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September 2002



Part 2. US policy in Latin America

62) It seems that it will have to be events, and bloody events at that, before the lesson is driven home, not just in the Middle East but worldwide. A new flashpoint could come in Latin America. Already the US administration has switched tack from even six months ago and is seeking Congressional backing to change US law so as to give 'greater flexibility' in aid to Colombia. 'Plan Colombia', designed to assist the Colombian regime in its anti-drugs campaign, was a thinly veiled schema to extend the influence of US imperialism in the region. Under the new proposals this would now mean that the Colombian army could use US-provided helicopters and supplies against the Colombian guerrillas, the biggest of who is the FARC, which claims to be 'Marxist'. This 'aid' is still under the banner of an 'anti-drugs mission' but is in reality a military-political offensive to eliminate the guerrillas.

63) Many in Congress who originally opposed such measures are now lined up behind the Bush administration. As one anti-intervention campaign commented: "This is mission creep, one hundred per cent". It is part of a package of millions of dollars, one of whose aims is to help to protect a 'rebel threatened' pipeline crucial to US oil company Occidental. This new aid is the first move away from focussing aid on 'counter-narcotics' measures.

64) The pretext for this increased military intervention was the breakdown of negotiations between the previous Colombian president, Andreas Pastrana, and the FARC. Troops have been ordered into an area which was once the haven of the FARC. At the moment there is a limit on the number of US personnel that can be involved in Colombia. However, the Colombian army is being assisted with 'illegal paramilitaries', which incidentally are also labelled as 'terrorists' by the US. But the Bush administration turns a blind eye to this of course. The election victory of the right-wing candidate, Alvaro Uribe, heralds a new dark, bloody period for the Colombian people, 64 per cent of whom are poor. Uribe received a majority of those who voted but 54 per cent stayed away from the polls. His 'democratic' mandate consists of no more than a quarter of the total electorate. However, this will not stop him, backed by US forces, from probably deploying on a big scale the right-wing death squads and paramilitaries.

A new phase of colonialism ruled out

65) These developments bear a striking resemblance to what happened during the first stages of the Vietnam War when 'advisers' led to the commitment of US troops. However, in its new military offensive phase US imperialism can undoubtedly pursue military-police type operations which can, through its overwhelming military power, temporarily defeat the perceived enemy. But notwithstanding the dreams of some military and diplomatic strategists a new age of 'colonialism', particularly of the direct form, is ruled out. It is true that such is the chaos and dislocation in the neo-colonial world that sometimes, as in the case of Sierra Leone, military force can be used temporarily, with the support and agreement of the majority of the population, who saw this as a relief from the gangster regime which was displaced. Such measures are the exception however, and moreover are temporary in character. Imperialism would much prefer, in a situation of a discrediting of indigenous political forces and personalities, that the forces of its local 'allies', preferably in neighbouring states or of a common ethnic or religious background, should do the dirty work on the ground. Nigerian troops played a key role in Sierra Leone, although British forces claimed most of the kudos.

66) In relation to a new phase of 'colonialism' the CWI has, in any case, designated the majority of Africa, Latin America and Asia, as 'neo-colonial' in character. Regimes in this area of the world, while nominally 'independent' are bound with iron hoops to imperialism and its policies. These are imposed upon them through a raft of policies and institutions such as the IMF, World Bank and the UN, but ultimately, and more importantly, through the economic control exercised by imperialist firms and their local agents. In effect, a period of increased economic re-colonisation has taken place.

67) The 'neo-colonialist' character of the governments and regimes in these regions has if anything been reinforced since the collapse of the Berlin Wall and the emergence of US imperialism as the only economic and now military superpower on the globe. This allows it to exercise an unprecedented sway over the direction of events and governments. Even formerly successful movements of a guerrillaist type of character have been compelled to take account of the new period and mood. For instance, the Tamil Tigers and the government of Sri Lanka have each recently announced a unilateral ceasefire after 19 years of war. There are a number of factors which have led to this, not the least of which has been the feeling on both sides that the war was at a stalemate. But undoubtedly the post-11 September mood, with the threat of Bush to outlaw all 'terrorist' movements, irrespective of whether they represent a genuine liberation movement or not, had an effect in forcing the Tigers to the negotiating table. Whether or not the demand for a homeland for the Tamils can be satisfied and the war permanently ended is another matter.

Saudi Arabia and the Oil Markets

68) On the other hand, the aggressive military stance of US imperialism, particularly towards the problems of the Middle East and Iraq, will have big political and social repercussions as we have already described. The economic fall-out could be considerable as well, leading to a reinforcement of recessionary or slump tendencies in the world economy. The Middle East, particularly Saudi Arabia, is crucial for the energy it provides to world capitalism. Oil has been more affected in recent history by military and political events than any other commodity. In the space of a few months its price can triple or crash from $30 a barrel to below $20. A hike in oil prices, with a considerable impact on the world economy, has followed important military and political clashes, as in the aftermath of the Arab-Israeli war of 1973.

69) The price has also been affected by the economic development of world capitalism and also the rivalries within the oil cartel OPEC and between OPEC and, for instance, Russia, a massive producer of oil, at certain periods. During the Afghan conflict there was some discussion in the US press of the possibility of a switch from buying oil in the Middle East to the Caspian Sea and Central Asia. As we have explained elsewhere, this is not a viable short-term policy for the US economy or world capitalism (see document on Afghanistan). Sixty-three per cent of the world's proven oil reserves are in the Middle East. Twenty-five per cent are in Saudi Arabia alone.

70) It is true that emerging Russian capitalism, with its huge oil-producing conglomerates such as Lukoil, is challenging Saudi Arabia as a potential main supplier to world capitalism. In the immediate period following the collapse of the USSR in the early 1990s oil exports from the former Soviet Union crashed. The instability in the CIS, the lack of adequate protection for investors, led to reluctance on the part of Western oil firms to seriously invest in this region. However, following the 1998 financial crisis, which ended in a devaluation of the rouble, the Russian oil industry, which had accelerated its consolidation before then, began to exploit this situation through rapidly increased exports. In the process the imperialist character of the new Russian capitalism has been clear. Not only have they developed 'partnerships' with foreign imperialist firms such as Conoco, Exxon-Mobile, Royal Dutch Shell, etc., but Russian firms are now competing for privatisation tenders for the oil assets of Poland, Latvia, the Czech Republic, Slovakia and Croatia.

71) Part of this process was the involvement of three Russian companies in 1997, led by Lukoil to develop the West Qurna oilfields of Iraq. This in turn led to these firms lobbying the Russian government, and Putin when he was elected in 2000, to lift the UN sanctions on Iraq. At the same time, the Russian oil giants have made a concerted effort to displace Saudi Arabia from its pivotal position as the supplier of the energy for world capitalism. The rapacious Russian oil capitalists are in any case smarting at the past policies of Riyadh. The latter used its position to effectively determine the price of oil, which had collapsed in 1985-86, which in turn led to the implosion of the Soviet oil industry and, as some bourgeois commentators have argued, allegedly hastened the demise of the Soviet Union. Russia therefore, in its later assertive policy, refused to limit its production of oil thus lowering the price. Saudi Arabia retaliated and attempted to blackmail Russia by threatening a price war.

72) However, a truce was declared by the end of 2001, with Russia adopting a more co-operative approach to OPEC and the other independent oil interests. The determining factor was that Russian capitalism felt that a price collapse would be bad for the world economy and the stability of oil exports. At the same time, Russia is pursuing internally a 'hands-off' policy towards its own 'crown jewels', its oil companies. It is not easing the way for US or other foreign direct investment in the oil sector. Moreover, it is coming up against the US oil giants in their attempt to control the exploitation of the vast oil reserves in the Caspian and with it the construction of a pipeline from Azerbaijan to Turkey.

73) As tempting as a turn towards Russian oil supplies was for US imperialism, ultimately it is safer and more cost effective for US imperialism to base itself upon Saudi and Middle East oil. Indeed, it has become more dependent on oil from this area than at the time of the Gulf War. And Saudi Arabia effectively subsidises the US economy through the lower price it charges. This is $1 a barrel less than on sales to the countries of Europe and East Asia (a subsidy to US consumers of $620 billion per year). It is the price paid by Saudi Arabia for United States deployment of military forces in the Persian Gulf. In this way the feudal rulers of Saudi Arabia hope to ensure that Washington will help defend Saudi Arabia. This means of course not only the defence of the kingdom's oil fields and 'territorial integrity' but the defence of the House of Saud as well.

74) The other side of the coin is that the presence of US troops on Saudi soil, dating from the Gulf War, is now a powerful weapon for the right-wing Islamic fundamentalists to attack the Saudi regime as a stooge of the 'infidel'. Thus there has been a very quiet but noticeable 'redeployment' of US forces in early 2002 from Saudi Arabia to neighbouring Qatar. In the event of an attack on Iraq the 'nightmare scenario' of a fundamentalist uprising in Saudi Arabia, overthrowing the regime, could take place.

Social and economic pressures in the Middle East

75) This could be combined with a similar movement in Egypt which could topple Mubarak, given the huge rise in the support for fundamentalism. This has occurred not just amongst the poor and the oppressed but also in wide sections of the disillusioned middle class. Their sons and daughters, in the catastrophic economic circumstances of Egypt and the Middle East, cannot get jobs or advance in society as before. Unemployment in Algeria, for instance, is estimated as at least 30 per cent and Egypt has seen a rising tide of joblessness as well. Egypt, however, is a crucial country in the Middle East. It has been kept afloat because of the more than $55 billion in aid received in the past quarter of a century from Western governments, largely the US, international lending organisations such as the World Bank, and the oil-rich Arab regimes.

76) Egypt was pressurised by imperialism to join the worldwide privatisation of former state assets. The result has been catastrophic, as 100 state enterprises were sold to investors by late 1988 with the predicted result that unemployment has increased. A brake has now been applied to this process merely to protect jobs. This has not avoided, however, a situation common to the whole Middle East of stagnation, mass unemployment - in the Middle East and North Africa it averages 15 per cent of the workforce. Moreover, a large segment of the unemployed are highly educated.

Instability of Arab regimes - Saudi Arabia

77) The precariousness of all the Arab regimes, but particularly Egypt and Saudi Arabia, is conditioned by the deterioration in their economic circumstances, enormously aggravated by a burgeoning birth rate, and the humiliation felt throughout the Arab world at the treatment of the Arabs and the Palestinians. Unprecedented mass demonstrations have swept the region despite the massive repressive military apparatus which the bourgeois Arab regimes possess. The Bush administration is widely perceived as more biased towards Israel than previous US administrations. Even the most pro-US regimes have clashed with the Bush administration on this issue. The power behind Saudi King Fahd, Prince Abdullah, initially turned down a written invitation from Bush himself to visit Washington. When he eventually travelled to meet Bush he commented afterwards that the president was "nice" but dim. Abdullah was compelled to give Bush a 'short course' over a couple of hours on the realities of the Palestinians' plight.

78) The fallout from the Arab-Israeli dispute has compelled the Saudi monarchy to launch its own ill-fated 'peace plan' involving recognition of the state of Israel. The feudal summits of Saudi society realise that their regime could be toppled if events spiral out of control. The massive and legendary oil riches of Saudi Arabia meant, in the past, a soaring of government spending and a relatively comfortable lifestyle for the majority of the population. This was in a period when oil revenues were $40 a barrel (1980), which dropped to $20 and below at one stage. The Gulf War, led militarily by US imperialism, was paid for largely by its 'allies', and particularly Saudi Arabia, which coughed up $60 billion. The rotten, parasitic, feudal 30,000 strong royal family has even gone in for a bit of ' belt tightening' and has been compelled to pay its telephone bills and to pay for travel on the national airline, which was looked on in the past as their private airline.

79) Unemployment is at least 15 per cent and discontented Saudi youth have rioted in Jeddah and other towns in the kingdom. Because of lower oil prices per capita income has slid from $28,600 per year in 1981 to below $8,000 today (in 2002 prices). Just after 11 September, a Saudi intelligence survey of educated Saudis between the ages of 25 and 41 found that 95 per cent supported bin Laden's cause. The regime has warned that the even more fanatical religious zealots who oppose it must stay in line or face repression. The stagnation of the economy, high unemployment, particularly of the educated, the lack of any democratic outlet for the pent-up energy of the youth and the growth of an even more extreme form of right-wing political Islam than the regime itself, makes for an explosive brew. This could ignite at any time. The Arab-Israeli dispute, an attack on Iraq or any other number of issues could be the match that lights the fire.

80) Ever mindful of the dictum that 'reform from above can prevent revolution from below' even sections of the Saudi dynasty such as Prince Talal are looking for a 'democratic opening' that could ventilate the stoked up anger within Saudi society. Even neighbouring Kuwait has a form of 'elections' while Qatar has 'communal' elections and there is even a 'wind of change' (more a faint breeze) in Bahrain, Oman and Yemen.

81) However, the Fahd regime has earned for itself the opprobrium of the fundamentalists for its decision to allow the forces of the 'infidel' (the US) to be stationed on the 'holy soil of the Prophet'. The hostility to this decision has grown in the wake of the war in Afghanistan and the Arab-Israeli dispute, and will be enormously inflamed as a result of an invasion of Iraq. Even the Saudi regime is now desperate to publicly appear as 'anti-American' in exerting pressure for the ending of the US military presence. At the same time the US itself is 're-examining' their presence in Saudi Arabia. In a masterly understatement, Bush's Middle East envoy Zinni declared in March 2002: "The military relationship with Saudi Arabia doesn't work well when it gets a lot of attention".

82) US military planners are envisaging greater 'flexibility' than just depending upon the base in Saudi Arabia for future military operations in the region. They are trying to "minimise the amount of time and size of the footprints that US forces have in Saudi Arabia". The alternative which has been floated is the el Oudriad airbase in Qatar but even this is now problematical given the radicalisation, even in the Gulf States, arising from the Arab -Israeli dispute.


83) Egypt, if anything, is more of a 'worse case scenario' than Saudi Arabia. This country, together with Israel, is the key to the region, the most populous Arab country. The rise of fundamentalism in Egypt is in inverse proportion to the deteriorating Egyptian economy. Support for these ideas is not borne out of any optimism but of despair at the state of Egyptian society. The heyday of Arab nationalism under Nasser, following the 1952 revolution, seemed to open up a brighter more equitable future for the Egyptian masses. The state became the engine of development. Companies were nationalised - although not resulting in a decisive break with landlordism and capitalism - and imperialist superexploitation of Egypt was discouraged. Contrast the situation then, when the government guaranteed a job to every graduate from the universities, technical schools and high schools, to the endemic and growing unemployment today.

84) Even the International Herald Tribune, comparing that period to today, commented: "The big government approach yielded some impressive improvements in social conditions. Enrolment in Egyptian primary schools more than tripled, to well over 90 per cent by 1990, and infant mortality plummeted". Following the beginning of privatisation in 1991 a hundred state-owned enterprises were sold off and with it a spiralling of unemployment. The Egyptian economy is kept barely afloat by the massive subventions of US imperialism and partly of European countries as well. However the growth of fundamentalism led to the plummeting of the profitable tourist trade which, allied with the slow down in the world economy and privatisation, has resulted in an economic catastrophe in Egypt. The slowdown in world oil prices has cut traffic and therefore revenues from the Suez Canal.

85) Faced with this desperate situation the Mubarak regime has retrenched and has even cancelled some of the proposed privatisations. One bourgeois commentator complained in the International Herald Tribune: "The whole spirit of freeing up the economy was killed within two years". The reality is that the neo-liberal model which imperialism attempted to impose throughout the Arab world in the 1990s has fallen on its face with terrible economic and social consequences for the 150 million Arab people.


86) The dead end of bourgeois society and bourgeois rule for the region is typified by the horrendous position in Algeria. Well over 100,000 lives have been lost in the ten year civil war between the military backed regime and different fundamentalist groupings. Two of these radical Islamist groups have been included in the US's list of organisations tied to Osama bin Laden. This in turn has emboldened the Algerian regime to demand US military backing for its own 'war against terrorism'. It is a further example of the stupidity of the Bush regime's black and white approach which labels any armed attempt to resist governments, no matter how dictatorial, as 'terrorist'.

87) In fact, the origins of the Algerian civil war arose out of the cancellation by the army of the 1992 parliamentary elections, which had clearly been won by the Islamic Salvation Front (FIS). The population was thoroughly sickened by the corruption of the regime, the mass unemployment and a massive drop in per capita income to $1600, which is half the figure of 1986. The Algerian army was successful in destroying the FIS as a political party.

88) Checked on the parliamentary plane, two Islamist groups - known by their acronyms GSPC and GIA - took to assassinating members of the security forces. However, all the evidence points to the fact that the great bulk of the murders and assassinations have been the work of the Algerian army and the state's 'security forces. In a vicious tit for tat more extreme splinter groups went beyond killing police and soldiers, and massacred that part of the population which tacitly or overtly supported the governing party. The level of violence reached 1000 deaths per month, with much evidence to show that the army was carrying through most of the executions. This has declined substantially in the last period but the problems of the regime remain.

89) Added to the economic and social problems is the national question posed by the Berbers in the Eastern region of Kabilye. Their national-cultural rights are denied by the regime. After the killing of a young Algerian in police custody in the summer of 2001, huge protests convulsed the Kabilye region. An enormous radicalisation amongst young people, most of whom hold anti-Islamist views, has taken place.

Political Islam

90) >From the Maghreb to the Persian Gulf not one of the fundamental problems which confronted the Arab revolution in the post Second World War period has been solved. The masses in these countries first turned to radical, socialist and communist ideas with the rise of mass communist parties in Iraq, the Sudan and considerable forces in Egypt and elsewhere. The false policies of the Stalinists, of tailending the so-called 'progressive' national bourgeoisie and Arab nationalism, shipwrecked the marvellous revolutionary opportunities which could have transformed the whole situation in the Arab world. The ideas of 'socialism' (mostly seen through the distorted prism of Stalinism), of Arab nationalism, of Ba'athism (which in turn was a witches' brew of pan-Arabism and Stalinist methods of organisation and procedure) have been picked up, found wanting and discarded by the Arab masses as they have moved into action to break the stranglehold of feudalism, of landlordism and capitalism throughout the region.

91) In despair a section of the middle class, the peasantry and even workers have recently turned to the ideas of so-called radical Islam, which is in effect right-wing 'political' Islam. That will also be found wanting as the tool whereby the masses can break the grip of imperialism and their local agents over the Arab world. (See Afghanistan, Islam and the 'Revolutionary Left' for an explanation of the processes and perspectives for 'political Islam'.)


92) A certain economic development took place in Israel, which created a proletariat capable of taking the destiny of society into its own hands. The rapid technological industrialisation of Israel, for instance, in the last ten to fifteen years, has helped to create a new proletariat in Israel. Prior to the current Arab-Israeli dispute Israel saw the greatest conflict between labour and capital in the region. The paradox of the current situation is that never before have the Israeli workers been potentially more capable of responding to an appeal, a class approach, from the Arab masses and particularly the Palestinian masses. However, the threat to their existence summed up in the demand for the dismantling of the Israeli state, particularly demanded by many of the sectarian organisations of the 'revolutionary left', will act to drive them into the arms of their own worst enemy, the Israeli bourgeois.

93) This current dispute once more illustrates that in the modern era it is impossible to build a successful workers' movement, never mind change the world, without a successful application of Lenin and Trotsky's ideas on the national question, developed and refined for use in the complex world in which we live today. In this region it is impossible to find a road to the masses, to even gain a hearing amongst significant sections, without combining a clear class programme aimed at winning the working class on day-to-day demands but also with a worked out, extremely sensitive, and developed application of our programme on the national question.

94) The current Arab-Israeli dispute once more underlines the incapacity of the little sectarian groups to understand how to successfully and sensitively apply Lenin and Trotsky's ideas on this issue in the modern context. It remains an overwhelming task of the CWI to use the important base we already have in Israel to break out into the Arab world. Once we do this we will find a massive sympathy amongst workers for these ideas.