Part 2 - ECONOMIC TERRORISM, by Prof. Michel Chossudovsky

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Mon May 7 16:51:40 MDT 2001


URL for this article is http://emperors-clothes.com/articles/choss/eco1.htm

ECONOMIC TERRORISM, PART TWO
by Prof. Michel Chossudovsky

THE COSTS OF THE AIR CAMPAIGN

Accusing the Serbian people and the former head of State of the crimes
committed by the aggressor is intended to instill a sense of fear and
collective guilt on an entire Nation.

But there is something else which has so far not been mentioned: Washington's
design is to hold President Milosevic responsible for the War not as an
individual but as the country's head of State, with a view to eventually
collecting war reparations from Yugoslavia.

In other words, if the former head of State were to be indicted by the Hague
tribunal, the country could be held "legally responsible" not only for the
costs of NATO's "humanitarian bombs", but for all the military and
"peacekeeping" expenses incurred since 1992.

In fact, an army of accountants and economists has already evaluated --on
NATO's behest-- the costs of the air campaign and the various "peacekeeping
operations". In this regard, the U.S. share of the costs of the bombing,
"peacekeeping" and "refugee assistance" solely in fiscal year 1999 was
estimated at $5.05 billion. The amounts allocated by the Clinton
Administration to pay for the war and the refugees in FY 1999 were of the
order of $6.6 billion. So-called "emergency funding" appropriated by Congress
for operations in Kosovo and other defense spending in FY 1999 totaled $12
billion. Moreover, the Department of Defense estimates the costs of
deployment of American occupation forces and civilian personnel stationed in
Bosnia and Kosovo since 1992 to be of the order of $21.2 billion.28

In other words, indicting President Milosevic on trumped up charges raises a
fundamental question of legitimacy. It sanctions the bombings as a
humanitarian operation. It not only absolves the real war criminals, it also
opens up the avenue for the indictment of Yugoslavia as a nation.

The former head of State is indicted; the people are collectively indicted.
What this means is that NATO could at some future date oblige Yugoslavia to
pay for the bombs used to destroy the country and kill its people.

There is nothing fundamentally new in this process. Under the British Empire,
it was common practice not only to install puppet regimes but also to bill
the costs of gunboat operations to countries, which refused to sign a "free
trade" agreement with Her Majesty's government. In 1850, Britain threatened
to send in its "gun boats" ---equivalent to today's humanitarian air raids--
following the refusal of the Kingdom of Siam (Thailand) to sign a free trade
treaty with Britain (equivalent to today's "letter of intent" to the IMF).
While the language and institutions of colonial diplomacy have changed, the
similarity with contemporary practices is striking. In the words of British
envoy Sir James Brooke (equivalent to today's Richard Holbrooke):

"The Siamese Government is hostile-- its tone is arrogant-- its presumption
unbounded... Should these just [British] demands firmly urged be refused, a
force should be present, immediately to enforce them by a rapid destruction
of the defenses of the river... Siam may be taught the lesson which it has
long been tempted, ... a better disposed king placed on the throne, and an
influence acquired in the country which will make it of immense commercial
importance to England... [Note the similarity in relation to Yugoslavia]
Above all, it would be well to prepare for the change and to place our own
kind on the throne ... This prince [Mongkut] we ought to place on the throne
and through him, we might, beyond doubt, gain all we desire.... And the
expense incurred [of the military operation] would readily be available from
the royal treasury of Siam."29

Replace the head of State, impose "free" trade, bill the country for the
military operation!

PRECEDENTS OF WAR REPARATIONS: VIETNAM AND NICARAGUA

In fact in the case of Vietnam --which won the war against US aggression--
Hanoi was nonetheless obliged to pay war reparations to the United States, as
a condition for the lifting of economic sanctions in 1994.

Although the historical circumstances were quite different to those of
Yugoslavia, the pattern of IMF intervention in Vietnam was in many regards
similar. The decision to lift the sanctions on Vietnam was also taken in the
context of a donors' conference. "Some two billion dollars of loans and "aid"
money had been pledged in support of Vietnam's IMF sponsored reforms, yet
immediately after the Conference another separate meeting was held, this time
"behind closed doors" in which Hanoi was obliged to fully reimburse ... the
debts incurred by the US installed Saigon military government."30 By fully
recognising the legitimacy of these debts, Hanoi had in effect accepted to
repay loans that had been utilised to support the US War effort.

Moreover, Hanoi's acceptance had also totally absolved Washington from paying
war reparations to Vietnam totalling $4.2 billion as agreed at the Paris
Peace Conference in 1973.31

NICARAGUA: "FREEDOM FIGHTERS" AND IMF ECONOMIC MEDICINE

Similarly the 12 billion dollars "reparations" that the US had been ordered
to pay to Nicaragua by the Hague International Court of Justice (ICJ) were
never paid. In 1990, following the installation of a pro-US "democratic"
government, these reparations --ordered by the ICJ-- were erased in exchange
for "normalization" and the lifting of sanctions. In return, Washington
approved a token $60 million in "emergency aid" which was of course
conditional upon the payment of all debts and the adoption of the most deadly
IMF economic shock therapy:

"The United States ... provides severance pay to government workers fired
under the U.S.-mandated [IMF structural adjustment] program to reduce the
size of Nicaragua's government. Among the results: Nicaragua's social
security budget has been slashed from $ 18 million to $ 4 million while
unemployment has risen to about 45 percent. Health spending has dropped from
$86 per person [per annum] five years ago to $ 18 [in 1991 in the year
following the elections]. Pensions for disabled war veterans have been frozen
at $ 6.50 per month while food prices have risen [1991] to nearly U.S.
levels... In the words of a State Department official 'The US is committed to
rebuilding Nicaragua, but there's only a limited amount you can do with
development aid.'"32

Yet the US did not hesitate in spending billions of dollars to finance nine
years of economic embargo and war in which Washington created and funded a
paramilitary army (the Contras) to fight the Sandinista government. Heralded
by the Reagan administration and touted by the media as "freedom fighters",
the Contras insurgency was financed by drug money and covert support from the
CIA. And in fact the same pattern of covert support using drug money was
applied to financing the Kosovo Liberation Army (KLA) with a view to
destabilizing Yugoslavia. William Walker, head of the OSCE mission to Kosovo
in the months preceding the 1999 war, was responsible together with Coronal
Oliver North in channeling covert support to the Contras which ultimately led
to the downfall of the Sandinista government and its defeat in "democratic"
elections in 1990.

THE ROLE OF THE UNITED NATIONS COMPENSATION COMMISSION (UNCC)

Another case is that of Iraq which --in the wake of the Gulf War-- was
obliged to pay extensive war reparations. The United Nations Compensation
Commission (UNCC) was set up to process "claims" against Iraq. Thirty percent
of Iraqi oil revenues in the "oil for food program" are impounded by the UNCC
to pay war reparations to governments, banks and corporations. The UNCC "has
awarded more than $32 billion [in claims], and more than $9.5 billion has
been paid out under the food-for-oil regime."33

These precedents are important in understanding the war in Yugoslavia.
Although no official statement has been made by NATO, the framework and
bureaucracy of the UNCC could at some future date be extended to collecting
war reparations from Yugoslavia. The UNCC's claim procedures are based on a
1991 UN Security Council resolution which establishes Iraq's liability for
the Gulf war under international law.

In the case of Yugoslavia, President Milosevic is accused by the Hague
tribunal for "crimes against humanity and violations of the laws or customs
of war", 34. Following the Iraqi precedent, a decision of the Hague Tribunal
concerning President Milosevic could constitute the basis for the formulation
of a similar UN Security Council Resolution establishing the liability of the
government and people of Yugoslavia for the "direct loss, damage... to
foreign governments, nationals and corporations", including "the costs of the
air campaign." 35

REWRITING HISTORY

Recent events have shown how realties can be turned upside down by the
aggressor and its propaganda machine. NATO's intent is to blatantly distort
the course of events and manipulate the writing of modern history. It is
therefore essential that the Yugoslav people remain united in their resolve.
It should also be understood that the "demonisation" of the Serbian people
and of President Slobodan Milosevic alongside the triggering of ethnic
conflicts is intended to impose the "free market" and enforce the New World
Order throughout the Balkans.

Internationally, the various movements against IMF-World Bank-WTO reforms
must understand that war and globalization are inter-connected processes.
Applied around the World, the only promise of the "free market" is a World of
landless farmers, shuttered factories, jobless workers and gutted social
programs with "bitter economic medicine" under IMF-WB-WTO custody
constituting the only prescription. Moreover, militarization increasingly
constitutes the means for enforcing these deadly macro-economic reforms.

Yugoslavia's struggle to preserve its national sovereignty is --at this
particular juncture in its history-- a part of the broader movement against
the New World Order and the imposition throughout the World of a uniform
neo-liberal policy agenda under IMF-World Bank-WTO supervision. Behind these
organizations --which routinely interface with NATO-- are the powers of the
US and European financial establishments and the Western military-industrial
complex.

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ENDNOTES

1. Agence France Presse , 19 November 1997.

2 Quest Economics Database. West LB Emerging Trends, 8 March 2001, Agence
France Press, 16 March 2001.

3. Statement of Secretary of State Colin Powell quoted in International
Herald Tribune, Paris, April 4, 2001

4. International Herald Tribune, op. cit.

5. B 92 News, Belgrade, 3 May 2001.

6. US House of Representatives, Bill HR 1064, section 302, September 2000, at
http://www.house.gov/house/Legproc.html., click 106th Congress and enter bill
number.

7. UPI, 2 April 2001

8. New York Times, 27 February 2001.

9. See Michel Chossudovsky, Washington Finances Ethnic Warfare in the
Balkans", Emperors Clothes, April 2001.

10. See IMF, IMF Approves Membership of Federal Republic of Yugoslavia and
US$151 Million in Emergency Post-Conflict Assistance,
http://www.imf.org/external/np/sec/pr/2000/pr0075.htm.

11. See IMF, IMF Approves Membership of Federal Republic of Yugoslavia and
US$151 Million in Emergency Post-Conflict Assistance,
http://www.imf.org/external/np/sec/pr/2000/pr0075.htm.

12. Government of Serbia, Serbia Info, Belgrade 2 May 2001,
http://www.serbia-info.com/news/2001-05/03/23335.html.

13 For further details see Michel Chossudovsky, Dismantling Former
Yugoslavia, Recolonising Bosnia, Covert Action Quarterly, Sprint 1996,
available at http://www.ess.uwe.ac.uk/Kosovo/Kosovo-controversies4.html or
http://www.emperors-clothes.com/articles/chuss/dismantl.htm.

14. See Group of 17 "Program of Radical Economic Reforms", Belgrade 1999 at
http://www.g17.org.yu/english/programm/program.htm.

15. New Serbia Forum, "Privatization", Budapest, 13-15th March 2000,
http://www.newserbiaforum.org/Reports/privatisation.htm.

16. The full text of the IMF program is available at
http://www.imf.org/external/pubs/cat/longres.cfm?sk&sk=3875.0 The
Government's commitment under the IMF program is outlined in Federal Republic
of Yugoslavia, "Economic Reform Program for 2001" Belgrade, December 9th,
2000, http://www.seerecon.org/FRYugoslavia/erp2001.htm, see also "Synthetic
View" of main economic policy measures at
http://www.seerecon.org/FRYugoslavia/epmeasures.pdf.

17. See Michel Chossudovsky, Kostunica Coalition Drives Up Prices and
Blames...Milosevic, October 2000,
http://emperors-clothes.com/articles/chuss/triples.htm.

18. See B 92 News, 3 May 2001 at http://www.b92.net/archive/e/index.phtml.

19. IM Program, op cit. On Bulgaria see The Wind in the Balkans, The
Economist, London, February 8, 1997, p.12 and Jonathan C. Randal, Reform
Coalition Wins, Bulgarian Parliament, The Washington Post, April 20 1997, p.
A21.

20. See the Statement of IMF Deputy Managing Director Stanley Fischer,
December 2000 at http://www.imf.org/external/np/sec/pr/2000/pr0075.htm.

21. See Michel Chossudovsky, "Brazil's IMF Sponsored Financial Disaster",
Third World Network, 1998 at http://www.twnside.org.sg/title/latin-cn.htm.

22. For details see Michel Chossudovsky, Financial Warfare triggers Global
Financial Crisis, Third World Network at
http://www.twnside.org.sg/title/trig-cn.htm.

23. See Michel Chossudovsky, The Globalization of Poverty, Zed Books, London
1997, chapter 12.

24. The IMF quotes the G-17 study, "Economic Consequences of NATO
Bombardment", Belgrade 2000 at http://www.g17.org.yu/english/index.htm.

25. See Michel Chossudovsky, NATO Willfully Triggered an Environmental
Catastrophe in Yugoslavia, June 2000, at is
http://emperors-clothes.com/articles/chuss/willful.htm.

26. See G-17, "Economic Consequences of NATO Bombardment", Belgrade 2000 at
http://www.g17.org.yu/english/index.htm.

27. USA Today, 10 October 2000.

28. GAO : Briefing report to the Chairman, Committee on Armed Services, House
of Representatives, RPTno: gao/nsiad-00-125br, Washington, 24 April 2000.

29. Quoted in M. L. Manich Jumsai, King Mongkut and Sir John Bowring,
Chalermit, Bangkok, 1970, p. 21.

30. See Michel Chossudovsky, The Globalisation of Poverty, op cit., Chapter
8.

31. A. J. Langguth, The Forgotten Debt to Vietnam, New York Times, 18
November 2000, see also Barbara Crossette, Hanoi said to vow to give MIA
Data, New York Times, 24 October, 1992.

32. The Houston Chronicle, 8 December 1991. To consult the International
Court of Justice 1986 Judgement on "Nicaragua v. United States of America"
see: "Military and Paramilitary Activities in and against Nicaragua
(Nicaragua v. United States of America) (1984-1991)" at
http://www.icj-cij.org/icjwww/Icases/iNus/inusframe.htm, summary at
http://www.icj-cij.org/icjwww/idecisions/isummaries/inussummary860627.htm.

33. UPI, 7 December 2000.

34. See the text of 1999 indictment of President Milosevic by the Hague
Tribunal at http://www.un.org/icty/indictment/english/mil-ii990524e.htm.

35. See the text of UNSC resolution 687 (1991) pertaining to Iraq at
http://www.unog.ch/uncc/introduc.htm.

C Copyright by Michel Chossudovsky, Ottawa, May 2001. All rights reserved.
Permission is granted to post this text on non-commercial community internet
sites, provided the essay remains intact and the copyright note is displayed.
To publish this text in printed and/or other form, contact the author at
chossudovsky at videotron.ca, fax: 1-514-4256224.

***

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