Hi Louis, once again, the rebuttal (sorry if it's a broken record):
On 3/14/2021 7:20 PM, Louis Proyect wrote:
...
I haven't paid attention to Ecuador at all. I do know that Patrick
Bond is a strict "leave it in the ground" advocate but that does not
address the need for foreign exchange that these poor countries rely on.
Actually that's the whole point, Louis, of the demand that the North pay
peoples of the South /not to exploit fossil fuels, as downpayment on the
climate debt/ owed. To remind, from this morning's post,
Against this, the "Yasunization" strategy of leaving fossil fuels
underground and demanding a compensatory payment from the North to
the government in Quito - a $3.6 billion downpayment on the
polluters' ecological debt - is still a very important component of
Climate Justice politics, and is explained here
<http://www.ejolt.org/2013/05/towards-a-post-oil-civilization-yasunization-and-other-initiatives-to-leave-fossil-fuels-in-the-soil/>:
http://www.ejolt.org/2013/05/towards-a-post-oil-civilization-yasunization-and-other-initiatives-to-leave-fossil-fuels-in-the-soil/
<http://www.ejolt.org/2013/05/towards-a-post-oil-civilization-yasunization-and-other-initiatives-to-leave-fossil-fuels-in-the-soil/>
Now to be sure, Ecuador has been using the US$ as its peg, so it's a
unique situation from the standpoint of forex needs. The way to address
the forex shortage there was often explained by Carlos Larrea - a Simon
Bolivar Univ prof and comrade in a "Leave Fossil Fuels Underground
<http://www.leavefossilfuelsunderground.org/>" (LFFU) network, third
from the left in this Quito event <https://vimeo.com/287927514>. (Larrea
was Correa's former lead economic advisor on the Yasuni campaign prior
to that tragic 2013 reversal.) To cut a long story short, Correa
attempted to get Germany, Norway and Italy to pay the $3.6 billion at
which point Yasuni could be left unexploited forever. But Berlin, Oslo
and Rome offered him less than $100 mn to keep Yasuni oil underground,
and insisted this should occur in a manner aiming to boost carbon
marketeering <https://www.ecologic.eu/4108>. So Correa reversed his
support for Yasunization and gave the oil drilling contracts to the
Chinese and an Ecuadorian state firm.
But had we put as much activist effort and mass consciousness-raising
into Yasunization - not just Correa's untrustworthy discussion with
European elite counterparts that ultimately went no further than helping
Northern companies merely offset, not dramatically cut, their emissions
- this demand might not have been, ultimately, a fantasy. Recall that
other activist-driven demands for global ecological sanity and
socio-economic justice - e.g. to ban CFC production in 1996 to halt
ozone hole expansion, and in the early 2000s to end Intellectual
Property on AIDS medicines and have the Bush regime pony up for a
massive U.S. Pepfar (plus UN Global Fund) /generic /distribution regime
- have been made, and actually won (in the former case shrinking the
ozone hole and in the latter case, raising life expectancy here from 52
to 65 since 2005 and similar miraculous improvements elsewhere).
(I wish we could do the same for Covid-19 vaccines and treatments - and
indeed a global protest was held last week thanks to London-based Global
Justice Now, to pressure the new ultra-neoliberal Nigerian head of the
WTO to join the side of 100+ countries demanding an IP waiver; but she's
instead going with Biden, BoJo, Brussels, Bolsonaro and other promoters
of vaccine apartheid.)
But back to the core question of relieving pressure on the trade and
debt repayment obligations: the logic behind this climate-grounded
Odious Debt write-off demand is delightfully illustrated by very naughty
German guys in "The Bill <https://www.youtube.com/watch?v=rWfb0VMCQHE>,"
a 4-minute video you will be curious about, I predict. (I share it with
my German relatives - who are nearly as obnoxious as you New Yorkers,
Louis - and suddenly they go all quiet about their holidays and Beemers.)
I saw this in Nicaragua. The plantations seized from Somoza continued
to produce cotton and sugar that were as destructive ecologically as
oil is in Ecuador but without the foreign exchange Nicaragua could not
import medicine, arms, etc.
Yes, but then the forex requirements would be carefully dissected, as
they've been in Cuba for 60+ years. If you were in the 1980s-era
Sandinista government and needed to buy medicines, oil and other goods
for which import substitution is difficult or impossible, and no
multilateral lender would give you a break, then the strategy I suspect
Ortega followed was to lower the currency value to make other
non-essential imports more expensive, and to encourage exports. However,
that was a fairly unique situation.
The only other recent example I can think of where a forex problem -
indeed a debt crisis and default - compelled a trade surplus along these
lines (with at least a center-left Peronista government) was Argentina
during the early 2000s. They seem to have done a very good job of
adapting without new forex loans (even trade financing was scarce then,
following the 2002 loan defaults). The DC-based anti-imperialist and
radical Keynesian institute (in which likely Ecuadorian president Arauz
worked when he was a PhD student) CEPR did studies of Argentina's
successful (albeit involuntary) financial delinking. The vital step was
refusing to pay $80 billion in inherited foreign debt and to either
allow profit repatriation or other compensation to firms like Suez which
had privatized the main cities' water systems (which were soon
remunicipalized).
But many countries would have a different calculus, more akin to the one
we face in South Africa, since the balance of internal class forces is
far more adverse than you witnessed in Nicaragua, or that prevailed in
Argentina and Ecuador in the 2000s. Here, the vast bulk of imports are
for inappropriate machinery (the biggest single such bill over the last
decade was to pay for corrupt Hitachi boilers used in coal-fired
powerplants), luxury goods (this being the world's most unequal country)
and petroleum. And like many places, SA thus faces a persistent current
account deficit (although not 2020 which witnessed a 7% GDP crash so
there were much lower import levels and indeed a current account surplus).
This, in turn, is largely explained by repatriated profits and dividends
going to multinational corporates and interest payments to foreign
banks. As a result, the left here advocates a dissection of the import
bill (and much tighter exchange controls to halt Illicit Financial Flows
and inappropriate imports), as well as questioning the repayment of
Odious Debt like that to the World Bank for those Hitachi boilers. Now
the latter Odious Debt argument was also made, after a rigorous debt
audit, by Correa in Ecuador, and resulted in Norway having to recognize
many of its shipping-related loans were too corrupt to justify
repayment, for example. Such arguments are regularly advanced here by
the second-largest trade union federation
<https://www.politicsweb.co.za/documents/imf-and-other-foreign-loans-rejected--saftu>
and by the Alternative Information and Development Centre
<http://aidc.org.za/aidc-calls-public-audit-debt-mtbps-2017/>.
The main international advocacy network promoting this approach is the
excellent Brussels-based Committee for the Abolition of Illegitimate
Debt <https://www.cadtm.org> whose leader Eric Toussaint is quite
phenomenal when making this case against neoliberals on every continent.
So that's just a quick taste of the struggle over ideas. It raged here
last April-August when the IMF prepared to make a huge, unnecessary
"Covid-19 relief" loan (after the ultra-neoliberal finance minister
lobbied it through the ruling party and even the largest union
federation). My spin on that is here
<https://www.counterpunch.org/2020/05/01/should-south-africa-follow-the-law-of-the-jungle-or-the-doctrine-of-odious-debt/>.
But we can continue to debate this, if anyone wants - as well as the
necessity for readers of this listserve who are in the Global North (as
am I, in the SA upper middle class) to pay their/our climate debt in a
systematic way: especially to do so, in the first instance, so as to
help activists compel their elites to leave fossil fuels underground
<https://toxicnews.org/2019/08/29/fighting-fossil-fuels-in-south-africa-campaigners-invoke-the-spectre-of-climate-chaos/>
in so many of our sites of extreme conflict - including an assassination
of community leader Fikile Ntshangase last October - involving coal, gas
and oil
<https://www.cadtm.org/As-South-African-climate-justice-veterans-fall-consciousness-begins-reviving>.
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