Street art in Breno, Italy,
by artist Ozmo.
Photo by Ozmo.
President Barack Obama, Thursday, signed into law legislation imposing a new set of sanctions against Venezuela. The action, taken just one day after he took what have been widely described as “historic” steps to “normalize” relations with Cuba, shed considerable light on the real aims being pursued in relation to the Caribbean island nation.
The “human rights” sanctions were imposed on the pretext of punishing individual Venezuelan officials for the handling of violent anti-government protests launched last February with the aim of deposing President Nicolas Maduro. The violence claimed the lives of 40 people, including numerous members of the security forces, as well as supporters of the government and others killed in confrontations at barricades erected by Maduro’s US-backed rightist opponents.
The “Venezuela Defense of Human Rights and Civil Society Act” abrogates or denies visas for a number of top Venezuelans and orders the freezing of any assets they may have in the US.
In another measure that serves to undermine the Venezuelan government, the US-based Fitch rating agency downgraded Venezuela’s credit rating from “B” to “CCC”, which suggests a likelihood of failure to meet payments.
Maduro, who only the previous day had praised Obama for his “brave and necessary gesture” toward Cuba, on Thursday denounced the new sanctions as “insolent measures taken by the imperial elite of the United States.” At the same time, he noted, “On the one hand, it recognizes the failure of the policies of aggression and blockade against our sister Cuba (…), and, on the other hand, it launches a new escalation of attacks” against Venezuela.
Underlying this seeming contradiction is a definite logic, however. The move toward rapprochement with Cuba and the sanctions against Venezuela are different tactics that are directed toward the same aim: bringing to power pliant regimes prepared to more fully accept US semi-colonial domination.
Washington is banking on the driving down of oil prices destabilizing Venezuela and creating better conditions for orchestrating a right-wing campaign to depose the Maduro government. At the same time, it sees economic and political destabilization of Venezuela, which has provided a lifeline to Cuba in the form of discounted oil shipments as well as tens of billions of dollars in loans, investments and grants, as a means of weakening Cuba and facilitating a restoration of the type of regime that characterized the country before the 1959 revolution.
For all of Obama’s rhetoric about “democracy,” “human rights” and “empowering the Cuban people,” these are the real aims and interests underlying the shift in Washington’s policy toward Havana.
And, while much has been written about Obama’s “bold move,” the reality is that the driving force behind a change in Cuba policy has been ruling corporate and financial sectors, which have seen a market that they believe should be theirs, dominated by China, Spain and other countries.
Fortune magazine’s response to Wednesday’s announcement was a story headlined, “Corporate lobbyists score victory in loosening of Cuban trade embargo.”
The story noted that truck and tractor manufacturer Caterpillar, the personal care product maker Colgate-Palmolive and the insurance giant Chubb “all spent tens of thousands of dollars to lobby government officials this year about the Cuban embargo, according to regulatory documents.”
“PepsiCo wants in. So does Caterpillar and Marriott International,” the New York Times exclaimed. “Within hours of President Obama’s historic move to restore full diplomatic relations with Cuba, companies in the United States were already developing strategies to introduce their products and services to a market that they have not been in for the better part of 50 years—if ever.”
The Financial Times reported, “Cargill, the private US commodities trader, was among the first to welcome the announced easing of US trade restrictions on Cuba.” It noted that the company, “although a long-time supporter of the Republican Party […] has long urged ending the more than 50-year trade embargo.”
While US business interests currently are exporting approximately $500 million worth of goods to Cuba annually, consisting mostly of agricultural products, this flow is hobbled by financial restrictions requiring pre-payment through a third-party bank, typically in Europe. Other competitors, including Brazil, have been able to gain a greater share of the market by offering credit. Among the executive measures that Obama has announced will be an easing of these financial barriers.
Propelled by these big business interests, Obama’s changes in Cuban policy will apparently be rolled out rapidly, with regulatory changes on trade and travel made “as soon as new regulations can be published in the Federal Register ,” according to the Washington Post.
Meanwhile, the process of restoring diplomatic relations is expected to begin next month with a visit to Havana by Assistant Secretary of State Roberta Jacobson. The official told the newspaper that the reestablishment of formal ties could be accomplished simply through an exchange of letters, and that Washington would then “change the sign” on its large US Interests Section in Havana, turning it into an embassy.
Asked about how quickly the new measures expanding trade, travel and US banking operations, as well the quadrupling of the amount of money that can be sent to individuals on the island, will be implemented, Jacobson told thePost, “I am quite certain we’re talking about days or weeks. Certainly not months.”
Washington’s strategy is for the expansion of US trade and investment to intersect with the series of counter-reforms implemented over the past five years by the government of President Raul Castro, which have slashed government jobs and social spending while spurring private enterprise and offering more favorable conditions for foreign capital to exploit cheap Cuban labor. The ultimate aim is the fostering of a new bourgeois layer as the social basis of a semi-colonial Cuban regime.
The communiqué issued at the end of the G20 summit held in Brisbane, Australia, over the weekend stated that agreement had been reached among the participants, whose countries comprise 85 percent of the world economy, to boost global growth by an additional 2.1 percent over the next five years, or more than $2 trillion.
However, any serious examination of the state of global capitalism or even the communiqué itself and its associated documents makes clear the commitments will be honoured only in the breach.
Both the International Monetary Fund and the Organisation for Economic Co-operation and Development poured cold water on the goal, pointing to “the high degree of uncertainty in quantifying the impact of members’ policies.”
The G20 leaders met after a year in which an array of economic data pointed to the growing stagnation and outright recession in the world economy and the increasing risks of another financial crisis, the consequences of which would be even more devastating than those of 2008.
Moreover, the summit was held amid growing geo-political tensions, arising from the renewed US military actions in the Middle East and the sanctions imposed on Russia which are further worsening the global economic outlook.
The communiqué pledged G20 members to work in “partnership” to lift growth and boost economic resilience. But major participants, including British Prime Minister David Cameron, Canadian Prime Minister Stephen Harper, Australian Prime Minister Tony Abbott and US President Obama, lined up to denounce Russia and threaten further sanctions aimed at crippling its economy, the ninth largest in the world.
The contradiction between economic reality and the commitments to boost growth jump out from the very text of the communiqué.
It begins by stating that raising global growth to deliver better living standards and quality jobs for people across the world is “our highest priority.” However in same paragraph, after noting that global growth is not delivering the jobs needed and the economy is being held back by a shortfall in demand, it points to the persistence of risks, “including in financial markets and from geopolitical tensions.”
Not a small component in the shortfall in demand results from the program of austerity being implemented by all major governments as they claw back the debts incurred as a result of bailing out the financial system and banks following the global meltdown of 2008.
The risks to which it points arise from the actions of the major powers themselves. Dangers to financial markets arise from the collapse of the asset bubbles, reflected in the rise of US stock markets to a record high, which have been created by the actions of the world key central banks in placing trillions of dollars at virtually zero interest rates in the hands of banks and financial speculators.
The geo-political risks, in the Middle East and Eastern Europe, are rooted, above all, in the drive by the United States to use military and economic power in its drive to maintain its global hegemony.
The measures set out in the communiqué are themselves internally contradictory. On the one hand, it states that G20 members will “ensure our macroeconomic policies are appropriate to support growth, strengthen demand and promote global rebalancing.” However the next sentence states that they will strive to put “debt as a share of GDP on a sustainable path”—the code phrase for continuing spending cuts that drive down demand and lead to deflation and stagnation.
The summit adopted a Global Infrastructure Initiative, declaring that it “recognises that we are facing investment and infrastructure shortfalls in the global economy which will grow further if we do not act.” But there is no prospect of co-operation and collaboration in the development of such projects.
On the eve of the summit, the Obama administration heavily intervened to ensure the Australian government reversed its in-principle decision to become a founding member of the Chinese-based Asian Infrastructure Investment Bank on the grounds that roads, ports and other facilities financed by the bank would enhance Chinese military capacities in the region.
The focus of the G20 measures is not the boosting of economic growth but so-called structural reforms. These have two related aims: to reduce government regulations on the operations of businesses and to worsen conditions for workers, through so called “labour market flexibility.”
In his preview of the “growth plan,” Australian treasurer Joe Hockey said that as monetary policy and fiscal policy had reached their limits, the focus had to be on “structural reform.”
An article published in the Australian Financial Review on the eve of the summit, by Richard Goyder, the chief executive of the Australian corporation Westfarmers and head of the B20 group of business leaders, made clear what that would entail. He said there was “work to be done to encourage labour market flexibility” and “workforce adaptability.”
The type of measures to be adopted was indicated in the Australian commitment to the G20 plan. It included government proposals to charge higher fees for university education and to force young unemployed people to wait for up to six months before receiving any government benefits.
The complete absence of any sense of broad-based collaboration to lift the world economy was exemplified in the extremely crass remarks by Abbott to the leaders’ retreat held shortly before official proceedings began.
As the leader of the host nation, he said the task of the summit was to “instil more confidence in the people of the world.”
Abbott then began his own five-minute contribution to the discussion by declaring that his government has carried out its election commitment to stop refugee boats arriving in Australia and had repealed the tax imposed on carbon by the previous Labor government.
He went on to bewail the fact that as part of its so-called reform agenda the government had so far been unable to introduce a $7 co-payment for visits to a doctor or deregulate university fees.
While they were a particularly graphic display of narrow nationalism, if not parochialism, Abbott’s remarks were at the same time an expression of the agenda of all the summit participants. Their actions are not determined by the need for global co-operation but by the needs of their own national-state.
National interests were to the fore in the discussions on climate change. There was a redrafting of the final communiqué to include a recommendation for countries to commit funds to the United Nations Green Climate Fund after what were described as “difficult discussions” and even “trench warfare.”
The Abbott government has specifically opposed the fund, describing it as “socialism masquerading as environmentalism,” and the prime minister was reported to have made a passionate defence of the fossil fuel industry.
However, the United States is in a different position as result of the development of the shale gas industry. Consequently Obama was reported to have forcefully opposed Abbott on the question of coal and coal-fired power stations.
The dispute was an example of the conflicting national interests which render all the wordy commitments to co-operation and collaboration to lift the world economy a dead letter.