10-27-05, 10:00 am

With every passing day it becomes increasingly evident that the criminal and illegal invasion of Iraq by US imperialism may very well be one of the major blunders committed by Washington in decades. Antiwar forces continue to grow, along with the militancy of their demonstrations, while the number of nations willing to commit troops to the Iraqi quagmire continues to diminish. This war, along with the continued challenge from China, Cuba and Venezuela, along with an Africa that refuses to bend, spells a deepening crisis for US imperialism. No better indication of the crisis faced by US imperialism in Iraq is the fact that the military is having increasing difficulty in recruiting new troops. Across the nation, the Army National Guard has seen a 24 percent decline in recruitment. Things have gotten so bad that the Guard has formed a partnership with Labor Ready, a provider of temporary jobs for unskilled workers in the hopes that this Tacoma-based company’s 700 branches across the country can help boost the dwindling number of recruits.

As US nationals balk, this has led to an increase in the recruitment of foreign mercenaries by the Pentagon. Fijians, Ukrainians, South Africans, Nepalese and Serbs are part of what is truly the “coalition of the billing” in Iraq. “Security” accounts for as much as 25 percent of reconstruction costs in Iraq. Recently Congresswoman Jan Schakowsky, an Illinois Democrat, complained about the proliferation of Colombians fighting for the US in Iraq. What is happening is that “Plan Colombia,” a so-called counterterrorism and narcotics interdiction program that since 2000 has cost US taxpayers $4 billion, is being used to train Colombian police and military – who then are hired by private concerns to provide “security” in Iraq. This has been a windfall for these US-based mercenary firms e.g. North Carolina-based Blackwater USA and Texas-based DynCorp.

Moreover, foreign nationals increasingly are fighting for US imperialism in Iraq with the hope of leveraging this combat for US citizenship. Since July 2002, 20,000 members of the US military of foreign origin have become US citizens. The armed forces now have at least 27,000 members who do not have US citizenship. In late July 2005 alone over one hundred troops from 43 different nations took the oath of US citizenship in a former palace of Saddam Hussein.

Yet whatever personal profit is accruing to foreign nationals or even mercenary firms is dwarfed by what is being garnered by Halliburton, the Texas-based transnational corporation once headed by Vice President Dick Cheney. Just recently Congressional Democrats released a report revealing previously undisclosed Pentagon audits showing that Halliburton obtained more than $1 billion in possible overcharges and $422 million in billing that lacked the kind of documentation that auditors needed to determine whether the charges were proper. All told, Halliburton has garnered about $10 billion for work in Iraq. This mischief was recently capped when the government official who exposed Halliburton’s rip-offs – Bunnatine H. Greenhouse, who happens to be African American – was demoted.

Meanwhile, back on the battlefield, things are not going very well in cities like Nasiriyah, Basra and Amarah, all south of Baghdad and all patrolled by foreign forces allied with the US. There is a new boldness shown by insurgent militias. The much debated Iraqi Constitution seems to lay the basis for creation of a theocracy that will be a disaster for women’s rights in particular.

The swirling controversy that the war in Iraq has become is creating tremendous ripples that are impacting the alliance that has been of paramount importance in the region – that between the US and Israel. The indictment of two former pro-Israeli lobbyists on charges that they shared information (on Iran) with foreign (read: Israeli) officials has raised eyebrows in Washington, DC. According to the August 12, 2005 edition of the Jewish weekly, the Forward, the “indictments are the culmination of a long running effort by some elements in the FBI and CIA to clip the influence of Israel and its allies in Washington.” For years AIPAC – the American Israeli Public Affairs Committee – has been a powerhouse nationally, helping to elect and defeat various members of Congress. Now this indictment is seen as a signal that a new day may be at hand. The Forward, citing the Israeli daily, Ha’aretz, wrote, The FBI’s motives are anti-Semitic. It is no coincidence that they made problems for [former US ambassador to Israel] Martin Indyk because of a computer he took out of the office and [former Clinton administration national security adviser] Sandy Berger about documents. They suspect all the Jews. Certainly US-Israel relations have hit a difficult patch lately, not least because of the attempt by the Jewish state to deepen ties with China. As it makes 21st century projections, Israel – like any clear-sighted analyst – can envision the rise of China and, thus, would like to improve relations with Beijing but this effort is complicating relations with Washington hawks who foresee a new “cold war” with China taking the role previously played by the former Soviet Union. Thus, Israel has sought to sell China the Harpy-model drone aircraft, a maneuver that caused the US to seek a virtual veto over Israeli arms sales, thereby converting this nation into something akin to the 51st state. Washington is also upset by the fact that Chinese investors are participating in a tender for Tel Aviv’s rail system and are seeking a controlling stake in Bank Leumi, the bank founded in 1902 by Theodore Herzl himself – the founder of modern Zionism – in order to fund development efforts in what was then Palestine.

Pressure from Washington was also a factor in Israel’s removal of settlements from Gaza, a development that caused severe rifts within the ruling Likud coalition, causing the defection of former Minister Benjamin Netanyahu, who is poised to challenge – from the ultra-right – Prime Minister Ariel Sharon.

Still, the impact that China is wielding on US-Israeli relations is just one more bit of evidence that Beijing is playing an outsized role in the global economy and in shaping the international correlation of forces. A cover story in the July 30, 2005 edition of the British weekly, The Economist, was as blunt as it was stunning: “Beijing, not Washington,” it was reported, “increasingly takes the decisions that affect workers, companies, financial markets and economies everywhere.” Of course, this conservative journal has its own interests for pushing such a line, adding provocatively that “the entry of China’s vast army of cheap workers into the international system of production and trade has reduced the bargaining power of workers in developed economies.” Nothing was said about management blunders and/or avariciousness. Still, this weekly is on to something when it concludes that “global monetary policy is increasingly being set in Beijing as well as in Washington.” As a result of this trend, The Economist asserts that the fate of American house prices could thus be determined by unelected bureaucrats in Beijing rather than the unelected central bankers of the West….global inflation, interest rates, bond yield, house prices, wages, profits and commodity prices are now being increasingly driven by decisions in China.

Moreover, since the Bush White House has cut taxes for the wealthy but, as of yet, has not been able to cut programs commensurately, it has become heavily dependent upon capital flows from China to keep already spiraling deficits from becoming even more uncontrollable. Thus, if China “decides to buy fewer American [Treasury] bonds, pushing up yields, then America [sic] might really have something to complain about: the first global downturn made in China.”

Such a downturn is not altogether hypothetical. The world’s central bankers were net sellers of US assets in March 2005 for the first time since September 2002. There is a growing fear that the dollar is due for a precipitous fall, a development that could have severe inflationary consequences in the US itself. The August 10, 2005 edition of the Financial Times reported that “the US has been living in a fool’s paradise. Its debt to the rest of the world looks set to rise sharply over coming years,” [as the nation] “will find itself borrowing not just to fund current spending but simply to service previous debts – a position more commonly associated with a developing economy.”

Certainly, the White House decision to fund reconstruction of the Gulf Coast of the US without raising taxes on the wealthy, suggests once more that the U.S. will have to rattle its tin cup before the bankers of Beijing.

Already China’s voracious appetite for oil is being blamed for the rise in the price of a barrel of oil, now heading – seemingly inexorably – toward $100 per barrel and already over $3 per gallon at the pump. When a Chinese-based firm bid for California-based Unocal, hawks in Washington sharpened their talons (something similar occurred when Chinese-based firm, Lenovo, bought IBM’s laptop business). A bipartisan effort spearheaded by Senator Charles Schumer, a New York Democrat, and GOP Senator Lindsay Graham, is threatening Beijing with harsh punishments unless it further devalues its currency, which – it is thought – will serve to reduce the yawning trade surplus that China presently enjoys with the US. Of course, too much can be made of these tensions. Though the Chinese oil firm, Cnooc, was involved in a sharp conflict with Chevron over the purchase of Unocal, they are cooperating on a natural gas project in Australia. Cnooc and Chevron also have joint oil operations in the South China Sea and in China’s Gulf of Bohai.

Nevertheless, progressives globally would be naïve to think that cooperation is the sole element in US-China relations. If so, it would be difficult to explain the recent stern declaration from Zhu Chenghu, a major general in the People’s Liberation Army, who announced in July 2005 that China was prepared to use nuclear weapons against the US if it is attacked by Washington during a confrontation over Taiwan. This comment was hyped in the right-wing Washington Times, which has stressed that conflict between China and the US is virtually inevitable, a conclusion rejected by more sober analysts.

Still, it is difficult to ignore the fact that the Pentagon continues to prepare for major 21st century conflicts. In March 2005 Pentagon chief, Donald Rumsfeld, signed a new National Defense Strategy Paper that said that the use of space “enables us to project power anywhere in the world from secure bases of operation.” The Pentagon is developing a suborbital space capsule that could hit targets anywhere in the world within two hours of being launched from US bases. Chinese diplomat Hu Xiaodi declared in response that “it is no exaggeration to say that outer space” was becoming the “fourth battlefield after land, sea and air,” thanks to US imperialism. Similarly at the spring 2005 conference reviewing progress in nuclear nonproliferation, the Bush White House sought to block all progress toward disarmament – while simultaneously raising a ruckus about Iran’s attempt to develop civilian nuclear power.

In any case, the prevailing atmosphere has led to significant collateral consequences. When Indian Prime Minister Manmohan Singh visited Washington in July 2005, the Bush White House bent over backwards to improve relations with this Asian giant which, during the cold war, was one of Moscow’s closest allies and, therefore, not embraced by the US. Now US imperialism envisions using India against China, just as China was used so adroitly against the former USSR during the cold war. Then in August 2005 Russia and China engaged in extensive military maneuvers that were interpreted widely as sending a dramatic signal to the US. Beijing and Moscow also joined their Central Asian allies in demanding that the US immediately set a date for removal of its bases in Uzbekistan and Kyrgyzstan. Besides targeting China and Russia, these bases are also seen as pivotal in the ongoing US war in Afghanistan.

Yet saber-rattling aside, it is China’s economic heft that may prove decisive in its relationship with the US. For example, despite the US thirst for oil, Canadian oil company, EnCana is considering bringing in Chinese companies to construct and operate drilling rigs in the Colorado Rockies, where EnCana has major interests. When China is considered for extensive economic involvement in this state with a conservative GOP governor, it is evident that whipping up anti-Beijing hysteria will not be simple or easy.

Similarly, despite extensive US interests in the Arab world, Saudi Arabia has been busily inking natural gas contracts with China and, just recently, China has been involved in developing the huge Dragon Mart in Dubai, which is intended as a platform for the expansion of Chinese exports in the Gulf. It can house as many as 4,000 Chinese companies and snakes for nearly two miles through the desert. However, it is in Africa where China is establishing a significant beachhead. Zimbabwe, for example, is considered to be a pariah in Washington and London, yet during the July 2005 visit to Beijing of President Robert Mugabe, the red carpet was rolled out. Interestingly, during the cold war, China and Mugabe’s ZANU-PF party were allies, a development which was not frowned upon by Washington since the alternative in this Southern African nation was ZAPU, backed by Moscow. So boosted, Mugabe surged to power where he has been ensconced for over a quarter of a century. But since he moved to expropriate the land of farmers from the European – mostly British – minority, sanctions have been imposed on his regime by the US and UK. In response, Mugabe has developed a “Look East” policy which has involved tighter relations with Malaysia, Iran – and China. Thus, his air force trains on Chinese jets, Zimbabweans wear Chinese shoes, Chinese consumer goods are ubiquitous – even some of the expropriated land is now said to be managed by Chinese nationals.

Washington has objected to this relationship on the grounds of human rights but such an allegation exceeds even the usual US chutzpah when it comes to this topic. For in the name of antiterrorism, the US is training thousands of African troops in an extensive program that encompasses Chad, Mali, Mauritania, Niger, Senegal, Nigeria, Morocco and Tunisia, all of whom have questionable human rights records either on par or exceeding that of Zimbabwe. Though some US officials have charged that “genocide” is occurring in the Darfur region of Sudan, in April 2005 Khartoum’s intelligence chief was in Washington for extensive consultations – again, with “anti-terrorism” being the ostensible reason. Representative Donald Payne of the Congressional Black Caucus objected sharply – but to no avail. Given such contradictions, it is becoming increasingly difficult to take the crusade against Zimbabwe seriously and, at any rate, this crusade has been rejected by Harare’s neighbors, including regional giant, South Africa.

The fact is that exploitation of Africa has long been essential to the economic well-being of US and European elites and, it seems, that they are concerned that increased Chinese involvement within the continent might encroach upon their privileges. Thus, major pharmaceutical companies routinely engage in clinical trials using Africans as veritable “guinea pigs,” testing drugs’ reliability before they are marketed in Europe and North America. In 2001 thirty Nigerian families sued US corporation, Pfizer, over trials of Trovan, an antibiotic to combat meningitis. During the course of these trials, during an epidemic in 1996, 11 children out of 200 died and others suffered brain damage and paralysis. In Africa these companies routinely ignore ethical considerations and the health of patients.

Similarly after the December 2004 tsunami which battered northern Somalia, it was revealed that tons of medical, chemical and nuclear waste washed up on the shores of the nation’s coastline – hazardous materials that had been dumped illegally by European-based companies.

Despite the crocodile tears being shed about Africa at the G-8 Summit in the UK in July 2005, it is evident that the developed nations – particularly US imperialism – have little or no interest in Africa’s well-being but are frightened by the notion of this continent striking out on an independent path of development assisted by China. Thus, before the advent of Hugo Chávez, Venezuela rarely was a matter of concern in the capitals of the major imperialist powers, though poverty was rampant and corruption rife. But now that this oil-rich South American nation is embarking on an independent path of development, in alliance with Cuba, China and its South American neighbors, relations with Washington have deteriorated to the point where GOP leader, the Rev. Pat Robertson, called for the assassination of President Chávez.

Caracas has led the way in the development of a television news station that will challenge the hegemony of CNN and the BBC. Caracas has provided petroleum at reduced prices to Caribbean nations and has deepened relations with socialist Cuba in particular. Actually, Venezuela is not alone in seeking to benefit from ties with Havana. In March 2005 the governor of Louisiana, Kathleen Babineaux Blanco, arrived in Cuba with three dozen business-people and returned with a $15 million deal for state agricultural exports to Havana. The port of New Orleans has been a beneficiary of increased trade between the US and Cuba, a trade that has proceeded in the face of staunch opposition from Washington hawks.

Meanwhile, Latin American integration is proceeding apace as ALBA – or the Boliviarian Alternative for the America, – initiated by Caracas, accelerates. This has led to deepening ties between Havana and Caracas in particular, a development of true revolutionary consequence. Venezuela is also deepening ties with Brazil, Argentina, Uruguay and its other neighbors. Chávez’s attempt to extract more revenue from the major oil companies operating in his nation so as to spend more on literacy, health care and other social programs (for example, Venezuela has some of the most sophisticated and extensive programs in music education) is being emulated in Bolivia, home to the region’s second-largest natural gas reserves, behind Caracas. In La Paz legislators have sought to pass a law introducing a 32 percent tax on foreign energy companies on top of an existing 18 percent royalty while dramatically expanding state involvement in this sector. This “contagion” spreading from Caracas has alarmed Washington hawks.

On the other hand, there is an actual contagion of “offshoring” that is spreading from the US to the four corners of the planet. Further evidence of this disturbing trend was presented when the May 2, 2005 edition of the Los Angeles Times reported that San Diego-based Sea Code Incorporated proposed to house 600 foreign software engineers on a cruise ship moored three miles off the coast of California, thus undercutting US wage rates and circumventing local labor regulations. This latest twist in “outsourcing” and “off-shoring” is, according to the Times, “threatening to hasten the disappearance of decent paying jobs for American professionals.” These executives “dream of eventually running multiple ships off the US coast and even expanding to Europe and beyond – again illustrating that the 19th century slogan, “workers of the world, unite” continues to be relevant in the 21st century.

That this slogan has yet to die, despite the alleged “cold war triumph,” illustrates that reality itself is a harsh teacher and that the crisis of US imperialism continues to persist.



--Gerald Horne is a contributing editor of Political Affairs and can be reached through pa-letters@politicalaffairs.net.

Correction: A typographical error unfortunately changed the meaning of a sentence in this article. The author intended to write that Senators Chuck Schumer of New York and Lindsay Graham of South Carolina are pressuring China to 'revalue' its currency, not 'devalue'; indeed, as is well known, they would like a revaluation upwards so as – they suggest – to increase the price of Chinese imports on this side of the Pacific and (they think) reduce the spiralling trade deficit the US has with China. As this will be a key battlefront going forward, it is extremely important to have clarity on this pressing matter. We regret this error.