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Cock 'n' Kabul Story

Ellie Keen — Sat, 14 Jun 2008 11:37:32 +0000

How the plan to devastate and then 'reconstruct' Afghanistan is paying dividends

This week the 100th soldier was killed since (illegal) British operations began in Afghanistan more than six years ago.”They have paid the ultimate price” said Gordon Brown, “but they have achieved something of lasting value.” Shareholder value that is - with most of the ‘aid’ / reconstruction cash going to a small number of corporate contractors for overpriced and shoddy work.

It’s considered legitimate for a corporation to make huge profits if its prepared to invest in a warzone. Its all about ‘rewarding risk’ and entrepreneurial prowess – War is an attractive proposition for right-wing money men and ex-army / militia thug types. £8bn in reconstruction money (almost all of it from the U.S) has been spent so far and, on average, each contract awarded to the private sector costs four times more than if it was run by the Afghan government. It costs, for example, £6,000 to build a classroom under a government run contract - but US corporations are building the same schools with the same sub contractors for more than 25 grand a piece. Half of all aid is actually spent outside of the country. At the same time the average resident of Kabul will be lucky to get more than six hours of electricity a day.

Most of the loot is being sucked up by reconstruction which runs over-budget. And since there’s no one’s checking the cashflow that comes as hardly a surprise. On average international ‘donors’ are spending three quarters of their ‘aid’ on privately run projects with no government oversight. Although the State Department does not gather the statistics because (says a spokesman) the figures are “not important to us” – it is estimated that only 3% of US aid is given to the Afghan government. The rest goes to the corporations that are so closely tied to (and sponsor) the Bush administration.

It was never the invading powers’ intention for their governments to pay for the reconstruction themselves - they’d be leaving that to the US and UK taxpayers. Using their leverage and influence to snap up lucrative investments and non-exec positions with the same companies bankrolling the political class help them all pick up this bountiful tax income through reconstruction, security and ‘advice’ contracts. Any shares in the corporations that win contracts can be packaged in a variety of ‘financial instruments’ (e.g. offshore trust funds) so the voter need never know that their political representative is making a fortune.

And if you’re vice President and former Chief Executive Officer of Halliburton, like Dick Cheney, then you can simply operate under a subsidiary name - Kellogg, Brown and Root (KBR) in this case. And what a nice little earner that’s turning out to be. KBR picked up a £50 million contract from the State Department back in 2002 to build a new embassy in Kabul. The company has since been awarded further contracts worth £115 million. Mindful of all the bad PR, Cheney left Halliburton in August 2000, promising to sever all financial ties to the company. A few stock options later and Dick was £20 million better off. But he still pockets anything between £100,000 and £1/2 million each year in ‘deferred compensation’ showing that he continues to profit from the war he made the decision to wage.

Afghanistan’s Rebuilding Agricultural Markets Program has been bankrolled by USAID (the government agency awarding contracts), with more than £25 million a year going to Chemonics International to persuade Afghanis to adopt the more profitable western approach to growing food. Chemonics is the the knowledge economy game where it receives hefty fees to ‘advise’ governments. Ninety percent of its cash comes through USAID - where its controlling owner, Scott Spangler, used to work as director under papa Bush.

The Price is Right

To help make the loot flow in the right direction, between 1990 and 2003 the Spangler family gave the republican party £50,000 – and now they want to see a return for their investment. Despite Chemonics best efforts a country once more than self sufficient in food now sees half the population go hungry.

Another option is to obtain a valuable contract – in security for example – and sub contract it out to the locals for a nice fee. Private security firm, United States Protection and Investigations, charges £2,500 a month for a security team of six. But when western security forces charge more than £1,000 a day, its so much cheaper to pay an Afghani security worker who only commands £60 a month. With six employees costing just £360 – 80% of the money is straight profit. In fact even the World Bank director in Kabul, Jean Mazurelle, estimates that 35 to 40 percent of all international aid sent to Afghanistan is “badly spent.”

The consequences of inaction on locally-led development are clear. While Brown talks of an ‘historic mission’, Afghanis are wondering where all the promised assistance has gone. Corruption in government and blatant profiteering by western corporations is only serving to alienate a population which then turns against those responsible for the abuses – be they warlords, government officials or the international forces that support them.

For more info on the recent rise of private military companies, check out Jeremy Scahill www.alternet.org/authors/5434

* More than one in five of the 100 soldiers killed since November 2001 were not caused by enemy fire – but accidents. The statistics are a little skewed when the crash of an aging Nimrod spy plane killed all 14 crew. Nevertheless of the 201 British soldiers killed in Iraq and Afghanistan more than 80 died because of accidents. Oops.

Two More Scandals

Ellie Keen — Wed, 27 Feb 2008 00:20:07 +0000

TWO more scandals concerning greed and inefficiency from two former public companies and still the government just tinkers at the edges.

Worst Late Western, that sad apology for a successor to the Great Western Railway, has finally put its hand up to admit that its record is unsatisfactory and has pledged to invest £29 million to improve customer service and to increase capacity.

And water industry fig leaf Ofwat has done its bit to hold the cost of living down by authorising the water privateers to raise prices to consumers by an average of 1.5 per cent over the 4.3 per cent inflation rate.

Firefighters, civil servants, teachers, local authority staff, prison officers, health workers and others have been told that they can have just 1.9 per cent, which means a sizeable cut in living standards, but the privatised utilities and transport services are a different kettle of fish.

Working people, who make a positive contribution to society, are ordered to tighten their belts, while parasitic shareholders sit back and see their dividends mount up.

It's the kind of comparison that used to be conjured up by Labour Party orators to put forward the need for nationalisation.

Our current Labour government regards such calls as old-fashioned and sets its sights no higher than reliance on free-market competition and the appointment of "regulators" who share its adoration of the profit motive.

These regulators take their instructions from the government, so they authorise the privateers to put profitability and shareholder dividends before consumers' living standards and the cost of living.

Indeed, so blatant is the disparity between the rampant price rises of the privatised utilities and the rigid constriction of workers' pay that it could be a carefully constructed pincer movement by government and private sector to squeeze consumer spending.

Transport Secretary Ruth Kelly's attempt to show that First Great Western has reacted positively to her firm approach is nonsensical.

Any action that it has taken is simply to prevent the loss of its franchise to another private company. It is protecting its shareholders, not the long-suffering passengers who have suffered lateness, cancellations, overcrowding and a plethora of replacement bus services.

The only comparison that can be made of the various private train operating companies is over the degree of inferiority that they display with regard to the services offered by publicly owned British Rail.

And this is despite a government subsidy that has risen since privatisation to be, like for like, five times that paid to British Rail in those days.

Water charges in Britain were once so small as to be added to the annual domestic rates bill. This year, the average charge per household will be £330.

This is despite the promise of hard-nosed private-sector management delivering efficiency and lower prices.

Yes, there had to be investment to improve water purity levels, but that requirement played second fiddle to profit maximisation through selling off the huge property portfolio handed over by the government, making thousands of staff redundant and pushing up charges.

With every scandal that emerges from the mad world of privatisation, the stronger must be the calls for renationalisation and the development of a strategic public sector.

Britain: Rising Fuel Prices Blight Millions

Ellie Keen — Sun, 03 Feb 2008 23:25:00 +0000

There are many ways in which poverty affects people’s quality of life. One of these is the ability to keep warm. The recent hike in oil and gas prices has seen a sharp increase in what is termed fuel poverty in the UK. The consumer group Energywatch estimates that about 4.4 million are now affected by fuel poverty, amounting to one in six people in Britain.

People are deemed to live in fuel poverty when they need to spend more than 10 percent of their income to heat and light their house. However, this rough definition is only part of a more complex situation that also involves a number of deprivations. These include poor housing stock with bad insulation and inefficient heating systems, rising fuel prices and low incomes. Fuel poverty therefore provides a good indication for the general level of poverty in society.

Based on the figures of Ofgem, which regulates electricity and gas markets in the UK, the last time fuel poverty levels were as high was in 1999, a period affected by broad world economic turmoil. Figures then fell until about 2005, but started to rise in the following years.

For many, fuel poverty is a question of life and death. The sick, the disabled and older people on low incomes are especially affected. Every year, tens of thousands die because they cannot afford to adequately heat their homes. Some 93 percent of these so-called “excess” winter deaths occur among those over the age of 65. Last winter, there were an estimated 23,900 such deaths.

Fuel poverty cannot be regarded separately from the general rise in poverty. The recent turbulence on the world markets following the US credit crunch crisis is leading to a further increase in attacks on the living conditions of millions, as the major corporations and banks seek to offset their losses onto the backs of the working class. In addition, many small and medium-sized companies are facing severe difficulties, if not being driven to the wall. This will have a devastating impact on the lives of millions of workers, increasing poverty in general and fuel poverty in particular.

This general trend can be seen in the pricing policies of the six corporations that dominate the energy markets in Britain. The latest rise in fuel poverty is directly linked to a hike in prices by these major energy suppliers. Three have raised their prices significantly this year. British Gas, the UK’s biggest power provider, announced increases in gas and electricity bills of 15 percent. Npower raised its electricity prices by 12.7 percent and gas by 17.2 percent, and EDF Energy put up its electricity tariffs by 7.9 percent and gas bills by 12.9 percent. E.On, Scottish Power and Scottish & Southern Energy are expected to follow soon. These increases will inflate household energy bills by well over £100 a year, pushing the average yearly cost to more than £1,000. It is estimated that each 1 percent increase in energy bills sends 40,000 more households into fuel poverty.

At the same time, the energy companies are making massive profits. There are many indications that the recent price hikes are nothing but a shameless attempt by these corporations to line their pockets. They seek to justify the consumer price hikes by pointing to a rise in wholesale costs for oil and gas on the world markets. While the energy companies claim they are simply passing on these extra costs to the customer, at best this is only half the truth. According to consumer groups, the current rises faced by domestic customers are far above the increased wholesale costs faced by these corporations.

British energy suppliers are holding the working class to ransom. For example, EDF claimed that “wholesale gas prices had risen 117 percent since February last year, with electricity up 90 percent over the same time,” whereas Ofgem put these figures at 31 percent for gas and 40 percent for electricity.

Research sponsored jointly by UNISON, the public service trade union, and the National Right to Fuel Campaign found that the average household prices charged to customers had increased by £2.3 billion more than the costs of producing and selling the electricity and gas that was supplied. In other European countries, such as Germany and France, price rises have been on a far lower level, even falling in some cases.

Consumer groups are demanding the government order a Competition Commission investigation into whether there has been “tacit collusion” by the power suppliers that dominate the UK market. Allan Asher, chief executive of Energywatch, told BBC News 24 that the entire energy market should be reviewed by the Competition Commission. “The price rises we’ve seen are not justified,” he said, adding, “There’ll be more, but sadly the market is not working well and that’s leading to consumers paying much, much more than they need to.”

Following a meeting between Alistair Darling, the chancellor of the exchequer, and Ofgem last week, a spokesman said the chancellor was “not minded” to call for an inquiry after “he had been reassured the market was working properly.”

This response reflects the contemptuous attitude of the government to the problem of fuel poverty. In 2001, the government announced a target to eradicate fuel poverty for all vulnerable and low-income households by 2010 and all other households by 2016. But in practice, it was adding to the problem by raising VAT (value-added tax) on consumer bills. A research commissioned by the Energy Efficiency Partnership for Homes—a group of 700 industry bodies concerned with domestic energy efficiency—pointed out that electricity prices surged by 39 percent and gas prices by 61 percent between 2003 and 2006.

The eradication of fuel poverty and poverty as a whole is only possible through ending the domination of society by the transnational corporations, including the energy companies. The economy must be organised not for the profit of a few but to meet the needs of all; bringing the utility companies under the democratic control of the working class to guarantee that every household receives the basic necessities of heat and light.