WORLDS POOR SUFFERING MOST IN THE CREDIT CRUNCH

• Development goals under threat from global slump
• Shrinking GDP will see $4.6bn fall in EU aid flow
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* Ashley Seager
* The Guardian, Thursday 5 March 2009
* Article history

The credit crunch is hitting the income of the world's poorest people the most and will make the UN's Millennium Development Goals more difficult to achieve than ever, according to research released today. The Global Monitoring Report from Unesco estimates the 390 million poorest Africans will see their income drop by around 20% - far more than in the developed world.

The global financial crisis has seen a fall in commodity prices as well as a drop in investment flows to poorer countries. The report's authors - Kevin Watkins and Patrick Montjourides - estimate this will cost sub-Saharan Africa's poorest people $18bn (£12.8bn), or $46 per person.

"These numbers will bring the region's limited progress in poverty reduction to a shuddering halt," says Watkins.

Douglas Alexander, the international development secretary, is hosting a conference in London next week to discuss the future of the goals, such as reducing child mortality and poverty amid growing concern progress towards these, agreed with great fanfare in 2000, is grinding to a halt.

The study also highlights wider human development impacts, including the prospect of an increase of between 200,000 and 400,000 in infant mortality. Child malnutrition, already a rising trend, will be one of the main drivers of higher child death rates. "Millions of children face the prospect of long-term irreversible cognitive damage as a result of the financial crisis," says Montjourides.

The Unesco warning follows hot on the heels of one from the International Monetary Fund. It said the world's 22 poorest countries might need an additional $25bn aid this year to cope with the financial crisis. If the crisis is worse than the IMF expects, though, that could hit $140bn.

Unesco reckons poor countries will need around $7bn to meet key education targets which form part of the goals. That compares with the $380bn of public money pumped into banks by rich countries in the fourth quarter of 2008. "Aid donors could clearly do far more to protect the world's poorest people from a crisis manufactured by the world's richest financiers and regulatory failure in rich countries," says Watkins.

The report analyses the scope of many of the poor countries affected by the credit crunch to use tax and spending measures to help themselves combat it. The conclusion is their capacity to do so is very limited. Using a new indicator for fiscal capacity, the analysis estimates 43 out of 48 low-income countries lack the wherewithal to provide a pro-poor fiscal stimulus.

Fiscal constraints are especially marked in many of the countries furthest from the international goals, it adds. There is a real danger these countries, many of which have been making progress towards universal primary education, will suffer setbacks, it says. The at-risk group includes Mozambique, Ethiopia, Mali, Senegal, Rwanda and Bangladesh.

The report says aid budgets in rich nations are being squeezed because they are expressed as a share of GDP, which is contracting. It estimates the EU's commitment to provide 0.56% of GDP in aid by 2010 will actually mean a drop of $4.6bn.

Unesco wants a concerted international effort to limit the impact of the financial crisis on the poor. Suggested measures include an increase of more than $500bn in IMF special drawing rights, along with governance reforms to give developing countries an increased voice.

The authors also call for the EU to provide a $4.6bn aid adjustment premium. They argue increased aid should be directed towards social protection and safety nets for the most vulnerable.

DEAR UNITED STATES,WELCOME TO THE THIRD WORLD!

via LA Times

Dear United States, Welcome to the Third World!

It’s not every day that a superpower makes a bid to transform itself into a Third World nation, and we here at the World Bank and the International Monetary Fund want to be among the first to welcome you to the community of states in desperate need of international economic assistance. As you spiral into a catastrophic financial meltdown, we are delighted to respond to your Treasury Department’s request that we undertake a joint stability assessment of your financial sector. In these turbulent times, we can provide services ranging from subsidized loans to expert advisors willing to perform an emergency overhaul of your entire government.

As you know, some outside intervention in your economy is overdue. Last week — even before Wall Street’s latest collapse — 13 former finance ministers convened at the University of Virginia and agreed that you must fix your “broken financial system.” Australia’s Peter Costello noted that lately you’ve been “exporting instability” in world markets, and Yashwant Sinha, former finance minister of India, concluded, “The time has come. The U.S. should accept some monitoring by the IMF.”
We hope you won’t feel embarrassed as we assess the stability of your economy and suggest needed changes. Remember, many other countries have been in your shoes. We’ve bailed out the economies of Argentina, Brazil, Indonesia and South Korea. But whether our work is in Sudan, Bangladesh or now the United States, our experts are committed to intervening in national economies with care and sensitivity.

We thus want to acknowledge the progress you have made in your evolution from economic superpower to economic basket case. Normally, such a process might take 100 years or more. With your oscillation between free-market extremism and nationalization of private companies, however, you have successfully achieved, in a few short years, many of the key hallmarks of Third World economies.

Your policies of irresponsible government deregulation in critical sectors allowed you to rapidly develop an energy crisis, a housing crisis, a credit crisis and a financial market crisis, all at once, and accompanied (and partly caused) by impressive levels of corruption and speculation. Meanwhile, those of your political leaders charged with oversight were either napping or in bed with corporate lobbyists.

Take John McCain, your Republican presidential nominee, whose senior staff includes half a dozen prominent former lobbyists. As he recently put it, “I was chairman of the [Senate] Commerce Committee that oversights every part of the economy.” No question about it: Your leaders’ failure to notice the damage done by irresponsible deregulation was indeed an oversight of epic proportions.

Now you are facing the consequences. Income inequality has increased, as the rich have gotten windfalls while the middle class has seen incomes stagnate. Fewer and fewer of your citizens have access to affordable housing, healthcare or security in retirement. Even life expectancy has dropped. And when your economic woes went from chronic to acute, you responded — like so many Third World states have — with an extensive program of nationalizing private companies and assets. Your mortgage giants Fannie Mae and Freddie Mac are now state owned and controlled, and this week your reinsurance giant AIG was effectively nationalized, with the Federal Reserve Board seizing an 80% equity stake in the flailing company.

Some might deride this as socialism. But desperate times call for desperate measures.

Admittedly, your transition to Third World status is far from over, and it won’t be painless. At first, for instance, you may find it hard to get used to the shantytowns that will replace the exurban sprawl of McMansions that helped fuel the real estate speculation bubble. But in time, such shantytowns will simply become part of the landscape. Similarly, as unemployment rates continue to rise, you will initially struggle to find a use for the expanding pool of angry, jobless young men. But you will gradually realize that you can recruit them to fight in a ceaseless round of armed conflicts, a solution that has been utilized by many other Third World states before you. Indeed, with your wars in Iraq and Afghanistan, you are off to an excellent start.

Perhaps this letter comes as a surprise to you, and you feel you’re not fully ready to join the Third World. Don’t let this feeling concern you. Though you may never have realized it, you’ve been preparing for this moment for years.

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R.I.P USA :DISSECTING THE DEATH OF A DYNASTY

By PMoor

On Monday, September 15 the chickens came home to roost. Now, when those words were used 45 years ago to describe the assassination of America’s beloved president John F. Kennedy it caused a rift in the Nation of Islam between Elijah Muhammad and Malcolm X, who erroneously mouthed those sentiments against the wishes of his advisers. We all know how that ended up. So, in the spirit of harmony I ask that you don’t shoot the messenger, I am just stating the obvious.

When the obituary for the American Empire is written, its death will not be attributed to Al Qaeda or Middle Eastern terrorists. The eulogist won’t say that everything came to an abrupt end because the country was on the cusp of electing it’s first “Black President.” No, it may read something more like this: In the end, the wagging dog ate it’s own tail. America, that great bastion of freedom and capitalism was consumed by unprecedented GREED.

Seven score years ago, one of the most tragic events in modern times took place in our beloved City of New York (9/11). An attack took place, that much we know, and the financial heart of the Empire, the World Trade Center was the target. Apparently the plan was to bring America to her knees by crippling her financial markets and destabilizing the economy through FEAR. Did it work? On the contraire, citizens were instructed to go shopping to infuse the economy with a stimulus so that we may fight the terrorist with our ‘wallets.’ Then an amazing thing happened as the wallets parted ways and the cash was delivered: under periods of stress and duress, America flourished. Red, white and blue flags were waving from places where years ago the same flag was burned to a crisp in protest of the Imperialistic agenda these jihadist were raging against.

Harlem, Bed Stuy, I seen them fly. It was the closest we’ve ever come to realizing King’s dream of holding hands and singing Kumbaya with lil’ black boys and girls and lil’ white boys and girls. In the cowboy tradition of Americanism though, we knew it was time to kick some ass, so the folk songs around the camp fires would abruptly come to an end and those same lil’ boys and girls would be outfitted with camouflaged fatigues, AK-47’s and sent to the mountains of Afghanistan to smoke Osama Bin Laden out of his hole, or cave, or something like that. Bush amassed a coalition of “friends” to join him in this Crusade against the infidel powers of Islam. This Coalition of the Willing set it’s sights on Iraq and justified preemptively ridding the region of any agitators, such as the Butcher of Baghdad, Saddam Hussein.

Also amassed in that coalition were the business interests that have had its sights set on not only the Iraqi oil fields but the coveted pipe lines that run through Afghanistan to the Caspian Sea, ironically enough. Also private contractors (mercenaries) like Black Water rode in with the caravan to lay waste to the region and set up paramilitary outposts from which smaller, undocumented wars are being fought in Iran, Pakistan, Georgia, and parts of Africa as we speak. These black ops are agitating already fragile relations that the US has around the world, but if these conflicts aren’t “technically” mandated by Congress then we will never see a diplomatic solution to them. All we’re privy to is pictures of burning embassies and we think, “dammit, those terrorist have struck again.” The “Shadow Government” lead by Dick Cheney and Co. is hard at work on behalf of the American taxpayer to drag the US into the very same 100 Year Conflict that McCain speaks so highly of. I know I sound like I’m tearing pages out of a Tom Clancy book, but click these links and do some research into these claims being made.

As a backdrop to all of this, we have the financial crisis that has forced itself to the forefront of the American consciousness. A 900 TON Gorilla that can’t be moved, swayed and refuses to go anywhere, anytime soon. On Monday, the crisis hit a crescendo with the collapse of Lehman Brothers and the subsequent bailout the following day of AIG, to the tune of $85 Billion. Guess who’s footing the bill? The Good Ole American taxpayer who nowadays is synonymous with the childhood icon “Mikey” from the LIFE commercials, because as consumers they’ll eat anything.

Coincidentally enough while the taxpayer is hemorrhaging nearly a trillion dollars in bailout money for financial institutions that went belly-up by defrauding these very same taxpayers not only is the Fed making no concessions to protect the average consumer who is facing foreclosure due to these cooked up schemes but the only form of recourse or redress they are being offered is the chance to make “Change” this upcoming election cycle by casting a ‘vote’ as if that is to cause some miraculous reversal of fortune. It is being predicted that in the next few months, a thousand banks are forecast to fail. FDIC is rumored to be tinkering on failure. Washington Mutual is on the auction block. Fannie Mae and Freddie Mac went belly up. Bear Sterns failed. Merill Lynch has blood on its hands. The only two mega institutions left standing are Goldman Sachs and Morgan Stanley. If they fail, then what? The complacency of Americans is frightening.

So here is the scenario. Almost seven years ago to the day, allegedly a band of Arab terrorist brought down the Twin Towers. Legislation (already prepared prior to the attacks, coincidentally enough) is immediately ushered through the halls of Congress that reformats the structure of our Constitution as we know it, making it possible for Bush to erode and deregulate government oversight. This is tantamount to stripping a computer of its firewall, then viruses of all forms start attacking and lay waste to the infrastructure. In this case the virus was the bankers (it’s always the money changers, ask Jesus) who came to pick apart the carcass that was America. They preyed on the weak, the feeble, the unsuspecting, and disproportionately the poor. Predatory lenders victimized the very people who looked towards the government for security. While unprecedented legislation was passed to create new bureaus such as Homeland Security, little was done to secure the homes in the land. The very same men who had the most to lose on that Tuesday in September turned into the very same animal that supposedly callously preyed on them. Not to mention the bleeding of Americans this summer by Bush’s cronies via the escalating gas/energy prices. Under George’s watch the rich got super rich and the poor got thrashed.

“Blacks” have been notoriously victimized by the current administration, whether it be Katrina, or loss of jobs, or subprime mortgages. As the saying goes the more things change the more they stay the same. This time around though the ramifications are massive but who wins? People are still out of their homes and the country will soon be out of fiat currency. The Fed, which is NOT a government agency, but a privately held consortium of international bankers cannot continue to issue federal reserve notes against growing inflation, deficit and a faltering dollar. A late night emergency session was called on the 18th to craft a plan to subsidize all of the failing financial institutions (M.other O.f A.ll B.ailouts) that are destroying the soundness of EVERY financial market on the market. To the tune of nearly a trillion dollars, the U.S. will be in further depth to the Fed, the IMF and the World Bank but victims from Hurricane Ike can’t get any ice down in Texas, the lame duck president’s home state. Obama, sounding presidential, stressed that relief for Wall Street shouldn’t come before, or at the expense of relief for Main Street, but no concrete plans are being laid out. The bill for Iraq is hovering around a trillion dollars, with $10 Billion a month being spent. You have Iran and Russia licking their chops right now, playing the waiting game before they make a strategic war move to force the hands of the Americans. Where is the U.S. going to get the money to fight all these wars?

The only thing that backs the “money” is the faith of the people. How fitting then, that the soundness of the financial institutions would fall on its face on the 15th, during a full moon in Pisces, and Pisces denotes “BELIEF” of course and the end of an ‘Age’ (reports are already referring to the crash on Monday as the end of Capitalism as we know it). It was conjoined by Uranus which represents AWARENESS, and the interpretation is once people become AWARE of the predicament this country has found itself in, the FAITH that they’ve blindly invested in this bankrupt corporation will dissipate and wane, just as the governments faith in Lehman Brothers dissipated and the fallout will be one of monumental, disastrous proportions. Got gold? Better get you some.