POLITICAL ECONOMY DYNAMICS IN AFRICA AND THE EURO
MEDITERRANEAN CONTINENT
ARIZONA STATE UNIVERSITY
POS 485 - POLITICAL ECONOMY
WEEK 3
5.1.
ECONOMIC FRUSTRATION LEADS TO REVOLUTION IN TUNISIA:
Mohammed Bouazizi, is just one of a generation of young Tunisians who graduated from
universities in computer and information technology. Jobs that are in high demand anywhere
in the world. However, it is unfortunate that this young man had to end his life in Tunis by
committing suicide and becoming the umpteenth wave of suicide victims in Tunisia. One of
the life choices for poor people in Indonesia is to reduce the quantity and quality of daily
meals to face the crush of life. As a university graduate, especially with a diploma in
information technology, Bouazizi certainly hoped to get a decent job in his field. He never
imagined that his country, which only has a population of around 10 million and is very
tourism-based in North Africa, would not be a paradise for job seekers like him. Under the
rule of Zine El Abidine Ben Ali, who had been in power since 1987 without any elections,
Tunisia was like a country whose money vaults were looted bit by bit by Ben Ali's cronies.
For Bouazizi, being an educated unemployed is very painful. Bouazizi never imagined that
what he did caused demonstrations and even chaos since December 14, 2010 until the fall of
President Ben Ali in Tunisia this afternoon, exactly a month of waves that forced him to leave
his country. Apparently, last night's image speech with the promise of 300,000 job creation
did not make the Tunisian people complacent except for the popular cry of degagez-vous,
repartez-vous (get off you, go away you) from your power where the military was neutral,
except for the police who remained behind Ben Ali and the support of the CIA's covert
headquarters in the underground of the international airport in Tunis.
According to some friends from this country who were blocked in Nice, Bouazizi
representing almost 30 percent of young Tunisians who graduated from universities with
diplomas of engineer, doctor, doctorate are unemployed. Bouazizi also never imagined that
his actions would have a ripple effect on other Tunisians in tourist cities such as Tunis, Sfax,
Jendouba, Sousse, and Kasserine. Algeria, as a neighboring country, also received a ripple
effect of frustration over the bleak future in North Africa. Not to mention that it spread to
Jordan for the same reason, namely employment.
In parts of North Africa such as Libya, Tunisia, Algeria, Morocco, governments have long
failed to provide jobs, even menial jobs. The first characteristic of these four countries is that
they have only one leader: Colonel Mouammar Kadhafi in Libya who ruled for more than 40
years, Ben Ali in Tunisia for 24 years, and King Mohammed V in Morocco who has been in
power since ten years ago after coup d'etat against his own father King Hasan II. If you add
Egypt, where Hosni Mubarak has been in power for almost 28 years, then the "greed for
power" in the Maghreb plus Egypt is complete. Only Algeria has a truly democratic system.
Secondly, since 50 years ago, many of its inhabitants have exodus to the mainland of the
European Union, especially to the mother country of its colonies such as Italy for Libyans and
France by any means through official, illegal channels, even by intermarrying with residents
of the former colonizing countries. On the one hand, France as a former colonizer is also
facing a scarcity of jobs due to the relocation of its multinational companies to mainland
China. Third, in the mainland European Union, these highly qualified educated workers are
not without problems. Sometimes being treated as second-class immigrants amidst the
invasion of workers from the EU's newcomer countries from Central and Eastern Europe adds
to their frustration. Fourth, like some leaders in other African countries, the leaders in this
country are flush with wealth. Look at what happened to Ben Ali's family, his wife also
controls the family company as a money-making machine. A Tunisian friend holding
permanent residence in Canada put his unrecorded wealth at 5 billion euros, Ben Ali's wife
currently temporarily fled to Dubai, his children fled to the UK and Canada where they
stashed their treasures, due to the fear of people power spearheaded by l'Union Générale des
Travailleurs Tunisiens (Tunisian workers' trade union) dominated by lawyers, teachers,
doctors and students which is evident today. For the first time we saw that, through the web,
FB played an important role in bringing down an authoritarian regime like Ben Ali, even
though the Tunisian government tried to block it last night, like the Al Nawaat site.
Hopefully, the economic frustration that resulted in the revolution in Tunisia as a
consequence of madesu (bleak future) will not spread to our country amidst the booming
labor force. According to BPS, in February 2010, job seekers reached 116 million people, or
almost half of Indonesia's population, amidst the phenomenon of pseudo-partisanship towards
Indonesia's poor.
5.2.
THE HOT BALL OF THE JASMIN REVOLUTION AND THE POLITICAL CRISIS
IN TUNI- SIA-FRANCE:
Yesterday evening February 27, 2011 at 20.00 French time the scent of Jasmin is back in the
Mediterranean. It began with the resignation of Mohamed Ghannouchi, Prime Minister of
Tunisia. He had to resign over a vote of no confidence from 100,000 Tunisians who
demonstrated last Friday, February 26, which resulted in the death of three people and dozens
injured. His resignation also ended the polemic of former Ben Ali supporters in the Tunisian
transitional government. By the ad interim President, Foued Mebazaa, former minister, Béji
Caïd Essebsi was appointed to replace Mohamed Ghannouchi in the midst of Tunisia which
stabilized relatively quickly despite facing the invasion of Libyan refugees in the East and the
wave of refugees of 5000 residents on the island of Lampedusa (Italy) allegedly Ben Ali's
cronies. At the same time, French President Nicolas Sarkozy reshuffled his cabinet for the
ninth time since he won the French presidential election for a five-year term in 2007. This
reshuffling was only five months after the eighth reshuffling in September 2010.
In our opinion, this reshuffling is closely related to two things: the revolution jasmine in the
Arab world and preparations for Sarkozy's second five-year election in June 2012. As we
posted early last month to this media, two members of Sarkozy's cabinet, Michèlle Alliot-
Marie (MAM) the foreign minister and François Fillon (Prime Minister) were smelled by the
media using the facilities of Ben Ali's cronies and the Egyptian military. However, François
Fillon's use of military aircraft facilities when meeting with former president Mubarak in
Sharm El-Sheik was still tolerated by the French public as a year-end state visit. However, the
end-of-year vacation MAM's year in Tunisia, which was caught by Le Canard Enchaîné
media on February 2 using the private jet of Ben Ali's closest crony, resulted in 52 percent of
the French people in a poll at LCI losing their trust. Of course this will be a sharp pebble for
Sarkozy in the midst of the decline in his reputation due to the impact of the economic crisis,
the elimination of 14,000 jobs in the education sector such as teachers, lecturers and
researchers plus the elimination of police jobs and the rising reputation of Dominique Strauss-
Kahn, the IMF boss from the social party who was actually recommended by Sarkozy when
he became Managing Director of the IMF in Washington 3 years ago.
Michèlle Alliot-Marie's career has been brilliant in the Sarkozy government. A Gaullist
who made a career since 1986 as Secretary of State for Infocomm and in 1993 as Minister of
Youth and Sports, which then since 12 years ago has been almost without interruption as
Minister of Defense, Minister of the Interior, Minister of Justice and finally Foreign Minister
before the year-end vacation scandal in Tunisia. But that was not Madame MAM's only sin.
Her suggestion at a press conference that she would send French police to assist the Tunisian
police in defusing the tense demonstrations in Tunisia on January 11 caused a prolonged
polemic in the land of fashion. His visit to Kuwait on Friday-Saturday last week, which
included a meeting with Yahia Elgamal, Egypt's deputy PM, was unfortunately his last visit,
even though he will meet with Madame Clinton on Monday. This reshuffling has also caused
a shift in Sarkozy's cabinet. Alain Juppé, former PM, current Defense Minister and Mayor of
Bordeaux returned to the Foreign Minister position he held in 1993-1995. The post left by
Juppé was filled by Gérald Longuet, Chairman of the UMP Party faction in the ruling
parliament. In addition, the Minister of the Interior, Brice Hortefeux, was replaced by Claude
Guéant, former secretary of the Elysée Palace. Meanwhile, Brice Hortefeux himself will
accompany Sarkozy as one of his advisors. Apparently, this is a consolidation towards the
2012 presidential election and at the same time dismisses rumors of the return of Rama Yade,
a young French Muslim woman born in Senegal in 1972 from her post as French ambassador
to UNESCO after previously occupying the Secretary of Youth and Sports which she left in
September 2010.
5.3.
WAITING FOR THE DOMINO EFFECT OF THE REVOLUTION JASMIN:
Yesterday afternoon, February 11, 2011, almost 5pm EU time or the 18th day of the
demonstrations demanding the resignation in Tahrir Place, once again, we witnessed a
political tsunami in the Mediterranean Maghreb region. Some time ago, as we recall on
Thursday evening EU time, we posted to kahmi pro the seconds of the collapse of the Ben Ali
regime in Tunisia. The dictator ranked fourth in October 2009 in yahoo.fr's top 10 dictators.
This time, le tremblement de terre politique (political earthquake) actually hit the 10th rank,
Hosni Mubarak who won 88.6 percent of the vote in 2005. In fact, since then, he has realized
that 77 percent of Egyptians lost confidence in him, as only 23 percent of Egyptians
participated in the vote. However, due to the euphoria of winning for three consecutive times
in 1987, 1993, 1999 with 95 percent of the vote and being engrossed in serving the interests of
other nations, the boredom of the Egyptian people was simply ignored by him. This included
the objections of Ayman Nur, a young lawyer, 40 years old at the time, from the Ghad party,
an opposition party that won only 7 percent of the vote, which was actually four times that
amount according to an honest count.
A. The Domino Effect in the Middle East:
Tunisia and Egypt are the théâtre de marionnettes of America and the European Union
according to some friends from the Magreban region. Our Arab friends have a hard character
but are very tenacious in trade, study and love their fellow Muslims and protect minorities.
Loss of self-esteem makes them rebel, especially when they are fought by the ruling regime,
which is none other than their own brothers for the benefit of other nations' services. That is
the sincere confession of my friends from Magreb. Almost all Tunisian friends admit that the
CIA has long been entrenched on Tunisian soil helping the Tunisian secret service to
perpetuate Ben Ali's rule. However, after Ben Ali left, America and France as thick friends
turned away from him by not providing political asylum. In Egypt, the fall of the Mubarak
regime was not only supported by young people Muslims, but the disappointment of
minorities such as les coqs (Egypt's orthodox Christian minority) who have been protected by
Egypt's Muslim majority. However, they were disappointed after the beginning of the New
Year when they were victims of a bombing in Alexandria during a prayer service, and
Mubarak did nothing about it.
In our opinion, the next victim of democracy in the Maghreb is Algeria. This country is
currently led by 73-year-old Abdelazis Bouteflika. He was elected for the third time in the
first round, April 9, 2009 with 90.2 percent of the vote, 5 percent more than the 2004 election
with 85 percent of the vote. Despite the boycott by opposition parties, the turnout of 74
percent is also questionable because, as was clearly seen on screen, Bouteflika arrogantly
challenged the Algerian people "votez contre nous, votez même avec un bulletin blanc, mais
votez" do not vote for our party, vote even with a blank ballot card, but vote, while addressing
his discourse to the Algerian community in the dominant south coast of France. It is
noticeable that although it went unnoticed by the world, the Algerian demonstration of
disappointment coincided with the Tunisian demonstration that forced Algeria to temporarily
close its border with Tunisia.
We are among the disbelievers and must cautiously await the fall of Bachar El-Assad's
regime which is being campaigned by the western media to be hit by the domino effect of the
jasmin revolution in the near future. The British-educated Bachar inherited power from his
father upon the death of the late Hafez El-Assad in 2000. At the time, he was studying and 45
years old. He is the youngest president in the Middle East. When he succeeded his father, he
received 97.29 percent of the vote amid an opposition boycott. In 2007, he was re-elected
with 97.6 percent of the vote for a second 7-year term. Syria is America's pebble in the
Middle East that it tries to pry away through opposition parties, but always fails. Peace with
Israel can only be realized if Israel gives Jerusalem to Palestine and the Golan Heights to
Syria.
Instead, we waited for the domino effect to head to Djibouti, a small former French colony
on the Red Sea coast. This country is a super marionettes, or French puppets, because it has
long been a French military base with the nuclear aircraft carrier Charles de Gaulle stationed
in the region like the French military base in Dubai. Djibouti became independent from
France in 1977. Ismail Omar Guelleh came to power in Djibouti after succeeding his uncle,
Hasan Gouled Aptidon who ruled from 1977-1999. In the general election on April 8, 2005,
he was elected with 100 percent of the vote, after his political opponent, Mohammad Daoud
Chelem withdrew on the grounds that he had no money to finance his campaign. Omar
Guelleh, however, could not run for a third 7-year term.
B. Domino effect to Central Asia:
We are currently waiting for the scent of jasmine perfume to cross over to Central Asia,
specifically to Turkmenistan and Kazakhstan. This former satellite of the Soviet Union in
Central Asia is predominantly Muslim. Turkmenistan is currently led by president
Gurbanguly Berdimuhamedow, who was elected in the 2007 elections, defeating five other
candidates after the death of Saparmyrat Nyyazov in 2006 with 95 percent of the vote under
the supervision of international representatives from America and Russia. The natural gas-
producing country is one that is eager to rapidly transform into a service sector. This is
evident in the massive development of the tourism sector on the shores of the Caspian Sea,
which has become a major destination for EU tourists in rival Istanbul. However, the election
was marred by the government threatening residents of Lebap province who abstained from
the monthly grain subsidy. In addition, the first person to arrive at the polling station, let alone
an elderly person, was promised a gift that turned out to be a book on the biography of the late
president Nyyazov. Kazakhstan, meanwhile, has had only one president to date, Noursoultan
Nazarbaïev. In 2005, he was re-elected president under the watchful eye of the European
Union's Organization for Security and Cooperation, which objected to him not following
international norms. However, once again, the EU and America turned a blind eye to the
results that brought him 91.15 percent of the vote. The 70-year-old president recently moved
the country's capital from Almaata to Karaganda for reasons that remain unclear. The U.S.
and EU praised him as a developed ex-Soviet state due to the attraction of oil and gas, despite
the fact that Nazarbaïev's government was hit by the Kazakhgate scandal, in which several
members of his cabinet, including him, allegedly accepted bribes from Exxon Mobil Oil
Company officials in order to obtain oil and gas exploration concessions. In addition,
Nazarbaïev was close friends with Nikolas Sarkozy, who allowed Total France to conduct oil
and gas exploration in Kazakhstan. Before the election, his political opponent, Namanbek
Nukardilov was killed in his home with two bullets lodged in his chest and one in his head,
which according to the results of the investigation of the Kazakh authorities, was a suicide for
reasons of family conflict as is often the case in Central Asia and Turkey.
C. Domino effect to Africa:
In the 38 Francophone African countries, there are some countries that are still happy to
leave power to their tribal descendants. Look at Chad, Niger, Central African Republic,
Cameroon, Ivory Coast with two presidents (Laurent Dbagbo from the south and Lassane
Ouatarra from the north who is Muslim), Gabon and Madagascar. In our opinion, Teodore
Obiang Nguema Mbasogo, president of Guinea Aquator is the next target of the jasmin
domino effect. The president, who ascended to the throne after the coup d'état of his own
uncle in 1979, is among the longest-serving, at 32 years. He was elected for the fifth time with
a slightly lower vote share than in the 2002 election of 95.4 percent. In 2002, he received 97
percent. Human Rights Watch classifies him among the most repressive and badly behaved
dictators in the world for using oil money to keep him in power. Journalist Peter Maass
categorized him in slate.com as the most repressive dictator in 2008. Just as Hosni Mubarak
groomed Gamal Mubarak as his successor, Nguema also groomed his son Teodorin as his
successor in the midst of prostate cancer and coronary heart disease at the age of 68. France as
his former colonizer seems to have turned a blind eye to the situation in this country, of
course, because the country is the third oil producer in the Subsaharan Africa region like its
neighbors Gabon is held by Ali Bongo, following the death of his Muslim convert father
Omar Bongo in Barcelona, in 2009 after 40 years in power.
D. Lessons for Indonesia:
The first lesson is to never mortgage the dignity of your nation. If this happens, especially
to the extent that the nation's property becomes colateralized by other nations, then this will
become the bubble that will burst at any time without us expecting it. This is what made the
Magreban African youth rebel, let alone become le téâtre de marrionnettes, only as pawns of
other nations. As for the bleak future, unemployment is just the umpteenth effect of the
mastery of crony capitalism.
The second lesson, especially for the government and those who want to run for local
elections, is that there should never again be evictions and confiscation of carts from the
informal sector. The outburst of anger by Tunisian youth was caused by the rare sight in
Tunisia of the confiscation of Mohammad Bouazizi's merchandise cart, which in Indonesia is
a regular customer of disbun and Satpol Pamong Praja operations. Ironic indeed, because on
the night of Mohammad Bouazizi's funeral, Ben Ali attended the ritual.
The third lesson is that in regions of Indonesia that are not dominated by industry and
services or trade, and without job creation, especially since the labor force in Indonesia has
reached almost half of the population, becoming a civil servant is a dream. This dream will be
quickly realized especially when local governments are controlled by family dynasties and
clans. When all the clans have control, there is no other way for those who are marginalized
but to rebel. That is what happened to Leïla Trabelsi or the Trabelsi family, a common clan in
Tunisia as in North Sulawesi and North Sumatra, the former Tunisian first lady who was
previously a coiffeuse (hairdresser) gave full discretion to her closest cronies. Shamelessly
carrying away 1500 kg of gold belonging to the Tunisian people. In the end, our colleague
Mohammed Trabelsi, a professor at the University of Tunisia was also affected by having the
same family name, even though he had no connection to the first lady and politics.
The Jasmin revolution has actually had a snowball effect on other countries including
France, the former colonizer. Michèlle Aillot-Marie (MAM), the French Foreign Minister,
was demanded to resign by 52 percent of the French people through a survey by LCI, one of
the French news TV stations that airs 24 hours to rival France24, the Arabic-language French
news TV, for using the private jet of one of Ben Ali's cronies during her year-end vacation in
Tunisia. François Fillon, the French PM, is being demanded to resign by the opposition for
using Mubarak's military plane during his year-end vacation and meeting Mubarak in Sharm
El-Syeik, the Egyptian tourist area by the Red Sea where Mubarak is now in exile. Hopefully
he will avoid being attacked by tiger sharks, which are fond of attacking tourists vacationing
in the region.
5.4.
EXAMINING THE DYNAMICS OF THE WORLD POLITICAL ECONOMY
ARABIC:
For two months, the international community was treated to the fall of two regimes that
had been in power for far too long in their respective countries. For 23 years and 30 years,
respectively, they controlled the country's economy for the benefit of their closest cronies. In
contrast, the fate of the people was completely neglected. In Egypt, the marginalized
population had to live in a cemetery. El Abidine Ben Ali and Hosni Mubarak had to surrender
to the demands of their people through the jasmin revolution, the name of a fragrant flower
that grows on the coast of Masrik and Magreb countries. In Tunisia, all economic sectors,
especially tourism in Tunis, Sfax, Gabès, Hammamet, Sousse, Kisserine, Jerba, were
controlled during the 23-year Ben Ali regime, including the Trabelsi clan. The couple El
Abidine and Leïla, a former hairdresser turned second first lady, are very influential in
Tunisia. In Egypt, Mubarak is preparing for his son Gamal to succeed him in September this
year. An attempt that has certainly failed. The phenomenon in Arab countries proves that the
ownership of petrodollars does not guarantee the welfare of the people. This was actually
warned by Stiglitz (2005), when he was Deputy Director of the World Bank. However, it was
still ignored. This phenomenon also proves that Abraham Maslow's self-actualization theory
does not apply in Arab countries. Of the 22 Arab league countries, we tried to examine 10
countries that are currently These regimes have either fallen or are anxiously awaiting the fall
of their authoritarian regimes. The ten countries are Morocco, Tunisia, Turkey, Jordan,
Algeria, Libya, Egypt, Saudi Arabia and Yemen. We use as reference the macroeconomic
publication published by le monde daily, edition, Tuesday, February 8, 2011.
Three of the ten countries are kingdoms. Morocco is ruled by King Mohammed VI who
ascended the throne ten years ago replacing his father King Hasan II. The king is very popular
in his country, having made the cities of Marrakesch, Fèsh, Cassablanca, Rabat, Tanger into
tourist cities on the coast and in the Sahara desert. We are among those who do not believe
Morocco will change anytime soon. However, he is not without his problems. The Western
Sahara rebellion with El-Aioun as its capital is one of them. Jordan is also a kingdom ruled by
King Abdullah II. The dissatisfaction of the Jordanian people over high unemployment and
weak government caused him to fire his prime minister. The Kingdom of Saudi Arabia so far
has not experienced the dissatisfaction of its people. In this Islamic Development Bank (IsDB)
headquarters country, the Islamic world's disappointment with Saudi Arabia is the excavation
of anthropological sites of their ancestors which sometimes obscures the Islamic heritage. The
rest is a republican system led by a president for life while preparing a successor from his
offspring. Yemen, Egypt, Tunisia, Algeria, Libya, Syria and Tunisia are real examples.
In terms of macroeconomics, firstly, Turkey, Algeria, Saudi Arabia and Egypt has a gross
domestic product above US$100 billion with the highest record achieved by Turkey which in
2010 reached US$729.1 billion followed by Saudi Arabia (US$434.4 billion), Egypt
(US$216.8 billion) and Algeria (US$159 billion). Meanwhile, other Arab countries have
GDPs below US$100 billion, with Jordan's smallest GDP of only US$27.1 billion, which is
dominantly derived from the tourism sector in the Dead Sea and the tourist city of Petra. With
the exception of Turkey, Algeria and Saudi Arabia rely on their petrodollars, which until now
have only been enjoyed by the rich and those closest to the kingdom.
Second, Algeria, Libya and Saudi Arabia have balance sheet surpluses trade. Meanwhile,
seven other countries are in deficit. This shows that the foreign trade sector has not yet had an
effect on job creation in the country. Moreover, the young people are the best-educated
personnel with degrees in computer science and information technology.
Thirdly, the economic structures of Jordan, Egypt, Morocco and Syria are between 16
percent and 31 percent exporters of agricultural products. This is why these three countries are
self-sufficient in food. In contrast, these four countries are importers of energy resources. On
the other hand, Algeria, Libya, Saudi Arabia and Yemen are world exporters of crude oil
through oil refineries in America and Rotterdam, the Netherlands and then exported to
Morocco, Egypt, Tunisia. Meanwhile, Algeria, Libya, Saudi Arabia, Yemen import food from
their neighbors but again through the European Union. So the trade relations between the
Arab countries themselves are created through the EU.
Fourth, 60-75 percent of the manufacturing sector is an export product of Morocco,
Jordan, Tunisia and Turkey, especially the tourism sector. Whereas in Egypt and in Syria, the
manufacturing sector has a proportion of 39.5 percent and 41.5 percent mainly in the tourism
sector. Meanwhile, in Saudi Arabia, Yemen, Libya and Algeria, this sector is below 11
percent in the export structure with the lowest proportion in Algeria reaching only 0.9 percent.
On the import side. All ten countries are importers of manufactured industrial goods,
especially household consumer goods, reaching above 49 percent with the highest proportion
in the import structure reached by Saudi Arabia reaching 87 percent. While the oil and gas
imports of the ten countries are between the proportions of -2.5 percent in Algeria and 33.33
percent in Syria. While Yemen is the largest importer reaching 28.6 percent.
Fifth, the population aged 14-25 is around 17.6 percent in Turkey and 22.1 percent in
Yemen. In Tunisia and Egypt, this proportion reaches 19.3 percent and 20.2 percent,
respectively. In these ten countries, the ratio of higher education graduates is above 10
percent, with the highest proportion in Jordan (41 percent), Turkey (38 percent), Tunisia (34
percent), Saudi Arabia (33 percent) and Egypt (28 percent). This is
The reason why the regimes of Ben Ali and Mubarak fell so quickly was because the
dominant role of educated young people became the core of people power in both countries.
Sooner or later, this phenomenon will spread to Libya ruled by Mouammar Khadafi for 43
years, Algeria by AbdelAzis Bouteflika (21 years) and Yemen by Abdullah Ali Saleh (32
years).
Sixth, the GDP per capita of four countries - Morocco, Syria, Egypt and Yemen - is in the
range of US$1000-4000. Three countries each Tunisia, Jordan and Algeria are in the range of
US$4000-10,000. Turkey, Libya and Saudi Arabia have GDP per capita in the range of
US$10,000-16,000. Only Turkey is certainly ready as an industrialized country. Meanwhile,
Libya and Saudi Arabia will face the paradox of natural resources. For both, oil is more of a
curse than a blessing. As for Saudi Arabia, it may only become an annual religious tourist
destination for Muslims.
Seventh, in terms of the corruption index, four Arab countries, Yemen, Libya, Syria and
Algeria are in the 2-3 point range. Meanwhile, the other six are in the 3-5 point range. The
smaller this index, the more rampant corruption is. The larger the index, the better the
country's accountability. This can be seen in New Zeland and Scandinavian countries such as
Sweden, Danemark, Finland and Norway as countries with zero corruption. The phenomenon
in the Arabian Peninsula shows that corruption still pervades the government structures of the
ten countries, especially followed by a crony capitalism mentality that causes the youth to
rebel because even working or working must go through the ruling clan, of course with cost
consequences.
So why would a small island nation like Bahrain join the protests? In the small country
ruled by King Hamad Bin Isa Al-Khalifa, the royal family is a Sunni minority dominated by
the Shia population. The royal family tried to distribute €2000 or the equivalent of 24 million
rupiah per family to quell the protests. However, this effort was in vain. The motive for the
protests in Bahrain is discrimination by the monarchy.
The collapse of the Mubarak regime was a climax because Egypt is the core pole in the
Arab world and a lesson for leaders who try to create crony capitalism in any government,
including at the smallest regional level in Central Sulawesi.
5.5.
POLITICIANS VICTIMIZED BY EUROZONE CRISIS :
History records that this year has been a dark one for four politicians victimized by the
Eurozone crisis. First, it started with Brian Cowen, the Irish Prime Minister who had to step
down in February 2011 during the anticipatory legislative elections in the Irish parliament.
Since then, his party has lost absolute dominance in parliament and ended more than 80 years
of party supremacy. Harsh conditional aid from both the EU and IMF was the beginning of
his party's downfall.
Secondly, in March 2011, Portugal's then Prime Minister José Socrates was deposed after
the Portuguese parliament rejected his fourth belt-tightening plan (plan d'austérité) which
included state budget efficiency, increased taxes, extended retirement for civil servants,
reduced health and education subsidies, and increased interest rates as directed by the IMF
and EU. He became the first victim of a socialist Prime Minister in the Eurozone. In June,
center-right liberal Pedro Passos Coelho became Portugal's new Prime Minister.
This week is a grim history for two politicians at once Prime
Ministers in their respective countries. Last night Georges Papandréou officially announced
his resignation after consulting with opposition parties to form a joint government. The Prime
Minister, who graduated from Amherst College, London School of Economics (LSE) and was
born in Minnesota, USA, is also the son of former Greek Prime Minister from 1994-1996,
Andréas Papandréou, who had to step down as PM after his unpopularity was caused by his
unilateral announcement of a referendum plan that was eventually canceled after consultations
with two major Eurozone leaders, Germany and France, the day before the opening of the
G20 in Cannes. Rumor has it that Greece's favorite for PM is Lucas Papademos, the former
Governor of the Central Bank of Greece from 1994-2002 who is credited with cleaning up
Greece's illegal accounts.
The fourth victim is Silvio Berlusconi. The Italian Prime Minister announced his
resignation yesterday (9/11/2011) after Cavalière lost the majority of votes in parliament. The
appropriate nickname for him is "unbroken by misfortune". How could he not, various
scandals have hit him such as Rubygate, corruption scandals, TV channel monopoly. As a
result, the Italiano in every demo expressed the words "Basta, aka ça suffit, aka enough!!!"
becoming a famous word in Italy today. It is voiced by Italian students and young Italians,
especially those who earn less than the regional minimum wage (UMR) of €900 per month.
Basta became popular because he saw Silvio Berlusconi's behavior as full of scandals, but
remained in power despite being abandoned by other supporting party allies and being hit by
the "Rubygate" scandal, aka his pleasure in inviting beautiful young chickens at Appiano
Gentile, Berlusconi's private residence for calling Milan police to free rubywomen of
Moroccan descent. Some demonstrators went to the extreme of displaying naked posters of
Berlusconi with euro vitals. It is an open secret in Italy that Berlusconi's wealth is a mixture of
his own wealth and hot money from Sicily. It started in the 70s when Stefano Bantade, a
frontman for the Cosanostra (as the Sicilian mafia is called) contacted Marcello Delle Utri,
Berlusconi's right-hand man in Milan. After making an appointment, he flew by private jet to
Milan, meeting at Berlusconi's Piazza Di Marcanti, unbeknownst to Berlusconi and in
Berlusconi's absence. Bantade invested his money in Berlusconi's property group, which now
dominates Italy's wealthy northern region as a thriving industrial center and technopôle. In
addition to long-time ownership of Milan's Accociazione del Calcio (AC) held by Adriano
Galiani, Berlusconi monopolizes TV channels through the Mediaset group. While waiting
for the Champions League final at Rome's Estadio Olimpico in May 2009, the author tried
switching channels at the Aston Roma hotel near Termini station. All the channels carried
Berlusconi's speeches and activities as prime minister. Perhaps the only two channels not so
keen on Berlusconi's image were la RAÏ and the state-owned Europe 7 and rival Mediaset.
While reading Corrièra de la Serra and Gazetta de lo Sporto, Berlusconi's picture was also
displayed. Apparently Corrièra de la Serra is a daily that Berlusconi took over through one of
his right-hand men Licio Gelli through the Mondadori group. Licio Gelli is actually the entry
point for anti-corruption and anti-dirty money prosecutors in Milan because according to
Galaldo Colombo, a retired Milan anti-corruption prosecutor who has a 5 ring bodyguard, it
was Licio who kept the attendance list of the Piazza de Fantana meeting, where one of those
present was Berlusconi. Costanzo, a senior idealistic journalist at Corrièra de la Serra, had to
resign because he could not bear to leave the daily in 1982.
In the entertainment business, Berlusconi owns Mendusa Multicinema, Italy's 21st in
almost all Italian cities. So almost all business activities in Italy are monopolized by the
Berlusconi business group. Hotels and restaurants, apartments, apartment agencies,
architectural companies through Mario Cattalano, AC Milan through Galiani, Mediaset
through Massimo Cancamito, Mondadori through priest Don Gallo, as well as the current
giant dam project in Venice costing €5.5 billion during the period 2003-2013 was done
without any referendum to the Venetian people, including with Cavalière and the former
frontman of the political party Forza Italiano aka let's go Italian who once made him prime
minister in the 90s before falling due to the abandonment of his ally, Humberto Bosi from
the Northern League party. Currently, Berlusconi holds the Cavalière party with the slogan
papolo de la liberta, which strangely enough has many fans in the southern region, especially
Naples. Many of these cavalière members are beautiful politicians where the family clan plays
an important role. Take Pamela Romano, a beautiful young woman who is Berlusconi's main
supporter in Naples. It is possible that among her supporters are the Camoras, as members of
the Napolitano mafia are known.
That's Berlusconi, although he has slipped up a few times due to scandals and
Many of his right-hand men went to jail for corruption and money laundering such as David
Mills, Berlusconi's lawyer in the UK, Marcello delle Utri hit by a money laundering scandal,
Mario Restucia, a corruption scandal, in addition to Rubygate, and the threat of
parliamentary impeachment. However, Berlusconi weathered it all. He remained calm in his
PM seat including utilizing immunity as PM. It is the Italian people who are at fault, because
one of the two Italiano elected him as PM. But as smart as a squirrel is, it must fall. He had to
step down because, precisely because of the debt crisis, this week marks the end of his two
terms as PM.
Who's Next?
Some politicians will of course follow the four victims of the eurozone crisis. Spanish
Prime Minister, socialist José Luis Zapatero is likely to be the next victim of la politique
d'austérité. He may be the third victim of socialist parties in the EU after José Socrates,
Georges Papandréou. He declined to stand again in the anticipated legislative elections on
November 20, 2011, which was a victory for the right-wing parties. Borut Pahor's
government in Slovenia may become the sixth victim in the Eurozone if his party loses the
snap legislative elections on December 4, 2011. Slovakia's ruling party fell last October, just
waiting for legislative elections in March 2012. Chancellor Angela Merkel's government is
not without threats. She will soon present her anti-crisis policy to parliament even though the
Christian Democrats, her party, still have high hopes for her in the face of opposition from the
Social Democrats and the Greens.
5.6.
INTERPRETING THE HISTORICAL CURSE OF OIL EARTH:
Since last March, the pages of the international media have been dominated by the rise in
global crude oil prices. There are at least three historical events that cannot be forgotten in the
world of black gold. First, the six-day Yom Kippur war in October 1973 between Arab
countries and Israel. The war in the month of Ramadan caused the world price of crude oil to
rise from US$3 per barrel to US$11 per barrel. Second, the dual events of the Iranian
revolution (1979) and the Iran-Iraq border war (1979-1981). These two events pushed up the
world crude oil price from US$14 per barrel to US$35 per barrel. Third, the world crude oil
price rose in the summer of 2008 to US$147 per barrel. This increase was driven by
speculation of increased Chinese demand and declining production of oil wells in member
countries. The Organization of Economic and Development Commissions (OECD) is the
home of advanced and newly industrialized countries.
When the anti-Ben Ali protests erupted in Tunisia on December 18, 2010, the prices of
light sweet crude oil and Brent were still at US$88.24 and US$91.67 per barrel, respectively.
By the time of the fall of Ben Ali and Mubarak on January 4 and February 13, 2011, light
sweet crude oil and Brent had moved between US$89-91.54 and US$98.68-95.25 per barrel,
respectively. This indicates that world oil prices are still in a tolerable range. These two
countries are not major producers of crude oil. The peak, when two days after the fall of
Mubarak, in Bahrain, Iran and Libya there was a wave of protests as a domino effect of the
jasmin revolution. At that time, both light sweet crude oil and Brent experienced
uncontrollable volatility in the range of US$91.54- 103.41 and US$101.43-119.79 per barrel
between February 14-24, 2011. This indicates that the wave of protests that led to the civil
war in Libya has been the main trigger for the rise in world crude oil prices Libya is the
world's leading crude oil exporter in North Africa.
Algeria together account for 35 percent of the world's supply. In its export structure, the
proportion of oil reaches 96.7 percent. While Algeria reached 98.8 percent. Libya is one of the
four major producers of crude oil in Africa, producing 1.6 million barrels every day. The
reduction in Libyan crude oil production has hit the European Union, especially Italy, which
imports 30 percent of Libyan crude oil. The current phenomenon in Libya is actually just a
spillover effect of the Arab people's boredom with monarchies and regimes that have been in
power for too long with no welfare. The Arab people are tired of their role as servants of
foreigners (compradors). Foreigners' interest in investing in their countries is dominated by
oil, while they are dependent on bread from the European Union. Will this rise last long? It is
difficult to answer, because in addition to acting as crude oil producers, Arab countries are
major importers of petroleum derivatives and agriculture, especially food. The proportion of
agriculture in the gross domestic product (GDP) of Algeria, Libya and the Arab world Saudi
Arabia is below 1 percent. Only Yemen accounts for 6 percent of the agricultural sector. Arab
oil-producing countries are highly dependent on food imports from the European Union and
America. This leads them to want to quickly transact oil and gas for their domestic food
needs.
Petroleum is seen predominantly as a curse rather than a blessing. The reason is, first, that
countries that have it tend to have corrupt and undemocratic leaders who even lead their
people into poverty. Take, for example, Theodore Obiang Nguema Mbasogo, president of
Equatorial Guinea. He ascended the throne after his uncle's coup d'état in 1979. He is the
longest-serving president in Sub-Saharan Africa at 32 years. He was elected for a fifth time in
2009 with a slightly lower vote share than the 2002 election of 95.4 percent (97 percent in
2002). Human Rights Watch classifies him as one of the most repressive and badly behaved
dictators in the world. He used oil money to keep himself in power. Journalist Peter Mass
even categorized him in slate.com as the most repressive dictator of 2008. Just as Hosni
Mubarak groomed Gamal Mubarak as his successor, Nguema is grooming his son Teodorin as
his successor in the face of prostate cancer and coronary heart disease at the age of 68. As the
third oil producer in the Subsaharan Africa region, Equatorial Guinea is almost a country
without development. Gabon, currently held by Ali Bongo, is no different. The death of his
father Omar Bongo in Barcelona in 2009 after 40 years in power has long prepared his heir,
albeit through elections. In Central Asia, Kazakhstan is an oil producer that has had only one
president since the country's independence. In 2005, Nursultan Nazarbaïev was re-elected
president under the watchful eye of the European Organization for Security and Cooperation,
which objected to an election that did not follow international norms. Yet, once again, the
European Union and America turned a blind eye to the results that brought him to power
91.15 percent of the vote. The same was true in Azebaijan. As an oil and gas producer In the
Caspian Sea, Hyder Aliev, a former head of the KGB, was in power from 1993 to 2003. He
was immediately succeeded by his son Ilham Aliev in 2003 upon his death. In 2008, Ilham
Aliev was re-elected for a second time as president with 88.73 percent of the vote amid
objections from the Organization for Security and Cooperation in Europe over the election.
Secondly, oil is the main source of wars on this earth that sometimes come to a halt simply
because the warring parties have tired themselves. Sudan and Anggola are indicators of this.
Third, oil makes foreigners, especially the European Union and the United States, impose
double standards on the countries that own it. The US and EU at the same time allow
repressive dictators to remain in power, wrapped in the name of protecting radicalism in Islam
in Arab countries. In Asia, they turn a blind eye to the suffering of the people as long as it is
profitable for them, including allowing bribery even as in Kazakhgate. This is what happened
in Kazakhstan and Azerbaijan. Fourth, oil price volatility knows no season. History records
that the Yom Kippur war was marked by an increase in energy demand in mainland Europe.
During the war, the European continent entered the fall season. Little by little, each country
reserved its energy for the coming winter. This phenomenon led to an increase in energy use
such as space heating in the winter. Today, Europe is in the midst of spring. Of course, energy
use is decreasing. However, for future needs, reserves must be made. Although the use of
mass alternative energy has been cultivated on this land such as solar power, windmills and
ocean currents, oil is still the favorite for industry.
Today, the cause of rising oil prices has shifted from the issue of The sentiments of
competition over holy cities, ethnicity, and border conflicts between countries as well as
moral hazard are issues of unfair sharing within the producing countries. Yet, oil continues to
bring prolonged suffering to the lower classes in Subsaharan Africa and Central Asia. Only
the United Arab Emirates in the Middle East can turn this curse into a blessing. Yet this
country was only built by Persian travelers in the past who certainly did not stay. As for Saudi
Arabia, it may be nothing more than a religious tourist destination for Muslims around the
world after its oil reserves run out. Moreover, Libya The Arab Magreb is an uninhabited
desert with an area three times that of France and its inhabitants predominantly inhabit the
Mediterranean coast. Unfortunately, the safe and peaceful Arab Magreb, as the Qur'an surah
At Tin suggests, has turned into a civil war arena because of the ego of individuals who do not
understand that the blessing of oil can be a curse of history. Our guess is that this oil wealth is
sometimes used as collateral by multi-national companies for oil exploration because of the
ignorance and selfishness of their leaders.
5.7.
WORLD SOCIAL FORUM: TIME TO TURN TO AFRICA:
While the world's attention is focused on ending the ripple effects of the Jasmin revolution
in Egypt, there is one important moment that has escaped our attention. The 11th World
Social Forum is currently taking place in Dakar, Senegal from February 8-11, 2011. Dakar, a
city synonymous with the final destination of the rally that claimed many lives including its
originator, Paris-Dakar at the beginning of each year before moving to Argentina as a
consequence of the lack of security guarantees in the Sahel (sub saharan) region. The Dakar
World Social Forum (le Forum Social Mondial), attended by between 40,000 and 50,000
participants, with the theme "Un Autre Monde est Possible", could there be another world, is
actually a rival to the World Economic Forum held at the end of January every year in Davos,
Switzerland, which looks very glamorous, capitalist and elitist, this year opened by Russian
President, D. Medvedev, who focused on inviting only G-20 heads of state. Moreover, the
registration fee is quite expensive for participants from developing countries (US$8000-
10,000) for the three-day event in the highlands plus enjoy the snowfall.
Unlike the World Economic Forum (WEF), this year's World Social Forum (WSF) is
funded by a syndicate of world non-governmental organizations (NGOs) which this year
reached 1.5 million euros which brought together politicians, especially socialist parties and
socialist democrats in the European Union, researchers, socialist militants, scientists from
developing countries in Latin America, Asia and Africa, and policy makers in developing
countries. This year, three Latin American leaders who are rising stars and who have shown
themselves to be full-time servants of their country the hearts of his people. First, Evo
Morales, the weathered footman who performed an anti-imperialist and capitalist plea.
Bolivia's first president of Indian descent, Morales is best known for his ideas and
implementation of Coca, a Bolivian national beverage that is popular in Latin America and
threatens the hegemony of American Coca Cola. However, he sometimes faced world opinion
that was led to identify Bolivian coca, which is sown in the Andes mountains, with cocaine.
In fact, it is very different, because coca can become cocaine when it goes through chemical
procedures in various illegal laboratories in Latin America. The second rising star to speak
was Luis Ignacio Lula Da Silva, the former President of Brazil who, although no longer
serving as president, remains popular in the European Union and developing countries
because of his idea of compensating developed countries for the preservation of the Amazon
forest which covers nine Latin American countries: Brazil, French Guiana, Guyane,
Suriname, Venezuela, Colombia, Peru, Bolivia, Paraguay which is famous for the idea of
Porto Alegre where the fourth WSF took place. The third rising star to speak, Hugo Chavez,
President of Venezuela, a symbol of the Bolivarian revolution that was instrumental in uniting
the world's socialists and inspiring a fair share of the world's oil and gas between
multinational corporations and developing countries that had been the bane of natural
resources as expressed by Stiglitz (2005). Turkmenistan, Azerbaijan, South Sudan, Sierra
Leon have felt the impact of Chavez's policies in Venezuela as well as reading the changing
signs of the times.
Some of the lessons learned from the WSF are firstly, since The first WSF was held in
2000, we can see how all participants debated and developed a roadmap and grounded the
solution of the world's social problems (hunger, education, health, environment,
marginalization of the poor, to African oil and gas exploration) without any barriers either as
NGOs, politicians, or state leaders, let alone feelings as superior or inferior nations. Secondly,
the organization of this event in Africa coincides with the moment of fading trust in world
capitalism amid the world economic crisis, especially in the European Union, which is led by
social parties that are affected by the legacy of the European Union. NThe Greek, Portuguese
and Spanish crises and the social consequences before our eyes such as the handling of the
food crisis and the volatility of world oil prices were initiated by France to be included in the
G8 and G20 agenda in Deauville and Cannes, France this year. However, once again,
America through Timothy Geithner (US Treasury Secretary) has objected, of course to protect
American speculators. It has become a common opinion in the EU that rising food prices were
one of the triggers of the Tunisian revolution and social unrest in various parts of the world
such as Haiti, Egypt, the Philippines, Sudan as a result of the actions of world speculators,
especially hedge funds based in the US and UK, two members of the G-20. Third, this WSF
should be a starting point for us in looking at Africa. Although every day we bow down five
times facing Africa, to be precise the coast of the small country of Comoros, which is indeed
the majority of Muslims wearing yellow skullcaps with white lines around them, the view that
Africa is poor and controlled by corrupt leaders must gradually be abandoned. South Africa,
Botswana, Anggola, Namibia in the Autral Africa region, Kenya, Mozambique, Tanzania, and
Ethiopia in the Eastern region, and Ghana and Senegal in the western region are candidates
for the new industrialized countries in Africa, although we will certainly find oddities in
Anggola, which was colonized by Portugal. This pro-western country has its oil wells
managed by the China National Oil Offshore Company (CNOOC), which is protected by the
marxist army from Cuba. Fourth, this WSF is a moment for countries in the Niger delta such
as Niger, Chad, Nigeria and Cameroon to voice environmental damage due to oil exploration
abandoned by Royal Dutch Shell as a consequence of the absence of security guarantees in oil
and gas exploration. Fifth, the WSF this time is also dominated by Chinese and Indian
entrepreneurs, especially those engaged in the agricultural, oil and gas exploration,
supermarket and property sectors. Remember that the dominant rose flower in the European
Union was imported as a result of equal cooperation between entrepreneurs from India and
the people of Ethiopia. It seems that half of Africa has been dominated by Chindia's dragons
and cobras including those who are competing for oil exploration in Tambura and Jabu, South
Sudan after winning oil exploration concessions in Gabon, Anggola, and Chinese
businessmen have made Mozambique the base for Chinese supermarkets in East Africa.
Unfortunately, even though it's just our guess, none of the Indonesian leaders participated
in this moment. Our leaders seem to be happier being a fan at the G20 event than the WSF
event in Senegal.
5.8.
WILL GREECE LEAVE THE EURO ZONE?
Apparently, Georges Papandréou prefers to have the legitimacy of his people rather than
the solidarity support of friends in the European Union in the crisis in his country. After the
emergency summit of 17 Eurozone member states, Thursday (27/10/2011) until Friday
morning in Brussels last week, he received full support from 16 other members. The three
action plans were to write off half of Greece's €150 billion debt, technical assistance from the
EU and IMF, and mass aid from both the IMF and the European Monetary Fund for Financial
Stabilization (Fonds Monétaire Européen pour la Stabilisation Financière). This institution has
a fund of €440 billion from contributions from 17 eurozone countries. However, it has already
drained €350 billion euros for economic recovery in various EU members. At the last decision
in Brussels, the institution received a commitment to have a fund of up to €1000 billion. This
is still a commitment. Why is it so important to save Greece from the crisis? The fear of a
ripple effect of the Greek crisis is the main reason. Like the experience of the Asian crisis that
exploded and spread from Thailand to South Korea, Indonesia, Malaysia and the Philippines,
the two single leaders of the Eurozone: Germany and France are worried about this. Ireland
and Portugal have already received crisis-fighting financial assistance from both the EU and
IMF. The Czech Republic is willing to receive incentives, while Slovakia, its parliament has
refused. Finland, according to the referendum results, the people trust their own strength
more. Another reason, of course, is the solidarity of European countries that do not want one
Greek asset after another to be sold to foreign hands. Since two years ago, the management of
two-thirds of the Piraus port has been taken over by Cosco, a Chinese giant that will last for
the next 30 years. Antata Bank, Postbank, port of Taloniki, Greek post office, Greek water
utility and state electricity company one sold to foreign investors including China, which held
US$4,210 billion in foreign exchange reserves at the end of last year.
However, the efforts of the 16 Eurozone member states seemed to be raw again after the
Greek PM from the socialist party made a surprising discourse in the Greek parliament to hold
a referendum in January 2012. A referendum that legitimizes whether or not to implement the
policy of tightening the belt (politique d'austerité).
Today, leaving the Eurozone for economic recovery is no longer a taboo option. Although
80 percent of Greeks still vote with the euro. If the choice to leave the Eurozone is made, the
following scenarios will occur for this choice:
First, Greece returned to its original currency, the drachme. However, to balance its trade
balance, Greece had to devalue its currency by 55 percent. Of course, this makes imports
more expensive, while spurring exports. However, this happens when the elasticity of imports
is greater than that of exports. If this condition is not achieved, then this policy actually makes
the Greek people even poorer, especially since the people are used to subsidizing
unemployment, health, pensions, housing. Of course, this is even worse than the policy option
of tightening the belt.
Second, a lose-lose scenario for donors. Exiting the Eurozone is certainly a bitter exit for
the main donor of the European commercial bank syndication, the IMF as they will lose €300
billion. The experience of the MBA crisis (Mexico, Brazil Argentina, 1980s), tequila crisis
(1994), Asian crisis (1997), Russia (1998), Turkey (2000), the IMF and other donors are more
concerned with saving their money and turn a blind eye to the hunger of the people in any
country. In the first semester of 2011, the profits of France's top banks such as Société
Générale, BNP Paribas, Crédit Agricole, Bank Populaire, Crédit du Nord reached €8.2 billion.
These profits, of course, will be eroded by €7.9 billion in the short term to cover the Greek
debt crisis. This is sure to upset shareholders and the French people.
Third, the fear of a domino effect. Paranoia over the spread of the Greek crisis has gripped
17 Eurozone leaders. Why not France, one of the triple A holders by Moody's like the
Netherlands, Luxemburg, Germany, Finland, is threatened with relegation if it does not
balance its public spending by December 2011. After Greece, getting ready to be hit by the
crisis is Portugal which has received a €6.5 billion bailout. In this country, unemployment has
reached 20 percent of the active population, followed by Spain, Italy. Even Ireland, which is
recovering from the crisis, will be hit. Even though this country has just received the title of
Ireland Asks for Fulus (IMF). Of course, after Italy is France.
The root of this crisis is actually governance. How could it not be, two of the 4 threshold
criteria of Maastricht were violated by Greece. When the country was preparing to enter the
Eurozone, before the socialist party came to power, its leaders acted dishonestly in reporting
macroeconomic indicators to be accepted as a member. The Maastricht criteria required
inflation to be in the range of 1.5-2 percent of the average inflation in the three lowest
inflation countries and not to exceed the three reference countries. Interest rates should not
exceed 2 percent of the three countries with the lowest average inflation. The fiscal deficit
should reach a maximum of 3 percent, and government debt to Gross Domestic Product
(GDP) should reach a maximum of 60 percent. When the Greek crisis erupted two years ago,
fiscal deficits in Greece and Portugal alone had reached 15 percent, not to mention Spain.
Today, in the four most economically weak countries in the Eurozone, government debt ratios
have reached 142.8 percent in Greece, 119 percent in Italy, 96.8 percent in Belgium and 93
percent in Portugal. So it is like a time bomb waiting to burst (bubble).
It seems that Greece did not learn from the Philippines during the Asian crisis. When Fidel
Ramos came to power, the country was only slightly affected by the Asian crisis because of
his good governance, although it was again countered by Joseph Estrada. Fidel Ramos
abolished monopolies, fought oligarchy in that he did not come from an oligarchic family like
some Philippine Presidents before and after him, carried out land reforms against land tenure
by 38 families who controlled almost 80 percent of productive land, including reforms in the
banking sector. On IMF advice, the Philippines only rationalized its water utilities and
airlines. Greece did not also learned from Malaysia, one of the four countries on earth that
forbade IMF loans like Botswana, Ecuador, Bolivia. The combination of policies set a fixed
exchange rate at 3.8 ringgit per US$ in the period 1998-2005, guaranteeing customers' money,
avoiding bank closures, lowering interest rates, recapitalizing financial institutions through
the creation of "Danamodal" and "Danaharta" institutions. The combination of monetary,
fiscal and trade policies was Keynes' idea that was successfully implemented in the USA
during the great depression of 1929. However, the IMF avoided applying it in Indonesia,
Korea, Thailand, but succeeded in Malaysia, because indeed the IMF is only concerned with
getting its money back plus its experts are paid handsomely by borrowing countries whose
academic capacity does not exceed the academic ability of economists in developing
countries.
