May 22 is Republic Day – a memory actively suppressed. There’s a reason the media won’t celebrate it.
Canadian mining company Cosigo Resources was caught illegally mining in an Amazon national park and taken to Colombia’s Constitutional Court. The company took Colombia to arbitration in Texas, citing the United Nations Commission on International Trade Law. Canada’s Cosigo insists Colombian constitutional protections in the park violate Colombia’s obligations to protect investor rights under the US-Colombia Trade Promotion Agreement.
Public bankers and doctor, teachers, lawyers, economists and media hacks are busy performing private practice. Justice and safety is sold to the highest bidder. Economists and media demand we submit to the World Bank and International Monetary Fund (IMF), who demand that the most important institutions in our country – economic policy, education, health – must be privatized beyond the long arm of public regulation.
Few people know about ‘Capital Controls’. They are policy measures vital to a nation’s economy. Sovereign governments use such methods to control volatile flows of money across borders. To prevent massive capital flight, to staunch economic meltdown. Some nations use them to prevent speculative bubbles. Governments that used capital controls during the 2008 crisis were among the least hard-hit, according to little-publicized IMF reports.
JR Jayawardene’s 1978 constitution handed over investment policy to the foreign banks and multinationals who control private sector, who monopolize the country’s resources. No president, parliament or peon can now change these laws, easily. These laws returned us naked to the colonial fold, 30 years after purported independence, with name, flag and anthem as mere fig leaf.
Our white masters hate capital controls, since such policy tools, which counter the narrow short-term interests of global financiers and corporations, are prohibited by US trade and investment policies. And since the US Treasury Department determines World Bank and IMF but also our economic policy as well – there go our protective jungies too.
We have governments, but are they really in power?
Singapore and Chile once sought exemptions from the US to use capital controls to prevent crises when they negotiated bilateral trade agreements. The Bush administration refused. The Obama administration’s bilateral investment treaty (BIT) continued to prohibit capital controls. No exceptions. Governments violating such rules could be sued by foreign investors in international tribunals (though not vice-versa!)
However, the US came under pressure to change its own dictat. Over 250 economists called for US trade policy to allow greater flexibility on capital controls. They claimed when US trading partners fall into financial crisis, they lose export markets and jobs, and ‘hot money’ makes it impossible to control currency values, hurting long-term US investors and exporters and importers! Whoa! Common sense goes to Washington? No way!
Our house-trained economists, regularly quoted in our business news pages, and politicians shouting ‘harshly’ on either side of the parliamentary merry-go-round, did not change their liberalization and privatization gospel accordingly! They insist our economies must shift according to US/EU needs.
Most corporate lawsuits against governments are kept secret, even when governments are sometimes fined hundreds of millions. The World Bank’s Transparency International is quiescent about such opacity. The United Nations Conference on Trade and Development (UNCTAD) once reported that capitalists had launched 450 known lawsuits against governments worldwide, by January 2012, using BIT clauses. BITs protect companies of one country investing in another state, allowing companies to sue governments but not vice-versa.
BITs handed multinational corporations an arsenal of clauses to fight state regulations against harmful investment. Foreign investors could challenge, in an international arbitration process, “any change in law and policy to protect the environment and public health, to promote social or cultural goals, or to grapple with financial or economic crises.” An arbitral tribunal made up of three highly paid individuals, usually specializing in commercial rather than public law, decide such cases. Many governments are however now ignoring them.
By 2011, 51 corporate lawsuits had been filed against Argentina, many about privatizing water! Argentina ignored such suits. Ecuador was fined $78 million because US oil giant Chevron (aka Caltex) claimed ecological efforts to protect the Amazon negatively affected profits. In the 1990s, Mexico was fined $16.7 million for preventing US-based Metalclad Co. from dumping toxic waste there.
Capital Controls vs. Capitalist Punishment
When the Argentine government took over its largest oil company YPF from Repsol. Multinational mass media abuse soon ensued: Spain, a European basket case, called Argentina an “international pariah.” The European Commission threatened to take Argentina’s new import restrictions to the World Trade Organization. US bank Goldman Sachs, accused of stage-managing the 2008 global economic downturn, warned capitalists their assets in Argentina were not 100% safe. Canada’s capitalist voice, Globe and Mail, threatened Argentina’s President that she would live to regret this (even as Canada’s mining companies were caught paying off journalists in South American countries to avoid mentioning their pollution there!).
These threats are no joke: Argentina’s YPF, in 1922, was the first oil company in the world set up as a state enterprise. In 1928, the government started taking over energy resources. In 1930, Rockefeller’s Imperial Oil and England’s Shell funded a coup to flummox that gumption. YPF was later privatized, and in 1999 bought by Spanish oil giant Repsol who, instead of investing in Argentina’s gas and coal, drained massive dividends from YPF, its largest foreign stake. This prompted Argentina’s takeover. But one does not mess with the US government and multinationals without fully relying on the people. We expected a ‘democratic’ coup or ‘color revolution’ to follow. What took place was a Yahapalana type scenario, which again did not last long.
The white media blame Argentina’s political situation on Peronism – President Juan Domingo Perón, who from 1946 created a passage for the working class into the middle classes by consolidating rights and “a rigid labour system”. There as well as here, the media are paid to ignore the conservative classes, who provoke political and economic instability to protect the multinational