Yemen’s media blackout

The shameful lack of coverage given to US-UK backed atrocities in Yemen is but one aspect of western media’s blackout of the truth about the conflict.
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One of the survivors of the US-UK supported bombing of a school bus in Yemen, which killed over 40 children, mostly under 10

 

Even by the depraved standards of the US-UK-Saudi-UAE aggression against Yemen, yesterday’s bombing of a school bus was a new low. The bus had stopped at a market whilst taking the children back to school from a picnic when it was targeted, according to Save the Children. Health officials have informed the world that the strike killed 47 people with 77 more injured, but that that number was likely to rise. Most of those victims, tweeted the Red Cross, were less than ten years old. Following the attack, Frank McManus, Yemen country director for the International Red Cross, whose workers are treated the wounded, pleaded that: “Today should be the day the world wakes up to the atrocities going on in Yemen … a bus full of school children cannot be viewed as mere collateral damage. Even wars have rules, but rules without consequences mean nothing.”

It is hard to see how the world will wake up, however, when western media remains so committed to its refusal to give anything like adequate coverage to the ongoing aggression. You might have thought that the targeted bombing of a bus full of children parked in a market far from any military activity, by forces enjoying full military, diplomatic and strategic support from the UK, would make headlines. Yet this is not the case. Take the Guardian, for example, supposedly a bastion of liberal values and humanitarian concern. Their report on the incident went online shortly before 7pm last night. Yet this morning, it does not feature amongst their 13 headline stories, which include such gripping items as  “the chips are down in Belgium at heatwave hits supply of fries”. Click on the ‘world news’ section, and Yemen is not even amongst the 11 headlines there, bumped by earth-shattering stories such as “New Zealand – Jacinda Ardern says country will ban plastic bags”. Only if you specifically click on the Middle East section would you find the story – fourth of that section’s six headlines, just behind “Mauritian presidential hopeful arrested” and “Looted Iraqi antiquities return home”.

The Independent, now online only and perhaps, you might have thought, less subject to the pressure from advertisers that drives some of the self-censorship of its loss-leading print-edition cousins, is little different. Yemen was among neither its eight ‘top stories’ this morning, which included headlines such as “British campers flee as flash floods batter France”, nor the eight pieces in its ‘more stories’ section, which included items titled “summer not over yet, despite thunderstorms and heavy rain” and “Pochettino blames Brexit for Spurs’ failure to sign any new players”

Of course, in a sense, these outlets are entirely correct not to consider the story as news – for there is nothing really new about yesterday’s atrocity. Indeed, only last week, an airstrike on a market and hospital killed at least 60 people; such slaughter has become routine. Even the killing of children is standard practice: in fact, the 29 children killed in the bus bombing yesterday are but a fraction of the 130 children killed in Yemen every day by the famine and disease which the aggression has brought to the country.

Indeed, alongside the straightforward lack of coverage, the downplaying of the level of killing in Yemen constitutes a second, more subtle, form of media blackout. Somewhere along the line, someone decided that 10,000 was the death toll to be forever associated with the Yemen war, and this number has appeared in virtually every article on the subject for years. In truth, this figure is a massive underestimate, given that at least150,000 are believed to have died from starvation and preventable diseases last year alone, a direct consequence of the aggression on Yemen, the blockade of its ports, and the targeting of its civilian and agricultural infrastructure. Thus the ‘death toll’ endlessly repeated in the media – and shamefully, this often includes alternative media – is in truth but a tiny fraction of the true level of suffering being rained down on that country by the west and its proxies.

Another form of blackout is the presentation of the conflict as a civil war. There was a civil war in Yemen, the endgame of which was reached when the Ansar Allah movement captured the capital city and President Hadi fled the country. Since then, beginning in March 2015, what has been occurring is a foreign aggression against the country. In the words of Professor Isa Blumi, what is ”Strategically left out of the discussion” here “are those outside facilitators of empire whose war has created new opportunities to plunder Yemen’s resources. Rather than seeing the heavy hand of empire, the outsider is expected to believe the media and think tank experts that it is Yemenis’ own pathologies, their social and economic backwardness, that leave them susceptible to violence and thus ‘civil war’. The ‘they are at war with themselves’ trope continuously repeated in various media and academic circles ultimately obfuscates who are guilty, laying blame on eighty percent of a country’s population currently being starved to death”.

Even when foreign aggression is admitted, however, the agency for this is often misrepresented. Thus a fourth form of blackout consists of presenting the war as somehow an independent initiative of the Saudis, which the west are, at best, merely ‘backing’ or ‘going along with’ for the sake of arms sales or oil supplies. This is truly putting the cart before the horse. The truth is thatthis is a US-UK war, planned in the corridors of Whitehall and Washington, but executed by their faithful Gulf proxies. We know now, from emails leaked by Wikileakslast year, that even Crown Prince Salman himself wants out of the war. But he knows that his family’s grip on power is utterly dependent on western support. And the price of that support is that their foreign policy is not their own. The deal, stretching back to the days of the British empire, is that the west provide security to the al-Saud family – but in return, the al-Sauds relinquish their foreign policy to the west. And right now, the west’s order of the day is to destroy Yemen.

Make no mistake, the war on Yemen is a UK-US war, and to present it as anything else is a dangerous misrepresentation of reality which attempts to lay the blame solely at the door of their oriental fall guys. Of course, it plays very well in countries like Britain, still drenched in its colonial and orientalist mentality, to shift the blame for Yemen’s genocide onto crooked and mischievous Arabs. Groups like Stop the War, I am sorry to say, tend to play into this narrative, portraying the recent visit to Britain by Crown Prince Bin Salman, for example, in terms of an otherwise pristine Britain sullying itself by association with a bloody Arab ‘despot’. This is a complete inversion of reality; the truth, of course, is that the Saudis’ greatest crime is their collaboration with the genocidal ruling class in Britain and the USA.

But there is also another form of media blackout on Yemen, one which even the alternative media (and here I would have to include some of my own past writings on the conflict) often succumbs to. This is the presentation of Yemenis as simply passive victims, lacking all agency, the hapless recipients of bombing raids and starvation policies. In fact, Yemen’s struggle is not essentially a story of victimhood, but of resistance. When we lament three years of Yemen’s bombardment, we should not forget that we are also celebrating three years of truly extraordinary and heroic resistance. To have survived these punishing raids for this long should demonstrate beyond all doubt that the Ansar Allah movement, against whom this devastating war is being waged, is a genuinely popular and representative movement – for if it were not, it would have collapsed years ago. The constant media refrain of Houthis being merely Iranian proxies fighting the ‘legitimate government’ turns reality square on its head. Legitimacy does not come from being ordained by the priesthood of global capital, as Hadi was, but from the kind of popular support that alone allows a movement to face down a ten-country coalition supported by the most powerful militaries in the world.
And where does the Ansar Allah movement’s popularity come from? It comes from putting itself at the forefront of resistance to the western project of selling off Yemen, opening up Yemen’s resources to looting by western financial corporations, and turning over Yemen’s political system to Saudi stooges. Indeed, in so doing, Ansar Allah are merely the latest incarnation of a spirit of Yemeni resistance to western capitalism going back over 100 years. It is this spirit which the current bombardment is trying – in an act of the most brutal futility – to crush. It is this spirit that the media desperately want to black out. And it is this spirit that will ultimately see empire, and all its stooges and apologists, crumble into dust.  

A version of this article originally appeared on Middle East Eye 

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Trump’s delusional Iran oil gambit is decades too late

Trump is using everything he’s got to wage economic war on Iran. His problem is that ‘everything he’s got’ is not nearly enough, as the virtual monopoly power once wielded by the US has long since evaporated.

Last week, a senior State Department official announced the US’ intention to cut Iranian oil exports “to zero” by November 4th this year, by threatening to impose sanctions on any company still trading beyond that date. Brian Hook, director of policy planning at the State Department, told reporters on July 2nd that “Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue on crude oil sales”.

Hitherto, experts had predicted US sanctions would see a reduction of around 500,000 barrels per day (bpd) by the end of the year – barely one fifth of the country’s current export of 2.4 million bpd. Even the sanctions that preceded the 2015 nuclear deal – which, unlike today’s unilateral effort, were supported by a broad alliance of world powers, including Russia and China – only succeeded in removing half Iran’s oil (1.2m bdp) from the market.

Hook reassured the world that “We are confident there is sufficient global spare oil capacity”, claiming Saudi Arabia alone could produce an additional 2 million bpd. Saudi Arabia and Russia have already agreed to increase production by 1 million bpd reversing the production quotas imposed in the wake of the oil price slump in 2016.

This determination to destroy Iran by any means necessary has, of course, been the Trump administration’s signature foreign policy since day one, with almost every member of his team harbouring a long-held and well documented vendetta against the Islamic Republic. What is new with Trump, however, is not this determination as such – let’s not forget that Iran has been on the official Pentagon hitlist since at least 2001 – as the means used to pursue it. As I argued in 2014, the nuclear deal was not, on the part of the west, a genuine rapprochement so much as a long term programme of western infiltration, based on the ‘Libya model’, aimed at building a pro-imperialist fifth column within the Iranian state in order to prepare the ground for ‘regime change’ in the future. The Trump team, of course, has no patience for the long game, and want to simply cut to the chase. The reason for this obsession with destroying Iran – shared by all factions of the western ruling class, despite their differences over means – is obvious: Iran’s very existence as an independent state threatens imperial control of the region – which in turns underpins both US military power and the global role of the dollar. And as South-South cooperation continues to develop, this threat grows every day, whilst the means to diminish it are reduced by the same measure.

At the same time, the US military encirclement of China – begun in earnest as Obama’s ‘pivot to Asia’, but, like so much else, undergoing major escalation under Trump – is intimately linked to a policy of cutting off China from its suppliers. In this sense, a policy of ‘isolating’ of Iran is aimed at isolating China also, as China is the largest market for Iranian crude.

Trump’s policy, however, is likely to get few buyers. Pepe Escobar has explained the likely response to Trump’s plans from each of Iran’s top customers:India will buy Iranian oil with rupees. China also will be totally impervious to the Trump administration’s command. Sinopec, for instance, badly needs Iranian oil for new refineries in assorted Chinese provinces, and won’t stop buying. Turkey’s Economy Minister Nihat Zeybekci has been blunt: “The decisions taken by the United States on this issue are not binding for us.” He added that: “We recognize no other [country’s] interests other than our own.” Iran is Turkey’s number-one oil supplier, accounting for almost 50% of total imports. Russia won’t back down from its intention to invest $50 billion in Iran’s energy infrastructure.. And Iraq won’t abandon strategic energy cooperation with Iran. Supply chains rule; Baghdad sends oil from Kirkuk to a refinery in Kermanshah in Iran, and gets refined Iranian oil for southern Iraq.”

With European companies likely to be more nervous about insubordination to US diktat, this merely leaves more tantalising investments open to Russian and Chinese companies.  As Philip K. Verleger noted, “It’s a huge opportunity for China and Russia to cement relationships with Iran”.

At the same time, all this activity and uncertainty is bound to push oil prices higher, meaning that any reductions in export quantities may well be compensated by increased revenues.

Trump’s attempts to persuade the rest of the world to cut off its nose to spite its face, then, are likely to all on deaf ears. It is in this light that Trump’s igniting of a global trade war must be seen.

At midnight on July 5th, US tariffs on $34billion worth of Chinese imports went into effect, at a rate of 25%. Trump told reporters that tariffs on a further $16 billion worth were likely to follow in two weeks, fulfilling a pledge made in April to slap tariffs on 1300 products totalling $50 billion annually. These tariffs were designed to target the Chinese aerospace, tech and machinery industries, as well as medical equipment, medicine and educational material. The final total, however, he added, could eventually reach $550 billion – “a figure”, noted Industry Week, “that exceeds all of U.S. goods imports from China in 2017”. These China-specific tariffs follow tariffs on steel (25%) and aluminium (10%) imports imposed on the EU, Mexico and Canada four days earlier.

According to Fox Business, Canada stands to lose around $2billion per year as a result of these tariffs, with Brazil, Russia, China and South Korea each set to lose at least $500 million annually.

But this may be precisely the point: not only to ‘bring jobs back to the US’, but also to create new forms of leverage to be used against rivals and allies (and is there really a distinction between the two anyway these days?) alike. So far, of course, Trump has famously refused to offer waivers to his allies. But with Trump, nothing is forever – everything is leverage, to be played and bartered as seen fit. Could it be, then, that waivers may yet be offered to countries who manage to wean themselves off Iranian oil by the November deadline? And even if not, the very willingness to use trade as a weapon so openly and brazenly is a reminder that there may be further punishments on the way for those who do not toe the line on the strangulation of Iran. After all, as Louis Kuijs, chief economist at Oxford Economics, has pointed out, this ‘new era’ has only just begun: “Clearly the first salvos have been exchanged,” he said, “and in that sense, the trade war has started. There is no obvious end to this”.

Nevertheless, Trump’s bark may yet be well worse than his bite. For on thing, the counter-measures employed by the Chinese – a reciprocal 25% tariff on $50billion of US goods – will hit the US hard. One product subject to the new tariff, for example, is soybeans. China is the market for 25% of all soybeans grown in the US. Grant Kimberley, a soybean farmer with the Iowa Soybean Association, estimates that this tariff alone could lead to a 70% drop in exports.

But even, even apart from the Chinese counter-measures, the US-imposed tariffs themselves are likely to hurt the US as much as China. A report on NPR suggests thatfor now, the blows are threatening to land hardest on non-Chinese companies like New Jersey-based Snow Joe/Sun Joe”, which – like so many other US companies, relies on Chinese imports for crucial parts of its supply chain. And in the end, of course, all of these increased costs will be passed on to the US consumer, directly depressing their real wages.

For China, however, the impact is likely to be – in the words of Ethan Harris, head of economic research at Bank of America Merrill Lynch – “quite small”.  Industry Week noted that whilst “In the past, the U.S. used its economic clout to win trade skirmishes with developing countries… China, whose economy has grown tenfold since it joined the World Trade Organization in 2001, poses a much more formidable adversary.” James Boughton, a senior fellow at the Centre for International Governance Innovation in Waterloo, Ontario, told the site that  “The dynamic is different from anything we’ve seen. China has an ability to ride out this kind of pressure, to weather the storm, that a lot of countries didn’t have in the past.”

 

Indeed, Trump has already been forced into retreat in some areas, given the likely repercussions. Ian Bremmer, president of the Eurasia Group consultancy, told CBS that  “Trump backed off a couple weeks ago on implementing what would have been significant measures against them. You’re familiar with the Chinese telecom firm ZTE. They were going to be made bankrupt by White House regulations what were being put in place. Trump himself intervened with a tweet saying, we don’t want to lose all of those Chinese jobs… [Trump] knows that China can hit back really hard and they can hit back in a targeted way against red states, against American farmers. So I would be very surprised if we saw significant escalation as opposed to significant rhetoric before elections in the U.S. in November, which is what we’re really talking about here.” Other possible Chinese retaliatory measures include limits on exports of rare-earth metals, essential for technologies such as smartphones, and of course the zero-option of dumping its holdings of US treasuries (although this would not be without serious pain to itself of course).

So the idea that trade war will somehow pressure China (and others) to dump Iran seems ultimately fanciful. The process of ‘delinking’ has already gone too far. China is already Iran’s biggest trading partner, and – with Chinese tariffs on US oil looming – is more likely to increase Iranian imports to replace that no longer coming from the US rather than vice versa. Iran already sells its oil to China in yuan, rather than US dollars, meaning that the entire US-controlled financial system is completely circumvented for the countries’ bilateral trade, and therefore outside the control of US-imposed financial sanctions. Looking forward, Iran is set to play a crucial role in the development of China’s mega Belt and Road Initiative, with a high speed railway planned to provide sea access to landlocked central Asia. And with French oil giant Total’s planned investment in the massive South Pars oil field in jeopardy, the contract is likely to now go to a Chinese company.

Economics professor Danny Quah noted back in 2009 that the dependence of China on US markets tended to be greatly overestimated in the west. By 2006, only 20% of Chinese exports were to the USA, with a far higher proportion going elsewhere in East Asia. In 2013, the US was not even the largest single customer for Chinese goods (it came second to Hong Kong). By 2o15, only 18% of Chinese exports were to the US; with almost half (48.5%) going elsewhere in Asia, 19.9% to Europe, 4.2% to Latin America, and 4.1% to Africa. In other words, the global South accounted for more Chinese exports than US and Europe combined. And, as is becoming clearer by the day, US and Europe are not combined.

According to the CIA’s world factbook, Chinese exports in total represent just under 20% of GDP. If we do the maths, then – 20% of 20% – it turns out that just 4% of Chinese GDP comes from exports to the US. Significant, but hardly the economic gun to the head that Trump seems to believe.

The days when loss of market access to the US meant oblivion for countries like China are long gone. The future now lies in South-South cooperation precisely along the lines of the multibillion Belt and Road Initiative. The US government understand that, and their attempts to simultaneously sabotage both China and Iran are last-ditch attempts to prevent the inevitable – further delinking, and a global economy in which the US is becoming increasingly peripheral. But the truth is, this effort is already too late.

This article originally appeared on RT.com 

Trump’s attack on the lira – a new financial war on the Global South

Trump’s attack on the Turkish lira, combined with recent Federal Reserve moves to choke off dollar supply, are pushing the world towards a rerun of the 1997 currency crisis. This may well be the whole point.

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Last Friday, Donald Trump announced new sanctions on Turkey – comprising a doubling of the steel and aluminium tariffs he had introduced earlier this year. Turkey’s currency was already struggling, but these new sanctions “are the straw that broke the camel’s back”, commented Edward Park of the UK investment management firm Brooks Macdonald. The same day, the Turkish lira fell to more than 6 to the dollar, the first time it had ever done so, hitting a low point of 7.21 to the dollar on Sunday. Following Turkish caps on currency swaps, it slightly regained some of its lost value, and was trading at 6.12 by Wednesday, still way below the 4.75 to the dollar it was worth last week. Whilst the Turkish move has had some effect, this should not be overstated: simply banning the trading of lira above certain limits, which is effectively what Turkey has done, is hardly a sustainable means of revalorising the currency; andaccording to the FT, investors “are still ratcheting up bets against Turkey in other ways, such as through credit default swaps that pay out in the case of a debt default”. Turkish bank shares now stand at their lowest level since 2003.

Underlying the currency’s vulnerability are the country’s massive dollar debts. Turkish companies now owe almost $300 billion in foreign-denominated debt, a figure which stands at over half its GDP. The question is – how did this happen, and why has it suddenlynow become a problem?

During the era of Quantitative Easing, the US Federal Reserve flooded US financial institutions with $3.5trillion in new dollars, much of which poured into so-called ‘emerging markets’ such as Turkey. So long as the music kept playing, this was fine – near-zero interest rates, combined with a weak dollar, made these debts affordable. But since the Federal Reserve ended its programme of QE last year – and then started to reverse it, selling off the financial assets it had purchased (and thus effectively taking dollars out of the financial system) – the dollar’s value has started to rise again, making debt repayments less affordable. This appreciation of the dollar has been compounded by two successive interest rate rises by the Reserve; but it has also been compounded by Trump’s actions. Paradoxically, Trump’s trade wars have led to a further rise in the dollar, as investors have viewed it as a ‘safe haven’ compared to other currencies deemed less able to withstand the unpredictable turbulence he has unleashed. Even the yen and the Swiss franc, traditionally viewed as ‘good as gold’ have weakened against the dollar – as, indeed, has gold itself. As Aly-Khan Satchu, financial analyst at Rich Management, has put it the “US dollar has been weaponised – either deliberately or by design” (is there a difference?), adding that the “dollar is basically knee-capping countries”, warning that other countries will face the same treatment “if they continue to pursue the policies that Erdogan is seeking to pursue”.

Thus Turkey has been hit by a quadruple whammy by the US – interest rate hikes and the choking off of dollars from the Fed; tariffs and sanctions from Trump. The result is a loss in the lira’s value of almost 40% since the start of the year.

And the effects are already being felt far beyond Turkey’s borders; the South African rand fell to a two-year low on Monday, and the Indian rupee, Mexican peso and Indonesian rupiah have all been hard hit. This is unsurprising, as the ballooning of dollar-denominated debts – from $2trillion 15 years ago to $9trillion today, largely in the global South – combined with the reversal of QE was a crisis waiting to happen. All the conditions which prefigured the 1997 East Asian currency crisis are now effectively in place. All that’s needed is a push – which is exactly what Trump has just given.

This is textbook stuff – or should be, if economics textbooks bore any relation to reality (which they don’t). The last ten years are virtually an exact replay of the decade or so running up to the 1997 crisis. Whilst the 1985 ‘Plaza Accord’ dollar devaluation was not exactly Quantitative Easing, it had the same intent and results – a flood of cheap money and dollar debt, and therefore growing global dependence on the dollar and vulnerability to US monetary and economic policy. This vulnerability was then effectively ‘cashed in’ with the ‘reverse Plaza accord’ ten years later, which, as with the current reversal of QE, choked off credit and ramped up interest rates, making markets more jumpy and bankruptcies more likely. In the end, the trigger was the collapse of the baht – the currency of a country (Thailand) with a GDP half that of Turkey – which spiralled into a crisis that ultimately spread across all of Asia, sabotaging the continent’s development and allowing US corporations to buy up some of the most advanced industrial plant in the world for a fraction of its value.

It is not hard, then, to see why Trump and the Fed might well wish to trigger such a crisis today. The more the currencies of dollar-indebted countries slide, the more real goods and services they have to pay in tribute to the US to service the same paper-dollar debts – whilst those who cannot keep up will be gobbled up for pennies on the dollar. Yet beyond these purely economic gains lies also the geopolitical imperative – to maintain and extend US domination by scuppering its rivals. Trump is, after all, about nothing if not the conversion of all possible means of power into leverage to obliterate his opponents. Forcing one country after another to the brink of bankruptcy – and therefore to the IMF for a bailout – is a means of cashing in the dollar-dependency built up over the past decade into raw power. One can easily imagine the demands the US might make in return for its support in securing an IMF bailout – end oil imports from Iran, discontinue involvement with China’s Belt and Road Initiative… the potential is vast. Already direct threats are being made against Turkey about ‘what it needs to do’ to ‘reassure the markets’ – the Times on Tuesday, for example, demanding that “Erdogan should end his spat with the West if he wants to avert a deeper crisis…his course of action should be clear: he should raise interest rates [that is, promise a bigger cut of the Turkish economy to international currency speculators], heed competent economists, explicitly guarantee the independence of the central bank [that is, remove it from democratic oversight], and make up with President Trump” – as, after all, “US support will be needed if the IMF of World Bank is to step in”. Indeed, the targeting of Turkey may well be a response to Erdogan’s insubordination in relation to Iran: noted Robert Fisk this week, “Erdogan is helping Iran to dodge US sanctions which were imposed after Trump flagrantly tore up the 2015 nuclear agreement, and – in a decision demonstrating the cowardly response of the EU’s own oil conglomerates to Trump’s insanity – has announced that he will continue to import Iranian oil. Thus will Washington’s further threat of increased oil sanctions against Iran be blunted.” Trump may well hope – as I argued recently – that tariffs can serve as a weapon to bring recalcitrant states back in line with his Iran policy.

Indeed, it is here that the false dichotomy between the ‘globalists’ and the ‘economic nationalists’ in the Trump White House – and the country at large – is, once again, exposed. When it comes to pushing the global South into bankruptcy, their interests are perfectly aligned. However much Goldman Sachs’ press releases may cry wolf about Trump’s tariffs, the reality is that the trade war is the icing on the cake of the Fed’s own policy of squeezing the ‘emerging markets’. Indeed, Wall st depends on precisely the kind of financial instability which Trump’s trade wars have triggered. As Peter Gowan has noted, “the US economy depends…upon constantly reproduced international monetary and financial turbulence” – while Wall St in particular “depends upon chaotic instabilities in ‘emerging market’ financial systems.” But by draping these actions in the flag, and parading them alongside a chorus of pseudo-shock from the ‘globalists’, their true nature is obscured. The global South now stands on the precipice – with ‘establishment liberals’ and ‘nationalist insurgents’ alike lining up to give them a shove.

An earlier version of this article originally appeared on RT.com