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Tonic for Colombia Troops

The new Colombian President is likely to continue with policies of terror and corruption. And he is backed by some influential friends, reports Tom Gill

Uribe is likely to intensify state-sponsored terror. So why are the British still training Colombia’s armed forces? Drugs and tenor have long been dragging down South America’s third-most populous country.

But they have also helped catapult this Harvardeducated man from the provinces to the pinnacle of political power.

The son of a wealthy cattle rancher who only escaped extradition on drug trafficking charges because of friends in high places, Uribe carried on the family tradition at the civil aviation authority, where he handed out dozens of licenses to narco-pilots. During his tenure as mayor of Medellin, he was so helpful to the Pablo Escobar drug cartel that the city earned the nickname “the sanctuary” among traffickers.

It was Uribe who created “self-defence” units that displaced some 200,000 peasants during his governorship of Antioquia province. Today, they are an 11,000-strong paramilitary army, responsible for most of the 20 politically motivated murders a day.

Yet Uribe claims he’s the man to end a cocaine-fuelled 40-year civil war that stepped up a gear in February after peace talks collapsed amid government inaction over paramilitary violence. He has promised a “firm hand” with FARC (Revolutionary Armed Forces of Colombia), the 18,000-strong Marxist guerrilla force and has declared a state of emergency along with a tripling of military expenditure.

He has also begun preparations to create a million-strong, civilian militia. This plan, which will see arms distributed, could be a vehicle to legitimise paramilitary violence, human rights organisations fear.

It is said that Uribe, who also wants to deepen the pro-market economic reforms that have added to poverty and unemployment, has a popular mandate for such policies. And indeed, opinion polls ahead of the May elections showed his star rise as fast as that of the FARC fell. But these should be distrusted in a country where so few of the 24 million poor have access to a private telephone line that it is a small minority of wealthy Colombians who shape public opinion. And despite winning the presidential election without facing a second round run-off, he was elected by less than 25 per cent of the voting population.

Still, the United States’ Government has celebrated Uribe’s election by boosting aid to some $1.6 billion under the military package, Plan Colombia. This includes hefty sums to defend the rich against kidnapping by the FARC and guerrilla attacks on US oil pipelines. George Bush has also won changes to the law so that the US Government can openly fund military operations against the guerrillas in a move that completes the mutation from a failed war against drugs to an equally-doomed war against the insurgency.

The British Government has been less conspicuous. Yet, Britain continues to provide antidrug and other unspecified training to Colombian armed forces and police. Tony Blair’s reception of Uribe at Downing Street last month is likely to add to concerns that the British armed forces risk aiding elements within the Colombian army directly implicated in civilian atrocities or indirectly, through links with paramilitaries.

According to the Washington-based Human Rights Watch, at least half the army’s 18 brigades are tainted. The Colombian Government has launched a public relations exercise aimed at cleaning up its image. There have been stories that senior army officers have been dismissed. But the army has not said whether these dismissals are linked to human rights abuses. And of the few who have been charged with abuses and kicked out, many are understood to have simply joined the paramilitaries. Meanwhile, paramilitaries who have been arrested are often released shortly afterwards.

Perhaps the most damning proof of continuing terror was the horrendous Choco incident in May, which left 119 civilians dead in the small town of Bojay in the remote jungle of north-west Colombia.

The worst casualty toll among the civilian population from a single battle in the four decade-long civil war occurred when the FARC fired a cooking-gas cylinder packed with explosives that veered off target and hit a church where 300 villagers were sheltered.

A report prepared by the United Nations Office of the High Commissioner for Human Rights (OHCHR) condemned the guerrillas. It also condemned paramilitary fighters who were hiding among the civilians to defend themselves from the rebel attack. But its most damning conclusion was that the Government, the police and the army not only ignored warnings of an impending tragedy but also may have collaborated with the outlawed paramilitary forces to allow them to enter the region.

A 250-person paramilitary unit sailed up the River Atrato in seven large boats and passed through two police and one army checkpoint without the slightest problem, the OHCHR found. Paramilitary fighters in civilian clothes began returning to the village of Bojay and a sister community, Vigia del Suerte, as soon as the army flew 800 troops in and took back control. In addition, paramilitary commanders flew into the town aboard light aircraft at a time when the town was under full military control and only army aircraft were authorised to land on the small airstrip.

AGAINST such a backdrop, it would be

reasonable to expect the British Government to clarify which British forces are active in Colombia, who exactly are they training and how are they ensuring this military training is not being used to abuse human rights. Yet it refuses. Releasing such information “would be harmful to national security, defence or international relations”, the the then Minister of Defence, John Spellar, said in an answer to a written parliamentary question last year.

The British Government’s secrecy contrasts with the US administration, which under the Leahy Amendment is compelled to spell out exactly what military aid it is giving to Colombia.

The Government’s defenders, noting that Britain is the second largest investor in the country after the US, might argue that its attitude is informed by a “war on terror” that only targets armed groups, such as FARC, which threaten British and US interests friends. The more sceptical, looking for some evidence of Labour’s ethical foreign policy and promises of open government, will be looking for an explanation.


The IMF’s delinquent pupil

Since last month’s upheaval, Argentina has broken with market orthodoxy and adopted a radical alternative

Tom Gill
The Guardian

“For many years in Argentina,” declared Eduardo Duhalde as he assumed the presidency on January 1, “they have made us believe that amid this new world order, there is only one possible economic model. This is a complete falsehood.”

Argentinians, who once lived in a country as rich as France, will be hoping he is right. These days, after two-and-half-decades of IMF-backed free-market reforms, more than 40% of the 38m population live below the poverty line and 100 children die daily from hunger and disease.

As a leading member of the Peronist party, which under Carlos Menem brought Argentina to the edge of the abyss, Duhalde might seem an unlikely candidate to challenge the status quo. But in recent years, he has taken an increasingly critical stance towards neo-liberal policies.

Now Duhalde is putting his views into practice. He plans to freeze the prices charged by the foreign-owned electricity, gas and telephone companies and tax the exports of foreign-owned oil companies. And to protect the impoverished middle class from a 40% devaluation, he is guaranteeing that dollar loans under $100,000 will be converted into pesos at the rate of one to one, transferring a burden of around $5bn from borrowers to the banks. Duhalde is also promising public money to cut the jobless queues and a dual exchange rate to protect local industry.

“Plunder” is how Spanish-owned Repsol-YPF, which controls Argentina’s largest oil company, describes these policies. In truth, plunder describes the practice of foreign investors in Argentina for the best part of three decades. Under the generals in the late 70s and early 80s, they took part in a frenzy of financial speculation and national asset stripping. Subsidiaries of western multinationals borrowed billions from western banks – debts which were then conveniently nationalised by a compliant government. Partly as a result, when the generals had returned to barracks in 1984, the public debt had risen to $46bn from $7.8bn nine years earlier.

Under Menem – whose 1991 peso-dollar convertibility plan helped stamp out hyperinflation, but effectively handed control of the government debt to foreign creditor banks – the foreign debt burden was pushed ever higher, from $65bn in 1991 to $160.2bn in 2000.

Foreign multinationals made billions from an accompanying privatisation programme and repatriated profits on a huge scale. Ordinary Argentinians saw welfare slashed and wages fall from 30% of national income in 1989 to 18% five years later.

By 1998, the inward investment boom that drove five years of strong economic growth had turned to capital flight. The government had run out of state companies to sell, the 1997 east Asian financial crisis dampened investors’ appetites for all “emerging markets” and the appreciation of the dollar priced Argentinian goods out of world markets. The country plunged into recession.

A string of austerity plans only aggravated the crisis. In December the government’s raid on Argentinian pension funds and imposition of limits on bank withdrawals crowned the pillage. A pauperised middle class joined the poor in revolt on the streets. A total of nine IMF stabilisation programmes since 1983 ended up with the largest sovereign debt default in history.

The fall of the IMF’s star pupil – coming after Mexico’s 1995 financial crisis, the east Asian meltdown and the reintroduction of capital controls in Malaysia – has forced some free-market thinkers to admit the obvious: that austerity plans during deflationary periods are disastrous; that abolishing capital controls creates instability; and that bond markets are no more reliable than private banks at providing governments with long-term financing.

Yet the US and Europe are demanding that Argentina “honours its international commitments”. The IMF is in the country pressing these demands. Duhalde appears in no hurry to oblige, but he has little room for manoeuvre. While devaluation of the peso will boost exports, major industrial countries are in recession and the US is turning to selective protectionism. A strong export drive would also mean more austerity for a population which has already signalled it has had enough.

Duhalde could do worse than seek inspiration from his own political movement’s past. General Juan Peron’s economic model of the 1940s, a sort of authoritarian Keynesianism, centred on producing for the local market. Driven by state-led industrialisation, it was supported by rising purchasing power of workers who, organised in powerful trade unions, pushed up wages and won higher benefits and welfare.

A revival of such policies would be strongly opposed by the US and Europe, which are intent on expanding free trade on the terms most advantageous to multinationals. But if a more protectionist and domestic-orientated growth policy were to bring a sustainable recovery, Argentina’s approach could gain popular appeal elsewhere. It is time for a new economic model and Argentina could help to show the way.

· Tom Gill is a freelance journalist who has lived and worked in Argentina


Old age

TOM GILL argues that Britain can afford a dignified state-funded pension and an efficient welfare state, but only if we redistribute wealth

COMPLEMENTARY or topup private pensions, as Labour puts it, are all the rage. Not only in Britain but also on the Continent, governments of all political shades are trying to cut back state provision and encourage the private sector to take up the slack.

German Chancellor Helmut Kohl has recently succeeded in pushing through a reduction in pensions from 70 per cent to 64 per cent of the final salary.

In Italy, Prime Minister Prodi has raised the retirement age from 53 to 57.

Committed to control their budgets to meet the Euro-club criteria, governments are also being heavily lobbied by business. They demand a cut in social security contributions in order to lower labour costs.

Companies and reforming governments say the state can no longer afford to provide a dignified universal pension for all in a world dominated by mass unemployment, (fewer contributors) and pensioners (more beneficiaries). We are told we must entrust our future income and security to the private pension industry.

In Continental Europe, where social security contributions are generally higher and private pension schemes are rare, it is particularly fashionable to argue that private pension companies are more efficient at allocating resources than the state.

They claim that private pensions can boost savings.

These can be reinvested in creating jobs, while guaranteeing higher pensions than those received from the state.

Experience does not confirm this. In Frank Field’s favourite example, Chile, which has pioneered private pensions, the funds have not delivered.

The North American pension funds, which pursue the highest return in the shortest possible time, are successful at raising profitability by decreasing the workforce.

In the search for high returns, and in a world of chaotic stock markets, enormous risks are taken with our future.

Robert Maxwell was not alone in risking pension funds and the recent Asian tremors shook many markets in which pension:funds were invested*  According to leading French academic Rene Passet the arguments in favour of abdicating the role of the state in pensions reflect effective lobbying by the private pensions industry.

He says that exponents of pension reform fail to take into account the continual rise in labour productivity. Even with a stable or falling workforce, wealth’ creation is constantly growing.

Writing in Le Monde Diplomatique, he claims that at current French productivity growth rates, by . the year 2040 just . 1.7 workers will be able to produce. what it took 4 workers in 1995.

This should go a long way to supporting a bigger -non-work ing population. According to Passet, economic growth of just 2 per cent annually would be more than enough to cope with the rise in the number of pensioners.

The problem is not Britain, France or any other European country’s ability to pay decent pensions, but policies which have made the redistribution of wealth a ‘priority in favour of the rich.

The State has been deprived Of the means of supporting the disadvantaged. -

MASS unemployment

has narrowed the tax base considerably, and the cost of unemployment payments to millions diverts fimds that could otherwise be used for other benefits.

The term complementary is misleading. It suggests the icing on the cake. The British state pension, at around 63,100, is among the lowest in Europe.

In Italy, a country with similar national income, the state pension averages £5,000.

Italy’s pension scheme, which is funded entirely from payroll taxes, is hardly enough to make a pensioner dance away his retirement.

Occupational schemes only deliver to that diminishing and privileged part of the workforce that has been in continuous full-time employment and are increasingly irrelevant in a deregulated and insecure labour market.

‘British pensioners have seen their pension cut from 20.4 per cent of average male earnings in 1979 to 15.5 per cent last April. .

They have no chance to enjoy the fruits of their labours. There is no inexorable demographic or economic reason to deny them a dignified and secure income provided that wealth is redistributed.


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