World class investigation on the murky International Aid industry

“The Crisis Caravan: What’s Wrong With Humanitarian Aid?” by Linda Polman

This book is literally giving me nightmares. It’s a disturbing eye opener, which explains the ugly truth of the international aid industry, written in a composed and factual manner. It analyses, among other things, the dilemma of neutrality in war zones, the hypocrisy of aid workers who fly in business classes and hugely contribute to the increasing rate of prostitution in whichever town they’ve arrived, and the role of refugee camps in wars (for instance, the fact that Afghanistan’s Taliban movement was born in an Afghan refugee camps in Pakistan).

The book talks about the likes of Bono and Bob Geldof, the “refugee warriors” that hide among the victims, the “genocide credit” received by Rwanda, the amount of money Mother Teresa actually had ($50 million in 1 account in New York City alone) and many ugly realities on the ground where international aid often becomes a big part of the problem in warring countries, and even unwillingly becomes the supplier for the rebels like in Sri Lanka, Yugoslavia and East Timor. It also discuss about aid opportunists like the case in Niger that caused inflation and famine, the illusion of “phantom aid” like in Iraq, and the blurry line between aid and US military strategy in Afghanistan post 9/11.

The book also describes human cruelty at its very worst: the deliberate starvation in Ethiopia, village burning and rape in Darfur, nurturing war criminals responsible for genocide in Goma, and all of this for, and in the name of, international aid. It also explains the reason why the rebels were chopping off hands in Sierra Leone, and why the government officials were jubilantly celebrating when Sierra Leone was ranked as the poorest country in the world.

I believe I haven’t read anything as disturbing as this book (have I mentioned that it’s literally giving me nightmares?), where the worst kinds of human beings have found a rotten way to exploit the aid industry, causing a genuine headache for the good guys trying to save the world. But nevertheless, it is without a doubt one of the best books I’ve ever read, with world class journalistic investigation and an engaging style of writing. And it is definitely 1 of my top 10 books to read to understand how the real world works. I can no longer see the likes of charity, refugee camps and war strategies the same way anymore.

Did Indonesia struck a deal with the US to get West Papua?

On November 2015 Indonesian politics was scandalised by a leaked secretly-recorded meeting between the head of the parliament and a representative from Freeport-McMoRan, a US gold and copper mining company that have a mining concession in West Papua. The meeting was related to the expiry of Freeport’s concession contract in 2021 and the head of parliament’s attempt to get some shares in the renewal of the huge contract, which was unethical not to mention illegal. It was disgraceful and it reignited the nationalistic debate whether Freeport even should be allowed to extend their concession contract beyond 2021, and instead plenty of Indonesian people believe that after decades of exploitation the mine should finally be given back to Indonesia.

Then it got me into a research mode, where I found some odd timeline about West Papua and Freeport, and discovered that “to give back” Freeport-controlled mine to Indonesia might not necessarily be an accurate expression, perhaps as misleading as to “unite back” the two Korean countries (there’s never been 1 country called Korea, only kingdoms before the peninsula was annexed by Japan).

So the timeline goes like this: Indonesia unilaterally claimed independence on 17 August 1945, while the Dutch acknowledged Indonesia’s independence from them only on 27 December 1949 but still occupies West Papua (then called Netherlands New Guinea). In 1960 Freeport geologist confirmed the Dutch discovery of a large above-ground gold and copper deposits in West Papua. On 1 December 1961 West Papua declared itself independent from the Dutch. In 1962 Indonesia began to launch a military operation to incorporate West Papua back into Indonesia (the argument goes, on 28 October 1928 Youth Declaration to fight for Indonesian independence, a youth representative from West Papua was present), however Indonesia was claiming to annex West Papua from the colonial Netherlands and not invading a recently-independent country. Then US president John F. Kennedy (JFK) interfere [with the official reason] to restore peace. And from 15 August 1962, following the New York Agreement (which was drafted by JFK’s brother Robert Kennedy whom was the special envoy for West Papua), United Nations forms United Nations Temporary Executive Authority (UNTEA) to act as a caretaker and prepare for an “Act of Free Choice” for West Papua in 1969, which is basically a referendum.

This is where it gets weird. Between 1962 and 1969 a lot of things happened: JFK was assassinated on 22 November 1963, while Indonesian president Soekarno was technically toppled in 1965 on a manipulative coup led by CIA-backed general Soeharto whom then officially became president on 12 March 1967. The 1st order of business by the new president Soeharto? He signed a concession deal with Freeport a month later on April 1967 to allow Freeport extract the gold and copper mine in West Papua, even though West Papua wasn’t officially a part of Indonesia yet. Note that a year earlier in 1966 Freeport formed Freeport Indonesia Inc, a subsidiary to negotiate a contract with the Indonesia government (not the Dutch government nor the independent West Papua government) to develop the Ertsberg mine, and the negotiation in 1967 was conducted under the guidance of Henry Kissinger (whom later joins Freeport’s board). On 5 June 1968 Robert Kennedy, like his brother before him, was assassinated. And in 1969 when the referendum was conducted, out of 815,906 population at the time only 1026 selected elders were eligible to vote, and some argued that they were under pressure to vote for joining Indonesia.

So this got me thinking, was West Papua the main reason CIA staged a coup on president Soekarno, to smooth the road for Freeport’s presence in there? And as a result, did CIA-backed president Soeharto struck a deal with the US on West Papua, where Indonesia gets the land but the US gets the natural resources underneath it? Despite the fact that West Papua has been a part of Indonesia for more than 4 decades now, it is still disconnected from the rest of the archipelago, with the news about the activities and history in West Papua are almost unknown until this day, as media access to West Papua have always been severely restricted. Even to visit West Papua, according to researcher at Human Rights Watch Andreas Harsono, an official permission would require signatures from 18 separate ministries and security agencies. The question is, what are they hiding?

Somewhere in the middle of these occurrences, the Free West Papua movement emerged, with Benny Wenda leading the movement for independence from exile in the United Kingdom. However, if history is any indication, the Free West Papua movement is arguably futile, because if ever they get their independence power will only shift from corrupt officials in Indonesia to corrupt officials in independent West Papua, while the majority of ordinary citizens remain relatively poor, deliberately under-educated and perhaps even oppressed. This is what have happened in a lot of post-colonial African countries and in countries with abundant natural resources, from Timor Leste to Guatemala to Nigeria. But if independence is not the answer, then what is? To his credit, compared to his predecessors, the new Indonesian president Jokowi has made a greater attention and effort to look after West Papua, including an effort to make the contract renegotiation with Freeport more beneficial for the local West Papuans. However, the results from these efforts remain to be seen and for now the big question remains, will they be significantly matter in the long run for the people of West Papua?

Obviously there are more questions than answers at this point, questions that are probably will never be truly answered.

The island of Papua is the 2nd largest island in the world after Greenland, and Indonesia officially owns half of it. The area covers around 40 million hectares of land (about 5 times the size of “main island” Java) with 3.5 to 4 million population live there (1.5 million of whom are native Papuans). Meanwhile, Freeport McMoRan controls 90.64% stake of Freeport Indonesia, where their current concession the Grasberg mine (multiple times bigger than the original Ertsberg mine, which was largely depleted in mid 1980s) span more than 2.5 kilometres in width, sit 4270 metres above sea level, and it is considered as the largest known deposit of gold and the 3rd largest deposit of copper in the world. It operates 24 hours a day, 365 days a year, with 700,000 tons of rock are moved every single day, and with 6 billion tons of industrial waste expected to be produced in total. As at the current contract, which will be expired in 2021, Freeport pays 1% loyalty on gold to the Indonesian government, and 3.5% royalty on copper. It is also worth noting that Freeport has been the largest provider of jobs, infrastructure, technology, education and services in West Papua, contributing up to 45.4% of the GDP in the Papua province.

Further readings:

John Pilger on West Papua [New Statesman / John Pilger]

The history of Netherlands New Guinea [Peter Van Der Heijden]

The story of Free West Papua movement [Open Democracy / Hugh Brody]

Documents on Indonesia’s 1969 takeover of West Papua [The National Security Archive / Edited by Brad Simpson]

JFK, Indonesia, CIA & Freeport Sulphur [The Secret Truth / lisa Pease]

West Papua: a history of exploitation [Al Jazeera English / N.A.J. Taylor]

West Papua: in need of media coverage and international intention [Unrepresented Nations and Peoples Organization]

The Indonesian government appoints Freeport lobbyist as presidential staff [Tempo / Inge Klara Safitri]

Papua’s time bomb [New Mandala / Yulia Indri Sari]

Freeport McMoRan’s positive economic impacts to Indonesia and enterprise development [3BL Media]

Enhancing the competitiveness of the Papua region [The Jakarta Post / Mamay Sukaesih]

100 things I learned and did in 2015

  1. Abracadabra is an ancient Hebrew word that means “give your fire until the last of your days.”
  2. History’s record keeping began around 6000 years ago in Mesopotamia, but modern human has already appeared around 200,000 years ago. That means about 97% of human history is lost and still remains a mystery. Now that’s scary and exciting at the same time.
  3. For now, we can only scientifically speculate: The genome of modern humans suspectedly contains the DNA from 4 different hominid ancestors: Neanderthals, Denisovans, Homo Sapiens and a fourth species that has yet to be found. According to Mark Thomas, an evolutionary geneticist at University College London, “what it begins to suggest is that we’re looking at a Lord of the Rings-type world – that they were many hominid populations.” Awesome!
  4. There’s a town called “Erect” in North Carolina US. Virginia don’t want to miss out, they have “New Erection.” Ah, American culture of competition at its best.
  5. When our body is fighting an infection our temperature rises, which helps to kill or disable the infection. With this in mind, a while ago syphilis used to be cured by infecting patients with malaria. As spectacular as it sounds, several fever cycles would actually kill the syphilis, and the doctor could then give quinine to the patient to cure the malaria.
  6. For the financial markets 2015 is the year the world eagerly anticipating Fed rate hike, with emerging markets currencies from Indonesia to Malaysia, Turkey, South Africa and Brazil among the worst hit. With Indonesian rupiah under pressure, this year I only travel around Indonesia (you know, like, to support local tourism businesses) from the mountains in remote Sukau and Krui, to mainstream Bali and Pulau Seribu, to the culinary adventures in Medan and Bandung, and I realised that I’ve only touched the surface of what this huge country has to offer for travel and adventures. Definitely going to travel more domestically!
  7. The biggest ice manufacturing company in Sierra Leone is called Ice Ice Baby.
  8. Standing up for 3-4 hours a day helps us get rid of bad glucose and burn 30,000 calories per year. That’s equal to running 10 marathon. I know, I didn’t believe it either.
  9. One day in colonial India, the person in charge in Delhi wanted to get rid of the many cobras that have been terrorizing the city. To do that, the dude decided to place a bounty on the cobras, and he thought that this incentive would encourage the citizens themselves to kill the cobras, and thus solving the cobra problem in Delhi. However, as a response some of the citizens in Delhi decided to farm cobras, to exploit this incentive scheme, and all of a sudden the government was getting too many cobra skins in exchange for money. Acknowledging the failure of the incentive scheme, the government then rescinded the bounty program. However, by then the cobra farmers had already breed a little population of cobras, and when the bounty was revoked they opted to just release the snakes, and thus ended up worsening the cobra menace in Delhi. Since then this episode became known as the cobra effect.
  10. In 1950 India was qualified to play in the World Cup, but was then not allowed to play and was banned by FIFA simply because they were playing in bared feet, and FIFA wouldn’t allow teams to play with no shoes. India did play barefooted before in an international competition, in 1948 London Olympics, before FIFA impose a rule banning playing barefooted following the 1948 Olympics.
  11. Did you know that there’s a 5th Beatle after John Lennon, Paul McCartney, George Harrison and Ringo Star? His name was Stuart Sutcliffe, and this is his tragic story.
  12. The assassination attempt of president-elect FDR in 1933 failed because the shooter’s chair was wobbly when he fired the shot, so instead of killing FDR he killed the Chicago mayor who were shaking FDR’s hand. His Vice President-elect had an ideology that opposed the New Deal, hence if FDR was shot and replaced by his VP the US wouldn’t survive the Great Depression, and the subsequent events following the New Deal wouldn’t have happened. All thanks to a wobbly chair.
  13. With the world population grew from 3 billion people to 6.8 billion people, there were more population growth in the 50 years between 1960 and 2010 than the previous 2 million years that humans have existed.
  14. Historians believe that alcohol was originated in the Middle East, where the name alcohol may have come from the Arabic word al-kohl or “the kohl.” It was loved by Arab tribes and was drank in ceremonies and celebrations, but later prohibited with the arrival of Islam, though the Holy Quran (arguably) does not literally ban the consumption of alcohol, instead it bans drunkenness (Al Baqarah 2:219, An-nisa 4:43, Al-Maida 5:90-91)
  15. According to ancient Mesopotamian myth, the civilisation’s ability to read was given by goddess Inanna to her city of Uruk, which she stole from the god of wisdom Enki when he was drunk.
  16. The name “cocktail” comes from an ancient custom to put a feather (a form of cock’s tail) into a drink, to alert people that the drink contains alcohol.
  17. I always thought that whoever invented condensed milk should win a Nobel Prize for his genius invention. Now I finally got the guy’s name, it’s Gail Borden. From the bottom of my heart, thank you.
  18. The Michelin Guide was co-founded by Edouard Michelin in 1900. Back then the fine-dining restaurant ratings guide around the world started out as a free practical information on petrol stations across France, where to find places to repair cars and find supplies and parts, and also a guide to find toilets, meals and accommodation along the way. The objective of the guide was meant to get people with cars to drive more, so that they would use their tires more often and would need to replace them more often. Now that’s thinking out of the box right there.
  19. There’s a region in France named “Alsace.” During the 19th century the region was German, became French in World War 1, then back to German in World War 2, and back again to France after the war. All Alsatians speak German now, and nobody speak French even though it’s a provice in France.
  20. The multi-tool device Swiss knives was invented by Karl Elsener in the 1880s, where he stepped up to the demand by Swiss military to give its soldiers a simple and portable tool. Elsener’s tool was named Victoria in 1909, a name he adopted from his mother Victoria who died the same year. And in 1921 the company began to use stainless steel in its knives, and the company has since became known as Victorinox (with inox being a French term for stainless steel).
  21. Still in Switzerland. It’s not a coincidence that a lot of Swiss private banks were founded around late 1700s and early 1800s, during the French Revolution. The bankers ran away from France towards the mountains in Swiss and settled there until now.
  22. Every year in ancient Israel on the Day of Atonement, the high priest brought 2 goats into the Jerusalem temple. One goat is sacrificed to expiate the sins of the community, and then the priest laid his hands on the second goat, transferring all of the citizens’s sins onto its head, and proceeded to send the sin-laden animal out of the city, to literally get rid of the sin out from the city. Moses explained that, in this way “the goat will bear all their faults away with it into a desert place.” And thus, the term scapegoat was born.
  23. The first map was drawn by the Greek Cartographer and astronomer Ptolemy in the year AD 150. I’m still curious, how can he possibly know the shape of a huge continent when flying hasn’t even been invented yet?
  24. The 1st person to sail around the world was Juan Sebastian del Cano, from 1519 to 1522. He took credit of the achievement after his captain Ferdinand Magellan was killed en route.
  25. This year I started to use Kindle app for iPhone, and I love it! I can now bring along my books wherever I go. Anyway, one of the books I bought on Kindle was Linda Polman’s book “The Crisis Caravan”, which I thought was a new book complementing her excellent book “War Games.” As it turns out, it’s the same book only with different cover. Right. I wasn’t remotely upset though as the book is brilliant, and so I decided to re-read the book and learned some new things along the way on the dreadful state of the global Aid industry. Here’s one paragraph in the book that pretty much sums it all: “The humanitarian aid community that travels to war-torn, crisis-ridden countries feels no embarrassment about looking like an international jet set on holiday. Its Land Cruisers can be found triple parked outside the restaurants, bars, and discos of war-ravaged towns and cities every evening. Wherever aid workers go, prostitution instantly soars. I’ve often seen bar stools occupied by white agronomists, millennium-objective experts, or gender-studies consultants with local teenage girls in their laps. I’ve known aid workers who cared for child soldiers and war orphans by day and relaxed by night in the arms of child prostitutes.”
  26. Here’s one direct example of the rotten world of International Non Government Organization: Red Cross promises to build $500 million worth of houses for 130,000 Haitians, but take a wild guess on how many they actually built? 6. They only build 6.
  27. The ruling empire checklist: The Pentagon has over 700 military bases in 130 countries. Speaking of empires, check out this excellent and very detailed article on how China currently building the most extensive global commercial-military empire in history. Interestingly, this global expansion includes ripping off 11 cities from the rest of the world, just because they can. And, also, to keep the economic activities (somewhat artificially) going.
  28. The 1st new year’s eve was celebrated by the ancient Babylonians around 4000 years ago. However, the ancient civilisation didn’t celebrate the changing of dates from 31 December to 1 January like we do today. Instead, the Babylonians celebrated the first new moon after the Vernal Equinox (the day in late March that has an equal amount of sunlight and darkness). Vernal Equinox was an important point of time in ancient cultures, where for example theologian Hippolytus of Rome believed that the world was created on the Vernal Equinox.
  29. The early Roman calendar, which consisted of 10 months and 304 days, also begins each new year at the Vernal Equinox, which made perfect sense due to its nature of the end of dreadful winter and the beginning of hopeful spring. The original calendar was created by the founder of Rome, Romulus, in the 8th century BC, with king Numa Pompilius later on added the month of Januarius and Februarius into the calendar system. Over the centuries this calendar system fell out of sync with the sun and in 46 BC emperor Julius Caesar solved this problem by introducing the Julian Calendar, where he added 90 extra days for the year 46 BC in order to realign the calendar with the sun, and instituted 1 January as the first day of the year (presumably based on the political decision mentioned in 100 things I learned and did in 2013 no.7 and 8).
  30. As time passes, 1 January have been continuously replaced with the likes of 25 December (the anniversary of Jesus’ birth) and 25 March (the Feast of the Annunciation) in Medieval Europe by Christian leaders, however 1 January was later reestablished in 1582 as the 1st day of the year by Pope Gregory XIII in his new Gregorian Calendar, the calendar system the world uses now.
  31. Can you guess where is the reputedly most humane prison in the world? It’s in Norway. What about the world’s largest Sauna? Yes you’re right, it’s Norway again!
  32. Sushi is not a Japanese culinary invention. Instead, it originated in the rice-growing region of South East Asia around 2000 years ago along the Mekong River. The culinary technique was then spread to other regions, and began to appear in Japan around the 700s AD.
  33. Tempura is also not a Japanese culinary invention, it is Portuguese. Originally named “Peixinhos da horta” (literally translated as “little fish from the garden”) the dish was introduced to Japan in the 1500s by Portuguese missionaries.
  34. In 1759 the Bank of England started to issue fixed-denomination notes (the £10 note), and became the 1st to print a single government money. Previously, most banks and merchants issue their own notes, which were issued to a particular person, with a unique value and was signed by the cashier issuing the note. A fully printed notes, with no name of the payees and no signature by issuing cashiers, were issued in 1853.
  35. The word “apocalypse” derives from the Greek apokalypsis, which means “something uncovered” or revealed.
  36. On July European market was once again rattled by yet another Greece crisis debacle, where Greece was close to default on its loan to the Troika. As expected, the saga reignited the debate on the impossible debt and austerity forced on Greece to save European banks with then finance-minister Yanis Varouvakis emerged as the champion of the people. Few strange things happened: At first Greece was adamant that they will NOT fulfil their debt payment, and thus threatening to default (which was supported by some of the best economists in the world like Thomas Piketty, Ha-Joon Chang, Joseph Stiglitz and Jeffrey Sachs) they even went as far as conducting a referendum on the debt payment (which the people voted no).
  37. But then, in a plot twist, Yanis Varouvakis suddenly resigned, and blamed his resignation on the bullies at EU, and straight afterwards Greek prime minister Alexis Tsipras agreed to negotiate a new bailout deal, with terms worse than the initial deal rejected by the referendum, thus completely ignoring the result of the referendum and wasting all of the time and effort made by Yanis Varouvakis. The people’s reaction? Lots of people think the Greece bailout deal was a coup. Here’s the complete history of the Greek debt drama in charts.
  38. For a comparison on how small Greece problem actually is for EU, thus making their plunder on Greece even more questionable, China suffered a stock market crash in the middle of the year, with the wipe out in 1 month in July alone ($3 trillion) equal to 15x of Greece annual GDP ($200bn).
  39. 39 The most afflicted spot by lightning in the world is in the village of Kifuka, in the Democratic Republic of Congo. The village is 975m high, and it received a whopping 158 lightning strikes per square meter a year.
  40. Around 420 to 350 million years ago, before trees were common and stood just a few metres high, the earth was covered in giant mushrooms. The ancient organism boasted trunks up to 8 metres high and as wide as 1 metre.
  41. Are you like me and thought that South Park’s Timmy and the Lords of the Underworld was a super cool band? Well, meet Hatebeak, a death metal band with a freakin parrot as its frontman.
  42. The motto “In God We Trust” in the US dollar bill was adopted by Congress in 1956 in response to fears of Godless communism, and not by the Founding Fathers. The original motto that was adopted in 1782 was E. Pluribus Unum, a Latin word that means “out of one, many” which reflected the US heritage of diversity and tolerance. Could someone please tell this to the Republican presidential candidates.
  43. There are around 228 pyramids in Sudan, making it 3 times more pyramids than all of Egypt. Also known as Nubian Pyramids, the pyramids in Sudan were built by the Kingdom of Kush, which invaded Egypt in 760 BC and ruled as a Pharaoh of the 25th dynasty of Egypt for a century. During their rule the Kushite Kingdom took Egyptian art forms, the hieroglyphics and indeed the pyramid idea, before the Assyrians under Psamtik I conquered Egypt and push them back south in 656 BC. The Kushite rulers then kept on building pyramids until their kingdom weakened and disintergrated due to internal rebellion in 350 AD, or around 2000 years after the Egyptians have abandoned this form of architecture.
  44. There’s an unmanned piece of land about 2060 sq km between Egypt and Sudan, which aren’t claimed by either Egypt and Sudan. And a US farmer Jeremiah Heaton is trying to claim the land and name it “North Sudan” (and of course, he’ll become the king).
  45. Child victims of Nepal earthquake are sold to factories and brothels by human traffickers. While there’s an underworld of human smuggling in the Sahara. These criminals are without a doubt among the worst human beings ever lived.
  46. But despite all the wars, conflicts and crimes committed around the world, we’re actually live in the most peaceful era in human history. There are fewer conflicts, less people are joining a war and the wars themselves didn’t kill as much people as it used to be throughout our violent history. But nevertheless, despite being the most peaceful era, there’s still one exception where our current era is more violent than previous: religiously motivated conflicts.
  47. The colour of night vision goggles are green because the human eyes can differentiates more shades of green compared to any other colour.
  48. North Korea has a crazy five-tier caste system called Songbun, which consist of (from the elite down): 1. Special 2. Nucleus 3. Basic 4. Complex and 5. Hostile. The caste system was created by North Korean founder Kim Il-sung (the Kim family is of course exempt) and the caste system is based on what your paternal family were doing during the 1950-1953 Korean war and the Japanese colonial period before that. So the descendants of war generals and war heroes would be in Special class (1st class), but people whose grandparents were a deserters they would be in the Complex (4th) and Hostile (5th) class. By 1967 this system has completely determine people’s fate (where they work, live and the type of education that they receive), with Nucleus (2nd class) as the largest caste. If you’re born below the Nucleus class there will be severe and systemic discrimination, though Basics (3rd class) can still work their way up into Nucleus class. And it’s also possible to upgrade up in the caste class through hard work, joining the Communist Party as an official, by being “awarded with an audience” or by speaking with the Supreme Leader for more than 20 minutes (or taking a picture with him, yes selfie is literally a way to climb a social ladder here).
  49. Bartolomeo Cristofori was credited as the man who invented the piano in 1709.
  50. The most powerful mafia in the world is probably the one you’ve never heard of, italy’s ‘Ndrangheta. In 2013 alone they made $60bn of revenue. This is their story.
  51. A lot of people say that their most favourite villain character is Darth Vader or Heath Ledger’s Joker. For me it used to be Frank Underwood (House of Cards) but this year I found my new favourite in Raymond Reddington (the Black List).
  52. In the year 1966 an internal British government memo declared “there will be no indigenous population except seagulls.” And so on 1 October that year all the inhabitants of the island of Diego Garcia, minus the seagulls, were expelled from their own home under the threat of gunfire. The British then illegally leased the empty island to the US for 50 years, where it is then used by the US as a military base, a staging ground for military offenses, and a black op site, where they torture suspected terrorists. It also has a golf course.
  53. Still in the Indian ocean, there’s an awful Human Safari taking place in India-controlled Andaman Islands, where people come to see the local Jarawa tribe in the manner similar like seeing a wild animal. This would be shocking, if it weren’t already happening in the 1950s colonial Europe, where they showcase Africans in a human zoo.
  54. The Seda Monastery is the largest Tibetan Buddhist school in the world, and the scenes over there are just breathtaking.
  55. The national flag of Nigeria was designed a year before its independence in 1959 by Michael Taiwo Akinkunmi. The interesting part was, mr Akinkunmi was only a 23 years old engineering student in London when he entered the flag designing competition. Now 79 years old, mr Akinkunmi is a retired civil servant, and has been living in the poor area of Ibadan on an irregular pension paycheck. He was living alone and left to the care of his neighbours when an undergraduate student compiling history of Nigeria found him, and leading to his story to be published in the national newspaper which brought him a lot of help from strangers and eventually led him to receive a presidential award from Nigerian president Goodluck Jonathan, and given a lifetime salary of a presidential special assistant each month of 800,000 naira (roughly $4000).
  56. Yngwie Malmsteen was born on the day Jimi Hendrix died. Reincarnation?
  57. The birth date of Jesus Christ was actually never given in the scriptures. And instead, the birth date of 25 December was decided by the Christians of Rome in the year 354 AD.
  58. Lamborgini was founded by Ferruccio Lamborgini in 1948 and started out as Lamborgini Trattori, a tractor company. One day Ferruccio approached Enzo Ferrari to buy one of his cars, but was rejected by Ferrari because he did not want tractor drivers to be seen in his cars. As a mad response, in 1963 Ferruccio started Automobili Lamborgini, and he made his own f*cking sports cars. Now that’s one badass attitude.
  59. In 7 years after the financial crisis 2008, Global debt has grown by $57 trillion. But a lot of global debt is really just tax dodging. Meanwhile, once over $12 trillion, the world’s reserves are now shrinking. Which got some economic historians thinking, are we in the final stage of capitalism, as Karl Marx predicted?
  60. In 2017 a disabled man Valery Spiridonov is going to have his head chopped off, and glued to a donor body, which will make him the 1st person to get a head transplant. Creepy, I know, but as we can see from the conversation with him the man has no other options left. This is a Q&A session with him.
  61. The earliest documentary evidence of a formal hospital, with doctors and nurses treating the sick or wounded, was in Sri Lanka in the 400s BC. According to this 6 century AD documentary evidence (the Mahavamsa, the ancient chronicle of Sinhalese royalty) king Pandukabhaya of Sri Lanka (reigned 437 BC to 367 BC) had Sivikasotthi-Sala (hospitals) built in various places of the countries, with Mihintale Hospital as the oldest in the world.
  62. Book of the year: This Changes Everything by Naomi Klein, for it’s urgency and spot on timing in the year of Paris Climate Summit (more on this below). As a sucker for history of money and finance, I also enjoy reading Money: the unauthorized biography by Felix Martin, while Indonesia Etc by Elizabeth Pisani describes the complicated Indonesia brilliantly, with great wit, detailed insights and it reads like an adventure novel.
  63. This year we’ve experienced the strongest El Niño in decades with potential infection disease risks emerged as a result of the record breaking weather phenomenon. The El Niño effect even disrupted the weather pattern in Atacama desert in Chile, where strong rains in the usually world’s driest place have paint the desert with widespread colourful flowers.
  64. This record breaking El Niño confirms, according to the Met Office, that the world has already “reached the halfway point towards the arbitrary “threshold” of a 2 degree Celsius increase on pre-industrial levels judged to be potentially dangerous for climate change.” The Met Office then eloborate, “[while] scientists estimate that around 2900 gigatons (a gigaton is 1 billion metric ton) of CO2 can be emmited into the atmosphere before the 2 degree celcius threshold is likely to be breached, industrialised nations have already about 2000 gigatons which means that the world has used about two thirds of its 2 degree celcius “budget” of fossil fuels.”
  65. In 2011 a think tank in London called Carbon Tracker Initiative conducted a research which found that the oil, gas and coal reserves that are claimed by all fossil fuel companies represented 2,795 gigatons of carbon, which is 5 times the maximum size of carbon can be burned between 2011 and 2049 (around 565 gigatons) in order for us to keep warming below 2 degree Celsius. The problem is, those reserves represent roughly $27 trillion in value, more than 10 times the annual GDP of the United Kingdom, and to keep warming under 2 degree Celsius approximately 80% of that reserves should remain grounded and become useless assets in these fossil fuel companies’ book, and there’s no way that they will comply without a fight.
  66. 2 degree Celsius rise, by the way, was the benchmark set by the Copenhagen Climate Change Summit in 2009, and again in Paris Climate Change Conference on early December 2015, where the participating nations pledged to keep global warming under 2 degree Celsius. However, a report by the World Bank warned that as things stand, if we don’t make any changes in the way the world operates, by the end of this century “we’re on track for a 4 degree Celsius warmer world marked by heat waves, declining global food stocks, loss of ecosystems and biodiversity, and life threatening sea level rise.” The report also cautioned that “there is also no certainty that [our] adaptation to a 4 degree Celsius [warming] world is possible.” As an illustration, while 2 degree Celsius warming could drown Pacific nations and the likes of Maldives, 4 degree Celsius warming would drown big cities like London and Dublin, cities that have huge river in the middle of it.
  67. In her book This Changes Everthing, Naomi Klein pointed out that currently the temperature have specifically increased by 0.8 degree Celsius, but this is already enough to create several alarming impacts, I may add, such as the El Niño and melting ice in West Antarctica, which could raise seas by 3 metres and cause a $43 trillion calamity, as scientists predict most of the ice will be gone in 2050. Meanwhile, even at the current levels climate change can throw 100 million people into poverty, and can wipe out 50 years of global health gains. Moreover, scientists also concluded that currently the earth has already exceeded 4 out of the 9 limits for hospitable life, with many species labelled “the walking dead“, including the world’s oceans that are facing the biggest coral die-off in history, and perhaps most importantly, humans.
  68. Nevertheless, scientists have also found that there’s indeed a direct link between the increase of CO2 level and the increase in thermal radiation heating earth’s surface. Proofing that human activities really caused accelerated global warming, and thus we can also curb it. Hence the 2 degree Celsius pledge in the climate summit is still possible to obtained. Der Spiegel further analyses whether the current capitalism system is destroying our planet, and they conducted an extensive interview with Naomi Klein on her book This changes everything, which discussed exactly this: the role of capitalism in destroying the planet, and what changes that are needed to save the planet, which makes Klein’s book extremely important and extremely urgent.
  69. The only confirmed person in history to have been hit by a meteorite: Ann Hodges. Here’s her amazing story.
  70. The song “Amazing Grace” was written by a former slave ship captain John Newton in 1772. Interestingly, John Newton was the mentor of William Wilberforce in his long fight to outlaw slave trading.
  71. Some people are critical with the fact that Prophet Muhammad (PBUH) married Aisya when she was just nine years old. But one excellent book on Islam If The Oceans Were Ink by Carla Power pointed out that one Jewish tradition holds that Rebecca married Isaac when she was three years old, while scholars estimate that Marry gave birth to Jesus around the age of twelve. Indeed, it’s all about context.
  72. The 1st computer ever built known to man is the Antikythera device, dating back 205 BC in Ancient Greece. While the conceptual father of the modern computer is a 19th century mathematician Charles Babbage.
  73. The price of oil has significantly dropped from $115/barrel on August 2013 to under $60/barrel on mid December 2014 to around $35/barrel levels currently on December 2015, and this has caused a $1.3 trillion wipe out. It’s already caused the lost of the political-left in Venezuela recent election, Russia will run out of cash by end of 2016 if oil price stay this low (and sanction remains imposed) and even Saudi Arabia will running on empty in 5 years. Anyway, this is a reminder of what’s going on with oil price.
  74. Have you ever wondered why humans generally have 2 nostrils? As it turns out, it is because of something called the Nasal Cycle, where we breathe predominantly one nostril at a time, while the other is semi-resting so-to-speak, before it switched predominantly into the other one every 4 to 6 hours. Furthermore, our right nostril usually blows out warm air while our left nostril blows out cool air, and this is where it gets interesting: when we feel tired, try to close our left nostril and breathe only through the right for about 5 minutes, and theoretically you’ll feel more refreshed. And when you’re having a headache, try to close your right nostril and breathe only through the left nostril for 5 minutes, and they say the headache will disappear. Try it out.
  75. Meanwhile in the map department: here’s a map of all the underwater cables that connect the internet. These astonishing maps shows how hard drugs are produced and sold around the world. Still in drugs, here’s 24 maps and charts that explain marijuana.
  76. Argentina has a weird annual tradition: every year the president adopts a Jewish boy as his/her godson to prevent him from turning into a werewolf. The tradition first began in 1907 and it’s practiced until now.
  77. 80% of the world’s rough diamonds eventually pass through the Diamond District in Antwerp. The 3-square-block area is under heavy 24-hour police surveillance and monitored by 63 video cameras. In 2000 the Belgium government even formed a special police taskforce, named the Diamond Squad, to keep a special attention on the district. But yet, in one night, the Diamond Centre (which has more than a 10-layer security system, with thick steel vaults, the most complicated combination locks and the most sensitive alarms) was successfully robbed. This got to be the most gripping robbery story: The untold story of the world’s biggest diamond heist. Personally, the most genius part of the story isn’t the method of the heist (which is mind blowing), but the twist in the story AFTER the heist was successful.
  78. Speaking of heist, according to a report Myanmar’s Jade trade is a “secretive industry driving armed conflicts and rampant drug abuse” and it is worth $31 billion in 2014, or equal to the entire GDP of Myanmar.
  79. Jonas Salk discovered the polio vaccine in 1955, but he chose not to patent his creation for the betterment of humanity. He said “there is no patent”, “could you patent the sun?” As a result he missed out an estimated earnings of $7 billion but millions of people around the world are saved because of his vaccine. What a hero.
  80. Meanwhile earlier this year New Jersey governor Chris Christie re-ignited the idiotic debate over the need of vaccine and whether it cause autism. Well, the scientific evidence could be very shocking for some: no, vaccines don’t cause autism.
  81. Swedish chemist Alfred Nobel patented the invention of dynamite in his country in 1867. Nine years later in 1876 he patented gelignite (aka blasting jelly). And then in 1895 he established the Nobel Peace Prize, a prize award that is championing antiwar, which ironically financed with the fortune he gained from the battlefield devices that he invented.
  82. Have u ever slept a sufficiently enough time but still wake up feeling aching or uneasy? Apparently it is because we sleep and/or wake up in the middle of a sleep cycle. Hence, even if we’re only sleeping for 4 hours-ish as long as we wake up right at the end of a sleep cycle, we’ll feel refreshed. Here’s a good sleep calculator for a guide on sleep cycle.
  83. In the ancient Hindu text Mahabharata, there is an ultimate weapon called Brahmastra that should never to be used, as it will destroy the universe and its contents. As you can guess, “villains all over the world” have been looking for Brahmastra all their lives, in order to control the world!
  84. Speaking of villains, the wanker of the year: got to be Donald Trump. He’s obnoxious, Islamophobic, chauvinistic and downright rude at the point of offending everyone from immigrants to women to handicapped people. And his ideas aren’t even that bright, hypocritical at best and economically catastrophic if he ever got elected. He’s one lab accident away from being a supervillain.
  85. In March Saudi-led coalition began to airstrike Yemen, where by the end of November there were 32,000 casualties, with 5700 people killed including 830 women and children, which means Saudi Arabia has killed more people than ISIS. But what did actually happen in Yemen? Martin Reardon argued in an Al Jazeera opinion post that Yemen is a proxy battle ground for the Great Game between Saudi Arabia and Iran, an argument Dieter Bednarz, Christoph Reuter and Bernhard Zand of Der Spiegel and Catherine Shakdam in her Russia Today op-ed also resonate.
  86. There’s a myth that says we can see both the Pacific and Atlantic ocean from the same spot somewhere in Panama. Although the myth is yet to be proven, there is a mountain in Costa Rica called Volcán Irazu where we can actually do that, see both the Pacific and Atlantic oceans. The 3434 metres high mountain is located near the city of Cartago, and to see both oceans it is best to go in the dry season (December till April) and as early in the morning as we can get before the heath turns the air hazy. Speaking of Costa Rica, in 2015 99% of their energy comes from renewables. Well done!
  87. The Biblical city of Sodom may have been found at present-day Tall el-Hamaam, Jordan. Meanwhile the stone that translated the Book of Mormon have also been found.
  88. There’s an urban legend that says we can go to the underworld by playing The Elevator Game. Mind you though, some conspiracy theories strongly suggest that the mysterious death of Elisa Lam in 2013 was the result of playing the Elevator Game. Here’s a 4 minutes video released by the police that shows her weird behaviour in the elevator, moments before her death.
  89. Person of the year: everyday anonymous heroes. Such as nurse Donnell Tholley who adopts a newborn baby after the little boy’s mom whom he treats dies of Ebola. Gissur Simonarson, an online journalist and web developer in Norway who help fund a poor Syrian refugee father who sold pens in Beirut streets, to become an owner of 3 businesses. The fearless and selfless guys in Clowns Without Borders who travel to the darkest and most dangerous corners of the world to bring back laughter.
  90. Earlier this year The Guardian reveals a research findings that say iPads and smartphones may damage toddlers’ brains: Journal findings warn that using a tablet or smartphone to divert a child’s attention could be detrimental to “their social-emotional development.” And this got me into a research mode, and I found more excellent articles on the subject: Is technology to blame for the rise of behavioural disorders?, Limit children’s screen time, expert urges, Are iPads and tablets bad for young children?, Doctors Raise Red Flag: Young Children Should Avoid Using Tablets and I’m saving the best for last, Steve Jobs didn’t let his kids use iPads.
  91. In Peru, in Chumbivilcas province, there’s a annual festival called Takanakuy where men, women and children fistfight each other on 25 December to settle conflicts that have been building up for the past year, so that they can begin a new year with a clean slate. Takanakuy is a word in local Quechua language, which literally translated to “when the blood is boiling.”
  92. Archaeologists findings suggest that in 1520 Conquistadors who were captured by the Acolhuas (allies of Tetzcoco, a major Aztec City) were sacrificed and eaten by the Aztec-era people. Even in present day, cannibalism still exist, where hotel restaurant in Anambra, Nigeria, was shut down for serving human flesh.
  93. Spectacular news of the year, the contenders: 1. Someone on a British Airways plane took a shit so stink that the plane had to turn around and come back to the airport again 2. There’s a Rabbi who is selling Kosher Vibrators 3. Anti-masturbation mascot arrested for, you guess it, public masturbation while swimming naked with dolphins at Sea World 4. A riot broke out after the winner of a Mr Ugly competition was branded too handsome 5. Morris dancers and blind footballers were involved in a mass brawl against each others, after a spectacular misunderstanding in Suffolk England. And the winner is: Got to be the mass brawl.
  94. Oregon College shooting on 1 October 2015 was the 994th mass gun attack in the US in three years, with death toll of approximately 1236 people. In 2015 alone, there were 204 mass shootings in the first 204 days, where interestingly only 1 was perpetrated by a Muslim. Indeed, since 9/11 twice as many people have died in attacks by right-wing groups in the US than by Muslim extremists. Right-wing groups is perhaps the key here, which not coincidentally are among those who passionately reject gun control. For me, Australian comedian Jim Jeffries can describe this gun culture problem the best way: Part 1 and Part 2. And just FYI, the modern gun-rights have a Slave-State origins.
  95. Remember the mysterious Socotra Island that I learned about in 2014 (no 51)? Well it’s gotten a bit more mysterious: the inhabitants who live in this weird Avatar-like island spoke a language with origins close to oldest written Semitic tongues that died thousands of years ago.
  96. There’s a village in the Netherlands called Hogeweyk, that is specially built just for people with dementia.
  97. Around 2030 there could be a very serious worldwide water crisis and the world will soon be at war over water, including the one is currently brewing (pun not intended) in the Middle East. Okay, you got me, the pun was intended. First sign of trouble: droughts.
  98. High-quality feces is a hot commodity at some weird lab, where human “donors” can actually earn $40 per dump. Holy crap! And by weird lab I meant MIT.
  99. And so, with that “s**t ending”, I hope that 2015 has been one great year for a lot of us and I wish all of you an exciting year ahead full of adventures and blessings!
  100. The word “goodbye” is originated in 1580 and it’s a contraction of “God be with you” (or more precisely, God be with ye). Have a great 2016 guys, God be with ye.

Articles to help us understand what ISIS is all about

The origins of ISIS, explained in a 5 minutes video [Vox / Max Fisher]

Enemy of enemies: a detailed history of ISIS [Al Jazeera English]

The organisational structure of ISIS [International Business Times / Gianluca Mezzofiore]

Who holds the real power in ISIS? [Al-Monitor / Ali Hashem]

Does the US have anything to do with the rise of ISIS? [The Guardian / Seumas Milne]

Secret Pentagon report: Ex-US intelligence official confirms this [ZeroHedge]

How ISIS makes its money to fund itself [VICE / Avi Asher-Schapiro]

How ISIS sold its oil [Counter Punch / Vijay Prashad]

Who else is funding ISIS? [The Independent / Robert Fisk]

You can’t understand ISIS if you don’t know the history of Wahhabism in Saudi Arabia [Huffington Post / Alastair Crooke]

And also the myth (and exploitation) of the Sunni vs Shia war [Al Jazeera English / Murtaza Hussain]

But don’t be fooled, a lot of the ISIS members are not a devout Muslims. They don’t even practice the religion. While some have been caught reading “Islam for Dummies” and “The Koran for Dummies” before launching their attacks [New Statesman / Mehdi Hasan]

How they expands: maps on the terrifying spread of ISIS [The New York Times / Hannah Fairfield, Tim Wallance and Derek Watkins]

Are all of the horrible acts conducted by ISIS justifiable by Islam? [The Independent / Adam Walker]

The most baffling of all: “ISIS has a small fighting force, which the US puts at 20,000 to 25,000 in Iraq and Syria, and another 5,000 or so in Libya. Compared to the number of active military personnel in Syria (125,000), Iraq (271,500), Saudi Arabia (233,500), Turkey (510,600), or Iran (523,000), ISIS is minuscule.” So why does ISIS command such a terror presence in the world? [Project Syndicate / Jeffrey D. Sachs]

Why does France keep getting attacked? [The Guardian / Jason Burke]

Why they keep succeeding in attacking France? Poor intelligence monitoring on this group of people [Bloomberg View / Leonid Bershidsky]

Why did they attack France via these people? An eye for an eye [The Atlantic / David A. Graham]

And I thought I knew my own country Indonesia

“Indonesia, Etc.: Exploring the Improbable Nation” by Elizabeth Pisani

Former Reuters journalist Elizabeth Pisani has been living in Indonesia for the majority of her adult life, stretching back since the 1980s.

She speaks fluent Indonesian, used to drive around Jakarta riding a motorcycle and now in this book she travels around Indonesia – from NTT, to the eastern islands around Maluku, to the big islands of Sulawesi, Sumatra, Kalimantan then the “main island” of Java – visiting the remotest regions, blending-in with the locals, even participating in numerous hard-labour works and various local festivals along the way (I’m still curious on what she did with that “request” in Mount Kemukus).

In every part of the nation that she visits, she describes the local customs, social hierarchy and economy in great detail. She also elaborates on the many problems facing with every single village, island and province – from corruption, exploitation, poverty, inequality, to transportation, infrastructure and even cultural problems.

And between the fascinating local stories she also give various facts, statistics and history of this great country to give us the bigger picture (“The ties that binds” chapter, in particular, is world class), and shows how the Indonesia that we thought we always knew, and the Jakarta-centric (and java-centric) one we see daily in national TV, is perhaps just 1/10th of the actual country.

Unlike any other western books on Indonesia – like special chapters in John Pilger’s New Rulers of the World, Naomi Klein’s Shock Doctrine, John Perkins’ Confessions of an Economic Hit Man, and even Andre Vltcheck’s Indonesia: Archipelago of Fear – who tend to have a brilliant but one-sided view, Elizabeth Pisani can show both the good side and bad side of nearly everything Indonesian and then elaborate in great detail on how it work out in reality.

For example, the many corruptions in the country are rightly seen as a bad epidemic by many, but Pisani also acknowledged it as one of the unlikely ties that weirdly binds the nation together, as a “new normal” way of life, whether we like it or not. Furthermore, like many authors before her Pisani portrays founding father Soekarno as a great charismatic leader, but she also pointed out the messiness of his presidency later on that led to a hyperinflation. She also portrays the “32 years dictator Soeharto” as a great leader that brilliantly tied the diverse nations together for the first 20 years of his presidency, but started to look “dictatorial” (with every stereotypes that come with the label) after his kids grew up.

Indeed, reality is a hard-to-swallow concept for a complex country like Indonesia, where the line between right or wrong, and taboo or normal are often blurry. And in this book Pisani taught us that we need to see the many different issues facing the country from many unfiltered angles to really understand what the country is all about. The underlying truth about Dayak-Madura ethnic conflict in Kalimantan, the “religious” violence in Maluku, and the birth of Police-backed extremist group FPI, for instance, are different compared with the way the mainstream media are describing.

With that in mind, this book is truly an eye opener, a well-balanced Rosetta Stone for my Western-educated train of thoughts and values, which often struggles to understand the complex reality of my own country. Not anymore.

The weakening of rupiah is the Indonesian government’s responsibility

The Indonesian government and some economic observers claim that rupiah’s weakening is largely caused by global events: anticipation of US Fed’s rate hike, el nino, the end of commodities boom, oil glut and China’s devaluation.

But the interesting part is, the most affected countries by these global events are Indonesia, Turkey, Brazil, South Africa, Russia and Malaysia, and they all have one thing in common: weak politics [Project Syndicate / Bill Emmott]

Specifically after China’s devaluation, the currencies of Kazakhstan, Saudi Arabia, Vietnam, Turkmenistan, Tajikistan, Armenia, Kyrgyzstan, Egypt, Turkey, Nigeria, Ghana, Zambia, Turkey and Malaysia all felt the immediate pressure, which, again, mostly caused by the economic mismanagement by their respective governments [Bloomberg / Srinivasan Sivabalan]

And Indonesia is not an exception. Global events may give the pressure to our economy, but the underlying problem is generated not from external factors, but from the distorted policies by former president SBY and president Jokowi [The Jakarta Post / Anwar Nasution]

Just because other countries are suffering too. Just because our current economic problems are nothing compared with the one we had in 1998. It doesn’t mean that the government are doing the right thing. Some urgent reforms are needed, and in the end the faith of our currency is in our government’s own hand.

A beautifully written book on Islam that takes us back to basic: the reading of the Holy Quran

“If the Oceans Were Ink: An Unlikely Friendship and a Journey to the Heart of the Quran” by Carla Power

This book is a perfect book for Ramadan reading, written by Carla Power, a secular Jewish journalist whom has 20 years+ unique friendship with a renowned Muslim scholar in Britain, Sheikh Mohammed Akram Nadwi.

It is an enlightening book, written with the mission to 1. Debunk the [negative] myths and stereotypes surrounding Islam and Muslims 2. To differentiate between local customs (like burqa-wearing Taliban) and the religion 3. And more centrally for the book, to interpret the verses in the Holy Quran and show, for instance, why the so-called “verse of the sword” that Osama Bin Laden used to justify his actions was being misinterpreted.

It is a personal book, built around the personae of the Sheikh, following his amazing journey from a simple madrassa student in his village in India, to researcher in Oxford University, and to world renowned expert on Hadith. It is also a personal book for the author, where she can relate a lot of major historical events with her own story – from her childhood in Tehran, Delhi, Kabul, Cairo, to her work in an Islamic Think Tank and as a journalist covering the Middle East.

It is also a beautifully written book, with the highest respect dedicated to Islam and the Holy Quran. The title of the book itself is a testament to this, which is a poetic reference from a Quran verse:

Say, even if the ocean were ink For (writing) the words of my Lord, The ocean would be exhausted Before the words of my Lord were exhausted, Even if We were to add another ocean to it. (Al Kahf 18:109)

Reza Aslan’s No God But God was enlightening, so did Karen Armstrong’s Islam: a short story. But this book is different, it moved me, humbled me and able to connect me to the solemn and peaceful [real] religion of Islam, one verse of Quran interpretation at a time. The Sheikh’s wisdom and teachings about Islam is very calming and reassuring, while the author’s worldly knowledge gave me a new perspective on how to see the so-called “Islamic World” from a different light.

I will read and re-read the book for sure.

Are all terrorists Muslim?

There seems to be a common catchphrase in the media these days: “Not all Muslims are terrorists, but all terrorists are Muslims.” While this statement is disturbing and even offensive for the majority of Muslims, in a glimpse our deep conscience may not question the validity of it. After all, Al Qaeda, ISIS, Boko Haram, Boston Marathon bomber, Charlie Hebdo attackers, even a lone Muslim gunman in Sydney Siege were all seem to frequently grab the headlines all around the world for their brutal acts.

But how big of a percentage Muslim terror acts actually took place in the West? And is the negative image of Islam portrayed by the mainstream media are thus justifiable? Let’s take a look at the statistics:

According to Europol, there were 152 terrorist attacks in the EU in 2013 but only 2 of them were actually “religiously motivated.” Instead, 84 of them (55%) were more motivated by separatist or ethno-nationalist beliefs.

One of the separatist groups was France’s FLNC that fights for the independence of the island of Corsica, where they launched rocket attacks to police stations in 2 French cities in December 2013. Another ethno-nationalist attacks occurred in Italy where anarchist group FAI conducted numerous terror attacks, while in late 2013 in Greece the left-wing Militant Popular Revolutionary Forces shot and killed 2 members of Neo-Nazi political party Golden Dawn.

Furthermore, in 2012 out of 219 terrorist attacks in the EU only 6 of them were religiously motivated, with 76% of the majority of events were again caused by ethno-nationalist separatist beliefs. 2011 was even more drastic, where out of the 174 terrorist attacks occurred that year not a single one of those were “affiliated or inspired” by terrorist organisations. Meanwhile in 2010 from 249 terrorist attacks only 3 of them were religiously motivated, and only 1 out of 294 terrorist attacks in 2009 were considered as “Islamist.”

This low rate of Muslim terrorist acts also occurred in the US, where according to FBI data compiled by the Princeton University’s Loon Watch, Between 1980 and 2005 Muslim extremists were responsible for only 6% of terrorist attacks. In fact, 24% of terror attacks were carried out by extreme left-wing groups and a whooping 42% of them were conducted by Latino-related groups.

When looking at this data, Jewish extremists (such as the Jewish Defense League) even committed more act of terrorism (7%) in the US than Islamic extremists, with terror act conducted based on their religious passions just like Al Qaeda and ISIS have done so wrongly in the name of Islam.

Moreover, in his report that tracks Islamist militancy in the US, Charles Kurzman, a sociology professor at the University of North Carolina, concluded that since the 9/11 attack until 2013 the US has suffered approximately 190,000 murders, but only 37 of which conducted by Muslim-American terrorism. In fact a different research concluded that Americans are more likely to get killed by a toddler than by a terrorist attack, where in 2013 five Americans were killed by toddler accidentally shooting a gun, compared with three that killed by a terrorist attack (in a much-hyped Boston Marathon bombing).

Hence, with all the big negative attentions, and attacks, towards Islam one couldn’t help but wondering, why would the mainstream media portray Islam in such a negative way, while in reality Islamic terrorists only conduct a tiny fracture of the overall terrorist activities?

A case in point, the media coverage for other religious terrorism acts. The killings of Muslim in Myanmar and Sri Lanka by Buddhist extremists have been under-reported at best.

When Anders Breivik slaughtered 77 people in Norway in 2011 – on the basis of his anti-immigrant, anti-Muslim and pro-“Christian Europe” stance – he was portrayed in the media as a “mad man” or “lone gunman.” Even the mention of a “Christian terrorist” outraged many right wing commentators, including Bill O’Reilly at Fox News.

When Craig Hicks murdered 3 of his Muslim neighbours it took the mainstream US media 15 hours to finally cover the news, and that’s only after a huge pressure from social media, which initially included an interview with the murderer’s wife but not the victim’s family. Even then the media quickly portray the case as an isolated neighbourly disputes provoked by a parking incident, and under-reporting his “extreme atheism” stance (that is, so anti-religion that he became hostile towards religious people), where he constantly shared anti-Muslim and anti-Christian links on social media and said “I have every right to insult a religion that goes out of its way to insult, to judge, and to condemn me as an inadequate human being — which your religion does with self-righteous gusto…”

Conversely, can you imagine how the world would react if every single one of these murders were conducted by a Muslim? A brilliant article in the Independent recently pointed out that “a Muslim shooter would mean a demand for condemnation, a demand for discussions on Islam, a demand for Muslims to reform, to assimilate, to take collective responsibility. We may even be graced with a little gathering of politicians. We would see, as we did following the attacks on Charlie Hebdo, a spike in attacks on mosques and Muslims. Polls would show a higher percentage of the population suspicious, distrusting and with more negative views towards Muslims.”

Let’s not forget that out of approximately 7.2 billion people in the world right now, 1.6 billion are Muslims. And out of those 1.5 billion people Al Qaeda only consist of around 10,000 members, ISIS (or what Arab nations refer as Daesh) consist of approximately 80,000-100,000 people, and Taliban consist of 36,000 people.

That makes it 0.00009% out of the total Muslim population are Al Qaeda, ISIS and Taliban affiliated terrorists. Even if the world suddenly have the total of 1 million Islamist extremists – from Boko Haram to Moro Islamic Liberal Front – that would still only make 0.06% out of the total Muslim population.

Therefore, even at its worst projection the number of Muslim terrorists in the world today, in relative with the total Muslim population in the world, do not even reach 1%. In addition, as mentioned above the number of crimes conducted by those 0.004% Muslim terrorists are actually only a tiny fraction of the overall terrorism acts in the world, and we haven’t even talked about terrorism act conducted by a state, like Israel bombings in Gaza and Russian aggressions in Ukraine’s border. And for those terrorists now in power in places such as Afghanistan, Iraq, Syria and most recently Libya, need I remind you which country’s military aggressions initially destroyed these countries, and created a breeding ground for extremists?

However, with the likes of Al Qaeda, ISIS and even Boko Haram seem to be spreading everywhere rapidly, and with them inspiring quite a lot of radicalised individuals, surely the scare in the mainstream media are relatively justifiable, aren’t they? In a sense, of course. But the problem is, oftentimes the media forgot (or deliberately fail) to educate its viewers or readers the very basic perception that have since stirred the Islamophobia problem we now have in the world: that 99.996% of Muslims are not extremists.

So, are all terrorists Muslim? As we all now know, not even the slightest.

Further readings:

PBS documentary Islam: Empire of Faith

Al Jazeera English documentary The Caliph

Book: “If the Oceans were Ink” by Carla Power

Book: “Fields of Blood” by Karen Armstrong

Also read: Articles to help us understand what ISIS is all about

Greece’s wind of change

In an interview with Der Spiegel, economic historian Albrecht Ritschl argues that Germany has been the worst debtor nation in the past century. The complete interview is worth reading at its entirely, but here’s the gist of it:

During the past century alone, [Germany has become insolvent] at least three times. After the first default during the 1930s, the US gave Germany a “haircut” in 1953, reducing its debt problem to practically nothing. Germany has been in a very good position ever since, even as other Europeans were forced to endure the burdens of World War II and the consequences of the German occupation. Germany even had a period of non-payment in 1990.

[In the default in 1990] then-Chancellor Helmut Kohl refused at the time to implement changes to the London Agreement on German External Debts of 1953. Under the terms of the agreement, in the event of a reunification, the issue of German reparations payments from World War II would be newly regulated. The only demand made was that a small remaining sum be paid, but we’re talking about minimal sums here. With the exception of compensation paid out to forced laborers, Germany did not pay any reparations after 1990 — and neither did it pay off the loans and occupation costs it pressed out of the countries it had occupied during World War II. Not to the Greeks, either.

Nick Dearden, the director of Global Justice Now, pointed out that even during the period when they were obliged to pay their debts the Germans still had it easy:

[Under the London Agreement on German External Debts of 1953], West Germany should only pay for debts out of its trade surplus, and any repayments were limited to 3% of exports earnings every year. This meant those countries that were owed debt had to buy West German exports in order to be paid. It meant West Germany would only pay from genuine earnings, without recourse to new loans. And it meant Germany’s creditors had an interest in the country growing and its economy thriving.

As a result, Germany experienced an “economic miracle” with years of strong economic growth, with their debt problem miraculously resolved.

By contrast, after Reagan’s Great Deregulation in the 1980s the way the world treats indebted countries could not be more different. In the Chicago-school era since early 1980s reckless debtors who got themselves into trouble will almost exclusively bailed out with new loans, with the argument of preventing “systemic failure”, while at the same time forcing the governments to implement the neoliberal holy trinity of austerity, liberalisation and privatisation to “ease the debt.”

In other words, they bailout the perpetrator of the crisis, but then shift the burden of the responsibility to the ordinary citizens that have nothing to do with the crisis in the first place. In Greece’s case, the Greek citizens are forced to pay for the bailout made to safeguards European banks who have huge inter-bank interests with the Greek economy (€94 billion exposure, with French banks alone exposed up to €40 billion and German banks up to €24 billion).

Moreover, while Germany can get out from their mess with the help of its creditors buying German exports, Greece’s creditors like Germany have no obligation nor interest to buy more of their exports, hence bringing pain without end into the Greek economy.

Some might think that it is therefore hypocritical for German Counsellor Angela Merkel to remain adamant that Greece should pay its debt, especially after looking at Germany’s past debt problems where, ironically, included non-payment to creditor Greece. Indeed, Greece was one of the signatories of the London agreement in 1953, where they agreed to postpone Germany’s “settlement of war reparations and debts incurred after 1933” until a conference to be held after Germany’s reunification, an event that never took place till this day.

Moreover, Albrecht Ritschl also estimated that “the total debt forgiveness West Germany received from 1947 to 1953 was more than 280 percent of the country’s 1950 gross domestic product, compared with the roughly 200 percent of GDP that Greece has been pledged in aid since 2010.” In other words, West Germany received much larger debt forgiveness than Greece ever needed today.

Hence, with the knowledge of positive lessons from the way the world dealt with Germany’s debt 60 years ago, and devastating lessons from the way the world wrongly dealt with Latin American debt crisis 30 years ago, Nick Dearden concluded that the well-informed actions of Europe’s leaders today in dealing with Greece are nothing short of criminal.

Because first and foremost, austerity fails. David Stuckler and Sanjay Basu in their book The Body Economic, explains the reason why Greece’s austerity failed in terms of the well being of the citizens by commenting that:

When the government cuts its spending during a recession, it drastically reduces demand at a time when demand is already low. People spend less; businesses suffer, ultimately leading to more job losses and creating a vicious spiral of less and less demand and more and more unemployment. Ironically, austerity has the opposite of its intended effect. Far from decreasing debt, austerity increases it as the economy slows. And so debt gets worse in the long run when we don’t stimulate economic growth.

Bizarrely, the IMF themselves even admitted that austerity has disastrous consequences, while recently Bank of England governor Mark Carney attacks eurozone austerity.

But of course, as Naomi Klein argues in her book The Shock Doctrine, austerity is not designed for recovery. Just like the plunder occurring in previous victim countries, not long after their banks were bailed out and draconian cuts on its welfare system kicked-in, Greece then forced to embark on a firesale – despite the fact that the Greek government is scrambling to pay off the debts they were forced to take – in a similar fashion like Ecuador was forced to give up their rain forest, while the local Greek oligarchs that control large parts of Greek businesses, financial sector, the media and politicians have also participated in the looting.

With the country’s assets being stripped apart, the effects of the draconian cuts were even more dreadful for the Greek citizens, as critical government programs such as health programs were cut HIV case rise by 200% and malaria returns to the country. The spread of HIV in particular was mainly caused by the largest cuts to housing safety nets in all Europe, where homelessness in Greece then rose by a quarter, and created a conditions of crowding and drug abuse in downtown Athens, thus raising the spread of HIV.

Moreover, due to economic problems homicides rates rise and in 2012 alone 600 Greek citizens committed suicide, an alarming number considering prior to the recession Greece had the lowest suicide rate in Europe. As at October 2014 around 60% of Greeks (that’s approximately 6.3 million people) now live at or below poverty level.

So is it any wonder that in their election Greece finally picked a left wing government, – an anti-thesis of “free-market” ideology – while most of Europe look to the right? As Matt O’Brien of Wonkblog put it “it turns out that forcing a country into a 1930s-style depression creates 1930s-style politics.”

To be fair, despite all the media frenzy, Syriza is not really a radical left wing party. But nevertheless their anti-austerity attitude is clear enough to send a wind of change from across Greece all the way to Spain, and prompt former German Vice-Chancellor Joschka Fisher, among others, to declare a Greek burial for German austerity.

This is going to be fun to watch.

Note: a big chunk of my arguments here are excerpts from my bigger-picture argument piece on the current state of world economy.

Financial Weapons of Mass Destruction: plutocrats’s paradise (Part 3)

Never forget that everything Hitler did in Germany was legal – Martin Luther King Jr.

Every era has its economic zeitgeist, its ‘spirit.’ From 1500 to 1800 in Europe mercantilism was the dominant economic rationale, which served as the theoretical basis for colonialism. After Adam Smith wrote the Wealth of Nations in 1776 a new wave of classical economic theories were in the ascendancy, which was followed by neoclassical economics since around 1870 with the likes of David Ricardo and James Mill. In the 1920s, supply-side economics dominated the administrations of 3 consecutive Republican presidents and subsequently created the Roaring Twenties, which eventually developed into a massive bubble that ended in the Crash of 1929. Then came the Great Depression, with Keynesian-style government planning and control became the most influential economic ideology of the era.

In the post-war period between 1949 and 1973 the implementation of social-liberalism’s development economics under the banner of Keynesianism, topped with the adoption of the Bretton Woods system and the implementation of Glass-Steagal Act, produced what often referred as the Golden Age of Capitalism. This period marked low income inequality, the longest stretch without banking crises, a steady economic growth with annual growth rates averaged 4% in the US and 4.6% in Europe, and impressive income growth rates per capita. In Europe, the income growth rate per capita rose from 1.3% in the ‘first globalisation era’ (1870-1913) to 4.1% during the Golden Age of Capitalism, with the US rose from 1.8% to 2.5%, while Japan skyrocketed from 1.5% to 8.1%. Indeed, it was a prosperous time, which prompted British Prime Minister Harold MacMilan to summed up the mood of the era by saying in 1957 that “most of our people have never had it so good.”

One significant factor of the success of the Golden Age of Capitalism, argues heterodox economist Erik Reinert, was the Marshall Plan conducted by the US at the start of the Cold War. Launched by US Secretary of Treasury George Marshall in June 1947, the Marshall Plan was created with the urgency to build a defence line to protect Europe and Asia from the spread of communism, in the same manner like the Truman Doctrine that was set forth on 12 March 1947 to protect Greece and Turkey from falling into the Soviet sphere.

At the time, the US just came out as the winner of World War II, and subsequently took the mantle of ruler of the world from the British Empire (which got damaged by the war even though the British were on the winning side) with the US left with the possession of nearly two-thirds of the globe’s gold reserves and more than half of its industry. The US mark their dominance in the post-war world through the creation of international organisations such as the Bretton Woods system (IMF and World Bank), the United Nations, and North Atlantic Treaty Organisation (NATO), all of which are controlled by the US through their funding and ultimately through their veto power. And so with both Marshall Plan and Truman Doctrine they began their domination in the world, starting by rebuilding Europe.

The US understood that the best way to create the defence line against communism was to create wealth in the nations bordering communism, and the way to create wealth was to industrialise them and support the project wholeheartedly by sending billions in economic and military assistance, and implement the same protectionist strategies that they conducted themselves successfully in the 19th century. The US’ agenda was clear, as described by Stephen E. Ambrose and Douglas G. Brinkley in their book Rise to Globalism, where in presenting the plan to the congress “[the administration] pointed out that a rejuvenated Europe could produce strategic goods that the United States could buy and stockpile, preserve Western control over Middle Eastern oil supplies and free Europeans from economic problems so they could help the United States militarily.”

As a result, with US assistance, the Italian Christian Democrats defeated the Communist-Socialist alliance in the 1948 election, the Greek government army won their civil war against the military branch of the Greek Communist Party in 1949, and by the 1950s and 1960s Western Europe, Greece and Turkey were all successfully industrialised. Friedrich List’s theory that free trade had to wait until all countries were industrialised was quickly adopted, with the US once again test-proof the formula that can make countries become rich.

Furthermore, according to Cambridge economist Ha-Joon Chang, another big part of the success of the era was the General Agreement on Tariffs and Trade (GATT) – which was also launched in 1947 – where the US and other rich countries allowed developing countries to protect and subsidised their local industries more actively than the rich countries, a big contrast to the era of colonialism and unequal treaties. As a ripple effect, between 1960s and 1970s developing countries also did very well, with their income growth per capita reached 3% per year, way above what they had during 1870-1913 and twice the rate since the 1980s under neoliberal policies. In Latin America, the economies were growing faster than those in the industrialised West, with domestic industry supplied 95% of consumer goods in Mexico and even up to 98% in Brazil.

Indeed, under the banners of FDR’s New Deal, the Bretton Woods system, the GATT, Truman Doctrine and Marshall Plan; Keynesian-style economics successfully dominated the Golden Age of Capitalism 1949-1973, with the latter two were created to fight off another dominating ideology of the era: Marxism. But there was another ideology being built in the background, one that started as a small movement among the business elites.

The rise of neoliberalism

According to historian Kim Phillips-Fein in her book Invisible Hands: The Businessmen’s Crusade Against the New Deal besides the size of the federal government control and the tamed financial sector, the power of the labour union was also influential in creating equality in the US during the Golden Age of Capitalism, at the expense of vast corporate profits. This situation concerns the business elites and the corporations, in which Lemuel Boulware – who was in charge of labour relations and community affairs for GE – believed that GE and all American capitalism was in grave danger.

From their positions, people like Boulware tried to work towards something impossible at the time: to end the reigning rule of the New Deal (there was even an attempt to assassinate FDR) and revive an age of laissez-faire where corporations thrived; with Boulware credited with architecting GE’s effective and widely influential strategy of union busting. Furthermore, through fund raising, institution building and fervent activism, men such as Jasper Crane, William C. Mullendore and Leonard Read joint forces with the titans of the National Association of Manufacturers and the Chemical giant DuPont to conduct a crusade to educate and organise their peers as a political conservative force to preserve the “American way” of doing business and thus preserve their higher chunks of profits.

These men subscribed to the economic theories of Ludwig von Mises, Friedrich von Hayek and ultimately Milton Friedman – with his Chicago School ideology – which have a strong socio-political identity focusing on the free-market and less intervention from the ‘nanny state’ of the government. This is somewhat ironic, since the emergence of the business elites – the industrialist – in America was a result of protectionist high tariffs that nurtured the infant industries into global powerhouses.

However, Joseph Stiglitz explains the intentions behind the choice of free-market economics ideology by commenting that “Every economy needs lots of public investments – roads, technology, education. In a democracy you’re going to get more of those investments if you have more equity. Because as societies get divided, the rich worry that you will use the power of the state to redistribute. They therefore want to restrict the power of the state so you wind up with weaker states, weaker public investments and weaker growth.” In other words, their choice of free-market economics was not because they believe in the theory for the good of the economy, but because it gives them the tools to exploit the economy for their own benefit. This echoes the tricks used by the British in 19th century when they used protectionism but then preach free-trade to the world for their unfair advantage.

Furthermore, the business elite movement use the Republican party as their political platform, and it sparked a some kind of civil war between the governing wing and this new ideological wing of the Republican Party, with the divide still persist till this day. Political realignment was ultimately achieved by gaining the support of religious organisations like the Moral Majority, who exploit white working-class contempt with public integration with other races in school, transportation and other cultural issues and turned it into a more generalised hostility against the “big government.” And in the 1950s they found the perfect spokesman for their movement, Lemuel Boulware’s work colleague, former actor turned GE’s spokesman, Ronald Reagan.

The business elites’ movement gained a big boost in the domestic politics when in the 1970s the collapse of the Bretton Woods system, the oil crisis caused by the Yom Kippur war, and Petrodollar Recycling created a stagflation in the Keynesian model. This perceived failure eventually led to their political momentum, with the crown achievement occurred in 1980 when Ronald Reagan was finally elected as US president under the reformed Republican Party. And thus the economic zeitgeist swung back to supply-side economics, in the name of neoliberalism.

At the core of neoliberalism lies the theory that argues that free-market and its drive for commercial-oriented competitions are the fuel that would really move an economic growth, hence justifying their push to the world for austerity, liberalisation and privatisation. In practice, however, this same push for free-market means that the powerful American corporations can now compete with weaker and smaller local competitions worldwide without these companies protected by their respective governments, and thus establishing the corporations’ supremacy and profitability in the free-market world.

These same powerful corporations, as mentioned earlier, were of course built with the help of protective tariffs and subsidies by the US government. In fact, as mentioned in part 1 and 2, the golden age of innovation in the US was made possible by substantially high tariff barriers and subsidies, which created unprecedented period of prosperity, strong economic growth and innovations that nurtured the likes of Thomas Alva Edison, Alexander Graham Bell, the Wright Brothers and Henry Ford, and produced industries like railroads, automobile, steam powers, telecommunications and other technology-intensive industries.

Moreover, commercial-oriented competitions in reality are not necessarily a key driver for innovation. Take Chinese inventions, for instance. The majority of Chinese inventions (such as clocks, paper and money, gunpowder, the compass, porcelain, waterpower and spinning wheels) were made between 960 and 1279 during the reign of the Song Dynasty, which ruled China with absolute power and oversaw growth under extractive institutions (institutions designed by the politically powerful elites to extract resources from the rest of society). Under the ruling of the Song Dynasty nothing resembles a parliament, the only political representation for groups in society was the monarchy, and the great inventions were brought into existence under the auspices and the orders of the government, not spurred by market incentives, as almost none of this was commercialised.

Therefore, if compared with the golden age of inventions in China and in the US, the aim of neoliberalism became clear right from the beginning: it is not about championing a fair competition in a free market, but instead it is simply a new tool to penetrate each one of the world’s “markets” for exploitation, and to gain superiority.

The neoliberal revolution reached new heights in 1991 when the Berlin Wall fell, an event that Francis Fukuyama inaccurately called “the end of history”, where the centrally planned communist system had failed and thus made neoliberalism with its free trade and free-market economy (aka the winner in the ideological battle for capitalism) perceived as the undisputed champion of economic theory. Most Western intellectuals then saw liberal capitalist democracy as humanity’s ultimate form of government, a some kind of perfected end product of a long process of evolution.

Previously during the Cold War, as the economic arguments between capitalism and communism developed and became fierce, the key issues to understanding uneven development slowly began to vanish without leaving traces in our contemporary discourse, making the Cold War view became too over-simplistic into the good capitalism versus the evil communism. On the process – on top of the US-backed brutal killings of people associated themselves with communism, in the likes of Indonesia, Vietnam and most of Latin America – for the sole purpose of eliminating their competition altogether, the neoliberals had not only destroyed important theoretical issues of the opposition ideologies, but also destroyed past axes and dividing lines of agreements and disagreements which have shaped the world we live in today.

For example, as described by Erik Reinert, in an edited Cold War world view Karl Marx and Abraham Lincoln represent an extreme opposite of the political axis with Marx represents the left with big government and planned economy, while Lincoln represents the right with freedom and markets. However, in reality they both often found themselves on the same side of the economic spectrum, where both disliked English economic theory that ignore the role of production, use slavery and impose free trade prematurely on a nation. Although of course they did not agree on everything, they found mutual agreement that what creates wealthy nations are industrialisation and technological change. There were even polite exchange of letters between these two historical figures, where from 1851 to 1862 Karl Marx contributed a weekly column to the New York Daily Tribune, the organ of Lincoln’s Republican Party.

Moreover, Ha-Joon Chang remarked that one of Lincoln’s top economic advisors was Henry Carey, a well-known protectionist economist at his time, whom Karl Marx and his colleague Friedrich Engels in 1850s described as “the only American economist of importance.” But yet, somehow he has now been almost completely erased from the history of American economic thought due to his protectionist nature. Seems that the old adage rings true, just like the “History of the Civil War in the U.S.S.R” – a historical account that celebrates the Soviet revolution – that was revised in 1938 to erase Stalin’s political rivals and to exaggerate Stalin’s cult hero image, history was indeed being (re)written by the victors.

This is evident in today’s mainstream economic textbooks, where we would often learn that the founding fathers of the first well-developed theory of economics, the predecessor of the first modern school by Adam Smith, were the French Physiocrats in the 18th century. However, in reality the French physiocrats’ laissez-faire ideas never actually reached Smith’s England, they were short-lived even in France where the implementation of their theories caused food scarcities and famines, and was quickly replaced by the competing ideas of the anti-Physiocrats – whom have existed long before the physiocrats themselves. In fact, the spark that triggered the storm of the Bastille in 14 July 1789 was when news reached Paris that the anti-Physiocrat Jacques Necker had been sacked as Minister of Finance. But yet, today the ideas of anti-Physiocrat economists such as Jacques Necker are almost completely air brushed from history.

Another case in point was found by a Harvard professor who was doing a comparative work on Adam Smith and Friedrich List, in which he complained about the lack of material on Friedrich List in the Baker Library. As it turns out, many of the title pages of the books that the professor needed had a ‘discarded’ stamp covering the bookplate and nowhere near to be found. It was then further discovered that despite the big American university libraries’ policy requires at least one of them must retain a copy of every book, it is not a coincidence that they sometimes ‘lose’ their copy. And among the lost collection of books from libraries not just in the US but from around the world, a lot of them were the type for understanding the successful economic policies implemented by the present wealthy countries during their transition from poor to rich.

For example, one of Germany’s most important 18th century economist was Johann Friedrich von Pfeiffer (1718-87), where during the World War II the only known copy of his book was mysteriously disappear from the University of Heideelberg library and has since assumed that no copies were to be found in Germany. As Erik Reinert put it “It was as if the genetic material of past wisdom was slowly being destroyed.” This should come to no surprise, however, as history shows that beside dismantling the defence, the head of state and the media, any invading nation would also destroy the native’s intellectual sources, just like on 47 BC when the Roman Empire invaded Egypt and burnt down thousands upon thousands of papyrus scrolls in the Library of Alexandria, in the same manner as George W. Bush’s invasion on Iraq 2003 in which thousands upon thousands of books in the Library of Baghdad were reduced to ashes.

Thus, with the opposition ideologies either beaten, discredited through smear campaigns, or simply erased from history, under the reigning neoliberalism the world have effectively been asked to accept the ideology that thinks “the market” is a self-regulating system, with the rise and fall of prices seen as a some kind of force of nature, and thus there is no need for regulations. And although the US have been forcing the world to implement free-trade (for US’ benefit) long before this, it was only through neoliberalism and its Chicago School formula of austerity, liberalisation and privatisation that the US have finally fully-succeeded to create the self-regulating environments in the world that hugely benefit the likes of modern robber barons, corporations and Wall Street.

The reigning Plutocracy

In 1981, with the support of Chicago School economists and lobbyists from various industries, the newly-elected Ronald Reagan began his term with a bang, by implementing the Great Deregulations with 4 pillars of controlling the money supply to reduce inflation, reducing government spending (aka austerity), reducing government regulations (aka liberalisation) and cutting capital gain tax as well as federal income tax. Reagan’s tax cuts, in particular, were aimed for corporations and for the wealthy, in which he cut top income tax from 70% to 28%, with the argument that its trickle down effects will somehow boost up the economy. Some pointed out that the tax cuts was indeed the driving force behind the solid growth in the 1980s, where they were able to cut loopholes for old-line industries such as real estate, railroads and utilities, thus freeing capital for restructuring corporate America.

However, in reality the tax cuts nearly doubled the public debt from 26% to GDP in 1980 to 41% GDP by the end of Reagan’s 2nd term in 1988, which in dollar term the public debt rose from $712 billion in 1980 to $2.052 trillion in 1988, a three-fold increase. Perhaps even worse, by cutting income taxes for the wealthy while at the same time increasing payroll taxes (which are paid by the working poor and middle class) Reagan actually shifted the tax burden down the income class. This can be seen throughout the 1980s where the total effective federal taxation rate for the poorest one-fifth of American families was increased by more than 16%, while federal taxation rate for the wealthiest one-fifth of families fell by 5.5%, with the richest 1% saved even more with their tax rate fell by 14.4%.

Meanwhile, the solid growth during Reagan’s two terms, rather than an effect of the tax cuts, was actually generated by a new trend created by Reagan’s Great Deregulation, particularly in the heartbeat of the economy: the financial sector. Before the 1980s, in response to the Great Depression the financial industry in the US was tightly regulated, with most banks were local businesses and were prohibited from speculating with depositors’ savings. Meanwhile, investment banks were then small and private partnerships, with the partners put their own money and invested that money very carefully in the market. A prime example of this was Morgan Stanley, while today they have 50,000 employees spread in offices all around the world, with capital of several billion dollars, in 1972 they had only 1 office, 110 personnel and capital of just $12 million.

But all of this changed when Reagan took power, where the Great Deregulation practically created the environment for high numbers of mergers and acquisitions (M&A) and leveraged buyout (LBO) that created the boom of the 1980s. The M&A and LBO boom were mostly financed using junk bonds, a high-risk-high-return security that was hugely developed by Drexel Burnham’s Michael Milken, nicknamed as the Junk Bond King. With the creation of the junk bond market, many corporations that were considered unworthy of investment or any deals that have high risk of defaults (such as these highly leveraged M&A and LBO deals) became a new form of investment because they gave high returns to its junk bond purchasers to compensate the risk.

During the same period, the deregulated financial sector also eased the restrictions for corporations to conduct an Initial public Offering (IPO), thus sparked an IPO boom (with the new trend of microcomputers as the top growing industry) and created a trading euphoria and bubble arguably not seen since the radio and automotive boom in the 1920s. Just as The Great Gatsby was inspired by the Roaring Twenties, the decade of greed was immortalised in several true-story tales such as the Barbarians at the Gate, Liar’s Poker and The Wolf of Wall Street, and the era was arguably epitomised in the fictitious movie Wall Street where Gordon Gekko presented his “greed is good” speech. In this environment, investment banks thrive to be the engine that listed the companies and the middlemen that made the M&A and LBO deal happened. And on top of this, they themselves also went public, and thus gave the partners huge amount of shareholder money in this bull market euphoria. And so, alongside the many booming corporations, Wall Street was also starting to get rich.

In the 3 decades after Reagan elected President, Wall Street and corporations have slowly developed into the reigning plutocracy, where step by step their excessive profits and bonuses were transmitted into political power through the likes of campaign contributions, and also paved the road for them to occupy positions that allow them to directly write rules and regulations. To get an idea of how big the flow of money is, according to OpenSecrets.org in 2011 US corporations spent around $3.32 billion to lobby lawmakers in Washington and billions more in campaign contributions and other practices that many describe as “legalised bribery”, legal simply because lobbying is protected by the First Amendment. This not including those “rent-seeking” stereotypical individuals such as the Koch Brothers who roughly speaking buy out fellow politicians to write rules and regulations that benefit them and their business empire.

Furthermore, a so-called revolving door culture between government and the business world – where people from corporations / Wall Street get a position in strategic government posts, and go back to business world after serving their term, thus blurring the line of conflict of interests between government and business – became a more common practice, especially by Wall Street executives. This made government power increasingly fall into to the hands of the few that Tom Wolfe in his novel The Bonfire of the Vanities referred as the masters of the universe, which complements their power grab on US central banking system in 1910.

For instance, William E. Simon, the Secretary of Treasury under the Nixon and Ford administration, was previously a partner at Salomon Brothers. After Washington he then became US governor of the IMF, the World Bank, the Inter-American Development Bank and the Asian Development Bank. Reagan’s first Secretary of Treasury was Donald Reagan, the CEO of Merrill Lynch. James Baker, Reagan’s Secretary of Treasury in 1985-88 was previously in a Houston law firm Andrews and Kurth, and after public service he became a senior counselor for the private equity firm Carlyle Group. His deputy Secretary of Treasury 1985-87 Richard Darman was a partner and managing director of Carlyle Group and managing director of Shearson Lehman Brothers before he became a government official.

Moreover, Nicholas F. Brady, who was appointed Secretary of Treasury by Reagan in 1988 and remained in office throughout the Bush administration, was the former chairman of Dillon, Read and Co., a New York investment banking firm. David Mulford, senior international economic policy official at the US Treasury under Reagan, Baker and Brady – the lead thinker in Republican administration’s international debt strategy and key figure in the development and implementation of the Baker and Brady plans – was the managing director and head of international finance at investment banking firm White, Weld & Co. before he went to office, and after Washington he became vice-chairman and member of the executive board of Credit Suisse First Boston.

This pattern continued in Clinton’s Democrat administration, when Clinton appointed the CEO of Goldman Sachs Robert Rubin as Treasury Secretary and Harvard economic professor Larry Summers as Deputy Treasury Secretary; where both men acted, and produced rules and regulations for the benefit of the financial sectors. The Mexican bailout in 1994, for example, attracted criticism in the US congress and the press for the central role of Robert Rubin, who used a Treasury department account under his personal control during the Tequila Effect 1994 to distribute $20 billion to bail out Mexican bonds, which Goldman Sachs was a key distributor.

Moreover, in 1998 Citicorp (a commercial bank holding company) merged with Travelers Group (an insurance company) and formed Citigroup, a conglomerate consist of commercial banking, insurance and securities services – which violated the Glass-Steagal Act 1933 and the Bank Holding Company Act 1956. The Clinton administration, however, did not sanction Citigroup for breaking the law and Fed Chairman Alan Greenspan also did not punish them, instead on September 1998 they gave Citigroup a temporary waiver.

A year later on 12 November 1999 the Gramm-Leach-Bliley Act (also known as the Financial Services Modernization Act 1999) was introduced, which effectively repealed the Glass-Steagal Act 1933 and removed barrier for commercial banks, investment banks and insurance companies to merge into one institution. The legislation was signed into law by President Clinton, and thus making the Citigroup merger legal. Robert Rubin would later join Citigroup as a board member – and for a brief period, the Chairman – after he left the government, making $126 million.

This revolving door between Wall Street and Washington also stretched to the IMF and World Bank. Larry Summers, for instance, was the chief economist of World Bank before taking the job as deputy Secretary of Treasury under Robert Rubin and then succeeded Rubin as the Secretary of Treasury in 1999, before making millions as the managing partner at the hedge fund D.E. Shaw & Co when his term finished. Stan Fisher, the number 2 person at IMF during the Asian crisis, went straight from IMF to become the Vice Chairman of Citigroup, before taking the top position at the central bank of Israel and proceeded to become the 2nd in command in the US Fed as Janet Yellen’s vice chairman.

Hence, with both institutions headquartered in Washington DC, with the US government as the only country that have an effective veto power, and where under Reagan the IMF and World Bank were transformed into the Washington Consensus under the command of the Secretary of Treasury; the revolving door between Wall Street and Washington also means that the Washington Consensus, in the words of Financial Times journalist Nicholas Shaxson, became the instrument of Wall Street, the handmaidens of globalisation, unfettered trade and capital flows.

Zero-sum world

The Asian Crisis 1997 was the result of a butterfly effect caused by the reforms and developments that took place since Ronald Reagan was elected as US president. The re-birth of Wall Street to power in the 1980s due to Reagan’s Great Deregulation, the widespread of global deregulation amid the newly-reformed Washington Consensus, financial liberalisation conducted by the Asian Tigers (due to the pressure to create a “level playing field” from the West) and the currency pegs to the dollar as the engine of American global dominance, were all instrumental in creating the US-interest-rate-sensitive environment for the Asian Tigers.

At first, the economies of the Asian Tigers flourish under a low US interest rates environment. However, the currency peg to US dollar and the newly-liberalised financial sector that sparked a heavy cross-border borrowings also meant when US interest rates unexpectedly jump, it can suddenly make a lot of these dollar-denominated debts become multiple-times more expensive. And this was exactly what happen. Similar like the effect of the murderous interest rates hike imposed by Paul Volcker in 1981, which created the Third World Debt Crisis, Alan Greenspan’s rate hike in 1994 – regardless whether it was deliberate or redundant – not only created global bond market massacre, instantly crashed the Mexican Peso and caused the subsequent Tequila Effect panic, but also triggered foreign-debt crisis in South East Asia that gave huge pressure to their respective economies.

Moreover, Alan Greenspan’s rate hike by 83% within 10 month in 1994 also rapidly strengthening the US dollar, and this made local central banks bleed in their attempts to maintain their dollar peg, leaving their forex reserve alarmingly low. And then during the height of the pressure, when they eventually decided to un-peg their currency and let it float, they no longer have sufficient fire power in their forex reserve to defend the currency. This is the fundamental gap that the likes of George Soros and Julian Robertson spotted, and this is why their short selling strategy on the Tigers’ currencies were damagingly successful.

However, while speculators like Soros and Robertson contributed to the crash they would not be able to crash the Asian market single-handedly if there were no fundamental gap to begin with. While local rulers also shared the blame – where if it isn’t for their brand of crony capitalism their respective countries would have stronger economic fundamentals that can withstand these kind of crises – one of the main causes of the Asian crash 1997 was not necessarily the rulers’ mismanagement of these countries’ economy, but instead it was triggered by the sudden liquidity dry-up from Japanese banks (whom the locals were heavily borrowed from), in an attempt to tackle Japan’s economic problems rooted from the Plaza Accord 1985, another product from the Reagan administration.

Furthermore, while currency depreciation, debt crisis and Japan’s liquidity dry up triggered the crash, flight of capital exacerbate the Asian crash into a full-blown crisis. As described Nicholas Shaxson in his book Treasure Island: Tax Haven and The Men Who Stole the World, due to deregulations and market liberalisation, in the neoliberal environment capital became relatively free to flow across the borders, and it generates new kinds of problems: In a world of floating currency regime, the flow of ‘hot money’ coming in and/or out of the country could make such a big impact on the overall economy, thus, through their ‘cross-border investments’ investors become powerful as they hold veto power over national governments and the fate of the millions of real lives of its citizens. Demand management by governments is replaced by uncontrollable bubbles and busts, as the government have less freedom to set their own economic policies without worrying about “hot money” coming out of the country.

And this “hot money” was exactly the problem that the Asian Tigers immediately had after their liberalisation on cross-border borrowing. During the height of the crash in 1997, outflows of “hot money” (i.e. flight of capital) was the key element that made the crash into a full-blown crisis. And vital for the arrangement of this flight of capital was the Structural Adjustment Program (SAP) and the bailout money by the IMF arm of the Washington Consensus, which opened the window for wealthy people to get their huge sums of money out of the country at favourable exchange rate – while the country was undergoing austerity, liberalisation and privatisation at a murderously high local interest rates -, leaving behind a very fragile economic infrastructure that ensured that the Asian Tigers were left wide open for plundering by Wall Street and multi-national corporations.

Therefore, with the petrodollar recycle of the 1970s – which made US dollar become the global reserve currency and the principal currency for commodities trading, and gave tremendous power for the Fed Chairman – and with the recapture of power for Wall Street in Treasury department and the Washington Consensus, it is then visibly clear that the main actors that created the Asian Market Crash and Asian Crisis were the same men that Wall Street and corporations saw as their cult hero, those who in their powerful positions can control the fundamental gaps on the majority of interconnected economies across the world: the Fed Chairman Alan Greenspan who controls the flow of dollar and who had increased interest rates by 83% causing several crises, and Robert Rubin and Larry Summers the Wall Street insiders who control the Washington Consensus. And behind these men lies a very powerful network of business elites who started out as a small grassroots movement in the 1950s using Ronald Reagan as their spokesman, and eventually ascended to power when their spokesman elected president in 1980 and began the reforms that open up “markets” and the path for legal corporate plundering in South East Asia and all over the world.

As a consequence of the neoliberal revolution in South East Asia, in a span of 2 years since the Asian Crash 24 million people lose their jobs, with over a decade later employment rates have still not reached pre-1997 levels in Indonesia, South Korea and Malaysia. Working conditions get worsen with labour rights weak at best, and with new foreign owners pushing for ever-higher profits from their investments. In Indonesia, food welfare system (the so-called Bulog system) was immediately dismantled after IMF aid was signed, with the food industry left wide open for foreign penetrations. As a result, local farmers were destroyed, basic food security diminished and through time the versatile lands in the country cannot produce good quality staple goods anymore, and instead Indonesia becomes an importer of food.

Furthermore, just like the Great Depression created the environment for fascism to rise in Europe, the new economic desperation among the unemployed has paved the way for religious extremist to rise in Indonesia, the explosive growth in human trafficking in Thailand, and the continuity of death by suicide in South Korea, where suicide is now the 4th most common cause of death, with the average of 38 people taking their own life everyday or more than double the pre-crisis rate.

However, the effects of the neoliberal revolution were not only suffered by developing countries or the victims of Third World Debt countries, but it also damages the US economy. In the nearly 3 decades after Reagan’s election, while Wall Street and corporations thrived, US public investments in roads, bridges, hospitals, schools, water and sewer systems came to a virtual halt due to significantly reduced government spending. Cities, counties and states were forced to sell public property to private corporations, while more than $2 trillion is needed to repair the infrastructure built during the Golden Age of Capitalism but then neglected after neoliberalism. Furthermore, according to Kim Philips-Fein under republican presidents of Ronald Reagan, George H. Bush and George W. Bush unions found themselves steadily losing influence, while business lobbyists increasingly shaping the legislative agenda and think tanks increasingly define the major issues in the media.

Meanwhile, although the US had managed to increase its GDP per capita by three-fourths from 1980 to 2010, the figures in GDP per capita does not tell much about the real situation for the average citizens. For instance when Bill Gates and Warren Buffett’s income go up the average income for the whole US also goes up. While in reality most full-time workers have seen their incomes go down and living standards deteriorating, not because the US economy has lost its ability to produce but because the benefits of that growth are increasingly given to the small sliver of people at the top.

this can be seen in the findings by US Federal Bureau of Labor Statistics, which pointed out that in 2006 the average American non-supervisory worker earned a lower hourly wage compared with in 1970 (adjusted for inflation), while during the same period the pay of American CEOs increased from under 30 times the average worker’s wage to nearly 300 times. In his book, Hoodwinked, John Perkins then added that when George W. Bush was elected president in 2001, the 400 wealthiest people in the US were approximately worth $1 trillion combined. And 6 years later in 2007 their worth had grown by 60% to $1.6 trillion, while real income for average workers decreased by more than $2000.

If this is a zero-sum world, the structural reforms made by neoliberalism have successfully “re-distribute” the wealth that was once distributed almost equally and fairly in the US during the Golden Age of Capitalism to only a handful of elites, with the top richest 1% took nearly 25% of the nation’s income and controls 40% of the wealth of the nation. Joseph Stiglitz argues in his book The Price of Inequality that much of the “re-distribution of wealth” is due to “rent seeking” by the business elite, i.e. a practice where the rich and wealthy use their resources and leverage such as lobbying or campaign donation to obtain unfair advantages over their particular interests, and this indirectly relocate income and wealth from huge number of people at the bottom of the pyramid (i.e. Taxpayers’ money) to a small number at the very top. Purchasing laws and regulations is one prime example, where bankruptcy laws in the US are actually designed to favour banks and their shareholders over homeowners and debt holders.

Furthermore, in a global scale, thanks to the Structural Adjustment Programs (SAP) imposed by the IMF and World Bank, and thanks to the unequal trade policies imposed by WTO, the growth rate per capita for developing countries was cut in half from 3% before the 1980s to 1.7% after the Washington Consensus era. In sub-saharan Africa, for example, after the 1980s SAP resulted a decline in income per capita at a rate of 0.7%, with GNP of the average country shrank by 10% in the 1980s and 1990s, with poverty nearly doubled. Moreover, a recently published research reveals that while Africa receives $30 billion in aid every year, $192 billion leaves the continent via debt repayments, repatriation of multinational company profits, illegal logging and fishing, illicit financial flows, loss of skilled workers and the costs imposed as a result of climate change. Even when these losses are compared to overall financial inflows (aid, foreign investments and remittances) Africa still left with a $58 billion a year net loss, or almost 1 1/2 times the estimated $37 billion a year of extra funding that would be needed if we are to deliver universal health coverage for everyone in the world.

In addition, as a result of SAP developing countries have lost $480 billion each year in potential GDP and another $160 billion each year to forms of foreign tax evasion legalised as part of the neoliberal package. At the same time, since Ronald Reagan elected president US investment abroad have grown to more than $10 trillion, with profits from those investments have increased from around 20% (compared with domestic profits) in early 1980s to 80% today. While developing countries have been systematically destroyed, US corporations have been enjoying a growing rate of returns from 5% in 1975 to over 11% in as far back as 1990 on these investments.

Meanwhile, as of 2008 the poorest 40% of the world’s population accounts for only 5% of global income, while the richest 20% accounts for three-quarters of world income (75%). While at least 80% of humanity lives on less than $10 a day (1.3 billion of which live on $1.25 a day or less) – where it is estimated that there are 925 million hungry people in the world (13.1% from the total 7 billion people in the world, or almost 1 in 7 people are hungry) – in the same planet there are around 1210 Billionaires living the luxurious life with total net worth of $4.5 trillion (surpasses the GDP of Germany). Of course this is not saying that all wealthy people are frowned upon, but rather highlighting the growing global inequality since the implementation of neoliberal policies, which leave more people at the bottom of the pyramid worse off.

This inequality can not be more clearer than in the percentage of who control the world’s wealth. The bottom 50% of the total world population only control 1% of the world’s wealth, while the wealthiest 10% control 85%. If we narrow the parameter, 40% of the world’s wealth are controlled by only the wealthiest 1% of world’s population, with the richest 358 people in the world have the same wealth as 2.3 billion of the poorest people (45% of total population) and the top 3 billionaires have the same wealth as 600 million people (all of the Lowest Developed Countries put together).

It is with this knowledge of inequality that in his long and thorough book Capital in the 21st Century French economist Thomas Piketty argues that under the existing neoliberal environment capitalism simply cannot work. With the basis of vast amount of impressive data and charts, Piketty concluded that the US and Western Europe may be getting similar with the “patrimonial society” of 19th century Old Europe, where a small number of wealthy rentiers lived extravagantly thanks to their inherited wealth, while the rest of the population had to struggle to be able to keep up.

And this situation, where wealth are increasingly concentrated only in the hands of fewer people, will have political implication and will ignite a crisis – I may add – similar with the class warfare against the monarchy that inspired Karl Marx to wrote the Communist Manifesto, and sparked the October 1917 revolution in Russia led by Lenin and Stalin. As the great classicist Moses Finley once said, in the ancient world all revolutionary movements had a single objective: “cancel the debts and redistribute the land.”

Where has all the money gone?

A vital part for the “re-distribution of wealth” is the role of tax havens in storing the, for the lack of a better word, “legally stolen money.” According to Nicholas Shaxson, the offshore system that tore financial control apart since the 1970s has served as an accelerator for flight of capital, as well as a distorting field that altered capital flows not to where they necessarily find the most productive investment, but rather lured to where they can provide the most lenient regulations, accommodate evasion of prudential banking regulations, offer zero or lenient taxes, grant freedom from rules of civilised society and where they can provide the greatest secrecy. In other words, money becomes increasingly out of reach for those who desperately need funding and investment to build a better future, and instead the majority of those who have money prefer to hide their money where nobody can touch them.

Today there are more than 80 tax havens around the world, including the Caribbean havens, Luxembourg, Lichtenstein, Cyprus, Andorra, Switzerland, Singapore and Hong Kong; and the number of listed offshore subsidiaries in them are staggering. For instance, the British Virgin Islands (with population of 25,000 people) hosts approximately 460,000 corporations, one modest building in the Cayman Islands host more than 18,000 entities, while the tiny South Pacific island of Nauru (with population less than 10,000 people and have only 1 road) host 400 banks and provide laundering services for billions of dollars of Russian money.

On paper, more than half of world trade now passes through these tax havens, with a third of foreign direct investments by multinational corporations are channeled through the offshore routes. Moreover, over half of all banking assets also routed through offshore, with around 85% of international banking and bond issuance takes place in Euromarket, a stateless offshore zone. In 2008 the Tax Justice network discovered that 99 out of 100 Europe’s largest corporations uses offshore subsidiaries, with a bank as the largest users in each country. In a December report of the same year, the US Government Accountability Office (GAO) reveals that 83 of US’ largest 100 corporations had subsidiaries in tax havens, including the big banks that receive bail-out money.

The intentions are clear, thanks to tax havens many of the world’s largest and profitable corporations pay no or little tax, making these corporations more profitable by the years, at the expense of depleted government funding for the development of the country. For example, according to US-bases Citizens for Tax Justice from 2006 to 2011 General Electric’s net federal income taxes have been negative $2.7 billion, despite the fact that they gained $39.2 billion in pre-tax US profit over the same period. Google was able to cut its tax rate by more than $3 billion through a technique called the “Dutch Sandwich,” where the company channel its profits through Ireland, the Netherlands and then to Bermuda. Also thanks to tax haven network, in 2010 the likes of Bank of America, Exxon/Mobil, Boeing and Citicorp paid no federal taxes.

To be fair, by law the number 1 objective for any publicly-traded corporation is to maximise shareholders’ wealth, and this includes seeking the best possible tax arrangements in order to maximise profit, hence tax avoidance is not necessarily a bad thing. However, legal tax avoidance is one thing, but it is a completely different matter if bribing is involved. A March 2012 investigation revealed exactly this, where 30 large US corporations that paid no federal income tax between 2008 and 2010 were also major contributors to US politicians in both parties, specifically to the committee members that control tax policy in both Chambers of Congress. But even this form of bribing is legal, as it is protected by the first amendment, and more crucially because the rules and regulations are made by among themselves, thanks to the revolving-door policy.

Moreover, tax havens also play a vital role in the existence of insider trading ring, gigantic frauds and the growth of complex monopolies in certain markets, while every big financial catastrophe – including the collapse of Long Term Capital Management, Lehman Brothers, AIG and Enron – are also very much an offshore tax haven story. In the case of Enron, before being exposed as a spectacular fraud the company had more than 6,500 shell companies in several tax havens, 600 of which were registered in the Cayman Island. All in all, in 2010 the IMF estimated that the balance sheets of small island tax havens alone added up to $18 trillion, a sum equivalent to around a third of the world’s GDP, and that, it said, was probably an underestimate.

Furthermore, by the end of 2010, according to James S. Henry, a former chief economist at the consultancy firm McKinsey in his report The Price of Offshore Revisited, the global super-rich elite has at least $21-32 trillion of financial wealth hidden in tax havens, or equivalent to the size of the US and Japanese economies combined. Henry’s report was commissioned by UK’s Tax Justice Network, and it used the data from the Bank of International Settlements, International Monetary Fund, World Bank and national governments to highlight the impact on the balance sheets of 139 developing countries that have its citizens’ money held in tax havens (financial wealth only, not including assets such as property, racehorse, goldbricks and yachts) and thus out of reach from their local tax authorities.

In the report, Henry discovered that since the 1970s, with aggressive and often illegal assistance from the international private banking industry, around $7.3 to 9.3 trillion of unrecorded offshore wealth have been accumulated by private elites by 2010 in this sub-group of 139 countries, even when their country were flushed in debts and enduring SAP. When looking at the 50 leading private banks alone, they already collectively managed more than $12.1 trillion for their clients in cross-border investing, with the top 3 private banks in handling the most assets offshore are Goldman Sachs, UBS and Credit Suisse. Henry then commented that “The lost tax revenues implied by our estimates is huge. It is large enough to make a significant difference to the finances of many countries, [and it creates] a huge black hole in the world economy.”

On this scale of the black hole, the offshore economy is large enough to significantly alter the estimates of national income and debt ratios, estimates of inequality of income and wealth, and above all, the negative impacts on the domestic tax bases of key source countries (countries that project net unrecorded private capital outflow over time). A case in point, in 2010 these same developing countries had aggregate gross external debt of $4.08 trillion, and were categorised as debtors. But when the debts are subtracted with their foreign reserves (most of which are invested in developed countries’ securities such as US Treasury bills) their aggregate net external debts were actually minus $2.8 trillion. This has been increasing steadily since 1998 when these 139 countries’ external debt minus foreign reserves was at their peak at plus $1.43 trillion.

In other words, by way of the offshore system, these supposedly debtors countries are not debtors at all, instead they are actually net lenders to the tune of $10.1 to 13.1 trillion. The problem, however, is that the assets of these developing countries are held by a small group of wealthy individuals, with the the majority of the assets ended up stored in tax havens, while the debts of the countries are shouldered by the ordinary citizens through their governments, where the debts normally imposed under dreadful conditions and interests. Henry then elaborates that “these private unrecorded offshore assets and the public debts are intimately linked, historically speaking: the dramatic increase in unrecorded capital outflows (and the private demand for First World currency and other assets) in the 1970s and 1980s was positively correlated with a surge in First World loans to developing countries: much of this borrowing left these countries under the table within months, and even weeks, of being disbursed.”

David Graeber illustrates this point in his book Debt: the first 5000 years, where after the Petrodollar Recycling in the 1970s and 1980s Western banks suddenly flushed with OPEC profit money from the oil crisis, and these banks began to send agents around the world trying to convince Third World dictators and politicians to take out dollar-denominated loans from them. A surge of First World loans to developing countries then occurred, with corrupt dictators borrowed a lot of money with national assets as the collateral (often persuaded by the bankers themselves), with the majority of the borrowed money would end up being directly transferred to their offshore bank account (i.e. unrecorded capital outflows) and created a black hole in the country’s economy.

But then, when the dictators were toppled or simply replaced by a honest regime, these offshore bank accounts remain untouched while the country (more specifically, the people) have to bear the burden of the debt repayment + interests that they never use, or worse, forced to surrender their control over the country’s economic sovereignty or loose their national assets for plundering.

Take Bolivia for instance. In the late 1970s Western banks were lending flows of money to the fast-changing dictators in then politically unstable Bolivia (where at one point presidents are changing every week), without really concerning about how these dictators and their ever changing ruling regimes would possibly pay back all of the dollar-denominated debts. By the time the Third World Debt Crisis hit Bolivia in the early 1980s, the ruling government at the time was burdened with a lot of debts that they did not use, but instead of defaulting on the loans – or even confiscate the money stolen by the dictators – they chose to print huge sums of money to pay all of its debt service obligations. This caused a massive hyperinflation by 1985, with inflation skyrocketed to as high as 14,000%, making the Bolivian citizens pay dearly for the sins made by their corrupt leaders.

To tackle the hyperinflation another newly-elected Bolivian government then requested help from a Harvard economist Jeffrey Sachs, in which his solution was summed up in a single executive decree D.S. 21060 that consist of 220 separate laws that impose an economic shock therapy. The implementation of the shock therapy was brutal: it called for a 300% hike in price of oil, the elimination of food subsidy, the cancelling of almost all price controls, opening Bolivia’s border wide open to unrestricted imports, the downsizing of state companies and even the freezing of government wages for a year despite the fact that the wages were already low and life was about to get more expensive.

As far as tackling hyperinflation concerns the shock therapy worked, where within 2 years inflation was rapidly pressed down to 10%. And many neoliberal economic reviews boasted this success ever since, emphasizing that in the long run the economic shock therapy were for the better of the country and its citizens. However, many of these economic reviews fail to mention the very high human cost, where the shock therapy increased unemployment rate from 20% in 1985 to 25-30% two years later, with the state mining corporations alone was downsized from 28,000 to just 6,000 employees. Furthermore, for those who still have jobs real wages were down by 40% (which at one point dropped to as low as 70%), and average income per capita dropped from $845 in 1985 to $789 two years later. But even this lower average figure is misleading since a small elite grew far wealthier during this period while Bolivian peasants were earning just $140 a year in 1987, or less than one-fifth of the average income.

Furthermore, the government statistics also fail to reflect the growing number of malnourished children, families forced to live in tents and peasants ended up begging on the streets. This economic situation drove poor Bolivians (including the family of Evo Morales, Bolivia’s current president) into growing coca leaves, as it pays roughly 10 times the normal pay at the time, therefore increasing the supply of coca leaves in the criminal underworld network and enhancing the illegal cocaine supply to the world. Also absent in the economic reviews are the main objectives of all of this rapid austerity, liberalisation and privatisation: to successfully open up Bolivia for plundering by multinational corporations. For example, Bechtel Corp of San Francisco eventually gained control over ALL the water (a basic human necessity) in Bolivia’s 3rd largest city, including the rain that falls from the sky.

This is also what happened with Russia in their post-Soviet economic reform in the 1990s, albeit with a different type of plunder, where economic changes in the transition from centrally-planned Communist system into free-market economy during Boris Yeltsin’s presidency led to mass transfer of money from the Communist state to few former Communist Party elites and their cronies (whom we now know as oligarchs), with the majority of their money were once again being transferred to tax havens. This transfer of wealth mainly occurred between 1990 and 1996, where economic shock therapy made income per capita plummeted by over 30% (slightly less than the decline in the Great Depression), purchasing power parity diminished to equal to the US in 1897 and created enormous rise in poverty, from 2% in the Soviet era 1987-1988 to over 40% by 1995. As a political consequence, within the first few years of his presidency, many of Yeltsin’s political supporters turned against him with vice president Alexander Rutskoy denounced the shock therapy as “economic genocide.”

Just like in Bolivia, Russia’s shock therapy forced austerity, liberalisation and privatisation in a very rapid manner, where in just 500 days Russia privatised more than 100,000 Soviet enterprises. In comparison, it took Margaret Thatcher, the great deregulator of the British economy, 11 years during her reign as prime minister to privatised around 20 large utilities companies, which made the British economy better off in comparison. Moreover, this type of slower deregulation also benefited two other former Soviet Union member countries Poland and Czech Republic in their reforms in the 1990s, where their shock therapy were disrupted and delayed due to pressure from trade unions and angry protesters. The slower pace of deregulation in these two former-Soviet countries made gradual transition from the centrally-planned communist system to free-market system became less dire for the citizens, gave enough time for local corporations to respond to the changes and made a more lasting positive impact on the overall economies.

Indeed, when implemented gradually and with prior economic infrastructure-building, austerity, liberalisation and privatisation can give a positive benefit for an economy. When Keynes himself created the original Bretton Woods system in 1945 he also wanted a world of open trade, but in contrary with neoliberalism he believed that free movement of goods could only be implemented if finance remains tightly regulated by the government. This same believe was also shared by Deng Xiaoping, where he implemented Friedrich List’s theory and created strict regulatory and competition infrastructure before China began their economic deregulation in the 1980s, which became the strong foundation for China’s success story today.

Therefore, with that in mind, the real intention behind rapid neoliberal weapons of austerity, liberalisation and privatisation (the so-called shock therapy or Special Adjustment Program), that are imposed to the world by the West and its Washington Consensus, becomes awfully clear. They were specially designed for plunder.

Plutocrats’s Paradise

For the past 70 years since the US took the mantle of new ruler of the world, we have witnessed a fundamental change in the way world domination are enforced. Gone are the heavy military aggressions that have filled our history books – from the quick expansion of Alexander the Great’s empire, to the vast expansions of the likes of Mongol and Ottoman Empires, to the European colonial times in Asia and Africa – with financial weapons of mass destruction and the resulting economic domination become the main tools to essentially create a softer version of imperialism.

Dilip Hiro analyses this change of imperialism model in his book After Empire, in which he highlighted that the “American Empire” outsourced its exploitation of local resources through its private individuals and corporations “without the expense and opprobrium of maintaining political administrative control, which was an integral part of European imperialism,” with the US government instead taking the role of the provider of military umbrella for these private individuals and corporations.

For example, countries like Iran in 1953, Guatemala in 1954, Indonesia in 1965 and Latin America in the 1970s-1980s were all indeed conquered with the help of CIA-backed local military aggressions. However, unlike the previous ruler of the world, the British Empire – who claimed all the lands that they have conquered -, these countries were never officially became US colonies. But instead, after the military coup and after these countries’ economies have been dismantled, their politics and resources are controlled by private American individuals and corporations from a de-facto position using friendly dictators as their puppet.

Iran was headed by a puppet Shah Reza Pahlavi between 1953 and 1979 but its finances were completely controlled by Rockefeller, and its oil resources were divided among the Seven Sisters of the Oil Industry. Guatemala became the first Banana Republic after the US government (on behalf of United Fruit Company) got rid of democratically-elected Jocobo Arbenz and installed the puppet Colonel Carlos Castillo Armaz.

Furthermore, Indonesia, with founding father Soekarno ousted by CIA-backed General Soeharto, became what Richard Nixon called “the richest hoard of natural resources, the greatest prize in south East Asia”, and, according to John Pilger in his book The New Rulers of the World, was divided among corporations in a 3-day conference in Geneva in November 1967, where all the corporate giants dictate and create the legal system for investment in Indonesia that hugely benefit them, such as the way Freeport operates in West Papua. And in the 1970s Latin American democratically-elected leaders were thrown out and replaced by Chicago-School disciples, with their puppet dictators proceeded to conduct some of the worst human rights violation in history, in order to control the people while the corporate plundering took place. Thus it was not an exaggeration when Martin Luther King Jr. said in the 1960s that without any hesitation, his country was “the greatest purveyor of violence in the world.”

By the time Ronald Reagan took office, however, the development of financial weapons at the hand of the US government have been perfected that they no longer need military aggression anymore to force countries to give up their economic sovereignty. Instead, with Dollar-denominated debts flooding the world since Henry Kissinger’s Petrodollar Recycling in the late 1970s, they can now flip any country burdened by US Dollar-denominated debt in a blink of an eye through their Fed Fund Rate.

Debt traps then became the name of the game. And while in individual cases it has given the US control over the likes of Panama Canal and allowed them to set up military base in places like Kyrgyzstan, collectively with the continuous rate hike of Volcker Shock and Greenspan Hike the US managed to economically conquer Third World Countries in the 1980s and South East Asian countries in 1997 through debt trap, proceeded by IMF’s SAP that tear open economic barriers, and followed by the inevitable corporate plunder; all of which were conducted with no military aggression whatsoever.

Hence it was not a coincidence that since Ronald Reagan elected president US investment abroad (by its private individuals and corporations) have grown to more than $10 trillion, with profits from those investments have increased from around 20% (compared with domestic profits) in early 1980s to 80% today, while the rest of the world population are either burdened by dollar-denominated debts themselves or forced to dearly pay back the money owed by their corrupt / incompetent leaders through their government.

This new imperialism model, however, is not only imposed in third world countries, with the aftermath of 2008 global market crash served as the clearest indication on how the current ruling empire still operates. When the sub-prime mortgage time bomb destroyed the global markets, the need to act swiftly was vital to rescue the global economy, with the ultimate solution narrowed down to the 2 age-old economic options: to increase spending or budget cuts? In the US and Europe (where the crash hit the hardest), the governments opted for a terrible mixture of the two.

First they mobilise an unprecedented Keynesian rescue package using public funds from taxpayers’ money for the banking sector (deemed too big to fail) to the tune of over $2 trillion in the US and UK – despite the fact that the banks had lost private money in a huge speculative gamble on Collateralised Debt Obligation (CDO) – which created massive government debts. But then, to significantly reduce the massive debts the governments launched a new economic policy, where spending not reduced by lowering entitlements to private corporations like the banks they just bailed out, but by launching massive cuts in social welfare spending. In other words, just like money-printing in 1980s Bolivia that caused hyperinflation, ordinary citizens in the US and Europe are taking the hit from the problems made this time not necessarily by corrupt leaders, but rather by the few plutocrats in the private sector that have strong leverage towards their respective governments, whom gave away bonuses of $70 billion among themselves just moments after they have received government bailouts.

Greece is the most badly-hit by this scheme. When the aftermath of the 2008 crash sets in Greece was caught in a mount of debts, and after their failing banks were bailed out by the IMF, European Central Bank and Greece’s northern cousins (together known as Troika) – to prevent systemic banking collapse in Europe – the Greek government was forced to rapidly implement the neoliberal measures of austerity, liberalisation and privatisation in its social programs (despite the IMF themselves bizarrely admitted that austerity has disastrous consequences) in order to pay off this bailout “loan.” In other words the Greek citizens are forced to pay for the bailout made to safeguards European banks who have huge inter-bank interests with the Greek economy (€94 billion exposure, with French banks alone exposed up to €40 billion and German banks up to €24 billion).

By contrast, Iceland was also suffering from the effects of 2008 crash, however in tackling their economic meltdown Iceland ignored the advise from IMF and Western governments and took the opposite road by letting the sinners (the banks) crash, and instead upholding the Keynesian measures to where it’s suppose to be: in its social welfare programs (healthcare, unemployment programs, old-age pensions and housing support), which at first caused recession in its economy but then quickly recovered in ways that Greece and the rest of Europe never could.

Iceland’s move is not without precedent, where in the aftermath of World War II UK’s debt was over 400% of its GDP, but instead of cutting its budget or reducing its deficits the Labour Party launched successful social protection programs such as the National Health Service that saved millions of lives during the hard times. And during the Great Depression in the US, instead of massively bailing out the perpetrators of the crash of 1929 and reducing government debt through austerity, FDR launched Keynesian-style New Deal that were heavy on social protection programs. The New Deal not only prevented public health disaster at a turbulent time, but it also created some of the most important social protection programs that continues till this day, such as Social Security and Food Stamps.

David Stuckler and Sanjay Basu in their book The Body Economic, explains the reason why Iceland’s stimulus worked while Greece’s austerity failed in terms of the well being of their respective citizens by commenting that “when the government cuts its spending during a recession, it drastically reduces demand at a time when demand is already low. People spend less; businesses suffer, ultimately leading to more job losses and creating a vicious spiral of less and less demand and more and more unemployment. Ironically, austerity has the opposite of its intended effect. Far from decreasing debt, austerity increases it as the economy slows. And so debt gets worse in the long run when we don’t stimulate economic growth.”

But of course, as we all now know, the shock therapy is not designed for recovery. Just like the plunder occurring in previous victim countries, not long after their banks were bailed out and draconian cuts on its welfare system kicked-in Greece then forced to embark on a firesale – despite the fact that the Greek government is scrambling to pay off the debts they were forced to take – in a similar fashion like Ecuador was forced to give up their rainforest, while the local Greek oligarchs that control large parts of Greek businesses, financial sector, the media and politicians have also participated in the looting.

With the country’s assets being stripped apart, the effects of the draconian cuts were even more dreadful for the Greek citizens, as critical government programs such as health programs were cut HIV case rise by 200% and malaria returns to the country. The spread of HIV in particular was mainly caused by the largest cuts to housing safety nets in all Europe, where homelessness in Greece then rose by a quarter, and created a conditions of crowding and drug abuse in downtown Athens, thus raising the spread of HIV. Moreover, due to economic problems homicides rates rise and in 2012 alone 600 Greek citizens committed suicide, an alarming number considering prior to the recession Greece had the lowest suicide rate in Europe. As at October 2014 around 60% of Greeks (that’s approximately 6.3 million people) now live at or below poverty level.

Meanwhile, in the US the Keynesian move to bailout the banks and corporations also included substantial cut in the Fed Fund rate down to 0.25% and series of Quantitative Easing (i.e. printing money) in order to boost up its slowing economy. By the end of 2010 the Fed had conducted the Quantitative Easing (QE) through purchasing US Treasury notes in the figure of $1.8 trillion in QE1 and $600 billion in QE2, which means that the Fed has flooded the world with cheap US dollars, plummeting the value of the currency in the process. As commodities prices are tied to US dollar, the fall of US dollar ignited a sharp increase in commodities prices and thus – along with severe drought and other extreme-weather related damages across the world – created global inflation, most crucially in the food sector.

As a result, in 2010 (the year QE2 was launched) the CRB food index was up by a staggering 36% while raw materials were up by 23%. Furthermore, in the same year according to the Food and Agriculture Organization of the United Nations, the worldwide food price index was at an all-time high “surpassing its 2008 peak, when skyrocketing costs caused global rioting and pushed as many as 64 million people into poverty,” while the price of oils, sugar and wheat have all hit new peaks. The price of wheat, in particular, rose from $157 per metric ton on January 2010 to $335 per metric ton on January 2011, an increase of 113% in a year. As the world’s largest importer of wheat, this substantial price increase was especially troubling for Egypt, and not coincidentally January 2011 was the time when the Arab Spring broke out in places like Tunisia, Algeria and indeed Egypt, countries where up to 56% of a person’s income is dedicated for the purchase of food and where inequality level has reached an alarming rate.

Just like the Volcker Shock and Greenspan Rout, Ben Bernanke’s QEs were first and foremost intended to safeguarding the US economy. However, as the price of commodities are tied to US dollar since the late 1970s, Bernanke’s reaction to cut interest rate near zero percent and flood the world with cheap dollar have created a massive butterfly effect, which leave millions around the world worst off economically and hungrier. And just like the Third World Debt Crisis and Asian Crisis, despite not being its primary objective, the US still ensured to reap out the fruit of their making in this 2011 turmoil by middling in Middle Eastern politics: assisting Libyan rebels in toppling Gaddafi, ensuring that Yemen’s Ali Abdullah Saleh (a friendly dictator) is still replaced by the same regime, and experimenting with democracy in Egypt only to back General Abdul Fatah Al Sisi’s military coup to replace inobedient Muslim Brotherhood leadership.

Never in the history of man have an empire being operated in such indirect but powerful manner, where financial instruments can be used to change the destinies of many, even in the remotest corners of the world, in a blink of an eye. Never in the history of man have legal plundering can become so systematically widespread globally as this and with consequences so dire for the majority of world’s population. And never in the history of man have the widening income inequality gap occurring in such an alarming pace. In terms of tackling poverty there is arguably no more pressing and urgent matter to address than this.

Many reforms have been proposed by a lot of scholars and professionals to address these issues, with unifying themes such as transparency for tax havens, more taxation on the rich, more regulation for the financial market, end to corporate welfare and even debt forgiveness for African countries who never touched the loan money stored by their dictators in their offshore bank account. Just as the formula that made rich countries rich are actually pretty straight forward (as described at length in part 2) these solutions to tackle global inequality are also fairly straight forward, with Keynesian solution – if targeted towards the right measures, i.e. Just like what Iceland did – have proven to be successful in cleaning up similar mess made by supply-side economics during the Great Depression, which proceeded to create the Golden Age of Capitalism.

Nevertheless, while the ills of the world arguably have the potentially right remedies, implementing these solutions would mean the end of the neoliberal system, and there is no way for the ruling regime and its plutocrats to dismantle the machine that generate the profitable flows of money that makes them wealthy. The Volcker Rule idea that became the very weak Dodd-Frank Wall Street Reform and Consumer Protection Act in the US – that was supposed to regulate the financial market after the 2008 crash – is one example of the poor attempt to address these issues. Even Thomas Piketty admitted after proposing more than 80% global tax on the largest income (as they were during 1920-1980, when the distribution of wealth was at its most equal) that “it is unlikely that politicians worldwide would agree in taxing the capital of the richest and most powerful citizens in their country.”

This is evident at the annual meeting between the IMF and World Bank in October 2014, where Rupert Murdoch showed this untouchable self-interest side when giving a speech in front of ministers, where he still praised austerity and minimum regulation, spoke against social safety nets desperately needed by the majority of humanity, and lectured on the danger of socialism and big government, despite all of the evidences that refute his world view. Murdoch’s media empire, of course, is famous for its misleading opinions and distorted facts, and in numerous times even instrumental on electing a country’s leader that would benefit Murdoch and his peers, such as when Fox News called George W. Bush the winner in decisive Florida during the 2000 presidential election.

The tone that Murdoch sets in the IMF and World Bank echoes the remark made by Australian Prime Minister Tony Abbott in Davos meeting earlier in January 2014, in which he dellusionally said that the global financial crisis was not caused by unregulated global markets, but instead was caused by too much governance, thus justifying his inaction for reform and his move towards more neoliberal measures.

Not surprisingly, with this kind of unchanged attitude from the so-called leaders in business and politics, according to a report by Oxfam during the period of time Australia has held the G20 presidency (between 2013 and 2014) the total wealth in the G20 member countries has increased by $17 trillion, but with $6.2 trillion of those wealth (36% out of the total) are captured by the richest 1%. Moreover, among the nine G20 countries that have sufficient data, the richest 1% have their income share increased significantly since 1980, with Australia’s top 1% risen from gaining 4.8% of the total share of the national income in 1980 to more than 9% by 2010.

But it is still in the US where wealth inequality are growing in the fastest rate, where in the past 3 decades the share of household wealth owned by the top 0.1% (160,000 families with total net assets of more than $20 million in 2012) has increased from 7% in the late 1970s to 22% by 2012, while by contrast the wealth owned by the bottom 90% of families fell from 36% in mid-1980s to 23% in 2012. In other words the share of wealth owned by the top 0.1% of citizens in the US is now almost equal to the share of wealth owned by the bottom 90%. Just like Mohamed Bouazizi that sets himself on fire in Tunisia during an intense period of economic frustration – which proceeded to ignite the Arab Spring – the inequality problem in the US has arguably reached a sensitive point where one “Bouazizi moment” could spill out what originally an economic frustration, into something else, just like what happened in Ferguson, Missouri, after the Michael Brown verdict.

Meanwhile, while the rich are getting richer and store the majority of their wealth in tax havens, today thanks to bailouts and Quantitative Easings in the post-2008-crash era, public debt level in the developed countries has risen to an average of one year of national income (90% of GDP), making the rich countries indebted at a level not seen since the wartime era in 1945. This have left developed countries still remain rich on paper but the government of the developed countries actually become poor, with the debts once again are burdened to the taxpayers, which simultaneously taking the hits from austerity measures.

“Never in the field of financial endeavour has so much money been owed by so few to so many”, concludes Bank of England governor Mervyn King after series of bailouts in the aftermath of the 2008 crash, “and one might add, so far with little reform.” Because as long as the rulers of the world are still the same plutocrats that created the rules and regulations in the first place, none of the proposed reforms will take any real effect, making the current global environment a plutocrats’s paradise.

Related posts: Part 1 and Part 2