(c/o DM) > https://rwer.wordpress.com/2017/01/03/a-well-kept-open-secret-washington-is-behind-indias-brutal-experiment-of-abolishing-most-cash/ > > A well-kept open secret: Washington is behind India’s brutal experiment of > abolishing most cash > Editor
> On November 8, Indian prime minster Narendra Modi announced that the two > largest denominations of banknotes could not be used for payments any more > with almost immediate effect. Owners could only recoup their value by putting > them into a bank account before the short grace period expired. The amount of > cash that banks were allowed to pay out to individual customers was severely > restricted. Almost half of Indians have no bank account and many do not even > have a bank nearby. The economy is largely cash based. Thus, a severe > shortage of cash ensued. Those who suffered the most were the poorest and > most vulnerable. They had additional difficulty earning their meager living > in the informal sector or paying for essential goods and services like food, > medicine or hospitals. Chaos and fraud reigned well into December. > Reading the statements with hindsight it becomes obvious, that Catalyst and > the partnership of USAID and the Indian Ministry of Finance, from which > Catalyst originated, are little more than fronts which were used to be able > to prepare the assault on all Indians using cash without arousing undue > suspicion. Even the name Catalyst sounds a lot more ominous, once you know > what happened on November 9. > > Catalyst’s Director of Project Incubation is Alok Gupta, who used to be Chief > Operating Officer of the World Resources Institute in Washington, which has > USAID as one of its main sponsors. He was also an original member of the team > that developed Aadhaar, the Big-Brother-like biometric identification system. > > According to a report of the Indian Economic Times, USAID has committed to > finance Catalyst for three years. Amounts are kept secret. > > Badal Malick was Vice President of India’s most important online marketplace > Snapdeal, before he was appointed as CEO of Catalyst. He commented: > > „Catalyst’s mission is to solve multiple coordination problems that have > blocked the penetration of digital payments among merchants and low-income > consumers. We look forward to creating a sustainable and replicable model. > (…) While there has been (…) a concerted push for digital payments by the > government, there is still a last mile gap when it comes to merchant > acceptance and coordination issues. We want to bring a holistic ecosystem > approach to these problems.“ > > Ten months earlier > > The multiple coordination problem and the cash-ecosystem-issue that Malick > mentions had been analysed in a report that USAID commissioned in 2015 and > presented in January 2016, in the context of the anti-cash partnership with > the Indian Ministry of Finance. The press release on this presentation is > also not in USAID’s list of press statements (anymore?). The title of the > study was “Beyond Cash”. > > „Merchants, like consumers, are trapped in cash ecosystems, which inhibits > their interest” in digital payment it said in the report. Since few traders > accept digital payments, few consumers have an interest in it, and since few > consumers use digital payments, few traders have an interest in it. Given > that banks and payment providers charge fees for equipment to use or even > just try out digital payment, a strong external impulse is needed to achieve > a level of card penetration that would create mutual interest of both sides > in digital payment options. > > It turned out in November that the declared “holistic ecosystem approach” to > create this impulse consisted in destroying the cash-ecosystem for a limited > time and to slowly dry it up later, by limiting the availability of cash from > banks for individual customers. Since the assault had to be a surprise to > achieve its full catalyst-results, the published Beyond-Cash-Study and the > protagonists of Catalyst could not openly describe their plans. They used a > clever trick to disguise them and still be able to openly do the necessary > preparations, even including expert hearings. They consistently talked of a > regional field experiment that they were ostensibly planning. > > “The goal is to take one city and increase the digital payments 10x in six to > 12 months,” said Malick less than four weeks before most cash was abolished > in the whole of India. To not be limited in their preparation on one city > alone, the Beyond-Cash-report and Catalyst kept talking about a range of > regions they were examining, ostensibly in order to later decide which was > the best city or region for the field experiment. Only in November did it > became clear that the whole of India should be the guinea-pig-region for a > global drive to end the reliance on cash. Reading a statement of Ambassador > Jonathan Addleton, USAID Mission Director to India, with hindsight, it > becomes clear that he stealthily announced that, when he said four weeks > earlier: > > “India is at the forefront of global efforts to digitize economies and create > new economic opportunities that extend to hard-to-reach populations. Catalyst > will support these efforts by focusing on the challenge of making everyday > purchases cashless.” > > Veterans of the war on cash in action > > Who are the institutions behind this decisive attack on cash? Upon the > presentation of the Beyond-Cash-report, USAID declared: “Over 35 key Indian, > American and international organizations have partnered with the Ministry of > Finance and USAID on this initiative.” On the website catalyst.org one can > see that they are mostly IT- and payment service providers who want to make > money from digital payments or from the associated data generation on users. > Many are veterans of,what a high-ranking official of Deutsche Bundesbank > called the “war of interested financial institutions on cash” (in German). > They include the Better Than Cash Alliance, the Gates Foundation (Microsoft), > Omidyar Network (eBay), the Dell Foundation Mastercard, Visa, Metlife > Foundation. > > The Better Than Cash Alliance > > The Better Than Cash Alliance, which includes USAID as a member, is mentioned > first for a reason. It was founded in 2012 to push back cash on a global > scale. The secretariat is housed at the United Nations Capital Development > Fund (UNCDP) in New York, which might have its reason in the fact that this > rather poor small UN-organization was glad to have the Gates-Foundation in > one of the two preceding years and the Master-Card-Foundation in the other as > its most generous donors. > > The members of the Alliance are large US-Institutions which would benefit > most from pushing back cash, i.e. credit card companies Mastercard and Visa, > and also some US-institutions whose names come up a lot in books on the > history of the United States intelligence services, namely Ford Foundation > and USAID. A prominent member is also the Gates-Foundation. Omidyar Network > of eBay-founder Pierre Omidyar and Citi are important contributors. Almost > all of these are individually also partners in the current > USAID-India-Initiative to end the reliance on cash in India and beyond. The > initiative and the Catalyst-program seem little more than an extended Better > Than Cash Alliance, augmented by Indian and Asian organizations with a strong > business interest in a much decreased use of cash. > > Reserve Bank of India’s IMF-Chicago Boy > > The partnership to prepare the temporary banning of most cash in India > coincides roughly with the tenure of Raghuram Rajan at the helm of Reserve > Bank of India from September 2013 to September 2016. Rajan (53) had been, and > is now again, economics professor at the University of Chicago. From 2003 to > 2006 he had been Chief Economist of the International Monetary Fund (IMF) in > Washington. (This is a cv-item he shares with another important warrior > against cash, Ken Rogoff.) He is a member of the Group of Thirty, a rather > shady organization, where high ranking representatives of the world major > commercial financial institutions share their thoughts and plans with the > presidents of the most important central banks, behind closed doors and with > no minutes taken. It becomes increasingly clear that the Group of Thirty is > one of the major coordination centers of the worldwide war on cash. Its > membership includes other key warriers like Rogoff, Larry Summers and others. > > Raghuram Rajan has ample reason to expect to climb further to the highest > rungs in international finance and thus had good reason to play Washington’s > game well. He already was a President of the American Finance Association and > inaugural recipient of its Fisher-Black-Prize in financial research. He won > the handsomely endowed prizes of Infosys for economic research and of > Deutsche Bank for financial economics as well as the Financial Times/Goldman > Sachs Prize for best economics book. He was declared Indian of the year by > NASSCOM and Central Banker of the year by Euromoney and by The Banker. He is > considered a possible successor of Christine Lagard at the helm of the IMF, > but can certainly also expect to be considered for other top jobs in > international finance. > > As a Central Bank Governor, Rajan was liked and well respected by the > financial sector, but very much disliked by company people from the real > (producing) sector, despite his penchant for deregulation and economic > reform. The main reason was the restrictive monetary policy he introduced and > staunchly defended. After he was viciously criticized from the ranks of the > governing party, he declared in June that he would not seek a second term in > September. Later he told the New York Times that he had wanted to stay on, > but not for a whole term, and that premier Modi would not have that. A former > commerce and law Minister, Mr. Swamy, said on the occasion of Rajan’s > departure that it would make Indian industrialists happy: > > “I certainly wanted him out, and I made it clear to the prime minister, as > clear as possible. (…) His audience was essentially Western, and his audience > in India was transplanted westernized society. People used to come in > delegations to my house to urge me to do something about it.” > > A disaster that had to happen > > If Rajan was involved in the preparation of this assault to declare most of > Indians’ banknotes illegal – and there should be little doubt about that, > given his personal and institutional links and the importance of Reserve Bank > of India in the provision of cash – he had ample reason to stay in the > background. After all, it cannot have surprised anyone closely involved in > the matter, that this would result in chaos and extreme hardship, especially > for the majority of poor and rural Indians, who were flagged as the supposed > beneficiaries of the badly misnamed “financial-inclusion”-drive. USAID and > partners had analysed the situation extensively and found in the > Beyond-Cash-report that 97% of transactions were done in cash and that only > 55% of Indians had a bank account. They also found that even of these bank > accounts, “only 29% have been used in the last three months“. > > All this was well known and made it a certainty that suddenly abolishing most > cash would cause severe and even existential problems to many small traders > and producers and to many people in remote regions without banks. When it > did, it became obvious, how false the promise of financial inclusion by > digitalization of payments and pushing back cash has always been. There > simply is no other means of payment that can compete with cash in allowing > everybody with such low hurdles to participate in the market economy. > > However, for Visa, Mastercard and the other payment service providers, who > were not affected by these existential problems of the huddled masses, the > assault on cash will most likely turn out a big success, “scaling up” digital > payments in the “trial region”. After this chaos and with all the losses that > they had to suffer, all business people who can afford it, are likely to make > sure they can accept digital payments in the future. And consumers, who are > restricted in the amount of cash they can get from banks now, will use > opportunities to pay with cards, much to the benefit of Visa, Mastercard and > the other members of the extended Better Than Cash Alliance. > > Why Washington is waging a global war on cash > > The business interests of the US-companies that dominate the gobal IT > business and payment systems are an important reason for the zeal of the > US-government in its push to reduce cash use worldwide, but it is not the > only one and might not be the most important one. Another motive is > surveillance power that goes with increased use of digital payment. > US-intelligence organizations and IT-companies together can survey all > international payments done through banks and can monitor most of the general > stream of digital data. Financial data tends to be the most important and > valuable. > > Even more importantly, the status of the dollar as the worlds currency of > reference and the dominance of US companies in international finance provide > the US government with tremendous power over all participants in the formal > non-cash financial system. It can make everybody conform to American law > rather than to their local or international rules. German newspaper > Frankfurter Allgemeine Zeitung has recently run a chilling story describing > how that works (German). Employees of a Geran factoring firm doing completely > legal business with Iran were put on a US terror list, which meant that they > were shut off most of the financial system and even some logistics companies > would not transport their furniture any more. A major German bank was forced > to fire several employees upon US request, who had not done anything improper > or unlawful. > > There are many more such examples. Every internationally active bank can be > blackmailed by the US government into following their orders, since revoking > their license to do business in the US or in dollar basically amounts to > shutting them down. Just think about Deutsche Bank, which had to negotiate > with the US treasury for months whether they would have to pay a fne of 14 > billion dollars and most likely go broke, or get away with seven billion and > survive. If you have the power to bankrupt the largest banks even of large > countries, you have power over their governments, too. This power through > dominance over the financial system and the associated data is already there. > The less cash there is in use, the more extensive and secure it is, as the > use of cash is a major avenue for evading this power. _______________________________________________ Infowarrior mailing list [email protected] https://attrition.org/mailman/listinfo/infowarrior
