Centre for Research on Globalisation
Centre de recherche sur la mondialisation


What Prospects In the Wake of The Tsunami

Poverty and Economic Destruction in Indonesia 

by Hendra Adiwidjaja

http://babelfish.ca/   5 February 2005
Original URLs: http://babelfish.ca/articles/tsunami0205.html
www.globalresearch.ca February 2005

The URL of this article is: http://globalresearch.ca/articles/502A.html

This essay attempts to briefly elucidate the origin and persistence of poverty in the Third World, focusing on the experience of Indonesia. In turn, this would shed light on the man-made nature of victims of ''natural'' disasters, such as one associated with the Indian Ocean Tsunami of 2004. The narration is based on logical implications of global socio-political events and country-internal financial-economic aspects. The country which the author is most familiar with, Indonesia, serves as a historical and present example.


A ''natural'' disaster

Everyone who has been following the world news for the past few weeks would have been aware of the earthquake-triggered tsunami that devastated coastal regions surrounding the Indian Ocean. The large loss of human lives, mostly from poor fishing communities, has generated an outpouring of sympathy around the world, especially in the West, which has rarely been seen in many larger scale disasters, for example, from conflicts in Africa. What makes the difference? One thing that comes to mind is the presumed naturalness of this disaster.

If this disaster were natural --- by implication, the loss of lives unavoidable --- then the many people scraping a living in these poor regions would have been natural also. As the logic goes, so would have been the exploitations that put people in this type of conditions in the first place.

As intelligent beings, humans can analyse, predict, and sometimes control nature in certain ways. For instance, this particular precursory earthquake was detected and measured to be around 9.0 in Richter scale, a ''rare great earthquake'' with ''released energy, equivalent roughly to 700 million Hiroshima bombs'' [1 ]. Any reasonably intelligent geologists/oceanographers who were well aware of the geometry of the Indian-Asian continental faultline near the epicentre of the quake would have predicted the resultant tsunami. Smarter folks familiar with the Indian Ocean Basin would have been able to guess the direction of the undersea waves. No undersea detectors, ocean buoys, nor computer models were needed.

The US and European advanced seismic and ocean monitoring offices were aware of the magnitude of the undersea earthquake, and would have likely predicted the resultant tsunami. Taking into account that the seismic data mostly originated from monitoring devices on the US Military Base in the Indian Ocean, circulating reports suggesting a foreknowledge of the tsunami by the US military and the US State Department are likely to be true [2 ]. None of the scientists, soldiers, nor bureaucrats felt any responsibility to properly inform the local regional governments. Suggestion by some scientists and policy makers in the West that proper evacuation plans were needed in any case, while reasonable, for the actual case of ''no-warning'' is like suggesting ''putting the cart without the horse''.1

For this tsunami, any warnings would have been ineffective for the Indonesian region of Aceh, the region closest to the epicentre of the undersea earthquake, as its coast would have been swept just minutes after the main quake occured; the loss of lives in this region is indeed the largest. For this reason, mainstream and alternative presses have recently focused on Aceh. However, it is not the first time that Aceh appears in the world news. For the past year, Aceh has experienced renewed military crackdown by the Indonesian authority, for its secessionist aspiration. Military operations by both the Indonesian army and the military wing of GAM (Aceh Freedom Movement) have been going on for almost three decades, with the majority of the (civilian) casualties likely occurring under the Indonesian military guns.


A basket case


With its 100 million people and its 300-mile arc of islands containing the region's richest hoard of natural resources, Indonesia is the greatest prize in South-East Asia.
Richard Nixon, 1967 [3 ]

Since the official establishment of the Indonesian Republic in 1945, to which the Aceh region opted to join under specific conditions, there have been two distinct periods of Aceh rebellion: the first one in the 1950s by Darul Islam, with the demand for an Islamic State of Indonesia, which ended in 1959 with the granting of regional autonomy; and the second one in the 1970s, by the present GAM (which did not win the support of the majority of Darul Islam rebels). The GAM rebellion rose around the time oil and natural gas in Aceh were discovered and exploited. The rebellion was likely triggered by the dissatisfaction with business and/or economic deals related to petroleum exploitation; the GAM members were in the few hundreds [4 ].

The natural gas exploitation by ExxonMobil (and its Japanese and Indonesian partners), one of the largest in output in the world and a major revenue generator for the Indonesian government, has been going alongside of the Indonesian military operations which invariably affect civilians the most; this, along with the little share of revenue given back to the local region, have exponentially worsened the conflict into widespread secessionist aspiration.

The Indonesian military has been considered as one of the most repressive in the world, along with the militaries of several Latin American and African countries. This is well-founded considering the number of victims in East Timor, West Papua, and Aceh. The military is also one of the most corrupt, with ownership of and connections to businesses in almost every sector of the economy. While it is quite widely known that the perpetrators of gross human rights abuses in Latin America were trained by the US military in the School of the Americas, it is relatively a secret that the current repression methods and corruption schemes of the Indonesian military (Doctrine of Territorial Warfare and Civic Mission) were originally collaborated under and funded by the Pentagon, the CIA, RAND Corporation, and (indirectly) the Ford Foundation, starting in the early fifties as a precursor to a planned coup d'état [5 ].

The Acehnese plight is not unique: there are many regions in the Third World where multinational corporations (MNCs) backed by western governments operate under martial law, especially in petroleum and mineral-rich areas. Indonesia is also not unique in being a country mired in ethnic-religious-ideological conflicts, trapped in mountains of foreign debt, and governed by military regimes. The majority of Africa, Asia, Middle East, and Latin America is in similar predicaments one way or another; only North America, Western Europe, and Australia (with the addition of a few small western-backed countries like Singapore, Japan, etc.) are immune. One might wonder if it is genetic predisposition which determines the former group of regions' proneness to these diseases? Without needing to be a world historian, one can find the answer in what has been going on in Iraq.

Iraq is rich in oil. After more than a decade of economic sanctions instigated by the US-UK governments, Iraq was invaded under the main pretext of possessing WMD (which after its un-discovery was conveniently modified into human rights abuses of Saddam Hussein, a former US ''asset''). Following the illegal invasion, billions of dollars have been allocated for the country as loans for reconstruction and development (which in effect will become the foreign debt of the Iraqi people); most of the money itself has never left the US, but merely transferred into the coffers of US-UK companies chosen by the Pentagon to do the work. This has benefitted the economies of the US and the UK in general, a substantial part of which is supporting and supported by the military industrial sector which, contrary to the popular myth, is largely integrated into the commercial sector [6 ], especially after the Reagan-Thatcher era in the 1980s.

Iraq of 2004 was Indonesia of 1965, in a general sense.

Indonesia is rich in minerals especially metals, from which the US depended on for much of its consumption. After more than a decade of destabilization and economic sanction instigated by the US government, the Indonesian government was toppled by a US military/CIA-organized coup d'état using a pretext of halting the spread of communism. Following the coup by the Suharto regime,2 billions of dollars were ''pumped'' into Indonesia as loans from Word Bank and other financial institutions, which became part of the current foreign debt of Indonesia. The contracts for reconstruction and development were mainly given to large western MNCs during a Geneva conference in 1967 by the new Indonesian government whose key ministers were mostly trained in advance in US schools, specifically for this ''nation building'' purpose. These contracts and others like them in many Third World countries have, for much of the later half of 20th century, benefitted directly and indirectly the western economies as a whole, especially the US's.

Instilling ''democracy''


Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign ''aid'' organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet's natural resources. Their tools include fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder.


John Perkins, 2004 [7 ]

The sequence of events associated with the rise of military regimes in and the impoverishment of Third World nations may somewhat differ; nonetheless, a logical progression seems to exist along the following trend (see, for example, an account of Perkins [7 ], a formerly-respected international banker who negotiated economic deals with a number of Third World governments). In the first phase (in increasing severity): persuasion of the targeted country's government, which is mostly done through economic incentives/bribery or economic pressure; destabilization or coup through covert civilian- and/or military-intelligence operations, many of which were accomplished in Asia and Latin America with help from ''aid'' organizations (e.g., USAID) and NGOs (e.g., the Ford Foundation [8 ]), but now increasingly through the OTPOR3 factor in Eastern Europe (e.g., recently in Ukraine [9 ]); economic sanction, which is reserved for geopolitically semi-important ''errant'' countries, presently like Cuba and North Korea [10 ]; and as a last resort, military invasion, several of which are still fresh in our collective memory: Iraq in 2004 by the US-UK and Haiti in 2004 by the US-Canada-France [11 ]. All of these steps are usually done in the names of establishing ''democracy'' and protecting human rights.

Following the accomplishment of the previous phase, victim countries are ''offered'' loans for reconstruction and development by the World Bank and other western-dominated international financial and country-specific donor institutions; a chunk of the money flows back directly to the donor economies through contracts given to MNCs, another chunk flows back indirectly through the establishment of export-oriented industries, and the rest is siphoned off by cronies of these western-groomed governments --- the debt stays with the people, this is the beginning of Third World countries' indebtedness. This ''debt'', along with the influx of ''investment'' money and the subsequent dollarization4 of the local economy, induced multiple economic crises in Latin America in the eighties and nineties, and later also in Russia and South-East Asia. During one of these crises, in order to avoid a default and the associated long-term economic consequences, a client country is forced to implement IMF5 Structural Adjustment Programs (SAPs) --- privatization, export-led growth, tariff and wage reduction --- to the benefit of mainly foreign private and institutional investors, and to the detriment of its own economy with increase in indebtedness, loss of national assets, and destruction of domestic economy.

The money in many of these ''investment'' schemes comes mainly from large western pension funds --- both private and public ones. This, along with money from mutual funds, hedge funds, and investment banks, powered the high-yield return of the stock market in the West. The inherent transfer of real wealth from client countries, in the form of exported manufactured products, is facilitated by the imposition of the US dollar, a fiat money, as the global trading currency.6 The increasing wage differential induced through free trade mechanism in this dollar-hegemonic trade regime --- along with the rise of structured finance and the implementation of debt bubble policies in the West --- not only materialized as continued ''profitability'' of stock-market-listed companies but also as increase of ''productivity'' of western workers --- the era of stock market ''wonder'' of the 1980s and 1990s.

This whole process --- from the toppling of governments to the creation of debt and the transfer of wealth --- has left many economies in shambles, many communities in poverty: the like of poor fishing communities surrounding the Indian Ocean.

MNCs, banks, and western governments are equal partners in this ''business'' venture. Western population is not mere bystanders either; some actively participate, many passively. The easy money and easy credit economic schemes --- inflated wages, high-yield investment, loans, mortgages --- have transformed most middle- and upper-class western population, along with the elite upper-class debtor countries' population, into the most resource consuming and the most polluting section of world population, per capita based.7 Extra money saved (outside of chequeing accounts) in many financial institutions is likely invested in these schemes. Only those people in the West with paltry savings living in rented rooms trying to survive, and those with an old-fashioned method of keeping cash under a mattress, are relatively free of any moral burdens; ironically, these folks are generally more aware of the global nature of the problem.

At this point in time, the impoverishment of regions throughout the world has reached a level which triggers widespread intra-regional conflicts. The diminishing return of the previously-mentioned stock market ''wonder'' has also eroded the middle-class in the West; privatization of education, health-care, and other social services are gaining momentum. Militarization of these sectors has also started.8

Loan shark business

... convince countries that are strategically important to the U.S. --- from Indonesia to Panama --- to accept enormous loans for infrastructure development, and to make sure that the lucrative projects were contracted to U.S. corporations. Saddled with huge debts, these countries came under the control of the United States government, the World Bank, and other U.S.-dominated aid agencies that acted like loan sharks --- dictating repayment terms and bullying foreign governments into submission.


Backcover Excerpt of [7 ]

Ethnic and religious conflicts, as much as the western media, politicians, and academics would like to picture as otherwise, mostly have inherent economic cause. The politicized portrayal of the conflicts given in the western media and academic journals is used, intentionally or not, to divert attention from the underlying cause: the roles of western governments in creating sufficient conditions for the conflicts to simmer. It is also used to generate wariness --- effective in reducing empathy and solidarity --- among western populations by putting both the blame for starting and the responsibility for resolving the conflicts on the parties involved. Many ethnically and religiously diverse regions in the world existed in relative harmony before the dawn of European colonization and US imperialization.

Inappropriate government policies, lack of social spending in education and health-care, resource exploitation, and environmental degradation --- any of these could create the kind of social jealousy which would inflame minor conflicts, especially when external actors have something to gain from enlargement of the conflicts. This is especially true for Indonesia, the most ethnically and linguistically diverse nation in the world (336 ethnic groups and 200 indigenous linguistic forms, each with separate regional dialects).

Various levels of conflicts exist at present in several Indonesian regions where mining, logging, and other resource extraction activities are ongoing. These regions also house many western MNCs along with their ''protectors'', Indonesian military personnel. Despite public relations campaigns by MNCs and the Indonesian government, the majority of these places are environmentally stressed --- even toxic in the case of mining --- and socially disadvantaged. Dissent arising from these conditions are usually militarily repressed. It is no wonder some regions advocate independence; however, the East Timor (now Timor-Leste) case shows that independence does not necessarily mean the end of exploitation [14 ].9

In rare occasions when the Indonesian authority seemed sympathetic to the local communities' causes, economic threats were made by the western governments whose business interests were jeopardized. For instance, when Freeport McMoran's10 operational license was to be forcefully reviewed, Henry Kissinger, a board member and, by his stature, a representative of the US government, reminded the Indonesian parliament of the economic consequences of loss of foreign investment [16 ]. Similar pattern was displayed recently in the Newmont pollution case, with the intervention of the US Ambassador [17 ]. Such economic threats are not the exclusive weapon of the US; in late 2002 the Canadian government whose mining interests would have been affected by existing forest conservation laws implicitly demanded that the laws be amended [18 ].

Despite the human rights mask that western governments and media conveniently wear whenever certain situations --- frequently, the ones concerning ''regime change'' --- call for world attention, cases such as the above highlight the West's disregard for the well-being of the global population in general and its intention in preserving the status quo in particular. The pressure brought by many human rights proponents in the West to bear solely on mostly dysfunctional Third World governments, seems like a big irony. The Indonesian authority's fear of such economic threats is a short-term expediency for political survival; loss of foreign investment has political and economic implications similar to a default on debt repayment. Indonesia in particular and debt-ridden Third World countries in general have only two options w.r.t. debt repayment under the present global system: the ''status-quo'' option and the ''default'' option.

The ''status-quo'' option of continuing debt repayment implies continuing transfer of national wealth to the West through dollarization of domestic economy, in addition to increasing loss of national assets to private MNCs and individuals through predatory IMF SAPs' privatization. The consequences are real and visible: reduction of social spending in all aspects of life and dismantling of domestic economy, further impoverishing the already-downtrodden population [19 ]; as well as, loss of national sovereignty. This kind of impoverishment merely depicts the inner workings of the loan shark business' primary rule: creditors would do anything within their power to make sure debtors would not be able to repay their debts for life, hence ensuring a steady flow of income.

The recent change of governments in Asia and Latin America shows that the integrity and credibility of the new governments --- be they corrupt or honest --- have little bearing on debt repayment or social reform ability of the said governments. The economy of countries trapped in this illegitimate debt is practically controlled by the creditors: the World Bank, the IMF, and country-specific donor groups.11

The ''default'' option, in practice, means a complete default on external debt repayment. This option if taken would at best trigger foreign and domestic capital flight, at worst induce government destabilization by western intelligence operations. Capital flight would drain government foreign reserves virtually overnight, and for a country not self-sufficient in energy resources, which are denominated in US dollar, the ''default'' option is a death option.12 Capital flight would also render existing domestic industries inoperational, most of which being jointly operated or owned by MNCs after decades of World Bank and IMF schemes. Even large privately-owned domestic industries would be in a similar situation, the owners or managements of which would have left the country along with the companies' savings. Even under foreign exchange control where capital flight could be limited, most of these industries would refuse to operate until their investment is returned. To jumpstart these industries means nationalization or forced operations.

History of the past half a century shows that nationalization almost always means western-backed attempted coup d'état --- either covertly or through the so-called ''rose'' or ''velvet revolution'' --- or worse, military invasion [20 ]. On display here is the loan shark business' secondary rule: creditors would provide mafia-styled protection racket. There are very few countries at present which can resist this takeover: countries with relatively pro-people military, for example, Cuba and Venezuela [21 ]; and countries which possess (possible) military deterrent, for example, Iran, North Korea, China, and Russia. In all these cases, some degree of regional cooperation is required.

Killing reform


... when the Vietnam War pushed the balance of payments into deficit, the [U.S.] government encouraged the large money-center banks to set up branches in these island enclaves to act as enablers facilitating global theft, fraud and other criminal activity.
The clients of this floating island world use a system that has been put in place by pillars of business integrity representing the global economy's core, not merely a peripheral underworld constituency. These enclaves belong at the center of economic analysis, yet they usually are treated as an anomaly rather than as an integral organ of modern wealth accumulation.


Michael Hudson, 2004 [22 ]

The Indonesian military is infamous for its gross violations of human rights and systemic corruption. As mentioned earlier, this disreputation has its origin prior to the US-backed coup d'état in 1965, with both doctrinal drafting and partial funding provided by the US government to a select group of army officers. Following the coup, this right-wing army group assumed a dominant role in the military, under the leadership of Suharto. Under western patronage and guidance --- with military funding partially provided by the US government and training by the US military --- Suharto ruled and transformed Indonesia the way he was supposed to, into a ''model pupil'' of military dictatorship. Reform of the military and bureaucratic organs, after so many decades of ''nurturing'', is hardly an easy task. In practice, this means weeding out middle- and high-ranking military officers, especially the ones in the army, from the military institution itself and from the national bureaucracy.

Under the current status quo regime of continuing debt repayment, this military reform is almost an impossibility. Asking the military to voluntarily leave its businesses is like asking the Bush regime to voluntarily leave the White House. Externally pressuring the military to do so, in practice requires economic embargo on some sectors in which the military has many dealings --- in logging, mining, and several important industries. However, these are the sectors from which most of the revenue used for debt repayment is earned. Aside from a national revolution, reform can only arrive through grassroots conscience arising from within the military itself, supported by a national government which can provide a basic level of funding needed to build military professionalism.13 The most progressive military reform in recent years was planned under the Gus Dur Administration which was toppled under budget politicking by the military and other political parties. This is expected for a country operating under a ''debt'' budget, with cuts in almost every single sector of social spending.

Reform of the military is a danger to western political and economic interests, for the following simple reason. With the Indonesian military still in its present state, the ''default'' option of debt repayment, and the subsequent nationalization of domestic industries, would not be feasible. As discussed in the previous section, a government under a coup d'état or military invasion threat following nationalization could not stand without a loyal military. This leaves the Indonesian government with the only other option: the ''status-quo'' debt regime.

Many observers suggest that eradicating corruption is a good start towards fixing the country's governance and improving the common people's lives. In reality, the prevailing Indonesian military dominance makes this a non-starter. The military deep-rooted control of bureaucratic organs makes the few courageous people who are willing to openly speak up against them, easy targets for intimidation and even assassination. Many of these people have fled the country and currently live in exile, mostly in western countries. Generally speaking, they do not pose any threats to the Indonesian military because they are naturally reluctant to speak up against their host countries and the western-built system that have reared the Indonesian military and have preserved its dominance for decades.

The causal relationships among debt repayment, military reform, and eradication of corruption show that the only feasible way for Indonesia, and for many other Third World countries, to move forward is to break the ''status-quo'' debt regime forced upon them. Aside from debt reparation (to be discussed in the next section), billions of dollars could be repatriated from the Indonesian big corruptors. However, the process, as described below, has proved to be rather ''challenging''.

Following the coup d'état in 1965, under the World Bank's and subsequently IMF's tutelage, Indonesia, a former ''model pupil'', implemented a wide-range export-oriented economic liberalization. To stimulate and retain foreign investment needed to finance the dictated path of economic development, a concurrent liberalization in banking and financial regimes was also performed. This virtually implied the forced dollarization of the local currency --- the US dollar being the de facto global trade currency after the OPEC oil/dollar crisis --- with both foreign capital and export income being mostly denominated in dollar. This dollarization, aside from destabilizing the exchange rate of the local currency, also enabled easy convertibility of capital and profits into dollar, which could then be safe-kept in overseas banks.

The use of the US dollar as the global trade currency and the dollarization of many countries' economies mean check-and-balance as to the origin of the deposited money is virtually eliminated. Traces of the flow of money are available from the banks involved; however, aside from being a monumental task to do a retrace, these banks and financial institutions are either setup or backed by the western governments [22 ]. This money-laundering and tax evasion system is made possible by the courtesy of the governments where these banks are located, either in anonymous-account/trust centres of Switzerland and England, or in offshore banking islands. Most of these offshore governments are western-clients; one should not wonder why the western countries ever bothered to stage a coup d'état or military invasion against these small countries, for example, Haiti (2004). The laundered money is likely invested in the global financial market; a repatriation of which back to its rightful owners, the Third World nations, is certainly undesirable for the West.

By having the laundered money in the safe-keeping of western-backed financial institutions --- virtually untouchable without interventions of the backing governments --- these big corruptors have full leverage against the governments of the countries from which they had stolen the money from. Prosecuting them to the full extent of the law would, in most cases, entail the unrecoverability of the stolen money, in addition to further loss of capital/investment money, kept in overseas accounts, of the companies in which they are part owners. In many cases, this approach would guarantee the non-operation of major domestic industries, the effects of which to the country's economy would not be trivial. For this very reason, many governments opt for negotiated settlements even with notorious corruptors.

In the case of Indonesia, for instance, an unknown but likely sizeable portion of this laundered money is stashed in banks in Singapore, an offshore island, especially after the South-East Asian economic crisis of 1997. The Singaporean government has persistently refused to extradite these wanted corruptors, for the reason that extradition would entail loss of the laundered money, most of which is likely invested in the domestic and global economy. Singapore is only a little player in this scheme; most western countries are hosts to these corruptors; for instance, the US is a well-known safehaven for Latin American corruptors.

Modern wealth accumulation

Third World countries indeed have responsibilities to fix their own governance and to take care of their population's welfare. Attempts at those could be seen with the rise of several populist governments in Asia, Latin America, and Africa. The seemingly ineffective actions for reform by the said governments, however, are only a visible symptom of the much deeper underlying causes.

The present continuing exploitation of nations and peoples by the Western regime is supported on the principles of western democratic and moral values: the spread of freedom and democracy associated with the toppling of governments and the installment of most oppresive regimes in the Third World; the kindness and compassion of the West in providing symbolic foreign aid as a veil to maintaining an illegitimate debt regime; and the protection of human rights, making the West the safehaven of many dissidents, corruptors, criminals, and terrorists. These principles are the bases of western population's implicit support for their governments' foreign policies.14

Contrary to popular myth, all western governments and their foreign policies in general maintain the support of a large majority of the people, fundamentally not through disinformation on the actual field implementations of the above principles, but through economic bribery on the basis of modern wealth accumulation and standard of living. Disinformation is indeed widely performed across political and economic spectrum; however, the realization of the actual mechanism of both modern wealth creation and improvement of standard of living in the West through exploitation of peripheral nations and some sections of its own people, does not seem to wake even the so-called Left to the fact that a reform of the western governments would likely imply a necessary decrease of the present general standard of living.

Contrasting to the past wealth accumulation system of the Europeans through centuries of colonization, the US --- and to some extent the present European, Canadian, Australian, and Japanese --- wealth build-up after WWII started with the birth of World Bank and IMF institutions. This era was characterized by the many attempted coups d'état, insurgencies, and military invasions sponsored by the US government [20 ], and by the setup of ''loan shark business'' regime in these client states, with the help of the aforementioned institutions. However, this transfer of wealth accelerated much further starting in the early seventies with the removal of gold as the dollar backing value, and the dollarization of both OPEC and Third World economies. A large percentage of production cost (and taxes) in the manufacturing industries was virtually eliminated by relocating these industries, except ones in the weapons-related sector, to the peripheral countries. The replacement services industries, particularly ones in the financial sector, and the existing export and domestic industries --- in agricultural, weapons, auto, and real estate sectors --- have acted in reality as industries for the support and sustenance of this massive transfer of wealth.

This new accumulated wealth has been paid with fiat money, the US dollar, a paper money with almost no real value, except for a guarantee through the US sovereign debt; a faith-based guarantee that the US will be able to maintain its dominion, hence pay its debt, through loan shark business, protection racket, coup d'état, or military prowess. Other western countries and smaller western-backed countries agreeably ride along in this ''wealth vehicle''. Nevertheless, lately, this faith-based guarantee has been called into question with the ballooning of the US sovereign debt and the weakness of its military in Iraq, giving rise to speculations on the plausible implosion of the US dollar and the US economy.

The wealth and standard of living obtained through this exploitation process do not only make the western population wasteful consumers but also make them accustomed to easy wealth gain through yield manipulation of pension and mutual funds and of real estate, and through debt financing of private properties, like mortgages; all of these are facilitated through the US --- and to some extent Canadian, British, and Australian --- monetary policies reflected in the rise of structured finance and debt bubble markets.15 The participation of the western population, acting as both consumers and investors, in these schemes is by and large voluntary; or at least, as a (sub)group, investors have a say in choosing investment policies.

The rigid adherence to the western standard of living, which was achieved first through the European colonization and later through US imperialism, is arguably the main reason for the political stasis in the West. The following comparison should be beneficial. Venezuela, a country previously controlled by big business and media, even under a coup threat by the US, managed to give rise to a populist government of Hugo Chávez. The US or Canada, for example, a country also controlled by big business and media --- the excuse that the majority of the population give for their inaction --- but not under any threats, is in long-term political stasis; each voter block votes for a party which can maintain its present standard of living. This only reflects the corrupt state of the society, including the so-called Left; or in Petras' words, ''colonized, mentally and materially'' [24 ]. This political inaction does not dissolve the complicity of the Western society in participating in and supporting the global exploitation system.16

The debt dependency of the western population makes them politically docile both at work and at home. For instance, the prospect of losing a mortgage is enough to force one to retain his/her (possibly unethical) job. The debt scheme also forces that person to focus his/her education and knowledge on the maintenance of the job. Otherwise, ones would be [26 ]

... at a disadvantage not only because their attention was divided, but also because their beliefs about big-picture issues such as justice and social impact caused them to stop, think and question.

What comes out of the end of this conditioning is a person who does not only ''fail badly in geography'', but also in basic facts of history and other fields necessary for the nurturing of a thinking independent individual.

The commercialization of the tsunami disaster and the donor bragging rights in the western media only underscore these failings of society, one which is not even aware of the common knowledge implied from the following fact [27 ]

For every $1 owed in 1980, developing countries have since repaid $7.50 but still owe $4.
In other words, if not for the global exploitation system built by the West, for every $1 in illegitimate debt in 1980, the West in 2002 owes to the Third World $8.50, or equivalently a total of several trillion dollars.

Should a slave be utterly grateful for some spare change one obtains for being a slave?



1 Not only did they suggest a ''fancy horse'' (a rather complex automated warning equipment), but also, even in an actual failure to do a simple task of providing an ''ordinary horse'' (a verbal warning to regional authorities, which in the present geopolitical situation, if originated from the US authority, would trigger responses in minutes), did they still need to fancy doing a much harder task of putting up ''the cart'' (a complex evacuation system).

2 An estimated 500,000 to 2 million people were slaughtered in the subsequent months, with some of the more prominent victims' names supplied by the CIA. It was later revealed that the main perpetrators of the coup were US-trained and US-funded army troops with connection to Suharto [5 ].

3 Otpor is the symbol of a Serbian youth group which instigated the downfall of Milosevic's government. Unlike the spontaneous Indonesian student movement which precipitated the downfall of Suharto, many of these so-called OTPOR groups were created and funded by western organizations --- e.g., the US Congress' National Endowment of Democracy and Soros' Open Society Foundation --- specifically to bring down governments in power through blockade of governmental institutions.

4 Dollarization refers to the conversion of domestic economy into export-oriented economy in order to earn US dollar. The dollar is needed to repay ''foreign debt'' and to buy oil and other dollar-denominated energy sources; it also increasingly serves as a foreign exchange reserve buffer to mitigate attack on local currency.

5 IMF and World Bank members are national governments, with membership shares apportioned according to the size of their economies; traditionally, the head of IMF has always been European and the head of World Bank has always been American, someone ''chosen by the US president''. As a result, the western countries effectively hold controlling shares and use this control to implicitly implement policies which suit their own foreign policy objectives and benefit their respective business communities.

6 The dollarization of trade was accomplished through dollarization of OPEC under the barrel of American guns during the oil/dollar crisis in 1973 [12 ]. The OPEC dollarization forces energy-dependent countries to acquire US dollars to buy oil.

7 The popular myth that the western population deserves these ''accolades'' based on the countries' shares of global GDP shows the lack of understanding and distortion of what the 'P' in GDP stands for. With the decline of manufacturing industries and agricultural output in the West, and the globalization of poverty, the 'P' of the West really comes from wage arbitrage against poor countries through import, global and domestic services, and weapons export. Aside from the dubious notion of services --- a major part of which is services related to consumption itself, and financial services for the maintenance of a system to be described in the next section --- the only major real product is weapons, something which perhaps does not deserve that much ''accolade''.

8 The increasing militarization of scientific research, which was, in the US, already largely militarized previously, is done not only to increase national export revenue --- weapon sector being the largest export sector of the US --- and to stimulate domestic (self-started-war) economy, but also to counter the global backlash originated from the Western-imposed global economic system. This kind of militarization is not unique to the US; for instance, the largest Canadian university is contemplating a partnership between one of its institutes, and the Defense Department and a Military Training Company [13 ].

9 The East Timor advocacy example sadly highlights the hypocrisy and duplicity of many western-based NGOs; following Timor-Leste independence, these NGOs jumped in droves to the next ''newsworthy'' advocacy cases --- in order to preserve either continued funding or self-relevancy --- and fail to raise any voice against the present exploitation by the World Bank and Australia. Similar patterns could be seen around advocacy cases for some regions in Eastern Europe, Central Asia, and Africa.

10 Freeport's Grasberg mines are some of the largest gold and copper mines in the world, the mining techniques and toxic tailings of which would create a similar mass unrest in the West were these mines located in its own backyard [15 ]

11 See one of the notes from the previous section regarding the membership and control of the World Bank and the IMF.

12 Some countries can bypass a virtual energy embargo by relying on regional friends, a la Cuba on Venezuela, through barter of oil and goods and/or services.

13 The Indonesian military personnel, discounting external business dealings, is well-known to be underpaid.

14 Many human rights NGOs in the West have been a major proponent in instilling the validity of the application of western democratic and moral values on Third World nations; however, by being apolitical, they are effectively a political propaganda tool of the western governments. The present working system of these NGOs only supports professional careerism in themselves, a copycat of the environmental NGOs' system of the past few decades.

15 See [23 ] for an extensive review of the US economic and monetary policies in the latter half of the past century.

16 Some society members, even as civilians, are beyond complicit. These include the brain in MNCs, banks, and governments; the nerve system, the technocrats crowding the halls of research institutions and the towers of financial corporations; and the muscle, the field workers either with briefcases [7 ] or with machine guns [25 ]. Many of these people are distinguished members of society.



[1 ] Michel Chossudovsky, The Tsunami: Why did the Information Not Get Out?, Centre for Research on Globalisation, 7 February 2005, [Link ].

[2 ] Michel Chossudovsky, Foreknowledge of A Natural Disaster: Washington was aware that a deadly Tidal Wave was building up in the Indian Ocean, Centre for Research on Globalisation, 29 December 2004, [Link ].

[3 ] John Pilger, The New Rulers of the World, February 2002.

[4 ] Mette Lindorf Nielsen, Questioning Aceh's Inevitability: A Story of Failed National Integration?, Global Politics Network, [Link ].

[5 ] Peter Dale Scott, The United States and the Overthrow of Sukarno, 1965-1967, Pacific Affairs, 58, Summer 1985, pages 239-264, [Link ].

[6 ] Maryellen R. Kelley and Todd A. Watkins, The Myth of the Specialized Military Contractor, Technology Review, April 1995, v. 98(3) p. 52-8.

[7 ] John Perkins, Confessions of an Economic Hit Man, Berret-Koehler, 2004.

[8 ] James Petras, The Ford Foundation and the CIA: A documented case of philanthropic collaboration with the Secret Police, Rebelión, December 15, 2001, [Link ]. See also David Ransom, Ford Country: Building an Elite for Indonesia, [Link ].

[9 ] William Engdahl, Ukraine: Oil politics and a mockery of democracy, Asia Times Online, 20 January 2005, [Link ].

[10 ] Gregory Elich, Targeting North Korea, Centre for Research on Globalisation, 31 December 2002, [Link ].

[11 ] Anthony Fenton, Canadian Crimes in Haiti: Beyond Complicity, Canadian Dimension, September/October 2004, [Link ].

[12 ] Lizette Alvarez, Documents Show U.S. Considered Using Force During Oil Embargo, The New York Times, 1 January 2004, [Link ].

[13 ] Rose Anne Dyson, Links between Military Training and OISE/UT Project Questioned, The Learning Edge, Newsletter of the Canadian Association for the Study of Adult Education, December 2004.

[14 ] Ben Moxham, Avoiding Indebtedness and Underdevelopment: Lessons for Timor-Leste, Focus on the Global South, 26 October 2004, [Link ]. See also Jon Land, East Timor: Australia's oil and gas grab exposed, Green Left Weekly, [Link ].

[15 ] Project Underground, Risky Business, The Grasberg Gold Mine, May 1998.

[16 ] WALHI Protes Keras ''Intimidasi'' Henry Kissinger, Suara Pembaruan Daily, 1 March 2000.

[17 ] WALHI, JATAM, ICEL, LBH Kesehatan, ELSAM, Intervensi Dubes AS Dalam Kasus Buyat Telah Melecehkan Hukum dan Kedaulatan Indonesia, 29 September 2004. See also US steps up pressure on Indonesia over Newmont, Reuters, 27 September 2004.

[18 ] No mining in the forests!, Down to Earth, No. 53-54, August 2002.

[19 ] Michel Chossudovsky, The Globalization of Poverty and the New World Order, Global Research , 2003.

[20 ] William Blum, Rogue State: A Guide to the World's Only Superpower, Common Courage Press, 2000.

[21 ] Joe Taglieri, Turmoil - Miracle in Venezuela, From The Wilderness Publications, 6 May 2002, [Link ].

[22 ] Michael Hudson (interview), An Insider Spills the Beans on Offshore Banking Centers, Centre for Research on Globalisation, 28 March 2004, [Link ].

[23 ] Henry C.K. Liu, The Global Economy in Transition, Invited Lecture, ERC/METU International Conference on Economics, September 6, 2003.

[24 ] James Petras, Third World resistance and western intellectual solidarity, Rebelión, 7 April 2004, [Link ].

[25 ] Barton Gellman, Secret Unit Expands Rumsfeld's Domain, Washington Post, 23 January 2005, [Link ]. See also David Isenberg, Security for sale, Asia Times Online, 14 August 2003, [Link ].

[26 ] Jeff Schmidt, Disciplined minds: a critical look at salaried professionals and the soul-battering system that shapes their lives, Rowman & Littlefield, 2000 (www.disciplined-minds.com).

[27 ] Drawn from the World Bank, Global Development Finance 2002. Quoted in, Eric Toussaint and Damien Millet, The Debt Scam, Vak Publications, India, 2003. p.68, through [14 ]


Copyright 2005 Hendra Adiwidjaja. The author is an independent researcher in physics and political economics. He can be reached at [email protected]

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