of foreign nations to countless public employee retirement plans.
No matter how the authorities try to “nationalize” the sucking chest wound of bad mortgages, the body of finance will flat-line — and the American public will get stuck with the bill from the intensive care unit. Those who, for some weird reason, continue to pay their way and meet their obligations, will be none too pleased to pay for misdeeds of the deadbeats and their banker-lenders. This portends a taxpayer rebellion, which may translate into a voter rebellion.
It’s too bad the current presidential candidates have been unable to address the unfolding economic nightmare. Their collective silence on the matter suggests that they don’t have a clue what to say about it. As the nightmare plays out and black swans flock in to blot out the sun, and the hedge funds come a’tumbling down, and more big banks blunder into black holes, and businesses big and small across the land shutter up their operations, and the unemployment rolls swell, and families are thrown out of their houses even when bailouts are supposed to be saving them (but the bureaucracy can’t get the paperwork done in time) — well now, they are going to be one pissed off bunch of people. What will they do at the conventions? Our outside the conventions?
In the deeper background of all this is the all-important oil story that nobody in politics or the media wants to pay attention to. Notice that in the fervid unloading of assets this past week, as investors dumped their positions in the commodities markets, the price of oil remained stubbornly above $100-a-barrel when it was all over on Thursday afternoon. Well, maybe they’ll ratchet down a little further this week, but the trend line will prove to continue remorselessly upward in the months ahead.
Peak oil is for real. The supply can’t keep up with global demand, even if it dips in the USA. And more portentous sub-plots develop in the story every month. Export rates are falling at a steeper rate than depletion rates. The exporting nations are not only buying more cars and running more air-conditioners, they also need to use more energy to lift the oil they’ve got out of the ground.
Another sub-plot is the fact that the equipment used world-wide to drill for oil and recover oil and move oil around the planet — all that equipment is now so old and rusty that it can barely do the job, and it is going to start failing altogether unless investments are made to replace it, which nobody is making.
By the way, Americans blame the familiar private oil companies for all the trouble with oil in their lives — Exxon-Mobil, Shell, et al — but they don’t seem to know that oil nationalism is in the driver’s seat now. The old private “majors” are only producing five percent of the world’s oil. The rest is coming from the national companies — Aramco, Petrobras, Pemex, et blah blah — and the very operations of the oil markets are entering a phase of radical instability as they move away from auctioning their stuff on the futures markets and start making long-term favored customer contracts instead.
The bottom line is that high prices for oil is hardly the only thing America has to worry about. Pretty soon the US will have to worry about getting the oil at any price — meaning, we’re in for shortages and supply disruptions sooner rather than later.
Also unbeknownst to most of America, the financial markets reflect all this instability around the basic resource of oil because industrial economies like ours are set up in such a way that they can’t run without cheap and reliable supplies of the stuff. So the least little twitter in the reality-based world of peak oil means that everything to do with money and capital investment will naturally go batshit, since our expectations for increased wealth — i.e. “growth” — are predicated on the activities driven by oil.
It will be interesting to see what new machinations are unveiled this week. Whatever else this catastrophe is, it’s a good show from the cheap seats.

————

about James Howard Kunstler:

James Howard Kunstler says he wrote The Geography of Nowhere, “Because I believe a lot of people share my feelings about the tragic landscape of highway strips, parking lots, housing tracts, mega-malls, junked cities, and ravaged countryside that makes up the everyday environment where most Americans live and work.”
Home From Nowhere was a continuation of that discussion with an emphasis on the remedies. A portion of it appeared as the cover story in the September 1996 Atlantic Monthly.
His next book in the series, The City in Mind: Notes on the Urban Condition, published by Simon & Schuster / Free Press, is a look a wide-ranging look at cities here and abroad, an inquiry into what makes them great (or miserable), and in particular what America is going to do with it’s mutilated cities.
His latest book, The Long Emergency, published by the Atlantic Monthly Press in 2005, is about the challenges posed by the coming permanent global oil crisis, climate change, and other “converging catastrophes of the 21st Century.” 

Mr. Kunstler was born in New York City in 1948. He moved to the Long Island suburbs in 1954 and returned to the city in 1957 where he spent most of his childhood. He graduated from the State Univerity of New York, Brockport campus, worked as a reporter and feature writer for a number of newspapers, and finally as a staff writer for Rolling Stone Magazine. In 1975, he dropped out to write books on a full-time basis. He has no formal training in architecture or the related design fields.
He has lectured at Harvard, Yale, Columbia, Dartmouth, Cornell, MIT, RPI, the University of Virginia and many other colleges, and he has appeared before many professional organizations such as the AIA , the APA., and the National Trust for Historic Preservation.
He lives in Saratoga Springs in upstate New York

A League of Democracies.
By Didier Jacobs

 http://www.policyinnovations.org/ideas/i…

March 3, 2008 , Policy Inovations, A Publication of the Carnegie Council for Ethics In International Affairs (CCEIA), New York City.

Republican presidential candidate John
McCain speaking at Stanford. Photo by
J. D. Lasica (CC).

“If I am elected president, I will call a summit of the world’s democracies in my first year to seek the views of my democratic counterparts and begin exploring the practical steps necessary to [create a League of Democracies]. […] This organization could act when the UN fails to act—to relieve human suffering in places such as Darfur, combat HIV/AIDS in sub-Saharan Africa, fashion better policies to confront environmental crises, provide unimpeded market access to those who endorse economic and political freedom, and take other measures unattainable by existing regional or universal-membership systems.”
John McCain introduced the above idea of global democracy during his 2008 U.S. presidential election campaign. The idea is worth exploring, and perhaps further than McCain intended.

What McCain proposes is basically a synthesis between two schools of international affairs: neoconservatism and internationalism. Like neoconservatives, McCain insists that spreading democracy across the world is the magnetic north of his foreign policy compass. He says the next president must be assertive in promoting America’s values despite predictable protests from China or Russia, Venezuela or Iran.

Like internationalists, McCain recognizes the importance of collaboration and says that, while the United States should try to lead by persuading its allies, it should also “be ready to be persuaded by them.” McCain is bound to be disappointed, for even democracies sometimes fail to persuade each other.

The question of a nuclear Iran is looming and will likely become just as divisive as Iraq was in 2003. The tough choice between neoconservatism and internationalism would then come back to haunt McCain. Either he would have to ignore his allies in the League of Democracies, or he would accept multilateral paralysis in the face of danger—which would not go well with his hawkish instincts.

And yet a synthesis between neoconservatism and internationalism is the right foreign policy doctrine for the 21st century. A League of Democracies will work only if the United States lets it be truly inclusive of all nations that accept human rights norms, regardless of how the United States may otherwise perceive those nations. There must also be true power-sharing among allies. Eventually, the League of Democracies should itself be run democratically—an extension of McCain’s idea that presumably he does not endorse at this time.

As things stand now, countries like Russia or India, Brazil or Venezuela have only two options: either pay allegiance to the United States on security matters, or become “strategic competitors” or “states of concern,” sowing the seeds of new conflict. As the Iraq War has shown, even traditional NATO allies no longer accept alliance without voice.

A democratic League of Democracies would offer an attractive choice to proud nations that embrace democracy (which could eventually include China: communism there is unlikely to last forever). They could work alongside the United States and other democracies as truly equal partners.

Some countries would continue to reject democracy, and hence not apply for membership. Still, an open League of Democracies would be less threatening than a closed club like NATO. Tension could certainly arise if the League of Democracies were to act without the blessing of the United Nations. But such tension would be productive, buttressing global public policies that benefit the world’s people rather than cocooning authoritarian regimes.

Would the United States surrender any sovereignty by creating a League of Democracies? With globalization, sovereignty is traded daily. The U.S. government is making compromises with other governments on a range of global public policies, particularly but not exclusively in the economic domain.

In the security area, President Bush boasted that “America will never seek a permission slip to defend the security of our country.” After the Iraq fiasco, the next president may well do just that over Iran: He or she will think twice before launching a preemptive attack without broad international support.

The reality is that divergent foreign policy among allies undermines everyone. Poor support from allies has increased the U.S. burden in Iraq; but even allies who took no part in that war feel less secure as a result of the mess it created.

A League of Democracies that pooled the power and sovereignty of allies could act inclusively and decisively. If need be, after a period for mutual persuasion, the League could move to a vote. All allies would own the majority decision, and accept its consequences. No go-it-alone fiasco; no multilateral paralysis.

Majority voting is critical to avoid paralysis in democracies. It is amazing that Americans accepted the election of George W. Bush based on a sliver of votes in Florida. And yet they did. By contrast, multilateralism is grinding to a halt. International institutions make most decisions by consensus, and consensus is increasingly unattainable in today’s world.

The stakes are ever higher, making compromise harder. Global public policies like the Doha Development Round of trade negotiations, the replacement of the Kyoto Protocol on climate change, sanctions against Iran’s nuclear program, or against Sudan’s genocide in Darfur deeply affect people around the world.

Moreover, the number of players that are too powerful to ignore has increased dramatically. As emerging countries assert economic might, Europeans and Americans are slowly coming to terms with the fact that they can no longer dictate global public policies.

Citizens of democracies around the world already know that their nation’s sovereignty is limited. They accept compromises. They even accept damaging stalemates. In the decades to come, they should learn to accept majority voting as a means to break deadlocks and produce global public policies that are better for the common good.

The European Union has set a precedent in this regard. It is the only international institution where majority voting takes place with each nation’s vote reflecting more or less its demographic weight. Consensus remains the norm. But the real possibility of voting concentrates officials’ minds and helps break deadlocks.

Of course, Europeans are a more cohesive polity than all the world’s democracies. But European citizenship was not really more pronounced back in 1957 than global citizenship is today. On many levels—English as lingua franca, penetration of global media, weight of diaspora—the world is more interdependent today than Europe was when it started its project of political integration.

The world can follow Europe’s journey this century, and a League of Democracies would be a good first step in 2009.

.Didier Jacobs is special advisor to the president at Oxfam America. He was previously a researcher in Oxfam America’s Policy Department, specializing in global governance and international finance. Before joining Oxfam, Mr. Jacobs was a researcher at the London School of Economics and Catholic University of Louvain, as well as an aid worker for Médecins Sans Frontières in Liberia during the civil war. He earned a Master in Public Policy from the Harvard Kennedy School of Government and a Master in Economics from the Catholic University of Louvain.

Articles by this Author:

• A League of Democracies (Innovations)
• Democratizing Global Economic Governance (Policy Library)
• Global Finance Hurts the Poor (Policy Library)

Selected Publications:
Global Democracy: The Struggle for Political and Civil Rights in the 21st Century (Vanderbilt University Press), a book that outlines a new foreign policy doctrine to build a fairer globalization.

Link: http://www.global-citizens.org/

Oxfam America
26 West Street
Boston, MA 02111
UNITED STATES
 djacobs at oxfamamerica.org

The Chavista Democracy - when you compare it to Pakistan, Kenya, Somalia, Zimbabwe, Serbia …  - It Is Indeed An Achievement. The man lost an election and took it standing on his feet.

Now something that is not a joke - it actually happened - and we found this hilarious.  During the intermission in the New Hampshire US Republican and US Democrat Panels of the Presidential Primaries in the US - there was time for advertisements that paid for this exercise in US democracy on ABC TV.

The main advertiser was CITGO. The company is owned by PDV America, Inc., an indirect, wholly owned subsidiary of Petróleos de Venezuela, S.A., the National oil company of the Bolivarian Republic of Venezuela - Mr. Chavez and his friends. The Advertisement by CITGO and the Government of Venezuela mentioned the help they are giving to America’s poor in the Bronx, by giving them free heating oil for the cold winter. So why indeed does the US President, whose own white house is dependent on Venezuela’s oil, make such a fuss?   We laud good humor and hope next President will also have good sense. We wonder if the winners in New Hampshire are aware of that advertisement - they surely did not react to it. Very hot for the campaign.

The ECONOMIST’S - “The Americas”
Get article background
Venezuela
Chávez slows to a trot
Jan 10th 2008 | CARACAS
From The Economist print edition

Socialism, but for a while only at the speed of a donkey

Illustration by Peter Schrank

SMARTING from his first-ever electoral defeat last month, Hugo Chávez has begun the year by shifting his leftist revolution into lower gear. “The main motor seized up, so we’ll have to go by donkey instead,” he said on his weekly television show, “Aló Presidente” (“Hello President”), on January 6th. The “motor” was a reform of the constitution aimed at turning Venezuela into a socialist state and giving the president the chance to stay in power indefinitely. By a narrow margin voters rejected this in a referendum on December 2nd, leaving the revolution coasting in neutral.

“I’m obliged to apply the brakes,” said the president, admitting that his mistake had been to get too far ahead of what Venezuelans were prepared to accept. With five years of his presidential term still left, he has the luxury of reconsidering the method while retaining the same goals. So he has announced a period of what he calls “the three Rs”— the “revision, rectification and relaunching” of the revolution.

He might have added another requirement: rapid results. In October the country will vote again, this time for mayors and governors. With 22 out of the 24 states currently in chavista hands, the president has a lot to lose. To avoid another reverse he needs to address the problems that, by common consent, lay behind his defeat.

The first is governmental incompetence. The revolution has failed to tackle a long list of problems, from crime to the cost of living. Mr Chávez’s response was to make a dozen ministerial changes in early January. Out went the vice-president, Jorge Rodríguez, an outspoken radical, who was in charge of the referendum campaign. His replacement, Ramón Carrizales, is a retired colonel who quietly ran the housing ministry. Unlike Mr Rodríguez, who was also overseeing the creation of Mr Chávez’s new political party, the Unified Socialist Party of Venezuela (PSUV), Mr Carrizales will focus “exclusively on government”, the president said.

Another big problem is the demoralization of Mr Chávez’s own movement. Last year the president abruptly announced that he was creating the PSUV as the “sole party” of the revolution. But three allied parties refused to join; one of them has moved into opposition. The PSUV is due to be formally launched on January 12th. But squabbling between its factions is intensifying in the run-up to the local elections. Those with ambitions to succeed Mr Chávez after the next presidential election in 2012 know that the best launch pad is to become governor of an important state. Here, too, the president has chosen to ease up. He has acknowledged what was previously anathema: the existence of legitimate internal “currents” within the movement. And he has dropped his insistence that only those prepared to join the party can be part of the revolution.

The third pressing issue is the economy. Inflation soared to 22.5% last year, almost double the government’s target. Staples such as milk, cooking oil and flour are in short supply. On January 1st the government launched a new currency, the “strong bolívar”, cutting three zeroes from its predecessor. Officials presented this as part of a plan to tame inflation. But since it has not been backed by policy changes, its main effect is just to simplify accounting.

The new finance minister, Rafael Isea, admits that the government needs to stimulate food production, which has failed to match growing demand prompted by an oil-fueled economic boom. After the referendum his predecessor promised a more “flexible” approach to price controls, which the private sector sees as the main cause of the shortages. What this means in practice has yet to be spelled out.

A big shift towards more market-friendly policies is unlikely. Mr Isea is a former army lieutenant, with a limited background in economics. The new planning minister, Haiman El Troudi, is a youngish ideologue, as committed to central planning as his predecessor, the president’s elderly economic guru, Jorge Giordani. Mr Chávez’s call for alliances with the private sector and the middle class on “Aló Presidente” was broadcast from a newly inaugurated “socialist training school”, against a backdrop featuring a portrait of Fidel Castro, Cuba’s communist president.

Indeed, Mr Chávez announced that he was launching a fresh “socialist offensive”. He promised that applying the brakes to the revolution in no way implied “surrender, moderation or conservatism”. He even announced the creation of a food production and distribution division of the state oil company, Petróleos de Venezuela. Mr Chávez acknowledges going too fast—but not in the wrong direction.