EGYPT:Women and Men, Shoulder to Shoulder

February 27, 2011 by

Global Geopolitics & Political Economy / IPS

By Cléo Fatoorehchi

UNITED NATIONS, Feb 26, 2011 (IPS) – The momentous events of Tahrir Square, Egypt also signify a huge step forward for gender equality in the region, women’s rights activists said Friday.

Nora Rafeh Refa Tahtawi, a youth activist who participated in the Tahrir protests and is now in New York for the two- week Commission on the Status of Women at U.N. headquarters, recalled that women stood side by side with men, all sharing the feeling that they belonged to the same movement with the same goals.

Dr. Azza Kamel, a prominent Egyptian women’s rights activist, was also part of the movement that toppled president Hosni Mubarak earlier this month.

The Egyptian people simply want "freedom, justice, dignity", Kamel told IPS, and "this is the first time that women deal with dignity as equals with men."

"There is no room for ethnic tension," she added, highlighting the idea of "family" described by Tahtawi with the formula "one heart, one hand, one brain".

"No one will manage to divide them [the Egyptian people] now," Kamel said.

Dignity – karama in Arabic – is a word that was chanted often during the protests. It is also the name of an international grassroots organisation created in 2005, which is based in Egypt and has programmes throughout the Arab world, with offices in Sudan, Lebanon, Morocco, Tunisia, Algeria, Syria, and Jordan.

Hibaaq Othman, founder and executive director of Karama, emphasised to IPS that "this revolution brought people who are completely different, of class, of education, politically, in every way."

"They saw themselves as a community," she said. "They have unified their vision, they have unified their energy, this was about them and for them. Every woman was suffering the same way."

"When people come together…nothing is ever going to stop them," she told IPS. "They become the bulldozers. They broke the wall of fear, of gender, of poor and rich… everyone was equal standing there."

According to Kamel, while Tunisian women were the "catalyst" for Egyptian women, now Bahraini women are breaking barriers too, even though the society is more conservative.

"We are writing our history now, and the sky is our limit," said Tahtawi, promising the Libyan people, "You will win."

The head of the Egyptian Center for Women’s Rights, Nihad Abou El Komsan, agreed that, "When women decide, there is no barrier."

She added that freedom can be more difficult in some ways than slavery, because it implies responsibilities. "The future is not guaranteed," she said.

Othman identified a "window of opportunities" for women. They were a very big part of the protests, and now they have to insist "to be involved in the draft of the constitution, they have to make sure that they are in every important committee," she told IPS – especially when the constitutional committee "doesn’t have any women yet".

"We will have very tough times now" to establish democracy, she acknowledged. People must unite, demand dignity, respect, and freedom – political, social and religious. "That’s when you realise democracy," she concluded.

The newly launched U.N. Women has an important role to play to ensure that women have a place at the decision-making table. The agency is reformulating its programmes in Tunisia and elsewhere in North Africa and the Middle East to include these new opportunities, said Moez Doraid, deputy executive director of U.N. Women.

"Gains and victories have been achieved at the political, societal and gender levels," he affirmed. "[We] need to sustain the benefits…and be vigilant to avoid reversal."

One way to achieve this is the use of affirmative action and quotas, he added.

According to Othman, U.N. Women needs to focus on civil society women’s organisations, "reflecting the aspirations, the themes, and the beauty of women, politically speaking."

She stressed to IPS the real challenge now is to ensure that this new U.N. entity will do what it has promised: prioritising women. It was "brought by women, and it should be for women," she said.

All rights reserved, IPS – Inter Press Service, 2011.

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The Betrayal of Public Workers

February 26, 2011 by

Republished on Global Geopolitics & Political Economy
Read the article in its original form on The Nation

Robert Pollin and Jeffrey Thompson | February 16, 2011

The Great Recession and its aftermath are entering a new phase in the United States, which could bring even more severe assaults on the living standards and basic rights of ordinary people than we have experienced thus far. This is because a wide swath of the country’s policy- and opinion-making elite have singled out public sector workers—including schoolteachers, healthcare workers, police officers and firefighters—as well as their unions and even their pensions as deadweight burdens sapping the economy’s vitality.

The Great Recession did blow a massive hole in state and municipal government finances, with tax receipts—including income, sales and property taxes—dropping sharply along with household incomes, spending and real estate values. Meanwhile, demand for public services, such as Medicaid and heating oil assistance, has risen as people’s circumstances have worsened. But let’s remember that the recession was caused by Wall Street hyper-speculation, not the pay scales of elementary school teachers or public hospital nurses.

Nonetheless, a rising chorus of commentators charge that public sector workers are overpaid relative to employees in comparable positions in the private sector. The fact that this claim is demonstrably false appears not to matter. Instead, the attacks are escalating. The most recent proposal gaining traction is to write new laws that would allow states to declare bankruptcy. This would let them rip up contracts with current public sector employees and walk away from their pension fund obligations. Only by declaring bankruptcy, Republican luminaries Jeb Bush and Newt Gingrich argued in the Los Angeles Times, will states be able to “reform their bloated, broken and underfunded pension systems for current and future workers.”

But this charge is emanating not only from the Republican right; in a front-page story on January 20, the New York Times reported on a more general trend spreading across the country in which “policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers.”

Considered together, state and local governments are the single largest employer in the US economy. They are also the country’s most important providers of education, healthcare, public safety and other vital forms of social support. Meanwhile, the official unemployment rate is stuck at 9 percent—a more accurate figure is 16.1 percent—a full eighteen months after the recession was declared over. How have we reached the point where the dominant mantra is to dismantle rather than shore up state and local governments in their moment of crisis?

Why States Need Support During Recessions

The Wall Street–induced recession clobbered state and local government budgets. By 2009, state tax revenues had fallen by fully 13 percent relative to where they were in 2007, and they remained at that low level through most of last year. By comparison, revenues never fell by more than 6 percent in the 2001 recession. Even during the 1981–82 recession, the last time unemployment reached 9 percent, the decline in state tax revenues never exceeded 2 percent. These revenue losses, starting in 2008, when taken together with the increased demand for state services, produced an average annual budget gap in 2009–11 of $140 billion, or 21 percent of all state spending commitments.

Unlike the federal government, almost all state and local governments are legally prohibited from borrowing money to finance shortfalls in their day-to-day operating budgets. The state and local governments do borrow to finance their long-term investments in school buildings, roads, bridges, sewers, mass transit and other infrastructure projects. They have established a long record of reliability in repaying these debt obligations, even during the recession. Nevertheless, these governments invariably experience a squeeze in their operating budgets during recessions, no matter how well they have managed their finances during more favorable economic times.

If, in a recession, states and municipalities are forced to reduce their spending in line with their loss in tax revenues, this produces layoffs for government employees and loss of sales for government vendors. These cutbacks, in turn, will worsen conditions in the private market, discouraging private businesses from making new investments and hiring new employees. The net impact is to create a vicious cycle that deepens the recession.

As such, strictly as a means of countering the recession—on behalf of business interests as well as everyone else in the community—the logic of having the federal government providing stimulus funds to support state and local government spending levels is impeccable. The February 2009 Obama stimulus—the American Recovery and Reinvestment Act (ARRA)—along with supplemental funds for Medicaid, has provided significant support, covering about one-third of the total budget gap generated by the recession. But that leaves two-thirds to be filled by other means. ARRA funds have now run out, and the Republican-controlled House of Representatives will almost certainly block further funding.

In 2010 roughly another 15 percent of the budget gap was covered by twenty-nine states that raised taxes and fees-for-services. In general, raising taxes during a recession is not good policy. But if it must be done to help fill deepening budgetary holes, the sensible way to proceed is to focus these increases on wealthier households. Their ability to absorb such increases is obviously strongest, which means that, unlike other households, they are not likely to cut back on spending in response to the tax hikes. In fact, ten states—New York, Illinois, Connecticut, North Carolina, Wisconsin, Oregon, Hawaii, Vermont, Rhode Island and Delaware—have raised taxes progressively in some fashion.

Of course, the wealthy do not want to pay higher taxes. But during the economic expansion and Wall Street bubble years of 2002–07, the average incomes of the richest 1 percent of households rose by about 10 percent per year, more than three times that for all households. The richest 1 percent received fully 65 percent of all household income growth between 2002–07.

One charge against raising state taxes in a progressive way is that it will encourage the wealthy to pick up and leave the state. But research on this question shows that this has not happened. We can see why by considering, as a hypothetical example, the consequences of a 2 percent income tax increase on the wealthiest 5 percent of households in Massachusetts. This would mean that these households would now have $359,000 at their disposal after taxes rather than $370,000—hardly enough to affect spending patterns significantly for these households, much less induce them to relocate out of the state. At the same time, a tax increase such as this by itself will generate about $1.6 billion for the state to spend on education, healthcare and public safety.

But even with the ARRA stimulus funds and tax increases, states and municipalities have had to make sharp cuts in spending. More severe cuts will be coming this year, with the ARRA funds now gone. These include cuts that will reduce low-income children’s or families’ eligibility for health insurance; further cuts in medical, homecare and other services for low-income households, as well as in K–12 education and higher education; and layoffs and furloughs for employees. The proposed 2012 budgets include still deeper cuts in core areas of healthcare and education. In Arizona, the governor’s budget would cut healthcare for 280,000 poor people and reduce state support for public universities by nearly 20 percent. In California, Governor Brown is proposing to bring spending on the University of California down to 1999 levels, when the system had 31 percent fewer students than it does today.

State and Local Government Workers Are Not Overpaid

Even if state and local government employees are not responsible for the budgetary problems that emerged out of the recession, are they nevertheless receiving bloated wage and benefits packages that are holding back the recovery? Since the recession began, there has been a steady stream of media stories making such claims. One widely cited 2009 Forbes cover article reported, “State and local government workers get paid an average of $25.30 an hour, which is 33 percent higher than the private sector’s $19…. Throw in pensions and other benefits and the gap widens to 42 percent.”

What figures such as these fail to reflect is that state and local government workers are older and substantially better educated than private-sector workers. Forbes is therefore comparing apples and oranges. As John Schmitt of the Center for Economic Policy Research recently showed, when state and local government employees are matched against private sector workers of the same age and educational levels, the public workers earn, on average, about 4 percent less than their private counterparts. Moreover, the results of Schmitt’s apples-to-apples comparison are fully consistent with numerous studies examining this same question over the past twenty years. One has to suspect that the pundits who have overlooked these basic findings have chosen not to look.

State Pension Funds Are Not Collapsing

Not surprisingly, state and local government pension funds absorbed heavy losses in the 2008–09 Wall Street crisis, because roughly 60 percent of these pension fund assets were invested in corporate stocks. Between mid-2007 and mid-2009, the total value of these pension funds fell by nearly $900 billion.

This collapse in the pension funds’ asset values has increased their unfunded liabilities—that is, the total amount of benefit payments owed over the next thirty years relative to the ability of the pension funds’ portfolio to cover them. By how much? In reality, estimating the total level of unfunded liabilities entails considerable guesswork. One simply cannot know with certainty how many people will be receiving benefits over the next thirty years, nor—more to the point—how much money the pension funds’ investments will be earning over this long time span. The severe instability of financial markets in the recent past further clouds the picture.

Thus, these estimates vary by huge amounts, depending on the presumed rate of return for the funds. The irony is that right-wing doomsayers in this debate, such as Grover Norquist, operate with an assumption that the fund managers will be able to earn returns only equal to the interest rates on riskless US Treasury securities. Under this assumption, the level of unfunded liabilities balloons to the widely reported figure of $3 trillion. To reach this conclusion, the doomsayers are effectively arguing that the collective performance of all the Wall Street fund managers—those paragons of free-market wizardry—will be so anemic over the next thirty years that the pension funds may as well just fire them and permanently park all their money in risk-free government bonds. It follows that the profits of private corporations over the next thirty years will also be either anemic or extremely unstable.

But it isn’t necessary to delve seriously into this debate in order to assess the long-term viability of the public pension funds. A more basic consideration is that before the recession, states and municipalities consistently maintained outstanding records of managing their funds. In the 1990s the funds steadily accumulated reserves, such that by 2000, on average, they were carrying no unfunded liabilities at all. Even after the losses to the funds following the previous Wall Street crash of 2001, the unfunded share of total pension obligations was no more than around 10 percent. By comparison, the Government Accountability Office holds that to be fiscally sound, the unfunded share can be as high as 20 percent of the pension funds’ total long-term obligations.

A few states are facing more serious problems, including New Jersey, Illinois and California. New Jersey is in the worst shape. But this is not because the state has been handing out profligate pensions to its retired employees. The average state pension in New Jersey pays out $39,500 per year. The problem is that over the past decade, the state has regularly paid into the system less than the amount agreed upon by the legislature and governor and stipulated in the annual budgets. For 2010 the state skipped its scheduled $3.1 billion payment altogether. However, even taking New Jersey’s worst-case scenario, the state could still eliminate its unfunded pension fund liabilities—that is, begin running a 100 percent fully funded pension fund—if it increased the current allocation by about 4 percent of the total budget, leaving 96 percent of the state budget allocation unchanged.

In dollar terms, this worst-case scenario for New Jersey would require the state to come up with roughly $4 billion per year to cover its pension commitments in an overall budget in the range of $92 billion. Extracting this amount of money from other programs in the budget would certainly cause pain, especially when New Jersey, like all other states, faces tight finances. But compare this worst-case scenario with the bankruptcy agenda being discussed throughout the country.

To begin with, seriously discussing a bankruptcy agenda will undermine the confidence of private investors in all state and municipal bonds—confidence that has been earned by state and municipal governments. When the markets begin to fear that states and municipalities are contemplating bankruptcy, this will drive up the interest rates that governments will have to pay to finance school buildings, infrastructure improvements and investments in the green economy.

Then, of course, there is the impact on the pensioners and their families. For the states and municipalities to walk away from their pension fund commitments would leave millions of public sector retirees facing major cuts in their living standards and their sense of security. Something few Americans understand is that roughly one-third of the 19 million state and local employees—i.e., those in fifteen states, including California, Texas and Massachusetts—are not eligible for Social Security and will depend exclusively on their pensions and personal savings in retirement. In addition, public sector pensions are not safeguarded by the federal Pension Benefit Guaranty Corporation. Unlike Wall Street banks, state pensioners will receive no bailout checks if the states choose to abrogate their pension fund agreements.

Getting Serious About Reforming State Finances

Of course, there are significant ways the public pension systems, as well as state and local finances more generally, can be improved. The simplest solution, frequently cited, involves “pension spiking”—that is, practices such as allowing workers to add hundreds of hours of overtime at the end of their careers to balloon their final year’s pay and their pensions. This has produced serious additional costs to pension obligations in some states and municipalities, but it is still by no means a major factor in explaining states’ current fiscal problems.

But states and municipalities also have to follow through on the steps they have taken to raise taxes on the wealthy households that are most able to pay. They should also broaden their sources of tax revenue by taxing services such as payments to lawyers, as well as by taxing items purchased over the Internet. And they have to stop giving out large tax breaks to corporations as inducements to locate in their state or municipality instead of neighboring locations. This kind of race to the bottom generates no net benefit to states and municipalities.

Finally, state and local governments are in the same boat as the federal government and private businesses in facing persistently rising healthcare costs. As was frequently noted during the healthcare debates over the past two years, the United States spends about twice as much per person on healthcare as other highly developed countries do, even though these other countries have universal coverage, longer life expectancies and generally healthier populations. These costs weigh heavily on the budgets of state and local governments, which finance a large share of Medicaid and health benefits for state employees. The problem is that we spend far more than other countries on medications, expensive procedures and especially insurance and administration. We also devote less attention to prevention. It remains to be seen how much the Obama healthcare reform law—the 2010 Patient Protection and Affordable Care Act—will remedy this situation. It is certainly the case that more must be done, especially in establishing effective controls on the drug and insurance industries.

These are some of the long-run measures that must be taken to bolster the financing of education, healthcare, public safety and other vital social services, as well as to support investments in infrastructure and the green economy. If states declare bankruptcy they will break their obligations to employees, vendors, pensioners and even bondholders, which will undermine the basic foundations of our economy. As we emerge, if only tentatively, from the wreckage of the Great Recession, this is precisely the moment we need to strengthen, not weaken, the standards of fairness governing our society.

Copyright © 2011 The Nation

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Filed Under: Budget, Economic Policy, Featured, Politics, Social Justice, United States Tagged With: ,

The Attack Against Social Security: The Power of Incompetence

February 26, 2011 by

Global Geopolitics & Political Economy
Originally published on The Guardian Unlimited, February 22, 2011
See the article on the original website

Dean Baker

The folks insisting on cuts to Social Security and Medicare have revved themselves up and are now in high gear. They see their final victory on the horizon with the possibility of a bipartisan deal involving substantial cuts to both programs. They argue that the large deficits facing the country make it imperative that we address the long-term budget problem, meaning the cost of these programs, immediately.

Before anyone prepares to surrender it is worth remembering once again how we got into the current situation. Before the downturn the budget deficits were relatively modest. Even with the cost of fighting two wars, the Bush tax cuts and a poorly designed Medicare drug benefit the deficit was just over 1.0 percent of GDP in 2007, the last year before the downturn. This was arguably bigger than desired, but a deficit of this size certainly posed no imminent danger to the economy.

Then the economy ran off the track. The reason was the collapse of an $8 trillion housing bubble. This bubble was easy to see for people who knew basic economics and third-grade arithmetic. It was also easy to see that the collapse of this bubble would derail the economy and lead to a serious downturn. That is why some of us were warning about the bubble as early as 2002.

But where were the current group of anti-deficit crusaders back in 2002-2006, when it might still have been possible to do something to stem the growth of the housing bubble before it reached such dangerous levels? Well, they were crusading against the budget deficit of course.

Peter Peterson, the Wall Street investment bahttp://creativecommons.org/licenses/by-nc/3.0/us/nker who is the patron saint and financier of much of the deficit crusade was paying for the “Fiscal Wake-Up Tour,” which was supposed to alert people to the dangers of the country’s budget deficit. This traveling road show of policy wonks and economists had nothing to say about the growing housing bubble that was about to explode and sink the economy.

Then we have the Washington Post, which is continuously setting new records for imbalance on this issue, for example by running six different columns by deficit hawks on the same day. As the bubble grew to ever more dangerous levels the Post had no room for those warning of the risks it posed. In fact, its main source for information on the housing market was David Lereah, the chief economist of the National Association of Realtors and the author of the book, "Why the Housing Boom Will Not Bust and How You Can Profit From It."

The same story can be told about National Public Radio, the major news networks and all the politicians now leading the charge to cut Social Security and Medicare. When the country actually did face a real economic disaster, these people were nowhere in sight. They were diverting attention to other issues and dismissing those of us who tried to warn of the real danger.

Now that we are experiencing an economic disaster – 25 million people unemployed or underemployed, millions of people facing the loss of their homes, more than ten million underwater in their mortgages — as a direct result of their incompetence, these same people are telling us again about the urgent need to cut Social Security and Medicare. The deficit hawks somehow think that their case is more compelling because of the damage done by their incompetence.

It should not work this way. In most lines of work incompetence is not a credential, it should not be one in designing economic policy either. Anyone who cares to tell us about the urgent need to deal with the deficit should first be expected to tell us how they managed to overlook the growth of an $8 trillion housing bubble. They should also be expected to tell us why they have a better understanding of the economy now than they did before the collapse of the housing bubble.

Social Security and Medicare provide essential supports to tens of millions of retirees and disabled workers. The projections are clear. The financing of Social Security poses no major problem – it is projected to be fully solvent for almost 30 years with no changes whatsoever. Medicare poses a problem only because the private health care system is broken.

Honest people talk about the need to fix the health care system. Less-honest people scream about the need to reform “entitlements.” And, they think that the public somehow should listen to them because of their record of incompetence.

Supposedly responsible news organizations, like the Washington Post and National Public Radio, have gotten in the habit of telling their audiences that we have to cut Social Security and Medicare. The need for cuts in these programs is often put forward as an unquestioned fact, not just in editorials and opinion pieces, but in supposedly objective news stories.

This work by Dean Baker, also published by CEPR, is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.

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Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of False Profits: Recovering from the Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media’s coverage of economic issues.


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Why a Flat Tariff on All U.S. Imports Would Work

February 26, 2011 by

Global Geopolitics & Political Economy

Ian Fletcher

I advocate protectionism. But one standard criticism is that this would just result in politically connected industries getting tariffs raised on the products they produce. This would corrupt our economy, force consumers to pay higher prices, and serve no legitimate economic logic.

Sounds logical enough. As the 19th-century American radical economist Henry George put it, "introducing a tariff bill into a congress or parliament is like throwing a banana into a cage of monkeys."

So let’s just cut that Gordian knot right now: what America needs isn’t some complicated system of tariffs, but a flat tariff, the same on every imported good and service.

The exact level at which to set the tariff is an open question. For the sake of argument, we can take 30% as a hypothetical figure, because it is in the historic range of U.S. tariffs and is close to the net pressure on America’s trade balance due to foreign nations’ VAT or value-added taxes. The right level will not be something trivial, like 2%, or prohibitive, like 150%. But there is no reason it shouldn’t be 25 or 35%, and this flexibility will provide wiggle room for the compromises needed to get a tariff through Congress.

A flat tariff would be imperfect, but it would be infinitely better than free trade and relatively politics-proof. Above all, it is a policy people are unlikely to support for the wrong reasons (AKA producer special interests) because it does not single out any specific industries for protection. It would thus maximize the incentive for voters and Congress to evaluate protectionism in terms of whether it would benefit the country as a whole–which is precisely the question they should be asking.

A flat tariff would also create the right balance of special-interest pressures: some interests would favor a higher tariff, others a lower one. This is a prerequisite for fruitful debate, as it means both views will find institutional homes and political patrons.

A flat tariff’s uniformity across industries would avoid the problems that occur when upstream but not downstream industries get tariff protection. For example, if steel-consuming industries do not get a tariff when steel gets one, they will become disadvantaged relative to their foreign competitors by the higher cost of American-made steel. And why should steelworkers be protected from foreign competition at the price of forcing everyone else to pay more for goods containing steel? The only reasonable solution is that steelworkers should pay a tariff-protected price for the goods they buy, too. This logic ultimately means that all goods should be subject to the same tariff.

A flat tariff would have other benefits, too. For one thing, it would avoid the danger of getting stuck with a tariff policy that made sense when it was adopted but gradually became an outdated captive of special interests over time, always a risk with tariffs. Although it is a fixed policy, it would not be fixed in its effects, but would automatically adapt to the evolution of industries over time. In 1900, it would have protected the American garment industry from foreign (then mostly European) competition. It wouldn’t do that today. As which industries are good industries changes over time, which industries it protects will change accordingly.

A flat tariff would trigger the relocation back to the U.S. of the right industries. For example, a 30% tariff would not cause the relocation of the apparel industry back to the U.S. from abroad. The difference between domestic and foreign labor costs is simply too large for a 30% premium to tip the balance in America’s favor in an industry based on semi-skilled labor. But a 30% tariff quite likely would cause the relocation of high-tech manufacturing like semiconductors. This is key, as these industries are precisely the ones we should want to relocate. These capital-intensive, knowledge-intensive industries support high wages and have bright technological futures.

Another objection to a tariff is that if any industry is granted protection, it will just slumber behind it. Some industries indeed long to shut out foreign competition, reach a lazy detente with domestic rivals, then coast along with high profitability and low innovation. But a flat tariff resists this danger because it does not hand out a blank check of protection: it gives a certain percentage and no more. Any industry that cannot get its costs within striking distance of its foreign competitors will not be saved by it. This discipline, although unpleasant for the losers, is the price we must pay for having a tariff that actually works, rather than one which eliminates the discipline of foreign competition entirely and protects all industries indiscriminately.

The political bickering that a tariff varying by industry would cause also militates in favor of a flat tariff. The inability of different industries to coalesce around a common tariff proposal sabotaged efforts to achieve a tariff in 1972-74, but this is a policy around which the greatest possible number of industries can unite.

A flat tariff is also more ideologically palatable than most other tariff solutions. Above all, it respects the free market by leaving all specific decisions about which industries a tariff will favor up to the marketplace. It will thus be considerably easier for ideological devotees of free markets to swallow than some scheme in which tariffs are set by a federal agency, leading to that nightmare of free-marketeers: government picking winners. In the real world, zero government intervention in the economy is impossible, so the issue for believers in economic freedom and small government is to design policies that work through the smallest possible, carefully chosen interventions. This is precisely what the natural strategic tariff offers because it operates at the periphery of our economy, leaving most of its internal mechanisms untouched. In fact, the more wisely we control our economic border, the less we will probably need to control the inside of our economy.

(One final note: a flat tariff would need to include a rebate on reexported goods in order to avoid handicapping American exporters. This would include both goods that are transshipped without modification and goods that are exported after value-added processing. The latter includes everything from chocolate made from imported cocoa to computers made from imported chips. This is implied by its intrinsic logic as a tax on domestic consumption. Other nations follow the same logic in rebating VAT to their exporters.)

© Copyright 2011 Ian Fletcher. All rights reserved.

This article should not be republished or redistributed without the permission of the original author or copyright holder.

Ian Fletcher is Senior Economist of the Coalition for a Prosperous America, a nationwide grass-roots organization dedicated to fixing America’s trade policies and comprising representatives from business, agriculture, and labor. He was previously Research Fellow at the U.S. Business and Industry Council, a Washington think tank founded in 1933 and before that, an economist in private practice serving mainly hedge funds and private equity firms. Educated at Columbia University and the University of Chicago, he lives in San Francisco. He is the author of Free Trade Doesn’t Work: What Should Replace It and Why.


Filed Under: Economic Policy, Featured, Trade, United States

Saudis to Offset Libya Oil Shortfall

February 26, 2011 by

Global Geopolitics & Political Economy / IPS

By Humberto Márquez

CARACAS, Feb 25, 2011 (IPS) – Saudi Arabia has increased oil production to compensate for the fall in output from Libya, as the popular uprising against the regime of Muammar Gaddafi continues to grow in that North African country.

The increase of 700,000 barrels per day is occurring under the attentive gaze of the rest of the members of the Organisation of Petroleum Exporting Countries (OPEC) — to which both Saudi Arabia and Libya belong — but with no intervention from the cartel.

Saudi Arabia "is playing the role assigned by the global economy: being the number one guarantor of stability on the oil market," Elie Habalián, a former Venezuelan governor at OPEC and expert on Middle East issues, told IPS.

The measure helped curb the escalation of prices. West Texas Intermediate (WTI), the U.S. benchmark grade, sold for between 97.36 and 97.48 dollars a barrel in New York Friday, down from 103.41 dollars Thursday.

In London, North Sea Brent, the European benchmark, traded at 112.14 dollars a barrel Friday, down from a peak of 119.79 dollars Thursday.

The week’s averages stood at 92.64 dollars a barrel (compared to 79.52 dollars in 2010) for WTI, 107.33 dollars (80.24 in 2010) for Brent, and 104.11 dollars (77.39 in 2010) for the OPEC reference basket, the Venezuelan Energy Ministry reported Friday.

Speculators are taking advantage of the turmoil in the Middle East to turn a quick profit, "which neither producers nor consumers want," warned Carlos Mendoza, another former Venezuelan governor to OPEC.

A conference of more than 80 representatives of energy ministries from oil producer and consumer countries, held this week in Riyadh, agreed to work for price stability.

Like other analysts, Habalián insists that the current crisis is manageable, and that "even the total loss of Libya’s output on the market, just over 1.5 million barrels per day, can be recovered from."

Reports indicate that crude oil shipments from Libya’s ports and terminals have almost come to a halt.

"Only Saudi Arabia has four million barrels per day in spare capacity," said Habalián.

Saudi Arabia was producing nearly 8.4 million bpd in December.

Maintaining that level of spare capacity — Kuwait and the United Arab Emirates also have spare capacity — must cost a fortune, said Habalián, who added that it was a cost that Saudi Arabia assumes to remain the arbiter of the market.

A report by Energy Intelligence, a New York-based industry publication, said Thursday that Saudi Arabia had not announced the increase in output publicly, "most likely because of the political sensitivities in the region and the internal dynamics of OPEC."

The oil cartel, made up of Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela, agreed in late 2008 to cut the supply target by 4.2 bpd, to 24.5 million bpd, with tolerance of up to two million bpd.

Venezuelan Energy Minister Rafael Ramírez said that for now, OPEC has no plans to gather ahead of the ordinary June meeting to discuss the crisis in Libya, "because international sales remain stable.

"The big consumers have large stockpiles. There is a great deal of oil stockpiled; I don’t think there will be a shortage of supplies," Ramírez said.

The U.S. Department of Energy reported crude oil stockpiles of 346.7 million bpd as of Feb. 18, 9.2 million bpd more than a year earlier.

The International Energy Agency (IEA), which represents industrial consumer countries, reported that OECD (Organisation for Economic Cooperation and Development) oil stocks were equivalent to 57.5 days of demand in December, a week over the critical threshold of 50 days of consumption.

Before the uprising in Libya broke out, the anti-government protests in the Arab world had mainly affected non-OPEC countries — Tunisia, Egypt, Yemen, Jordan, Bahrain. But if they continue to spread, and cause instability in major oil producers, the unrest would inevitably affect the global energy market and oil policy.

But this scenario is not yet on the horizon, according to Habalián. In the case of Algeria, which produces 1.2 million bpd, the army has such a tight grip on the country that lengthy unrest affecting oil exports is unlikely.

Even in Libya itself, either Gaddafi or any government that might replace him would need to get production and exports going again to run the country.

In the event of a popular uprising in Saudi Arabia, the market would definitely be upset, but Habalián said that was improbable.

He noted, for example, that the Shiite minority opposition to the ruling Sunni royal family is small, demands for democracy are timid, and the king has adopted prevention policies, such as the recent announcement of 37 billion dollars in additional spending on social programmes.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Energy, Middle East, Report Tagged With: , ,

Cutting Public Sector Wages Will Make Recession Worse

February 26, 2011 by

February 25, 2011

Bob Pollin and Jeff Thompson: Public sector wages are not higher than comparable private sector; cuts will fuel recession

More at The Real News


Filed Under: Budget, Economic Policy, United States, Video Tagged With:

‘To The Hungry, God Is Bread’

February 26, 2011 by

Global Geopolitics & Political Economy / IDN

By Ernest Corea

IDN-InDepth NewsAnalysis  
 
WASHINGTON D.C. (IDN) – Finance Ministers and Central Bankers of the Group of 20 (G20) — the world’s top economic performers — who met on February 18-19 in Paris, took a low-keyed approach to a potential world food crisis that was the subject of much analysis and agitated comment on the eve of the meeting.

Some commentators even assumed that the main purpose of the ministerial meeting was to discuss what could be an impending food crisis, and work out counter-measures. This was not to be.

The finance ministers are safely back home, but a sense of distress continues to hang over assessments of how high spiking food prices will reach. Remember: it is just three years since the last world food crisis, which was such a disaster for the millions already affected by food insecurity.

Now, the World Bank reports that its global food price index rose by 15 percent between October 2010 and January 2011. That is 29 percent higher than it was a year earlier, and a mere 3 percent below the peak of 2008. The Food and Agriculture Organisation’s (FAO) Food Price Index also rose for the seventh consecutive month in January, averaging 231 points, up 3.4 percent from December 2010.

By way of response, World Bank Group President Robert B. Zoellick issued the grim warning that "global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world."

In a separate response, UN Secretary General Ban Ki-moon summoned the UN’s High Level Task Force on Food Security, for the sixteenth time since it was created in 2008, to review and respond to the facts of the current situation. Subsequently, Task Force Coordinator David Nabarro reported to the the UN’s Economic and Social Council (ECOSOC) that his group is "extremely concerned about the uncertainty around food supplies and changes in food prices."

COMING UP SHORT

G20 finance ministers, however, made only a perfunctory reference to food security and agriculture in their final communiqué. Perhaps they did not want to court the embarrassment of having to confess that agriculture and, therefore, food security in Africa was impaired because the world’s economic powers had failed to fulfil their pledge to support agriculture in that continent.

In 2009, they undertook to provide $22 billion over three years for that necessary and worthwhile enterprise. Up to now, they have come up with only $350 million.

Or perhaps they did not consider these topics to be part of their portfolio — thus, leaving them aside to be examined and acted on only by G20 ministers of agriculture when they meet later this year. That is a narrow, bureaucratic approach to issues that are universally significant, should attract universal attention, and even cause universal concern.

As Nabarro has pointed out, fluctuating food prices contribute to "food insecurity, poverty, hunger and political instability." Price instability can lead to systemic economic instability. It also can function as a catalyst of social upheaval, when a tipping point has been reached, thus causing political disruption whose effects might be felt not only nationally but regionally as well.

In fact, the recent and continuing political upsurge in the Middle East was initially misinterpreted as solely a case of "bread riots" no different from those that erupted before as a result of rising food prices and a shortfall of supplies in Egypt, among other countries, and subsided fairly quickly. There was much more to the Middle East upsurge than rising prices. Nobody can doubt, however, that the hardship caused by the rising cost of food contributed to anti-government fervour.

MIRED IN POVERTY

The composite account of world food price increases compiled by the World Bank is that wheat prices have doubled between June 2010 and January 2011, the price of maize (corn) has jumped by some 73 percent, while items that contributed to dietary diversity such as vegetables, including beans and yams, have increased as well in parts of Asia and Africa. The prices of edible oils and sugar have also risen.

A bright spot is provided by rice, the staple food of millions, with major production and consumption primarily in Asia. Rice prices, says the World Bank, "have increased at a slower rate than other grains." This is considered by many observers to be an important reason why the world does not face a crisis of 2008 proportions in 2011 — at any rate, not yet.

Additionally, the prices of maize in Africa have remained stable as a result of improved harvests.

Food prices have not reached 2008 levels, and most state and multi-national agencies appear to possess a greater capacity for emergency action now. But higher prices have already taken their toll: the World Bank estimates that an additional 44 million people in developing countries have been thrown into poverty by rising food prices since June last year.

CRUSHING IMPACT

As always, volatile food prices have their most crushing impact on the poor who generally spend a greater proportion of whatever income they possess on food than do other segments of society. The World Food Programme reports, says Nabarro, that in the poorest households, "many are now paying 15 percent more for food than they did last year."

Some developing countries have found it necessary to expand their "safety nets" to support the most vulnerable among the poor as they deal with the impact of rising prices. Some households have adopted their own corrective measures to confront the problem: buying less food, eating fewer meals, reducing or suspending some expenses (for example, on health), borrowing more to meet their bills and, where opportunities exist, earning at multiple work places.

Such opportunities are limited, however, and the inevitable result is that the poor, already weighed down by their circumstances, are compelled to carry ever-increasing burdens. Not surprisingly, therefore, the UN Task Force informed ECOSOC that "high food prices present a real threat: causing extreme poverty and endangering the lives and livelihoods of nearly one sixth of the world population."

GREATER TASK

International agencies have acquired the experience and the expertise to respond effectively when a food crisis occurs. If the current upward trends persist, turning sooner or later into a full-blown crisis, there will be plenty of hand-wringing and headlines, and there will also be attempts to help those affected.

The much larger and, in fact, more significant task is that of seeking to ensure that such crises are eliminated or, at least rare. What is required is not a series of reactive policies but a reorientation and transformation of agriculture and related practices. This will be a massive undertaking, and the temptation to wallow in excuses that justify inaction will no doubt beckon politicians and officials at national, regional, and international levels.

If they continue to succumb to that temptation, as they have before, the world will lurch from one food crisis to another, causing more hardship and greater upheaval. Perhaps their resolve to take the long-term view and act boldly will be strengthened if only they can live by the principle that combating poverty and its inevitable product, hunger, is a moral imperative. As Gandhi said with his eternal wisdom: "To the hungry, god is bread." (IDN-InDepthNews/26.02.2011)

Copyright © 2011 IDN-InDepthNews | Analysis That Matters

The writer has served as Sri Lanka’s ambassador to Canada, Cuba, Mexico, and the USA. He was Chairman of the Commonwealth Select Committee on the media and development, Editor of the Ceylon ‘Daily News’ and the Ceylon ‘Observer’, and was for a time Features Editor and Foreign Affairs columnist of the Singapore ‘Straits Times’. He is Global Editor of IDN-InDepthNews and a member of its editorial board as well as President of the Media Task Force of Global Cooperation Council.

This article should not be republished or redistributed without the permission of the original author or copyright holder.


Filed Under: Development, Health, Report Tagged With: ,

China Learns to Live With Inflation

February 26, 2011 by

Global Geopolitics & Political Economy / IPS

By Mitch Moxley

BEIJING, Feb 26, 2011 (IPS) – At Mr. Ma’s fruit and vegetable shop, located in a historic hutong alleyway a few blocks from the Lama Temple, the impact of China’s growing inflation is evident. In recent months, the prices of Mr. Ma’s products have soared. Eggs have gone from RMB 7 (6.5 RMB to a dollar) to RMB 10 per kilogram. Tomatoes have almost doubled. Cabbage has tripled.

Despite the government’s pledge to rein in food prices, Mr. Ma’s not so sure – a sentiment shared by a growing number of ordinary Chinese. "Prices will definitely keep rising," he tells IPS. "There’s not much we can do."

Soaring inflation has been the dominant news story coming out of China in recent months. In January, consumer prices in China climbed 4.9 percent compared to the same month a year ago, according to government figures. That was lower than expected, but still cause for concern. Critics claimed that the statistics bureau had recalculated the index to give less weight to food costs, meaning inflation might have actually been higher than reported.

Consumer confidence dropped four points to 100 in the fourth quarter of 2010, the lowest level since 2009, indicating concern among Chinese about inflation’s impact on their daily lives and salaries, according to a survey published by the China Economic Monitoring and Analysis Centre and the Nielsen Company, a media research firm.

According to the survey, numbers above 100 indicate degrees of optimism, while numbers below the 100 mark reflect pessimism. In the second quarter of 2010, Chinese consumer confidence was at 109 points.

The cost of food, most notably fruits and vegetables, has been climbing for the past year, and food prices now rank as the country’s third largest concern, behind income stability and health, the study found. January’s food prices soared 10.3 percent from the month before, and 84 percent of consumers believe food prices will continue to climb in the next 12 months.

Economists also expect more price increases the months ahead, as demand outstrips food supply and commodity prices remain high. China analysts have said that inflation is a major concern for the Communist Party, which has based its legitimacy to rule on economic prosperity. In many areas of China, families spend up to half their income on food.

For ordinary Chinese, life goes on. Small business owners interviewed by IPS on a recent morning say that although they were concerned about rising prices, most weren’t expecting a dramatic drop in business.

"Yeah, the prices are going up, but there’s nothing we can do," says Ms. Shao, the owner of a tiny convenience store a few doors down from Mr. Ma’s vegetable shop. She says that the cost of most of the items she sells is on the rise, including milk, sugar, beer, cooking oil and flour. Cases of a popular brand of instant noodle are up from RMB 36 last fall to RMB 45 today. All major beer labels are hiking prices.

Ms. Shao has run this convenience store for eight years, and these are the highest prices she’s seen. But she’s not overly concerned – business is down slightly, but not significantly.

"People seldom complain. They know about inflation. You have to eat."

On a busy street in the heart of central Beijing, Boss Liu barely has time for questions, his bread stand is so busy. His product has gone up from RMB 0.6 (less than a penny) to RMB 0.8, and he expects to sell each shao bing – layered flatbread with sesame seeds on top – for RMB 1 each soon enough.

He’s not too confident the government will be able to control prices, but his business has been largely unaffected by rising inflation.

"Some old people aren’t buying them anymore, but maybe just 1 percent of customers. We’ll be OK."

The central government in Beijing has promised to rein in inflation by raising bank reserve requirements and interest rates. The central bank recently raised the reserve requirement ratio for banks by 50 basis points, or 0.5 percentage points, and it has raised interest rates three times since October, with more increases likely.

Beijing has tried to calm public concerns by paying subsidies to poor families, keeping prices low at university cafeterias and ordering local governments to ensure vegetable markets are well stocked.

But the government’s pledges offer little comfort to Ms. Tong, the owner of a beef noodle shop near Andingmen subway station. Rising costs are eating into her profit and she’s having trouble retaining staff. Over her lunch she says she’s thinking about closing shop and heading back to her home province of Shandong.

"Nobody wants to work here. They have to work long hours – it’s hard work," Ms. Tong says. "The price of materials keeps rising and workers keep asking for raises. I can’t afford to keep this place anymore."

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Economic Policy, Economy, Featured Tagged With: ,

"New Egypt" the Wild Card in Stalled Mideast Peace Process

February 26, 2011 by

Global Geopolitics & Political Economy / IPS

By David Elkins

WASHINGTON, Feb 26, 2011 (IPS) – The ability of the United States to broker a successful Palestinian-Israeli peace agreement will hinge on the future of Israeli-Egyptian relations, a panel of experts at the Palestinian Centre argued here Thursday.

Given the emergent political dynamics of post-Mubarak Egypt, the panelists called for a renewed focus on the ‘Palestinian question’ and for the United States to be more assertive in its stance on Israeli settlements and Palestinian national unity.

Although the White House is focused on more immediate events in the region, they argued that it is in the midst of a fleeting opportunity to encourage reconciliation between parties in the Palestine Liberation Organisation (PLO) and place pressure on a new Egyptian government to carefully consider the possible repercussions of any break from Israel, with whom Cairo has struck a consistent yet uneasy 33-year peace and whose blockade on the Gaza strip it has supported.

Ambassador Clovis Maksoud, director of the Centre for the Global South at the American University, also argued that, ultimately, continued U.S. acceptance of Israel’s isolation of Gaza and occupation of the West Bank will be detrimental to Israeli-Egyptian relations and will preclude any peace deal between Israel and the PLO, unified or not.

"If [the U.S.] does not admit that Israel is an occupying power, then the peace process is a process without peace," Maksoud said.

Last week, the U.S. vetoed a U.N. Security Council resolution that condemned Israel’s settlement policy.

Meanwhile, although domestic priorities will dominate the agenda of any new Egyptian government, Maksoud predicted that Cairo will be expected to make clear decisions regarding the ‘Palestinian question’.

Prominent Egyptian theologian Yusuf al-Qardawi called for ‘dignified negotiations’ with Gaza-based Hamas last week, including discussions over the blockade, but other Muslim Brotherhood officials such as Assam el-Erian have repeatedly argued that any decision impacting relations with Israel should be determined through a popular referendum.

While Egypt re-opened the lone exit and entry point to the outside world for Gazans this week, the panelists said that Egyptian-Israeli ties will grow more tense with the possibility of a break in the blockade and a more porous border between Egypt and Gaza.

Regardless of any Egyptian move to lift the blockade or even nullify its peace treaty with Israel, U.S. policy would be limited if Israel were to avoid re-engaging the Palestinians based on concerns over security near its southern border, they argued.

A breakdown in direct Palestinian-Israeli negotiations, brokered by the U.S. in September 2010, has resulted in the Palestinian Authority (PA) making an independent appeal to the U.N. for recognition of statehood.

While some believe it would be in the United States’ and Israel’s best interests to work with an internationally recognised Palestinian government, the conference panelists argued that a successful deal on larger issues such as the jurisdiction of Jerusalem and the return of Palestinian refugees would not be likely if anxieties over security remained exploitable or the PLO remained fragmented.

In a recent move to appease domestic discontent, the PLO announced parliamentary elections would take place for the first time since 2006. Hamas was quick to deny the legitimacy of any scheduled elections.

However, PA Prime Minister Salam Fayyad’s recent gestures towards Hamas indicate that an internal shift towards PA- Hamas reconciliation, which would be contingent on Hamas’s assurance not to break its ceasefire agreement, seems more likely as Fatah turns its attention towards multilateral avenues of statehood recognition – a step greatly advantaged by a politically unified party, inclusive of Hamas.

"There are some trends that will help the PA regime maintain its position, including the fact that the West and the Western media are vested in the Fayyadist dream of institution building under occupation and trying to get a state, as well as growing support for the PA’s plan to seek U.N. recognition of statehood," said panelist Nadia Hijab, co-director of the Palestinian Policy Network.

"All of this will help to perpetuate the PA regime in the West Bank and Gaza, but none of it will shake Israel’s control of the territories," she added.

"The Palestinian situation I think is unsustainable, but I do think that the Obama administration doesn’t know where to go," said panelist Michelle Dunne, former specialist on Middle East affairs at the White House and U.S. Department of State.

"Unfortunately, they are dealing with an Israeli government that has already shown no interest in reaching an agreement with the Palestinians and now seems to be looking at regional events as a reason to do less rather than more," she argued.

As Israeli Prime Minister Tzipi Livni made clear in his Washington Post op-ed on Thursday, the path to Palestinian statehood will require acknowledgment of a new paradigm in regional relations and that leaders from all sides are willing to accept a new reality in order to make essential compromises over Palestinian-Israeli peace.

"[M]ere anxiety is not a policy for any leader, the values and experience of the Jewish people demand that we embrace the promise of real democratic change, not merely express concern about uncertainties associated with it," he wrote.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


Filed Under: Geopolitics, Middle East, Peace, Politics Tagged With: , ,

U.S. Lays Out Sanctions on Libya as "First Step"

February 26, 2011 by

Global Geopolitics & Political Economy / IPS

By Aprille Muscara

WASHINGTON, Feb 25, 2011 (IPS) – As the bloodshed of protestors in Libya continues unabated for the eighth day in a row, the White House took its strongest stance against Muammar Gaddafi’s regime Friday, announcing that the United States will impose unilateral sanctions and has suspended its embassy operations in the oil-producing country.

"We are initiating a series of steps at the unilateral level and the multilateral level to pressure the regime in Libya to stop killing its own people," White House spokesperson Jay Carney told reporters Friday.

"Additionally, the United States has suspended the very limited military cooperation it had with Libya," freezing pending military sales and bilateral events, he said.

The Pentagon began re-engaging with its Libyan counterparts in 2009, when Tripoli promised to cease its weapons of mass destruction programmes and compensate terrorism victims.

The Treasury Department also instructed U.S. banks to closely monitor the movement of assets related to the events in Libya for any misappropriation of state funds or illegal payments, Carney said. Switzerland announced Thursday that it had ordered a freeze of the Gaddafi regime’s assets.

"Finally, the U.S. is using the full extent of its intelligence capabilities to monitor the Gaddafi regime’s actions and we are particularly vigilant for evidence of further violence or atrocities committed against the Libyan people," Carney announced.

"This is a first step and, obviously, we continue to review our options going forward, he said, adding "[T]he steps that we take in the near future are not the only steps we’re prepared to take."

When asked whether military action was being considered, Carney said that all options are on the table. The Barack Obama administration has come under some scrutiny by hawkish critics this week, who have argued that its response to the violent developments in the North African country has been delayed and hasn’t been forceful enough.

"There has never been a time when this much has been done this quickly," Carney argued. "The U.S. has acted in concert with our international partners and with great deliberation and haste."

The press secretary said he waited to announce Washington’s decision to impose sanctions and temporarily suspend its diplomatic activities until after it was confirmed that a ferry carrying U.S. citizens and embassy staff arrived in Malta and a chartered plane headed to Istanbul containing more Americans and the remaining embassy employees safely departed Tripoli Friday.

In addition to measures Washington is taking on its own, " [w]e have decided to move forward with…coordinated sanctions with our European allies and multilateral efforts to hold the Libyan government accountable through the United Nations," Carney noted.

Obama spoke with Turkish Prime Minister Recep Tayyip Erdogan Friday morning and French President Nicolas Sarkozy, British Prime Minister David Cameron and Italian Prime Minister Silvio Berlusconi Thursday in an effort to coordinate an allied response.

"He will continue these consultations to build international consensus for strong measures in the days to come," Carney said.

On Monday, Obama will meet with U.N. Secretary-General Ban Ki-moon here to "discuss the diplomatic, legal and other actions needed to put a stop to violence against civilians in Libya."

U.N. figures place the Libyan death toll at over 1,000, with some approximations as high as 2,000 protestors killed at the order of Gaddafi’s regime.

Obama and Ban "will also discuss the range of activities that U.N. agencies and the international community can undertake to address the significant humanitarian needs created by this crisis," Carney added.

The world body estimates that some 22,000 Libyan refugees have fled to Tunisia and 15,000 to Egypt, with many internally displaced residents unable to leave. Meanwhile, the U.N.’s World Food Programme has expressed concern about the country’s food supplies.

U.S. Secretary of State Hillary Clinton will travel to Geneva this weekend, where she will address the U.N. Human Rights Council on Monday.

The UNHRC adopted a highly critical resolution Friday morning that strongly condemned the "gross and systematic human rights violations committed in Libya, including indiscriminate armed attacks against civilians, extrajudicial killings, arbitrary arrests, detention and torture of peaceful demonstrators, some of which may amount to crimes against humanity."

Before its adoption, the entire Libyan delegation in Geneva resigned in protest of the Gaddafi regime’s violence against its citizens.

The resolution, adopted by consensus, also launched an independent commission of inquiry to investigate these alleged violations of international human rights law and recommends that the U.N. General Assembly suspend Libya’s membership in the council.

"The United States strongly supports these efforts and is already closely working with our international partners to carry out this suspension, which will be acted on by the General Assembly early next week," Carney noted.

The U.N. Security Council also met Friday to discuss a draft resolution that could include an arms embargo, targeted sanctions and a recommendation for the International Criminal Court to investigate whether the Libyan government is carrying out crimes against humanity in its attacks on peaceful protestors.

All rights reserved, IPS – Inter Press Service, 2011.

This article may not be republished, broadcast, framed, or redistributed without the written permission of IPS – Inter Press Service. Republication of this material without permission from IPS, the copyright holder, constitutes a violation of United States and international copyright laws and may result in legal action.


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