Tag Archives: neo-liberalism

The Serco Group. Who they are and what they do

As I was walking down Fulham Palace Road in Hammersmith, I spotted a roadsweeper’s trolley with the name “Serco” on the side. Serco are the new waste management partners of the London Borough of Hammersmith & Fulham having recently taken over the contract. It then occurred to me that Serco is involved in more than one business activity, some of which are not well-known to the general public.

I’d known for some time that Serco was the operator of the Docklands Light Railway but what I didn’t know was that they also operate the Woolwich Free Ferry.  Last year Serco was found guilty of failing to stop a train at All Saints station after a passenger fell onto the track and were fined £450,000. A drop in the ocean.  They were given the contract to run the London Cycle Hire Scheme and they also run Merseyrail and Northern Rail.  Neither operator, it seems, is much-loved.

Serco also runs prisons and prison transport, IT systems in further and higher education institutions and they have been given the contract to run the government’s Welfare to Work scheme.

Here’s a small list of Serco’s other activities

Nuclear – they manage the Atomic Weapons Establishment (AWE) at Aldermaston

NHS – they run a variety of activities from facilities management and pathology labs to occupational health and hospital cleaning

Defence – under this heading they manage the AWE as well as the Defence Science and Techonology Laboratory. They provide support for the Skynet 5 military satellite network and provide training at the Defence Academy

Leisure – this is an odd one: they run 65 leisure and fitness facilities on behalf of local authorities and universties

This article from Bloomberg says that they are involved in a bid to run India’s nuclear programme.

Serco Group describes itself as an “international services provider”.

Last week a guard at the Serco-run Yarl’s Wood detention centre was suspended after he was accused of having an affair with a detainee .

Serco took over the running of Yarl’s Wood Immigration Removal Centre in April 2007.

The centre, opened in November 2001, had been hit by a series of incidents, including a major fire in February 2002 which destroyed half the building.

Staff at a Buckinghamshire hospital were paid so poorly that they had no choice but to work – even when sick. The Buckinghamshire Free Press says,

HOSPITAL staff have gone into work whilst ill because they do not receive ‘adequate’ sick pay, union leaders have said.

Some cleaning, portering and catering services at Wycombe and Amersham hospitals are contracted to private firm Medirest – but its staff only get statutory sick pay of £79.15 per week.

Some workers say they feel they have no choice but to go to work to earn their full wage – but warn this is putting vulnerable patients at risk.

Some companies will do anything for a profit, even if it means putting people’s lives at risk.

But how, exactly, does a private prison make a profit? That’s a question to which no one seems to know the answer. If anyone knows, please feel free to drop me a line.

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The myth of economic growth

Certain politicians are fond of telling us how ‘important’ economic growth is. Some will use growth as a means of defining themselves culturally and some will try and claim that it is the alpha and omega of a healthy economy.  In neoliberal discourse,  growth is essential to create wealth; the wealth is created at the top and ‘trickles down to the lowest on the income scale’ at least, this is what they want us to believe. What these economists (often presented by news channels as ‘experts’) fail to tell us is who really benefits from economic growth: the already wealthy.

Here is a classic example of how politicians use economic growth to make the puerile claim that ‘we’ are better than ‘them’ because of ‘our’ rate of growth is ‘superior’. It is an excuse to attack, in this case France, for having a better organized labour movement. Here GDP is held up as the means by which a nation’s growth is calculated but GDP is a flawed method of measurement because the parameters of its remit have been deliberately constricted to favour one set of economic arguments over another.

David Korten, author of When Corporations Rule the World wrote that there are 6 economic myths,

  • The myth that growth in GNP is a valid measure of human well-being and progress.
  • The myth that free unregulated markets efficiently allocate a society’s resources.
  • The myth that growth in trade benefits ordinary people.
  • The myth that economic globalization is inevitable.
  • The myth that global corporations are benevolent institutions that if freed from governmental interference will provide a clean environment for all and good jobs for the poor.
  • The myth that absentee investors create local prosperity.

Those who defend the current  economic model promote the idea of growth as necessary for happiness; people will buy more consumer goods and thus become happier human beings. But this is a facile argument that relies on the specious notion that the consumption of meaningless objects equates to happiness which is, itself, notoriously difficult to measure – though they will try. Even war-torn Iraq has a ‘happiness index’; which was used to present a picture to the world of a country ‘turning the corner’. The real picture was much more horrific. This is the political economy of the sign where a set of signs is presented as a form of truth that is based entirely on representations. In this case, it is the representation of happiness being used to inform the world that Iraq is ‘normal’. Neoliberals trust in signs and have no concept of reality.

Growth provides justification for the arguments of the wealthy who have little idea of how the poor and the low-waged live. For them, anyone who is unemployed is a serious ‘drain on the economy’; they are referred to as being ‘economically unproductive’ and those who are ‘economically productive, that is to say, those who have the disposable income to buy the latest consumer items, are held up as model citizens. This perversion is redolent of a Heinleinian world where only those who serve in the military are offered full citizenship. Indeed those who are unemployed are considered less than full citizens by the policy wonks of Whitehall and the ‘scholars’ who work for the various think-tanks.

Growth is also seen as a measure of progress; the Republic of Ireland was depicted as a Celtic Tiger; a powerhouse of economic growth. But this growth occurred on the back of speculation; there was no real wealth being created; the country had no manufacturing base to speak of and remains a service economy that is heavily reliant on tourism. The money people that had in their pockets was loaned to them or came from a credit card.

4 days ago, the BBC ran this story of how Britain’s economic growth was “slowing”. The key to this slowing was identified by the British Retail Consortium as a lack of ‘consumer confidence’,

“We’ve now had six straight months of low growth thanks to persistently weak consumer confidence and worries about the future,”

Because mainstream politicians have no original ideas on how to advance society, they have become over-reliant on the words of economic sages. To whit, they are in hock to the finance houses and the money men who operate them: the money men receive tax breaks for providing certain economic conditions and when they fail, they are given a slap on the wrist and told off. The banks after having been given their slap are now paying themselves bigger bonuses and higher wages while the rest of us are told to take pay cuts. Why? Because they tell us that they are ‘creating wealth’. Well, yes, they are creating wealth – for themselves.

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Chile: neo-liberalism, weak unions and populism

In the aftermath of the rescue of the 33 trapped miners in Copiapo, I listened with incredulity as Sebastian Piñera said “when people hear the word Chile they will not remember the coup d’etat or the dictatorship, they will remember what we’ve done; all the Chileans together”.  Unfortunately the ghosts of the dictatorship won’t disappear as  quickly as he would like them to. As  I reported in this blog, the Chilean President has given 3 Chicago Boys jobs in his cabinet. Commentfactory tells us that his brother, Jose Piñera,

is today revered in many economic circles for his application of Chicago School-inspired principles, yet whose connections to Pinochet run even deeper. Jose Piñera was a minister in the Pinochet cabinet from 1978 to 1981, first as the Secretary of Labour and Social Security and then as Secretary of Mining (much of Chile’s economy is dependent on the vast copper and nitrate mines in the north of the country). During his period in office, Jose Piñera introduced legislation that saw large-scale privatisation of the pensions system and healthcare, and the repeal of laws introduced after the coup that had effectively banned trade unions, following the threat of a boycott of Chile from North American trade unions, something that would have had severe implications for the Chilean economy.

Piñera also said that the mine would close…that was until they allegedly discovered deposits of precious metals nearby. The Herald Scotland said,

Frankly, given Chile’s modern history, it did seem strange to have a right-wing government present itself as a guardian of the people. Where I found myself drawing the line with Pinera’s otherwise admirable handling of the rescue though, was his observation that in future when people think of Chile they will remember the rescue of the miners, not the 1973 coup that brought the infamous General Pinochet to power in a military dictatorship that lasted until 1990 and was marked by severe human rights violations.

If this mine collapse had happened during the dictatorship, I doubt the General would have been present to witness the rescue. Though he would have milked any successful rescue effort for all it was worth – just like Piñera has done. Away from the festive scenes and the ballyhoo, the Chile that Pinochet and his Chicago Boys created still exists: trade unions are effectively outlawed (there are two rather weak unions). This Guardian blog says,

While labour standards and workers’ rights are often sidelined by the aggressive “pro-growth” talk of development economists, they are fundamental components of social or human development.

The freedom of association and the right to join a trade union is a human right. Yet such rights are often forbidden because they form an obstruction on the road to economic growth – or so the pro-business economists tell us. The mines of Chile have been allowed to continue in business without any regard for safety. The Chilean government has consistently failed to ratify the International Labor Organization’s (ILO) conventions on health and safety in mines

The International Federation of Chemical, Energy, Mine & General Workers’ Unions (ICEM) yesterday called on the Government of Chile to radically change the procedural methodology it uses on mine safety once the imminent rescue of 33 miners at the San José mine near Copiapó in northern Chile is complete.

In a letter to Minister of Mining Laurence Golborne Riveros, the 20-million-member global union federation called on the government to streamline workplace safety and health enforcement, now contained in several different ministries, into a single, autonomous agency “that has full powers and full technical capabilities to inspect and correct workplace deficiencies before accidents happen.”

The San Jose mine has witnessed dozens of deaths in the last few years. However Piñera has promised a mine safety review while the mining minster, Laurence Golborne said,

Avoiding such incidents, he suggested, was not just a matter for legislation: “The real origin to avoid this in the future lies in the consciousness of people: of workers, entrepreneurs… all society to face situations of safety at work.”

The neo-liberal personal responsibility mantra is invoked here which suggests that any legislation is likely to be piecemeal.

Because of his hands on approach to the rescue, Piñera’s popularity has risen which ensures his victory in the next presidential election in 4 years. Of course if it all goes badly for the president, Golborne could always put himself forward as a candidate in the hope that people will find his good looks more appealing than his politics.

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The Chicago Boys are back in town

The Chilean Miners’ plight has been the biggest news story of the year – next to that of the hapless Raul Moat of course. But what is really going in post-Pinochet Chile aside from the massive world media event that surrounds every move of the rescue efforts at Copiapo? I don’t want to denigrate the plight of the miners; they’ve suffered and will probably continue to suffer for some time to come. What I cannot fathom is the way in which the company that owns the mine has behaved towards the 33 trapped miners and the workers on the surface. Last week, the Buenos Aires Herald reported that,

Employees from the San Esteban Company, owner of the mine where 33 miners have been trapped since August 5, held a demonstration in Copiapó, northern Chile, in order to protest unpaid salaries.

Some 300 persons, amongst them miners and their families, protested peacefully against the company, owner of the San José mine, claiming that the salaries corresponding to the month of September have not been paid.

There was a brief mention of this on BBC News but the focus was inevitably drawn towards the ‘human interest’ story of the trapped miners – who have also not been paid.

Union leaders have called on the government to pay compensation to the men, together with roughly 270 other employees of San Esteban who are now out of work. They blame the accident on poor regulation, pointing out that the mine was allowed to remain open despite repeated safety violations which led to the death of a miner in 2007.

But this is Chile. Remember? This is the Friedmanite Paradise designed by Pinochet’s Chicago Boys.  Here the market operates without any interference, what began under Pinochet continues to this day in spite of the stagnation of Chile’s economy,

While both the Concertación economists and those of the far right sought to blame Chile’s woes on outside factors—the Asian crisis of 1997, the Argentine implosion of 2000, the U.S. slump of 2001, and so on—a few dissident economists had predicted all along that the boom would inevitably reach an impasse. One, economist Graciela Moguillansky of the U.N. Economic Commission for Latin America and the Caribbean, argued that the large Chilean finance/resource-processing conglomerates which dominate the economy had exhausted the easy resource-processing opportunities handed to them by the government through programs created decades ago. The “Chilean miracle” had reached its own self-imposed limits.

Nothing can grow indefinitely, not even economies but try telling that to some Austrian School zealot.

While the Chicago School is known for its devotion to free-market policies and its hostility to government regulation, the chief target of the Chicago Boys (and other right-wing economists), along with the military dictatorship and the business class, was not state intervention in economic life, but rather the organized power of the Chilean working class.

Does any of this sound familiar? It should.  The soi-disant libertarians of the British right often try to couch their anti-union rhetoric in terms of freedom. Last week Emperor Boris called for a change in strike laws.

The UNHCR has documented cases of serious violations of trade union rights in Chile.

So while the world waits for the latest chapter in the latest media drama to unfold, spare a thought for Chile’s workers who now have to struggle to survive under Chile’s first right wing government since Pinochet. 3 of the original Chicago Boys have been installed in the cabinet as ministers. One of them, Juan Andrés Fontaine, is currently Minister of the Economy.

Fontaine said he was “called to serve with a mandate to increase economic activity in Chile.”

He even has a Facebook page.

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The Blair interview

I saw the Blair interview last night. There he was in his expensive suit and the hands…THE HANDS! He kept doing that thing with his thumb…you know that really annoying thing that he does where he jabs the other person. He kept doing the ‘gate thing’ with his hands too. He even pretended to smash things with his fist when he was talking about “reforming public services” (always worry when politicians talk about ‘reforms’).  The third thing that he said in the interview was “I mean, you know, look”. Classic Blair.

Aside from his range of hand gestures, we got the usual spiel from him: he didn’t regret the decision and he did what he had to do. He repeated the lie that the world is a “safer place without Saddam”. But the things that really stood out for me in this interview was his shallowness; this is not a man with any real depth and he proved that when he was talking about Northern Ireland. He apparently “bent the truth” in order to drive things forward. Is this a man we want as a Middle East negotiator? I don’t think so. Lying is a classic narcissistic behaviour. He also claimed to have cried tears for those Iraqi civilians who were killed by his desire to topple Saddam. Were these tears of a guilty man or was he just saying this in order to appear more human?

He looked like a man possessed at times, especially when he was talking about Iraq and his ‘might is right’ doctrine. My god, the zeal in the man’s eyes was frightening to behold. In another time and in another place, he could be a serial killer.

Towards the end of the interview he gave the most chilling performance yet. he talked of how it may be ‘necessary’ to ‘use military force ‘ to subdue Iran’s nuclear [weapons] programme. I do not want this man anywhere near a negotiating table; he’s demonstrated to me, beyond all reasonable doubt, that he’s only in it for himself. Blair is a warmonger who only cares about his place in history. Serial killers kill because, in their twisted minds, they believe themselves to be superior to others. They also wish to be famous – like Blair. The only difference is that most serial killers don’t get anywhere near the levers of power. Blair did.

As for his ‘drink problem’, this wasn’t a problem and he was certainly no George Brown when it came to drink: a whisky or a G&T before dinner and half a bottle of wine with dinner is hardly pushing the boat out. He said this in order to get our sympathy and for no other reason.

Blair also described himself as  “progressive” but, in his hands, that word has been divested of all its former meaning. What is so progressive about continuing the neo-liberal policies of the Thatcher government? In some respects Britain is  like Chile but without the military junta. The illusion of individual economic freedom freedom is used to mask the lack of social and political freedoms.

Blair’s place in history is assured but not for the reasons he imagines.

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Who broke Britain in the first place? The Tories should look closer to home for an answer

I still laugh whenever I hear the phrase “broken Britain”. The phrase was David Cameron’s battle cry during the General Election. To give flesh to this skeletal phrase, he and his team constantly conjured up images of a country under siege; a nation beset with serious social problems where binge-drinking culture fuelled anti-social behaviour and gangs of feral youth roamed the streets looking for trouble. No mention of causality; problems seemingly occurred magically, appearing out of nowhere but coinciding, strangely enough, with Labour’s 13 years in power. Remarkable.

Let’s go back to the 1980’s, when Thatcher was in power. The country’s manufacturing industries were either wound up or sold off to overseas bidders. Mines were closed and those who worked below the ground were left on the slag heap; their communities devastated. The communities that grew up around the pitheads are now blighted by unemployment, drug addiction and hopelessness. In some former mining communities, retail parks have been built on the land once dominated by the colliery. A cruel irony. This is the legacy of the party that currently uses the phrase “Broken Britain” as though it were someone else’s fault; as though the phrase  actually meant anything.

With less government regulation, the banking sector was free to make up ‘products’ at will and sell mortgages and loans to people who could not afford to pay them back.  People were encouraged to buy rather than to rent. So some people bought properties, not so that they could live in them but so they could rent them out to others at inflated prices. Welcome to the buy-to-let market. The net result? We now have the biggest housing crisis in our history. This is the legacy of the party that currently uses the phrase “Broken Britain”.

The Tory-led coalition likes to claim how the current economic situation was caused by the last Labour government. But this Labour government merely continued the neo-liberal policies of the Thatcher government; the same Thatcher government that sold off state assets at the lowest possible price. The story of rail privatization is a good example: British Rail’s pension fund was offered as a ‘sweetener’ to seal the deal between the government and the private companies that bought rail franchises at rock bottom prices. This was the same Thatcher government that sold off council homes and refused to allow councils to replace the stock that was sold. In power, Labour continued the practice of Right to Buy and refused to permit the councils to spend their capital receipts. This is the legacy of the party that currently uses the phrase “Broken Britain”.

The bankers have always been close allies of the Tories. Angela Knight, the Economic Secretary to the Treasury in the Major government, now heads the British Bankers Association. Knight is the one who appears on television claiming how badly the banks are suffering and how ‘we’ must do more to help them. Why? What about the people whose lives have been devastated by redundancies and foreclosures?  Because Labour under Blair had bought into the entire neo-liberal project, his party developed closer ties with the City and became better Tories than the Little Englanders and Europhobes who referred to themselves as Conservative.

To hear Cameron and Clegg  talk, the current economic problems are all Labour’s fault for ‘spending too much’. This article written last year for Globalreasearch and lays the blame for the crisis squarely at Thatcher’s door.

True economic causality was obscured and reams of press copy from the Friedmanite free market camp, during the Reagan and Thatcher era claimed that the ‘defeat of inflation’ had been due to the ruthless discipline of Volcker and Thatcher. That was, we were told, again and again, the reason why the market should be unfettered from government regulation, freed to the devices of its own unbounded innovative genius. The results of that unfettered ‘humanistic capitalism’ or what Alan Greenspan approvingly called the ‘revolution in finance’ is now bringing both meccas of neo-liberalism, the United States and Great Britain to economic ruin. Somewhere between this and Stalin’s Soviet central planning there lies a better way.

Unfettered deregulation can only lead to one place: economic ruin. The lessons from the 1930’s have not been learned by the current government and if Labour had any sense they would rediscover the socialism of Keir Hardie pretty sharpish. Instead they will run scared of the right wing press as they have done for the last 13 years. Afraid of being labelled ‘socialist’, they will do all they can to appear like a ‘caring Conservative party’.

A quick Google search for “Broken Britain” reveals a total of 10,700,000 results. On the first page alone the list of entries comes predominantly from the right or from those organs that have sympathies to the right. This one has links to the Libertarian Alliance. We can regard this as an effort on the part of the soi-disant libertarians of the right to force the ‘smaller state’ idea onto the agenda.

So where did this phrase come from? I think I have found its source here at The Quiet Man’s Centre for Social Justice. In 2006 it was referred to as “Breakdown Britain”. I suspect “broken” sounded better; it had a dramatic ring to it and Lord Snooty loved it so much that he made it his campaign slogan. What a tool.


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Nation-building and imagining nationhood: is Afghanistan being fattened up for neo-liberal exploitation?

“Nations” as Benedict Anderson observed are “imagined communities”. They are socially constructed spaces that only a small group of people have a hand in building  This group is, for all intents and purposes, the dominant class. They commission national anthems, flags and compile the histories. They are also responsible for the way in which myths are incorporated into the story of the nation or conscripted for use in war-making campaigns. There are always legends of heroes fighting against the odds to create the nation that we all know today. There is also the lie that is told each time someone criticises the nation-state – “I fought a war to give you your freedom”.

As we have witnessed in the last 70 years, the construction of nations is not always the responsibility of the inhabitants of that nation; rather they are constructed by an outside nation – usually a more powerful nation that has either invaded or occupied the geographical space that people think of as their country. We have some recent examples of this tendency of the powerful to build states or nations in their own image. Iraq is one place and Afghanistan is another.

Before the 18th century, nation-states were dominated by a sovereign who was the physical embodiment of the state. As Foucault argues, any crime that was committed was considered to be a slight on the body of the sovereign (who was also His ‘representative’ on Earth) and the punishments could be brutally severe – even for the slightest crime. Nation-states exist to make wars; they invade other countries, lay siege to its cities, kill its denizens and cart home the booty – this was the case in the Classical and Medieval periods and it still the case today but rather than use Deuteronomy as a means of legitimation, the cry of ‘free-trade’ is now employed to achieve the same effect – this is a product of Enlightenment thinking. Therefore today’s wars are ostensibly waged either for the ‘defence of liberty/freedom/democracy’ or to ‘open up markets’. Iraq and Afghanistan provided cover for the latter in the guise of the former. The ‘opening’ of  Iraq’s markets in the aftermath of the invasion is a modern version of carrying home the spoils of war.

Today, we still have vassal states that are yoked to more powerful countries rather than vast empires . These are the states that have been destroyed and rebuilt with mainly US money. The principle of humanitarianism in the case of Iraq does not apply; it was seen as ripe for conquest and colonization by the free-market – a lab for the extended free-market ideas of Friedman. The memory of Chile was still fresh in the mind of the war’s planners who had high hopes for Iraq’s resources.

In the early days of the occupation, the US exarch in Iraq, L Paul Bremer, issued a series of executive orders all designed to lay claim to as much of Iraq’s wealth as possible. Executive Order 39 for example says that “all sectors of the economy except oil and gas are open to foreign investors on terms no less favourable to an Iraqi investor”. Bremer instituted a flat tax rate under Order 37 –  flat tax rates are often portrayed by proponents as ‘fair’, when in fact they benefit big business and the rich.  Order 17 grants immunity to certain contractors and persons associated with the Civil Provisional Authority immunity from prosecution under Iraqi law. So any foreigner could quite literally get away with murder.

So what is in store for Afghanistan, that other site of Western nation-building? I saw an item on yesterday morning’s BBC Breakfast where the journalist was reporting from inside the mine. He pretty much said, ‘Afghanistan has a lot of natural resources: iron, copper, gold’…. It wasn’t so much a news report as a marketing message to would-be opportunists, ‘Come to Afghanistan and claim your share’!

The Globalrealm says that the war in Afghanistan is a profit-driven one and US geologists have discovered plenty of mineral booty under the ground. It argues that these vast mineral deposits will pay for cost of the war  I am sure that Karzai’s  government has already bent over backwards to assist foreign investors.  Here’s what the Cato Institute said in 2002

The real long-term answer to Afghanistan’s development lies with free trade and the internal pro-market reforms that trade helps bring about. The Bush administration should therefore pledge to negotiate a sweeping free-trade agreement with Afghanistan’s newly formed government once the Senate passes trade promotion authority (TPA)–something that needs to happen soon.

The TPA expired in 2007 but USAID (US Agency for International Development)are still deeply involved in the country – as one would expect. USAID produced a document in 2002 that provided the blueprint for the mass privatization of Iraqi assets. Has it done the same for Afghanistan? USAID does not dole out aid as such, it doles out reconstruction contracts to companies like Bechtel and Dyncorp. It is deeply involved in the liberalization of state economies to not only re-form them in the economic image of the parent but to create systems of exploitation that benefit the occupying power(s). As US General Smedley Butler once said “War is a racket“. Here’s what he said in his pamphlet written about World War I but it could be about any war.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

A YouTube version of Butler’s speech can be viewed here.

Another example Butler’s thoughts on war and nation-building can be found in this clip from The Corporation.

 

A group of US industrialists and others tried to persuade Butler to participate in a coup plot against the White House but he refused to become, in his words, a “gangster for capitalism”. Shame that lesson hasn’t been learned by other military leaders.

We were told that the war in Afghanistan was being waged to ‘protect us’ and to defend ‘our way of life’. The plain truth is that the world is not a safer place and the bodybags are still coming home in their hundreds (the British death toll  stands at 308 at the time of writing). Yet, there are those who would applaud the nation-building efforts in Afghanistan precisely because they have something to gain from the adventure. The Afghans, on the other hand, have nothing to gain from any of this – except, perhaps, for Karzai and the various warlords who are allied to the NATO occupiers.

Nation-building is fine if it is done by those who live in the country or region but national identity is a different matter and one that I shall cover at a future date on this blog. Creating nations in order to serve the interests of a more powerful nation can only lead to one thing: exploitation.

UPDATE:

I found this while looking for something else. It’s about rentier state-building in Afghanistan.

http://www.cigionline.org/blogs/2010/5/rentier-state-building-afghanistan-political-economy-view

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Filed under Afghanistan, Government & politics, National Identity