‘Terrornomics’: Logic of war and GDP growth


When machines and computers, profit motives and property rights are
considered more important than people, the giant triplets of racism,
materialism, and militarism, are incapable of being conquered.
A true revolution of values will soon cause us to question the
fairness and justice of many of our past and present policies
: - Martin Luther King, Jr -from "A Time to Break Silence",
King's address given on this day, April 4th in 1967 at the Riverside
Church in New York City

The progressive school of thinking has long pointed the finger at the powers that be, leveling various accusations that strike conspiracy. One that has been repeated throughout history is that governments embark on wars in order to satisfy their own personal ambitions or to secure riches or to obstruct people’s attention away from domestic economy issues. A more recent phenomenon is the emergence of countries that wage civil or cross-border wars whilst also achieving GDP growth.

Recent history is littered with examples of such strategies. For example, General Gultiarri’s invasion of the Falkland islands in the early 1980’s was widely believed to be an effort to distract the Argentinean people away from a troubled economy to a long forgotten international dispute over islands that are not of any significant value in terms of strategy or resources. Whist, the desired affect of distraction may have been achieved, the defeat of the Argentinean forces by the UK forces was less clearly anticipated by the dictator.

Twenty-five years on, it is increasingly clear that the new world order currently unfolding is increasingly shaped by a shift in the global balance of power towards the East. In the midst of this monumental shift, some developing nations are able to disregard the dictates of the West, particularly in the realm of trade and commerce.

For instance, Sudan’s conflict in Dafor has witnessed some 200,000 deaths and 2.5 million displacements according to some data. US sanctions have been in place since 1997 with threats of further action in the offing despite it accepting 3,000 peace keeping troops in Dafor.
Even so, Sudan is currently planning out its first Golf course as part of a $4.5 billion development project. This fact is largely untold in the media that focuses more on horror stories about the southern region of Africa’s largest nation. Negative publicity has resulted in the exodus of many US and European businesses over the past decade. However, rather than being cowed by it all, Sudan has reoriented its trade and investment plan to look Eastward. As a result, Sudan is locking massive deals with China, India, and Malaysia as well as with the Persian Gulf.
In 2005, direct foreign investment topped $3.8 billion with double digit GDP. Multi-million dollar dam and oil pipeline deals are currently being executed with China holding a 40 per cent stake in total trade. According to a report in Marketplace, Chinese investors have claimed that they are concerned about what is taking place in Dafor. However, some Chinese investors are quoted to have said that they do not trust the West’s view of events.
Whilst most Western companies have pulled out due to the US trade embargo, the ones that remain are known to be making healthy profits. For instance, the sale of BMW’s are quoted to have tripled in the past six years. Similarly, the Coca-Cola plant in Khartoum churns out a million bottles per day. It also happens that they have a special pass to do business through a US approved licensing process.
The increasingly brazen application of double standards have spurred more and more developing nations to shrug-off US and Western pressure and align them selves with the emerging giants. For instance, in a backlash to the failure of the ‘Washington consensus’ economic model promoted by the World Bank and IMF, the continent of Latin America has witnessed a wave of victories for leftwing candidates who were critical of the Washington favored status-quo.
Brazil, Argentina, Ecuador and Venezuela have made efforts to shrug off outstanding debt to the World Bank. The Venezuelan Minister of Finance is quoted to have said that “Venezuela is free ... and thank God, neither today’s Venezuelans nor children yet to be born will owe one single cent to those organizations.” Later that month, in the wake of the Wolfowitz scandal, President Chavez declared that ‘Venezuela was withdrawing its membership in the World Bank and the International Monetary Fund.’ (The information clearinghouse.com)
Likewise, other Latin states are also actively seeking to break-free of IMF debts and conditionalities. Ecuador’s Premier has gone as far as to claim that his country reserves the right to bring official charges against the World Bank for damages caused by the cancellation of a $100 million loan and has announced that it will closely study the loans taken out by previous administrations.
‘Pot and kettle’
Currently, Sri Lanka is facing more aid cuts in response to a deterioration in human rights according to diplomats (AFP). A leading US administration official recently toured the island and remarked that the new government has failed to deliver on its promises to reduce violence. That US weapons have been used for such purpose was not mentioned. It has been reported that US weapons exports to Sri Lanka has increased 40-fold from 2006 to 2007.
With Germany first to act, the UK recently announced plans to freeze its debt relief aid to the island. International rights groups are said to be placing pressure on Japan to link future aid to human rights.
Whilst it is true that many of those country’s pointing the finger are themselves guilty of having a hand in much larger scale human rights violations and many rights institutions are guilty of remaining silent on many international hot-spots, the fact is that rights violations should not be tolerated anywhere by civilized citizens. The bottom-line is that seven hundred people missing in one year is 700 hundred too many. ‘Wrong is wrong, no mater who is responsible’ (Malcolm X).
Whilst the recently announced aid curtailments from leading European countries to Sri Lakna were widely publicized, the economic impact of the cutback are not likely to be severe. As the Foreign Minister himself pointed out, the few million dollars that the UK government will withhold is not significant in the overall scheme of things. Germany’s decision to cut its aid operations is also likely to be negligible on the ground in the wider picture.

However, a number of facts need to be kept in mind when disregarding the concerns of the international community. Firstly, the exports of Sri Lankan goods around the world are currently concentrated in a few Western nations. Foremost amongst these are the USA, UK, Belgium, Germany, Italy, Russia, Japan, France and the Netherlands.

In this connection, it is important to maintain sound trade and diplomatic relations with these vital trade partners and take note of their sensitivities on the all important issues related to human rights and the conflict. Sri Lanka’s exporters will find it difficult to survive if the island is placed on any ‘black list’ of national violating rights.

With increasingly sensitive international consumers doing their research on the products that they purchase, more and more pressure has been placed on western companies to cease business operations in countries that are deemed (by the western governments) as having a poor record on human rights. .

Furthermore, Sri Lanka does not have the same lure as that of Venezuela or Sudan to foreign investors. Both have vast reserves of oil and other natural resources. In the case of the latter, it has been this fact that has enabled them to carefully craft a foreign policy that has turned away from a hostile West to an investment friendly east.

By contract, if Western consumers of Sri Laknan goods and services were to shirk away due to any poor publicity, the impact would be devastating on our exports. Tourism has already taken a hit.

Fortunately, the emerging pattern across the developing world is reflecting the shift in orientation of economic power in the global market. The likes of India and China are less accepting of the West’s unbalanced view of human rights and the violation there of.

Unimpressed by the now exposed double-standards of a number of western countries and unsatisfied with the international development institutions that pay lip service to the interest of developing nations and appear to act in to converse, trade blocks and regional groups will in the authors opinion move further towards asserting their own independence in coming years.

Earlier in 2007, Argentina and Venezuela launched the new ‘Banco del Sur’ or ‘Bank of the South’ with a pledge of $1 billion to get things up and running. Other states are known to have expressed their interest to join the multilateral institution that poses a direct challenge to the IMF and World Bank.
Unfortunately, not all developing world entities follow an enlightened path. Some are complicit in the crime. Whilst many of these same developed nations themselves exercise double standards, pay lip service to human rights whilst at the same time profiting from a lucrative arms trade that kills thousands of people in developing nations many a ‘parasitic elite’ fattens their pocket from the same trade. Sri Lanka needs to pursue a clean record not only for the sake of good trade relations but for the intrinsic benefit of all its own people.


"A patriot sets himself apart in his own country under his own flag,
sneers at other nations and keeps an army of uniformed assassins on
hand at heavy expense to grab slices of other people's countries and
keep them from grabbing slices of his. In the intervals between
campaigns he washes the blood off his hands and works for
'the universal brotherhood of man' - with his mouth."
: Mark Twain, The Lowest Animal



Sources: Lanka Business Online, The Marketplace, Information Clearing House, Tamil Net.