Month: October 2003

Not Just About Gas

Last week the president of Bolivia resigned in the face of widespread strikes, protests, and a crippling blockade of Bolivia’s capital city, La Paz, and its other major cities. The US press largely ignored the tumult in South America’s poorest nation and, when the protests were covered at all, they were described as a reaction against the Bolivian government’s plans to build a natural gas pipeline through neighboring Chile to the sea.

In actuality, Bolivians turned out in the hundreds of thousands to protest a much deeper problem: the theft of the nation’s natural resources. For the past 150 years, Bolivia has been through three major extraction/export cycles. In the 1800s it was silver, extracted by the Spanish colonial rulers to enrich themselves. In the late 1800s and early 1900s, it was rubber, which put money into the pockets of large landowners. Throughout the Twentieth Century it was tin, and Bolivia’s small upper class is mostly composed of rich mine owners and executives (including Bolivia’s recently booted president). With each extraction cycle, Bolivia’s natural resources have been depleted, the proceeds pocketed by a few, and the vast majority of Bolivians starved, scratching out a living on less than $2 per day.

So when the second largest reserves of natural gas were recently discovered in Bolivia, the Bolivian people decided to draw a line. The proceeds from natural gas sales must not be used to enrich a few at the expense of many, the protesters said; the proceeds must go into funding social programs. In a nation where few homes have electricity, the people wanted the natural gas to be used for domestic consumption first before being shipped abroad to run power plants in the United States. Having played the privatization game and lost, Bolivians were ready to change the rules.

The protesters had a few key demands that were somehow always left out of US press reports. In addition to wanting the president–a man who spoke Spanish with a thick, American accent–to resign, they insisted that the government halt and roll back the privatization program. They called for a national referendum so all Bolivians could vote on whether Bolivia should export its natural gas. They called for a new constituent assembly that would represent all sectors of society–not just wealthy landlords and mine owners. They wanted increased spending on social programs, land reform, and higher wages. They wanted Bolivia to withdraw from the US-dominated Free Trade Area of the Americas (FTAA). Whether they will get any of these things remains to be seen. Certainly, they have won the first round with the ouster of President Sanchez de Lozada.

They’ve won something else, too, that’s been widely ignored in the US press. The current Bolivian protests represent the success of a certain type of globalization that few people expected: the globalization of anti-globalization protests. Bolivia has been through mass demonstrations before, particularly in the 1999-2000 struggle that prevented Bechtel from taking control of a large water utility in Bolivia’s second-largest city. That, too, was a protest against privatization, and a successful one. But it wasn’t on quite the same scale as the current, massive, nationwide blockade that has involved nearly all sectors of Bolivian society: peasant farmers, indigenous Aymara and Quechua peoples, miners, public sector workers, barrio residents, transport workers, students, priests, union members, small businessmen, and intellectuals. This unity made the blockades and protests effective and will serve as an inspiration for future protests all around the world.

In addition, the Bolivian protests have pointed up the failure of US foreign policy in South America, which rests on two platforms. The first is drug eradication, which has put indigenous farmers out of business without providing alternative work. Certainly, peasant farmers can grow food crops for export, but global food prices are too low for them to make a living. Enormous North American and European corporate farms produce surplus food with governmental subsidies, and that surplus floods the world markets, driving commodity prices down. That’s why there was such a big fuss over agricultural subsidies at the WTO. That’s also why a South Korean farmer climbed onto the barricades at Cancun and stabbed himself in the chest: he could die slowly, heavily in debt and starving, or he could die quickly and make a statement that the whole world needed to hear. His was an individual protest; in Bolivia, however, unemployed peasant farmers have opted for mass protests over this issue.

The second US foreign policy concern in South America has been to create a showplace for free-market, neoliberal economic theory. By privatizing state industries, IMF technocrats have helped an elite group of very rich people to buy up South America’s treasures on the cheap. By forcing cuts in social services, the same economists have driven poverty rates to all-time highs. In Bolivia, some 70-80% of the population lives below the official poverty line. Neoliberal theory has proved disastrous in practice in Bolivia, Chile, Ecuador, Argentina, Venezuela, and Brazil. All of these nations have been through recent upheavals over disastrous IMF policies.

Fortunately, the Bush administration’s narrow focus on Iraq has opened up a space for change in South America. While Bush & Co. are absorbed with the Middle East, the US’s Latin American sphere of influence has begun to deflate. Fortunately, no US troops are available for deployment to Bolivia to help the Bolivian army murder peaceful demonstrators. And while $87 billion is pouring out of the US Treasury into the black hole of Iraq occupation, no funds are available to prop up a president who was elected by only 22% of Bolivian voters.

It’s exciting to watch the destruction of an old, corrupt system in Bolivia and the birth of a new one. Hopefully the Bolivian people can keep up the pressure and see their demands met.

Iraq: The Money Pit

A mere week after the Bush administration announced it would privatize Iraq’s infrastructure, the plan has been put on hold. Perhaps someone in the administration finally realized that, since there is no Iraqi infrastructure to speak of, there isn’t anything to privatize. More importantly, any future Iraqi infrastructure will have to be built with US taxpayer funds.

The $87 billion bill currently winding its way through the Senate–without much friction, unfortunately–contains a lot of pork. Three-quarters of the money will be spent on the military occupations of Iraq and Afghanistan. About $20 billion is earmarked for Iraqi reconstruction, but even those funds contain a lot of waste. Some of the more dubious expenses include:

–$100 million for a witness protection program that will serve 100 people. That’s $1 million per person to relocate them overseas and find them jobs.

–$100 million to hire 500 people to investigate Saddam Hussein’s crimes against humanity. Never mind that the US military could have seized all the incriminating Iraqi government documents that it wanted way back in April, but instead let looters and saboteurs burn Iraq’s government buildings. It’s a little late now to sift through all those ashes. And expensive, apparently.

–$99 million to build 26 jails and prisons, at a cost of about $3.8 million apiece. Someone in the Bush administration is expecting the guerrilla war and lawlessness in Iraq to drag on for a really long time.

–$9 million to “modernize” Iraq’s postal system by, among other things, assigning zip codes to the country. Okay, zip codes are important, but why $9 million just to generate a few numbers?

–$55 million for an oil pipeline repair team…which will consist of retired NBA All-stars, it seems.

–$100 to build a housing complex for 3,500 people. An Iraqi contractor has said that he could build the complex for about $10 million.

–$150 million to build one–yes, just ONE–children’s hospital in the city of Basra.

–$35 million for on-the-job training for private businesses. Yes, you read that correctly: private businesses.

–$40 million for computer training classes, at $333 per month per course. Such classes cost less than half that amount at community colleges here in the US.

–$3.6 million for 600 radios and phones, at $6,000 each.

Other fripperies include a $10,000-per-month business school that will be twice as expensive as attending Harvard Business School and a fleet of $33,000 pickup trucks (which are probably meant for the All-star oil pipeline repair team).

These are just a few of the details. Many portions of the bill are so vague, and many line items so large that it’s very difficult to tell what the money will spent on. For example, $130 million will go for building 10 irrigation and drainage projects, with no details of what technology will be used, how much money will be spent for labor versus equipment, and whether any funds will be allocated for ongoing maintenance. The same is true for the $2.9 billion allocated for rebuilding Iraq’s electrical system and the $1 billion for a new drinking-water system.

Of course, the most ridiculous item in the bill is $600 million for the continuing operations of the Iraq Survey Group, whose leader, David Kay, admitted to Congress last week that there are no weapons of mass destruction in Iraq. Kay did try his best to put a spin on his report that would favor George Bush’s assertions that Saddam had WMD, but the whole exercise was pathetic and futile. When Colin Powell waved a single vial of botulinum toxin in the air as “proof” of Saddam’s intent to wipe out the whole United States with biological, chemical, and nuclear weapons, only the most slavering right-wing apologists could listen without jeering.

This made a poor impression on our foreign “partners,” from whom the Bush administration wants to collect about $20 billion in pledges to help with Iraq’s reconstruction. A major donor’s conference is scheduled for late October, where European nations, Japan, Russia, China, and Middle Eastern sultanates are expected to make financial commitments. But indications are not good–in fact, the Bush administrations has had to revise its expectations downward first from $20 billion to $10 billion, then downward again to $2 billion, and are now praying for at least $1 billion in donations. So far, only the European Union has announced a firm commitment of money: about $235 million–far less than was expected.

The sticking point is who will have control of the funds and what they’ll be spent on. Most of the wealthy donor nations, including France and Germany, want the IMF or World Bank to set up a fund and control the financing process. The Bush administration is resisting this idea, refusing to give up even a modicum of control in Iraq. This, combined with the emerging details of the $87 billion spending bill before Congress, has made foreign nations wary of throwing their money into a bottomless pit.

American taxpayers should be equally concerned. The $20 billion in this spending bill is only the first of many outlays US taxpayers will have to make if the international community balks at funding Bush’s folly. The World Bank has estimated that Iraq will need between $60-$70 billion in reconstruction funds over the next four to five years. With the US economy limping through a “jobless recovery” that has plunged millions of people into poverty and the federal government running a record deficit, we simply can’t afford the kind of pork barrel politics being played out in Washington DC.

–Maria Tomchick

For further reading:

“AP: Bush Paper Details Iraq Spending Plan,” Alan Fram, Associated Press, 9/22/03; “GOP Finding Iraq War Request a Tough Sell,” Jonathan Weisman, Washington Post, 10/1/03, A14; “Some Iraqis say Bush money request doesn’t address needs,” Cesar G. Soriano, USA Today, 9/29/03; “Officials Say Bush Seeks $600 Million to Hunt Iraq Arms,” James Risen and Judith Miller, New York Times, 10/1/03; “Reconstruction ‘will cost up to $70bn’,” Edward Alden, Financial Times, 9/23/03.

Nickels’ Hand Is in the Till Again

The city is $24 million in the hole, mainly because city budget planners didn’t do their jobs late last year when they drew up the biennial budget. The main reason for the shortfall is that city budget planners expected revenues to increase by 5% for 2004. Obviously, they believed, along with Wall Street, that the US economy would be zooming ahead full steam by now, although it’s obviously not. Big surprise.

So Mayor Greg Nickels has used this little budget crisis to propose a revised 2004 budget that would shift money around to fund his pet projects at the expense of funding for the Department of Neighborhoods, arts and culture, and our basic utility infrastructure.

To make the budget balance, the city only needs to make about a 1% overall cut in its expenses. Instead of spreading this cut out across all the various departments, Nickels chose to make deep cuts in some departments and shift their funds to other areas.

In the Department of Arts, Culture, and Recreation, the Seattle Center would lose 5% of its funding, while the Office of Arts and Cultural Affairs would lose 8%. Parks and Recreation would lose about 4%. Is it a coincidence that Arts, Culture, Parks, and Recreation are the special province of Councilmember Nick Licata, who has served as the liaison for citizens who can’t get a hearing at City Hall? I don’t think so.

Meanwhile, the Public Safety Department (cops, courts, and fire fighters) takes a tiny cut of less than 1%, which is more in line with what the other departments should have. Obviously, Nickels felt no need to dip into Councilmember Jim Compton’s wallet.

He did, however, take an axe to the Department of Neighborhoods, cutting I by a whopping 17.6%–the largest cut for any line item in the budget. This includes a complete elimination of the Neighborhood Plan Implementation program, loss of all funding for surveying historic assets in city neighborhoods, and the elimination of the Neighborhood Leadership Program, with the smarmy note that the city will “no longer be able to provide leadership training tailored to specific community groups.” This is definitely a nasty payback for the community groups that opposed Nickels’ developer-friendly projects in the University District, Northgate, and South Lake Union.

He also chopped out additional money that citizens could use to get technical information about school construction and neighborhood plans–funds that have shrunk from $1.2 million down to nearly zero. Nickels did manage, however, to reallocate about $177,000 of those funds to “Major Institutions and Project Management,” which is exactly what it sounds like: help for “major institutions” to deal with neighborhood improvements (in other words, a handout for businesses).

Nickels took the opportunity to impose his priorities on another department: Utilities and Transportation. In his budget, City Light loses over $3 million for basic maintenance, including new equipment and materials, tree-trimming, and upgrades that were schedules for the Aurora Avenue Project. City Light will also have to give up some of its repair trucks and will lose $525,000 for dealing with the environmental impact of its various projects and repairs.

Even worse, the city will lose nearly $1 million of desperately needed money for managing sewage overflows that pollute our local waterways–a chronic problem every fall when heavy rains arrive.

Nickels, however, dumps the extra money from all his cuts into the transportation budget to fund his dubious pet projects: $2.7 million in new funds for Sound Transit, $650,000 for his sidewalk upgrade plan, and over $5 million on a brand-new scheme to replace Seattle’s parking meters with “pay station kiosks that control multiple spaces.” Unfortunately, the new kiosks won’t save money in staff time, as you might expect: the $5 million includes 1 new full-time Parking Meter Repair Crew Chief and 1 new full-time Civil Engineering Assistant.

In addition, Nickels shifts $3 million to “complete financing arrangements for the University Ave. Project.” This little line item has no explanation as to why this money is needed now, when the project is already, and quite visibly, completed.

Nickels also allocates $538,000 to fill potholes, but adds a second puzzling line item: $572,000 for new staff and technology which seem to be related to filling those same potholes. Who knew that a few guys with shovels and trowels could be so expensive?

At the same time, Nickels cuts funds to necessary transportation projects by cutting capital spending for specific street improvements by a whopping $17.6 million.

Fortunately, Nickels’ proposed budget is only a draft. The City Council will be picking it apart and making changes in the next 6 weeks. This process will include taking testimony from disgruntled citizens. To find out the schedule for the budget hearings, you can visit the city council’s website at or call the City Council’s Agenda Information Line at 206-684-8889.

Mayor Nickels’ draft city budget can be found online at in case you want to take a peek.

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