Thursday, April 28, 2011

"Overpaying the Poor"

I submit what the empire likes the least about the Islamic Republic of Iran is not its nuclear program but its being prone to "overpaying [sic] . . . the poorer members of Iranian society." Cf. Najmeh Bozorgmehr, "Iran's Handouts Prove Costly" (Financial Times, 28 April 2011):
Iran's populist government is backing away from a plan to phase out subsidies on energy and other basic commodities, analysts say. Instead, it is overpaying cash compensation to the poorer members of Iranian society to maintain political support.

Official estimates admit that for decades Iran spent $100bn a year on subsidising basic commodities -- although the support was widely viewed as unsustainable and distorting supply and demand signals.

In December last year, Mahmoud Ahmadi-Nejad, the president, embarked on a parliament-approved plan under which subsidies on energy products and foodstuffs were to be phased out gradually over a five-year period.

The plan was backed by all Iranian political groups as well as the International Monetary Fund and was viewed as a much-needed reform to the country's state-dominated economy.

However, economic analysts believe the government's populist approach has ended up inflicting a heavier burden on the economy and say that the government is moving away from the initial goal of making prices more realistic.

Under the plan, half of the government's savings from the cuts in subsidies were to be redistributed to those who registered to receive financial assistance, regardless of means. Now every man, woman and child can receive IR445,000 ($42.30) a month.

The remainder of the savings were to go to the industrial, agricultural and services sectors as well as state-owned organisations to help them cope with higher costs.

But analysts say the only section of the scheme which has been implemented is the cash payment to people.

Now, about 70m out of Iran's 75m-strong population is in receipt, which is generally considered to cost more than the old subsidies.

"People now receive cash two times more than their consumption which means our goal of managing consumption of energy products is not being achieved," Jamshid Ansari, a reform-minded parliamentarian, tells the Financial Times.

The cash payments have so far been benefiting up to 30m mainly rural poor.

They and their counterparts in the cities are even net winners because the per capita consumption of their populous families is low.

"The government is buying political support through an uneconomic and illogical way of extra subsidies payments despite the budget deficit this policy has been creating," says an analyst, who asked not to be named.

Akbar, a janitor in an affluent neighbourhood in northern Tehran, says he has not yet spent his family's payments which are almost equal to half of his monthly salary. "We have saved it so far," he says.

However, the middle class who are estimated to be also about 30m in number usually live in apartments equipped with gas and electricity for heating and cooling systems. They may own at least one car and do not have many children.

Officially, the price of gas has risen fivefold, electricity and water by three times, flour by 40 times and petrol between four and seven times.

Wednesday, April 27, 2011


Many critics of the Libya war, as was the case in the Iraq and Afghanistan wars, are seeking to explain the empire's motive by looking at what the target country has (especially natural resources), which the empire might want to have, and what the target country does, which the empire might want to stop.

In my view, rather than trying to explain each case of the empire's military invasions with ad-hoc explanations, it's better to emphasize as a given the fact that within the power elites of the Western powers, especially the United States, there is an influential bloc that is constantly advocating military "solutions" to states that those power elites regard as "problems." Let's call them "militarists."

The rest of the power elites, sometimes called "realists," also generally share the same goal -- regime change -- as militarists but they prefer "soft power" (support for in-country and in-exile "civil society" opposition + propaganda), economic sanctions, covert actions, military coups, proxy wars, etc. to the direct use of their own armed forces (mainly due to concerns about political and financial costs).

Sometimes the militarists get their way as in Iraq, Afghanistan, and Libya; other times they don't, as in Cuba, Iran, Syria, North Korea, etc. so far in recent decades. The difference is that the latter are tougher nuts to crack, for various reasons (such as the strength of the spirit of independences, the extent of political cohesion and the depth of ideological commitment, the number and power of international allies and supporters . . . and the demonstrated possession of nuclear weapons in the case of North Korea in particular). In other words, the question to be asked is which state in the South enjoys the power of deterrence and which doesn't.

Saturday, April 23, 2011

Pax Sinica for the Beijing Consensus

Theoretically, China can pursue global Keynesian policy in addition to domestic Keynesian policy, which would go some way toward countering austerity in the US and Europe and be good for China as well as the rest of the world. China says that "By the end of 2009, China had provided a total of 256.29 billion yuan in aid to foreign countries, including 106.2 billion yuan in grants, 76.54 billion yuan in interest-free loans and 73.55 billion yuan in concessional loans" (the figures are cumulative -- unfortunately no annual figure is given). For such a global Keynesian purpose, China should give away 5% of its GDP in grants.

Then, China would also have to learn to veto all Western wars, so that what it helps build won't get bombed. Pax Sinica based on the Beijing Consensus would be welcomed by the axis of resistance in the Middle East, North Africa, and Latin America; the rest of BRIC, Turkey, and South Africa; and anyone else who prefers peace for profit to war for power.

Tuesday, April 19, 2011

Intelligence Failure Due to Wishful Thinking

In an article posted on 19 April 2011, Simon Assaf of the SWP (UK) says that "accepting the deployment of Western ground forces remains a line that no [Libyan] rebels are yet prepared to cross." On Libya, this organization has so far distinguished itself among left-wing voices by being consistently at odds with the real world, due to a combination of intelligence failure and wishful thinking (the latter, imho, is the cause of the former). On the same day as Assaf's statement above, the Wall Street Journal reports: "Rebels in Misrata Call for Foreign Troops."

Sunday, April 10, 2011

Leftists for Chaos?

There is an opinion like this on the left side of the blogosphere:
Arab regimes (and Iran) often warn against change and revolutions: they try to scare us by warning of the potential for chaos. I say: we should work for the overthrow of all those regimes (Arab regimes and Iran) because chaos is far superior to those regime. At least, under chaos there is a stronger chance for change and sabotage (sabotage of oppression and injustice and occupation and conspiracies).
But I doubt that most leftists in the oppositions in Iran and the Arab world are looking for "chaos." In any case, they are too few in number and too unorganized to take advantage of it if that's the idea. Instead, such leftists as exist there are looking to establish better governments than they have and wish to lead organized mass action for that purpose, though in most cases they end up following rather than leading rebellious largely-non-left-wing crowds when such arise.

If you want chaos, you can find it in Somalia, for instance, and increasingly in Libya as well, but Libya and Somalia (unlike Egypt and Tunisia), if anything, are in all likelihood disincentives, not incentives, for would-be left-wing revolutionaries elsewhere.