The New Nation - Internet Edition

Garment factories targets again

It is reported in the press that workers in Savar industrial zone ransacked fifteen garment factories on Sunday. They were agitating over the non-payment of arrear wages by the owners of those factories. Workers of the Polonia Garment Factory in Jamgara area, on arrival in the morning, found that owners of the factory had closed the main gate. The owners earlier reportedly, made commitment to pay the workers on Sunday.

The law enforcing agencies came to the scene for containing the spread of agitation to different factories. Some clashes between the police and the workers occurred during the agitation by workers, who tried to block the Dhaka-Tangail highway and created problems for movement of passengers and goods for hours. The incidents have virtually furnished the image of the industrial belt that so far encouraged local and foreign investors to set up garment factories.

It is worth noting that some quarters, seem to have insisted upon proper action, to be taken by owners of garment factories, to meet the demands of workers. Security of economic resources, including factories and establishments in the country, has to be kept above anything else. They may consider the creation of industrial intelligence agencies, that would monitor the work of the workers and their trade unions as well as the affairs of the owners of factories and business houses. Such agencies would be able to help nip industrial disputes before they take a violent turn.

The repeated agitation by workers in garment factories are undesirable. The workers and the employers, with necessary help from official agencies, should work dispassionately for removing problems. The damages done to the fifteen factories are quite heavy. Similar incidents of agitation by workers occurred also in the past.

Farmers' training in a mess

AS reported in the media, the government's training programmes aimed at acquainting farmers with modern technology may end up on wastage of money for poor logistics, lax monitoring and inadequate incentives for target farmers across the country. The Department of Agricultural Extension runs a number of projects and a separate wing to train farmers on latest farm technologies and improved farming methods. But the activities lack co-ordination and may fail the main objective of increasing farm output to attain food security and protect domestic market from global price volatility.

All project directors are required to send regular reports on training activities to DAE's training and field service wing. But in most cases they fail to do so. There are allegations that many upazila agriculture officers prepare 'fake reports' and send those without conducting any training for farmers. Senior officials reportedly do not care to take proper note of this. Poor allocations and delays in fund release are also cited as impediments and proofs of the government's lack of priority for the farmers' training schemes. The government has released only Tk 2.22 crore in eight months from September 2007 out of total Tk 2.97 crore as approved by the finance ministry against a demand for Tk 4 crore for the 2007-2008 fiscal year.

The government must strengthen monitoring activities by making it obligatory for senior officials to supervise the implementation of programme. Lack of incentives also discourages farmers from joining the training programmes and spending the whole day without food and money, as most of them have to travel from remote areas to attend training sessions - each spanning seven hours and a half a day - usually at the thana headquarters. Instead of becoming successful the training programme may thus fail if corrective measures are not taken right now.

US, Iran need to talk nuclear issue

Md. Masum Billah

Iran's nuclear project has further antagonized the USA-Israel combine. USA and Israel seek penal actions against Iran including a quick war. Israel has carried out an exercise that appears to have been a rehearsal for an attack on Iran's nuclear faculties. More than 100 Israeli fighter jets took part in maneuvers over the eastern Mediterranean in the first week of June. The Israeli Air Force held exercises at a distance of 1500 km from its shores. The Iranians have responded with test firings of the Shihab missiles which have similar range. Iran now possesses 6000 centrifuges, machines used to enrich uranium. Israel exercise is a message for Iran. Ehud Olmert warned Iran must be shown there will be devastating consequence if it develops such nuclear weapon. In 1981 Israeli jets bombed the Iraqi nuclear reactor at Osirak, 30km outside Baghdad. Israel said it believed the French-built plant was designed to make nuclear weapons that could be used against Israel .Israel is worried that a powerful Iran could be an additional strength for the Arabs which will disturb their peaceful sleeping which they do today at the cost of killing and massacring the Palestinians almost everyday.

But the world and US military experts must give due consideration to the fact that Iran dominates the whole length of Hormuz Straight. They can seal it hermetically with their missiles and artillery both land based and naval. It if happens, the price of oil will skyrocket----far beyond the 200 dollar per barrel that pessimists dread now. This will cause a chain of reaction--- world-wide depression, the collapse of whole industries and catastrophic rise in unemployment in USA, Europe and Japan. In order to avert this danger, the Americans would need to conquer parts o f Iran-perhaps the whole of this large country. But the US does not have at its deposal even a small part of the forces they would need. Particularly all their land forces are tied down in Iraq and Afghanistan. Amid rising speculation about the possibility of an Israeli or US bombing attack on Iranian nuclear facilities earlier this month, a major study produced for the US Air Force by top defense think-tank that US military action against Iran was likely to have negative effects for US.' A large number of Iranian strongly believe that Iran has the same right as other nations to develop nuclear energy including the construction of operation of nuclear enrichment facilities

"We will continue our cooperation with the agency in according to our legal obligations." But he questioned the right of IAEA to push Iran for answers on the weapons allegation which he described, "fabricated and forced'. " The agency is not a UN watchdog". In its last Iran report in May the IAEA said Iran might be withholding information on whether it tried to make nuclear arms. it also noted that Tehran continued to expand its uranium enrichment progress despite three sets of retaliatory UN Security Council sanctions.

President Ahmadinejad vowed that Iran would not yield in the crisis over its nuclear drive as world powers awaited a response from Tehran to a proposal aiming to end the standoff. He continued," The Iranian people are steadfast and will not step back an inch against the offensive power. The Iran nation does not value your threats. You are mistaken if you think you force this nation to back down with sanctions, threats and pressure." His defiant comments come after world powers warned Iran had only a fortnight to respond to their latest offer seeking to end a five year crisis that has raised fears of regional conflict and sent oil prices spiraling.

US took the unprecedented step of sending a top diplomat to meet Iran's chief negotiator Saeed Jalil in Geneva which ended in stalemate. "We hope the Iranians will provide a positive answer. But if they do not, the international community is united that more sanctions are coming."- National security spokesman of the USA Gordon Johndroe said. In respect of Iran's developing nuclear power USA is dead against it and mobilizing the world opinion and power against. It shows very active cooperation and helps develop the same in India. Which reason they can stand here? Pressurizing Iran is tantamount to hypocrisy in respect of using nuclear energy.

Turkey is a close allay of the USA and also a member of NATO. Washington has been tactfully using its Turkish connection to pressurize Iran not only to give up Uranium enrichment program but also to keep itself away from Kurds movement. USA supported the Turkish bombing of Kurdish location in Iraq which is under US occupation. What a tactful and subtle policy the US has taken to exercise domination over the Whole Middle East!" Kurdish Organization is PKK which is the enemy of Iraq, USA, Turkey,"------says Rice. Turkey gets involved in the nuclear issue because natural gas deals being on top. Turkey has economic cooperation with Iran. It in fact follows persuasion diplomacy toward Iran. Gregory Schulte, US ambassador to IAEA said in Ankara, "We don't want war with Iran. ." Ahmadinejad said, "The enemies are planning to dominate all countries through a long-term plan and do not want the regional countries including Iran, Iraq, Turkey to be powerful and live in peace." Actually this is the fact for which USA is so much active to freeze the Iranian Iran and Turkey have come to a close sort of understanding that the contentious could be addressed through cooperation not by continuous confrontation as Iran is now a regional power and it makes no sense to deny that.

The real US aim was to take possession of the Caspian Sea/Persian Gulf oil region and station a permanent US garrison at the centre. This aim was indeed achieved through the occupation of Iraq. The US are now thinking about their forces remaining in Iraq for 100 years and they are now busy engaging in dividing Iraq's huge oil reserve among the four or five giant US oil companies. Whereas the Iraqis everyday show their abhorrence towards the presence of occupied forces there. American generals don't want to seem the fact still. Rather they are planning to stay there for another 100 years. Moreover, they want to make Iran impotent in the region. But the Iranians are still adamant to develop their nuclear programme.

The supreme Iranian leader Ayatolla Ali Khameni pledged to continue the country's nuclear program. Senior Iranian officials depicted the support from a high-level conference of the Non -aligned movement as deflating claims by the US and its allies that most of the international community wanted Iran to stop enrichment.

The conference backing which echoes the group's previous declaration acts to 'remove this notion that the international community opposes the nuclear activities of Iran. F.M. Manouchr Mottaki.Ali Ashgar Soltaneiah, Iranian top representative to IAEA " The endorsement from 115 countries, present at Tehran Conference sends a strong positive signal that the only way is to negotiate and dialogue." The idea that any retreat or backing down from righteous position would change the politics of arrogant world powers is completely wrong and baseless. The horizon is bright for us and we know what we are doing and where we are going.-the way to reach that point is not to stand but to go."-Khameni. More than 100 non-aligned nations backed 'Iran's right to peaceful' use or nuclear power on July 29, an endorsement sought by Tehran in its standoff with the UN Security Council over its refusal to freeze uranium enrichment.

Garry Sack of Columbia University and an Iran expert who was interviewed after the July 19 meeting when he said, "Washington and Tehran were both showing an increased desire to end the showdown that has raised fears of a military conflict. Another change on both sides is Washington's willingness to look at opening and interests section in Iran-a first step toward restoring diplomatic ties cut three decades ago and Tehran's openness to the idea. The expert said that Washington had learned that its past desire to isolate Iran with increasingly stiff sanctions had failed to stop Iran enriching uranium -a key stage in efforts to make of nuclear bomb.

URI Avenry, an Israeli peace activist has rightly said commenting on the acrimonious situation between Israel and Iran " If the worst comes to the worst, we will have a 'balance of terror' between Israel and Iran, much like US-Soviet balance of terror that saved mankind from world war III or India and Pakistan balance of terror that provides a framework for a rapprochement between those two countries that hate each other guts"

The dollar's reign coming to an end

Chandra Muzaffar

One of the most significant trends in the global economy in recent years has been the decline of the US dollar. It is a trend that has far reaching consequences for all the inhabitants of this planet.

It is partly because the US dollar has declined so much in value since 2003 that the price of oil - a lot of the oil trade is denominated in the dollar - has shot up. According to an analyst, "against a basket of currencies, the dollar has fallen by 25 percent since 2003, and considerably more since its peak in 2001." What this means is that the dollar value of a barrel of oil today is much more than it was 5 years ago. Of course, there are other reasons why the price of oil is escalating.

Since oil is the lifeblood of contemporary civilization, the steep price hike has impacted upon all areas of life. With the higher cost of living, not only the poor but even those who are at the lower echelons of the middle class are struggling to make ends meet. The increase in food prices on a global scale, for instance, is linked to oil. The rising costs of both food and oil - it has to be reiterated - are directly connected to the decline of the dollar.

The adverse consequences of the declining dollar go beyond oil and food. Since the US runs huge trade deficits with countries like China and Japan, the declining dollar will not be in the interest of the latter. Neither will it be in the interest of countries which hold most of their foreign exchange reserves in the dollar. A number of them are already feeling the effects of the diminishing value of their reserves.

It is not surprising therefore that countries are converting part or whole of their reserves into other currencies, notably the euro. Some oil producing countries are also switching to other currencies. Expectedly, these moves have further weakened the dollar.

The US is not happy about this, though a weaker dollar may boost its exports and reduce its trade deficit marginally. The US knows that it is the dominant position of the dollar that enables it to exercise global financial and economic hegemony. It is because the dollar is the world's reserve currency that the US has so much political clout in the international arena. This is why the dollar has been described as one of the two principal pillars of US global hegemony, the other being its military power.

It explains why the US leadership was so incensed when the late Iraqi President, Saddam Hussein, abandoned the dollar and switched to the euro in 2000. He also converted Iraq's 10 billion reserve fund at the UN to euro. Commentators have argued that it was partly because of these decisions that the US and British governments pushed hard for the invasion of Iraq which at the time of the currency switch was already under tough UN sanctions.

Since 2002, Iran, currently the world's second largest oil exporter, has converted all its foreign exchange reserves to a basket of currencies, excluding the dollar. In the second quarter of 2008, it went further and decided to denominate its entire oil trade in currencies other than the dollar. Is it any wonder that Israel, the US's closest ally, has become more bellicose in its threat to attack Iran in recent weeks? Of course, as in the case of Iraq, there are also other motives behind attempts by the US, Israel and their other Western allies to bring Iran to its knees.

For the US, any move by a major oil exporter to wean itself away from the dollar is a direct challenge to its hegemonic power. Look at its continuous manoeuvres to undermine Venezuela's democratically elected president, after Hugo Chavez placed a portion of his country's oil trade out of the dollar's orbit. It is not difficult to fathom why the US is so obsessed with perpetuating the oil-dollar nexus. It is partly because most of the oil trade - more than any other trade - is denominated in the dollar that the US currency is able to dominate the world economy. In fact, it was the US's agreement with Saudi Arabia in 1974 that the oil trade would be denominated in the dollar which gave a huge lift to the dollar's reign. The US will fight tooth and nail to ensure that that reign continues.

But the supremacy of the dollar must end if US hegemony is to end. US hegemony - like all hegemonies in history - has been a bane upon humanity. It has brought death and destruction to millions through wars and conflicts. It has widened the gap between the 'have-a-lot' and the 'have-a-little' right across the globe. It has reinforced global authoritarianism and stymied the growth of global democracy and international law. It has given rise to antagonism and antipathy between civilizations, especially between the Western and Muslim worlds. It has denied equality and respect to civilizations and cultures outside the West. It has led to global environmental degradation and a global climate crisis. Global hegemony has also provoked a vile and vicious reaction from a fringe within the Muslim world in the form of global terror.

This is why citizen groups in both the Global South and the Global North should campaign with greater vigour to bring global hegemony to an end by weakening the role of the dollar as the world's reserve currency. More oil producing countries should be persuaded to switch from the dollar to other currencies. In international trade, countries should shift to other currencies which are more conducive to their short and long term interests. If foreign reserves are still in dollars a concerted endeavour should be made to convert them into other currencies which will at least protect their value. Citizen groups should also encourage their governments and corporations to accelerate regional trade and investment which could be conducted in their own currencies. Some Latin American States, such as Cuba, Venezuela and Bolivia are showing greater enthusiasm for regional cooperation with the ultimate goal of ensuring that their continent is liberated once and for all from US dominance and control. Cuba and Venezuela have even stepped up barter trade, the former's health expertise in exchange for the latter's oil which minimises altogether the role of money. Intra-ASEAN (the Association of Southeast Asian Nations) trade and investment have also increased significantly in recent years With the emergence of China and India as important economic players, ASEAN and other states in Asia should consider using one of the major Asian currencies for regional trade and not continue to depend upon the US dollar.

Quite apart from all these efforts, citizen groups should demand comprehensive reform of the international financial system. This is the right time to make this demand. They should make it abundantly clear to all and sundry that the dollar can no longer serve as the world's reserve currency. It has to be replaced. Shouldn't we start working now - even if it takes a few decades - towards a common world currency which is not linked to any particular nation or region that can be used for international trade? Why shouldn't we let our imagination run ahead of reality at a time like this?

(Dr. Chandra Muzaffar is President of the International Movement for a Just World (JUST) and Professor of Global Studies at Universiti Sains Malaysia, Penang, Malaysia.)

Why oil prices are so high?

Paul Craig Roberts

How to explain the oil price? Why is it so high? Are we running out? Are supplies disrupted, or is the high price a reflection of oil company greed or OPEC greed. Are Chavez and the Saudis conspiring against us? In my opinion, the two biggest factors in oil's high price are the weakness in the US dollar's exchange value and the liquidity that the Federal Reserve is pumping out. The dollar is weak because of large trade and budget deficits, the closing of which is beyond American political will. As abuse wears out the US dollar's reserve currency role, sellers demand more dollars as a hedge against its declining exchange value and ultimate loss of reserve currency status.

In an effort to forestall a serious recession and further crises in derivative instruments, the Federal Reserve is pouring out liquidity that is financing speculation in oil futures contracts. Hedge funds and investment banks are restoring their impaired capital structures with profits made by speculating in highly leveraged oil future contracts, just as real estate speculators flipping contracts pushed up home prices. The oil futures bubble, too, will pop, hopefully before new derivatives are created on the basis of high oil prices.

There are other factors affecting the price of oil. The prospect of an Israeli/US attack on Iran has increased current demand in order to build stocks against disruption. No one knows the consequence of such an ill-conceived act of aggression, and the uncertainty pushes up the price of oil as the entire Middle East could be engulfed in conflagration. However, storage facilities are limited, and the impact on price of larger inventories has a limit.

Saudi Oil Minister Ali al-Naimi recently stated, "There is no justification for the current rise in prices." What the minister means is that there are no shortages or supply disruptions. He means no real reasons as distinct from speculative or psychological reasons. The run up in oil price coincides with a period of heightened US and Israeli military aggression in the Middle East. However, the biggest jump has been in the last 18 months.

When Bush invaded Iraq in 2003, the average price of oil that year was about $27 per barrel, or about $31 in inflation adjusted 2007 dollars. The price rose another $10 in 2004 to an average annual price of $42 (in 2007 dollars), another $12 in 2005, $7 in 2006, and $4 in 2007 to $65. But in the last few months the price has more than doubled to about $135. It is difficult to explain a $70 jump in price in terms other than speculation.

Oil prices have been high in the past. Until 2008, the record monthly oil price was $104 in December 1979 (measured in December 2007 dollars). As recently as 1998 the real price of oil was lower than in 1946 when the nominal price of oil was $1.63 per barrel. During the Bush regime, the price of oil in 2007 dollars has risen from $27 to approximately $135. Possibly, the rise in the oil price was held down, prior to the recent jump, by expectations that Democrats would eventually end the conflict and restrain Israel in the interest of Middle East peace and justice for the Palestinians.

Now that Obama has pledged allegiance to AIPAC and adopted Bush's position toward Iran, the high oil price could be a forecast that US/Israeli policy is likely to result in substantial supply disruptions. Still, the recent Israeli statements that an attack on Iran was "inevitable" only jumped the oil price about $8.

Perhaps more difficult to understand than the high price of oil are the low US long-term interest rates. US interest rates are actually below the rate of inflation, to say nothing of the imperiled exchange value of the dollar. Economists who assume rational participants in rational markets cannot explain why lenders would indefinitely accept interest rates below the rate of inflation.

Of course, Americans don't get real inflation numbers from their government and have not since the Consumer Price Index was rigged during the Clinton administration to hold down Social Security payments by denying retirees their full cost of living adjustments. According to statistician John Williams, using the pre-Clinton era measure of the CPI produces a current CPI of about 7.5%. Understating inflation makes real GDP growth appear higher. If inflation were properly measured, the US has probably experienced no real GDP growth in the 21st century.

Williams reports that for decades political administrations have fiddled with the inflation and employment numbers to make themselves look slightly better. The cumulative effect has been to deprive these measurements of veracity. If I understand Williams, today both inflation and unemployment rates, as originally measured, are around 12 %. By pumping out money in an effort to forestall recession and paper over balance sheet problems, the Federal Reserve is driving up commodity and food prices in general. Yet American real incomes are not growing. Even without jobs offshoring, US economic policy has put the bulk of the population on a path to lower living standards.

The crisis that looms for the US is the loss of world currency role. Once the dollar loses that role, the US government will not be able to finance its operations by borrowing abroad, and foreigners will cease to finance the massive US trade deficit. This crisis will eliminate the US as a world power.

(Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.)