Global Debt Crisis

Global Debt Crisis: Can a Collective Currency Devaluation Do the Trick?

Every country in the world, except for perhaps a handful, severely suffers from a growing debt crisis. Collectively, this is crippling the world economy and threatening the world with global instability following an imminent collapse of the international financial and economic systems. But if virtually all countries are in debt, who is lending? In fact, since almost all countries, or states, are in debt, that might be the solution to the problem.

Some brave economists and even politicians such as Brown and Sarkozy have made it clear that we need a new International Monetary System, a "New Bretton Woods" sort of agreement. That would probably solve things in the long-term. But still, what do we do with the existing debt crisis?

Let us assume that a country like the United States, with GDP of about $14 Trillion and a Public Debt roughly the same amount, "creates" or "prints" 12.5 percent of that amount annually for the next eight years, as to totally pay off its public debt problem. This generates some "fake" $1.75 Trillion a year, slightly more than the current US annual budget deficit. Usually, printing money this way would lead to significant inflation, U.S. consumer suffering and a severe devaluation of the American currency in addition to dissipation of the investors' trust into U.S. currency and economy, things which could probably spark off a global financial meltdown. But what if every other country agreed to more or less do the same process, and that newly created money does not find its way into the money markets in terms of additional liquidity or government spending, but instead is solely used to pay off the staggering debts?

The result may be that all major currencies would be devalued, but because they are all devalued, their relative value or exchange rate will be more or less the same, give or take a few points. If you think about it from a collective perspective, this idea may not be as crazy as it sounds at first.

So, if the G20 States, which together make up a sizeable portion of the global economy, and also where most of debtors and creditors come from; lending and borrowing institutions exist, signed up to such an arrangement within a larger effort to reinvent the international monetary and financial systems, followed by the rest of the world's states approving and repeating the same arrangement, could that solve the problem? Would that work as a global debt relief for everybody? A giant Paris Club to relieve the entire world from a deadly debt problem?

Of course the global economic and financial systems need to be totally redesigned. Yes, governments should stop spending beyond their means creating these monumental deficits. Yes, we need to shrink the speculative portion and reduce reliance on instruments creating virtual money, things which are poisoning existing systems.

We eventually have to even create a new accounting currency, be it ICU (International Currency Unit, or simply ECO), Bancor or SDR, which will work as an international bench mark currency to reduce the risks of relying on any one currency for reserves. But for now, the debt crisis seems urgently threatening yet highly ridiculous. After all, when everyone stands on their tiptoes, no one will ever seem taller.

First Published on HuffPost

http://www.huffingtonpost.com/wael-nawara/collective-currency-devaluation_b_926476.html

المصريون يزيحون الفرعون

Egyptians Unseat the Pharaoh

For the first time in their history, the people of Egypt remove their ruler through peaceful protests that lasted for 18 days. Having used the term peaceful, around 350 died and more than 5,000 were injuredas police used excessive force including tear gas bombs, rubber bullets and even live ammunition at many instances.

In a short televised address to the nation, Omar Suleiman, who was vice president for only a week and a half, announced that President Mubarak would step down, handing his authority to the army. The army had earlier announced that it supports and guarantees the demands and aspirations of the Egyptian people.

Barely before the statement was over, Egyptians took to the streets, waving Egyptian flags, cars blowing their horns, protesters jumping up and down in Tahrir Square, celebrating the achievements of the "revolution." The Egyptian people have made it. They challenged a formidable police state and a vicious security apparatus and came out victorious.

What comes next is crucial. Egyptians hope that the army will reiterate its commitment to giving the Egyptian people what they fought for, a civil state and democracy. Egyptians have asserted their power and the nature of the relationship between the people and the state will change forever. We hope that the army will learn from Mubarak's mistakes. Mubarak was consistently one week behind with his offers to the people. We hope the military will give the people exactly what they want -- dignity and self-rule.

Egyptians hope that the army will form a transition government of national unity and/or a presidential council of civilians and military people with a limited mandate and a clear timetable. The purpose of the transition is to draft a new constitution, amend political laws, dismantle the oppressive regime's arms and install new democratic institutions, where free and fair elections will mark successful completion of the transition and the revolution.

This is a historical moment. Egyptians, empowered by technology, Facebook, Twitter and mobile communication ended the 30-year-long regime of Mubarak in just 18 days! There have been many sacrifices, human, economic and social. But from this ordeal, Egypt was delivered, reborn and will hopefully emerge as a healthy nation with an awakened spirit. 

First Published in HuffPost 

 

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Amr Moussa May be Offering a Safe Exit for the Egyptian Regime

First Published in Huffington Post, December 30, 2010 17:43:14

Amr Moussa, Secretary General of the Arab League (AL), has made a surprising statement regarding his intentions to run as a candidate in Egypt's presidential race. "Every qualified Egyptian has the right to run for the presidency", said Moussa at an AL conference in Cairo on Monday. "As for my candidacy, I shall address it in due time," Moussa added. Moussa's short announcement, seemingly meant to keep his options open, may indeed be carrying a coded message for Mubarak himself; "I am here if you need me. I can provide a safe exit scenario for you and the regime. A safe exit from an unsustainable situation that can turn ugly."

In 2005, Mubarak explained that "existing" power was not an easy thing to do. Several analysts speculated what he had meant. But the now 82-year old man may have meant every word. He must have feared of what could happen to him, his family and "heads of the other families" which run the show in Egypt; politicians, security officials or business tycoons who are accused of profiteering from monopolies, illegal land appropriations and other corruption charges. Mubarak is unlikely to live forever, but there is no one else, by design, who could take his seat. Mubarak, and the regime, have become hostages of the very machine they had designed and operated.

A few months ago, Amr Adeeb, a popular Talk Show host, experienced a dangerous slip of the tongue when he talked about the need to explore a safe exit for the President. All hell broke loose in Adeeb's face and eventually his show was discontinued, although it was aired by a satellite channel owned by a foreign media group. Emad Eddin Adeeb, Amr's brother and a media mogul, re-opened the topic of the regime's safe exit in an interview on Dream TV a few days ago, saying that chances of a safe exit for the regime were now diminishing. State-owned media launched a vicious campaign of attacks against Emad, who had hosted Mubarak back in May 2005 in a special documentary designed to show the human side of Egypt's top man as a part of Mubarak's first ever Presidential Campaign. Mubarak has been President of Egypt since 1981.

The results of the Parliamentary Elections of November 2010 proved disastrous in further pushing Mubarak and his regime into a path with a dead end. After the first round of the Elections, the ruling Party, NDP, acquired 96% of the seats which came with massive claims, reports, photos and videos of wide irregularities. The Muslim Brothers and El Wafd withdrew from the second round, joining the Democratic Front Party, El Ghad Party and the National Assembly for Change which had called for boycotting the elections from the start.

Amr Moussa, 74, has been with the regime since his early days. He joined the Ministry of Foreign Affairs in 1958, successfully advancing through the ranks till he became Minister of Foreign Affairs in 1991, a position which he held for 10 years. Moussa became popular for his strong rhetoric on issues close to Egyptians' hearts, such as Palestine and the invasion of Iraq. When Shaaban Abdel Rehim, a popular local singer lovingly mentioned him in a song, a sign that he had become too popular for his own good, the regime kicked him to the Arab League, where he was appointed as Secretary General. None of the foreign ministers who succeeded him managed to fill his shoes, at least in the public eye. In 2007, a number of informal opinion polls demonstrated that Amr Moussa scored highly in the minds of Egyptians as a potential successor to Mubarak. Moussa was careful to choose his timing. Now, Moussa probably realizes that his time is drawing near. He knows that he has valuable political capital, and he may be willing to cash it in. But only in one condition, it seems. If he is asked by the President himself.

Why would Mubarak be willing to consider Moussa and not his own son, Gamal, who has been groomed for almost a decade for the position? Mubarak is a smart man. He realizes that despite the massive campaigns for his son, there is a wide public dissent against the idea. The military does not seem supportive either because Egyptians believe that "Egypt is not like Syria", where succession seemed to work for Al Asads. No one else has been prepared in the public eye for the position. It may be of little consequence to rig Parliamentary Elections because Mubarak himself is there providing legitimacy. But once Mubarak is out of the picture, the regime may collapse like a house of cards. Rigging elections for a presidential candidate who has no public support can spark unrests, instability and eventually mark the end of the regime. The regime it seems, is stuck and out of options. Moussa would not be the regime's favorite alternative. But he is now the only one who relates to the regime and in the same time commands sufficient public support to provide necessary stability.

Technically, the ruling party cannot nominate Moussa because he is not a member of the Party's Leading Council. But that obstacle could be overcome either by changing the constitution or by getting signatures from 250 parliamentary members, something only the NDP could do. The ironic twist is that ElBaradei, another potential candidate for the Presidency, is Moussa's cousin. In 2010, ElBaradei led a campaign which managed to collect one million signatures on a petition with seven demands of political reform including amendment of the constitution. When ElBaradei returned to Egypt beginning of 2010, he visited Moussa and no one knows the sort of discussion that went on that day. Anyone who comes after Mubarak will be bound to introduce a reform package to rebuild the regime's legitimacy and unite Egyptians with a national consensus around key political, social and economic issues. The extent and seriousness of these reforms will depend on how Egypt's opposition can stand united around basic reform demands. This is why initiatives like the "Alternative Parliament" or "Parallel Parliament" and the National Assembly for Change are important vehicles in the critical weeks and months to come in Egypt.



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State-owned Media

State-Owned Media Lies,

Corruption and Mind Control

By

Wael Nawara

First Published at Huffington Post

On Easter Sunday, 4th April 2010, Al Ahram published a photo on its front page, that shows ElBaradei, ex-IAEA Chief and a possible candidate for Egypt's 2011 Presidential Race, sitting next to Margaret Scobey, U.S. Ambassador in Egypt, attending Easter Mass at the Orthodox Cathedral in Abbassia, Cairo.

ElBaradei news and photos have scarcely made it to the paper, let alone its front page, since his announcement that he "might" consider running for presidency, except in the context of ridicule or defamation. ElBaradei is not even sure to run; he set forth tough a number of conditions for his candidacy including amending the constitution and changing election system. But this published photo was not to be missed by the newspaper. The events inside the Cathedral surrounding the photo shoot are no less intriguing. First, ElBaradei was led to this seat in the front row in the Easter Sermon celebration in the main Cathedral of Christian Orthodox in Egypt and beyond, so that this photo is taken. Then he was later driven away to the end of the row, away from Ambassador Scobey, possibly so that the connection is not made permanent!

To add insult to injury, the paper put a caption under the photo with only Ambassador's Scobey's name. The message intended by this photo is multi-faceted. First, it is an attempt to say that El Baradei, ex-Chief of IAEA, represents U.S. interests in Egypt. Second, it is an attempt to alienate Muslim conservatives by showing ElBardaei and Scobey participating in this Christian ceremony.

Using and fueling sectarian sentiments is a wicked strategy which the regime often employs. A sort of "divide and conquer" strategy targeted not at the enemies of Egypt, but against the Country itself and the unity of its people. If ElBaradei is seen to like Christians, then some Muslims would hesitate to support him, damaging his political popularity, or so the regime hopes.

Al Ahram, which had been as an independent newspaper since 1875 when it was first published by Salim and Bechara Takla, was "nationalized", i.e., confiscated by the regime after the 1952 "revolution". Since then, the paper has served as a relentless and shameless propaganda mouthpiece in the hands of the regime.

This meant that only those loyal to the regime, rather than to their readers, could go places and get to the seats of influence and power in the paper. That singing the praises of the president and the government is more important than journalistic professionalism and integrity. That government approval, conditioning and "retouching" of the news and even photos is more important than the urgency of publishing the latest updates and fresh stories on time. It is all part of the corrupt value system which thrives in today's Egypt. Corrupt values which are seen as shameful elsewhere, are celebrated and rewarded in this corrupt setting.

Over the years, Al Ahram gradually became much more than a paper. The propaganda machine started to acquire arms, legs, brains and additional voices. Al Ahram today is a sprawling empire with over 30 papers, magazines and publications. The multi-billion dollar empire also operates a wide network of print houses, an extensive distribution apparatus, advertising and media agencies, book publishers, a university, a computing center, a strategic research center and think tank, and the list goes on.

Despite all of these "commercial" enterprises, many of which are monopolies protected, guarded and nourished by the state, Al Ahram loses a great deal of money each year. A few years ago it was revealed that Al Ahram owed the public treasury several billion pounds in unpaid taxes. Al Ahram papers and publications are sold at relatively lower price levels than independent competing publications. It does not matter if Al Ahram makes or loses money. The bill will always be paid from public funds. This meant that independent papers cannot commercially survive in this monopolistic setting. Independent papers, had to make peace with the regime if they wished to survive. Only then would government advertisements be placed in these papers to save them from bankruptcy. As a result, it has been almost impossible for truly independent media to survive for long in Egypt.

The 1960's saw the establishment of the "Ministry of National Guidance", an equivalent to the Ministry of Truth in George Orwell's masterpiece, 1984. The main function of Al Ahram, as well as that of all other state-owned and state-manipulated media outlets, was to shape public opinion of the Egyptian people in a manner which will sustain and support the regime's policies and figures. National guidance really meant brain-washing and mind control, polluting Egyptian conciseness into accepting dictatorial practices, corrupt settings, abuse of power and the resulting failures and humiliating defeats; as necessary or inevitable, often portrayed as the product of grand conspiracies against Egypt by foreign powers, thus absolving the regime and its leaders from any responsibility to such failures. With no accountability or consequences, failures continued to mount and Egypt's health, wealth and influence were gradually drained.

But when the regime becomes responsible for appointing its own critics, the public eye which should watch, observe and report malpractices, flaws and shortcomings; how can we expect the media and the press to perform these vital functions? And while ElBaradei demands focus on amending the constitutions and sanitizing the election system, true reform can only happen when these media empires are restructured and made independent. Ownership of these institutions and the rights to hire, fire and shape policies must be transferred to independent Boards of Trustees immune from government control.

Link to the Original Article

http://www.huffingtonpost.com/wael-nawara/state-owned-media-lies-co_b_531915.html

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