Civic activist Ralph Nader has often talked about how Washington has become corporate occupied territory. This has been achieved primarily through the increasingly out of control influence of money on the electoral process. This has been aided and abetted by an unconscionable and irrational Supreme Court decision that unfathomably decreed that campaign contributions constituted 'speech' and that such bribes were thus unregulateable.
Yesterday, the US Senate's Foreign Relations Committee voted 16-1 to recommend Hillary Clinton's nomination for Secretary of State to the full Senate.
The lone dissenter was Republican David Vitter. The Louisiana senator cited that fact that the global foundation founded by former Pres. Clinton to address ills in the developing world accepted donations from other countries' governments. Vitter, who, last year, found himself embroiled in a hooker sex scandal, lectured the rest of the committee on the risk of impropriety, or even the appearance of impropriety. I suppose he should know.
In other words, donating money to the non-profit foundation of a public official's spouse represents a disqualifying potential corrupting influence. But donating money directly a public official's campaign coffers is nothing more than a selfless gesture and unimpeachable "freedom of speech."
Friday, January 16, 2009
Thursday, January 15, 2009
Groundhog Day in Guinea
This essay is part of an occasional feature on this blog that presents compelling stories from elsewhere in the world, particularly Africa, that are little reported in the American media. It's part of my campaign to get people to realize there is a lot going on in the world outside the US, IsraelStine, Iraq, North Korea and Iran.
A long-ailing dictator finally dies. A corrupt, repressive regime heading a sclerotic state is overthrown, replaced by a military junta of young officers which tears up the constitution, promises to crack down on graft and improve the country's economic state and launches a purge of high ranking officials. 1984 in Guinea is repeating itself.
The death of the West African country's strongman, Gen. Lansana Conté, has cast confusion into a country that once billed itself an island of stability in a turblent West African sea. Conté himself came to power in a 1984 military coup under nearly identical circumstances as today. Less than a day after his death, a group of young soldiers took power and formed a ruling junta called the National Committee for Democracy and Development (known by its French-acronym CNDD).
As expected, the seizure of power was widely condemned by the outside world, including the US, European Union, African Union and the West African regional body ECOWAS. This is understandable, as these entities tend to have a pro forma opposition to military coups d'Etat.
What's notable is how the coup was generally welcomed by Guineans themselves. Pres. Abdoulaye Wade of neighboring Senegal was one of the few foreign leaders to urge recognition of the junta. The civilian opposition parties in Guinea were also notable in their failure to condemn the putsch.
The main difference is that outside countries and organization hold general principles like military intervention is always bad, civilian rule is always good, constitutionalism and elections are the be all and end all. These are good principles in theory and perhaps the only principles these organizations can actually enunciate but in practice, things are more nuanced.
The main reason Guineans themselves supported this military intervention against "constitutionalism" is because constitutionalism in Guinea was a fraud. The Guinean loi fondamentale was basically ignored by Conté and the cabal around him, including his minions in the judiciary. The constitution Conté himself (or his loyalists) wrote decreed that the head of state be a civilian. Yet Conté remained an active military general for nearly all of his reign. The constitution allowed the Supreme Court to declare a 'vacancy in power' should the president die or become seriously ill and that the National Assembly president become acting head of state. Despite Conté being a virtual vegetable for years, such a vacancy was never declared and the state remained paralyzed. In fact, the current National Assembly's mandate officially ended in 2006 as legislative elections have been repeatedly postponed. So it's debatable whether the normal constitutional process would even be legal in this case.
In suspending the constitution, the CNDD merely formalized what had been the reality of the past several years: the Guinean constitution had long ceased to be relevant to the country's politics.
And it's worth asking why the Conté regime's massive human rights abuses, abuses of power, corruption, arbitrary arrests and the like did not garner a fraction of the international condemnation received by the soldiers who put an end to this regime.
In reality, the military intervention was not a coup against an irrelevant constitution. It was a coup against an irredeemably corrupt system. The mafia around Conté has had a stranglehold on the economy for years. Had the "constitutional" transition taken place, this cabal would've retained its suffocating control on the floundering economy. People who had a vested interest in the system were never going to permit changes. They'd proven this in the way several of Conté's former prime ministers found their much needed ideas for reform strangled by those vested interests. A "constitutional" transition would've permitted the continuation of the dysfunctional, sclerotic institutions and faux democracy that had never been given a chance to work normally.
Conté had been a vegetable for years. It's an open secret that his cabal has been de facto running the country for a long time. The "constitutional process" would have both legitimized and perpetuated this disastrous state of affairs.
In principle, I don't like appear to be endorsing military coups. But when legality has long ceased to be part of the equation, what's the difference? Who cares whether the men illegally holding power wear khaki or not?
The main concern about the coup is talk of a split within the armed forces. High-ranking military officials opposed the coup and supported the "constitutional" continuation of the system from which many of them benefited. Junior officers, feeling they got the short end of the stick, led the coup. Guinea's new head of state, Captain Moussa Dadis Camara, has publicly admitted divisions within the armed forces and urged dissident officers to remain calm, though this appeal came a few days after the junta arrested several top generals.
The CNDD's reign may not ultimately lead to democracy and good governance. But a continuation of the old system was guaranteed to prevent those things. A short-lived military junta is not sure to bring progress, but regime change is the only chance for such progress to have the slightest hope of getting enough oxygen to thrive.
It's worth remembering that the CMRN junta led by Conté from 1984-93 brought real improvements to the Guinean economic and political climate before they became too comfortable with power and fell prey to Lord Acton's Dictum.
The Guinean opposition is calcified and opposition parties are based largely on the cult of personality around their party leader. Nearly all older opposition parties have the same leader they did when pseudo-democracy was declared in the early 90s. Nearly all of the newer opposition parties formed since have been created by a dissident from an existing party who got pissed off and formed a party around their own self. Opposition parties are mostly ethnically-based and have no real ideological agendas... other than professing their belief in democracy (because that's what all parties say when in opposition).
But in fairness, the repression waged by Conté's regime really prevented opposition parties from having the political space to operate normally. Opposition party members were systematically harassed, subjected to arbitrary arrest and the like.
Neither was civil society really given much space to operate, except when they finally forced themselves onto the scene during the general strike of early 2007. And the general strike might prove to be one of the most significant events in Guinean history. It was the first civilian event that truly made the dictatorial Conté regime tremble with fear, because it was the first uprising that was truly popular in origin. It was the second time in Guinea's history that a grass roots uprising made a dictatorial regime blink, the 1977 market women's revolt being the first.
With the former opposition political parties impotent and incoherent, an organized and assertive civil society might be the difference between a military junta that keeps its promise to cede power via democratic elections this year and one that finds a million excuses to hang on to power ad infinitum.
A long-ailing dictator finally dies. A corrupt, repressive regime heading a sclerotic state is overthrown, replaced by a military junta of young officers which tears up the constitution, promises to crack down on graft and improve the country's economic state and launches a purge of high ranking officials. 1984 in Guinea is repeating itself.
The death of the West African country's strongman, Gen. Lansana Conté, has cast confusion into a country that once billed itself an island of stability in a turblent West African sea. Conté himself came to power in a 1984 military coup under nearly identical circumstances as today. Less than a day after his death, a group of young soldiers took power and formed a ruling junta called the National Committee for Democracy and Development (known by its French-acronym CNDD).
As expected, the seizure of power was widely condemned by the outside world, including the US, European Union, African Union and the West African regional body ECOWAS. This is understandable, as these entities tend to have a pro forma opposition to military coups d'Etat.
What's notable is how the coup was generally welcomed by Guineans themselves. Pres. Abdoulaye Wade of neighboring Senegal was one of the few foreign leaders to urge recognition of the junta. The civilian opposition parties in Guinea were also notable in their failure to condemn the putsch.
The main difference is that outside countries and organization hold general principles like military intervention is always bad, civilian rule is always good, constitutionalism and elections are the be all and end all. These are good principles in theory and perhaps the only principles these organizations can actually enunciate but in practice, things are more nuanced.
The main reason Guineans themselves supported this military intervention against "constitutionalism" is because constitutionalism in Guinea was a fraud. The Guinean loi fondamentale was basically ignored by Conté and the cabal around him, including his minions in the judiciary. The constitution Conté himself (or his loyalists) wrote decreed that the head of state be a civilian. Yet Conté remained an active military general for nearly all of his reign. The constitution allowed the Supreme Court to declare a 'vacancy in power' should the president die or become seriously ill and that the National Assembly president become acting head of state. Despite Conté being a virtual vegetable for years, such a vacancy was never declared and the state remained paralyzed. In fact, the current National Assembly's mandate officially ended in 2006 as legislative elections have been repeatedly postponed. So it's debatable whether the normal constitutional process would even be legal in this case.
In suspending the constitution, the CNDD merely formalized what had been the reality of the past several years: the Guinean constitution had long ceased to be relevant to the country's politics.
And it's worth asking why the Conté regime's massive human rights abuses, abuses of power, corruption, arbitrary arrests and the like did not garner a fraction of the international condemnation received by the soldiers who put an end to this regime.
In reality, the military intervention was not a coup against an irrelevant constitution. It was a coup against an irredeemably corrupt system. The mafia around Conté has had a stranglehold on the economy for years. Had the "constitutional" transition taken place, this cabal would've retained its suffocating control on the floundering economy. People who had a vested interest in the system were never going to permit changes. They'd proven this in the way several of Conté's former prime ministers found their much needed ideas for reform strangled by those vested interests. A "constitutional" transition would've permitted the continuation of the dysfunctional, sclerotic institutions and faux democracy that had never been given a chance to work normally.
Conté had been a vegetable for years. It's an open secret that his cabal has been de facto running the country for a long time. The "constitutional process" would have both legitimized and perpetuated this disastrous state of affairs.
In principle, I don't like appear to be endorsing military coups. But when legality has long ceased to be part of the equation, what's the difference? Who cares whether the men illegally holding power wear khaki or not?
The main concern about the coup is talk of a split within the armed forces. High-ranking military officials opposed the coup and supported the "constitutional" continuation of the system from which many of them benefited. Junior officers, feeling they got the short end of the stick, led the coup. Guinea's new head of state, Captain Moussa Dadis Camara, has publicly admitted divisions within the armed forces and urged dissident officers to remain calm, though this appeal came a few days after the junta arrested several top generals.
The CNDD's reign may not ultimately lead to democracy and good governance. But a continuation of the old system was guaranteed to prevent those things. A short-lived military junta is not sure to bring progress, but regime change is the only chance for such progress to have the slightest hope of getting enough oxygen to thrive.
It's worth remembering that the CMRN junta led by Conté from 1984-93 brought real improvements to the Guinean economic and political climate before they became too comfortable with power and fell prey to Lord Acton's Dictum.
The Guinean opposition is calcified and opposition parties are based largely on the cult of personality around their party leader. Nearly all older opposition parties have the same leader they did when pseudo-democracy was declared in the early 90s. Nearly all of the newer opposition parties formed since have been created by a dissident from an existing party who got pissed off and formed a party around their own self. Opposition parties are mostly ethnically-based and have no real ideological agendas... other than professing their belief in democracy (because that's what all parties say when in opposition).
But in fairness, the repression waged by Conté's regime really prevented opposition parties from having the political space to operate normally. Opposition party members were systematically harassed, subjected to arbitrary arrest and the like.
Neither was civil society really given much space to operate, except when they finally forced themselves onto the scene during the general strike of early 2007. And the general strike might prove to be one of the most significant events in Guinean history. It was the first civilian event that truly made the dictatorial Conté regime tremble with fear, because it was the first uprising that was truly popular in origin. It was the second time in Guinea's history that a grass roots uprising made a dictatorial regime blink, the 1977 market women's revolt being the first.
With the former opposition political parties impotent and incoherent, an organized and assertive civil society might be the difference between a military junta that keeps its promise to cede power via democratic elections this year and one that finds a million excuses to hang on to power ad infinitum.
Wednesday, January 14, 2009
"Those who make peaceful change impossible, make violent change inevitable"
Secretary of State-designate Hillary Clinton told a Senate committee that the US would not talk to Israel until Hamas renounced violence. She did not enunciate any requirement that Israel renounce violence. Personally, I would have no problem with both Israeli and Hamas leaders being shipped off to the International Criminal Court, given their mutual disregard for international law with regard to civilians. Though it's worth noting that the biggest difference between the two parties is that the weaponry with which Hamas commits its war crimes was not paid for with billions of my tax dollars.
One of my favorite quotes is from former US president John F. Kennedy who said, "Those who make peaceful change impossible, make violent change inevitable." I said before that as long as Israel continues to occupy the Conquered Territories, there WILL be resistance. Every colonial power in history has found out that the people don't like to be ruled by outsiders, no matter how righteous the latter consider themselves.
Standard Israeli rhetoric is that they would be more thrilled that a 11 year old girl at a Jonas Brothers' concert if the Palestinians would simply renounce violence and try to solve the region's difference through peaceful, democratic means. There's one major problem. The Israeli state has pretty much made that impossible. And you can refer to the JFK quote to figure out what will happen next.
Israel's Central Elections Committee has banned the two leading Arab parties from contesting the next election. The majority of Arab members of the Knesset (Israeli parliament) belong to these two parties.
The ruling Kadima Party (which is actually moderate in the Israeli context) has made its racism clear by opposing demands of one of the banned parties that (gasp) all Israeli citizens be treated equal under the law. Kadima claimed that such equality would "undermine Israel’s identity as a Jewish state." Such naked tribalism is something most westerners stereotype to darkest Africa, not the country that repeatedly pats itself on the back as 'only democracy in the Middle East.'
So Israel's message is that Arabs and Palestinians are not permitted to be part of the 'democratic' process and they are 'terrorists' if they resort to violence. So how exactly are they supposed to express themselves?
Some fanatical pro-Israeli demonstrators in New York City have an answer: the Palestinians should simply be wiped out.
Now, if some random US Muslim called for Israel to be wiped out, it would be news in this country on every major news outlet as well as Fox News. But when it's made by an Israeli supporter about Palestinians, it barely gets a mention even in the alternative media.
One young fanatic said of Hamas, "They are forcing us to kill their children in order to defend our own children. Those who die are suffering God’s wrath."
Given the high percentage of women and children killed in the aggression against Gaza, this gives some insight into the dementia suffered by religious extremists. But really, what rational person can have any comment on such inhuman bile except to shake one's head in disgust?
The only hope is that, according to this article, progressive Jews are trying to take over the American Jewish lobby from the militarists. That's a battle worth fighting.
One of my favorite quotes is from former US president John F. Kennedy who said, "Those who make peaceful change impossible, make violent change inevitable." I said before that as long as Israel continues to occupy the Conquered Territories, there WILL be resistance. Every colonial power in history has found out that the people don't like to be ruled by outsiders, no matter how righteous the latter consider themselves.
Standard Israeli rhetoric is that they would be more thrilled that a 11 year old girl at a Jonas Brothers' concert if the Palestinians would simply renounce violence and try to solve the region's difference through peaceful, democratic means. There's one major problem. The Israeli state has pretty much made that impossible. And you can refer to the JFK quote to figure out what will happen next.
Israel's Central Elections Committee has banned the two leading Arab parties from contesting the next election. The majority of Arab members of the Knesset (Israeli parliament) belong to these two parties.
The ruling Kadima Party (which is actually moderate in the Israeli context) has made its racism clear by opposing demands of one of the banned parties that (gasp) all Israeli citizens be treated equal under the law. Kadima claimed that such equality would "undermine Israel’s identity as a Jewish state." Such naked tribalism is something most westerners stereotype to darkest Africa, not the country that repeatedly pats itself on the back as 'only democracy in the Middle East.'
So Israel's message is that Arabs and Palestinians are not permitted to be part of the 'democratic' process and they are 'terrorists' if they resort to violence. So how exactly are they supposed to express themselves?
Some fanatical pro-Israeli demonstrators in New York City have an answer: the Palestinians should simply be wiped out.
Now, if some random US Muslim called for Israel to be wiped out, it would be news in this country on every major news outlet as well as Fox News. But when it's made by an Israeli supporter about Palestinians, it barely gets a mention even in the alternative media.
One young fanatic said of Hamas, "They are forcing us to kill their children in order to defend our own children. Those who die are suffering God’s wrath."
Given the high percentage of women and children killed in the aggression against Gaza, this gives some insight into the dementia suffered by religious extremists. But really, what rational person can have any comment on such inhuman bile except to shake one's head in disgust?
The only hope is that, according to this article, progressive Jews are trying to take over the American Jewish lobby from the militarists. That's a battle worth fighting.
Tuesday, January 13, 2009
Martin Luther King Jr. ceremony in Glens Falls (and Johnsburg)
[From a press release]
January 12, 2009 – The Glens Falls Martin Luther King Day Committee announced today that the 2009 Dr. Martin Luther King Jr. Day Commemoration will be held Sunday, January 18, 2009 in Glens Falls.
The keynote speaker will be the Reverend Doctor Glorya Askew, currently serving as the Ministerial Program Coordinator for Ministerial and Family Services with the Department of Correctional Services. For 28 years, Reverend Askew has served as chaplain at four correctional facilities, the last, Bedford Hills Correctional Facility, is the only maximum security facility for women in New York. Dr. Askew has co-edited two books entitled, Reclamation of Black Prisoners: A Challenge to the African American Churches and From Prison Cell to Church Pew: The Strategy of the African American Church.
Dr. Martin Luther King Jr. was one of the most important leaders of the Civil Rights Movement in America. Dr. King led the Montgomery Bus Boycott, helped to found the Southern Christian Leadership Conference and delivered his “I Have A Dream” speech during the March on Washington in 1963. Dr. King vociferously opposed the Viet Nam War and became the youngest person ever to be awarded the Nobel Peace Price. He was assassinated forty years ago this April 4 while in Memphis, Tennessee, to support striking black sanitary public works employees, represented by the American Federation of State, County and Municipal Employees (AFSCME). Dr. King was posthumously awarded the Presidential Medal of Freedom by President Jimmy Carter in 1977.
Martin Luther King Day was established as a national holiday in the United States in 1986, but it wasn’t until 2000 that all 50 states officially observed the holiday for the first time. Before 2000 the holiday was not observed by New Hampshire, Arizona, or South Carolina and in Virginia, the holiday was added on to Lee-Jackson Day, a day meant to honor confederate generals, and became Lee-Jackson-King Day. Although the day is now a universally celebrated federal and state holiday, it is usually not observed by American corporations.
The event will begin at 3:30 pm on the steps of Glens Falls City Hall with remarks from local politicians, including Glens Falls Mayor Jack Diamond and State Senator Betty Little. At 4 pm, following their brief remarks, marchers will proceed to Christ Church at 54 Bay Street where a public program celebrating the life, work, and message of Dr. King will be held beginning at 4:30 pm.
The public event at Christ Church will feature the Faith Tabernacle Baptist Church Choir, the Christ Church United Methodist choir and the keynote speech by Dr. Glorya Askew. There will be a reception with free baked goods and beverages to follow. The Glens Falls chapter of the NAACP will be collecting non-perishable food items to be donated to local food pantries, as a community service project in honor of Dr. King’s call to action. You are encouraged to bring a non-perishable food item to the event.
Update: Adirondack Almanack reports that the town of Johnsburg will also have an event in honor of Dr. King.
January 12, 2009 – The Glens Falls Martin Luther King Day Committee announced today that the 2009 Dr. Martin Luther King Jr. Day Commemoration will be held Sunday, January 18, 2009 in Glens Falls.
The keynote speaker will be the Reverend Doctor Glorya Askew, currently serving as the Ministerial Program Coordinator for Ministerial and Family Services with the Department of Correctional Services. For 28 years, Reverend Askew has served as chaplain at four correctional facilities, the last, Bedford Hills Correctional Facility, is the only maximum security facility for women in New York. Dr. Askew has co-edited two books entitled, Reclamation of Black Prisoners: A Challenge to the African American Churches and From Prison Cell to Church Pew: The Strategy of the African American Church.
Dr. Martin Luther King Jr. was one of the most important leaders of the Civil Rights Movement in America. Dr. King led the Montgomery Bus Boycott, helped to found the Southern Christian Leadership Conference and delivered his “I Have A Dream” speech during the March on Washington in 1963. Dr. King vociferously opposed the Viet Nam War and became the youngest person ever to be awarded the Nobel Peace Price. He was assassinated forty years ago this April 4 while in Memphis, Tennessee, to support striking black sanitary public works employees, represented by the American Federation of State, County and Municipal Employees (AFSCME). Dr. King was posthumously awarded the Presidential Medal of Freedom by President Jimmy Carter in 1977.
Martin Luther King Day was established as a national holiday in the United States in 1986, but it wasn’t until 2000 that all 50 states officially observed the holiday for the first time. Before 2000 the holiday was not observed by New Hampshire, Arizona, or South Carolina and in Virginia, the holiday was added on to Lee-Jackson Day, a day meant to honor confederate generals, and became Lee-Jackson-King Day. Although the day is now a universally celebrated federal and state holiday, it is usually not observed by American corporations.
The event will begin at 3:30 pm on the steps of Glens Falls City Hall with remarks from local politicians, including Glens Falls Mayor Jack Diamond and State Senator Betty Little. At 4 pm, following their brief remarks, marchers will proceed to Christ Church at 54 Bay Street where a public program celebrating the life, work, and message of Dr. King will be held beginning at 4:30 pm.
The public event at Christ Church will feature the Faith Tabernacle Baptist Church Choir, the Christ Church United Methodist choir and the keynote speech by Dr. Glorya Askew. There will be a reception with free baked goods and beverages to follow. The Glens Falls chapter of the NAACP will be collecting non-perishable food items to be donated to local food pantries, as a community service project in honor of Dr. King’s call to action. You are encouraged to bring a non-perishable food item to the event.
Update: Adirondack Almanack reports that the town of Johnsburg will also have an event in honor of Dr. King.
Monday, January 12, 2009
Why a small businessman supports single payer health care (guest essay)
Editor's note: During the recent State of the State address in Albany, the Green Party of New York held a press conference to respond to Gov. Paterson's address. In it, local baker and activist Matt Funiciello explained why he, as a small-businessman, has become a strong support of single-payer health care and why it would provide superior coverage at significantly less cost. His remarks are reprinted with permission.
(WNYT-TV's coverage of the press conference can be found here; Matt's own blog is here).
**
My name is Matt Funiciello. I am the owner of a bread bakery and cafe in Glens Falls, N.Y. I currently employ 36 people. I am here today to deliver my own brief state of the state from a small business owner’s perspective. This is not the perspective of a lobby group purporting to represent small business. It is the perspective of someone who has actually run a small business in New York state for over 20 years.
As this economic downturn began, small business owners, like the majority of Americans, saw substantial increases in energy costs and commensurate increases in most other goods and supplies. In my industry, we were already struggling with the negative impact of increasing wheat prices as corn subsidies encouraged many wheat farmers to grow corn for ethanol. This created a terrible “food for fuel” quandary in which the corn lobbies seem to have been the only clear winners.
While our costs have steadily increased so has the cost of living for our workers. Even so, we have not been able to make pay increases to keep up with cost of living as our sales have been in decline. We were actually forced to implement a small pay cut in September of 2008 and I was eventually forced to sell my home and borrow a substantial sum of money to keep my business afloat as the year progressed and we suffered the additional negative effects of a fire.
We ceased carrying health insurance about a year ago as costs skyrocketed along with co-pays and pharmaceutical prices. We had to discontinue our retirement plan as we were no longer able to afford to participate in it. Many of our restaurant and retail accounts have been adversely affected as well by decreased consumer spending. Several long-time customers have even thrown in the towel.
I say all of this not as some kind of litany of woes but as an example of what the typical business owner is actually going through. We are a tough bunch and we will make it but, make no mistake, we are hurting. If you wish to understand the direct impact the recession is having on those in the working and middle class, look no further. We have tightened our belts, cut costs and minimized our needs, but we are still prepared to sacrifice more if we have to. We would, however, like to know that every single person in the state is joining with us in this suffering and sacrifice and that we are not being asked to shoulder the burden entirely.
Governor Patterson said yesterday that, “We cannot solve our problems overnight or without sacrifice - they run too deep for that. These problems may last for many more months or even years. But we can solve them and, with courage, we can craft a brighter, smarter future for New York.”
I agree with those sentiments, but I think we need to put a little bit of common sense in there before we continue with the sacrifice.
I don’t know about your economy but bailing out banks and insurance companies seems to have had very little impact on mine, thus far. I know that the Wall Street bailout was hardly Governor Patterson’s doing but I know that it is a perfect example of why we HAVE to find answers at the state level for the problems of the day. We simply cannot depend on the federal government to do what is right or just when things are broken.
If we leave it up to the fed or follow their lead, the problems New Yorkers are now facing will go unsolved. The biggest problem, without any doubt, is health care. In fact, according to a recent survey conducted by the Business Council of NY, health care is the single biggest issue for business owners in New York State. Worker’s comp rates came in a distant second.
Governor Patterson says we “need the courage to balance our budget as well as our priorities.” Well, he is absolutely right and small business has spoken loudly about the priority; it is health care. The question becomes, How do
we balance our budget while insuring the millions of New Yorkers who lack coverage?
I know the answer and, in reality, so does the Governor. That’s why I was absolutely horrified yesterday to see him openly advocate for more bureaucratic and incremental answers to our health care crisis rather than the sweeping reform we so desperately need.
Where health care is concerned, there is one clear answer and it is Single-Payer Health Care. It is basically the Canadian Health Care system with a few twists. It’s a clear and intelligent answer to a pressing problem. The Governor’s advocacy for building additional bureaucracies in our state with substandard care and inconsistent access is not such an answer. We need to get rid of the HMO’s and administrate our state’s health care through one mechanism instead of the hundreds that currently exist. It is projected that just that one bold move would save us 25-30% of what we currently pay for health care.
The Canadian system costs about $5200 per person with universal coverage and if you question its efficiency, you should know that, propaganda aside, Canadians live a full year longer than we do. You should also know that no sober, literate, Canadian would even consider switching health plans with anyone living in the U.S. unless they were forced to at gunpoint.
Here, in the U.S., we spend about $7200 per person on health care. Bear in mind that this is with about 60 million people completely uncovered and another 50 million or so ‘underinsured’. With all the layoffs projected from the recession, these numbers will increase dramatically. The incredible truth is that if we adopted Single-Payer Health Care in this country, we would actually be spending far less on care and everyone would be covered. It’s really a common sense approach to the problem.
Thanks to John Conyers and Denis Kucinich, there is already a resolution before congress, HR 676, which does have sponsors, but we need to be realistic about its chances in Washington. The resolution is unlikely to pass. There is simply too much HMO and pharmaceutical money floating around the Capitol for our public servants to do what is just. Many people think of my congresswoman, Kirsten Gillibrand, as a progressive of some kind. She, just like Barack Obama, and now New York’s Governor, has refused to discuss single payer at any level and has refused to support HR 676 even though she knows it is the best, most economical answer.
With our federal representatives doing such a poor job of representing us, we need Governor Patterson to help us resolve this issue right now, right here at home. We can have a single-payer system right here in New York state. We are projected to spend some $140 billion dollars in this state on health care in 2009. If we were to set up a single-payer health plan and spend a similar amount to what the Canadians do per capita, we would be saving $1,800 per person over what is already being spent with EVERY New Yorker covered. Who knows? Maybe we could start living a year longer, too!
Governor, business leaders are telling you that health care is the single biggest issue on the state's agenda but we can also tell you that there is a simple solution. Now is the time for our state government to implement solutions that actually make sense and not just those that seem politically feasible. We have suffered enough. Our workers have suffered enough. How, as a state, can we lose? How can it not make sense to save boatloads of money during a recession while ensuring that every citizen of New York has total access to health care?
The Governor called this recession “the gravest economic challenge in nearly a century.” Well, it seems to me that it really doesn’t have to be if we can just make decisions together which benefit everyone in our state and not just special interest groups and lobbies. Please, Governor Patterson, do what is right and support single-payer health care. Support common sense.
(WNYT-TV's coverage of the press conference can be found here; Matt's own blog is here).
**
My name is Matt Funiciello. I am the owner of a bread bakery and cafe in Glens Falls, N.Y. I currently employ 36 people. I am here today to deliver my own brief state of the state from a small business owner’s perspective. This is not the perspective of a lobby group purporting to represent small business. It is the perspective of someone who has actually run a small business in New York state for over 20 years.
As this economic downturn began, small business owners, like the majority of Americans, saw substantial increases in energy costs and commensurate increases in most other goods and supplies. In my industry, we were already struggling with the negative impact of increasing wheat prices as corn subsidies encouraged many wheat farmers to grow corn for ethanol. This created a terrible “food for fuel” quandary in which the corn lobbies seem to have been the only clear winners.
While our costs have steadily increased so has the cost of living for our workers. Even so, we have not been able to make pay increases to keep up with cost of living as our sales have been in decline. We were actually forced to implement a small pay cut in September of 2008 and I was eventually forced to sell my home and borrow a substantial sum of money to keep my business afloat as the year progressed and we suffered the additional negative effects of a fire.
We ceased carrying health insurance about a year ago as costs skyrocketed along with co-pays and pharmaceutical prices. We had to discontinue our retirement plan as we were no longer able to afford to participate in it. Many of our restaurant and retail accounts have been adversely affected as well by decreased consumer spending. Several long-time customers have even thrown in the towel.
I say all of this not as some kind of litany of woes but as an example of what the typical business owner is actually going through. We are a tough bunch and we will make it but, make no mistake, we are hurting. If you wish to understand the direct impact the recession is having on those in the working and middle class, look no further. We have tightened our belts, cut costs and minimized our needs, but we are still prepared to sacrifice more if we have to. We would, however, like to know that every single person in the state is joining with us in this suffering and sacrifice and that we are not being asked to shoulder the burden entirely.
Governor Patterson said yesterday that, “We cannot solve our problems overnight or without sacrifice - they run too deep for that. These problems may last for many more months or even years. But we can solve them and, with courage, we can craft a brighter, smarter future for New York.”
I agree with those sentiments, but I think we need to put a little bit of common sense in there before we continue with the sacrifice.
I don’t know about your economy but bailing out banks and insurance companies seems to have had very little impact on mine, thus far. I know that the Wall Street bailout was hardly Governor Patterson’s doing but I know that it is a perfect example of why we HAVE to find answers at the state level for the problems of the day. We simply cannot depend on the federal government to do what is right or just when things are broken.
If we leave it up to the fed or follow their lead, the problems New Yorkers are now facing will go unsolved. The biggest problem, without any doubt, is health care. In fact, according to a recent survey conducted by the Business Council of NY, health care is the single biggest issue for business owners in New York State. Worker’s comp rates came in a distant second.
Governor Patterson says we “need the courage to balance our budget as well as our priorities.” Well, he is absolutely right and small business has spoken loudly about the priority; it is health care. The question becomes, How do
we balance our budget while insuring the millions of New Yorkers who lack coverage?
I know the answer and, in reality, so does the Governor. That’s why I was absolutely horrified yesterday to see him openly advocate for more bureaucratic and incremental answers to our health care crisis rather than the sweeping reform we so desperately need.
Where health care is concerned, there is one clear answer and it is Single-Payer Health Care. It is basically the Canadian Health Care system with a few twists. It’s a clear and intelligent answer to a pressing problem. The Governor’s advocacy for building additional bureaucracies in our state with substandard care and inconsistent access is not such an answer. We need to get rid of the HMO’s and administrate our state’s health care through one mechanism instead of the hundreds that currently exist. It is projected that just that one bold move would save us 25-30% of what we currently pay for health care.
The Canadian system costs about $5200 per person with universal coverage and if you question its efficiency, you should know that, propaganda aside, Canadians live a full year longer than we do. You should also know that no sober, literate, Canadian would even consider switching health plans with anyone living in the U.S. unless they were forced to at gunpoint.
Here, in the U.S., we spend about $7200 per person on health care. Bear in mind that this is with about 60 million people completely uncovered and another 50 million or so ‘underinsured’. With all the layoffs projected from the recession, these numbers will increase dramatically. The incredible truth is that if we adopted Single-Payer Health Care in this country, we would actually be spending far less on care and everyone would be covered. It’s really a common sense approach to the problem.
Thanks to John Conyers and Denis Kucinich, there is already a resolution before congress, HR 676, which does have sponsors, but we need to be realistic about its chances in Washington. The resolution is unlikely to pass. There is simply too much HMO and pharmaceutical money floating around the Capitol for our public servants to do what is just. Many people think of my congresswoman, Kirsten Gillibrand, as a progressive of some kind. She, just like Barack Obama, and now New York’s Governor, has refused to discuss single payer at any level and has refused to support HR 676 even though she knows it is the best, most economical answer.
With our federal representatives doing such a poor job of representing us, we need Governor Patterson to help us resolve this issue right now, right here at home. We can have a single-payer system right here in New York state. We are projected to spend some $140 billion dollars in this state on health care in 2009. If we were to set up a single-payer health plan and spend a similar amount to what the Canadians do per capita, we would be saving $1,800 per person over what is already being spent with EVERY New Yorker covered. Who knows? Maybe we could start living a year longer, too!
Governor, business leaders are telling you that health care is the single biggest issue on the state's agenda but we can also tell you that there is a simple solution. Now is the time for our state government to implement solutions that actually make sense and not just those that seem politically feasible. We have suffered enough. Our workers have suffered enough. How, as a state, can we lose? How can it not make sense to save boatloads of money during a recession while ensuring that every citizen of New York has total access to health care?
The Governor called this recession “the gravest economic challenge in nearly a century.” Well, it seems to me that it really doesn’t have to be if we can just make decisions together which benefit everyone in our state and not just special interest groups and lobbies. Please, Governor Patterson, do what is right and support single-payer health care. Support common sense.
Sunday, January 11, 2009
Some are more equal than others
Ed. note: I usually try to avoid writing about the monthly Israeli-Palestinian wars because hardly anyone can comment on it in a civilized, rational manner and I'll probably regretting making an exception but here goes...
The most famous line of the US Declaration of Independence reads, "We hold these truths to be self-evident, that all men are created equal..."
I've concluded that this line is not true. Because whenever erupts the monthly violence in the Middle East, what I hear is that either (though not both) Israeli lives or Palestinian lives are worth more than those of any other human being.
Why?
Because when a few Israelis get killed by Hamas rockets, it's an outrage that requires a massive, completely disproportionate military response. If hundreds of Gazan civilians die in the process, it's unfortunate but it's 'worth it' if it saves the life of one Israeli civilian. There you have it quite explicitly and unashamedly. The life of one Israeli civilian is greater than the lives of hundreds (soon to be thousands?) of Palestinians.
But Israel apologists are not unique in this regard. Several hundred Palestinians have died during the recent Israeli aggression against Gaza. There has been deafening international condemnation of this action.
Some of it has been from Arab countries. Most of these countries have human rights' records that are at least as bad, if not far worse, than Israel's. Most of these are countries that arbitrarily arrest people, make sure opponents are 'disappeared' and ban free speech... except of course when it comes to anti-Israel protests.
A lot of the protest comes from western Europe. They claim it's a disgrace, an outrage, amassive crime against humanity what Israel's doing to Gazans. These poor civilians who had nothing to do with Hamas rockets shouldn't be murdered, claim European (and a few American) protesters.
But this also begs the question. A few hundred have died in Gaza and this has provoked international outrage, especially from the western left. By contrast,5.4 MILLION people have died during the last 10 years of war and chaos in the DR Congo. Are there mass protests in the European streets about this far greater tragedy? The Central African Republic. Burma. Darfur. Northern Uganda. North Korea. There are at least half a dozen places around the world with a humanitarian situation comparably bad to Gaza. You haven't heard about most of them.
Why? Because the Israel-Palestine is a cause celebre. Some see Israel as a projection of their own militaristic tendencies. Some see Palestine as a projection of their own anti-imperialist beliefs.
The truth is that, with a few exceptions, global "concern" for the Israel-Palestine situation really has little to do with the Israeli and Palestinian civilian victims of the violence. The concern has to do with supporting or opposing the US' unconditional support of everything Israel does.
If you oppose this, then Hamas is justified in rocketing Israeli villages and using civilians as human shields. If you support this, then Israel is justified in bombing UN schools and banning humanitarian assistance from Gaza and, if they felt like it, nuking the Occupied Territories.
Viewed objectively, viewed as a human being rather than as a member of one tribe or the other, ALL of these are war crimes. Too bad hardly anyone views it that way.
If the US government weren't involved in this, most Americans wouldn't give a damn what happened to Israeli civilians and most of the rest of the world wouldn't give a damn what happened to Gazan civilians. Just ask the Congolese. Or the Burmese. Or any of the thousands of political prisoners in Syria or Egypt or Iran. Who's protesting on their behalf?
The most famous line of the US Declaration of Independence reads, "We hold these truths to be self-evident, that all men are created equal..."
I've concluded that this line is not true. Because whenever erupts the monthly violence in the Middle East, what I hear is that either (though not both) Israeli lives or Palestinian lives are worth more than those of any other human being.
Why?
Because when a few Israelis get killed by Hamas rockets, it's an outrage that requires a massive, completely disproportionate military response. If hundreds of Gazan civilians die in the process, it's unfortunate but it's 'worth it' if it saves the life of one Israeli civilian. There you have it quite explicitly and unashamedly. The life of one Israeli civilian is greater than the lives of hundreds (soon to be thousands?) of Palestinians.
But Israel apologists are not unique in this regard. Several hundred Palestinians have died during the recent Israeli aggression against Gaza. There has been deafening international condemnation of this action.
Some of it has been from Arab countries. Most of these countries have human rights' records that are at least as bad, if not far worse, than Israel's. Most of these are countries that arbitrarily arrest people, make sure opponents are 'disappeared' and ban free speech... except of course when it comes to anti-Israel protests.
A lot of the protest comes from western Europe. They claim it's a disgrace, an outrage, amassive crime against humanity what Israel's doing to Gazans. These poor civilians who had nothing to do with Hamas rockets shouldn't be murdered, claim European (and a few American) protesters.
But this also begs the question. A few hundred have died in Gaza and this has provoked international outrage, especially from the western left. By contrast,5.4 MILLION people have died during the last 10 years of war and chaos in the DR Congo. Are there mass protests in the European streets about this far greater tragedy? The Central African Republic. Burma. Darfur. Northern Uganda. North Korea. There are at least half a dozen places around the world with a humanitarian situation comparably bad to Gaza. You haven't heard about most of them.
Why? Because the Israel-Palestine is a cause celebre. Some see Israel as a projection of their own militaristic tendencies. Some see Palestine as a projection of their own anti-imperialist beliefs.
The truth is that, with a few exceptions, global "concern" for the Israel-Palestine situation really has little to do with the Israeli and Palestinian civilian victims of the violence. The concern has to do with supporting or opposing the US' unconditional support of everything Israel does.
If you oppose this, then Hamas is justified in rocketing Israeli villages and using civilians as human shields. If you support this, then Israel is justified in bombing UN schools and banning humanitarian assistance from Gaza and, if they felt like it, nuking the Occupied Territories.
Viewed objectively, viewed as a human being rather than as a member of one tribe or the other, ALL of these are war crimes. Too bad hardly anyone views it that way.
If the US government weren't involved in this, most Americans wouldn't give a damn what happened to Israeli civilians and most of the rest of the world wouldn't give a damn what happened to Gazan civilians. Just ask the Congolese. Or the Burmese. Or any of the thousands of political prisoners in Syria or Egypt or Iran. Who's protesting on their behalf?
Wednesday, January 07, 2009
Ghana
Congratulations to the Republic of Ghana, in West Africa, for holding yet another free and fair election with minimal controversy, with no outside interference and marked by admirable conduct from the major candidates.
Thank goodness Ghana took its lessons in electoral democracy from Botswana and South Africa rather than Florida or Minnesota.
Thank goodness Ghana took its lessons in electoral democracy from Botswana and South Africa rather than Florida or Minnesota.
Tuesday, January 06, 2009
Pipeline Politics: The Russian/Ukrainian Gas Dispute (guest essay)
Editor’s note: While last summer’s Russia aggression against Georgia garnered international headlines, Russia’s consistent use of energy in recent years to bully other countries has also had serious ramifications. Earlier this week, Russia kicked it up a notch by slashing natural gas supplies to much of Europe due to a murky dispute with Ukraine. MOFYC's resident Eastern European Expert Mark offers his take on the situation.
Pipeline Politics: The Russian/Ukrainian Gas Dispute
by Mark
Most of us appreciate the sharp decline in gas prices in recent months. However, two major geopolitical crises are responsible for the recent spike in prices, and unless both are resolved rather quickly, the upward pressure on prices will continue. After dropping to a low of around $31 per barrel, as of mid-week they are creeping towards $50 once again. The Israeli assault in Gaza is one factor, and the one most of us are familiar with; the second is the dispute between Russia and Ukraine in regards to natural gas prices for the 2009 fiscal year. While the Israeli-Palestinian conflict is a long-running and convoluted dispute in itself, the natural gas dispute is arguably just as complex, if not even murkier. Let me introduce you to the opaque world of energy politics in Europe and the former Soviet Union.
Russia has not only been blessed with among the largest natural gas reserves in the world, but plenty of energy-hungry neighbors on its borders and beyond to which to sell this resource. Currently, Russia, through its state-run energy monopoly Gazprom, provides the European Union with about one-quarter of its natural gas needs. If you break down that statistic into individual countries, things get even more impressive: according to Wikipedia, as of 2004, Gazprom is the *only* natural gas supplier to Bosnia and Herzegovina, Estonia, Finland, Macedonia, Latvia, Lithuania, Moldova and Slovakia, and provides 97 percent of Bulgaria's gas, 89 percent of Hungary's, 86 percent of Poland's, nearly three-quarters of the Czech Republic's, 67 percent of Turkey's, 65 percent of Austria's, about 40 percent of Romania's, 36 percent of Germany's, 27 percent of Italy's, and 25 percent of France's. If you think the US is too dependent on crude oil from the Middle East, re-read the aforementioned figures.
Natural gas is not that easy to transport. Due to its very low density, the most economical way of transporting it is through pipelines. However, to get to Europe, Russia must ship natural gas through several countries, particularly Ukraine. Let’s look at this map from the BBC:
80% of western and central Europe’s natural gas travels through Ukraine. That is a choke point in every sense of the word.
An independent, western-oriented Ukraine has been a thorn in Russia’s side for years. The most recent disputes between the two involve a whole list of issues, such as NATO membership for Ukraine, the status of the Russian language in Ukraine, the future of the Russian fleet base in Sevastopol, influence in Ukraine’s Crimean peninsula, the Russo-Georgian War of August 2008, recognition of the Ukrainian Famine-Genocide (the Holodomor) as an act of genocide perpetrated by the Soviet regime, etc. In the 2004 Orange Revolution, the pro-Russian government and its preferred presidential candidate, Viktor Yanukovych, were defeated and discredited in street demonstrations and new elections by the pro-western democratic forces led by current president Viktor Yushchenko.
One method of putting pressure on Ukraine has been for Russia to raise natural gas prices. It has been done before, and that appears to be the situation currently. In the most recent dispute, Gazprom began making claims in November that Ukraine owed them some $2.4 billion, and they would stop supplying Ukraine with gas unless the debts were paid off in full by December 31, 2008. This is where it gets really confusing, but bear with me.
Ukraine countered that since they technically purchase natural gas through an intermediary called RosUkrEnergo (RUE, a murky enterprise half owned by Gazprom, half by two Ukrainian businessmen, and all accused of having ties to organized crime in Russia and lining the pockets of some Kremlin officials) it was impossible for Ukraine to owe Gazprom any money. Then Ukraine admitted it owed $1.2 billion. Then Ukraine said it had paid off the full debt to RUE.(“In full” by whose standards?) Then Gazprom said Ukraine still owed them $614 million in late fees. And get this: a month before the accusations began flying around, the prime ministers of both countries had apparently signed a deal where RUE would have been abolished and Ukraine would have purchased natural gas from Gazprom directly. An agreement was signed to nix RUE (we think?), and within a few weeks new accusations about unpaid debts are made.
And then, we come to the newest part of the dispute. What price should Ukraine pay for natural gas? And what price should Russia pay to transport natural gas to its customers beyond Ukraine? As of December 2008, Ukraine was paying $179.50 per 1,000 cubic meters, and charging Russia $1.70 to transport 1,000 cubic meters per 100 kilometers. Energy analyst Roman Kupchinsky writes:
“[Gazprom] CEO Alexei Miller said in December that Ukraine would pay $450 per 1,000 cubic meters in 2009. During the unsuccessful negotiations, Gazprom demanded $250, which the Ukrainians rejected, making a counteroffer of $208. Miller responded that since they had rejected $250, they would pay $418. On January 1 Oleh Dubyna, the head of [the state-run Ukrainian energy monopoly] Naftohaz Ukrainy, offered to buy Russian gas for $235 contingent on a price increase for transporting Russian gas to Europe from the current $1.70 per 1,000 cubic meters per 100 kilometers to $1.80. Russian Prime Minister Vladimir Putin rejected this increase and insisted that transit fees were locked into a contract that is due to expire in 2010. The next day Ukrainian President Viktor Yushchenko and [Prime Minister Yulia] Tymoshenko made a joint public statement on the crisis in which they upped the proposed transit price to “not less than $2.00.” (full article here)
Ukraine denies the existence of a transit fee contract that supposedly expires in 2010, and also points out that the transit fees of Western European countries are regularly twice as much as what Ukraine charges Gazprom. If Russia wants to raise natural gas prices, why can’t Ukraine ask for higher transit fees as well?
Does your head hurt yet? The media has had just as much trouble as you and me in trying to keep track of all these threats, statements and deals. There were times at which, if you went on Google or Yahoo news for updates, you would literally see contradictory headlines on articles written merely a few hours apart. All of this is a symptom of the lack of transparency in the negotiating process.
Since Ukraine and Russia could not agree on the debt nor the 2009 gas price, Russia cut supplies to Ukraine… sort of. They simply deducted from the pipelines the amount of gas Ukraine regularly receives, and kept the rest flowing west. (A full cut would obviously cut all supplies to western and central Europe.) However, Russia now claims Ukraine is illegally siphoning large amount of gas from the pipes, some 65.3 million cubic meters between January 1-4. Ukraine counters that a much smaller amount than that is being siphoned by their state energy monopoly, but only enough to maintain pressure in the pipes for the Western consumers. It is also entirely plausible that some Ukrainian companies, particularly in heavy industry, are taking gas from the pipelines without permission from the Ukrainian government to keep their own factories on line.
In response, the Kremlin ordered an even greater cut in the amount of natural gas shipped west, and now nearly a dozen European consumer countries are reporting that the amount of natural gas reaching them has decreased or been completely halted. The EU, which has been calling this a commercial dispute between Ukraine and Russia, is finally being, ahem, motivated to do more. Fact-finding missions have been sent to both Kyiv and Moscow to figure out what the hell’s going on. Gazprom says it will re-supply the west through pipelines in Belarus and Turkey, but, logistically speaking, cannot make up the difference. Luckily for everyone, negotiations are supposed to resume tomorrow in Moscow. But will they succeed?
The Ukrainian economy is reeling from the global financial crisis. The currency has lost some 60% of its value, and steel production, a key component of its economy, is down over 40%. Ukraine qualified for over $16.4 billion in IMF loans, but it may not be enough to keep the country from falling into an economic depression and/or social instability. Ukraine has stated that it cannot afford to pay $250 for natural gas, never mind $450.
When a private individual is in debt, normally the creditor can suggest a deal where the debt is renegotiated or even lowered, because the creditor would prefer to retrieve some money than no money from the debtor. But when it comes to the situation between Ukraine and Russia, rather than Ukraine going bankrupt and not repaying Russia, the Kremlin probably hopes for a different outcome- the fall of the current government. If the Ukrainian public sentiment against the pro-western government rises high enough, it can mean a return to power of a more agreeable, pro-Russian government. Yanukovych lost the 2004 presidential election, but if the crises with Russia continue and Ukraine’s economy keeps faltering, he may take office in just over a year.
Russia also has many problems of its own: the collapse in energy prices has shaken the economy to the core. The stock market has lost 75% of its value in less than five months, and the currency is down some 25% to the dollar. The market and ruble would have fallen even further if the Kremlin had not sunk tens of billions of dollars from government coffers into subsidizing the market, the currency and many large companies (including Gazprom!) as a last resort. Russia needs oil prices of at least $70 a barrel to balance a budget, and the recent downturn has many Russians very worried about their economic prospects and yes, even questioning their own government’s competence.
According to Pavel Baev of the International Peace Research Institute of Oslo, “One direct consequence of this [Russian economic] downfall is the new Russian-Ukrainian “gas war,” which Moscow has launched this year out of desperation rather than arrogance as was the case in 2006. In autumn Gazprom was reaping record profits from exporting gas to Europe, because the price of gas follows that of oil with a lag of six to nine months. These increased prices are set to disappear in 2009, so Gazprom wants to fix the price for Ukraine at the current European level, which Kiev [sic] has every reason to consider too high.” (full article here) The collapse of oil prices has been hard enough on Russia; a collapse in natural gas prices would hurt Russia even more.
Ukraine needs to undergo two sets of reforms to get out of this predicament: energy use reform and energy politics reform. The country’s Soviet-era industries and factories are among the least energy efficient in the world, and Ukrainian consumers pay rates that are highly subsidized by the government. Industry must be modernized and made more energy efficient, and gas prices must be raised to reflect market rates; the Ukrainian government recognizes this and has proposed a transition over the next several years to higher prices, but a hike to $250 or more for natural gas in the short term could crush the economy. Ukraine, and the rest of Europe, should also strive for energy source diversification, so as to not rely almost entirely on the whims of an increasingly authoritarian and belligerent Kremlin for their energy needs. Secondly, the corruption and serious lack of transparency in the energy market of the former Soviet Union is a plague upon the entire region. Deals and contracts are made, money is transferred, but few really know what is going on. Until the industry’s accountability standards and local judicial system can be improved, future energy contracts between Ukraine and foreign entities such as Gazprom must be made open to oversight, preferably through a trusted third party such as the EU, OSCE or WTO. A neutral referee can make sure funds are correctly transferred and contracts are properly made and fully upheld.
Mark is a recovering blogger who quit cold turkey in the summer of 2007. Currently he is an irregular guest analyst of international affairs, particularly on Eastern European happenings, for Musings of a (Fairly) Young Contrarian Mark has led a full and productive life ever since he suspended full-time blogging: he has argued with Ukrainian election officials as an accredited international observer, seen the inside of an Eastern European maximum security prison, toured the Lower Ninth Ward after Hurricane Katrina and lent a hand in the city’s reconstruction, was nearly trampled by a pack of New Orleans police horses, completed an MA in history, sampled Germany’s finest beer, and climbed a 5,600-foot peak in Bavaria without provisions. For his next act, Mark is plotting a week long excursion to Slovenia at the end of this month. For pictures of these adventures and more, go to: http://community.webshots.com/user/shukhevych
Pipeline Politics: The Russian/Ukrainian Gas Dispute
by Mark
Most of us appreciate the sharp decline in gas prices in recent months. However, two major geopolitical crises are responsible for the recent spike in prices, and unless both are resolved rather quickly, the upward pressure on prices will continue. After dropping to a low of around $31 per barrel, as of mid-week they are creeping towards $50 once again. The Israeli assault in Gaza is one factor, and the one most of us are familiar with; the second is the dispute between Russia and Ukraine in regards to natural gas prices for the 2009 fiscal year. While the Israeli-Palestinian conflict is a long-running and convoluted dispute in itself, the natural gas dispute is arguably just as complex, if not even murkier. Let me introduce you to the opaque world of energy politics in Europe and the former Soviet Union.
Russia has not only been blessed with among the largest natural gas reserves in the world, but plenty of energy-hungry neighbors on its borders and beyond to which to sell this resource. Currently, Russia, through its state-run energy monopoly Gazprom, provides the European Union with about one-quarter of its natural gas needs. If you break down that statistic into individual countries, things get even more impressive: according to Wikipedia, as of 2004, Gazprom is the *only* natural gas supplier to Bosnia and Herzegovina, Estonia, Finland, Macedonia, Latvia, Lithuania, Moldova and Slovakia, and provides 97 percent of Bulgaria's gas, 89 percent of Hungary's, 86 percent of Poland's, nearly three-quarters of the Czech Republic's, 67 percent of Turkey's, 65 percent of Austria's, about 40 percent of Romania's, 36 percent of Germany's, 27 percent of Italy's, and 25 percent of France's. If you think the US is too dependent on crude oil from the Middle East, re-read the aforementioned figures.
Natural gas is not that easy to transport. Due to its very low density, the most economical way of transporting it is through pipelines. However, to get to Europe, Russia must ship natural gas through several countries, particularly Ukraine. Let’s look at this map from the BBC:
80% of western and central Europe’s natural gas travels through Ukraine. That is a choke point in every sense of the word.
An independent, western-oriented Ukraine has been a thorn in Russia’s side for years. The most recent disputes between the two involve a whole list of issues, such as NATO membership for Ukraine, the status of the Russian language in Ukraine, the future of the Russian fleet base in Sevastopol, influence in Ukraine’s Crimean peninsula, the Russo-Georgian War of August 2008, recognition of the Ukrainian Famine-Genocide (the Holodomor) as an act of genocide perpetrated by the Soviet regime, etc. In the 2004 Orange Revolution, the pro-Russian government and its preferred presidential candidate, Viktor Yanukovych, were defeated and discredited in street demonstrations and new elections by the pro-western democratic forces led by current president Viktor Yushchenko.
One method of putting pressure on Ukraine has been for Russia to raise natural gas prices. It has been done before, and that appears to be the situation currently. In the most recent dispute, Gazprom began making claims in November that Ukraine owed them some $2.4 billion, and they would stop supplying Ukraine with gas unless the debts were paid off in full by December 31, 2008. This is where it gets really confusing, but bear with me.
Ukraine countered that since they technically purchase natural gas through an intermediary called RosUkrEnergo (RUE, a murky enterprise half owned by Gazprom, half by two Ukrainian businessmen, and all accused of having ties to organized crime in Russia and lining the pockets of some Kremlin officials) it was impossible for Ukraine to owe Gazprom any money. Then Ukraine admitted it owed $1.2 billion. Then Ukraine said it had paid off the full debt to RUE.(“In full” by whose standards?) Then Gazprom said Ukraine still owed them $614 million in late fees. And get this: a month before the accusations began flying around, the prime ministers of both countries had apparently signed a deal where RUE would have been abolished and Ukraine would have purchased natural gas from Gazprom directly. An agreement was signed to nix RUE (we think?), and within a few weeks new accusations about unpaid debts are made.
And then, we come to the newest part of the dispute. What price should Ukraine pay for natural gas? And what price should Russia pay to transport natural gas to its customers beyond Ukraine? As of December 2008, Ukraine was paying $179.50 per 1,000 cubic meters, and charging Russia $1.70 to transport 1,000 cubic meters per 100 kilometers. Energy analyst Roman Kupchinsky writes:
“[Gazprom] CEO Alexei Miller said in December that Ukraine would pay $450 per 1,000 cubic meters in 2009. During the unsuccessful negotiations, Gazprom demanded $250, which the Ukrainians rejected, making a counteroffer of $208. Miller responded that since they had rejected $250, they would pay $418. On January 1 Oleh Dubyna, the head of [the state-run Ukrainian energy monopoly] Naftohaz Ukrainy, offered to buy Russian gas for $235 contingent on a price increase for transporting Russian gas to Europe from the current $1.70 per 1,000 cubic meters per 100 kilometers to $1.80. Russian Prime Minister Vladimir Putin rejected this increase and insisted that transit fees were locked into a contract that is due to expire in 2010. The next day Ukrainian President Viktor Yushchenko and [Prime Minister Yulia] Tymoshenko made a joint public statement on the crisis in which they upped the proposed transit price to “not less than $2.00.” (full article here)
Ukraine denies the existence of a transit fee contract that supposedly expires in 2010, and also points out that the transit fees of Western European countries are regularly twice as much as what Ukraine charges Gazprom. If Russia wants to raise natural gas prices, why can’t Ukraine ask for higher transit fees as well?
Does your head hurt yet? The media has had just as much trouble as you and me in trying to keep track of all these threats, statements and deals. There were times at which, if you went on Google or Yahoo news for updates, you would literally see contradictory headlines on articles written merely a few hours apart. All of this is a symptom of the lack of transparency in the negotiating process.
Since Ukraine and Russia could not agree on the debt nor the 2009 gas price, Russia cut supplies to Ukraine… sort of. They simply deducted from the pipelines the amount of gas Ukraine regularly receives, and kept the rest flowing west. (A full cut would obviously cut all supplies to western and central Europe.) However, Russia now claims Ukraine is illegally siphoning large amount of gas from the pipes, some 65.3 million cubic meters between January 1-4. Ukraine counters that a much smaller amount than that is being siphoned by their state energy monopoly, but only enough to maintain pressure in the pipes for the Western consumers. It is also entirely plausible that some Ukrainian companies, particularly in heavy industry, are taking gas from the pipelines without permission from the Ukrainian government to keep their own factories on line.
In response, the Kremlin ordered an even greater cut in the amount of natural gas shipped west, and now nearly a dozen European consumer countries are reporting that the amount of natural gas reaching them has decreased or been completely halted. The EU, which has been calling this a commercial dispute between Ukraine and Russia, is finally being, ahem, motivated to do more. Fact-finding missions have been sent to both Kyiv and Moscow to figure out what the hell’s going on. Gazprom says it will re-supply the west through pipelines in Belarus and Turkey, but, logistically speaking, cannot make up the difference. Luckily for everyone, negotiations are supposed to resume tomorrow in Moscow. But will they succeed?
The Ukrainian economy is reeling from the global financial crisis. The currency has lost some 60% of its value, and steel production, a key component of its economy, is down over 40%. Ukraine qualified for over $16.4 billion in IMF loans, but it may not be enough to keep the country from falling into an economic depression and/or social instability. Ukraine has stated that it cannot afford to pay $250 for natural gas, never mind $450.
When a private individual is in debt, normally the creditor can suggest a deal where the debt is renegotiated or even lowered, because the creditor would prefer to retrieve some money than no money from the debtor. But when it comes to the situation between Ukraine and Russia, rather than Ukraine going bankrupt and not repaying Russia, the Kremlin probably hopes for a different outcome- the fall of the current government. If the Ukrainian public sentiment against the pro-western government rises high enough, it can mean a return to power of a more agreeable, pro-Russian government. Yanukovych lost the 2004 presidential election, but if the crises with Russia continue and Ukraine’s economy keeps faltering, he may take office in just over a year.
Russia also has many problems of its own: the collapse in energy prices has shaken the economy to the core. The stock market has lost 75% of its value in less than five months, and the currency is down some 25% to the dollar. The market and ruble would have fallen even further if the Kremlin had not sunk tens of billions of dollars from government coffers into subsidizing the market, the currency and many large companies (including Gazprom!) as a last resort. Russia needs oil prices of at least $70 a barrel to balance a budget, and the recent downturn has many Russians very worried about their economic prospects and yes, even questioning their own government’s competence.
According to Pavel Baev of the International Peace Research Institute of Oslo, “One direct consequence of this [Russian economic] downfall is the new Russian-Ukrainian “gas war,” which Moscow has launched this year out of desperation rather than arrogance as was the case in 2006. In autumn Gazprom was reaping record profits from exporting gas to Europe, because the price of gas follows that of oil with a lag of six to nine months. These increased prices are set to disappear in 2009, so Gazprom wants to fix the price for Ukraine at the current European level, which Kiev [sic] has every reason to consider too high.” (full article here) The collapse of oil prices has been hard enough on Russia; a collapse in natural gas prices would hurt Russia even more.
Ukraine needs to undergo two sets of reforms to get out of this predicament: energy use reform and energy politics reform. The country’s Soviet-era industries and factories are among the least energy efficient in the world, and Ukrainian consumers pay rates that are highly subsidized by the government. Industry must be modernized and made more energy efficient, and gas prices must be raised to reflect market rates; the Ukrainian government recognizes this and has proposed a transition over the next several years to higher prices, but a hike to $250 or more for natural gas in the short term could crush the economy. Ukraine, and the rest of Europe, should also strive for energy source diversification, so as to not rely almost entirely on the whims of an increasingly authoritarian and belligerent Kremlin for their energy needs. Secondly, the corruption and serious lack of transparency in the energy market of the former Soviet Union is a plague upon the entire region. Deals and contracts are made, money is transferred, but few really know what is going on. Until the industry’s accountability standards and local judicial system can be improved, future energy contracts between Ukraine and foreign entities such as Gazprom must be made open to oversight, preferably through a trusted third party such as the EU, OSCE or WTO. A neutral referee can make sure funds are correctly transferred and contracts are properly made and fully upheld.
Mark is a recovering blogger who quit cold turkey in the summer of 2007. Currently he is an irregular guest analyst of international affairs, particularly on Eastern European happenings, for Musings of a (Fairly) Young Contrarian Mark has led a full and productive life ever since he suspended full-time blogging: he has argued with Ukrainian election officials as an accredited international observer, seen the inside of an Eastern European maximum security prison, toured the Lower Ninth Ward after Hurricane Katrina and lent a hand in the city’s reconstruction, was nearly trampled by a pack of New Orleans police horses, completed an MA in history, sampled Germany’s finest beer, and climbed a 5,600-foot peak in Bavaria without provisions. For his next act, Mark is plotting a week long excursion to Slovenia at the end of this month. For pictures of these adventures and more, go to: http://community.webshots.com/user/shukhevych
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