Posts Tagged ‘Multi-national corporations’


Shape of things to come

May 19, 2009

I have written on the shape of things to come before here. Disturbing trends are converging at a rapid rate which portend an entirely different future than humans have imagined (except in science-fiction).

Three articles below stand out as huge milestones in the relentless march toward a New World Order: sophisticated human implants, corporation monopolies of food production and the alliance of China and Russia politically. The vehicle of implementing surveillance through implants and DNA collection, could very well be world hunger as corporations have taken over food production.

When I first blogged on these issues, I was alarmed. But finding the ongoing progress of technology to control the masses, I am beginning to fear the road ahead for us. Not that I have a solution – but the first step in definitely being aware.

Saudi ‘Killer Chip’ Implant Would Track,
Eliminate Undesirables


It could be the ultimate in political control — but it won’t be patented in Germany.

German media outlets reported last week that a Saudi inventor’s application to patent a “killer chip,” as the Swiss tabloids put it, had been denied.

The basic model would consist of a tiny GPS transceiver placed in a capsule and inserted under a person’s skin, so that authorities could track him easily.

Model B would have an extra function — a dose of cyanide to remotely kill the wearer without muss or fuss if authorities deemed he’d become a public threat.

The inventor said the chip could be used to track terrorists, criminals, fugitives, illegal immigrants, political dissidents, domestic servants and foreigners overstaying their visas.

“The invention will probably be found to violate paragraph two of the German Patent Law — which does not allow inventions that transgress public order or good morals,” German Patent and Trademark Office spokeswoman Stephanie Krüger told the English-language German-news Web site The Local.
Click to enlarge pic.

The 21st century’s bleak harvest

Rising food prices increased the aid dependency of developing countries [GALLO/GETTY]

By Asif Mehdi, development practitioner

As the world staggers from one economic crisis to another, it seems easy to forget the global food crisis that occupied centre stage in 2008.

World prices for essential grains more than doubled between 2006 and 2008.

Rice, the staple food of most of Asia, doubled in price in just seven months. And, despite their commitments to trade liberalisation, a few significant grain-exporting developing countries rushed to protect domestic grain stocks by banning exports.

The poor, who typically spend between 50 and 70 per cent of their meagre incomes on food, were most affected by the crisis.

According to the United Nations Food and Agriculture Organisation, the food crisis raised the number of undernourished people from 923 million to more than one billion by this year.

In late 2007 and 2008, the crisis caused food riots in at least 15 countries across the world, from Brazil to Bangladesh, and international media and forums spoke of little else.

Then, as suddenly as it struck, declining prices relegated the food crisis to collective global amnesia.

Causes not addressed

However, while prices for grains and foods have declined in 2009, they are still higher than pre-crisis levels and the fundamental causes of their volatility have not disappeared.

The international economic system has witnessed a dramatic disbanding of trade and investment barriers.

However, the international market for agricultural commodities, the nature of industrial agriculture, changing consumption patterns and international finance all threaten to make food price volatility and food insecurity a recurrent feature of the early 21st century.

Agriculture offers a textbook case of international market distortion. And in this case, the market distortion is created by precisely the developed countries that extol the virtues of free markets.

Double standards

The developed world protects its domestic agriculture with any number of subsidies and technical barriers to trade.

In 2006, for example, the Organisation for Economic Co-operation and Development (OECD) estimated that agricultural subsidies in OECD member countries were about $230bn.

In contrast to the magnitude of those subsidies, Official Development Assistance from OECD member states amounted to $120bn (the US alone had a military budget of $600bn in 2007).

The agricultural subsidies cover a host of measures – from domestic price support, to compensation to farmers for maintaining fallow land, to export price subsidies to dumping, some of which is disguised as food aid.

Paradoxically, international trade negotiations and, more importantly, International Monetary Fund (IMF) lending conditions expect developing countries to remove agricultural subsidies and liberalise domestic markets to imported foods.

While these measures allow for the increased availability of food, they have also eroded domestic agriculture and impoverished the rural economy, often in the most economically fragile states.

It was not surprising that the most impoverished countries were unable to meet the international price surge with increased domestic production, or the release of buffer stocks of staple food commodities.

In fact, those countries became ever more aid dependent as governments struggled to find the resources to pay the bills for imported food (and fuel), in the face of sharpened threats of hunger and undernourishment.

Industry domination

The opening of developing country markets does not benefit the average farmer in the developed world.

The international agricultural industry is dominated by a few grain, seed, chemicals and oil companies.

Such is their market power that three companies control the global grain trade and one company controls 60 per cent of seed production.

The grain trading conglomerates have unchecked market power to hoard and influence world prices.

Seed companies have employed breakthroughs in biotechnology to produce seeds that are compatible only with certain brands of pesticide or supply patented terminator seeds which germinate just once, and therefore the seed from a harvest cannot be used to grow a second crop.

This last feature of the seed business ensures a seed serfdom for the farmer, who cannot set aside part of the harvest for replanting.

It is no wonder, then, that the profits of the grain traders soared to astronomical heights in 2007, in one case up by 60 per cent over the previous year.

And it is no wonder that small farmers are bankrupted by one crop failure because of their inability to afford to buy or finance the procurement of seed for a new crop.

Industrialised agriculture

The other facet of industrialised agriculture is its energy intensity and reliance on hydrocarbon resources, whether as fertiliser or as fuel.

The poorest were most seriously impacted by rising food prices [GALLO/GETTY]
During the heyday of the Green Revolution, one study noted that between 1945 and 1994 US energy input for agriculture increased four-fold while crop yields only increased three-fold.

Since then, energy input has continued to increase without a corresponding increase in crop yield.

Barring a breakthrough in seed technology, industrial agriculture has reached a point of diminishing marginal returns from energy usage.

In addition, the fact that oil resource availability has peaked suggests that oil prices will be on a long-term increase, thereby increasing the costs of food production.

Given the nature of the financial crisis in developed countries, it is highly doubtful that governments will have the fiscal resources to increase subsidies to the agricultural sector, in order to contain the increase in prices.

For the developing world, fiscal constraints on governments and the likely drying up of development assistance will have the same impact.

Food to fuel

The recent movement in the developed world to produce bio-fuels is yet another factor propelling the price of grains.

A World Bank study, prepared in April 2008, pointed out that a third of US corn production goes to produce ethanol and half the vegetable oils produced in the EU to the production of biodiesel.

This diversion from food to fuel is subsidised extensively, while imports from Brazil (which has had the longest standing and most extensive bio ethanol production) are subjected to tariff barriers that effectively prohibit imports of Brazilian ethanol into these markets.

Commodity speculators, seeing the potential from increased demand for grains in these subsidised programmes, drove up futures commodity prices which in turn raised current prices in grain markets.

The same World Bank study contends that 75 per cent of the food price increase was due to bio-fuels, a figure hotly contested by the Bush administration at the time.

An International Food Policy Research Institute study asserts that the effect was somewhat less, at 30 per cent of the food price increase.

Ideology of the rich

The financial crisis in itself was a cause for the food price hike.

While prices rose steadily through 2006 and 2007, the latter half of 2008 saw a sharp increase in prices, in a so-called price spike.

However, little had changed in the fundamental conditions of supply or demand to cause such dramatic market adjustments.

If the financial crisis reduces aid another food crisis could be devastating[GALLO/GETTY]
By now it is clearly evident that as the unregulated and complex financial sector of the US was facing the unfolding effects of the real estate bubble, trillions of dollars moved across sectors and spaces and invested in food and primary commodities, causing another price bubble, this time of an altogether more serious consequence.

The simultaneous inflation of oil and food futures caused cost increases in the production of food while inflating its trading prices at the same time.

It seems that finance had run out of opportunities for profit, so it turned to the earth as a means of generating speculative profit, whether through real estate or primary commodities and food.

As the more recent financial crisis has shown, there is no regulatory capacity to stop such profiteering from reoccurring.

These are the difficult prospects and consequences of a world run by the ideology of the rich and powerful.

Development lessons

There are development lessons to be learned here.

First, food security is an issue requiring long-term international effort and food security demands that local agriculture be able to supply domestic needs wherever possible and that reserve stocks are garnered for difficult times.

Second, the developing nations are justified in holding out in the Doha Round of trade negotiations until real and tangible concessions are made with regard to trade in agricultural products.

Third, national development efforts need to be replenished with such ‘old fashioned’ endeavours as investing in rural production, water availability and the empowerment of the small farmer.

Economic history shows us that industrialisation was preceded by agricultural transformations, with the state playing a heavy role.

And economic history is a better guide to policy than the theorising of free marketers serving powerful corporate interests.

Asif Mehdi works in international development with an international intergovernmental organisation and has worked extensively in Asia and Africa during his 29-year career as a development practitioner.

The views expressed by the author are not necessarily those of Al Jazeera.

China’s top legislator: China-Russia partnership
enjoys fast growth


The strategic partnership of cooperation between China and Russia is currently showing all-round momentum and rapid growth as high-level contacts remain frequent, China’s top legislator said in Moscow on Wednesday.

Wu Bangguo, chairman of the Standing Committee of the National People’s Congress, made the remark during a meeting with Russian President Dmitri Medvedev.

Wu, who arrived in Moscow on Wednesday for an official goodwill visit, said he appreciates the frequent contact between leaders of the two countries.

He said Medvedev’s visit to China last year helped lay the foundation for continuous growth of the strategic partnership between the two countries.

Medvedev said that he and Chinese President Hu Jintao held their first meeting this year during the London G20 summit in April. He expressed the wish that they will have more meetings later this year.

The Russian president said he expects Hu to pay a state visit to Russia in June. Medvedev also expects to meet with Hu during the Shanghai Cooperation Organization summit and the summit of “BRIC” countries, namely Brazil, Russia, India and China, later this year.

China and Russia this year also are to hold a series of activities to mark the 60th anniversary of the establishment of diplomatic ties.

Wu and Medvedev stressed the importance of parliamentary exchanges between the two countries, saying they reflect the high level of development of the China-Russia partnership of strategic cooperation.

Wu said the strong China-Russia partnership is reflected in such areas as frequent contacts between top leaders of the two countries, the staging of “Russian Language Year” in China, the signing of an oil cooperation agreement between the two governments, and exchanges between the NPC and the Russian parliament.

Russia, Medvedev said, places high importance on parliamentary exchanges and cooperation between the two countries.

The Russian president also said Wu’s visit reflects the momentum of fast growth in bilateral links.

Source: Xinhua


Ireland must re-invent itself

May 9, 2009

One of the main drivers of the Celtic Tiger was the attraction of Foreign Direct Investment (FDI) to Ireland with lower corporation taxes. Ireland having been in the economic dumps for decades jumped with glee at the prosperity of jobs that American corporations brought to Irish people. The other main driver was the property boom, fueled by low interest rates and speculation.

Both drivers are bust now: the corporations that fueled our economy are moving jobs to countries with lower costs (wages); thus we are again seeing a migration of Irish people to countries that have been the benificiaries of these jobs. It was, of course, inevitable. The bottom has fallen out of the property market worldwide and will not recover soon.

Yet Ireland is capitalistic, through and through. We seek not to examine our system and its moral failures, but to maintain our prosperity. It has not really occurred to the government (or the people) that capitalism itself is failing from internal contradictions, way beyond the control of the Irish government and industry.

Ireland is more dependent than ever on the EU, our own Big Brother, and locked into a capitalist form of economy for the foreseeable future. But the capitalist system is doomed, sooner or later.

For our own good, and the good of all, the word ‘socialism’ must creep back into our moral dialogue as a partial solution to the crisis of today. Putting ‘people before profits’ must be our priority in fashioning the Ireland of tomorrow. Ireland was a leader in economic development for the world previously; it must now find the courage to lead again with innovative thinking that moves us away from the shackles of corporate capitalism.

Here are some points to consider:

  • Economic theory without a moral dimension is savagery. When Ireland prospered from FDI and the jobs of foreign corporations, the people gorged themselves on affluent consumption without a thought to the real corporate priority of ‘profits’ before people. The consequences of ignoring the moral dimension of corporate strategy has left the Irish gobsmacked with the speed at which jobs are leaving the country.
  • It is always a mistake to ignore the basic philosophy of those on which one depends. What goes around comes around. It was Einstein who said that the definition of Insanity is doing the same thing over and over and expecting different results. We cannot fix what was the wrong direction; we can only be aware of the right direction. The Irish people themselves must decide whether personal affluence or common good is a priority for Ireland’s future.
  • With the current economic crisis, the approval of the Lisbon Treaty is likely as terrified Irish people vote in a desperate attempt to save themselves. Personally, I find provisions of the Treaty very troublesome, especially the prospect of having Nicholas Sarkozy or Tony Blair president of the EU for 2 1/2 years. (Both did extreme damage to the political unity of the EU in just the 6 short months of their terms recently: imagine what havoc they could wreak for five times that period?)
  • The Irish government scrambling to maintain Ireland’s lower tax rate for corporations may very well be in vain. First with more power, the EU has a strong eye toward ending this deferential designation for the entire Eurozone. Second, Obama is getting set to close the loopholes for American corporations who outsource their operations to avail of tax breaks internationally. (Article below) So the strategy of attracting more FDI for another boom maybe fatally flawed altogether.
  • We are not going back to the Celtic Tiger consumer frenzied lifestyle. The entire Western world is in the same position. Ireland is about to relearn the lessons it has forgotten from days gone by: less is often more. Waste and self-indulgence support corporate profits, but do not necessarily produce a happy, secure culture.

Once the Irish are finished lamenting the loss of materially surpassing the rest of the world, they may consider how to re-invent themselves and their economy in a way which affirms the basic values deeply embedded in the Irish culture. This will require some real focus on the now-to-the-future link, rather than action from financial panic; it will require solidarity and vision.

Ireland is small, but that is as much a boon as a disadvantage. By bonding with other small countries in the EU like the Czech Republic, the Irish people can change the future. Small countries of the EU can indeed tip the scale on the direction of what ‘political unity’ means in Europe.

Now is the time to lead with fresh thinking. But first we must stop and reconsider our basic values and shade the glare of unfettered consumerism from our vision; we must stop panicking and start observing the abundant opportunities that surround us. If the Irish people do not decide the direction of their future now, it will be decided for them.

European ‘tax havens’ face Obama action
President Obama is spearheading a tax shake-up

By Alex Ritson
BBC News

Ireland and the Netherlands are two countries which could fall foul of President Obama’s plan to crackdown on tax havens.

For many years, some of the best-known American companies in the world, including the software giant Microsoft have maintained large operations in European countries with low corporate tax rates.

President Obama claims current US tax law for American corporations has created a system where “you pay lower tax if you create a job in Bangalore, India than if you create a job in Buffalo, New York”.

The argument centres on what are known as “tax deferral rules”, which make it more expensive for American companies to reinvest overseas profits at home than abroad.

Tax rates

Now tax experts are warning that President Obama’s proposals will make many American corporations reconsider their overseas investments – and that this could be very bad news for Ireland and the Netherlands.

Currently, an American company which invests in Ireland pays corporation tax on its profits there of 12.5% to the Irish government.

In the Netherlands, the rate of corporation tax is 25.5%.

As long as the American company never brings the profits home to America, that’s the only tax it will ever have to pay.

Until now, that’s been a big disincentive to ever bringing the profits home, where the corporation tax rate is more than three times that of Ireland’s – at 39.25%.

President Obama sees that as a loophole and believes that by closing it, he will raise an extra $60bn in taxation over the next five years for US government finances.

Different standpoints

John Christensen, from the UK-based pressure group the Tax Justice Network, says action is long overdue.

“This will start to undermine the tax advantages that countries used for booking profits offshore like the Netherlands and Ireland offer to the American companies that use these places.,” he says.

“These countries are tax havens – not in the traditional sense, of offering secretive banking like Switzerland or the Cayman Islands – but in terms of offering facilities for profit shifting to international corporations.

“It’s just the start – and it’s clear that Obama will go a lot further”.

But Charles Cain, the chairman of the CM Skye investment fund, which is based on the Isle of Man says the United States will ultimately be the country that suffers most.

“If Obama’s plans go through, US corporations will find a way to move out of the US altogether, so as to avoid the problems,” he says.

“In so doing, probably Ireland and the Netherlands will be net beneficiaries”.

Recession deepens

The Irish Government told the BBC it would monitor the progress of any legislation carefully, and says it has sent a senior executive to its embassy in Washington to engage with the US administration and Congress.

As the global recession deepens, the US government, is keen to gain a bigger slice of the profits which multinational corporations keep in so-called tax havens around the world in order to pay for spending commitments at home.

But it is likely to win few friends in Ireland or the Netherlands by grouping them with Bermuda as “small, low tax countries” that supposedly account for a disproportionate share of the foreign profits of American companies.