Israel’s master of mischief

Avigdor Lieberman has a restless nature. From time to time he has to do something, anything.

As Minister of Foreign Affairs he should be doing something about, well, foreign affairs. Trouble is, Israel’s foreign affairs are managed by others.

The most important sector of our foreign affairs concerns the relationship with the United States. Indeed, this is so important that Binyamin Netanyahu keeps it entirely to himself. Our ambassador in Washington reports to him personally, after being handpicked by Sheldon Adelson, the casino billionaire.

Relations with the Palestinians are mostly (mis)managed by Ehud Barak, who, as Minister of Defence, is formally in charge of the occupied territories. The main actor there is the Shin Bet, which is under the authority of the Prime Minister.

The relations with the Arab world, such as they are, are maintained by the Mossad, also under the authority of the Prime Minister. In practice, Netanyahu and Barak together make all the decisions, including, of course, The Decision concerning Iran.

So what’s left for Lieberman? He can deal as much as he wants with Zambia and the Fiji islands. He can appoint ambassadors to Guatemala and Uganda. And that’s it.

Except that he has a personal monopoly on relations with the countries of the Former Soviet Union. How’s that? Well, he was born in Soviet Moldavia and speaks Russian fluently. Even though he came to Israel already 34 years ago, just a few days after his 20th birthday, he is still considered by most Israelis as a “Russian”, speaking Hebrew with a heavy Russian accent and looking as foreign as possible. But his connection with that part of the world goes beyond cultural factors – he is an ardent admirer of Vladimir Putin and his Doppelgängers, Alexander Lukashenko in Minsk and Victor Yanukovych in Kiev. He would dearly like to install the same kind of regime in Israel, with himself as the Putin look-alike.

Most of his colleagues in Europe and around the world shun him because of his views, which many of them consider semi-fascist, if not worse.

So how of all possible jobs, did Netanyahu come to give him the job of foreign minister? Well, as the leader of a party essential for the formation of the right-wing coalition, he had a right to one of the three major ministries: defence, finance or foreign relations. Who would dare to deny that defence is a God-given fief of Barak?

Since Netanyahu considers himself an economic genius, he decided to keep the finance ministry in practice to himself. He found a doctor of philosophy, who had the advantage of being innocent of any knowledge of economics, and appointed his as his proxy minister of finance. That left only foreign affairs, a much despised ministry, for Lieberman.

As this ministry does not provide much activity, and even less that generates headlines, Lieberman is compelled every few months or so to do something to stir things up. He has already insulted many of his colleagues abroad, ably assisted by his deputy, Danny Ayalon, who boasted to journalists that he humiliated the Turkish ambassador by putting him on a low seat.  Since at the time the Turkish army was still the closest partner of the Israeli army in the region, Barak was livid.

Lieberman also needs something to divert attention from his famous corruption affair. For 14 years now he has been under investigation about receiving millions of dollars from mysterious sources abroad. Some of the money went to straw companies abroad managed by his daughter, who was then in her early twenties. The Attorney General still has to decide whether to indict him – which may compel him to resign.

Now Lieberman has caused a stir again.

Two weeks ago, Netanyahu and Barak were amazed to read in the newspapers that Lieberman had sent letters to the foreign ministers of the so-called quartet – the US, the European Union, the UN and Russia – who oversee the non-existent “peace process”.

In this message, Lieberman demanded that the four dismiss the President of the Palestinian Authority, Mahmoud Abbas, and call immediate elections in the West Bank.

The idiocy of this message is mind-boggling, even by Lieberman standards.

First of all, the quartet has absolutely no authority to dismiss anyone in Palestine, or for that matter, Israel. Nor can it order elections anywhere.

True, Palestinian elections are long overdue. They should have taken place in January 2010. Hamas has already announced that they would not take part, so they would be held only in the West Bank. That would have finalized the split between PLO and Hamas – a split no Palestinian on either side wants to aggravate.

Second, if Hamas did participate, the next Palestinian president would conceivably be the Hamas leader Khaled Mishal, the man Israel tried to assassinate. With the Muslim  Brotherhood, Hamas’ mother organization, now ensconced in power in Egypt, the chances of Hamas in democratic elections would probably be even stronger than last time, when they won handily.

Third, and most importantly, Mahmoud Abbas is by far the most peace-oriented Palestinian leader around. And that is the crux of the matter.

Lieberman bases his bizarre demand on his contention that Abbas is the main obstacle to peace – an assertion that few experts around the world would take seriously. Lieberman’s real reason for his initiative may be the very opposite: that Abbas’ stance puts Israel in the uncomfortable seat of the peace-destroyer.

Abbas’ conditions for the start of peace negotiations are well-known: Israel must stop all settlement activities. The world, by and large, agrees with that.

Abbas’ terms for peace are also well-known. They were formulated long ago by Yasser Arafat: a State of Palestine side by side with Israel, with East Jerusalem as its capital and a return to the Green Line border (with insubstantial and mutually agreed exchanges of territory). For the refugee problem, an “agreed” solution, meaning the symbolic return of a small number. The world, by and large, agrees with that too.

If it wanted to, Israel could achieve peace with the Palestinians next week, followed the week thereafter by peace with the entire Arab world, on the terms set out in the Arab Peace Initiative, which are practically identical with the Palestinian terms.

And that, of course, is the source of Lieberman’s hatred of Abbas. Like Netanyahu, he doesn’t dream of giving up Greater Israel. Therefore he very much prefers a Palestinian leadership composed of Hamas – that is, as long as Hamas rejects peace.

In practice, the Palestinian Authority led by President Abbas is actively cooperating with Israel in the one field that really matters to Israelis: security.

Most Israelis believe that Palestinian violence (a.k.a. “terrorism”) has been stopped by the “security obstacle”,


the combination of walls and fences that cut deep into the occupied Palestinian territories. However, a wall can be climbed, tunnels can be dug underneath and militants can be smuggled through the checkpoints. As an American politician said about the wall between the US and Mexico: “You show me a 50 foot wall, and I’ll show you a 51 foot ladder.” I have seen Palestinian youngsters climb the wall even without a ladder.

The real reason for the total cessation of acts of violence in Israel emanating from the West Bank is the intimate, day-to-day cooperation of the Palestinian security forces with the Israeli security services. On the orders of Abbas, the Palestinian police, which is actually a military force trained by US officers, is mercilessly persecuting the militants of Hamas and other Palestinian factions favouring “armed struggle”.

By following this course, Abbas is taking huge risks. Hamas and others accuse him of collaborating with the occupation and compare the Palestinian authority with the Vichy regime in France, which collaborated with the Nazi occupation. (The police of Marshal Henri Petain, a World War I hero, closely cooperated with the Germans, inter alia helping them to round up the Jews and send them to Auschwitz.)

Abbas has come to the conclusion that the “armed struggle” has led the Palestinians nowhere. He hopes that the absence of violent acts will allow the West Bank population to build up their civil society, strengthen Palestinian institutions, raise the pitiful standard of living (far less than a tenth of the Israeli one), and assure the Palestinian Authority of foreign aid and legitimacy. Under the able stewardship of his prime minister, Salam Fayyad, this is working – for the time being.

The risk is indeed great. The West Bank economy, such as it is, may founder any time. The creeping enlargement of the settlements is reaching a point where every Palestinian village is surrounded by them, making life for the Palestinians intolerable – especially since young settlers carry out almost daily acts of terrorism (so defined by Israeli security officials), physically attacking villagers, burning mosques, houses and cars and felling olive trees.

Some day, the spirit of the Arab Spring may reach the West Bank, and even the PLO leadership will not be able to stem the tide.

In something close to desperation, Abbas is seeking some respite by appealing to the UN for recognition. The application for the acceptance of Palestine as a member state is barred by the US veto in the Security Council. The application to the General Assembly, where there is no veto, to receive Palestine as a member “which is not a state” has been called by Lieberman “political terrorism”.

The Israeli government has condemned the Palestinian application as “one-sided”. As though the Israeli 1948 application for membership in the UN had been “many-sided”. However, be that as it may, in face of the dire Israeli and American threats, Abbas may have to drop this effort too, endangering his position even more.

This week, Abbas has been invited by the Iranian regime to take part in the huge assembly of so-called non-aligned nations in Tehran. The Palestinian leader had to weigh whether to accept the invitation and gain some international status or to refuse, for fear of American reprisals. He decided to attend.

In the meantime, Lieberman has already achieved his goal – a few days in the news, and his face, with his trademark shifty eyes and sinister smile, was on all TV screens.

Now he will drop from the news again for a few weeks or months, until he can think up some new way to cause mischief.

URI AVNERY is an Israeli writer and peace activist with Gush Shalom. He is a contributor to CounterPunch’s book The Politics of Anti-Semitism.

BY :   Uri Avnery.

GRAMEEN BANK TAKEOVER : Property rights, liberty in danger

While  delivering  a  speech  in  Oslo, Norway, on  10 Dec 2006  Muhammad  Yunus, who invented microcredit  and  founded  Grameen  Bank said, “Nine  elected  representatives  of  the  seven  million  borrowers – cum owners  of  Grameen  Bank  have  accompanied  me  all  the  way  to  Oslo to  receive  the  prize. I  express  thanks  on  their  behalf  to  the  Norwegian  Nobel  Committee for  choosing  Grameen  Bank  for  this  year’s  Nobel  Peace  Prize. By   giving  their  institution  the  most  prestigious  prize  in  the  world, you    gave  them  unparalleled  honour. Thanks  to  your  prize, nine  proud  women  from  the  villages  of   Bangladesh  are at  the ceremony  today  as Nobel laureates giving  an  altogether  new  meaning  to  the  Nobel  Peace  Prize.”

Six years after that on 23  August the government of Bangladesh, which  neither  travelled  to  Oslo nor  was mentioned anywhere, issued  a  notification  to  constitute  a  search  committee  to  prepare  a  panel  for  the  government  for  appointing  a  managing  director of  its  choice  for  the bank. Sheikh  Hasina’s  cabinet  had  approved  on  2 August, an amendment to the Grameen  Bank Ordinance ,1983 assuming all powers to appoint the managing  director  to  monitor  a  privately owned enterprise.

Now  8.4 million  underprivileged own the bank, mostly women, holding  97%  shares, with  the  government  retaining barely  3% of  the total  shares. On  August  2, the  government  arbitrarily  decided  to nationalize the private property of the poor women  entrepreneurs  much in the same way as the Sheikh Mujib government   nationalized the private properties  during  the  years  between  1972  and  1975.

On 23 August Dr. Muhammad Yunus issued a statement: “This  day  will  go  down  as  a  black  day  in  the  history  of  our  nation. Our government has obliterated the unique characteristics – one of which is the bank being owned and run by women – which made the institution universally lauded and a Nobel Prize winner. Thanks to the amendment the institution has been rendered into another cookie-cutter public organization. I cannot bear the sorrow.”

Although the Grameen Bank take-over evokes sorrow it is not simply a matter of sentiment or emotion, but a hard practical question involving individual liberty and property rights which has  to be answered by ripe political sense and wisdom.

“The political liberty of the subject,” says Montesquieu, “is a tranquillity of  mind arising  from  the  opinion each  person  has  of  his  safety. In order to have  this  liberty, it is requisite that the  government  be  so  constituted  as  one  man  need  not  be  afraid  of  another.” According  to  him: “When  the  legislative  and  executive  powers  are  united  in  the  same  person, or in  the  same  body  of  magistrates, there can be no liberty; because apprehensions may  arise, lest the same monarch or senate  should  enact tyrannical  laws to  execute  them  in  a  tyrannical  manner.”

“Again, there is no liberty,” he  says, “if  the judiciary  power be  not  separated  from  the legislative and  executive ….There  would  be  an  end of everything, were the same man or the same body, whether of  the nobles or of  the people, to exercise those three powers, that of  enacting  laws, that of executing the public resolutions, and of trying  the causes of individuals.”

Indeed, there has been an end of everything in Bangladesh after  the arbitrary adoption of the August  2  amendment of the Grameen  Bank Ordinance.

In Bangladesh, the government is not democratic. It is autocratic or at its best is aristocratic. Here the legislative and executive powers are united in one person who is the prime minister and the leader of the House in the parliament. The same person appoints the judges. There is  no  liberty  here  in  Bangladesh  because  the  same  person  can  adopt  an  ordinance  or  amend  it  when  the  parliament  is not  in  session and execute it in tyrannical manner. Here the life and liberty of the people is exposed to arbitrary control. The government is despotic. It can arrogate to itself whatever power or authority it pleases.

The August 2 amendment carried out arbitrarily by a cabinet decision has violated the property rights of citizens. Ordinarily property rights are cherished as personal benefits by those fortunate enough to own a substantial amount. But  property  rights  are  best  assessed  in  terms  of  their  economic  effects  on  the  well- being of  the  population  at  large. And  the  property  rights  of  the  women  of Grameen Bank  have  been  rightly   assessed  by  the  international  community in terms of their economic effects on the well-being of  the people at large. And how  do  the  people    with    property  rights  differ from the  people  without  it ? One  example  was  the  erstwhile  Soviet Union  where  individuals did  not   own  agricultural  produce  as their private  property. Here  the  monitoring  of  the  produce  handling  was  done   by  the  Communist  Party  members  who  were  honeycombed  throughout  the  society  to  report  on  dereliction  of  duty and  violation  of  law.  But  the  widespread  corruption and inefficiency found even under Stalinist  totalitarianism suggest  the  total   failure  of  governmental  monitoring as compared  to  automatic  self-monitoring  by  the property  owners  themselves.

In a democratic country where free-market system prevails, property  rights  create  self-monitoring  which  is  more  effective  and  less costly  than  third-party  monitoring. Normally animals not owned privately are threatened with extinction. Inanimate things  like air and water  are  easily  polluted  because  they  are  not  owned   by  anybody. Similar  neglect  of  property  not  owned  privately  occurred  in  the  Soviet  Union. Bangladesh, unfortunately  , now  is  following  the  footsteps  of  the  Soviet  Union, abruptly  taking  over  management of privately owned enterprises just for the hake of it.

Through  the  Grameen  Bank  the  poor  entrepreneurs  changed  their  economic conditions using  their own  savings  or  borrowings. The powerful people in the government do not like it. Leaders of the  party - in - power  have already declared that the Grameen Bank is  a  public property like  the  state  owned  enterprises  which  means  the  8.4 million  women who  own  97%  of  shares  in  the  bank  will  be  dispossessed of their property. The apprehension of Dr. Muhammad Yunus that the bank “has been rendered into another cookie-cutter public organization” is not unfounded. The take – over bid is  intended to  keep out  people  of  average  or  low  income   from  the  production-distribution  chain.

It is incentives which matter in the Grameen Bank and in this  institution  property   rights  are  assessed economically  in  terms  of  the  incentives . The powerful  incentives  created  by  a  profit –and  - loss economy depend on the profits  being  private  property. When  government  owned  enterprises  in the  erstwhile  Soviet  Union  made  profits, those  profits  were  not  their  private  property  and  could  be  taken  by  government  for  whatever  purposes  it  chose  to  spend  it. Soviet  economists  pointed  out  the  adverse  effects  of   this  on  incentives: “We  are  taking  away  from  those  who  work  well  in    order  to  keep  afloat  those  who  do  nothing.”

Job crisis is not only the cause of  poverty  in  the Third World   but  also  the  cause  of the  double –dip  recession  in  the  developed  countries. Entrepreneurship could be the answer to the global need for employment opportunities. At  the  moment  there  is  an  uneven  playing field that makes the choice to become an entrepreneur. Dr.  Muhammad  Yunus  has  matched  this  uneven  playing  field  by  his  microcredit tool. In an article published  in the  September  13 , 2010 issue Tim  Kane drew  the  attention  of  the  U.S  policy  makers in  the  following  words:

“All  human  beings  are  entrepreneurs”, says  Nobel  Peace  Prize  winner Muhammad Yunus, an economist who kicked off  microcredit  in  his  native  Bangladesh. Well, Washington: Are you listening?

To Yunus every individual is an entrepreneur. In the process of    implementation of the concept he has turned 8.4 million low-income women into self-employed, self-starter entrepreneurs giving a boost to the country’s economic development.

Knowledge has now been recognized as a factor of production. In fact there is much that the ruling party hierarchy do not know that   knowledge  is  vital  to  the  functioning  of  an  enterprise. One may ask, “How much knowledge does it need to fry a hamburger?” And the answer, certainly, is best known to McDonald’s.

 One may ask again, “How much knowledge does it need to run the Grameen Bank? The  answer to  this  question  is  best  known  to  the  man  who  took  the  nine  village  women  of  Bangladesh  to  Oslo in  2006 to  receive  the  Nobel  Prize.  Anybody  who  studies  the  history  of  the Grameen  Bank  will  be  astonished  at  the  amount  of  detailed  knowledge, insights, organizational and technological innovation, financial  improvisation, all-out  efforts, and desperate sacrifices  that went into creating an enormous economic and social  transformation. In  both  the  cases, it  was  the  knowledge  that  was  built  up  over  the  years – the human capital – which ultimately  attracted  the  financial  capital  to  make  ideas  become  a  reality. This  fact  alone  is  sufficient  to  answer  the  question  why  Dr. Muhammad  Yunus  is  indispensable  for  the  Grameen  Bank. He is irreplaceable. No  sensible  man  in  his  right  mind  will  ever  think  of  taking  the  place  of  Yunus, the  icon whose  microcredit  is  a  modern  marvel. The whole nation is proud of him.

BY :  Abu Hena.  (The author is a  former  Member  of  Parliament )

The indispensability of Finance Minister Muhith

Reckless in his utterances, Finance Minister Abul Mal Abdul Muhith has of late become over sure about his “indispensability” in the present government. And for him, public opinion or disaffection of the leaders of opinion has always been dispensable. According to a news-analyst in a vernacular daily, the finance minister has been ruling the roast over four big financial scandals during his current tenure over three years eight months. The first one was the share market scam of 2010, which exceeded in its severity the 1996 scam under the first Sheikh Hasina government. He laughed over the plight of small investors who found their capital and savings wiped out in share-market manipulation by share-sharks. The latter were, however, protected by the Finance Minister from ‘political’ considerations, and no action was taken over the Ibrahim Khalid inquiry report that identified the big shots behind the market debacle, and the break-down condition of the capital market has continued ever since.

 

Then came in 2011 the Padma Bridge corruption scandal, and in consequence, the cancellation of the World Bank Loan agreement for the project. The finance minister’s crude reaction was to throw the ball back to the court of the World Bank, accusing the international financial institution of being involved in corruption itself and behaving undiplomatically. Later he toned down his loud-mouthed denunciation of the World Bank, but continued sermonising it by public harangues from time to time. With mainly Indian diplomatic help, he has obtained a breathing space for renegotiating the loan agreement with the World Bank. Other financing institutions who joined the World Bank in a consortium to fund Padma Bridge, such as the Asian Development Bank and the Japan International Cooperation Agency have extended their loan agreements for this month and for three weeks of September respectively to allow time for the finance minister to come to terms with World Bank, which is the leader of the Consortium. The finance minister has indeed managed to strike a world record by provoking the occurrence of cancellation of such a big-size project loan agreement as the Padma Bridge.

 

Another scandal was his speech in the parliament during his presentation of the current budget and in his remarks to the press thereafter. He virtually acknowledged the black-money holders and illicit earners as the movers and shakers of the national economy and sought to lure them to support him bridge the deficit budget and his high-spending leaky pre-election projects. Racketeering got recognition and rewards. Productive trade, industry and agriculture were not only discouraged by the discrimination and injustice meted to honest tax-payers, but also starved of regular bank-financing on account of liquidity crisis as a result of heavy government borrowing. 

 

It has now been revealed that the culture of wheeling and dealing and illicit practices have so contaminated the banking system, and the “politically appointed” directors of nationalised banks have been mixed up with rent-seeking and money-spinning rackets in such a way that despite bank liquidity crisis, directors and officers of some state-owned banks have been able to funnel out over Taka four thousand crores into private pockets and share the loot. The scandal has badly shaken customer-confidence in the banking system as a whole. But the Finance Minister is simply laughing away the matter. He has blamed the media for “over blowing” the gravity of the scandal and creating difficulties for proper action to be taken, which he said was the recovery of the loot rather than punishing the culprits. He said he was confident of recovering half the amount embezzled, and claimed that probably nearly the entire amount could have been recovered had the media not raised a hue and cry to scare away the wrong-doers. He also bluntly suggested that a sort of systems loss of Taka 4000 crore in bad debt out of Taka 40,000 crores lent by the banks annually (i.e. 10%) was not such a big deal, so to say.

 

The public, the banking leaders, the business leaders and even the colleagues of the finance minister in the parliament were flabbergasted by such an irresponsible attitude towards “financial crime” adopted by Finance Minister Muhith, who has meanwhile rewarded one of the suspects of collusion in that crime, the Chairman of the Board of Directors of Sonali Bank, by renewing his tenure in that post for an indefinite period. There was speculation that the suspect Chairman and his board members would be eased out of office, if not taken to task, by not renewing their contract when their tenure ended after the first week of September. That expectation has been dashed now. But public demand is becoming louder by the day for punitive action to be taken against all the culprits, including ministers and advisers of the government lending “political” blessings to the wrong-doers, irrespective of high connections or pleas of diminished responsibility. Two important Members of Parliament, Tofail Ahmed and Sheikh Fazlul Karim Selim have already voiced in the floor of the House their strong disapproval of the finance minister’s utterances and inaction. They have urged the finance minister, albeit with mild words but with strong meaning, to institute criminal proceeding, against all wrong-doers without sparing “political” protégés, and also advised the finance minister to talk less. But who cares?

 

The question, however, looms whether in reality Finance Minister Muhith is indispensable for the present government. Indeed in the reactions from the government’s own set of aspirants for promotion in the financial hierarchy, one can sense bids for outdoing one another in pinpointing blame on Muhith and shifting part of responsibility for the banking scandal from one to the other. In the race to the chair of the Finance Minister in case it falls vacant are Adviser Masihur Rahman and Bangladesh Bank Governor Atiur Rahman. Both have been put on the dock for their “share” or their “failure” in the course of the scandal by other aspirants like Khondaker Ibrahim Khaled (Krishi Bank Chairman) and Farashuddin Ahmed (former Bangladesh Bank Governor). Finance Minister Muhith’s fate may be decided in the course of the month by his success or failure in obtaining assurances from the World Bank for renegotiation of the Padma Bridge loan agreement. For all the diplomatic words of assurance and support he has obtained, one wonders what trump card he may have up his sleeves to be so cocksure in his demeanour.

 

BY :  Sadeq Khan.