Monday, 30 May 2011

G8 Promises Billions in Aid to the Arab Spring

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G8 FranceAt last week’s meeting held in Deauville, France, the assembled leaders of the so-called G8 (the “wealthiest industrialized nations”) agreed to send at least $20 billion dollars to Egypt and Tunisia to help the nascent governments in those countries to spur their economic growth. The G8 leaders hope that a large infusion of aid money will prevent these countries from sliding away from the “democracy” they claim to be establishing.

Many of the leaders attending the Group of 8 working meetings last Thursday and Friday expressed concern that in the absence of a quick infusion of significant cash, the summer following the Arab Spring will burn and wither the new buds of democracy taking root in the Middle East. “We members of the G8 strongly support the aspirations of the Arab Spring, as well as those of the Iranian people,” proclaimed in a memo published after the conclusion of the late night confab.

The $20 billion figure was tossed around by French President Nicolas Sarkozy as a starting point; Sarkozy said the final figure “could be double that.”

President Obama is credited with organizing this choir. A spokesman informed the New York Times that European leaders had gladly added their voices to the chorus calling for aid.

“Chancellor Merkel, President Sarkozy, a number of leaders, have all stressed the importance of using these meetings to show a unified front in providing support for Egypt and Tunisia,” Benjamin J. Rhodes, Mr. Obama’s deputy national security adviser, said of Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France.

There is little doubt that the lion’s share of that aid package will come from the United States. While there were few detailed denominations provided in any of the statements praising or pronouncing this latest unconstitutional promise of foreign aid, there were a couple of specific starting points provided.

A story published in the New York Times reports:

Prime Minister David Cameron told Mr. Obama on Wednesday that Britain would support the effort, and it would pledge $178 million. American officials said they had gotten encouraging signs from Germany and France, even if neither has made a concrete pledge.

The International Monetary Fund, which has had a team in Egypt for the last week, is readying a package worth $4 billion to $5 billion to help it bridge a financing gap, a fund official said. Egyptian officials said their economy, damaged by unrest that halted trade and tourism, will need an infusion of $12 billion just this year to steady itself.

Last week, Mr. Obama announced $1 billion of debt relief and $1 billion in loan guarantees for Egypt. The European Union plans to increase its aid by $1.75 billion.

President Obama was quick to assure the American people that the promise of aid to Egypt and Tunisia was not “a blank check” but “an envelope that could be achieved in the context of suitable reform efforts.”

There is no doubt that President Obama would not welcome the taking of a similar tack by the American people regarding our own government. What would be his reaction (and the reaction of the coterie of congressional co-conspirators) be if en masse the citizens of the United States informed the federal government that we would be happy to fund the government pending its demonstration of reasonable and “suitable reform efforts” toward adhering to the principles of limited government set forth in the Constitution?

As for how they anticipate that their substantial aid money will be used by the recipient nations, the leaders of the G8 imagine that it will be employed in “broadening economic opportunity” and “breaking down trade barriers.”

This generous proffer of largesse comes at a curious time, given the global economic recession. The manipulation of the economies of the nations represented by the G8 by their respective centralized banking authorities through the creation of never-ending “boom-bust” cycles has left these nation’s ravaged financially.

Instability is a concern not only for the nations experiencing the Arab Spring, but also for the very nations offering them money to avoid it.

“For the United States, the euro is a big concern,” said Nicolas Véron, a senior fellow at Bruegel, an economics research institute in Brussels, and a visiting fellow at the Peterson Institute in Washington. “The Americans want to avoid systemic instability.”

As the New York Times reports:

The European Union and the I.M.F. have tried for the last year to calm the bond markets. But demonstrations against harsh austerity measures in Spain, Portugal and Greece; bickering among European leaders over Greece’s financial problems; and the European Central Bank’s fierce opposition to any restructuring of Greek debt have all conspired to send bond rates soaring in the last week.

Some analysts, like Bruce Stokes of the German Marshall Fund in Washington, suggest that the problems of the euro could put the recovery of the United States at risk. “If the European crisis gets worse again, the United States will have fewer tools to fight off the contagion,” he wrote in The National Journal.

The answer to how nations mired in such seemingly inescapable financial quagmires of their own could make guarantees of such lavish amounts of cash to developing nations is likely found in the central role being played by China in the global market.

The story is described by the New York Times:

The Group of 8 has been overshadowed by the larger and more economically oriented Group of 20, in which fast-growing emerging nations like China, India, Brazil and South Africa also sit at the table, reflecting the shifting balance of power in the global economy.

“The competition for global leadership is bigger than before the financial crisis,” said Jan Techau, the director of Carnegie Europe, the European office of the Carnegie Endowment for International Peace. Similarly, David Shorr of the United States-based Stanley Foundation, said that “the G-8 bears a burden of proof to show its relevance and influence in today’s world of shifting political and economic power.” As a “club of the Western old guard,” he asked, “does it have enough key global players at the table to tackle the big challenges?”

Beyond relevance, the U.S. government in particular — the de facto leader of the G8 — views itself as having a stake in financing the expansion of empire and the erection of key outposts in the Middle East. The billions of dollars that would be used to "support the aspirations of the Arab Spring" would be sufficient to create permanent client states dependent year in and year out on constant deposits from the treasury of the United States.

Photo: AP Images