Global Shift: Asia, Africa, and Latin America, 1945-2007 9780773587694

A striking portrait of states in the non-Western world from the dismantling of European empires to their inclusion into

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Global Shift: Asia, Africa, and Latin America, 1945-2007
 9780773587694

Table of contents :
Cover
Copyright
Contents
Preface
1 - On With the Show: The End of World War II, the Resurrection of Capitalism, and the Making of the Third World
2 - The Sony Also Rises: Japan’s Undulations
3 - Glorious Capitalism in Communist China
4 - Reorientations: Colonialism, Socialism, and Capitalism in Vietnam and Indonesia
5 - Tigers: Export-Led Industrialization in South Korea, Taiwan, Hong Kong, and Singapore
6 - A Tryst With Neoliberalism: India after the Permit Raj
7 - Storms over Afpak: Permanent War in Pakistan and Afghanistan
8 - “Bomb, Bomb, Bomb, Bomb, Bomb Iran”: Dictators and Domination in the Middle East
9 - Africa Independent: Peaks of Progress, Troughs of Despond
10 - The Chimera of Progress in Latin America
Afterword
Notes
Bibliography
Index

Citation preview

global shift

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Global Shift Asia, Africa, and Latin America 1945–2007 mike mason

McGill-Queen’s University Press Montreal & Kingston • London • Ithaca

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©  McGill-Queen’s University Press 2013 isbn 978-0-7735-4062-0 (cloth) isbn 978-0-7735-4063-7 (paper) Legal deposit first quarter 2013 Bibliothèque nationale du Québec Printed in Canada on acid-free paper that is 100% ancient forest free  (100 % post-consumer recycled), processed chlorine free McGill-Queen’s University Press acknowledges the support of the Canada  Council for the Arts for our publishing program. We also acknowledge  the financial support of the Government of Canada through the Canada  Book Fund for our publishing activities.

Library and Archives Canada Cataloguing in Publication Mason, Mike, 1938– Global shift: Asia, Africa, and Latin America, 1945-2007 / Mike Mason. Includes bibliographical references and index.  ISBN 978-0-7735-4062-0 (bound). – ISBN 978-0-7735-4063-7 (pbk.) 1. Developing countries – History.  2. Developing countries – Economic   conditions.  3. Economic development – Developing countries.  I. Title.  D883.M38 2013

909'.097240825

C2012-903464-9

This book was typeset by Interscript in 10/13 Sabon.

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Contents

Preface  vii   1  On With the Show: The End of World War II, the Resurrection  of Capitalism, and the Making of the Third World  3   2  The Sony Also Rises: Japan’s Undulations  31   3  Glorious Capitalism in Communist China  48   4  Reorientations: Colonialism, Socialism, and Capitalism in Vietnam  and Indonesia  73   5  Tigers: Export-Led Industrialization in South Korea, Taiwan,  Hong Kong, and Singapore  106   6  A Tryst With Neoliberalism: India after the Permit Raj  135   7  Storms over Afpak: Permanent War in Pakistan and Afghanistan  158   8  “Bomb, Bomb, Bomb, Bomb, Bomb Iran”: Dictatorships and  Domination in the Middle East  190   9  Africa Independent: Peaks of Progress, Troughs of Despond  221 10  The Chimera of Progress in Latin America  252 Afterword  285 Notes  291 Bibliography  313 Index  341

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Preface To bring up to date a work dealing with the “Third World” involves little  short of total re-writing. Indeed much of the data one uses is dépassé by the  time the book appears in print, if only because one depends upon publications  which themselves normally appear well after the events they describe. Peter Worsley, “Preface to the Second Edition,” The Third World

The history that follows concerns the rise and transformation of what  for about four decades was known as the “Third World.” The birth of  this world was one of the most unexpected outcomes of the wars that  swamped  Eurasia  in  the  1930s  and  ’40s  and  which  put  an  end  to   colonialism  in  its  conventional,  European  form. Alongside  this  newlyimagined Third World were the First World of Western capitalism, dominated by the United States superpower, and the Second, or Communist,  World, dominated by the Soviet superpower. The three-world universe  exploded, suddenly, at the end of 1991. With the remarkably peaceful  disintegration of the Soviet Union in that year, it seemed obvious there  would now be a single, unipolar world, that pole being centred on the  über-USA, the last man standing and the one that seemed to own all the  most powerful fleets, the most inexhaustible supply of dollars as well as  the  best  pop  songs  and  movie  plots.  But  by  2007,  after  less  than  two  decades of unipolarity, it seems likely that this world, too, might disintegrate, in part if not in its entirety. In the two decades after 1945, the belle époque of the postwar period,  the rulers of the prewar European empires were awakened to the fact  that the end of the road had been reached. While economic health was  slowly returning to Western Europe, their empires were suffering from  a series of afflictions that seemed incurable. Not the least of these were  nationalism and communism. Meanwhile, the competition between the  two superpowers, obvious since the end of the Second World War, transformed itself into the Cold War, a forty-year standoff during which the 

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Preface

main military competitors managed to keep their battlefields at a safe  distance. But after four decades (c. 1950–90), by the late 1980s, it was  obvious that the Soviet Union could no longer stand the pace. By this  time  the  United  States  had  already  established  the  global  regime  that  was, apparently, to guarantee its dominance of the entire globe; “globalization” meant, precisely, a global system where the United States was  not  merely  the  dominant  military  power  but  the  dominant  economic  power  as  well.  This  globalization,  now  only  partly  under  American  aegis, is known as “neoliberalism” and it still rules over us. I mention it  in passing at several points in the narrative that follows. In  any  case,  with  the  dissolution  of  the  Soviet  Union  in  December  1991 it seemed obvious that the United States was incontestably supreme,  economically and politically. “Unipolar” and “New World Order” had  become the triumphalist terms used to describe an international situation in which, for the first time in modern history, there was but a single  Great  Power. “We  are  the  indispensible  nation. We  stand  tall. We  see  farther  into  the  future,”  boasted  the  US  Secretary  of  State  Madeleine  Albright.1 Some argued, contentedly, that history had actually come to  an end; with liberal democracy on top globally there was nowhere else  to go. How could this not be the case? In this last decade of the twentieth century, Japan, the most successful of the Asian Tigers and, according to the declinist argument, apparently the main successor to American  economic  influence,  was  faltering,  while  China,  whose  return  to  the  capitalist marketplace at whatever a low level was bound to make all  Western vendors rich. China in the 1990s was still at some distance in  the rear view mirror of the advanced economies and not likely, anytime  soon, to enter the passing lane. But a decade has proved to be a short  time in the history of modern capitalism. Now, twenty years after the disappearance of the Soviet Union, and  in the bitter afterglow of a succession of setbacks, including defeat of  the United States and its allies in both Iraq and Afghanistan as well as  the great financial crisis that began in the late summer of 2007 and the  second downturn in 2011, a reappraisal has come due. We now recognize that US neo-imperialism was the swan song of some five centuries  of spreading Western domination and that in the future there must be  a Great Power China among a constellation of other eastern economic  stars. The West and East have partly dissolved into one another, leaving  several  centres  and  many  margins  of  indeterminate  status. With  the  rise  of  the  BRIC  (Brazil,  Russia,  India,  China)  countries  and  the  youth-led  Arab  Spring  of  2011,  the  unpredictability  of  the  margins 

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ix

and the marginalized has cast doubt on the stability of any projected  bi- or multi-polared world. The study that follows considers the course of history over the period  from 1945 to 2007. It is a reinterpretation rather than merely an update  of my earlier Development and Disorder: A History of the Third World Since 1945 (1997). It considers the non-West not in regional or ideological terms (“The Middle East,” “The Communist World”) but in the  form of an album combining, on the one hand, group photos (“Afpak,”  “Latin  America”),  and  on  the  other,  portraits  (“Japan,”  “Vietnam,”  “India”). Naturally there are gaps – whole chapters and several major  arguments may seem to be missing – while the same foci – “oligarchies,”  “development,” “ISI,” “neoliberalism,” “inequality”  –  pop  up  repeatedly. Some readers will doubtless be discomfited by my superficial treatment of Africa and Latin America while others may point out that the  whole affair is biased in the most conventional ways – that is, towards  the doings of men in suits and in the states that they steer. The simplest  (and slipperiest) excuse I can offer is space; an earlier form of this study  was nearly twice as long. But since the book is meant for the university  classroom, I have had to be prudent. In  the  end,  what  I  have  found  myself  creating  –  more  than  a  little  unwittingly  –  is  a Western  history  of  the  East  from  the  standpoint  of  someone who has been a student of Asian and African history for more  than fifty years. The view that informs my narrative is not, of course, just  any Western view but one of several possibilities. There are, of course,  other views – from Havana and Cairo and Calcutta, for example – which  provide more adequate “Third Worldist” interpretations. Whether they  are likely to meet the requirements of my audience remains to be seen. While the subjects in this book have been contemplated since I enrolled  in my first Asian Studies course in 1957 (text: George B. Cressey, Land of the 500 Million: A Geography of China, 1955), this book has been composed in the last several years. It is based on lectures I have given in the  History Department at Queen’s University since 2000 and is dedicated to  my students there, especially those who stood by me in trying times in the  autumn of 2011. It is also dedicated to the memory of contemporaries,  none of whom I have ever met except on paper, whose insights, essential  to  my  own  understanding,  are  no  longer  available  to  us:  Giovanni  Arrighi, Peter Gowan, André Gunder Frank, and Fred Halliday. The debts I owe to my family, friends, and colleagues who have shared  with  me  my  trek  over  the  past  decades  are  inestimable. They  include  Mary  Hallard,  my  pole  star  in  too  many  ways,  Lucie  and  Catherine 

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Mason, fellow travellers, and my colleagues, old and not so old, especially Linda Freeman, Robin Porter, Myron Echenberg, Dan O’Meara,  Emily  Hill,  David  Parker,  Paritosh  Kumar,  Jamie  Swift,  and  David  Macdonald. Librarians at Queen’s and University of British Columbia  and booksellers everywhere, especially Oscar Malan of Novel Idea in  Kingston, have proven to be of inestimable importance. To the anonymous readers of the manuscripts on which the present study is based,  I  would  also  like  to  offer  my  grateful  acknowledgment.  I  trust  that  the revisions that I have undertaken on their suggestions will go some  way to meeting their criticisms. My editor, Jeff Brison, has been patient  and painstaking, and to him, too, I owe my thanks. As for my copy  editor, Joanne Muzak, Sherlock Holmes could wish for such powers  of detection. 

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global shift

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1 On With the Show: The End of World War II, the Resurrection of Capitalism, and the Making of the Third World Relations between the capitalist core and periphery have undergone extraordinary transformations during the twentieth century. In many ways the optimal  form of the relationship from the angle of core economies was that of the core  empires, with the British relationship to India being the paradigm. The inability of the European states to handle their own internal relations during the  twentieth century produced paradoxical results. The combination of two devastating European wars and new, far more productive American production  technologies generated a new phase of postwar growth in the core. And the  rising American capitalism needed to break up the European empires rather  than build a new exclusive empire of its own.  Peter Gowan, “Crisis in the Heartland,” New Left Review Even if the crises that are looming up are overcome and a new run of prosperity lies ahead, deeper problems will still remain. Modern capitalism has no  purpose except to keep the show going. Joan Robinson qtd. in Andrew Glyn, Capitalism Unleashed

introduction

By the end of the Second World War in 1945 the world had been divided  into several parts, the most fundamental being the antagonistic realms of  capitalism and communism. Virtually all of the Western world was capitalist, although in the homeland of global capitalism, Western Europe,  this capitalism was in sorry shape, as we shall see below. By contrast,  North America,  where  New York  reigned  as  global  capitalism’s  new 

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Global Shift

headquarters, was robust and expansive, having in the first half of the  twentieth century undergone a remarkable transformation. Over the previous centuries, the North Atlantic had become the new Mediterranean,  a sea that joined the two shores of the West and over which its leading  states had indisputable dominance. But beyond the North Atlantic world  from about 1920 was peril in the form of the dark, Eurasian, continent  of communism. The condition of this communist continent in 1945 was  desperate  in  the  sense  of  material  life,  although  in  spiritual  or  at  least  ideological terms, it was hopeful. The Communists, after all, had history  on their side; it was Moscow, not London or Washington, that had led  the titanic and victorious struggle to destroy fascism and that was bound,  ultimately, to become globally triumphant. On the periphery of the capitalist world was the “Third World,” as it  became known from the 1950s, unborn but incipient. Its rise, struggles  and divisions, always within the circumstances of the existence of communism and of the continuing hegemony of capitalism, forms the heart  of the narrative that we shall follow. The Third World, we shall see, rose  on  the  ruins  of  the  empires  of  the  Europeans  and  Japanese.  These  empires, which we shall take a moment to describe below, had at their  hearts economic imperatives in that they all sought some combination  of  monopolized  markets,  accessible  raw  materials,  cheap  labour,  and  profitable  investment.  Ideally  their  economies  were  export-oriented;  exports and empire danced together cheek to cheek. The music that kept  them on their feet was the drumbeat of violence, either actual or threatened. (It must be stressed, however, that the violence against the peoples  of  the Third World  only  rarely  came  near  the  violence  meted  out  by  Europeans against other Europeans, or Asians against other Asians.)1  Since  the  decline  of  imperialism  and  its  rebirth  as  neo-imperialism  forms the underpinning of the history that follows, a passing note on  the subject of empires may be in order.2 At the outset, let me emphasize  the obvious – there has never been any such thing as a voluntary empire.  Even in apparently peaceful realms like Canada, so distinct from Mexico  or Peru or even the American West, the Indigenous people were forcibly  dispossessed  before  they  were  marginalized,  impoverished,  and  ultimately alienated. In his study of the origins of the modern world economy, Kenneth Pomeranz reminds us that in harnessing the New World  to the old, one of the conditions for the triumph of the West, coercion  was  a  central  and  possibly  essential  feature.3  Chalmers  Johnson,  too,  gets this right in his meditation on the American empire when he writes  that “the United States dominates the world through its military power.”4 

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The Making of the Third World

5

Of course the “neocons” of the twenty-first century acknowledge this,  and  the  title  and  the  contents  of  Chapter  8,  “Bomb,  Bomb,  Bomb  Iran,” reflect it. Let me then provide a summary history of the rise and  fall of the empires of the modern age before we go on to discuss their  submergence.  empires

Up until the 1960s and ’70s, one conventionally started the history of  empires and of the modern age together with a celebration of Columbus  and the discovery of America in 1492. Columbus and his Spanish investors, venture capitalists before their time, were the pioneers of modern  imperialism. Their  objects  were  as  simple  as  their  achievements  were  astonishing. They were in search of opportunity, in the form of maritime  routes to the fabled wealth of the Far East that skirted the Middle East;  simply put, they were looking for some way to get their hands on luxury  goods, spices at first and later porcelain and silk, without having to deal  with  the  impediments  that  the  Muslim  powers  had  erected  in  their  way. They had heard that China was the incontestable centre of the rich  and sophisticated Asian economic world; nowhere, not Europe nor the  Middle East, compared.  Alongside China there existed other realms of potential wealth – for  instance, Africa. Obviously Africa was closer than the Far East to the  European heartland, although, until the middle part of the fifteenth century, accessibility to its shores was problematic. In 1415 the Portuguese  had sought a greater share of the wealth of the African world by sending their armies across the Straits of Gibraltar and establishing a foothold at Ceuta in Morocco. As it turned out, Ceuta was the genesis of  a Portuguese empire, which was to last, despite the decrepitude of the  Portuguese  state  itself,  until  1975.  It  is  the  Portuguese  empire,  then,  stretching  from  the  Strait  of  Gibraltar  to  the  South  China  Sea  and  enduring from 1415 to 1975, that provides the book ends for an entire  half millennium of modern European imperialism. In  1415  the  Portuguese  were  after  gold. This  was  the  alluvial  gold  that  was  brought  from  the  Niger  Bend  region  of West Africa  where,  today, we find Mali and Senegal. Africans traded it to Berbers and Arabs  who transported it from oasis to oasis across the Sahara to Morocco  whence it was distributed throughout the whole of the world, Muslim  and Christian, from the Atlantic to the Gulf. African gold was no mere  luxury – it formed the basis of most of the coinage that circulated in the 

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medieval  period.  Later  in  the  fifteenth  century,  as  the  trans-Saharan  trade fell off, sugar and slaves would eclipse gold to form another chain  that  bound Africa,  the  islands  of  the Atlantic  off  the  coast  of Africa,  Iberia, and the New World together. Slave-produced sugar was to remain  a  major  source  of  wealth  for  merchants  and  investors,  European  and  African,  until  the  nineteenth  century.  No  other  commodity  has  ever  engendered such misery. It was the Portuguese who supplied the Spanish of the Americas with  African  slaves. They  also  settled  slaves  in  the  northeast  of  their  own  colony of Brazil to grow sugar there. (Brazil’s population and its footballers  today  reflect  this: Argentina,  Uruguay,  and  Chile  were  too  far  south to support plantation-grown sugar and have no African elements  in their populations or, for reasons that are not evident, no great footballers.)  Besides  sugar,  the  Portuguese  and  Spanish  colonies  of  South  America and the Caribbean yielded a wide variety of products to stimulate  fortunes  of  the  mercantile  elements  of  the  economies  of Western  Europe  – gold, silver, furs, cocoa, coffee, tobacco, indigo, and cochineal  among others. There was additionally the loot, especially in the form of  ceremonial objects made of silver, gold, and precious stones, plundered  from the civilizations of the New World.  As far as all empires were concerned, besides the imperative of violence,  two  other  characteristics  stand  out.  First,  empires  were  about  investment, accumulation, and profits for the privileged minority who  ruled. Other factors, such as prestige and employment for soldiers and  administrators  were  tangential.  Secondly,  empires  at  their  height  fostered grandiose delusions, while, in their morbid phase, they provoked  bitter  reaction.  Yet,  in  the  twentieth  century  at  least,  apart  from  the  single case of the German massacre of the Herero and Nama peoples in  Africa in 1904, there was no intentional mass killing on the scale of that  visited by Europeans upon one another in the middle part of the century, as I have suggested above. For the slaves taken from Africa and the indigenous peoples of the  New  World  alike,  empires  were  about  war,  misery,  and  death.  More  than twelve million slaves were removed from Africa, a huge proportion of whom died either in the process of being transported or on the  New World  plantations  where  they  were  worked  to  death. And  as  a  consequence of the European invasion of the New World, the indigenous  populations  were  devastated  by  diseases  to  which  they  had  no  r esistance.  In  one  estimate  the  population  of  central  Mexico  in  the  1520s was twenty-five million. By 1608 it had fallen to 852,000. Peru 

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supported nine million people in the 1520s and only 600,000 a century  later.  Imperialism,  whether  in  the  sixteenth  or  the  twentieth  century,  may, quite reasonably, thus be associated with unintentional mass killing;5 the claim made by its promoters that its aims were those of a “civilizing mission,” or that the casualties imposed on its victims were the  price of progress, is either fatuous or mere propaganda.6 The  British,  French,  and  Dutch  got  into  the  business  of  mercantile  empires late. At first they satisfied themselves by trading with, and often  plundering, the Portuguese and Spanish. The plundering of plunderers is  a slightly more complex form of what has been called “primitive accumulation.” From around 1600, they began to build their own overseas  empires, first in the Caribbean and North America, then Asia and Africa.  Colonies in Africa below the Sahara, such as the Portuguese outposts  along  the Angola  coast  and  on  the  Zambesi  in  Mozambique  and  the  Dutch colony at the Cape of Good Hope in South Africa developed only  slowly until the nineteenth century.  The final stage in the history of imperial appropriation came during  the “Age of Empire,” between 1875 and 1920. It was in this period, after  the Atlantic slave trade ended (which was of interest only for its trickle  of luxury exports like gold and ivory), that Africa was partitioned be tween the British, French, Belgians, Portuguese, Spanish, and Germans.  Indochina was grabbed by the French in the same period, who thus got  to share control over most of Southeast Asia with the British and Dutch,  who  seized  almost  all  of  the  Indonesian  archipelago.  From  the  mideighteenth century the British had expanded their grip on India while  the coast of China had been put under the influence of a combination of  Europeans and Americans from the middle of the nineteenth. In 1920  the Middle East was added to the list of Europe’s dominions, but only  tentatively; for by then the current of opinion in the capitalist West was  running against colonialism. By the beginning of the twentieth century  a tiny, archipelagic, American empire, formal and informal, had emerged.  Its elements included Cuba and Puerto Rico, and the Philippines,7 several outposts in the South Pacific, and in another register, Liberia and  Panama. This period of half a century (1875–1920) may be seen as the  North Atlantic world’s finest and almost final hour – thereafter came  wars, depression, and fighting retreats, fiscal crises, and the rise again of  Asia, or, in the pun of André Gunder Frank, the period of “ReOrient.”  The key date for Asia’s rise? Perhaps 1978 when Deng Xiaoping took  the first steps to liberalize the economy of communist China and governments in the United States and Britain shifted their economies in the 

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direction of neoliberal capitalism, which the Chinese embraced, as we  shall see, on their own terms. What  stimulated  the  late-nineteenth-century  scramble  for  colonies?  Numerous theories exist.8 One suggests the fear of protectionism; each  European country feared that its rivals would elbow it out of lucrative  markets and sources of raw materials. “If you were not such persistent  protectionists,” the British prime minister told the French ambassador  in 1897, “you would not find us so keen to annex territories.”9 There  were also metaphysical motives: Shelley Baranowski draws our attention to the fact that the German Kaiser’s naval minister, Grand Admiral  Alfred Tirpitz, appointed in 1897, connected empire with national survival.10 After the Second World War this rather desperate assumption  still  retained  its  attraction  among  politicians  of  the  old  empires  of  Britain,  France,  the  Netherlands,  and  Portugal,  but  especially  among  those who feared what lay ahead in the postwar world. Besides being characterized by violence on a globalized scale, the Age  of Empire had another characteristic. Overlapping with the last stage of  the slave trade and with a period of widespread forced or “indentured”  labour, which lasted until the First World War, was the period of environmental  profligacy  assured  by  industrialization  and  in  the  name  of  consumerism.  A  massive  example:  elephants  were  slaughtered  in  the  thousands, especially in the Belgian-owned Congo, to make trivial consumer goods like billiard balls and hair combs. That Africans, slaves and  semi-slaves, were made to carry their huge trunks over unthinkable distances reminds us that pre-capitalist and industrial epochs – slaves producing for urban populations – overlapped. Certainly, the industrialization of the economies of the North Atlantic  states and their changing demands has to be understood if we want to  see the motives behind the Age of Empire. These motives were, in simple  terms,  the  same  as  they  had  always  been  –  raw  materials  to  be  got  cheaply,  for  cheap  labour  to  collect,  transport,  and  process  these  raw  materials and for profits from investment in the extraction, processing,  and transport. This applied equally to demands for newish commodities  like  vegetable  oils  (palm  and  olive,  as  in “Palmolive”)  for  soap,  and  natural  products  like  ivory  and  rubber,  and,  as  always,  for  minerals,  gold,  silver,  and  copper  and,  from  about  1900,  petroleum. These  raw  materials had become, from the early nineteenth century, the grist for  the  mills  of  an  industrial  world;  certain  big,  old  imperialist  powers   had transformed themselves into new industrial states: Britain, France,  the Netherlands, Belgium, and Germany, especially. Old, pre-industrial 

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Portugual pioneer of imperialism, was not industrialized and remained  backward; it sold the manpower of its African subjects in Mozambique  to British-owned mines in South Africa. Spain had already lost most of  its American colonies before the Age of Empire began.  Not  all  Europeans  got  their  share  of  the  cake.  The  Germans  and  Italians  felt  left  out,  all  the  more  so  because  the  Germans  had  been  stripped of their colonies in Africa and the Pacific after they had been on  the losing side in World War I. No more Platz an der Sonne. This rankled  and  was  exploited  in  the  1930s  by  the  rising  Nazi  Party,  which  demanded  that  Germany  be  allowed  to  seize  lands  for  settlement  on  Germany’s eastern frontiers, especially in Czechoslovakia, Poland, and  the eastern parts of the Soviet Union. Of course, the Nazi Party did not  just call for land. After all, the Germans believed in total annihilation of  the enemy, later known as “ethnic cleansing” or even “genocide.” About Italian imperialism, not much can be memorably said. It was  based on delusive claims about fascist Italy being the successor to the  Roman Empire; it established a brief hold over parts of northeast Africa  – Libya, Ethiopia, Eritrea – and was closed down by the British during  World War II. Libya, where the Italians hoped they might settle tens of  thousands of surplus citizens, was under the control of Rome’s fascist  government  between  the  wars. The  number  of  deaths  from  all  non-  natural  causes  in  the  colony  between  1912  and  1943  was  between  250,000  and  300,000  out  of  a  population  of  less  than  a  million.  As  many 12,000 Cyrenacians were executed between 1930 and 1931 while  concentration  camps  killed  thousands.11  Unsurprisingly,  its  empire  gained the Italians little but ignominy and caused much horror among  its victims, many of whom, in Ethiopia, suffered from the Italian use of  poisonous gas sprayed from airplanes.  A final point: the Portuguese, during their “voyages of exploration”  along the African and Asian coasts in the fifteenth and early sixteenth  centuries,  did,  obviously,  expand  the  possibilities  of  trade.  They  also  redirected and in some cases smashed it; that is, Portuguese ships in the  sixteenth century blasted their rivals out of the Indian Ocean and bombarded  its  littorals,  undermining  the  expanding  regional  free  trade.  There is no way of showing convincingly whether inter-Asian trade was  overall stimulated or overall depressed by the arrival of the Portuguese  and their successors, the Dutch and English. It has been suggested that  the  Portuguese  delayed  the  establishment  of  a  Asian  Pacific-centred  world economy – holding it back, thus, for half a millennium – while a  European Atlantic-centred world economy forged ahead from the early 

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seventeenth  century.12  There  is  also  an  argument  to  suggest  that  by   forcing Asians to produce various commodities on plantations for the  European market and manipulating local Asian trade in the interest of  overseas  markets,  the  Europeans  engendered  poverty,  starvation,  and  even famine. This seems likely to be true, although, as a kind of moral  offset, we should recall that it was Stalin and, after him, Mao Zedong,  a Caucasian and a Chinese communist, not Western merchant capitalists, who were the all-time champions of state-engineered famine. wars

The long European nineteenth century (1815–1914), of which the Age  of Empire was but a chapter, ended with what the Europeans called “the  Great War  for  Civilization”  that  began  in August  1914  and  ended  in  November 1918. For most, the consequences of the war were stark and  depressing, and the aftermath uncertain. While some hoped that there  would be a return to the certainties of the world before the war, others  saw it as the opportunity to refashion the politics of nations along new  lines of socialism and democracy. So, after the war, while many talked  of peace and stability, it was the threat of further war and uncertainty  that were being stored up for the future.  The first of the two most striking changes wrought by the war was  the appearance on the world stage of American power, the consequence  of  the  United  States  having  become  the  world’s  largest  economy  by  1913. Second, there was the revolutionary birth of the Soviet Union in  1917 from the ruins of czarist Russia. In the whole history of the twentieth century there was no more influential event than the Russian revolution,  just  as  in  the  eighteenth  there  was  no  more  remarkable  event  than  the  French  Revolution.  As  Europe  of  the  old  monarchies  thus  crumbled after World War I, in its former domains rose new ideologies  that would virtually guarantee future crisis.  For two of the major western powers, Britain and France, victory in  the Great War was taken as an opportunity to expand and consolidate  their hold on the world. Both had centuries of imperial conquests behind  them  and  both,  like Tirpitz  and  other  Germans,  saw  their  empires  as  guarantees of greatness. For them, the most dazzling prize offered in the  postwar peace settlement negotiated at Versailles in 1919 was the oilsoaked lands of the Middle East, the final frontier for colonial expansion.  Having,  during  the  war,  secretly  agreed  with  the  French  to  the  carve-up of this region, the British immediately after the war moved in 

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to  dominate  Iraq  as  well  as  to  take  control  of  Palestine  and  TransJordan. British domination of several statelets of the Gulf and of Aden  had  already  been  negotiated.  The  French,  yet  again  trumped  by  the  British in the pursuit of empire, had to content themselves with Syria –  out of the side of which they carved Lebanon. Vivisection, the fate of  Africa,  now  befell  the  whole  of  the  Arab-speaking  world  from  the  western borders of Iran through Egypt and the Sudan to the shores of  Morocco. Unbelievers now ruled the umma, the community of Muslims.  As I shall argue below, the rise of “political Islam” in the last quarter of  the twentieth century came as the most profound consequence of this  instance of Western imperialism. Several other powers had benefited from the postwar carve-up authorized by the assumptions of the Versailles peace treaty of 1919, including the United States, which was licenced to seize morsels of the former  German overseas empire in the Pacific. The Americans were now permanently  launched  into  a  sphere  that  the  Europeans  had  claimed  as  their own in the nineteenth century and into which the Japanese, latecomers to industry and empire, were also expanding. In sum, then, by  about  1920,  the  Middle  East,  together  with  East  and  Southeast Asia,  seemed to be on the way to following South Asia and Africa as a domain  of foreign rule. The voices of nationalists whether Chinese, Vietnamese,  Arab, or Indian were drowned out by the clamour of the Europeans and  Americans boasting of the benefits sure to follow from their domination. Imperialism and the nationalism it guaranteed were to be the guiding stars in the history of Asia and Africa right up until the last quarter  of the twentieth century. If World War I had been mainly a European affair – with echoes that  were  heard  everywhere  – World War  II  (1939–45)  was  a  Eurasian  and Pacific struggle – but with effects that were diametrically opposite to those  of World War I. Instead of launching the further colonial partition of the  world,  in  comparatively  short  order  (c.  1947–75),  it  undid  the  global  dominance of Western Europe and opened the door to the epoch marked  by  the  zenith  of  US  global  power  and  the  domination  of  its  economic  practices  and  multinational  firms.  The  epoch  of  unrivalled  American  power was coincidentally the heyday of the Third World; the one having  fashioned the other as an unplanned corollary of the Cold War. While we can now in 2012 see that parts of what was once the Third  World – especially China and most of East and Southeast Asia – were  emancipated  and “developed”  in  the  postwar  period,  much  of Africa  and  Latin  America  managed  only  to  sputter  along,  rising  towards 

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greater  independence  and  economic  security,  falling  back  under  the  pressure of foreign manipulation, and then attempting to advance again  but always with uncertainty, at least until the early twenty-first century.  The American preoccupation with the Middle East and Central Asia has  been offered, quite plausibly, as an explanation for the renaissance of  Latin American independence and economic development. Brazil, especially under Luiz Inácio Lula da Silva (popularly known as Lula), was  as much a regional phoenix as any of the Asian dragons. The spread of American domination, if not actually an empire in the  conventional sense, has been beyond question remarkable, comparable  to the spread of that of the Soviet-backed communism (1918–48), or,  very much earlier, the sudden spread of Islam (in the late seventh and  early eighth centuries CE). While the origins of US domination, during  what is sometimes called the “American century,” are debatable, beyond  doubt  in  the  minds  of  liberal  commentators  in  the  early  twenty-first  century  is  the  fact  of  decline.  “Time  has  expired  on  the  American  Century,” says the dust cover of Andrew J. Bacevich’s 2010 book.13  nullpunkt : the postwar european world

“Today the sun goes down on more suffering than ever before in the world,”  British Prime Minister Winston Churchill (r. 1940–45, 1951–55) observed  in early February 1945. Three months later, on 8 May, the war in Europe  was over. Germany, the greatest industrial society on the continent and the  ephemeral possessor of a gigantic European empire, lay in ruins and its  homelands – not only the Germany that we now recognize but on such   frontiers as Sudetenland and East Prussia – suffered the indignity of being  occupied by its enemies. Almost every factory chimney … stood cold and still. Businesses lay empty,  for what business could be done? No trains ran. Refugees huddled in overcrowded ruins, feeding on soup, potatoes and despair. No vessels save Allied  warships moved in the ports. The roads were clogged with stony-faced people;  soldiers in tattered uniforms or ill-fitting civilian clothes creeping home, families fleeing from the Russians; freed prisoners and slave labourers roaming the  landscape in search of freedom, revenge or booty. Thick dust, generated by  countless millions of explosive concussions from end to end of Germany, lay  on everything – windows, furniture, vehicles, houses, corpses, living people.  Max Hastings, Armageddon: The Battle for Germany, 1944–45

Germany now existed only notionally in economic terms, its cities were  piles  of  rubble,  and  large  tracts  of  its  rich  industrial  and  agricultural 

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prewar territories in the East were severed from it. For a brief period  after  its  defeat,  Germany  had  even  lacked  paper  currency.  Instead,  American  cigarettes  were  used;  teachers  working  for  the  Occupation  authorities were paid five packs a week. Sex was paid for in cigs. In  Hamburg, an egg cost a day’s wages. Everyone wanted American dollars. Not until 1949–50 did economic recuperation really begin. Even in  1950,  seventeen  million  of  West  Germany’s  forty-seven  million  were  still living in poverty. Thirty-six and a half million Europeans had died between 1939 and  1945  from  war-related  causes,  of  whom  six  million  were  Jews  murdered in cold blood. No war in history had killed so many people in  such a short space of time.14 Soviet military losses alone were 8.6 million; of 5.5 million Soviet soldiers captured by the Germans, 3.3 million  died in captivity. Soviet losses in the battle for Moscow alone “were  greater than the combined casualties of Britain and the United States  in the whole of World War II.”15 We might recall these figures when we  contemplate  the  enormities  inflicted  on  Asians,  Africans,  and  Latin  Americans in the postwar period. By the end of August 1945 Japan had followed its ally Germany to  defeat. The  epoch  that  had  followed  the  stretched  nineteenth  century  (1815–1945)  –  by  whatever  name   –  was  now  at  an  end,  and  the  American age, the age of the “indispensible nation” (c. 1945–2007) –  had commenced.16  American armies and ancillary forces like those under British command (including the Canadians) were dispersed across Western Europe,  Southeast  Asia,  and  Japan  by  September  1945.  Facing  them,  the  armies of the Soviet Union controlled the whole of northern Eurasia  from the Baltic to Sea of Japan. Thus, abruptly, there came into being  two main geopolitical spheres separated, in one provocative telling, by  an “iron  curtain.” These  spheres  were  quite  distinct  from  those  that  had been in place a mere five years before when the great empires of  Britain, France, and Japan had seemed so indestructible. Then much of  the world had been divided into blocs, empires, and zones of influence,  some expanding, others becalmed, many waiting. But this world had  come tumbling down. Of the novel postwar spheres separated by the imaginary curtain, the  largest  and  richest  was  the “West,”  later  called  the “free  world”  and  sometimes  the “First World”  or  even  the “Atlantic World.” The West  included Western Europe, the heartland of the great colonial empires.  This world was for the greater part devastated and humbled, depleted,  starved,  shocked,  and  disorganized. Through  the  whole  of  the  period 

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from 1945 to 2007 it was politically, culturally, economically, and militarily dominated – in American international relations jargon, “led” –  by the United States. This idea of US “leadership” was reaffirmed at the  beginning of the war when the newspaper magnate, Henry Luce, summonsed  Americans “to  realize  their  destiny  as  the  crowning  glory  of  human achievement.” The fortunes of all nations, he ran on, “depended  on US management of the international community.”17 Naturally, it was  difficult for leaders in London or Paris to admit this openly. Still, even though the Western Europeans, and especially the French  under President de Gaulle (r. 1959–69) might resent this, or pretend it  was otherwise, as did the British with their comforting notion of a “special relationship,” American domination was clear. Two world wars in  quick succession had, after all, put paid to any claims that the Western  Europeans might have to determining the flow of world politics or be  able to trumpet their “civilizing mission.” As we shall see, this was of  fundamental importance as far as the Third World was concerned. Now  America ruled. Within the orbit of the great American centres were all  the institutions that would matter for the next fifty years – Wall Street,  the United Nations (UN), the World Bank, the International Monetary  Fund (IMF), the Pentagon, the great universities, the film studios, and  the powerful think tanks. To the chagrin of the French, even art, ever  mercenary, moved its headquarters from Paris to New York. Now, parallel to ballooning American political and economic influence, American  culture came to suffuse the world: Mickey Mouse, Marlboros, and later  McDonald’s were embraced by almost everyone who could afford the  price  of  a T-shirt,  a  cigarette,  or  a  Big  Mac. The  business  of Western  Europe, it became increasingly evident, was business not empires, and  the terms of business – from currency reserves to rating agencies – were  invariably expressed in US terms. This was the case for the whole period  1945 to 2007.  As I have suggested, facing the free world from 1945 to 1991 was a  rival political and economic giant, the Soviet Union, the heartland of a  “Second World.”  Ravaged  by  wars  and  torn  by  purges  and  mass  displacements for much of the period from the outbreak of World War I  (1914) to the end of World War II (1945), the Soviet Union had, with  the defeat of Germany, become more coherent and militarily powerful  than ever. It offered a grand idea, communism, which not only its leaders but many throughout the First World felt was a glorious plan for the  future of humanity.  Having  kept  control  of  czarist  Russia’s  continental  territories  –  including those of Central Asia – and having expanded westward into 

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the  Baltic  and  Prussia  as  a  consequence  of  its  victories  against  the  Germans – “the Soviet Bloc” became even more threatening to the West  when  allied  to  China,  the  world’s  most  populous  country,  where  in  1949,  in  the  aftermath  of  the  Japanese  defeat  in  1945  and  civil  war,  communists  had  taken  control.  Communist-controlled  parts  of  the  world now constituted a looming monolith.  The Cold War (c. 1947–90) was prosecuted in an attempt to cripple  this  monolith  and  to  prevent  Moscow  from  spreading  its  influence.  Though massive and potentially powerful, China did not pose the same  kind  of  active  threat  during  this  period  –  it  became  overwhelmingly  autarkic, that is, inward-looking. To people of the colonial world struggling for emancipation from Western colonialism or from US domination, like certain of the Vietnamese or the Indonesians or the Cubans, or  even some Afghanis, the Soviet Union offered enticing possibilities. Both of these worlds, the first, capitalist, and the second, communist,  world were in a state of flux, and out of this flux was born the “Third  World,” the independent existence of which was seen as a challenging  opportunity for both the United States and the communists. Before we  consider this Third World we should look in more detail at the condition of first two worlds in order to try to understand how they sought  to shape the Third World to their own advantage. the heartland : west european resurgence

The British had forged the most successful economy in the world in the  nineteenth and early twentieth centuries. As late as the 1930s, London  had been the heart of global finance; sterling was the international currency. In 1945 the British still had the world’s greatest empire and were  the supreme power in Western Europe. They had “stood alone” in the  first part of the war – apart, that is, from their massive empire and commonwealth  –  and,  all  told,  had  suffered  about  370,000  war  deaths,  which was about six times as many casualties as the Americans were to  suffer in Vietnam and on the basis of a much smaller population. Now,  as victors, they sought to recover what they had lost – industrial leadership and commercial domination, a reborn empire sustained by naval  and air bases in Asia and Africa and by troops conscripted at home and  in the colonies, replenished sterling reserves, diplomatic pre-eminence in  Europe and the world. There were hints of a New Jerusalem to come.  What  British  leaders,  especially  those  like Winston  Churchill  and  his  homologues had failed to grasp was that, in spite of the huge and heroic  efforts  entailed  in  mobilizing  their  people  against  the  threats  from 

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Global Shift

Germany and Japan, Britain could no longer claim to be a great power,  either financial, commercial, or military.18 The eminent economist J.M.  Keynes (1883–1946) had tried to point out at the end of the war that  there was little, in reality, to sustain Britain’s ballooning triumphalism,  that  Britain  during  the  duration  of  the  war  had  sold  off  its  foreign  investments  and  dispensed  huge  sums  on  feeding  and  defending  itself  and preserving its empire. It was now broke. Nonetheless, the British seemed determined to press on as before; in  spite  of  an  empty  treasury,  vast  armies  were  maintained,  and  British  bases, crawling with armed men and bristling with ships and warplanes,  still girdled the southern oceans and their littorals – Gibraltar, Malta,  Cyprus, Suez, Aden, Cape Town, Singapore, Hong Kong. Some of these  soldiers – in Greece, Burma, Indochina, the Dutch East Indies, Malaya,  Kenya, Cyprus, and Egypt – would be called upon to fight wars of imperial redemption against a wide range of nationalist movements into the  1950s. These wars were sometimes known as “emergencies,” and from  the viewpoint of imperial ambition emergencies they were. Yet in spite  of the actions of military fire brigades, in the end the fires of nationalism  proved to be inextinguishable. Gradually, then, with a mixture of relief and bitterness, the British  withdrew, first from India and then from Singapore and East of Suez.  Finally, in 1997, after a rearguard action that had lasted for more than  fifty  years,  amid  wistful  eulogies,  false  promises,  and  tears  on  the   rain-sodden  evening  of  30  June,  the  last  British  governor,  a  failed  Conservative  member  of  Parliament,  sailed  away  from  Hong  Kong.  This apart, by the 1970s “Empire” had already become a matter not  for  politicians  but  for  historians  and  novelists  while  its  institutions,  like  its  memories,  faded  away.  The  liquidation  of  European  empires  was  to  become  one  of  the  most  shocking  of  the  unintended  consequences of the Second World War. The French had possessed the second greatest of the overseas empires.  Unlike the triumphant British at the end of the war, the French, humiliated by swift defeat followed by five years of German occupation and  collaboration  and  the  loss  of  their  position  in  the  Middle  East,  were  despondent. “As the tide [of war] retreated it suddenly exposed, from  one end to another, the mutilated body of France,” lamented Charles de  Gaulle, France’s exiled wartime leader and its postwar champion.19 Yet  de Gaulle, who confessed that the war had changed everything, could  not imagine that the process of metropolitan recovery could be successful without the resources of a rehabilitated French empire, despite the 

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estrangement with the colonies during the war. Then there was the matter of French prestige; it went without saying that great nations had to  have great empires. France would never give up on the African theatre  of its colonial empire.  Elsewhere  and  in  spite  of  the  destruction  at  home,  imperial  longing  lived on. After the war the Dutch lamented, Indië verloren, raampspoed geboren (“If the Indies are lost, we’re done for”).20 Two imperial powers,  Portugal and Spain, both reactionary backwaters that had stayed neutral  (while sympathizing with fascism) during the war, had actually benefited  from it. Portugal in particular hung on to its colonial possessions, despite  widespread poverty, ill-health, and medieval levels of ignorance at home.  The dozen years between 1944 and 1956 were marked by a number  of novel initiatives that established the character of the postwar epoch.  Among  the  least  durable  of  these  were  the  attempts  of  the  European  colonial powers to resume their imperial destinies where they had left  off  before  the  war.  The  empires  they  sought  to  revive  were  meant  to  keep  any  kind  of  free  trade  at  a  safe  distance. An  example  of  this  attempted  imperial  resurrection  occurred  as  early  as  1944,  when  the  exiled “Free French” government organized the Brazzaville Conference  in the capital of French Equatorial Africa near the mouth of the Congo  River. Here, they sketched out utopian designs for launching a renewed  empire. In these schemes, independence was not seriously contemplated;  a minimal amount of representative government was to be granted. The  main object of the conference was, in fact, “neocolonial”: it was to plan  for a centralized empire, which would support the rebuilding of a devastated and humiliated France. There was little awareness of the potential strength of the virus of nationalism. In the face of the challenges posed in the immediate postwar Europe,  the Europe that had defined its self-image through colonial power and  colonial  wars  over  the  previous  two  centuries  had  to  be  buried. The  definitive  break  with  the  old  colonial  style  came  as  a  showdown  in  1956.  The  British  and  French,  with  help  from  Israel,  invaded  Egypt,  ostensibly to reassert their control of the Suez Canal after it had been  nationalized  by  the  president  of  Egypt,  Colonel  Gamal  Nasser.  The  Americans were furious – partly because these old-style colonial habits  were inimical to the new world of open trade, but also because, as luck  would have it, this invasion came at virtually the same moment as the  Soviet Union invaded Hungary. How could America condemn one invasion without condemning the other? America forced Britain and France  into a humiliating climb-down. 

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The other side of the Atlantic was, more than merely geographically, a  world apart from ravaged Europe and colonized Asia and Africa. All of  North and South America, including Canada and Mexico, had flourished during the war; not a bomb had fallen over the wide area between  Vancouver and Valparaíso or Montreal and Montevideo. Many, such  as Ecuador, Venezuela, Brazil, Columbia, and some Central American  states,  had  benefited  from  wartime  economic  growth  of  more  than  6 per cent. Of the non-Americans, only the Canadians, still stuck in the rut of  sympathy for the British Empire, had even suffered casualties. Canadian  troops,  like  those  from  India,  as  well  as  the “white”  dominions  of  Australia and New Zealand, had died everywhere for Britain and under  ultimate British command. Although the whole of the Americas benefited from World War II, it must be emphasized that it was the United  States alone that enjoyed the greatest triumph; power, glory, and wealth  all flowed in unprecedented infusions. Even before the war the United  States had towered above its European rivals in economic terms by a  head; after the war it stood alone for its conspicuous wealth, economic  potential,  and  military  muscle.  American  citizens  lived  in  the  warm  glow of prosperity.  American economic preponderance had actually become a fact since  the  beginning  of  the  First  World  War.  Even  then,  its  annual  average  growth rate had been almost three times that of Britain or France while  its per capita GDP was twice that of Western Europe. In 1945 US industrial production was double the average of the five prewar years; the US  produced half the world’s coal, two-thirds of its petroleum, and more  than half of its electricity. In 1945 the United States held 80 per cent of  the world’s gold and three-quarters of its invested capital. On top of this  there was military power: “Its strategic air force was unrivalled. Its navy  dominated the seas. It had a monopoly over humanity’s most intimidating weapon, the atomic bomb. The United States had a preponderance  of power.”21 The cost? About 300,000 Americans had died in all theatres  of  war  –  70,000  fewer  than  the  British.  Compared  to  Soviet  or  even German losses, the Americans, the real winners of the war, had got  off light. This lead would continue into the 1970s.  The war had given the United States an apparently unassailable commercial and technological lead. Both the hubris and the misgivings of  American leaders in the postwar period, right up through the unipolar 

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period, has to be seen in this light. Hubris was rarely acknowledged; of  misgivings,  there  were  several  but  none  greater  than  the  irreducible  spread of communism.  American concerns over defence had lagged behind the focus on economic growth. Even in 1940, the United States spent only 18 per cent of  its federal budget on its military. This changed dramatically after the war.  “By 1948, with the Cold War raging and enormous economic aid being  sent to Western Europe, 46 per cent of the federal budget was devoted to  defence and international affairs. By 1952, with the Korean War, it was  72 percent, and domestic priorities were a thing of the past.”22  But could America prosper if Europe languished in poverty? In Washington, even at the highest levels, there was serious talk about forcing  Germany  to  de-industrialize  –  if  not  actually  returning  to  fields  and  forests, then at least being forced to revert to the kind of backwardness  typical of Eastern Europe. Even after the Third Reich had been reduced  to rubble, its former enemies still feared a resurgent Germany more than  they did the Soviet Union.23 During the war the answer to this question had become obvious to all  but  the  most  perverse:  world  capitalism  depended  on  world  markets,  and markets could only revive if economies returned to good health and  were open. Germany, then, would have to be helped to its feet; after all,  if  money  were  put  into  the  pockets  of  its  consumers,  it  was  obvious  whose consumer goods they would spend it on.  In  the  three  years  between  the  international  meetings  at  Bretton  Woods in July 1944 and the announcement of the European Recovery  Plan in June 1947, the foundations of the rehabilitation of the economy  of  the  developed  capitalist  world  and  the  dominance  of  that  world  by  the  United  States  were  laid.  At  the  conference  at  Bretton  Woods,  orchestrated  by  Washington  and  London,  accords  tied  the  US  dollar  to  gold,  and  other  currencies  to  the  US  dollar  through  fixed  rates  of  exchange. Alongside these accords, other institutions were established  that sustained American hegemony no less: the International Monetary  Fund (IMF) and the World Bank (officially, the International Bank for  Reconstruction and Development, the IBRD). Together they would put  an  end  to  the  economic  isolationism  that  had  been  so  desperately  embraced right across the developed world in the 1930s. Isolationism  was thus to be replaced by a set of economic assumptions, all de facto  American-channeled,  that  would  foster  long-term  investments,  deal  with  balance-of-payments  problems,  stabilize  currencies,  and  regulate 

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government planning so that it would dance in tune with markets. The  General  Agreement  on  Tariffs  and  Trade  (GATT),  a  sister  institution,  would establish the framework for tariff reduction by means of periodic  haggling  between  vastly  unequal  national  representatives.  Both  the  World Bank and the IMF were to be located in Washington, DC. They  were to be the twin towers that replaced the Ozymandine monuments of  capitalism in the City of London, the location of the second most important financial centre, which had been the financial heart of global capitalism before World War II. Its fate was to become a remarkably prosperous  satellite of Wall Street and the dark heart of offshore capital. While nearly fifty states participated in the founding of the IMF and  the World Bank, discussions were actually dominated by two men, J.M.  Keynes and Harry Dexter White,24 representatives of the British and the  US treasuries respectively. While Keynes was by far the more celebrated  as an economic thinker, it was White, with the economic clout of Wall  Street  behind  him,  who  was  bound  to  triumph.  Economic  ideas  were  thus trumped by political weight. Whereas in the peace settlement at the  end  of  World  War  I,  the  Europeans  had  blocked  the  Americans,  at  Bretton Woods and later, this was inconceivable. It was this situation,  above all, that defeated the American isolationists who hadn’t wanted  America to join either world wars and certainly didn’t want their country to get involved in the rehabilitation of postwar Europe. Consequently,  writes Jeffry Frieden, “America’s western allies were at the mercy of the  United  States.  Britain  and  France  expressed  their  concerns  forcefully,  sometimes even American policy-makers listened; but there was no pretense of an equal partnership. It was easier to ‘sell’ American international  involvement  at  home  when  this  involvement  was  on American  terms.”25 For the next three decades (1944–73) the IMF and the World  Bank would carry the “Made in America” guarantee. After this, during  the first deep postwar recession of the early 1970s, the Americans jettisoned the Bretton Woods agreements as being cumbersome. In the place  of  the  more  universalist  regulations  that  they  had  formulated,  a  new  regime more blatantly dominated by Wall Street and in the interested of  American banking and finance was coaxed into being. Parallel to the Bretton Woods institutions and also dominated by the  United States was the United Nations. The United Nations was founded  at San Francisco in 1944 and headquartered, apparently for its lifetime,  in  New  York  on  land  donated  by  the  Rockefellers.  Its  charter  was   ratified  in  October  1945,  a  month  after  the  Japanese  surrender,  and  its General Assembly first met in January 1946. When it was founded, 

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Americans, on the whole, were among its firmest supporters. And for  good reason: never in its history was the UN anything but sympathetic  to  US  designs,  and  never  were  its  secretaries-general  anything  but  American nominees.  Yet,  in  fact,  in  spite  of  the  preponderant  influence  of  the  United  States over “the free world,” immediately after the end of World War  II  what  lay  in  the  future  was  anybody’s  guess.  In  Moscow,  Joseph  Stalin  (r.  1922–54),  the  Soviet  dictator,  was  quite  convinced  that  the  capitalist countries would soon again be at one another’s throats. The  Americans themselves were more than a little dismayed at the prospects  for Europe for two intertwined reasons: first, as we have seen, American  prosperity depended upon the recovery of European markets. Second,  the spread of communism over most of Eastern Europe and its popularity  especially  in  France  and  Italy,  threatened  to  close  off  those  markets.26  In  response,  in  what  has  usually  been  regarded  as  an  unusual  instance of foresight as well as a rare act of international philanthropy,  in June 1947, US Secretary of State George C. Marshall announced a  program of exports to the barely recovered states of Europe that was  intended to simultaneously revive their economies and stimulate the US  economy. These  were  not  to  be,  like  Lend-Lease,  the  1941 Anglo-US  exchange of Atlantic bases for decrepit warships, exchanges, but rather  free donations. Marshall, himself, spoke of breaking “the vicious circle  and  [restoring]  the  confidence  of  the  European  people  in  their  own  countries and of  Europe as  a whole.”27 This was to be known as  the  European  Recovery  Program  (ERP)  or,  more  commonly,  the  Marshall  Plan. Prosperity, it was quite rightly assumed, was the antidote to communism. The Marshall Plan lasted from 1947 to 1952, and saw $13 billion dispersed to sixteen European countries, especially to Britain and  France but also to Greece and Turkey. No state within the Communist  sphere  benefited,  nor  did  Spain.  The  Europe “as  a  whole,”  to  which  Marshall referred, was not to come into existence for nearly half a century. We shall see in the next chapter how Japan and South Korea benefited from American aid that was equivalent to the Marshall Plan. While  cavil  concerning  American  intentions  was  a  regular  refrain   during the Cold War, there can be little doubt that the Europeans benefited hugely from Washington’s magnanimity. In fact, the Marshall Plan  remains as the paradigm for foreign aid over the whole postwar period.  By 1952 when ERP aid was ended, Europe was confidently on the way to  postwar  recovery.  Whereas  Western  European  per  capita  output  had  doubled in the sixty years between 1870 and 1929, it doubled again in 

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the fifteen years between 1948 and 1964. The United States was, in any  case, now securely in control of all of the major institutions of political  and economic importance in the West – the World Bank, the IMF, the  ERP,  the  United  Nations  and,  from  1949,  the  North  Atlantic  Treaty  Organization (NATO). From 1961, the United States, and the economies  whose growth had been fostered by American support, formed a club  known as the Organisation for Economic Co-operation and Development  (OECD). Here was the engine room and pilot house of the West. This  organization,  too,  was  American  dominated.  Excepting  those  who  nourished illusions about a postwar community of equal nations, none  of this was a mystery. As two neo-conservative commentators, Robert  Kagan and William Kristol, were to crow in 2000, when American dominance still seemed unshakeable: Today’s international system is built not around a balance of power  but around American hegemony. The international financial institutions were fashioned by Americans and serve American interests.  The international security structures are chiefly a collection of  American-led alliances. What Americans like to call international  “norms” are really reflections of American and West European principles. Since today’s relatively benevolent circumstances are the  product of our hegemonic influence, any lessening of that influence  will allow others to play a larger part in shaping the world to suit  their needs … American hegemony, then, must be actively maintained, just as it was actively obtained.28

“ the east is red ” In direct opposition to this Western world dominated by America stood  the East. With the Bolshevik revolution of 1917, a new kind of empire  had been created to rule over the extensive territories of Central Asia.  After  1945  Soviet  influence  extended  over  the  countries  of  Eastern  Europe liberated from the German occupation by the Red Army. These  included the eastern half of the smaller postwar Germany, as well as the  former independent Baltic and Eastern European states.  This broad polyglot expanse of Eurasia became known as the Soviet  Bloc,  and  it  remained  in  existence  until  December  1991.  Within  this  Bloc,  the  Communist  Party  became  the  equivalent  of  the  established  church;  dissent  was  regarded  as  apostasy,  with  suitably  cruel  punishments. Indeed, under Josef Stalin there were hundreds of thousands of  political executions. 

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Over the other countries in the Soviet Bloc, Moscow established protectorate colonialism in the name of socialism. The economies of states  from the Baltic to the Black Sea came to be integrated with and subordinated to the economy of the Soviet Union.  But  the  Soviet  threat  was  not  the  only  one  causing  anxiety  in  Washington.  Even  in  the  West,  communism  in  this  period  was  only  slightly  off  the  peak  of  its  1930s  popularity.  Communist  ideology,  of  course, had lived and even gained supporters right across Eurasia since  the Russian Revolution in 1917 and elsewhere in Asia. And in the New  World, from New York to Buenos Aires, it also had fervent adherents,  especially among intellectuals.  Given the devastation wrought by the Germans on the Soviet Union  itself, and on Poland, and acknowledging the economic and social backwardness of most of Eastern Europe, not to mention the lack of access  to  American  capital,  it  could  hardly  be  expected  that  the  economic  growth of the communist Second World would be miraculous. Yet, in  1969, Nikita Khrushchev (r. 1953–64), boasted that by 1970, or even  sooner, the Soviet Union would leave the United States standing in its  dust, and even intelligent anti-communists took this seriously. But after  an initial spurt in the 1950s when national income growth reached a  respectable  5.7  per  cent  per  annum,  Soviet  economic  performance  stalled. By the beginning of the 1970s, it had fallen to 3.7 per cent and  by  1980–85  to  2  per  cent. “Having  displayed  considerable  vitality  in  many  spheres,  from  the  early  1970s  the  Soviet  Union  entered  into  a  downswing, before swinging definitively into stagnation.”29 Although  by  the  1970s  the  standard  of  living  of  Soviet  citizens  was higher than it ever had been, and it was rising in Eastern Europe,  most  Poles,  Czechs,  and  Hungarians  simply  resented  the  imposition  of Soviet rule, with rebellions being crushed by Soviet tanks in 1956  and 1968.  The allies of the Soviet Union also were expected to move briskly into  the  future,  and  share  the  fruits  of  communist  production,  within  the  framework of the Council for Mutual Economic Assistance (COMECON),  the  communist  equivalent  of  the  European  Union,  founded  in  1954.  Perhaps surprisingly, by the early 1990s, the economic pecking order of  the  newly  independent  states  of  Eastern  Europe  was  much  as  it  had  been before World War II. East Germany and Czechoslovakia were the  most  advanced,  Poland  was  in  the  middle,  and  the  Balkan  states,  Bulgaria and Rumania, were the most backward.  Still, communism may seem to have been more of a failure in retrospect  than  it  ever  was  in  reality.  In  his  book,  Russia:  The Once and

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Future Empire from Pre-History to Putin,  Philip  Longworth  summarizes the Soviet trajectory.  Despite rumblings of discontent in one or two COMECON countries,  the Soviet Empire in 1980s seemed stable and reasonably successful.  The Soviet Union itself had not caught up with the United States  in terms of economic output … but it was incontestably a world  power, it peoples more prosperous and freer than in the 1950s. True,  the Communist movement was no longer a dynamic force in the  world, but Moscow was still a beacon of hope for poorer countries,  and also for some less poor that wished to distance themselves from  American culture and the embraces of capitalism. Even though   the system had not yet quite succeeded in replacing nationalism   with a supranational Marxist faith, no informed observer seriously  expected the vast and powerful Soviet fortress … to suffer any  marked decline in the foreseeable future. Yet within a dozen years …  it simply evaporated.30 With  the  dissolution  of  the  Soviet  Union  and  its  empire,  that  is,  the collapse of the Second World, there emerged a universe of newly  independent states in Eastern Europe, most of whom now queued to  join  the  European  Union.  Capitalism  was  back. The Americans  now  saw themselves, quite reasonably, as masters of the universe: Madeleine  Albright, the US secretary of state, put this emphatically in 1998 when  defending the bombing of Iraq: “If we have to use force, it is because  we are America. We are the indispensable nation. We stand tall. We see  further  into  the  future.”31  Others,  like  Kagan  and  Kristol  whom  we  have seen above, took up chorus and continued to celebrate America’s  heroic singularity into the opening years of the twenty-first century.32 Few thought seriously about China, a communist state that had taken  a different road since it had shifted, at least ostensibly, from a centrally  planned  state  to  a  market  economy  in  1978. The  government  of  the  People’s Republic (PRc) had remained a close ally of the Soviet Union  throughout the 1950s; as a result of this massive bloc, the fevers of the  Cold War reached their most delirious levels.  Throughout Southeast Asia and across the Middle East, in the 1950s  there  were  numerous  non-communist  regimes  and  political  leaders  that tolerated local communists (up to a point) or were downright proMoscow – Sukarno in Indonesia, Nasser in Egypt, Mossadeq in Iran,  Sihanouk  in  Cambodia,  Iraq  after  the  1959  revolution,  and  Algeria 

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after  1962. And  then,  of  course,  from  1959  there  was  Cuba,  a “satellite”  in  the  eyes  of  Western  leaders,  a  valuable  ally  in  the  eyes  of  Moscow. Later there would be friendships between Moscow and  various  African regimes: in Ethiopia, Mozambique,  and Angola,  and between  these  regimes  and  Cuba.  There  would  also  be  treaties  of  friendship  between independent Asian and African states and China.  Taking stock of the whole epoch, 1945 to 2007, what is remarkable  is not only the rise and disappearance of the Third World and the demise  of the Second, Communist, World, but also, in the declining years of this  period and in the period that immediately followed, the apparent subsidence of the US-dominated First, so-called Atlantic World.33 We have  not seen the likes of this magnitude of change on a global scale for two  centuries, since the period of the revolutions, economic and political, in  Britain, France, and the Caribbean and the Seven Years’ War. the third world

Of  the  outcomes  that  concern  us  here,  those  of  the  west  European,  American, and communist worlds are of less interest than that of the  “Third World.” This  world,  a  fitfully  imagined  community  of  mainly  postcolonial states, supposedly emerged between the capitalist West and  the communist East from the end of World War II. It survived, notionally at least, from the early 1950s, when it was given its name without  ceremony, to c. 1991, the year of the death of the Second World and the  end of the division of the geopolitical globe into three spheres. The year  1991, and the decade that followed it, marked not only the death of the  1950s version of the three worlds, but also the triumph of a US-guided,  universalist capitalism that, in the words of one writer, and to the choking indignation of doubters, marked the end of history.  Thus it came to pass in the postwar period, as America triumphed,  colonialism  died  and  communism  spread,  the Third World  was  given  life.34 The period from the 1950s to the mid-1970s were, in Asia and  Africa, a Third World golden age. By 1956 many of the former colonial  states on these two dominated continents were already independent; the  former  League  of  Nations  Mandates  in  the  Middle  East  (Iraq,  Syria,  Jordan, and Lebanon, but not Palestine) had been let go, at least formally, either before or during World War II; India and Burma had been  freed; Pakistan was invented in 1947; and Ceylon was given independence in 1948. And more of the same appeared to be coming in the future  – the French had been defeated at Dien Bien Phu in 1954, the year that 

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the  war  in  Algeria  had  begun.  A  year  later  the  Gold  Coast  (Ghana)  became independent, and, four years later, the most populous state in  Africa, Nigeria, followed it. By the end of the 1960s, most of Africa had  gained political independence. In a parallel demonstration of the possibilities  of  liberation,  in  the  Caribbean,  long  considered  an “American  lake,” Fidel Castro and his armed companions had set sail from Mexico  to liberate their homeland. On the first week of 1959 they walked into  Havana. Then came the defeat of America in Vietnam in the mid-1970s  and  a  period  of  Soviet  diplomatic  achievement  especially  in  Ethiopia  and Yemen. It should be made clear, however, that the former imperial countries  only reluctantly and begrudgingly became resigned to their fates. On the  eve of the Suez crisis, when the British were still optimistic about the  future, the British politician and later prime minister, Harold Macmillan  (r. 1957–63), confided to his diary: “If we lose Singapore, it’s a terrible  blow to all our Far Eastern interests.”35 Macmillan had made his views  clear that what lay ahead for Britain was a choice between “the slide  into  a  shoddy  and  slushy  Socialism  (as  a  second-rate  power),  or  the  march to the third British Empire.”36 As the vision of the third empire  slipped  away,  the  spectre  of  the  shoddy  and  slushy  British  version  of  socialism got closer. Meanwhile in Latin America the dream of democracy and economic  development fell under a shadow. From 1954 when the United States  effectively ousted the democratically elected government of Guatemala,  US  interventions  in  Latin  America  continued  to  rise,  cresting  in  the  epoch of the dictatorships of Argentina, Brazil, and Chile between 1964,  the year of the coup in Brazil, and 1983, the year of free elections in  Argentina. We should also recall that the wars that Washington launched  against the peasants and other reformists of Latin America were as brutal as any colonial wars of the twentieth century.37 Of course, in Asia and Africa there were also counter tendencies to  the  general  movement  for  emancipation:  in  South  Africa  the  racist  apartheid  regime  strengthened  itself  both  economically  and  militarily  against  its  rivals,  especially  from  1948,  while  the  equally  exclusivist  Israeli settler state was tightening its grip on the lands and the bodies of  the Palestinians. The white settlers in Southern Rhodesia also had their  decade of delirious expectation, although, in record time, the applause  faded and this was over.38 Both the apartheid regime and that of Israel  were backed by Washington and its allies; for the UN, despite innumerable meetings, commissions, and even occasional peeps of protest, the  message was “hands off.”

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One of the most ambiguous examples of the forward march of Third  World independence being halted was the Chinese invasion and annexation of Tibet in October 1950. China had long claimed suzerainty over  Tibet,39 it is true, but then France had claimed suzerainty over Algeria  for more than a century, and Portugal over Angola and Mozambique  for  even  longer. The  Chinese  invasion  received  not  a  word  of  protest  from  Nehru’s  India,  which  was  recently  independent  and  at  the  forefront of the struggle for an independent Third World. Nehru was to pay  dearly for this complacency when China invaded India in October 1962.  While the People’s Liberation Army of China withdrew from Indian territory, the Chinese occupation of Tibet has only become more entrenched  with  time.  China  is  thus  the  sole  example  of  a  Eurasian  empire  that  actually expanded in terrestrial terms in the postwar period. As late as  2006, with the completion of a railway line linking Beijing and Lhasa,  this expansion became more secure. China’s hammerlock on Xinjiang  proceeded on a parallel track. As Asia rose – first Japan, then South Korea and the other Asian Tigers,  and finally China – American political dominance in the region wavered,  but  not  without  a  ferocious  rearguard  action  in  the  Middle  East  and  Central Asia. It may be possible to pinpoint the beginning of the arc of  America’s postwar strategic decline to 1968, the year the great protests  in the West (and especially in France) and of Tet;40 for this was the year  of the first major US trade deficit and of the devaluation of the dollar.  By then the US was suffering severe competition not so much from the  devils it knew – the communists – but from the devils that had blindsided them, these being in the form of capitalist rivals in Europe and  Japan and even from the parts of eastern Asia in which America itself  had  facilitated  industrialization  for  strategic  purposes.  In  any  case,  while there have been many turning points in the history of the postwar  world, 1968 is doubtless one of them. With the Bandung Conference of Third World leaders in 1955,41 the  first Nonaligned Foreign Ministers’ Conference of 1972, and the simultaneous rise of leaders like Nasser, Sukarno, and Nkrumah, alongside  Nehru and Zhou Enlai, the idea of neutral, tricontinental (Asia-AfricaLatin  America)  solidarity,  if  not  any  coherent  and  effective  program,  began to take uncertain shape. There was every reason to think that this  Third World, might liberate itself and become an independent and decisive player in world politics. The defeat of the United States in Vietnam  seemed to confirm this. “Liberation” was thus the leitmotif of the period  of  1950  to  1975.  Of  course,  the  separation  of Third World  countries 

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from the sphere of Western influence, and, even worse, their neutralism,  was  deplored. As  the American  Secretary  of  State  John  Foster  Dulles  claimed,  “the  concept  of  neutrality  is  obsolete,  immoral,  and  shortsighted.”42  The  thought  of  Nehru,  intellectual,  independent,  vaguely  hostile to the United States, made him seethe. development , or not

As I shall argue again in Chapter 8, it was during this period of liberation that the ideology of “development” was re-invented. Development  was a Western idea of nineteenth-century origin. Reformist, its object  was guided amelioration; it should always be paired, therefore, with the  words “stable”  and “controlled.”  Development  enthusiasts  sought  to  ensure that Third World countries should benefit from economic and  social  improvement  prudently,  under the guidance of the West, and  quarantined from the Communist bloc. This idea of development was  not without its own family relationships; it was the cousin of “modernization” and niece of “Westernization.” All these ideologies descended,  ultimately, from the same ideological touchstone, the confident notion  of a binary separation of the civilizations of West and East. Development  was therefore, put in the crudest of terms, a charitable means of control  of the Third World, like poor relief in Victorian England was meant to  control the dangerous poor. In its postwar form, while it claimed that it  was mutually beneficial to Africa and the colonial states of Europe, the  main objective of development was the resurrection of the economies of  Britain and France. American development objectives were only slightly  different: “Washington’s  main  concerns  were  the  Cold  War  with  the  Soviet  Union  and  the  economic  organization  of  the  core  areas  of  the  capitalist world in ways that would firmly tie the underdeveloped world to their needs” (italics mine).43 Advocates of development, especially in  its Cold War heyday (c. 1950–90) normally sought to tie the underdeveloped world to the needs of the core areas of the capitalist West. Of  course after 1990, by which time the Cold War had ended, East Asia  had long since become “developed,” the Third World had disappeared,  and “development” came to refer to Western policies, both predatory  and philanthropic, towards Africa. Liberation  was  thus  the  antithesis  of  development.  Liberation  was  normally  national  liberation;  national  emancipation  was  at  its  heart.  The Americans who had forgotten their own  revolutionary traditions  distrusted national liberation; for it smacked of radical nationalism and 

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a  loss  of  control. They  tended  to  inflate  its  objects,  referring  to  it  as  “extreme nationalism” or “ultranationalism” and to demonize its leaders as “communists” or, later, “radical populists.”44 Radical nationalism,  and especially radical economic nationalism, was the antithesis of the  objects of international economic order founded at Bretton Woods and  solidified in the decades that followed. The US National Security Council  (NSC), founded in 1947, the same year as the Central Intelligence Agency  (CIA), was at the heart of American policy making, and was the main  source  of  what  has  been  called “visionary  globalism.”  Its  ideologues  argued that “nationally organized economies were ultimately inconsistent with long-term American interests and were thus to be opposed.”45  It was clear to all those who looked that there could be only one centre  of  capitalism.  Liberation  struggles  were  ubiquitous  in  the  postwar  world, and their roots may be found in the nineteenth century. The guerrilla was their icon; guerrillas fought not only to liberate their homelands  but  to  destroy  the  oligarchies  that  ruled  them  once  they  were  liberated. In the postwar period, Ernesto “Che” Guevara was the most  famous guerrilla poster person but there were many others – Algerians,  Angolans, Annamese, Argentines, Afghanis. The normal, but not inevitable, fate of guerrillas was to be gunned down either by agents of colonialism – such was the case of Amílcar Cabral (1924–1973) who led the  struggle for the independence of the Portuguese colony of Guiné – by  Americans or by governments and institutions that they supported. In  Latin America, Che Guevara was such a victim, and the Condor Plan  was such an institution.46 Guerrillas, whose ideologies were normally secular, sought to liberate in order to create new or even renewed nations, each expressing its  own form of national political modernism. They had no unifying ideology – some were communists, some primitive rebels, others nationalists,  or,  much  later,  mujahidun.  The  mujahidun  were  not  the  only  religious nationalists; many Latin American Catholics were too.47 The  latter  had  made  the  connection  between  religion  and  liberation  and  called  their  philosophy “liberation  theology.” This,  too,  was  anathematized by the Vatican as well as the State Department, and many of  its adherents were murdered.  By their enemies, guerrillas were called “bandits,” “terrorists,” “insurrectionaries,” “insurgents,” or worse.48 The era of the guerrilla, the age  of liberation, overlaps both the beginning and the end of the era of the  Third  World:  guerrillas  were  born  in  the  nineteenth  century  and  are  alive and well in the twenty-first.49 In the decades after World War II, 

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guerrilla bands were active in places as far apart as Greece, Aden, Kenya,  Malaysia, Cuba, Bolivia, Nicaragua, Argentina, Angola, Mozambique,  Nepal, and even India. It could be argued that the fear of the guerrilla,  as much as any philanthropy on the part of governments, was the main  stimulus for the dogmas of development that unfolded in the West. 

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2 The Sony Also Rises: Japan’s Undulations On top of … [Japan’s] … concern with brute industrial strength – natural in a  country whose entire modern history essentially constitutes a desperate quest  to avoid domination by capricious foreigners whose motives could never be  trusted – has been the unique legacy of a political and social order that has not  been overturned in its most fundamental aspects for 800 years … Thus we see  the obsession on the part of Japan’s governing class with the maintenance of  social peace, and a nearly pathological aversion to anything that potentially  threatens disorder or a loss of social control. Indeed, Japan’s 125-year-long  drive for technological self-sufficiency and overwhelming industrial might  is really part and parcel of the overall efforts to neutralize any threat to the  existing order.  R. Taggart Murphy, “Japan’s Economic Crisis,” New Left Review

introduction

The origins of the Japanese empire are in the late nineteenth century,  and its downfall came only decades before that of the European empires  in Asia. In common with the European empires, imperial Japan sought  security, stability, and a degree of grandeur. In order to assure these it  needed industrial raw materials, cheap food imports, and markets. The  raw  materials  were  essential  to  sustain  its  heavy  industries,  which  in  turn  supported  its  armies  and  navies,  in  competition  with  older  and  more mature economies – especially Britain and the United States; the  cheap food imports, like sugar and rice, sustained its increasingly urbanized and proletarianized population. Unlike Germany, Italy, and Belgium, all of which had become unified  states only as a consequence of economic change in the nineteenth century,  Japan,  as Taggart  Murphy  has  pointed  out,  had  always  been,  in  effect, united and coherent. The origins of its court, in 660 CE, anticipate that of all European states. Certainly from the sixteenth century, a 

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centralized,  culturally  mature,  if  remarkably  feudal,  Japan  already  existed.  Until  the  middle  of  the  nineteenth  century  this  feudal  state  remained largely isolated from the increasingly globalized world; only  the  most  carefully  invigilated  trickle  of  foreign  goods  and  ideas  were  allowed to seep into the country, and those through a single port. As for  foreigners, while they were ubiquitous from Peru to India, in Japan they  were  obsessively  restricted,  and  even  shipwrecked  sailors  were  shown  little mercy. Japanese scholars interested in Western ideas thus lived dangerously. Then, suddenly, after the visit of a small flotilla of American  gunboats  in  1852,  Japan’s  ruling  group  realized  that,  unless  it  transformed itself, their country would fall prey to Western expansionism in  the same way that neighbouring China had. Radical institutional change,  as it has since been called, followed as the Japanese ruling class speedily  reformed itself by means of a velvety and thus bloodless revolution.  From  1867  began  a  new  era.  The  emperor,  who  for  centuries  had  been eclipsed by an official known as the shogun, was led back onto the  stage,  his  divinity  was  exalted  and  the  shogun  rusticated.  Japan  now  made the transition from feudalism to industrial capitalism at greater  speed and with more enduring effect than has any country anywhere in  modern  history.  Yet,  while  other  countries  steered  themselves  in  the  twin wakes of the American and French Revolutions towards republicanism  and  constitutionalism,  the  Japanese  political  system  was  kept  deliberately in the premodern mould. The oligarchy that surrounded the  emperor, many of them knights (samurai) of the ancien régime who had  become  Japan’s  new  ruling  class,  would  remain  pathologically  suspicious of any form of democracy until after the Second World War. And  even then they would prefer single-party rule to the dangerous disequilibrium that a multi-party system might provoke.  Within only two decades after the reform of 1867, Japan had burst  out  of  its  pre-capitalist  economy  and  was  industrializing;  out  went  handicrafts, in came textile factories – to the dismay of the British, the  dominant  imperialists  in  Asia  whose  share  of  global  cotton  exports  plummeted. Here was the first intimation of the mortality of Western  economic superiority, demonstrated by an Asian economy that would  drive the leading European industrial economy to the edge. Paralleling its phenomenal industrial growth, by the 1930s Japan had  become  one  of  the  world’s  leading  military  powers  with  a  navy  that  could be compared to that of the British, the world’s leading sea-power.  The significance of this should not be overlooked: from the early nineteenth century, the Europeans and Americans had ruled the waves and 

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many of the shores against which they lapped. The Mediterranean, the  Caribbean, the Atlantic, and the Pacific were Western lakes. Now Asian  warships backed by Asian industry had made a dramatic entry. The history of East Asia was quite suddenly on the road to a convulsive and  dramatic  change  that,  within  a  century,  would  see  it  turn  global  economic and political relations upside down. The role of war and empire in the expansion of Japanese heavy industry is conspicuous. War with China (1894–95), with Russia (1904–05),  and the invasions of Korea in 1910 and Manchuria in 1932, all stimulated  war-related  industry.  Even  World  War  I,  in  which  the  Japanese  took  no  direct  part,  had  a  positive  effect  on  industrial  growth.  Later,  wars in China from 1932 to 1945, as well as the Korean War from 1950  to 1953, and the American-Vietnamese War from 1965 to 1975, all contributed their tonic effects on the Japanese economy. By  the  1920s,  the  first  stage  of  Japanese  industrialization  had  been  completed. National income had grown from 2,300 million yen in 1890  to  12,700  in  1930.  In  ways  broadly  comparable  to  the  countries  of  Western Europe, primary industries had decreased in importance, secondary  (manufacturing)  industry  had  trebled,  and  tertiary  industry  (including  commerce)  had  almost  doubled.  Japan  had  gone,  roughly  between 1870 and 1930, from being a land dominated by agriculture  with  small  export  and  import  sectors  to  a  land  characterized  by  the  formidable development of heavy and medium industry, and one fully  engaged in world trade. In roughly the same period, the population had  increased by nearly 50 per cent. While class distinctions that had separated  nobles,  knights,  and  peasants  were  eroded,  the  state  remained  strong with political power remaining concentrated in the hands of an  oligarchy drawn from the upper reaches of society.  violent transformations , 1894–1945

The Japanese Empire lasted from 1894 to 1945; its lifespan was thus  significantly shorter than that of the greatest of the European empires  – the Russian, the British, the Dutch, the French, and the Portuguese –  but respectable compared to such twentieth-century nouveaux empires  as those of the Belgians, Italians, and the Germans.  The  birthdate  of  Japan’s  overseas  expansion  was  1894,  when  the   Japanese took Taiwan from China as well as gained control of the Pescadores and the Liaodong peninsula in southern Manchuria. After seizing control of Korea in 1910, Japan expanded further into Manchuria. 

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Korea had been a Chinese tributary and Manchuria a Chinese province,  but the Chinese, disorganized and economically backward, were inefficient guardians of their customary domains.  But the most sensational achievement of the Japanese was at the cost  to Russia’s Asian ambitions. In February 1904 the rivalry between Japan  and Russia over spheres of influence in North-East Asia boiled over. In  a naval engagement the Russians were decisively defeated by the superior Japanese navy and conceded both Lushun at the end of the Liaodong  peninsula  and  half  of  the  Sakhalin  peninsula.  Sometimes  seen  as  the  beginning of the twentieth-century Asian political revival, this victory  led  to  Japanese  rule  over  a  crescent  at  the  centre  of  which  stood  the  Japanese home islands with the tips pointing to Siberia and Manchuria.  As W.G. Beasley explains in Japanese Imperialism,  By victories over China in 1894–95 and Russia in 1904–05 Japan  became a world power, entering into rivalries which required a  much larger military establishment than in the past. Increased  spending on armaments and war-related industry had repercussions  throughout the economy. Participation – at arm’s length – in the  world war of 1914–18 had two further effects; it provided an export  demand for the products of Japanese heavy industry … and it  reduced for a time the availability of foreign machinery of almost  every kind, so increased the opportunities enjoyed by Japanese   manufactures at home. Thus war made for faster growth in heavy  industry that might otherwise had taken place. It also furnished government with additional reasons to intervene in that sector of the  economy [and justified government overseas investment in] concerns  like the South Manchuria Railway Company … In addition, there  were subsidies for shipbuilding and shipping, as well as indirect help  in the form of official contracts.1 Manchuria now became the focus of Japanese investment and development. The formula of Japanese capital + forced Chinese labour = handsome profits assured both the Japanese capitalists and the Japanese state  that colonialism was the direction of the future – and led directly to the  markets and manpower of China. Full-scale  war  began  in  the  summer  of  1937. The  Japanese  armies  moved  south  from  Manchuria,  taking  Shanghai  in  the  summer  and  Nanjing, the Chinese capital, in December.2 The rape of Nanjing was 

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one  of  the  most  fearsome  of  the  atrocities  committed  by  colonial  or  fascist regimes anywhere in the twentieth century. In 1942 and 1943 the  Japanese armies in China, pursuing a policy of “kill all, loot all, burn  all,”  killed  over  two  million  civilians.  The  Chinese  government  fled  southwards, ultimately to Chongqing. Easy victories on the mainland and the lurking fear that rival powers  might choke off Japan’s access to vital strategic resources overseas led  Tokyo to form an alliance with the Germans and Italians. The Germans,  especially, were motivated by the same fear as the Japanese – that of  enclosure and of the growth of their rivals, especially America but also  the British and Soviet Empires. After all, 80 per cent of Japanese oil  came from the United States, the world’s largest producer. The Japanese  found  no  difficulties  in  recognizing  the  fascist  new  order  in  Europe,  and the Germans and Italians in return accepted Japan’s domination of  East  and  even  Southeast Asia.  Only  a  little  later,  in  1942,  after  war  with the Americans and their allies had broken out, did the Japanese  formally announce the creation of the Greater East Asian Co-Prosperity  Sphere, an empire in all but name exhibiting the same spurious claims  of  all  empires,  namely,  that  the  subjects  would  prosper  alongside  the conquerors. Relations between Japan and the United States had worsened through  1940 as Washington demanded that Japan withdraw from China and  threatened to embargo oil shipments. In Japan, a war party of military  adventurers  and  imperial  advocates,  supported  by  the  emperor,  had  come to power after having destroyed their rivals by terror and assassination. Victories in Korea and China, and against the Russians, in the  past half century had convinced them that the Americans, too, could be  confronted. In a gamble as desperate as the German invasion of France  in 1939, on 7 December 1941, the Japanese carried out a surprise aerial  attack on the American naval base at Pearl Harbour in Hawaii, crippling much of the US Pacific fleet. “I never thought those little yellow  sons-of-bitches could pull off such an attack, so far from Japan,” complained  Admiral  Kimmel,  the  commander  of  the  Pacific  fleet.3  The  Americans responded with outrage at what one military historian later  referred to as Tokyo’s “strategic imbecility.” Like the Japanese, they, too,  had  been  history’s  victors:  the  extension  of  US  control  over  Latin  America had been implacable, and they had been on the winning side in  the Spanish-American War, which gave them colonies in the Pacific as  well  as  the  Caribbean.  No  one  had  attacked  them  since  the  British 

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burned  down  Washington  in  1814.  Now,  for  a  fleeting  moment,  it  looked like their authority in the East would be reversed and the Pacific  would become a Japanese lake. That  moment  lasted  until  early  June  1942  when,  in  a  great  naval  battle near the island of Midway, the Americans smashed the Japanese  navy.  Between  Pearl  Harbour  and  Midway,  in  the  flash  of  time  from  December 1941 and June 1942, the Japanese had conquered and gained  control  of  most  of  Southeast Asia  –  French  Indochina  had  effectively  been handed over by the Vichy regime; the great British base at Singapore  had fallen, while Malaya, Burma, the Philippines, and the Dutch East  Indies had all surrendered. Even India had been invaded. After the battle at Midway, with what in hindsight might seem like  inevitability given the immense economic power of the United States,  the tide of empire ebbed. As the Americans advanced across Southeast  Asia,  the  Japanese,  their  navy  shattered  and  their  army  slaughtered,  withdrew; the empire that had expanded so wonderfully now collapsed  painfully.  The  end  came  in  August  1945  after  the  Americans,  who  had  firebombed  sixty-four  Japanese  cities,  dropped  atomic  bombs  on  Nagasaki and Hiroshima. Let me quote the elegy of Mikiso Hane for  what proved to be one of the most audacious if brutal of the world’s  twentieth-century empires. The aftermath of war and defeat found Japan in an appalling condition … Most of its major cities lay in ruin … Nationwide about  eight million people had become homeless … At the end of the war  industrial production stood at barely 10 per cent of the normal prewar level … For the entire year of 1946, it remained at 30.7 percent  of the 1934–1936 level.  Territorially Japan was now back to where it was when  Commodore Perry arrived in 1853. It was compelled to relinquish  Taiwan, the Pescadores, Korea, and Southern Sakhalin. The Kuriles  were now occupied by the Soviet Union and Okinawa was placed  under US administration.4 The Japanese used the term yaki-nohara, “burnt plain,” to describe their  cities in 1945. “They were vast expanses of charred ruins. In many areas,  as far as the eye could see, what were once thriving commercial districts,  quiet residential neighbourhoods, and bustling factory zones were burnt  rubble. An estimated 2.7 million Japanese soldiers, sailors, airmen, and  civilians had been killed between the attack on Pearl Harbour … and the 

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cessation of hostilities.”5 Six and a half million were still stranded in  Asia  and  the  Pacific,  many  of  whom  never  made  it  back  to  Japan.  Japan itself had lost all claims to being a great power; it had regressed  from the  status of itto¯ koku, a country in the first rank, to that of yonto¯ koku, a fourth rate country. It had lost 3 to 4 per cent of its 1940 population of about seventy-four million. An estimated 179,000 Japanese  civilians and 66,000 military personnel perished in Manchuria in the  winter that followed the Japanese surrender. Of the 400,000 estimated  to have fallen into the hands of the Soviet armies, less than a quarter  were accounted for. resurrection , 1945–1970

With a speed that amazed all observers, Japan rose again within a couple of decades to the front of the first rank of world economic powers.  By the 1970s, resurgence had been completed; by the beginning of the  twenty-first  century,  Japan  was  the  world’s  second-largest  economy  with a G D P  greater than those of Britain and France combined. By  1950,  then,  the  Japanese  economy  was  out  of  the  woods. The  new, civilian, leaders of Japan had focussed on continuing the industrial  revolution  that  had  been  diverted  to  serve  military  purposes.  Japanese success was no longer measurable on maps that charted its  domination  of  its  neighbours  but,  instead,  by  statistics  that  demonstrated  its  hurtling  industrial  and  especially  export  achievements.  These  were  matched  at  home  by  its  extraordinarily  high  per  capita  GDP and virtually universal literacy.6 Although the darker tendencies in Japanese politics had been utterly  discredited with the surrender of September 1945 and the occupation  of Japan by US forces, except in the very short run big business suffered  the  loss  of  neither  political  power  nor  prestige. Thus  when  we  consider Japan’s postwar resurrection and success, we should not separate business and politics; in Japan, the one – business – was the dog  that  wagged  the  other.  In  China,  as  we  shall  see  below,  an  opposite  model prevailed: the Chinese Communist Party was the dog that willed  the wagging, even after the transition to capitalism was made at the  end of the twentieth century. In any case, it would be possible to argue  that the main business of the Japanese state was business. In this interpretation  Japan  thus  becomes  an  artless  and  affectless  state  of  business, unrivalled in either its efficiency or its cultural insecurity by any  advanced economy in the world.

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The  benignly  contemptuous  American  forces  that  occupied  Japan  in late 1945 were remarkable in several respects. Unlike the Allies who  occupied defeated Germany, the Americans knew virtually nothing of  Japan; it goes without saying that few could speak Japanese. Brimming  with  the  victors’  bluff  self-confidence,  they  nonetheless  set  out  in  the  most  high-minded  way  to  teach  the  former  enemy  the  rudiments  of  decent, democratic political life, American-style. This was indeed their  civilizing  mission, now  christened  “Americanization.” Yet,  although  they  conceived  of  themselves  as  superior  as  a  civilization  (and  also  racially superior), the Americans did not see the Japanese as being subjects in the colonial sense. They were a defeated enemy that was capable,  it  was  earnestly  believed,  of  rehabilitation. “Outlaw  Japan  was  to  be  rendered a peaceful, democratic, law-abiding nation by eradicating the  very roots of militarism.” By establishing rule according to the “will of  the people,” the Americans would extirpate the evil of the “will to war.”7  The  head  of  the  occupying  forces  in  Japan,  known  as  the  Supreme  Commander of Allied Powers (SCAP), was the American general, Douglas  MacArthur, a dogmatic and imperious character who resembled one of  the numerous British proconsuls and viceroys of the late nineteenth and  early twentieth centuries in his messianic self-esteem. He compared the  Japanese  to American  twelve-year-olds.  MacArthur  stripped  Japan  of  its military apparatus and purged the country of its militarists, hanging  a  few  in  the  full  glare  of  publicity  for  effect. The  greatest  of  the  war  criminals, Emperor Hirohito (1901–1989), he preserved, on the argument that without him the Japanese, who had come to regard him as  divine, would be difficult to manage. This was at best a doubtful proposition; the Germans had, after all, adapted to living without their Führer almost overnight.  Like Germany at the end of the Second World War, Japan had been  forced to abandon its militarism and its chauvinism. General MacArthur,  almost immediately upon his arrival promulgated “five great reforms”  involving  (1)  “emancipation  of  the  women  of  Japan  through  their  enfranchisement”; (2) “encouragement of the unionization of Labour”;  (3) liberalization of the education system; (4) creation of a “system of  justice designed to afford the people protection against despotic, arbitrary and unjust methods”; and (5) “democratization of Japanese economic institutions to ensure wide distribution of income and ownership.”  In  the  first  postwar  election  in  April  1946,  thirty-nine  women  were  elected to the lower house of the Diet, the Japanese parliament.8 Japan’s  relationship with the United States was clearly established and would 

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not change over the next half century; the principle of incorporation  and subordination established during the occupation meant that Japan  would always remain not merely an economic ally of the United States  but a unique kind of valet state, ostensibly independent but unwaveringly  faithful.  Even  as  the  credibility  of  US  global  hegemony  was  shrinking, Japan, dominated by the Liberal Democratic Party, remained  in an obedient trance. As for the zaibatsu, the monopolistic firms that had profited from and  backed  imperial  expansion,  these  were  abolished.  However,  they  soon  re-formed,  attired  in  the  sheep’s  clothing  of  the  banks  that  they  controlled.  The  conglomerates  of  cooperating  firms  and  banks  were  now  known as the keiretsu. More successful as a reform was the forced sale to  their tenants of the lands belonging to semi-feudal landholders. This was  to have a long-term effect of Japanese politics; for the newly endowed  landowners were to become a well-organized political constituency. As elsewhere, not only in Asia but in Europe, in the postwar years,   a militant labour movement, whose organizations had been proscribed  by the former militarist regime, sprang back to life. Allied with it was  a  coalition  of  communists  and  socialists.  In  May  1947  this  coalition  organ ized a general strike to demonstrate its power. As many as five million  people  pledged  to  support  it.  But  the  strike  never  took  place  as  General  MacArthur  forbade  it.  So,  also  as  elsewhere  in  the  postwar  world, from Latin America to Europe and Asia American, power showed  itself  willing  to  accommodate  political  monsters,  like  Hirohito,  and  compromise with business, even when it was tainted with fascism and  stained with the blood of millions. But it was not willing to take any  chances with labour or leftism, no matter how popular, or even heroic,  its past record had been. Japan’s postwar recovery might have been more uncertain and turbulent had it not been for the Korean War that began in June 1950. The  war, which I shall discuss further in Chapter 4, was a challenge to the  new American role in East Asia and an opportunity for Japan. It was  also a disaster for Korea and a threat to China.  When the Korean War broke out in 1950, the forward base for the  American  campaign  was  Japan.  Not  only  were  American  forces  brigaded here but they also were supplied by Japanese industry. Military  industry went from low to high gear in a matter of months. Suddenly,  Sony, which supplied electronic goods, and other manufacturers recovered the overseas business that they had lost with defeat. The goods the  Americans  bought  they  paid  for  with  vital  foreign  currency.  Japan’s 

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foreign exchange situation now brightened while increased demand for  manufactured goods translated to improved employment prospects for  Japan’s restive working class. To the Japanese prime minister, Shigeru  Yoshida (r. 1946–54) the war was “a gift from the gods.” In 1952 the occupation of Japan was brought to an end by the San  Francisco  Peace  Treaty.  The  Japanese  state,  its  hands  now  unbound,  stepped in to reoccupy the Promethian role it had enjoyed since the late  nineteenth century, minus empire and armed forces. Using the Japanese  Development  Bank,  it  directed  funds  to  the  sectors  it  wanted  to  promote, particularly in the area of heavy industries such as electric power,  coal, shipping, and steel. Other industries were encouraged by means of  tax exemptions. Since foreign exchange was in short supply, the government apportioned it, providing it to firms that sought to purchase foreign technology, especially from the United States, the most advanced of  the capitalist economies, but withholding it from those whose purposes  were judged to be less vital. The government encouraged the application  of imported technologies to infant industries such as electronics. On the  other hand, foreign imports were discouraged; Japanese consumers had  a  choice  between  Japanese  goods  or  nothing.  Some  of  the  results  of  state-directed  planning  were  evident  immediately.  Massive  investment  in the latest technologies for steel production contributed to the rebirth  of Japan’s shipbuilding industry that, as early as the 1950s, came to be  the world’s leader.  Then, in the mid-1950s, came a radical shift in developmental policies. Up to this point Japan’s planners had been satisfied with providing  goods  for  the  domestic  market,  including  the  markets  for  Japanese  goods  created  by  the  American  war  in  Korea.  Now  a  new  strategy  emerged, subsequently called Export-Led Industrialization. As the name  implies,  Japan’s  economy  now  became  focussed  on  overseas  markets  and especially the most luscious market of all, that of the United States.  The consequences of this new program were monumental, as we shall  see below and in the following chapters when we discuss the industrialization of East Asia. They were also to be especially remarkable for the  effect they were to ultimately have on the US economy, and especially  the balance of payments. Although changing its strategic focus from internal to external, the  Japanese industrial model not only retained its prewar monopolies but  also a form of its prewar style of labour relations. In 1953, as the wartime  boom  continued,  the  workers  at  Nissan,  the  car  manufacturer,  went on strike. Among other demands, including better wages and more 

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control on the factory floor, the leaders of the Nissan strike wanted to  organize an industry-wide union, an equivalent, say, of the Canadian  Auto Workers Union. The strike was strenuously opposed by the Nissan  management, who, supported by the managements of other automakers, held out against the strikers, virtually starving them back to work.  With  the  ending  of  the  strike  came  the  end  of  the  possibility  of  an  industry-wide union. In its place would be company unions. The workers  in  these  unions  would  find  that  company  loyalty,  not  union  solidarity, was the best guarantee of security. They now became soldiers  conscripted in company armies for life. In exchange for the acceptance  of no strikes or stoppages, or of any form of workers’ control, and of  wage clawbacks, there would be no layoffs. Conformity was now the  mother of security. This system was applied alike to public sector and  large export-oriented firms.  The docility of the Japanese working class from this point surprised  outside viewers, especially Americans. So, too, did Japanese labour productivity that more than doubled between the 1960s and the 1980s. By  the  1960s  Japan  had  entered  the  fast  growth  lane  of  the  highway  to  industrial capitalist heaven. In that decade overall, Japanese GNP grew  at  an  annual  average  rate  of  11.6  per  cent.  How  did  this  compare  to  Europe,  also  ravaged  by  war  and  dislocation?  “In  the  course  of  the 1950s, the average annual rate at which per capita national output  grew in West Germany was 6.5 per cent; in Italy 5.3 per cent; in France  3.5 per cent. The significance of such high and sustained growth rates is  best appreciated when they are compared with the same countries’ performance in earlier decades; in the years 1913–1950 the German growth  rate per annum was just 6.4 per cent, the Italian 6.6 per cent, the French  0.7 per cent.”9 So while parts of Western Europe grew fast, Japan grew  even faster. The multilateral removal of barriers to trade was the key to  this fast growth; for it was this that exports, and especially exports to  the United States, depended on. But could Japan maintain its lead in a  world in which the numbers of exporters increased and the cost of production was lowered by poorer entrants into the race? Nor were these  the  only  problems  to  confront  the  world  economy,  although  certain   others, such as environmental costs, were virtually invisible. By  1973  it  was  clear  that  a  new  epoch  had  arrived  in  the  history  of Japan’s postwar capitalist development. In 1955 farm workers and  others in the primary sector formed 41 per cent of the labour force. In  1974 agricultural employment was down to a mere 14 per cent. Massive   emigration into the cities from the rural areas had taken place and the 

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sararii-man, the white-collared employee on a fixed salary, had been  born. “Between 1955 and 1974, the dollar value of Japanese exports  increased twenty-five times over. So did the value of its imports. Japan  found itself poised to supply exactly what the world was demanding  in greatest quantity; steel, fabricated metal products, ships, and precision equipment. Near the end of the era it added automobiles, business  equipment,  and  audio  and  video  equipment  to  this  list.  The  sale  of  these export earned the currency Japan needed to pay for its imports;  petroleum  and  other  energy  sources,  industrial  raw  materials,  and  food products.”10  Appropriately, it was the United States, the world’s leading capitalist  state  and,  as  such,  the  former  mentor  of  the  Japanese  economy,  that  changed this situation. In 1974 the Americans had imposed a 10 per cent  import surcharge and forced the Europeans and the Japanese to revalue  their currencies. As the yen grew stronger, Japanese exports grew more  expensive. Already they were reeling from the blow of President Nixon’s  abandonment  of  the  Bretton Woods  system  of  fixed  exchange  rates  in  1971. On top of the import surcharge came the first oil crisis in October  1973. Both of these problems came as consequences of US foreign policy,  and together they served as tombstones marking the demise of the epoch  of the golden age of postwar economic expansion. More than this, they  marked the beginning of the end of the Third World. changing places

Washington’s abandonment of the Bretton Woods system in 1971 was  in part a response to the growing US deficit that had been accumulated  as the war in Vietnam progressed. Between 1967 and 1971 this deficit  had  expanded  from  $2.9  billion  to  $19.8  billion.  President  Nixon  (r. 1969–74) decided that the US government could no longer afford to  exchange its currency for a fixed value of gold. This is what countries  like France demanded but it would have led to dollar devaluation. By  abandoning the Bretton Woods system, the dollar was allowed to float,  that is, rise or fall according to the demands of the market. The main  consequence of a floating exchange rate was instability; exchange rates  would now rise and fall on the basis of manipulation and speculation.  We will see how this affected Japan in a moment. The  occasion  of  the  first  oil  crisis  in  October  1973  was  the  war  between  Israel  and  its Arab  neighbours,  Egypt  and  Syria. When  the  United  States  flew  in  military  support  to  Israel,  the  members  of  the 

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Organization of Petroleum Exporting Countries (OPEC) cartel imposed a  boycott that drove up the price of oil fourfold. In Japan, panic ensued.  No industrialized state was more dependent on imported oil than Japan;  nearly 75 per cent of its energy requirements were supplied by oil, none  of which it produced itself. As oil prices went up, so did inflation, and  with  inflation  went  deflationary  government  cutbacks.  Eventually  the  system was brought under control but by now the realization had dawned  – the high-growth era was slowing down. New policies would have to be  introduced by Japan’s economic managers. These policies came from the  Ministry of Trade and Industry (MITI) that would direct Japanese production in a few focussed areas, autos and electronics especially. The second oil crisis, in 1979, devastated developing countries across  the  world  and  accelerated  their  downward  slide.  It  had  less  effect  on  Japan than the first crisis since the government was able to more quickly  control inflation. By now Japan’s rapid growth in exports, and the trade  surplus that they generated, also served to cushion the shock of spiralling oil prices. Yet the success of the export drive had generated another  set  of  problems  and  these  had  affected,  especially,  the  United  States.  Unsurprisingly,  by  the  1980s,  the  success  of  Japan’s  export  drive  had  begun  to  seriously  undermine  the  key  element  in America’s  industrial  economy – steel production. Chalmers Johnson explains: “At the outset  of the Cold War, reconstructing or creating steel industries abroad was  a keystone of US strategic policy, and encouraging steel imports became  a tool for maintaining alliances. [US] leaders by and large ignored the  resulting conflict between Cold War and domestic goals.”11 So, as a result of ignoring the domestic side of the foreign policy equation, first steel and then other sectors of US industry, such as machine  tools, slowly fell behind Japan. Worse, for the United States, this happened in an epoch when world demand for steel-based heavy industrial  goods was declining. Cars were but one ingredient in the shrinking pie;  in  the  1960s,  the  automobile  market  in  Western  Europe  and  North  America had expanded at about 12 to 13 per cent each year. The twin  spectres of overproduction and underconsumption were now ravaging  the world of car production. By the early 1980s, expansion had slowed  down to 2 to 3 per cent, and many European automakers had simply  disappeared,  as  had  the  smaller American  manufacturers.  Punctuated  by fitful remissions, the automobile situation would continue to worsen. For the North American working class this was a particular disaster  as  its  buying  power  now  decreased  when  workers  lost  high-paying  industrial  jobs  as  employers  sought  to  recover  profits  by  outsourcing 

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Global Shift

jobs to East Asia. It is not surprising, then, that as Western workers lost  jobs, and trade unions were thus weakened, inequality increased. What  is more, the United States, the postwar economic colossus, was now losing its economic dominance globally. Between 1971 and 1991 the number of Japanese multinational firms in the world’s top 500 had increased  from 53 to 119. In the same period US firms in the top 500 had dropped  from 280 to 157. At  home  in  the  United  States,  unemployment  and  lower  wages  increasingly began to affect the less well-paid parts of the population.  As  jobs  in  steel  disappeared,  the  newly  unemployed  turned  to  lower  paying  jobs  in  the  service  sector. This,  in  turn,  affected  the  domestic  market;  poorer  pay  affected  consumption. The  earlier American  formula for political stability based on prosperity – the Fordist formula of  all-round  prosperity  based  on  mass  consumption  enabled  by  cheap  resources – was now evaporating. To reiterate, the strategists who had  encouraged  the  development  of  East  Asian  industry  as  a  means  of  dampening the local interest in communism appear to have sown the  dragon’s teeth. In defeating communism, they undermined the basis of  America’s economic strength. By the late 1970s friction between Japan and the United States over  trade had already become chronic. US trade policies sought and failed,  except in the short term, to limit Japanese access to the American market.  Many  solutions  were  tried,  from “balanced  trade”  to “managed  trade” to “structural impediments,” yet few worked in the long term.  From steel to cars to computer chips, goods flowed by air-freight and  aboard container carriers across the Pacific as the American trade balance with Japan continued on a steady downward course. A new phenomenon now unfolded: as container dependency became more feverish,  whole ports were transformed to absorb Asian exports. Two  of  the  greatest American  weapons  in  the  economic  wars  that  began in the era of President Richard Nixon were the overall domination of the United States in world trade and the particular advantage  accorded to the dollar by virtue of its being the main, and for a quarter  of  a  century  after  World  War  II,  the  only  international  currency  –  known as seigniorage. Seigniorage allowed Washington to print money  at  will  and  to  force America’s  trade  rivals  to  accept  the  devaluation  of the dollar. One French finance minister referred to this as an “exorbitant  privilege,”  “exorbitant”  in  the  sense  of  excessively  costly  to  America’s trade rivals.12 

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Then there was what was known by the euphemism of an “exchange  rate shift.” In reality, this was a kind of reverse Pearl Harbour in economic warfare. Negotiated between the Group of Five industrial nations  in 1985, the devaluation resulted in the Plaza Accord, which agreed to  the devaluation of the US dollar in relation to the yen. This was a turning point, at least in the short term, for the economy of the United States  and  a  major  watershed  for  the  world  economy  as  a  whole.  Suddenly  there was a significant drop in the profits of Japanese automakers and  the  producers  of  electronic  goods.  By  some  estimates  losses  to  the  Japanese economy amounted to $400 billion in only a few years. Japan’s  share of total world exports dropped from a peak of 10.3 per cent in  1986 to 8.5 per cent in 1990.   Clearly, as a result of the Plaza Accord, the cost of production, especially  wages,  had  to  be  lowered. The  best  way  for  Japanese  industry  to do this was to follow the American example and move offshore to  lower-cost areas in East and Southeast Asia. Already by the late 1970s,  Japan  had  become  the  single  most  important  foreign  investor  in  Southeast Asia. “So much money flowed out that Japan began to look  at Southeast Asia as its own backyard, much as the US does with Latin  America.”13 Initially investment flowed to South Korea, as we shall see.  By the second half of the 1980s this flow shifted to China, now ripe for  capital from anywhere.  The  move  of  production,  trade,  and  finance  to  East  Asia  was  not  without a high cost. By the end of the century Japanese growth had been  at a virtual halt for a decade, and Japanese capitalists, like the Americans before them, had sown the seeds for the growth of rivals.14 The  idea was to focus domestic production in Japan ever more exclusively  on the highest technology lines by relying on the country’s highly skilled  but expensive labour force, while sloughing off less advanced production to East Asia. Japanese banks supplied huge loans to Japanese corporations  initiating  operations  in  East  Asia,  as  well  as  to  East  Asian  corporations, and came to constitute the largest external source of bank  loans to every country in the region except for Taiwan and the Philippines. By 1996, East Asia was absorbing more than 40 per cent of Japan’s  exports and about the same percentage of its foreign direct investment  in  manufacturing,  up  from  about  30  and  20  per  cent,  respectively,  six years earlier. Japan’s banks were responsible, moreover, for between  30 and 40 per cent of East Asia’s outstanding loans from the advanced  capitalist economies.

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From 1973 to 1986, the Japanese growth rate was only slightly higher  than that of the United States. On the basis of per capita income (but  not  per  capita  consumption),  Japan  had  by  1988  become  the  world’s  richest  country,  one  that  was  emulated  by  the  Asian  Tigers  and  the  countries that followed in their footsteps. The late 1980s were a time of  exuberant  and  aggressive  expansion  with  Japanese  firms  buying  Hollywood film studios and prime New York real estate; it was in these  years that it was claimed that the market value of the Imperial Palace  Grounds in Tokyo was greater than the real estate value of the entirety  of Canada. When the Ministry of Finance removed restrictions on housing  loan  companies,  reckless  lending  followed. And  then  as  Japanese  authorities  raised  interest rates to reign  in the stock  market and land  bubbles, a recession was triggered. Caught short, the housing loan companies now had to face the fact that they had trillions of bad debts. One  of  Japan’s  worse  postwar  economic  and  political  crises,  beginning  in  April 1991, followed. Between 1991 and 1995, inflation-adjusted GDP  growth fell to a low level of 0.6 per cent a year. Manufacturing productivity  declined  by  50  per  cent  (compared  to  1985–91).  In  1993  the  thirty-eight-year reign of the Liberal Democratic Party was brought to  an end (for a few months) by a disenchanted electorate. Two years later  came what was unofficially dubbed saiyaku no toshi, “an awful year”  – the worst in memory for most people. In 1997–98 Japan even experienced negative growth. Gavan McCormack, however, urges a cautious  approach to any assumptions of Japanese declinism.  Yet predictions of demise were greatly exaggerated … [for] Japan  was fabulously wealthy, its GNP … more than 80 per cent of that of  the United States, a nation nearly twice its size in per capita terms.  Put another way, Japan’s GNP was more than double the combined  GNP of all other Asian nations, including those of the Indian subcontinent … With fewer than 120 million people, it was on track to  become the largest economy in the world, perhaps even before the  end of 1995, thus matching, and exceeding, the highest ambitions,  and the wildest dreams, of not only the preceding fifty years but of  the century and a half since Japan began to pursue the path of  Westernization and modernization. In 1995, unemployment was   statistically insignificant. The nine biggest banks in the world …  were all Japanese, as were the major trading companies and many  of the major industrial corporations. Japanese investment funds  flowed in waves that fed the growth of the region. It became the 

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unquestioned chief “goose” behind which formed the ranks of the  world’s dynamic economies.15  A  decade  before  its  “awful  year”  Japan  had  become  the  principal  holder of American government debt and a key supporter of the dollar,  which  it  used  to  denominate  its  trade  with  other  countries,  both’   honours it has been able to maintain up to 2012. This has given the  Japanese useful leverage when faced with claims by American protectionists, for instance, in the automobile industry. In sum: you threaten  to impose import tariffs on our Toyotas, we buy fewer of your bonds  and switch our foreign exchange holdings to euros. The consequence:  not only a greater trade surplus for Japan but greater indebtedness for  the United States. After crisis in 2002 came a faltering but incomplete recovery. Beneath  the surface a litany of problems seethed. Japan had become diplomatically isolated while moving towards closer military ties with the United  States; it came to be further at odds with its East Asian neighbours in  both  South  and  North  Korea  and  China. As  a  consequence  of  Prime  Minister Junichiro Koizumi’s (r. 2001–06) insistent and tactless visits to  a  Shinto  shrine  that  memoralized  several  of  Japan’s  war  crim inals,  Japan’s ambition to become a member of the United Nations Security  Council was blocked by its neighbours, especially China. In 2006 there  were anti-Japanese riots in several Chinese cities. Crowning its other woes, Japan had now become the most indebted  of all developed states – “king of the world’s debtors,” in the words of  Prime Minister Keizo Obuchi (r. 1998–2000) – and had one of the highest levels of its citizens living below the poverty line of the whole of the  OECD. Its population was ageing and had the highest rate of suicide on  earth. Polls revealed, far from any exultation that Japan had exceeded  the “wildest dreams” of its planners, a deep social pessimism. There was  now serious doubt that the Japanese economy, as opposed to individual  firms,  would  be  able  to  recover  its  miraculous  level  of  growth.  Commentators  from  the West  now  felt  comfortable  at  gloating  that  there  was really no “Japanese model” for the capitalist future, only an “American model.” Yet, by 2007, the American model itself was being abjured.  And meanwhile the future was unfolding unpredictably; first, the United  States, which had led the world into the meltdown that began in 2007  had to deal with the $800 billion (2006) in debt owed to the Japanese,  and second, by early 2009, Japan had entered its worst economic crisis  since the war.

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3 Glorious Capitalism in Communist China Chinese Socialism can best be grasped as a modern project that has sought  to develop by its own unique means into its own unique type, always conscious of the other possibilities it has refused to emulate: that is, Soviet-style  bureaucratic socialism (and now Russian postcommunism) as well as diverse  forms of peripheral capitalism. From the beginning, the Chinese communist  revolution – the successor to and radical transformer of a republican revolution – was self-consciously an alternative to colonial modernity. The post-  revolutionary Maoist experiment, in turn, aspired to create an alternative to  the Stalinist model, which it considered both a failure and a betrayal of the  project to construct a credible socialist society. Even when the post-1978  reforms as a socialist self-adjusting movement were set back by the logic of a  market transition in the late 1980s and 1990s, the People’s Republic of China  (PRC) continued to search for a “socialist market” alternative to capitalist  integration. Insofar as this collective effort has persisted, the chance of the  Chinese model to succeed cannot be ruled out. As a country of 1.3 billion  people and as an economy reaching $1.64 trillion in gross domestic product  (GDP) in 2004 (the sixth largest economy in the world), and with an ambition of resisting subordination to global capitalism, China is at the epicentre  of global transformation.  Lin Chun, The Transformation of Chinese Socialism Today’s “rising China,” which from the outside can seem to exude strength  and confidence, inwardly lives with an unsure view of itself. People sense …  that their country’s current system is grounded partly in fraud, cannot be  relied upon to treat people fairly, and might not hold up. Insecurity, the new  national mood, extends from laid-off migrant labourers to the men at the top  of the Communist Party. The socialist slogans that the government touts are  widely seen as mere panoply that covers a lawless crony capitalism in which  officials themselves are primary players. This incongruity has been in place for  many years and no longer fools anyone. Perry Link, “China: From Famine to Oslo,” New York Review of Books

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introduction

For most of the twentieth century it had been accepted, certainly in the  West,  that  from  c.  1500  the  states  of  the  North Atlantic  littoral  had  gradually  advanced  to  become  the  heartland  of  world  trade  and  the  very  soul  of  what  was  to  become  global  modernity.  First  the  Spanish  and Portuguese, then the English, Dutch, French, and later the Americans,  spread  their  enterprise  far  and  wide  across  the Atlantic  and  the  Mediterranean and then into the Indian Ocean, the South China Sea,  and the Sea of Japan. By the twentieth century, in this interpretation,  “modern” meant “Western”; from the middle of the century, in fact, it  meant “American.” This Atlanticist interpretation was palpably triumphalist and was the basis for the “feel good” sentiments that accompanied the teaching, especially in North America, of courses in “Western  Civilization.” It served also as the basis of modernization theory. This view has now lost credibility. In its place is the argument that up  to circa 1750, or even 1800, China was one of the main global centres  of economic development – alongside Western Europe and Japan – as it  had been from at least circa 1400, an argument summarized by Kenneth  Pomerantz  in the following terms: “Core  regions  in China and Japan  circa 1750 seem to resemble the most advanced parts of Western Europe,  combining  sophisticated  agriculture,  commerce,  and  nonmechanized  industry in similar, arguably even more fully realized, ways.”1 It seems  apparent,  then,  that  China’s  economic  advancement  had  been  established before the modern period in Europe, signalled by the Renaissance  and the voyages of discovery, had shaken off the somnolent darkness of  the Middle Ages.2 Nor was China isolated or autarkic. During its long  period of economic expansion, already begun thus by the fifteenth and  lasting until the end of the eighteenth century, perhaps more than elsewhere China had benefited from the effects of global trade expansion,  not  least  by  the  inflow  of American,  and  to  a  lesser  extent  Japanese,  silver.  It  was  Japanese  silver  that  was  used  to  monetize  the  currency  system in the fifteenth century. American silver, shipped from Peru and  Mexico  via Acapulco  then  across  the  Pacific  to  Manila  and  to  China  served as a further stimulus to trade. By the seventeenth century, China  was importing a quarter to a third of the world’s silver. Then came the nineteenth century and full on industrialization in the  West.  At  a  time  of  dynastic  weakness  in  China,  the  warships  of  the  Royal  Navy  arrived  to  further  the  interests  of  British  mercantilism.  Seeking to find an export that might be used to pay for the silk, tea, and 

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porcelain that consumers in Britain craved, British merchants had hit  on  opium  from  Bengal.  Chinese  officials  resisted  opium  imports. The  British declared war and used their navy, the world’s most deadly and  efficient, to batter China’s protective coastal defences. The Chinese surrendered and accepted British terms; the dealers had won the first drug  war  in  modern  times.  For  the  Chinese  came  the  beginning  of  a  long  century punctuated by disaster. In the century after the Treaty of Nanjing  (1842) that ended the Opium Wars, China suffered unprecedented devastation and humiliation.  Consider the fate that followed its surrender: numerous coastal ports  were occupied by foreigners (normally seen as barbarians), who were  free  to  trade  opium  on  their  own  terms.  The  authority  of  its  central  government, eroded by defeat, was followed by rebellions, and famine  throughout the country led to warlordism and civil war replacing order  and security. China was now in a shrinking mode with its Korean tributary  and  its Taiwanese  colony  confiscated  and,  a  century  after  the  Opium War, its northern Manchurian domains annexed.  In  1911  China’s  ruling  oligarchy,  which  had  obdurately,  and  even  suicidally, blocked any kind of national renewal, was overthrown in a  republican revolution. Thereafter, until 1949, China became one kind of  Third World republic; a sort of Turkey at the other end of Asia, but with  major differences, one of which was that China for most of its long history  had  been  both  united  and  economically  advanced.  Its  unity  was  sustained by the world’s oldest and most extensive civil service, a body  of mandarins who reproduced themselves outside of normal palace politics.  In  the  process  of  China’s  revolution,  Confucianism,  supported  by the state for two millennia was totally extirpated, with communism  taking its place. Civil  war  had  begun  in  China  in  1927.  On  the  one  side  were  the  Nationalists (Guomindang), the republican party that was dominated  by pro-Western, modernizing, businessmen, mainly from the east coast,  and  sustained  by  village  autocrats,  under  the  leadership  of  a  general,  Jiang Jieshi (1888–1976). On the other, the Communists, a mass party  of  peasants,  workers,  the  urban  and  rural  poor,  and  a  smattering  of  intellectuals and even nationalist capitalists, led by Mao Zedong (1893– 1976).3 In October 1934 the Communists saved themselves from military oblivion at the hands of Jiang’s armies by means of a heroic trek  into the interior of the country, known as the Long March. Thereafter,  they survived, too weak to prevail against either of their enemies, the  Guomindang, or the Japanese, waiting to see what lay ahead. The point 

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here is that unlike that of Japan, China’s republican ruling class in the  1920s and ‘30s was weak and divided and, given the extensive influence  of the Communists and the fact of Japanese aggression, lacking in the  means  of  effectively  imposing  its  domination  by  uniting  the  country.  The Chinese Communists’ other weakness was their dependence upon  Moscow where the Soviet dictator, Joseph Stalin, seemed more inclined  to support the Guomindang than the local comrades. A truce between these two sides had held during the Second World  War when both had agreed to a common effort in what was called, not  “World War II,” but the “Anti-Japanese War.” In the official estimates of  the People’s Republic, thirty-five million, mostly civilians, were killed in  this war. With the Japanese surrender in 1945, civil war burst into flame again.  Even though the Nationalists were supported by the United States, their  military leadership was so indifferent and their civil policies so unpromising that they were readily defeated by the Communists. By early 1949,  on the cusp of defeat, the Nationalists’ leaders, together with a part of  their  armies  and  as  much  of  the  moveable  wealth  of  China  that  they  could bundle up, had retreated to Taiwan where they set up an alternative  government,  the  existence  of  which  soon  came  to  be  guaranteed  militarily by Washington’s patrolling Seventh Fleet. Taiwan, now a protectorate, had thus become America’s second Japan; an unsinkable aircraft carrier manned by embattled Asians anchored in dangerous waters  and  kept  buoyant  by American  support,  economic  and  military. And  due to the workings of the law of unintended consequences, as we shall  see in Chapter 4, Taiwan became a model for capitalist development in  Asia. Its resemblance to South Korea, also a fast-growth US protectorate, was more than coincidental.  In the wake of the fugitive Nationalists was now a ravaged China in  the hands of the Communist Party. For the first time in a century, however, it was empty of foreign gunboats and soldiers, and no longer disturbed by warlords and bandits. In October 1949, in Tiananmen Square  in Beijing, the People’s Republic of China (PRC) was proclaimed with  Mao Zedong, chairman of the Communist Party, as its effective dictator.  While the new government stressed that the people of China were sovereign, it was the Party that was all-powerful and that had unrivalled  control  all  of  the  organs  of  the  state  as  well  as  a  monopoly  of  all  of  China’s resources. At  this  point,  and  for  the  next  three  decades,  communist  regimes,  Chinese and Soviet, ruled a third of the world and much of the massive 

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Eurasian  continent.  It  is  hardly  surprising  that  there  was  panic  in  Washington. In the United States, the term “the loss of China” became  a familiar trope in foreign policy and journalistic circles. “To have Free  China become Communist seemed a national disaster,” wrote John King  Fairbanks, the dean of American historians of China.4 Stalin’s visit to  Beijing in December 1949 confirmed the worst Cold War fears. Dean  Rusk, long-serving US secretary of state (1961–69), was among those  virtually blinded by outrage. The government of the People’s Republic,  he  fumed  in  1951,  was “a  colonial  Russian  government.  It  is  not  the  Government of China. It does not pass the first test. It is not Chinese.”  Chester  Bowles,  an  eminently  liberal  figure  in  the  government  of  Presidents J. F. Kennedy and Lyndon B. Johnson (together r. 1961-69),  warned in 1961, “We are going to have to fight the Chinese … in two,  three, five, or ten years.”5 But both were, thankfully, wrong. After the  Korean  War  the  two  sides  settled  for  two  decades  of  mutual,  fist-  waving, distain with the United States and its allies, effectively quarantining China by blockade. The isolation that ensued was thus hardly a  matter of choice for the Chinese leadership. the chinese road to socialism

For thirty years from the October 1949 celebration of its emergence as  a “People’s Republic” and the return to power of a unified and forceful  government, China remained isolated and self-sufficient. It is this selfsufficiency as an agrarian country that should be stressed: controlling  only  7  per  cent  of  the  world’s  arable  land,  China  was  able  to  feed  20 per cent of the world’s population. Except, as we shall see, when it  starved them. The PRC at the point of its emergence had regained all of its lost territories, except Taiwan, the Pescatores, Chinmen, Matsu, Hong Kong,  and Macau.6 The foreign-controlled enclaves that had dotted its coasts  and decorated some of its main inland centres had all been surrendered.  In the Korean War of 1950–53, it demonstrated forcibly to an alliance  of  Western  powers  that  there  would  be  no  return  of  foreign  armies  tramping into Manchuria via Korea nor, indeed, easy victories of any kind  on its peripheries. The occupation of Tibet in 1952 and the Himalayan  war  with  India  a  decade  later  confirmed  that  Inner  Asia  was  another  strategic frontier that Chinese armies would readily defend. The rulers of the PRC were formed into two main bodies, the Party’s  Central Committee, an assembly of around 200 officials, and below 

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them the 2,000 members of the Party Congress. It was from the Central  Committee  that  the  top  leaders  of  the  country  were  selected  –  those  belonging  to  the  Political  Bureau  (Politburo),  the  Politburo  Standing  Committee, and above them all, his authority incontestable, the general  secretary of the Communist Party from 1949 until his death in 1977,  Chairman Mao Zedong. The first priority of the party rulers was the creation of the Chinese  version of Communist Man according to the tenets of Marxism. This  required the inculcation of socialist morality in the place of what was  seen to be its decadent, bourgeois, equivalent. Also following the Soviet  model, a socialist command economy was established, measured in fiveyear plans. The first Five Year Plan ran from 1953–57. The most recent,  the eleventh, was passed in early 2011. After 1953 the capitalist sector,  the heart of which was Shanghai, was abolished almost in its entirety by  a series of sweeping nationalizations. Resources were from now on – at  least until the period of reform in the 1980s that we shall discuss below  – allocated not on the basis of the market but on the bases of political  decisions usually made centrally. Naturally, a socialist economy required  a legislative program: the Agrarian Reform Law of 1950 had destroyed  what  was  left  of  the  landlord  class  and  turned  landless  peasants  into  landholders if not landowners. In 1955–56 collectivization was undertaken;  from  this  point,  until  the  early  1980s,  the  Chinese  peasants  farmed state-owned land, not as individuals, but as members of units,  collectively. The economy had thus become effectively socialized, that is,  owned publicly rather than by private firms or individuals. Indeed, the peasants had become virtual serfs in a moneyless socialist  economy; goods thus became the medium of exchange and scarcity was  universal.  Bartering,  especially  for  the “three  treasures”  (medical  services, transport, and food) was now ubiquitous. In the countryside taxation was paid in grain. The aim of the peasants was not to meet their  own needs but to fulfil goals set by the planners in the bureaus of the  central government; targets had come to replace markets. The  taxes  paid  by  peasants  were  used  to  fund  the  development  of  heavy industry; the amelioration of the lives of rural people was therefore sacrificed in the interest of urban workers. In this program of rapid  industrialization  financed  by  agriculture  the  Chinese  were  once  more  copying the Soviet Union where the same program had been undertaken  at staggering human cost in the 1920s and ’30s.7 Throughout the 1950s,  thus, the Soviet model was to the PRC the equivalent of the American  model  elsewhere  in  the  world.  As  elsewhere  in  the  Third  World  the 

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 program  of  economic  development  was  based  on  a  form  of  the  later  much-abused import substitution industrialization. Industrialization  was  imperative.  The  industrial  economy  that  the  Chinese leaders had inherited by 1949 was both backward and ruinous.  It could not remain so if China was to avoid a return of the previous  disastrous  period  of  national  helplessness  and  foreign  invasion.  The  Korean War was a reminder of the perils of the Cold War future. But  rapid industrialization required outside help, and for this the Chinese  had  turned  to  the  Soviet  Union  for  advisors. “Sino-Soviet  friendship”  was another cause of agony in Western foreign policy circles. The five-year plans specified absolutely everything that was necessary  for industrial development – goals, procedures, manpower, distribution,  and  deadlines. The  first  plan,  measured  by  the  increase  of  steel,  coal,  electricity, cotton, grain, and even high school graduates, was a success.  The  autarchy  of  the  backward  regions  was  dissolved  and  a  national  market  expanded  on  the  basis  of  increased  and  a  road  and  railway  infrastructure. For their sacrifice the people of rural China received little  compensation  beyond  what  was  needed  to  sustain  them  as  well  as  a  minimal improvement in public hygiene. This sacrifice was seen, by the  party  leaders,  who  did  not  have  to  make  it,  as  an  acceptable  price.  Perhaps  they  were  justified;  for  in  spite  of  the  war  in  Korea  and  the  exhausting demands of rapid industrialization, the population of China  rose rapidly. The 1953 census, the first using modern methods, revealed  a population of 582.6 million. By 1957, due largely to a public health  revolution,  it  had  reached  646.5  million.  In  a  mere  four  years,  then,  China’s population had increased by 64 million, an increase larger than  the total populations of any state in the Middle East or Africa or Latin  America, excepting Brazil. This phenomenal growth would cause problems of its own. For Chinese economic development to have taken place there had to  be investment, and, ruling out foreign sources, this had to come from  the  state  on  the  basis  of  taxes.  State  investment  in  heavy  industry,  in  fact, reached remarkable levels. During the First Five Year Plan, investment in heavy industry reached 38.7 per cent of total investment; during the period from 1958 to 1978 the proportion rose to 52.8 per cent. Throughout the 1950s China’s international prestige grew, especially  in the Third World. The Chinese became essential players in international  conferences  like  that  at  Geneva  in  April  1954,  which  was  convened  to discuss the future of Korea and of Indochina. Chinese participation at  the Bandung Conference of 1955, where the idea of non-alignment was 

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launched, was a further source of Western angst, especially the fact that  the host state, Indonesia, itself boasted a huge communist party. Would  the East, saved from Japan, now turn Red? Was there to be a gigantic  bloc of communist countries spanning Eastern Europe, Central Asia, East  Asia, and Southeast Asia? Would it serve as a magnet for the new states  of the Third World? The answer was “no” in all cases and this had little to do with Western  machinations. The Soviet Union and China had both enjoyed common  purpose and common enemies throughout most of the 1950s. But by  the  end  of  the  1950s,  after  the  death  of  the  Soviet  tyrant  (officially  “General  Secretary  of  the  Communist  Party  of  the  Soviet  Union”),  Joseph  Stalin  (r.  1922–53),  and  the  succession  of  Nikita  Khrushchev  (r. 1953–64), this came to an end, and the two communist goliaths were  now, quite suddenly, bristling with hostility towards one another. The  hundreds  of  Soviet  specialists  were  suddenly  called  home  while  the  Soviet leadership under Khrushchev were collectively branded as “revisionists”  by  Beijing.  In  the  lexicon  of  twentieth  century  communism,  revisionism  equalled  apostasy. The  Sino-Soviet  affair,  and  with  it  any  thoughts of global communist solidarity, was thus at an end and would  remain fractured until the end of the century. The Second, Communist,  World had lasted as a unified bloc for barely more than a decade. The  struggle  between  those  dubbed “revisionists”  and  the  true  and  unwavering  Communists  within  China  picked  up  where  the  struggle  between the Chinese and the Soviet Union left off. It took the form of  the  Cultural  Revolution  that  continued  from  inception  in  1966  for  a  whole decade. The Cultural Revolution was the defining watershed of  a half-century of Communist rule. Two years after it ended the period  of reform and the slide towards capitalism began.  The Cultural Revolution was, in fact, the second of the tumultuous  and destructive campaigns launched by the Chinese leadership in order  to  both  push  China  forward  and  to  purge  the  country  of  dissenters.  Anticipating it had been the Great Leap Forward (1958–62), an attempt  at  the  acceleration  of  agricultural  and  industrial  production  that  had  sought to push China ahead under the banner of “more, faster, better,  cheaper.”  Agricultural  reform  led  to  the  replacement  of  cooperatives  and the complete abolition of private property. At first, the Great Leap  Forward  seemed  to  be  succeeding  and  production  had  skyrocketed.  Then it became apparent that government officials had been massaging  production  figures  to  please  their  masters,  especially  Mao  Zedong.  What  was  worse,  forced  appropriations  of  agricultural  surpluses  had 

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left the peasants in some provinces with so little food that a man-made  famine  followed  in  which  as  many  as  forty-five  million  died,  many  more than had been killed in the Anti-Japanese War and several times  more than had been either starved or shot during the Great Terror in  the Soviet Union.8 The failed Great Leap Forward had barely ended when the first battles of the Cultural Revolution took place in 1966. The ostensible object  of  the  Cultural  Revolution  was  to  weed  out  all  those  who  were,  by  almost any criteria, soft on capitalism as an economic and political system and even on its culture – “taking the capitalist road” this was called.  The Cultural Revolution paralysed the country for a decade (during  which schools and universities remained closed, many students taking  up the inane and anti-intellectual rhetoric of Maoist revolutionarism). It  ruined tens of thousands of lives. Although at the time it was seen by a  minority  of  faithful  Chinese  and  Western  communists  as  a  heroic  attempt to continue the original Chinese revolution, few would argue  nowadays that its benefits outweighed its costs.  Then came one of the great dramatic surprises of the late twentieth  century,  a  shock  as  great  as  the  Nazi-Soviet  Non-Aggression  Pact  of  August  1939.  Barely  had  the  torrents  of  rhetoric  against  “capitalist  roaders” and their international backers begun to subside than, in February 1972, the Chinese leadership welcomed the US president, Richard  Nixon  (r.  1969–74),  an  anti-communist  sans pareil,  and  his  national  security  advisor,  the  ruthless  realist,  Henry  Kissinger.  The  mouths  of  China-watchers  now  swung  fully  open  with  astonishment.  Richard  Nixon himself boasted that his visit to China “changed the world,” a  verdict  that  takes  no  account  of  the  changes  already  taking  place  in  China  in  reaction  to  the  excesses  of  the  Cultural  Revolution. Yet  his  apparent acceptance of the People’s Republic was a game changer; the  roads from this point onward led to the ultimate coexistence in China  of capitalist practice and communist rhetoric and, in the United States,  to an increasing willingness, fully recognized three to four decades later,  to  yield  a  share  of  global  economic  leadership. The  first  courtship  of  what was much later to become the G2 had now been accepted; intimate relations were to follow. Thus Sino-American détente; in the official discourse of Washington,  “Red China” was dropped in favour of the more respectful (and realistic) “People’s Republic of China.” It has been argued that the ultimate  justification  of  Sino-American  détente  was  strategic  rather  than  economic. China wanted to offset Soviet global influence even at the cost of 

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cozying up to Washington. If this is the case, the Chinese were successful. The Soviet Union was now isolated.    After  President  Nixon’s  visit,  Mao  Zedong’s  health  continued  to  deteriorate. He died in September 1976, aged eighty-two, preceded by  Zhou Enlai, China’s premier and foreign minister, by only a few months.  The question of his succession now loomed large – were the ideals of the  Cultural Revolution to be upheld or was China, like the Soviet Union  before it, to move westward and marketward, towards détente and capitalism?  Not  even  the  most  astute  China-watchers  correctly  predicted  what was to happen next. What  did  happen  next?  In  general  terms,  within  two  years  of  the  death  of  Mao  Zedong,  China  abandoned  its  alignment  to  the Third  World and turned resolutely to the United States and the other developed capitalist states. In early 1979 China attacked Vietnam, a warning that Beijing did not welcome a Soviet ally – one that the Chinese  themselves had once supported – on its borders. “The war was thus the  true beginning of China’s entry and assimilation into the American-led  economic  order;  from  another  angle,  the  war  also  demonstrates  the  relationship  between  marketization  and  violence.  From  this  moment  on,  the  old  socialist  stance  of  internationalism  gradually  faded  from  the  scene,  and  China’s  previous  one-sided  policy  of  openness  was  transformed into another one-sided policy of openness – that is, openness toward the West.”9 auditing chinese communism

What are we to say about the revolutionary China that died, at least  according  to  one  Chinese  commentator,  in  1989?10  Obviously,  the  Communist  Party  had  succeeded  in  uniting  the  country  and  keeping  attackers at bay, something that pre-revolutionary regimes had singularly  failed  to  do. The Americans  had  bombed  Japan  and  Korea,  and  later Vietnam  and  Cambodia,  as  well  the  Middle  East,  the  Maghreb,  and Afghanistan but they did not bomb China. It  also  succeeded  in  developing  economically,  creating  an  efficient  industrial  sector,  a  functioning  transportation  infrastructure,  and  an effective system of distribution. This guaranteed that China’s armed  forces,  the  People’s  Liberation  Army  (PLA),  would  become  the  most  effective  fighting  force  in  the  whole  of  Asia  and  not  one  to  be  challenged.  After  the  break  with  the  Soviet  Union  this  development  was  accomplished with little outside assistance; thus China, like the Soviet 

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Union from the 1920s onward, modernized while remaining outside of  the world capitalist system. This proved to many Third World leaders  that the engineers who were to build the road to the future might not  necessarily follow the blueprints of capitalism. Probably none of these  leaders knew of the tens of millions who had been starved to death during the Great Famine of 1959–62. And  the  Chinese  people?  In  most  respects,  China’s  majority  rural  population lived at the numbing level of poverty that resembled peasants elsewhere in the Third World. In his sketch of the fates of the two  great  communist  states,  the  Soviet  Union  and  China,  Perry Anderson  comments, “Around 1980, the per capita GDP of the PRC was fourteen  times lower than that of the USSR. Over 70 per cent of its labour force  was engaged in agriculture, as against 14 per cent in the Soviet Union.  Nearly every third Chinese could still not read or write. Its universities  were  a  fraction  of  those  even  in  India.  It  can  safely  be  said  that  no  observer, either inside or outside the country, could have predicted the  reversal in fortunes.”11 Unlike peasants in Africa or in Latin America, however, the Chinese  were prevented by law from moving into the cities without authorization. They were expected to hand over what they produced in return for  what were essentially rations. Yet, at the same time (1979), thirty years  after  the  People’s  Republic  had  come  into  existence,  even  the  World  Bank looked on China with a barely concealed admiration. Despite a  2 per cent annual growth in population, “rapid expansion of industrial  output has caused national income per person to grow fairly fast. With  adjustments for international comparability, per capita GNP appears to  have grown at an annual rate of 2.0–2.5% in 1957–77 and, because of  a spurt in the last two years, 2.5–3.0% in 1957–79. Even the former  rate is significantly above the average for other low-income developing  countries (1.5% in 1960–78).”12 The  World  Bank  report  seems  especially  impressed  with  income  equality and went on to note that  China’s most remarkable achievement during the past three decades  has been to make low-income groups far better off in terms of basic  needs than their counterparts in most other poor countries. They all  have work; their food supply is guaranteed through a mixture of  state rationing and collective self-insurance; most of their children  are not only at school, but being comparatively well-taught; and the  great majority have access to basic health care and family planning 

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services. Life expectancy – whose dependence on many other economic and social statistics makes it probably the best single indicator  of the extent of real poverty in a country – is (at 64 years) outstandingly high for a country at China’s per capita income level.13 What the bank was observing was that between 1978 and 1984, as a  consequence  of  a  second  spasm  of  agrarian  reform,  the  household  responsibility  system  propelled  peasant  production  forward,  causing  agricultural output to leap up by a third and peasant incomes to rise  from 30 to 44 per cent of national income. In  the  next  chapter  I  will  compare  this  with  India,  a  model  Third  World democracy where there was no communist revolution, no great  leap forward, no cultural revolution, no pretence at equality, and where  economic growth since the 1990s has remained behind that of China. reversal of fortunes – the transition to “ market leninism ”

With the death of Mao Zedong in 1976, after a surprisingly brief period  of  internal  political  struggle,  China’s  new  ruling  class,  under  Deng  Xiaoping  (r.  1980–94),  launched  the  country  in  a  radically  new  economic  direction.14  Mao  himself  had  appointed  Deng  as  his  successor  in 1975. While Deng’s collaborators were exultant, Mao’s leftist allies  were appalled. Even from the early 1970s Deng had become anathema  to them. They referred to him as an “arch-unrepentant capitalist roader,”  and they were right. By the end of the 1980s, he had transformed China,  although to what ultimate end remains beyond our view. Capitalism, now costumed as socialism with Chinese characteristics,  was  thus  reinstated  and  many  of  the  central  institutions  of  socialism,  such as the collectivization of agriculture, were abandoned. Blame for  the calamitous Cultural Revolution was heaped on Mao Zedong, and  the  revolution  itself  suffered  from  a  thorough  negation.  According  to the Resolution on Party History, published in 1981 by the Chinese  Communist Party, “The ‘cultural revolution’ … was responsible for the  most  severe  setback  and  the  heaviest  losses  suffered  by  the  Party,  the  state and the people since the founding of the People’s Republic. It was  initiated and led by Comrade Mao Zedong.” In 1993, a hundred years after the birth of Mao Zedong, the Maoist  version of communism was as dead as the Spartan equality that it celebrated.  In  1978,  when  Deng  began  his  process  of  reform,  almost  all 

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elements  of  the  national  economy  were  state-owned.  Usually  called  state-owned enterprises (SOEs), they were at the centre of the economy  and  were  reasonably  profitable.  Not  insignificantly,  they  offered  their  employees security of employment as well as welfare and pension benefits. Then, to the dismay of millions, they were dissolved as a private  sector slowly gathered speed. “As the market sector gained strength and  significance, so the whole economy moved towards a neoliberal structure.”15 Alarm  was  now  audible  in Western  business  and  government  circles as China seemed to be, not a communist world power, but a capitalist dynamo, its motive force wound around a neoliberal armature.  Popular books, authored by intellectual tourists and leaving no cliché  unturned,  now  began  to  appear  speculating  breathlessly  about  the  “Chinese dragon,” the creature that, once awakened, might turn on its  rivals in the world marketplace and scorch them with its fiery breath.  It only slowly dawned on the “reform” enthusiasts that, although ownership  of  the  means  of  production  was  now  partly  capitalist,  China  remained  a  dictatorship  in  which  power  was  vested  in  a  single  party,  and that party was, apparently, immoveable. Their assumption that an  emergent and vital bourgeoisie and perhaps a middle class, every globalist’s dream, would wrest power from the sclerotic hands of the communist ruling class and usher in democracy and a free press turned out to  be  an  unrealized  fantasy.  The  communist  ruling  class,  organized  as  we have seen in a set of hierarchies that governed at the apex through  a  Central  Committee,  a  Politburo,  and  a  Standing  Committee  of  the  Politburo,  was  no  more  willing  to  commit  suicide  than  its  Western  cousins. Indeed, the cousinage of the Chinese and US elites, both striving to assure their own dominance within their respective states, has  been commented on  by Ho-Fung Hung, who draws  our  attention to  the symbiotic relationship between the Chinese and the American ruling classes – to the detriment of those living in rural China destined to  exist  in  a  world  of “social  marginalization  and  underconsumption.”  This  symbiotic  relationship,  suggests  Ho-Fung,  has  given  birth  to  a  hybrid “Chinamerica.”16  We  might  follow  the  argument  that  capitalism  had  never  died  in  China – it had been extinguished in Shanghai, its Chinese heart, in the  1950s but hung on in Hong Kong and Taiwan. At any rate, after a long  winter of civil war and communist rule, it burst out into full flower, first  in  the  Guangdong  hinterland  of  Hong  Kong  and  in  Shanghai  and  its  hinterland  and  then  elsewhere.  That  this  blooming  now  had  official  sanction  became  fully  apparent  in  1980  when  Premier  Zhao  Ziyang 

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(r. 1980–87) announced, “In economic work, we must abandon once and  for all the idea of self-sufficiency which is characteristic of the national  economy. All ideas and actions based on keeping our door closed to the  outside world and sticking to conventions are wrong … By linking our  country  with  the  world  market,  expanding  foreign  trade,  importing  advanced technology, utilizing foreign capital, and entering into different  forms of international economic and technological cooperation, we can  use our strong points to make up for our weaknesses.”17 From this point, Chinese economic policy moved towards the Taiwan  model of export-led development, joining what some saw as the flock   of westward-flying geese led by Japan. That China was no mere goose  content to follow the lead of Japan was soon to become apparent; its  foreign trade, a mere 7 per cent of GNP in 1978, by the early 1990s had  soared to 40 per cent. The change in policy towards the outside, capitalist, world was paralleled by a radical transformation within China. Previously, all land had  been consigned to the state; now, private plots were allowed. By 1983,  the  commune  system,  the  backbone  of  China’s  socialized  agriculture,  had been dismantled. Land could now be bought and sold. Some of the  peasants who owned it become landlords while others had joined the  dispossessed. When  restrictions  on  their  movements  were  removed  in  the late 1990s, millions of these – 130 million, actually – flocked to the  cities  where  they  depended  on  a  booming  export  economy  to  find  employment. This huge pool of migrants, toiling long hours for almost  unbelievably  low  wages,  staffed  the  workshops  of  Pearl  River  Delta  behind Hong Kong, which produced the cheap goods retailed in North  America  and  elsewhere  by  Toys  “R”  Us  and  Walmart.  According  to  one  estimate,  this  region,  home  to  just  sixty  million  people,  produced  5 per cent of the world’s manufactured goods.18    Although  initially  unskilled,  the  peasants  who  emigrated  to  the  industrializing east were eager to escape from the chronic, and intentional,  poverty  that  had  been  their  fate  in  rural  China. Their  lack  of  skills was a small problem since the technology of their working places  was  usually  quite  unsophisticated.  The  state,  that  is,  the  Communist  Party,  made  sure  that  they  didn’t  organize  trade  unions  in  order  to  improve their wages and working conditions, the latter of which were  normally  quite  appalling. The  labour  cost  of  these  repressed  Chinese  workers were not only dramatically less than workers in the West, they  were as little as one-sixteenth the cost of labour costs in South Korea  and Taiwan.

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Neoliberalism also meant that there was a decrease in the significance  of state-owned industrial firms. Whereas by the 1950s the private sector  had been almost extinguished, now it gradually returned. Central planning, the symbol of the socialist state was now moving away from centre  stage.  By  1994  the  state  sector  produced  barely  over  half  of  the  output  value  of  Chinese  production,  and  by  the  early  2000s,  stateowned firms accounted for only 20 per cent of China’s industrial production. On the other hand, while the number of state-owned enterprises  (SOEs) fell from 77,600 to about 42,000 between 1995 and 2002, “that  sector remained the chief contributor, with substantial productive gains,  to the nation’s fast-growing economy.”19 Much of the foreign direct investment that at first trickled and then  flooded into China came from the accounts of the Chinese diaspora that  numbered in the tens of millions. Chinese businessmen in Hong Kong,  Taiwan, Singapore, the Philippines, and even the United States began to  move  their  money,  especially  to  the  coastal  provinces  of  Fujian  and  Guangdong – especially the Pearl River Delta. As we have seen above,  after first having moved eastwards across the Korea Strait, from mid1985  Japanese  capital  and  manufactures  began  to  move  westwards  across the South China Sea, attracted by the magnetism of low wages  and high profits. By the early 1990s Japanese investment in China had  skyrocketed.  And  American  multinationals  were  also  keen  investors;  the consequence of this, of course, was that these multinationals could  produce  goods  for  sale  in  Walmart  that  undercut  in  price  the  goods  produced in the United States itself; US consumers benefited while US  workers lost. China had become the largest recipient of foreign direct  investment in the developing world. Deng  had  justified  this  on  the  basis  of  the  trickle-down  theory  of  development. He argued that the richer regions should not be held ransom by the poorer – Deng said that “some will get richer first” – and  that, left to natural processes of the market, the richer, and especially the  privileged “special economic zones” within them, would draw wealth  which would then be diffused to the poorer. That this might produce a  “Third World” of poverty in western China, an area that would provide  raw materials and labour but benefit at a much lower level from economic expansion, was accepted. Already  by  the  mid-1980s  several  developments  that  reflected  the  transition to capitalism had become evident. The gross value of agricultural output had increased at an annual rate of about 9 per cent since  1978. In contrast to the famine associated with the Great Leap Forward, 

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the  grain  harvest  of  1984  was  the  largest  in  Chinese  history.  Living   standards saw a continued improvement, and rural per capita income  doubled in a five-year period. The rural gains came partly because the  peasants’  response  to  the  incentive  of  the  market  had  led  to  a  rise  in  output. But it was also partly due to a vast urbanization of peasants,  which led to a building boom in both rural and urban areas, which in  turn led to improved housing, at least in some locations.  It should be noted that, as in the transition to capitalism in the Soviet  Union in the 1990s, the large-scale privatization of state-owned enterprises  in  China  was  catastrophic  for  many. “Since  1978,  nearly  forty  thousand  state-owned  enterprises  have  been  shut  down.  From  1996  to  2001,  53  million  people  working  in  China’s  state  sector  lost  their  jobs  …  in  the  four  years  beginning  in  1998,  state-owned  companies  fired 21 million workers. That’s more than all the Americans who work in manufacturing” (italics in original).20 inequality and the transformation of chinese socialism

Accordingly,  from  the  mid-1980s  questions  began  to  be  asked  about  what  was  called  socialist  modernization.  One  question  concerned  the  growing inequality that we have touched on above, while another was  the  corruption  of  the  ruling  elite  and  their  accomplices.  For  many  of  China’s students and young workers these questions were linked to that  of  human  rights.  On  10  April  1989  millions  of  them  marched  into  Beijing’s central Tiananmen Square and in as many as 132 cities around  China  to  demonstrate  in  favour  of  democracy  and  political  freedom.  By 22 April there were as many as 100,000 in the square, and China’s  “Democracy  Movement”  had  been  born.  By  early  June  even  more  flooded into the streets to demonstrate.  Crisis now loomed at the highest levels. China’s leadership, divided  on how to handle the crisis, decided that the burgeoning social movement threatened its very existence. Tanks and armoured vehicles were  sent against the demonstrators, killing and arresting thousands of them.  The “Beijing spring” had now turned into winter as a witch hunt began,  seeing thousands imprisoned and the toppling of liberal figures even at  the apex of power, like Zhao Ziyang, the premier who was to spend the  final  sixteen  years  of  his  life  under  house  arrest.  China’s  democracy  moment was now declared dead and the next two decades would see a  flourishing capitalism guided by a communist oligarchy. The country’s 

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expanding  middle  class,  at  the  pinnacle  of  the  150  million  lifted  out  of poverty by socialist modernization, would not protest. High rates of  growth were the guarantee of stability. After the Tiananmen massacre and the ensuing purges, the program  of economic liberalization paused to gather its breath and then plunged  on. In December 1990 the Shanghai Stock Exchange opened, and, by  the end of the next year, it had as many as 100,000 investors. In February  1992  Deng  undertook  a  tour  of  southern  China  where  he  assured  his  listeners  that  making  money  was  glorious.  In  the  same  year,  the  Fourteenth Party Congress approved economic and financial deregulation. This  deregulation  was  further  entrenched  at  the  Fifteenth  Party  Congress in 1997. From 1992 the push towards accelerated marketization increased. In  March  of  that  year  the  Communist  Party  mouthpiece,  the  People’s Daily,  announced  that “active  and  prosperous  financial  markets  will  bring  the  country  innumerable  benefits,”  and “a  joint-stock  economy  can serve our socialist construction.”21 After 1993, stepped up marketization combined with the acceleration of economic growth. Yet, amid the celebration of the achievements of socialist construction, sombre notes could be heard. According to one New York Times report of 1991, China has made enormous strides in medical care in the four  decades since the Communist Revolution, and in some ways the  health profile of the population resembles that of a developed   country more than that of a country with a per capita income of  $300 per year. The World Bank lists life expectancy among Chinese  at 70 years, compared with 76 in the United States and 58 in India.  But there are some indications that the gains in health care have slowed in the last dozen years, at the same time that China has opened to the world and doubled its per-capita income. By some counts, for example, infant mortality has shown little improvement in recent years … The main reason for the slowdown in health-care  improvements in recent years appears to be the collapse of the   commune system (italics mine).22 Nearly two decades later, Susan Shirk, formerly an official of the US  State Department, could testify, “China’s once-impressive public health  system … has fallen apart.”23 The reforms of Deng and his successors 

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had  in  fact  represented  a  decisive  move  away  from  egalitarianism.  Formerly, the central planning associated with the command economy  had been used to resist the growth of inequality through the redistribution of resources from the richer to the poorer provinces. The “iron rice  bowl” system of social welfare had now been smashed and inequality  between  persons,  sexes,  groups  (including  social  classes  and  ethnic  groups) and regions accelerated.  By the early twenty-first century, the increasing inequality in China  was attracting attention. Rising inequality has been a common feature of international economic development in the most recent decades, and China is no  exception. One of the world’s most egalitarian societies in the  1970s, China in the 1980s and 1990s became one of the more  unequal countries in its region and among developing countries   generally … Seldom has the world witnessed so sharp and fast a rise  in inequality as has occurred in China. Increasing economic and  social inequality has therefore been an important subtext in the   generally positive story of rapid growth accompanying economic  reform and transition, and it calls into question the sustainability  of that growth by raising the spectre of social instability.24 Yet while inequality increased, so, too, did the GDP; between 1988–95 it  increased by 88 per cent. Up to 2003, then, (1) the Chinese nation on the whole got richer with the majority enjoying a higher standard of living:  “According to the World Bank, the number of Chinese subsisting on less  than $1 a day had fallen from 490 million in 1981 to 88 million in 2003.  Further, in 1977 there were 250 million – or 30.7 per cent of the total  rural  population  –  who  remained  below  China’s  own  subsistence  line,  whereas in 2003 they reduced to 50 million, of whom around 30 million  were rural and 20 million emerged as the new urban poor. Overall in this  period, China accounted for three-quarters of the global population lifted  out of abject poverty.” (2) Social welfare worsened with the decline of  basic health care and education and inequality along regional, sectoral,  class,  gender,  ethnic,  and  other  lines  increased. The  Gini  coefficient  of  household income jumped from 0.33 in 1980 to 0.454 in 2003.  So we can assume that males living in the east of China (especially the  areas of Beijing, Shanghai, and the Pearl River Delta) involved as workers in manufacturing and construction got richer than women in general 

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and  all  people  living  in  the  east  of  the  country  as  well  as  peasants  –  forty million of whom had been forced off their land – and minorities in  general.  (3) At  the  pinnacle  of  the  social  pyramid,  the  few  got  much  richer; some, like the seven billionaires, fabulously so. To use the favourite metaphor of development economists, then, while the rising tide of  globalism did not lift all boats, it did lift the yachts.25 Thereafter, between 2003 and 2008, poverty and all forms of inequality seem to have increased, with globalization perhaps fulfilling its destiny of both moving the centres of the global economy from West to  East, generally, enhancing global economic uncertainty and increasing  polarization. The  situation  in  China  was  thus  not  analogous  to  that  in  the  Soviet  Union  in  the  1990s  where  the  transition  from  a  statist  economy to capitalism meant disaster by the simple yardstick of falling  life expectancy. Let us return to the question of who got richer and who poorer. In  terms  of  regions,  the  easterners  within  China  got  richer  than  the  westerners  by  a  long  shot.  Since  1989  Guangdong  province  in  the  hinterland of Hong Kong has had the highest GDP in all of China. Its  capital, Guangzhou, has become one of the workshops of the world,  a Manchester of contemporary China. The province of Fujian on the  coast to the north came to have a per capita income ten times higher  than the provinces in the western interior. Shanghai – by circa 2007  with a per capita income of $7,000+ and massive new investment –  had come to look like Singapore on steroids. By comparison, Western  cities like Manchester, the original workshop of the world, or Toronto,  much less Detroit, looked downright dowdy or even “Third World.” In 1995 Chinese from the west of the country received an income  40 per cent lower than they would have had they lived in Guangdong,  Fujian, or Shanghai. While average incomes grew by 20 per cent in the  western rural areas, they grew by 71 per cent in the rural eastern areas.  The urban to rural income gap has widened and so has the gap within  rural China. On the whole, however, despite China’s remarkable GDP  growth rate, there was “virtually no decline in the poverty rate between  1988 and 1995.”26 Within cities and towns, inequality increased and  urban poverty failed to decline. This situation was worsened by government policy as regards the social safety net, ration coupons, subsidies, and housing. And, meanwhile, the gender gap increased; men got  better pay than women. Who are the poor – and what does poverty actually mean? In some  cases  the  poor  are  the  lowest-income  fraction  of  the  population, 

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comprising  at  least  one  hundred  million  people  and  including  the  twenty-two million urban people living on a monthly income of below  $19.4 US per day.27 For them, collectively, poverty means “an increase  in underweight,” i.e., that the number of them that are below average  weight is increasing. Even in the early 1990s, it was noted, “Clearly  poverty has remained a problem in China not just in the remote hinterland, and in some respects it might be a growing problem, emerging  from the effects of marketization.”28 Not only is inequality a problem,  then, but so too is actual poverty. It is the GDP growth, more than the question of inequality, that has  hypnotized Western commentators and especially the prophets of globalization.  The  reasons  for  their  fascination  are  several.  On  the  one  hand  is  China’s  potential  as  a  market  for Western  goods  and  investments, that is, as a source for US and European high-tech goods and,  notably, capital. It is here that Wall Street especially rubbed its collective  hands. On the other hand is the increasing likelihood of China’s swamping  Western  markets  and  hollowing  out  the  West’s  industrial  base.  Hence China’s gain would be Michigan and Ohio’s loss. Robert Brenner  has  pointed  out  yet  another  problem: “The  same  exploding  imports  [e.g., from China] that drove the world economy [in the 1990s] brought  US  trade  and  current  account  deficits  to  record  levels,  leading  to  the  historically unprecedented vulnerability of the US economy to the flight  of  capital  and  the  vulnerability  of  the  dollar.”29  Commenting  on  this  analysis,  David  Harvey  presciently  adds, “If  the  US  market  collapses  then the economies that look to that market as a sink for their excess  productive capacity will go down with it. The alacrity with which the  central bankers of countries like China, Japan, and Taiwan lend to cover  US deficits has a strong element of self-interest: they thereby fund the  US consumerism that forms the market for their products.”30 During the period 1991–94, China’s average annual GDP growth was  as high as 12.2 per cent. Even in 2006, it was 10.2, although by early  2008  there  was  apprehension  that  it  might  sink  to  below  8  per  cent.  Where  once  China  was  seen  as  a  threat  to  the  capitalist  world  order  because  of  its  communism,  it  was  now  increasingly  cast  as  a  hazard  because of its successful capitalism. In 1990 it ranked eleventh in the  world by GDP; by 2007 it was fourth. The hammerlock on power of the ruling Communist Party remains,  however, thus far, at least, immoveable. Timothy Cheek puts this plainly:  “The CCP-dominated government seeks to create their version of a harmonious  society  that  will  stabilize  the  current  privileges  of  the  Party 

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elite. Similarly, the tiny but fearsomely wealthy super-elite, along with  the much broader middle class, finds a confluence of interest with the  Party elite in pursuing this consolidation.”31 Although  exact  figures  are  impossible  to  come  by,  in  one  estimate  there are some seven billionaires, 300,000 millionaires as well as at least  40 million well-off. This is, it should be recalled, a small part of a total  population of 1.3 billion. “Who are China’s new capitalists?” some have  asked. Many are former party and government officials who have been  able to translate their positions into ownership of privatized state enterprises. Others have come from outside state and party to start private  ventures, beginning as small tradesmen or professionals or as peasants,  like  the  country’s  richest  man,  Huang  Guangyu.  Other  functionaries  behave like entrepreneurs in pursuit of profit as directors of state agencies and enterprises, but are not yet property owners in their own right. In  2002  members  from  the  private  sector  were  welcomed  into  the  Communist Party, although none of these have yet advanced to significant positions within the ruling elite; a single businessman was elected  as an alternate member of the CCP Central Committee. If private sector  capitalists were on the rise in the Communist Party, protest was, likewise,  on  the  rise  in  the  countryside.  In  2003  there  were  more  than  58,000 major incidents of social unrest, an increase of 15 per cent over  2002.  In  2004  there  were  74,000  incidents  –  more  than  200  protests  every single day. The incidence of popular struggles in the rural areas  had risen to such staggering numbers that in February 2006 the government announced a major initiative under the banner of a “new socialist  countryside.” The object of the initiative was to expand health, welfare,  and education for rural people. “The central government has changed  direction  to  focus  on  uneven  development,”  explained  one  Chinese  writer. “The economic gap is creating social conflict, and social conflict  has become a more and more serious problem,” notes Giovanni Arrighi.32  The economic gap is not merely between rich and poor but between the  rural  and  the  urban  populations.  The  gap  continues  to  widen  with  10 per cent of the population holding 45 per cent of the country’s wealth  and the poorest 10 per cent holding only 1.4 per cent. The per capita  income of urban residents by 2005 was 3.25 times that of rural dwellers, and the growth of their incomes at 8 to 9 per cent was almost twice  that of rural incomes, at 4 to 5 per cent. From  the  late  1980s,  then,  several  changes  appear  simultaneous  in  China  and  its  neighbourhood.  First,  the  sequestration  of  China  from  the global economic system came to an end. Secondly, within China, the 

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idea of equality in poverty disappeared, to be replaced by the idea of  acceptable  inequality  as  between  persons  and  regions.  Thirdly,  from  around  1998,  China  came  to  replace  Japan  as  the  leading  goose  and  economic centre of East and Southeast Asia, driving down, because of  its  undervalued  currency  and  its  huge  appetite  for  trade,  the  growth  rates  of  the “miracle  economies”  that  had  emerged  from  the  1960s.  Their growth rates now dropped from 7 to 9 per cent in the mid-1980s  to 4 to 6 per cent in the late 1990s. Japan’s fate seemed to be that of an  ageing economy, namely slowing growth. In one analysis, in fact, Japan  had  lost  its  technological  leadership,  and  its  annual  growth  rate  was  expected to be around 1.5 per cent. Finally, it should be emphasized that  the transition from socialism was no accident; it was managed by the  ruling  political  authorities,  the  Chinese  Communist  Party,  the  whole  way. It was they, after all, who passed the laws that undid the socialist  economy and facilitated its successor.  What  should  we  expect  in  the  future?  Richard Walker  and  Daniel  Buck provide one answer to this crucial question: “The abolition of the  right to strike in the 1982 Constitution and the shooting of dissidents in  1986 and 1989 are classic examples of the brutal birth of a capitalist  order … Moreover, the Chinese state’s exercise of extreme repression is  unsurprising, given the CCP’s ongoing monopoly on political power – a  crucial component of the PRC’s distinctive road to capitalism. An imminent  leap  to  democracy under  such  circumstances  is  a  liberal  fantasy.  The people of China face a long and arduous period of popular struggle  if they are to tame the beast that has been unleashed.”33 China’s distinctive capitalist road, it seems by 2012, was not without  potholes. The most immediate problem was the global financial crisis  that had an unsettling effect on China’s export economy as the demand  for  the  cheap  goods  produced  by  the  labour-intensive  factories  in  Guangdong and elsewhere suddenly began to dry up. After decades of  having to endure choirs of praise from Western economists and businessmen delighted at the success of the transformation from socialism  to capitalism, we are now stirred in our pews by such sharp, dissident  analysis as that by Joshua Kurlantzick. Writing about “the wave of protest  sweeping  across  China  as  the  global  financial  crisis  batters  the  country’s economy,” he judges that China was too reliant on foreign investment in low-cost manufacturing. The country failed to build sophisticated domestic companies  that could compete with multinationals and innovate in cutting-edge 

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industries like green technology or mobile communications. China’s  few home-grown international brands … depend on a vast, opaque  web of state subsidies and loans from state-linked banks to expand.  Most Chinese firms, lacking skilled management or effective customer service, have failed to compete in developed world markets.  Instead, they tend to focus their energies of Africa, South-East Asia  or Central Asia, where they often do not have to compete with  Western or Japanese firms. China is also finding that, though it may  seem to have a bottomless pool of cheap labour, neighbouring states  such as Vietnam are already undercutting it and attracting away  investment – China’s own entrepreneurs are flocking to north  Vietnam to build factories.34 China’s amazing GDP growth rate, which had only recently surged to  10 to 12 per cent, might soon sag, although given the unreliability of  official statistics it was not clear how far – some writers suggested 8 per  cent and others as low as 5 per cent. The Chinese state, like those of its  Western  partners,  was  suddenly  obliged  to  reconsider  its  role  in  the  national economy. And on the horizon are other looming problems, not the least of these  being  the  ageing  of  the  population. The  country  was  ageing  at  a  rate  faster than that of any other major nation, as its median age, thirty-two  years in 2004, was projected to soar to forty-four in 2040. “China will  get old before it gets rich,” notes one commentator gravely.35 Perhaps  even  more  immediately  threatening  is  the  utter  ravaging  of the Chinese landscape. Recall that we have noted the PRC had only  7 per cent of the world’s arable land to feed 20 per cent of its people fifty  years  ago.  Since  then,  constant  diminution  has  affected  the  country’s  land  bank;  a  total  of  2.54  million  hectares  of  farmland  were  lost  in  2003 alone. “The country’s forested land had been so depleted that at  a per capita 0.11 hectares, it was considered to be one of the world’s  sparsest (ranking 107 out of 140).36 Desertification too was at a pace  of more than 10,000 square hectares yearly, with desert covering nearly  28 per cent of the PRC territory. The level of serious air pollution was  also rising … Water pollution was such that the drinking water supplies  for  600  million  people  were  substandard,  and  two  thirds  of  the  total  number of Chinese cities were short of water. Many rivers dried up.”37 Shirk raises a final question. Crystal ball gazing, she argues that as  control by China’s communist rulers slips away, perhaps due to rising  mass  protest,  nationalism  will  emerge  as  a  tool  to  be  used  by  rival 

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groups seeking power. This could lead to confrontation with Japan, and  even worse, the United States, notably over the issue of Taiwan, which  Washington is pledged to protect but Beijing regularly insists remains a  part  of  China.  Such  conflict  is  no  less  likely  given  the  Bush  regime’s  (2001–09)  encouragement  of  Japanese  rearmament.  Writing  in  2008,  Shirk  argues, “Japan  is  now  well  on  its  way  to  abandoning  the  selfimposed military limits that America encouraged after its defeat in World  War II. In the next few years Japan is likely to revise its ‘no war’ constitution and come out of the closet as a formidable military power.”38 That China’s economic “miracle,” at least while it lasted, had been  accompanied  by  a  renewed  military  and  diplomatic  self-confidence,  seems to be a cold comfort. By 2006 it was clear to Washington that a  new threat had risen in the East; in its February 2006 statement, the  Quadrennial Defence Review singled out China as having the greatest  potential  to  present  a  competitive  threat  in  Asia.39  Yet,  attempts  to  isolate China from its neighbours – with the exception of Japan – had  come to nothing. But, for China, military questions are secondary to  those  of  the  economy.  When  asked  in  2000  what  was  the  greatest   international  threat  to  China,  Zhu  Rongji,  China’s  premier,  replied:  “Problems in the US economy.”40  The  title  of  Martin  Jacques’s  2009  book,  When China Rules the World,  a  Sinophile  study  of  the  rise  of  China  from  the  depths  of  its  defeat and disorganization to become the world’s number one export  economy (a fait accompli announced in January 2010) caps what has  been a decade or more of, first, complacency, and then alarm over the  rise of China to dominance in Asia, the creation of a US-China bipolar  world, and perhaps China’s future top position as a world power. The  view of China’s ascendancy has been especially a commonplace during  the Great Financial Crisis that became apparent from 2007: American  establishment commentators concluded that the Great Crash of 2008  would be the catalyst for a shift of the centre of global capitalism from  the US to China. The unravelling of US hegemony in East Asia and the  world seemed, thus, like a done deal. Jacques calls this the changing of  the guard.41  By 2009, however, the kaleidoscope had turned; America was, so it  seemed, on its way back, or, at least, China may have been approaching  the end of its development tether. This is, at least, the argument of Hung  Ho-Fung,  who  has  shown  that  the  development  of  industrialized  and  prosperous urban eastern China has been purchased at the expense of  the impoverishment of the west of the country, the source of its virtually 

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endless  supply  of  cheap  labour.  If  this  is  halted,  for  whatever  reason,  then China’s expansion must suffer. In Hung’s view, then, the question  is  not  whether  China  will  supercede  the  United  States  as  the  world’s  hegemon, but how long the compact of American finance capital and  Chinese exporters can sustain the present system of mutual benefit and  global dominance. The struggle continues. In 2007 Premier Wen Jiabao,  who headed the “populist” faction within the government of the PRC,  referred  to  China’s  development  as  unstable,  unbalanced,  uncoordinated,  and  unsustainable.  His  opponents  of  the “elitist”  faction,  representing the interests of the coastal, export-oriented bourgeoisie, seem,  however, to be in control of the agenda. Meantime, what of democracy, sometimes called “the fifth modernization” and the future of Party rule? Who would be so rash as to cast a  prediction  for  a  country  capable  of  such  shifts  in  direction?  David  Harvey, for one. He notes the growing integration of the party and business elites and writes, “China … has definitely moved towards neoliberalization  and  the  reconstitution  of  class  power,  albeit ‘with  distinctly  Chinese characteristics.’ The authoritarianism, the appeal to nationalism, and the revival of certain strains of imperialism suggest, however,  that  China  may  be  moving,  though  from  quite  a  different  direction,  towards  a  confluence  with  the  neoconservative  tide  now  running  strongly in the US.”42 Chinamerica? More recently, Robin Porter has expressed a more cautiously optimistic  view: “It  is  hard  to  see  how  in  the  longer  term  the  continued  existence of the Chinese Communist Party with its present form and  function  can  be  compatible  with  the  new  stresses  and  demands  of  China  in  transition. There  is  already  nascent  pressure  for  the  further  development  of  civil  society,  and  with  Chinese  people  keen  and  able  progressively to take matters into their own hands, the political expression of this can only be a matter of time. Whether this takes the form of  a  demand  for,  or  push  towards,  democracy  on  the Western  model  is,  however, rather less clear.”43

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4 Reorientations: Colonialism, Socialism, and Capitalism in Vietnam and Indonesia Those who survived continue to live. But that will has gone, that burning will  which was once Vietnam’s salvation. Where is the reward of enlightenment  due to us for attaining our sacred war goals? Our history-making efforts for  the great generations have been to no avail. Bao Ninh, The Sorrow of War It’s common for foreigners to assume that the reformers’ victory is inevitable;  that the great march of History will take Vietnam into the promised land of  free markets and, later, to political pluralism … There is nothing inevitable  about what is happening in Vietnam; the outcome will be the result of   day-to-day choices made by the Party and the people. Bill Hayton, Vietnam: Rising Dragon

introduction

Until the period of decolonization after the Second World War, Southeast  Asia, both mainland and archipelago, comprised the following: a single  independent state, Thailand (Siam), two British colonies, Malaya (which  included Singapore, its capital), and Burma (before 1937, an adjunct of  India, afterwards a dependency) and a couple of protectorates, British  North Borneo and Sarawak, and five French jurisdictions, collectively  known as Indochine. Spain had ruled the Philippines until it had been  ousted  by  the  Americans  in  the  Spanish-American  War  (1898–99);  thereafter  this  archipelagic  nation  became  an  American  protectorate  until 1947. The Netherlands had dominion over the sprawling Dutch  East  Indies  archipelago,  and  Portugal  held  on  to  the  eastern  part  of  the tiny island of Timor. Until the First World War, Germany had owned  the eastern part of New Guinea but in 1920 this was given over to the 

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Australians as a prize for sacrifices on behalf of the British Empire in  World War I. It was officially considered a League of Nations mandate.  Like much of Asia and Africa, Southeast Asia was thus infiltrated, parcelled, tagged, bound, evaluated, and manipulated by Europeans and  Americans – and very briefly by the Japanese – over several centuries,  but mainly between the middle of the nineteenth and the middle of the  twentieth centuries. European rule over most of mainland Southeast  Asia, especially compared to Egypt, India, or Latin America, was of  short  duration;  over  archipelagic  Southeast  Asia  it  stretched  over   several centuries. vietnam : colonialism and nationalism

In the area of the rich Mekong Delta, which the Vietnamese called Nam  Bo, the French created the colony of Cochinchine. They divided the central and northern regions of Vietnam, Trung Bo and Bac Bo, into two  protectorates, Annam and Tonkin. Together with Laos and Cambodia  these  five  jurisdictions  collectively  became  known  as  Indochine  and  were ruled by a governor general in Hanoi. The Vietnamese emperor,  Bao Dai, a puppet like many other rulers in the French and British colonial worlds, was kept in a gilded exile in Hué.  French  colonialism  had  hardly  lasted  for  half  a  century  before,  in  June  1940,  France  was  defeated  by  Germany. According  to  the  peace  treaty  that  followed,  while  the  Germans  were  to  rule  all  of  western  France from Paris, central France was to remain ostensibly independent  – although clearly sympathetic to the Third Reich – under a collaborationist regime headquartered  in Vichy. It  was from Vichy,  rather than  Paris, until the liberation of France in 1944 that the French ruled over  the darker subjects of their tropical empire.  The Vichyite regime in the tropics combined the worst vices of Nazism  and French imperialism; while proclaiming its paternalism and its mission to spread civilization, it was in practice doggedly anti-democratic,  complacently  racist,  and  immovably  xenophobic.  Both  at  home  and  abroad, while unshakeable in their belief in France’s mission, most of its  officials nurtured a loathing for their rival imperialists, the British, as  well as a profound dislike for the Americans.  From the fall of France in 1940, then, the Vichyites ruled Indochina,  Vietnam included. In 1941, following the defeat of both the British and  Dutch in Southeast Asia and obedient to the orders of Vichy, the French  colonial administration accepted the regional dominance of the Japanese. 

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Its  officials  demonstrated  their  willingness  to  requisition  the  labour  of  the Vietnamese  and  the  raw  materials  of  their  Indochinese  colony  for  Germany’s Asian ally. Under this new regime of wartime exactions, life  for the poorest peasants became almost unbearably difficult. Yet almost  all Vietnamese, from rich to poor, feared that the Europeans would be  replaced by the Japanese themselves whom they knew to be more cruelly  oppressive even than the French. The  opposition  to  the  Japanese  was  mainly  carried  out  by  the  Indochinese Communist Party (ICP) at the head of their own military  arm,  the Vietnamese  Liberation Army. The  leader  of  the  ICP  was  one  Nguyen Ai Quoc (aka Nguyen Tat Thanh), best known as Ho Chi Minh.  Ho  had  visited  the West  during World War  I  and  was  present  at  the  creation of the French Communist Party (PCF). From France he travelled to Russia and China. As capable in Russian as he was in French  and Chinese, Ho was the most worldly of all of Asia’s leaders of the first  half  of  the  twentieth  century,  and  he  ruled  over  the Vietnamese  communists from the time he returned to Vietnam in 1940 until his death on  2 September 1969, the twenty-fourth anniversary of the restoration of  Vietnamese national independence. (We must be careful, however, about  what “communism” means in this context; for it certainly should not be  taken to suggest that Ho Chi Minh and his comrades wanted Vietnam  to  be  subordinated  to  Moscow  or,  later,  Beijing. Above  all,  and  even  more than social revolution, they wanted national independence.) While the leading lights of Vietnamese communism were nationalists,  first and foremost, they were also modernists – or at least as modern as  it  was  possible  to  be  in  a  peasant  society.  Communism  for  them  was  both a weapon and a theory; a weapon for liberation and a theory for  modern  social  reconstruction.  Communism  in  colonies  like  Vietnam  worked effectively in providing an ideological glue that bound colonial  people together, admittedly often by means of terror, and gave them a  universalist cause with which to combat colonialism. This was communism’s most valuable quality in the colonial world: its capacity to unite  people – militants, fence-sitters, and opportunists included – behind a  disciplined  cause  that  would  help  them  overturn  colonialism  and  the  form of neo-feudal landlordism that colonialism often sustained, especially in southern Vietnam. But  the  communists  did  not  own  nationalism.  An  early  form  of  Vietnamese nationalism had existed long before the idea of communism even entered the country. This focussed on resistance to foreign  rule  of  whatever  hue  but  especially  Chinese.  A  powerful  current  in 

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twentieth-century  Vietnamese  nationalism  was  a  movement  against  landlords who, in the south of the country and especially in the Mekong  Delta, were associated particularly with plantations and French rule, as  well as against poverty and exploitation. As first the French and later  the Americans were  to learn,  nationalism and  socialism together  produced an indomitable force. In March 1945, in the last days of their shrinking Asian empire, the  Japanese carried out a coup to rid themselves altogether of the French  and put Indochina directly under their own rule. This was the opportunity for the irregulars of the Vietnamese communist party, known as the  Viet Minh (Viet Nam Doc Lap Dong Minh Hoi) to move against their  weakened occupier and to capture one province after another. Confident  that the Americans and British were sincere in their rhetoric about liberating subject peoples from Nazi and Japanese rule, on 2 September  1945, the leader of the Viet Minh, Ho Chi Minh, read out the Vietnamese  “Declaration  of  Independence”  and  announced  the  existence  of  the  Democratic Republic of Vietnam (DRV). In many parts of the country  concerted  attacks  on  landlords  and  the  village  officials  that  had  supported the colonial regime followed. The landlords together with the rich  and even middling peasants fled into the towns while their tenants seized  their lands. This ebb and flow of land ownership, beginning in the immediate aftermath of the war and lasting for the next thirty years is what  David W.P. Elliott refers to as “the beginning of one of the most sweeping  socio-economic transformations in modern Vietnamese history.”1  In the autumn of 1945, supported by British imperial forces, which  were  mainly  Indian,  the  French  army,  which  was  mainly  Asian  and  African, reoccupied Indochina. The troops of the French expeditionary  force  included  recruits  from Algeria,  Morocco, West Africa,  and  Indochina as well as legionnaires from a number of European countries, including those who had served in the Wehrmacht during World  War II. The poorly armed communists were forced to negotiate a truce.  To cover up their attempts to restore colonialism, the French invented  the Indochinese Union. But almost immediately the truce was broken,  and  from  November  1946  the  Franco-Vietnam  War  began;  war  was  now to be the fate of the Vietnamese for three decades. Meanwhile in  the  rural  areas  in  which  the Viet  Minh  had  gained  control,  unofficial  land reform, backed by and benefiting the poor peasants, went ahead.  While  it  was  being  carried  out,  the  Franco-Vietnam  War  ebbed  and  flowed. Then came the turning point when the northern French garrison  at Dien Bien Phu fell on 7 May 1954. The battle of Dien Bien Phu, one 

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of a succession of Cold War confrontations, led to the most spectacular  military defeat endured by any colonial power in the whole of the twentieth  century.  Altogether,  the  Viet  Minh  captured  10,000  French  and  colonial troops. Six months after the fall of Dien Bien Phu, on 1 November  1954, the uprising against French rule in Algeria began. Dien Bien Phu  was the Stalingrad of French imperialism – not the end but the beginning of the end. Two years later came the scuttle at Suez, after which the  ultimate humiliation of defeat and withdrawal in Algeria.  Essential to the victory of the Viet Minh was the support given from  late  1949  by  the  People’s  Republic.  The  Chinese  trained  Vietnamese   soldiers and provided them with arms. In January 1950 first Beijing and  then Moscow recognized the government of Ho Chi Minh. In June of  the same year communist troops from the north invaded South Korea.  For the statesmen of the West the lesson was obvious; a red tide was  sweeping across Asia. The fall of Dien Bien Phu was thus one of the landmarks of the era,  as the fall of the British colony of Singapore had been to the Japanese a  dozen years earlier and as Suez became a couple of years later. It marked  the closure of what in the West is conventionally called the First Vietnam  War (1946–54). In fact, curtain time had now arrived for French colonialism in the whole of Southeast Asia; the French were now to follow  the Dutch out of the region for good. Unlike the case of Africa, there  would be no serious attempts to replace colonialism with neocolonialism. The destruction of the French was the opportunity for the Americans  who had supported the French materially since 1950. Besides supplying  the  French  with  tanks,  warplanes,  weapons,  and  munitions  under  the  aegis  of  an  official  Military  Advisory  Assistance  Group  (MAAG),  American  mercenaries  flew  the  transport  planes  that  parachuted  supplies to the besieged garrison. The American Saigon Military Mission,  the  successor  to  the  MAAG,  was  established  in  June  1954;  with  it  Washington  advanced  further  into  the  swamp  of  involvement  that  would suck the Americans ever further down. From an international perspective, the fall of Dien Bien Phu came at  the  end  of  the  first  round  of  the  Cold War  (ca.  1947–54)  when  both  major antagonists had paused to survey the global situation and to sign  treaties  assuring  one  another  of  détente.  It  coincided  with  the  major  international  conference  at  Geneva,  the  main  object  of  which  was  to  find some modus vivendi between the communist and non-communist  powers in Southeast and East Asia. Korea was high on agenda; the solution to the Korean problem in 1945 had been division. This was to be 

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the  solution  to  the  Vietnamese  problem  as  well;  just  as  Korea  was  divided along the 38th parallel, with the Communists being restricted to  the north, Vietnam was to be temporarily divided along the 17th parallel,  also  with  the  communists  to  the  north.  Northern Vietnam  was  to  retain the name given to it in 1945, the Democratic Republic of Vietnam  (DRV),  and  be  ruled  by  the  communists  from  Hanoi,  the  old  French  administrative  capital  for  Indochina.  Communist  fighters  of  the  Viet  Minh in the south were expected to migrate to the north, which many  did. Christians and other anti-communists in the north were removed to  the south. An International Control Commission (ICC), of which Canada  was a member, was expected to supervise this transfer of populations.  gieo gio gat bao (“ sow the wind , reap the whirlwind ”): the my - diem regime , 1954–1963

Southern  Vietnam  was  now  launched  as  the  temporary  Republic  of  Vietnam (RVN) headed by Ngo Dinn Diem and was to be ruled from the  capital  of  the  colony  of  Cochinchine,  Saigon.  Saigon,  located  on  the  Mekong River that drains much of peninsular Southeast Asia, was, as  well, the commercial hub of the whole of Indochina. According to the  terms  of  the  Geneva  agreement,  after  300  days  there  were  to  be  free  elections  in  both  halves  of  Vietnam,  supervised  by  the  ICC,  and  the  country would again be united. In the RVN the landlords had attempted to repossess their lands but  to limited avail; the August Revolution had proven irreversible and the  old structure of rural power had been shattered for good. Many of the  southern landlords anyway objected to Diem, a Catholic from central  Vietnam. By means of a limited land reform program supported by the  Americans, he had facilitated the continued dissolution of their estates;  and in their place he encouraged a strata of rich and middle peasants  who  had  no  interest  in  further  land  reform  and  were  antagonistic  towards the communists. The poor peasants, on the other hand, pinned  their hopes on the communists. By 1960 some 75 per cent of the land  was still owned by 15 per cent of the population; of the 46,415 hectares  distributed by the Viet Minh, only sixteen hectares were still in the hands  of the original beneficiaries in 1960. For the 15 per cent, the six years  from 1954 to 1960 were an idyllic period of peace and prosperity.  But  the  promised  elections  were  not  actually  held,  and  the  proAmerican, anti-communist, and ostentatiously pious Ngo Dinh Diem,  surrounded by his colourful family, held firmly to power, systematizing 

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corruption  in  a  manner  familiar  in  client  states  throughout  the Third  World. In the villages his henchmen ruled, often settling old scores particularly  against  those  who  had  supported  the  resistance  against  the  French and acted against the landlords. The Western media were nonetheless enchanted by his victory and praised him fulsomely. The Saturday Evening Post claimed that he had saved his people from “the red tide  of  Communism  in  Asia,”  while  the  CIA  functionary,  William  Colby,  claimed that Diem’s election “enhanced stability and encouraged hope  for the future.” Diem  continued to appoint his  relatives  to  top posts  in  the   government  and  to  terrorize  the  opposition,  communist  and  non-communist;  this  became  more  furious  with  the  passing  of  the   draconian Decree 10/59 of May 1959 that sharply escalated political  repression. The writer Frances Fitzgerald was to claim that the Diem  regime  in  the  years  that  followed  was  “an  indissoluble  mixture  of  nightmare  and  farce.”  Even  the  Buddhists,  who  comprised  a  huge  majority  of Vietnam’s  population,  suffered  from  the  wrath  of  Diem,  who destroyed any of their leaders who protested against his government’s  policies.  This  alienated  many  of  the  Buddhist  rank-and-file,  most  of  whom  were  normally  anti-communist.  Privately,  there  was  some scepticism about this new US puppet, but as President Johnson  admitted, “Shit, man, he’s the only boy we got out there.”2 The American  presence  was  the  necessary  prop  for  Diem’s  rule.  In  fact, the communists referred to the regime of Diem as the “My-Diem  regime” – “My” being an elided version of “American.” Americans were  ubiquitous – as aid-givers, military and civil advisors, and intelligence  collectors.  As  elsewhere  there  was  a  seamy,  covert  side  to  American  activities.  CIA  activities,  for  instance,  were  partially  financed  by  the  opium/heroin trade that the French had rehabilitated after World War II.  More  importantly,  from  the  late  1950s  the  Americans  guided  the   campaigns of rural terror that sought to destroy the Viet Minh in the  countryside. This  campaign  appeared  for  a  time  to  have  been  largely  successful.  Out  of  30,000  communists  in  the  central  Mekong  Delta  region of South Vietnam in 1954, fewer than 1,000 survived to the late  1950s.  Between  1954  and  1959  the  Diem  government  killed  68,000,  arrested 466,000, and imprisoned or exiled another 400,000. But in the  long term, American support was counterproductive; for it was against  this  background  of  repression  that  a  distinctive Viet  Cong  movement  emerged  in  South  Vietnam,  leading  an  insurgency  against  the  Diem  regime that began in 1960 and led to increasing US intervention between  1965 and 1979. 

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Over  the  decades  the  influence  of  the  communists  had  risen  and  fallen.  With  an  almost  Newtonian  predictability,  insurrections  had  been replaced by repression that spawned new resistance. In 1940, for  instance, the Nam Ky insurrection led by the Indochinese Communist  Party – whose militants were armed with bamboo spears and machetes  –  had  been  severely  repressed,  and  the  party  in  the  south  was  devastated. It was resurrected to organize the August Rising of 1945, which,  in turn, was suppressed by the returning colonialists. In the repression  of the late 1950s the communists had reached a point of near extinction  in the south – 5,000 had been arrested in a single southern province.  In  spite  of  this,  another  uprising  followed  in  1959–60. This  uprising  achieved its intended result of neutralizing the influence of the Saigon  regime in the south and led to the formation of the National Liberation  Front (NLF) in December 1960. Finally, during the Tet Offensive of early  1968, the communists again suffered crippling losses. And again they  recuperated to launch the Easter Offensive of 1972 and ultimately to  overthrow the Saigon-based Government of Vietnam (GVN) in 1975.  By 1967 the average age of Party members was between twenty-two  and twenty-five years. “The party focused on recruiting youth because  of their energy, fuelled by a genuine idealism in most cases and often  reinforced by ambition.”3 Although the Party had an enlightened attitude towards women, relatively few held leadership positions.  While  the  communists  in  the  south  were  barely  surviving,  in  the  Democratic Republic of Vietnam (DRV) to the north, a revolution was  taking  place.  By  1956  land  reform  there  had  reached  a  frenetic  level.  China was the DRV model, and between the DRV and China relations  were as close as they ever would be. In September 1962 Beijing declared  that  China  and  Vietnam  were “as  close  to  each  other  as  the  lips  to  the teeth.”4 The arms that the communists used were manufactured in  the  Soviet  Union  and  China  and  shipped  via  the  Cambodian  port  of  Sihanoukville to the Ho Chi Minh Trail, a series of winding roads linking north and south Vietnam and passing through Laos.  development and counterinsurgency

The My-Diem regime had responded to the uprising of 1959–60 with  repression  in  the  form  of  counterinsurgency,  a  military  strategy  fashioned by the British in Malaya and perfected in Kenya in the 1950s. In  South  Vietnam,  the  Americans  trained,  armed,  and  directed  local  forces that sought to destroy the communist insurgents. Under President  

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John F. Kennedy (r. 1961–63), who claimed that the 1960s would be a  “development decade,” counterinsurgency was seen as an extension of  “development”; where one failed, the other was prescribed. We will see  the same combination later applied in Afghanistan where the lessons of  Vietnam fifty years earlier had been forgotten. “Pacification” was the ultimate goal; successful pacification resulted  in the elimination of communism and inevitably movement in the direction  of  the  “free  world.”  Like  developmentalism,  counterinsurgency  boasted of specific techniques and lexicons that sought to circumvent  admission that pacification really meant forcible migrations and mass  killings. Central to US assumptions was the decision that, since the rural  communists  were  like  fish  in  water,  draining  the  water  would  expose  them and put them in a position to be “attrited.” To “attrit” a person  or  a  group  meant  to  kill  him  or  them;  killing  was  a  positive  value   measured, statistically, by body counts. Between December 1968 and  June 1969, the US Ninth Infantry Division fighting in the Mekong Delta  reported  a  body  count  of  almost  11,000  enemy  dead.  Later  it  was  claimed that close to half of the 11,000 were civilians. This was the time  of the Phoenix Program, the means by which “accelerated pacification”  would “drain the pond to catch the fish.” For the Vietnamese, one consequence of this regime of terror was further rural depopulation. Exposure  of  the  communist “fish,”  it  was  theorized,  would  follow  from  the  establishment  of  strategic  hamlets  into  which  rural  people  would be herded and in which they would be watched over by armed  guards.  Outside  the  strategic  hamlets  were  the  killing  fields,  called  “free  fire  zones”  in  which “search  and  destroy”  missions  would  be  operated by Saigon’s Army of the Republic of Vietnam (ARVN), advised  by American counterinsurgency specialists, supported, now for the first  time, by armoured personnel carriers, helicopters, and defoliation, first  used in 1963. Yet, even when the new strategies failed, as in the battle of  Ap Bac in January 1963, there was cover-up in Saigon and Washington.  The communists responded to pacification and strategic hamlets with  ingenuity, and by the mid-1960s, the bankruptcy of this form of developmentalism was becoming apparent. What is more, while hitherto the  communists  of  the  NLF  had  been  appallingly  armed,  by  1963  larger  quantities of weapons had begun to arrive in the south from the north.  The weapons were accompanied by instructors, many of whom had fled  north after the Geneva Accords of 1954. By  1963,  as  seen  from  the  capitals  of  the  West,  the  situation  in  Vietnam looked bleak: the communists were secure in the DRV to the 

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north, while in the south the Army of the Republic of Vietnam (ARVN),  fighting  for  the  My-Diem  regime,  had  been  unable  to  destroy  the Viet  Minh. Worse,  due  to  repression  and  corruption,  the  Diem  regime  had  become increasingly unpopular: “hearts and minds” were thus being lost  to the Communists. “Perhaps Diem’s worst mistake was his inability to  comprehend the needs of the peasants, who made up more than 80 per  cent of the population of the RVN.”5 His second worst mistake was to  alienate the Buddhists, who made up 90 per cent of the population.6 The Americans decided that Diem was unsupportable: they organized  his assassination, which occurred on 1 November 1963, and the purging of his family. Diem was replaced by the generals who had destroyed  him, the leaders of whom were Generals Duong Van “Big” Minh, Nguyen  Van Thieu, who became president, and Nguyen Cao Ky, formerly a pilot  on  the  French  side  against  the  Viet  Minh.  Ky,  under  suspicion  from  Washington for drug dealing, enjoyed the protection of the US embassy.  After a year, Thieu ousted the politically incompetent Minh, and, for the  remaining years of the life of the Saigon regime, he and Ky ruled as a  duo, known as the “Thieu-Ky regime.”  The overthrow of Diem led to a renewed offensive on the part of the  NLF in 1964–65 that demonstrated that without outside aid the ARVN  might soon fall apart. This fear provoked outright US military intervention and a protracted war that the communists had hoped to avoid. In  the  first  stages  of  this  offensive  the  strategic  hamlets  program  was  destroyed. It was succeeded from 1966 by a strategy of “pacification”  that involved “rural development cadres” who sought to ensure that key  regions of rural South Vietnam would remain secure from communist  infiltration.  “Welfare”  now  co-existed  with  warfare  in  the  battle  to  “build  democracy”  in  an  increasingly  depopulated  countryside. “The  Vietnamese understood the term ‘pacification’ (binh dinh) quite well,  since  the  French  had  used  it  to  describe  their  colonial  conquest  of  the country.”7 the thieu regime and american defeat : 1963–1975

Forgetting the lesson of Korea (“Never fight another land war in Asia”)  the Americans decided on a solution that was to haunt them for decades  – to commit more troops. The American War was now launched. The  civilian planners in Washington, ironically known for posterity as “the  brightest and the best,” were urged by a military that still believed in  the invincibility of American arms. Together they dreamed of a decisive 

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victory  in  a  relatively  short  period  of  time.  In  1961  there  had  been  3,000  US  troops  in  South  Vietnam.  Gradually  this  number  escalated  until by 1967 it reached half a million. Besides the US troops were their  allies, 1.3 million South Vietnamese soldiers as well as contingents from  Thailand, Taiwan, Korea, Australia, New Zealand, and the Philippines.  Canadians stayed home and can probably thank Prime Ministers Lester  B. Pearson and Pierre Trudeau. The Americans had been warned by no  less a figure than Charles de Gaulle: “You will sink step by step into a  bottomless  military  and  political  quagmire,  no  matter  how  much  you  spend in money.”8 And deeper and deeper the Americans sank, with the  Johnson  administration  and  its  wise  men  resorting  to  lie  after  lie  to  deceive the American people, sacrifice more lives, and spend more money. tet

Several critical moments might be imagined in the decade after 1965.  One of them was the communists’ Tet offensive launched on the night  of  30–31  January  1968.  Even  before  that,  at  the  end  of  1967,  the  Americans  had  acknowledged  that  the  communists  had  become  the dominant presence in the now depopulated countryside of South  Vietnam. Still, rural support for the revolution remained listless: people  had grown tired of ceaseless war and the endless promises of the communists that victory was just around the corner. These two factors led  the  strategists  in  Hanoi  to  assume  that,  by  launching  simultaneous  attacks throughout the region, a general uprising could be orchestrated.  Although the Tet attacks were launched with reckless confidence in victory and heroic sacrifice, the uprising did not happen. It was the communists who were now failing to learn; in May a second offensive was  launched, and it, too, failed. The Americans and their ARVN allies were  not destroyed. The Viet Cong suffered such devastating and irrecoverable losses that by 1970 demoralization had become endemic, a sentiment captured by Bao Ninh in his The Sorrows of War: “Victory after  victory, withdrawal after withdrawal. The path of war seemed endless,  desperate and leading nowhere … The soldiers waited in fear, hoping  that they would not be ordered in as support forces, to hurl themselves  into the arena to almost certain death.”9 To maintain even faltering pressure on the enemy, northerners had to  be sent south across the  17th parallel. It  seemed that the  ARVN,  with  masses  of  US  equipment,  might  actually  win  the  war.  What  was  not  included  in  this  calculation  was  the  effect  of Tet  on American  public 

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opinion. Until the end of 1967 the public was evenly divided on the war,  but after the offensive, which entered American living rooms by means  of remarkable live television coverage, public support for the war began  to drop rapidly. By the beginning of 1973 two out of three Americans  disapproved of the war. On the other hand, by 1970 American official opinion had become  giddy with optimism. Strategists in Washington now concluded that the  war could be entrusted to the ARVN; “Vietnamization” became flavour  of the year. Disengagement now seemed a safe option. Alas, this optimism was not shared by the President Lyndon B. Johnson. Overwhelmed,  he did not run for office again. In the presidential elections of 1968, his  Democratic successor, Hubert Humphries, was defeated by a Republican,  Richard Nixon, who appointed Henry Kissinger as his National Security  advisor.  Kissinger  was  now  on  his  way  to  becoming  America’s  most  bloodied  Cold War  realist,  involving  himself  in  the  overthrow  of  the  neutralist Sihanouk of Cambodia in 1970, the Allende government of  Chile in 1973, and the invasion of Portuguese East Timor in 1974. For  his efforts in Vietnam, where he sought to ensure peace on American  terms, he was awarded the Nobel Peace Prize. In  1970,  under  the  newly  elected  President  Nixon,  withdrawals  of  the by now heavily drug-addicted US army were begun. Cambodia was  bombed and invaded to assure that the supply lines to the south would  be closed down. As in the case of his Republican successor, George W.  Bush,  Nixon  hoped  that  there  would  be  no  defeat  during  his  presidency. It was unthinkable, anyway, that Washington could be humbled  by  Hanoi.  At  Christmas  of  that  year  came  the  massive  bombing  of  Hanoi as an attempt to soften up the northern regime in preparation  for peace talks. In depopulated rural South Vietnam the communists, reinforced by  troops  from  the  North,  held  on.  Conveniently  for  the  re-election  of  Nixon, the Saigon regime reached a peak of its effectiveness in 1971.  Then,  in  the  spring  of  1972,  the  communists  launched  their  Easter  Offensive, the main target of which was the northern provinces of South  Vietnam just below the 17th parallel. The main aims were to undermine  Saigon’s pacification program and revive the guerrilla movement. Given  their  losses,  the  recuperative  powers  of  the  revolutionary  forces  seem  surprising. Once again, the balance of power shifted; this time in favour  of the communists. There followed the Paris Peace Accords of January 1973, by which  the  United  States  agreed  to  end  its  combat  role  in  Vietnam.  After 

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March  1973,  there  were  no  US  combat  troops  left  in  Vietnam,  although thousands of civilians, mainly supporting the air force of the  Thieu regime, remained. Worse, for Saigon, military assistance from  Washington  declined. Then,  in  spite  of  professions  of  peace,  in  mid1973, came another surge. Territory held by the GVN in 1972 was now  lost again. After an inconclusive year during which widespread dissatisfaction  with  the  corruption  and  incompetence  of  the Thieu  regime  became  even  more  manifest,  the  balance  of  force  was  now  changed  conclusively. In late 1974 and early 1975, quite suddenly, came a string  of NLF victories and the collapse and rout of the army of the ARVN.  The  final  chapter  in  the  long  and  bitter  struggle  for  an  independent  Vietnam had come. On 3 May the communist flag was hoisted over the  presidential  palace  in  Saigon  –  all  this,  and  the  final  humiliation  of  American flight from the roof of the US embassy watched on television  by the millions. William Duiker, formerly a Foreign Service officer stationed in Saigon, has described the end of the affair in his biography of  Ho Chi Minh. On the morning of April 30, 1975, Soviet-manufactured North  Vietnamese tanks rumbled through the northern suburbs of Saigon.  Seated on the tanks, soldiers dressed in combat fatigues and the  characteristic pith helmet with the single gold star waved the flag of  the Provisional Revolutionary Government (PRG). Just after noon, a  row of tanks rolled slowly along Thong Nhut Avenue past the  American Embassy, from the roof of which the last US marines had  lifted off by helicopter only two hours before. The lead tank hesitated briefly before the wrought-iron gate in front of the presidential  palace and then crashed directly through the gate and stopped on  the lawn … The young tank commander entered the building …  [and] … ascended to the roof of the palace where he replaced the  flag of the Republic of Vietnam on the flagpole with the red and  blue banner of the PRG.10 the audit of victor y

President  Nixon  had  put  an  end  to  what  has  been  called  America’s   neocolonial entanglements, and in the course of the wars that lasted for  thirty  years,  the Vietnam  of  1945  had  been  transformed  irreversibly.  Now  not  only  was  the  country  free  of  foreign  domination  but  the  social  structure  had  been  utterly  overturned. “The  landlordism  that 

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had fuelled peasant resentment and attracted a mass rural following  to  the  revolution  had  nearly  disappeared  even  by  the  middle  of  the  conflict, and the land question itself had been pushed into the background by the war.”11  The cost of the war remains inestimable. The Pentagon has conceded  that between 700,000 and 1,225,000 civilians were killed and wounded  between  1965  and  1972  in  South Vietnam  alone. The  US  Senate  estimates  were  195,000  to  415,000  deaths.  Dilip  Hiro  has  claimed  that  “nearly 3 million Vietnamese” died. Marilyn Young has calculated that  in  South Vietnam  where  the  worst  of  the  fighting  was  endured,  some  9,000 hamlets out of 15,000 were destroyed, along with 25 million acres  of farmland and 12 million acres of forest; and 1.5 million farm animals  were killed. The war had left “an estimated 200,000 prostitutes, 879,000  orphans, 181,000 disabled people, and 1 million widows.”12 Then  there  is  the  matter  of  the  application  of  chemical  warfare  in  the  form  of  defoliants  and  especially Agent  Orange,  produced  by  the  American chemical giant Monsanto, used initially to deprive the communists of rice and later to destroy their jungle shelter. Gabriel Kolko,  who has written extensively on US foreign policy, comments: “In 1963,  US  experts  learned  that  the  principal  defoliant, Agent  Orange,  might  cause cancer, birth defects, and much else (a fear that was confirmed),  but  this  knowledge  failed  to  affect  policy  in  any  way. The Americans  used  defoliants  for  nine  years,  spraying  20  per  cent  of  all  of  [South  Vietnam’s] jungles and 36 per cent of its mangrove forests – resulting in  irrevocable human and environmental damage.”13 The war in Vietnam,  the  longest,  costliest,  and  most  divisive  war  since  1865,  was  an  utter  failure on the part of the United States. Other, unexpected, consequences eventuated. The American invasion  led to South Vietnam being flooded with cheap consumer goods and a  tidal wave of modern equipment, both military and other, from 1954  on. Combined with the dislocation of peasant communities during the  war and with the land reform introduced by the US-backed regimes, the  rural class structure was utterly shattered and there was huge migration  into the towns. In the place of a poor peasantry, an independent rural  middle class had been born, its members resistant to any attempts by  Hanoi after 1975 to carry out agricultural collectivization. The market  reforms that became the hallmark of the capitalist economy after 1986  were  broadly  supported  by  the  peasants,  whom  the  revolution  had  released from what the communists called “feudalism,” that is, the dominance of landlords.

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postwar

After thirty years of war (1945–75) came peace and, for those revolutionaries who had survived, optimism. While the bloodbath that Western  experts warned of did not take place after Saigon fell (although 100,000  people were arrested and taken off to “re-education camps”; of these,  94,000 returned, presumably rehabilitated, and the rest perished, many  due to the primitive conditions of the camps) mammoth problems confronted the newly unified country. The economy of what now became the Socialist Republic of Vietnam  was at a crisis point. In the north, US bombing had smashed Hanoi and  shattered the port of Haiphong. A huge army had to be returned to useful  peacetime  activity.  In  the  south  the  problems  of  the  DRVN  were  even  greater. The DRVN had relied almost absolutely on the US; the agricultural  economy, which had not been reformed, had shrivelled due to a flood of  US  imports,  unfarmed  land  was  matched  by  unemployed  farmers,  the  infrastructure had been battered by the war, the cities were choked with  ex-soldiers,  ex-bar  girls,  and  various  other  employees  of  the  invading  forces. In a secret protocol signed in Paris the US had agreed to reconstruction aid. This aid never materialized; instead Vietnam became subject  to a US embargo just as China was after 1949 and Cuba after 1960. Furthermore, the country had to remain on a war footing because of raids  from Cambodia that killed hundreds or even thousands of Vietnamese.  The SRV, in retaliation, invaded Cambodia on 25 December 1978,  driving  the ruling Pol Pot regime from Phnom Penh. Thereafter the Chinese supported the Pol Pot rump with military aid, at a high cost to the Vietnamese  who  established  a  puppet  army  of  their  own  on  Cambodian  soil.   In February 1979, after Deng Xiaoping had denounced the Vietnamese,  the Chinese Peoples’ Liberation Army (PLA) invaded the northern provinces of the country. This was a move calculated to undermine the Soviet  influence  in Vietnam  and  to  improve  China’s  relations  with  the  United  States that, according to Bill Hayton, had given Beijing the green light.14  Although the PLA received a mauling and retired after only sixteen days,  Beijing  had  sent  a  strong  signal:  no  more “insubordination,”  no  more  communist solidarity. As a result, the Vietnamese were forced even further  into the Soviet camp. As the life span of global communism was drawing  to a close, the Soviets were subsidizing the Vietnamese economy to the  tune of $2 billion a year. This could not go on. So, while, initially at least, life in Vietnam seems to have improved, by  the end of the 1980s the economy was in sad shape. A turn towards the 

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West, the fate of communist regimes in the Soviet Union and China, was  in the cards. This turn came with the accession to power of a new generation of modernizers, led by the general secretary of the Communist  Party,  Nguyen Van  Linh,  who  began  his  career  condemning “bureaucratic centralism and subsidization.” The pivotal moment came with a  resolution passed by the Politboro in May 1988 that called for a “multidirectional orientation” for the country to replace the simple reliance   on the Soviet Union. At first, as in China, reform, known by the term doi moi (“renovation”),  was  carried  out  within  limits  and  not  without  misgivings;  the  leading  role  of  the  state  was  not  abandoned. Then,  as  Neil  Sheehan,  who  reported  the  war  in  Vietnam  for  the  New York Times,  testified  when he visited the country in 1989, Rationing and subsidized prices for rice and all other commodities  were abolished. People were told that they would have to buy what  they needed in the open market. Capitalism was legalized and private enterprise encouraged. The currency was freed to find its true  value; the artificial exchange rate was ended, and the dong was permitted to float at approximately the black market rate … By the  summer of 1989, prices had stabilized, stores were filled with a spectrum of goods, inflation had fallen from 1988’s 600 to 700 per cent  to a projected 25 per cent … rice production was up considerably,  and the country was able to export rice in quantity for the first time  since the 1930s.15 With surprising speed, the “dragon model” was put in place. Although  the essential social services that had impressed the World Bank – health,  education, and family planning – were now neglected, most of the economy remained in the hands of state-owned enterprises. In fact, although  the foreign-owned sector is a highly visible part of the economy, in 2005  the state owned 122 of the 200 biggest firms in Vietnam.  Economic growth reached 8–9 per cent in the early 1990s, slowed  down after the Asian crisis of 1997, and then increased again, averaging 7.5 per cent between 1991 and 2008. This growth was rooted in  an  export  strategy  dependent  on  coal,  oil,  textiles,  footwear,  coffee,  rice, and seafood. The per capita income in 1997 was $350 per annum;  by  2001  it  had  reached  $2,130,  still  below  Malaysia  ($3,640)  and  Indonesia  ($2,940)  but  above  Thailand  ($1,970).  In  2007,  the  year  the  country  joined  the  World  Trade  Organization,  Vietnam  ranked 

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109th on the UN’s Human Development Index, which measures health,  longevity, education, and living standards. This ranking was well below  Malaysia  (at  58th)  but  above  India  (at  127th).  Bill  Hayton  offers  a  summary account: It’s a common assumption among many observers of Vietnam  that the coming of capitalism will create a new force in society,   a new middle class with sources of income independent of the  Communist Party and able to stand up and defend itself. This  may come in time, but it seems a long way off. For the moment  getting better off requires loyalty to the Party. The well connected  are exploiting their connections to become rich, and the rich are  exploiting their money to buy protection from the state. The  result is widening inequality between rich and poor … Poor   families have benefited less from falls in infant mortality and malnutrition than better-off ones. A third of poor children are underweight, compared to 5 per cent of better-off ones. Bear in mind  that in Vietnam the “poverty line” is around $15 per month.  Anyone earning over that is not classified as “poor.” A further  problem is that most wealth in Vietnam is hidden from view,   usually because it has been obtained through shadowy means.  The gap between the top and bottom of the pile is wide and  getting wider.16 In spite of the political monopoly of the Communist Party, Vietnam is  still held up as a shining example of economic liberalization. Perhaps  this is a misinterpretation of the role of the party; for as Hayton has  argued:  “[An]  explanation  for  Vietnam’s  success  is  that  reform  was  begun  to  protect  the  state  sector,  not  to  dismantle  it;  …  the  state’s  involvement  has  remained  consistently  high  throughout  the  reform;  and … until recently, World Bank policy advice has been ignored, except  where it fitted with the Communist Party’s own priorities.”17 indonesia : colonialism and nationalism

If colonialism in Southeast Asia was normally of short duration, Dutch  colonialism is the exception. For some of the nearly 20,000 islands of  the  East  Indies,  Dutch  rule  had  lasted  a  remarkable  three  and  a  half  centuries – from 1600 to 1942. Then, with astonishing suddenness, it  was terminated. Between March and May 1942, the Japanese occupied 

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Dutch India, as it was called, rounding up the Dutch colonialists and  imprisoning  nearly  10,000  of  them.  The  few  lucky  escapees  bolted  to Australia. The East Indies now became Japanese, to be exploited mainly for the  oil reserves of Borneo and Sumatra. Unlike the case of Vietnam, where  during the war nationalists kept their distance from the collaborating  French,  many  of  the  Netherlands’  former  subjects  signed  up  with  the  Japanese. For these, as it turned out unexpectedly, service to the Japanese  cause was a useful apprenticeship. The Japanese, unsurprisingly, claimed  that their empire wasn’t a real empire in the European sense but rather  a Co-Prosperity Sphere, that is, a kind of commonwealth. They claimed  that the Indonesians should enrol themselves in the broad anti-imperial  movement that sought to liberate Asia from Europeans. “Asia for the  Asians” was thus the Japanese slogan, a kind of antidote to the European  claim  of  a “civilizing  mission,”  which  meant,  in  reality, “Asia  for  the  Europeans.” The Japanese slogan had the effect of encouraging faith in  the idea of an Indonesia for Indonesians. Even in adversity, the Dutch had few doubts about the future of their  Indies. On the first anniversary of Pearl Harbour, their Queen, Wilhelmina,  who was in exile in Ottawa, gave a speech reminding her listeners of the  indivisibility of the kingdom. She offered practically nothing to the colony’s nationalist leaders other than the promise of consultation.  In Indonesia itself her assertion was met with scorn by the nationalists who had formed the Partai Nasional Indonesia (PNI) in 1927. The  slogan of the PNI was forthright: “Free Indonesia.” By 1930 the party  had  already  enrolled  100,000  members.  Unlike  the  Dutch,  who  had  attempted to elaborate a racial-legal system that privileged the few and  excluded the many, the nationalists sought to establish an independent  state that was all-inclusive. At the youth congress of 1928 the central  principle of “one country, one people, one language” had been established. Achmed Sukarno (1901–1970), the leader of the nationalists, in  common  with  nationalists  elsewhere,  had  spent  years  in  and  out  of  colonial prisons. On 17 August 1945, two days after the Japanese surrender, the Indonesian  nationalists  struck,  declaring  that  a  new,  independent  country  had  been  born;  Sukarno  was  proclaimed  president  and  Muhammad  Hatta,  his  vice-president.  Sovereignty  was,  however,  short-lived.  By  November the Dutch were back, seeking to take over from the interim  occupation of the British, who had undertaken the task of reinstating  Dutch  colonialism.  As  with  the  French  in  Vietnam,  their  claim  was 

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e  nergetically disputed. For four years, the Dutch colonial army of some  90,000 fought against the nationalist irregulars while the population of  the country suffered, particularly as a result of the Dutch blockade. On  the sidelines the Americans and the Soviets watched, both, for different  reasons, supporting the nationalists.  By  March  1949  following  a  truce  brokered  by  the  newly  created  United Nations, the nationalists emerged victorious. Clearly, the tide of  world  affairs  had  turned  against  colonialism,  and  Indonesian  independence became a reality: in December the United States of Indonesia  (Republik Indonesia Serikat) was born. The whole of Asia, apart from  crumbs  like  Portuguese  Timor,  Hong  Kong,  and  Macao,  had  by  this  time either become independent – like India, Ceylon, and Burma – or  was on the cusp of freedom from colonialism. It was also listing dangerously leftward; for alongside communist China and socialist India was  an emergent Indonesia that was ruled by a left-wing nationalist coalition, a major element in whose support was the Communist Party of  Indonesia (PKI). independence : the sukarno era , 1949–1966

Blindsided by the successes of nationalism, the Dutch had tried to bind  the Indonesian islands to the Netherlands by means of a NetherlandsIndonesian Union. This was an imitation of the British Commonwealth  and the French Union, and, like both of these, it was a failure. Worse  followed. In 1957 Dutch firms in Indonesia were nationalized and, in  1963, West Irian, the western half of the huge and resource-rich island  of New Guinea, which the Dutch had tried to hold on to, was given to  the Indonesians by the United Nations.  Achmed Sukarno, who ruled Indonesia as president from 1949 until  he was overthrown in 1966, was simultaneously a nationalist, an anticapitalist,  an  authoritarian  populist,  and  a  spiritual  obscurantist.  A  secularist, like the rulers of China, India, Egypt, and, up to a certain  point,  those  of  Pakistan,  he  was  resolutely  determined  to  keep  Indonesia in civilian hands. To this end, at the political level, he contrived a blend of nationalism, religiosity, authoritarianism, socialism,  and Third Worldism that he called “Guided Democracy” – an eccentric  mix since most regimes recognized religion and communism as being  antithetical.  Then  there  was  his  national  moral  philosophy  called  Pancasila, a weak metaphysical tea that stressed rectitude and struggle  in the direction of spiritual revolution. 

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The Indonesian Communist Party (PKI) was the oldest in Asia and the  largest outside the Soviet-Chinese bloc. At its peak it had three million  members  and  included  civic  officials  and  even  a  few  ministers  in  the  government.  Adhering  to  the  revolutionary  tenets  of  Leninism  and  imagining  that  world  revolution  was  nigh,  the  PKI  had  launched  an  abortive uprising known as the Maidun rebellion in 1948. From 1963  its leaders had organized land seizures and were demanding the right  to  arm  their  followers. They  were  obviously  pleased  with  Sukarno’s  claim, made in 1964, that the Americans in Vietnam were “imperialists,” but otherwise their insurrectionary instincts were sublimated; no  historical evidence has ever materialized indicating that the leaders of  the  PKI  planned  to  overthrow  Sukarno  and  establish  a  communist  regime. Nevertheless, some of the army leaders and the Americans in the  embassy in Jakarta certainly suspected this. Sukarno himself was cautious; the kind of communist takeover that  had been witnessed elsewhere was far from his mind. When the Chinese  foreign minister, Zhou En-lai, visited Indonesia in 1964 to celebrate the  tenth anniversary of the Bandung Agreement, he tempted Sukarno with  a  shipment  of  arms.  But  Sukarno  temporized,  inviting  his  generals  to  study the question and never followed through with the proposal.  Military Coup In the decades of Sukarno’s rule a couple of major problems had risen to  an unsettling prominence. First of all, there was the economy; Sukarno  had  neither  an  overall  plan  nor  the  technocrats  to  implement  one.  Indonesia was thus more like Cambodia, or even one of the ex-colonies  in Africa, than India or China where high levels of education had survived from pre-colonial times to produce, under colonialism, a layer of  competent  modernist  functionaries  and  technicians.  The  Dutch  had  walked away from Indonesia as their neighbours, the Belgians, had from  the Congo, leaving only the merest educated stub. Sukarno had no talent  as a planner and hardly any sense of the gravity of the problems from  which  the  Indonesian  people  were  suffering.  He  thus  was  unable  to   formulate any kind of strategy to assure that agricultural productivity –  essentially the production of rice – met the needs of the people. So when  agricultural  productivity  decreased  and  the  transport  infrastructure  crumbled, Sukarno turned increasingly to borrowing. This was at best an  interim  solution;  by  1964  deprivation  had  continued  to  rise,  reaching  levels not felt since the time of Japanese rule. By 1965 foreign debt had 

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reached $2.1 billion, an amount greater than could even be serviced by  export earnings; and by the end of 1965, inflation was so high that prices  doubled  every  few  weeks.  People  were  encouraged  to  turn  away  from  rice, which was needed for export, and to eat corn. By the mid-1960s the  Indonesians were among the least well-fed people in Asia. While  many  of  the  junior  officers  of  the  Indonesian  military  were  communists,  some  of  the  senior  officers  were  no  longer  sympathetic  with  the  vague  goals  of  the  president,  especially  his  foreign  policy  of  “steering  to  the  left,”  that  is,  towards  China.  They  were  alarmed  at  the growing influence of the PKI. Prominent among these was MajorGeneral  Suharto  (1921–2008),  an  opportunist  and  self-server  of  no  avowed political convictions, although, obviously, he loathed and, presumably, feared, the communists. In common with other army officers,  Suharto  had  become  involved  in  smuggling.  Even  before  the  coup  of  September 1965, largely due to the entrepreneurial activities of a number of the senior officers, the army was becoming an economic force to  be reckoned with. Sukarno used the PKI as a counterweight to it. On the night of 30 September 1965, Suharto became involved in, and  perhaps  even  initiated,  a  coup  d’état. To  this  day,  the  events  of  what  became a thoroughgoing counter-revolution are opaque, in part because  it became a coup against the PKI in which the whole of the leadership  of the party and hundreds of thousands of its followers, including those  in the army and air force, were slaughtered. The estimates are imprecise. Max Lane sets the figure at between two hundred thousand and   two million. On the island of Bali alone between December 1965 and  early  1966  “an  estimated  80,000  people,  roughly  5  per  cent  of  the   population were killed.”18 Many of these were not communists at all  but rather the victims of revenge on the part of landlords who sought  to destroy peasant organizations set up by the PKI. Chinese were also  killed for racist reasons, and women were raped and slaughtered because  they had belonged to women’s organizations affiliated with the PKI. In  the months that followed, in the climate of government- controlled anticommunist hysteria, about a million and a half people were imprisoned,  many of whom perished from inadequate diet and torture.  The role of the United States in the coup of 30 September – 1 October  1965  is  as  controversial  as  the  coup  itself.  Yet  even  the  CIA  seemed  shocked  by  the  extent  of  the  bloodbath.  In  a  report  on  the  killings,  it explained, perhaps disingenuously, “In terms of the numbers killed,  the anti-PKI massacres in Indonesia rank as one of the worst mass murders of the 20th century, along with the Soviet purges of the 1930s, the 

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Nazi  mass  murders  during  the  Second  World  War,  and  the  Maoist  bloodbath of the early 1950s.”19 The PKI did not survive the purge that followed the coup; by the end  of 1965, the largest communist party outside of the Soviet Union and  China had been extinguished, and in March 1966 Sukarno was forced  at  gunpoint  to  hand  over  all  government  functions.  His  cabinet  was  dismissed and fifteen members were arrested. A New Order was now  installed. suharto and

“ developmentalism ”: 1966–1995

However incompetent as an economic manager, Sukarno had attempted  to steer Indonesia between the rock of the West and the hard places of  Moscow and Beijing. He had undertaken reforms that aimed at greater  equality between rich and poor and between women and men. Suharto  made no such attempt, turning Indonesian foreign policy sharply to follow  a  resolutely  pro-Western  course  and  creating  a  radically  unequal  society. The spirit of Bandung was thus dead. The embassies of Beijing  and Moscow were closed. Washington and London rejoiced. Equality,  too,  was  finished;  engorgement  by  the  few  and  the  subordination  of  women were now policy. The  fact  of  a  military  dictatorship  with  hundreds  of  thousands  of  communists  in  prison  stimulated  foreign  investment,  and  for  three  decades  the  economy  of  Indonesia  grew.  President  Nixon  noted  his  satisfaction: Indonesia, he said, was “the greatest prize in the Southeast  Asia area.”20 With the economy wide open to foreign investment and  ownership, by 1977 the Americans and the Japanese had sunk $8 billion in the country.  Military involvement in the economy, which had begun before the  coup, spread furiously with officers being given important state companies and plantations to manage (and plunder) as well as becoming  involved  in  outright  ownership  of  hotels,  service  stations,  mills,  and  transportation.  ”Different  parts  of  the  armed  forces  as  well  as  individual  officers  began  to  operate  businesses  as  if  they  were  private   capitalists  …  During  the  first  fifteen  years  of  the  counter-revolution,  businesses owned by different sections of the armed forces formed a  majority of the major new corporations. Later, this started to be overtaken by huge conglomerates owned by the families of a small number  of generals. Foremost among these was the huge business empire of the  Suharto family.”21

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By 1982 the generals managed 47 per cent of civil government departments;  even  before  then,  in  1977,  the  US  Securities  and  Exchange  Commission had complained about the level of corruption. But overall,  Washington was happy: “The US government had closely followed the  events of 1965, and approved of the abolition of communism, by whatever means. While being careful that there should be no direct involvement  in  the  massacres,  the  US  made  it  clear  that  it  was  ‘generally  sympathetic with and admiring of what [the] Army [was] doing.’”22 The ideology of the new regime, replacing the wooliness of Pancasila,  was “developmentalism.”  By  parliamentary  decree,  in  1983  President  Suharto was named “Father of Development.” As we have seen, “development” had been formulated in the West as a universal panacea for the  Third World and was, by some, at least, considered a third way beyond  communism  and  Western  capitalism.  Developmentalism  in  Indonesia  was guided not by the idealism of the non-aligned but by technocrats,  especially economists, trained in the West and associated with the University of Indonesia. These were known as the “Berkeley mafia”; they  and  their  teachers  came  from  a  variety  of Western  universities,  all  of  which, of course, taught orthodox, neoclassical, economics. In common  with the Stalinists who managed the Soviet economy in the 1930s and  the Maoists who managed that of China in the 1950s, few of these were  concerned with human rights and all were obsessed with growth. Their  program, however, was nothing new; they aimed at exiting the dead-end  of  Sukarno’s  socialism  by  promoting  state-led  capitalist  development  with particular emphasis on national industries. These industries were  to be both heavy, that is, producing industrial goods, and light, turning  out  products  for  the  consumer  markets.  Central  to  this  industrial  growth, and thus central to Indonesia’s future, was oil.  Oil and Economy Although the Anglo-Dutch Shell and the American Caltex oil companies  had long been established in Indonesia, the oil industry had hardly taken  off by the time that Suharto seized power. In 1967, his first year as president, he established the national oil company, Pertamina. Six years later,  following  the  first Arab-Israeli  war,  came  the  first  oil  embargo.  Prices  spiked. Then came the Iranian Revolution, and they climbed even further. By the early 1980s, with oil prices still buoyant, energy sales as a  proportion of total export earnings had reached 70 per cent and were  still floating upwards. 

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As the sea of oil on which Indonesia floated came bubbling into the  economy and the pockets of Indonesia’s oleocrats, it benefited almost  the  whole  of  the  population,  lifting,  especially,  the  boats  and  the  fortunes  of  the  growing  middle  class,  many  of  whose  members  found  employment in a swollen state bureaucracy that grew from 608,000 in  1963  to  over  3  million  by  1986.  Still,  Indonesia’s  middle  class  was  smaller than that of anywhere in capitalist East or Southeast Asia. Oil  not  only  enriched  the  dominant  class  and  sustained  the  middle  class but it provided a lubricant that reduced the friction between the  rivals within the ruling group. For the top ranks of Indonesia’s officer  elite, there was always a ministry or a directorship to be managed, irrespective of qualifications or competency. There is no better an icon of  petroleum-fuelled rapacity than the first head of Pertamina, Suharto’s  close crony, General Ibnu Sutowo. It was Sutowo who had developed  intimate and mutually enriching relations with the Japanese businessmen who needed all the oil that the Indonesians could pump in order to  feed their insatiable industrial demands. By the time he had forced to  step down as manager of Pertamina in 1976, General Sutowo, through  imprudent borrowings, spendings, and pilferings, had plunged the company into over $2 billion in debt. But, being an intimate of President  Suharto, he was allowed to retire in peace to manage his commercial  empire  of  thirty-seven  companies,  which  included  ownership  of  the  Jakarta Hilton. One of Sutowo’s protégés was B.J. Habibie, who was to  succeed Suharto as president.  Yet we should not be distracted by the mammoth gains accumulated  by  the  few.  As  we  have  noted,  the  many  also  benefited  from  the  oil  boom; in the period 1970–80 per capita income almost doubled. Unlike  Nigeria, for example, the Indonesian state invested extensively in agriculture and rural development in the form of irrigation, fertilizer subsidies, and rural public works. It was this investment that partly accounted  for the rise in living standards and longevity of the majority of the people who lived in rural areas. At the same time Indonesia expanded its  infrastructure of basic health and education facilities, giving the country  one of the highest levels of primary school enrolment rates in the world  (93 per cent).  In  some  respects  Indonesia  resembled  such  oil-rich  developmental  states such as those in the Middle East where oil revenues poured into  the  pockets  of  those  who  stood  nearest  the  apex  of  power  but  also  providentially sprayed those standing near them. It did not resemble the  oil producers of Africa, where gouts of oil wealth squirted directly from 

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the hands of the military leaders and the bureaucrats and middle men  around them directly into the banks of Switzerland.  Windfall profits from oil stimulated the wider economy that was protected  from  foreign  imports  and  heavily  subsidized.  In  the  industrial  sector, development projects like steel and aluminium mills soaked up  the  profits  from  oil  and  expanded  Indonesia’s  working  class. The  oil  bonanza continued until the 1980s when oil revenues began to decline  sharply and many large-scale projects had to be scrapped. Subsidies for  food  and  fuel  were  also  cut  back.  Up  until  this  time  Indonesia’s  economic  diversification  had  become  modestly  successful  but  was  still  heavily dependent on natural resources (oil, timber) and cheap labour,  some of it being semi-skilled and employed in the textile industry. Two  developments kept up the steady supply of this cheap labour. First, efficiencies introduced in connection to the Green Revolution reduced the  number  of  agriculture  jobs,  especially  women’s  jobs;  the  unemployed  therefore sought unskilled work in industry. Second was the failure of  education. Despite primary school levels of education being provided to  all, Indonesia lagged so far behind other Asian states that few people  were being equipped for anything other than basic labour. Basic manufacturing, therefore, was sustained on the backs of literate but poorly  educated  young  women  who,  as  elsewhere  in  the  world,  were  disciplined through fear of losing their jobs. By the 1990s, manufactured exports had risen so steeply that there  was talk of Indonesia no longer being dependent upon hydrocarbon  exports. Most of these exports were of the low-skill, labour-intensive,  light industrial kind that were produced right across the region from  Sri  Lanka  to  South  Korea:  textiles,  garments,  footwear,  furniture,  toys, and sporting goods. The basis of the economy had now shifted  away from oil: “The share of non-oil exports as a percentage of total  exports increased from 31 per cent to 50 per cent in the period 1978– 87.  By  1990,  it  was  reported  in  the  Far Eastern Economic Review, there was no longer talk about Indonesia’s reliance on hydrocarbon  exports.”23  Between  1990  and  1995  Indonesia  became  one  of  the  world’s  fastest  growing  economies,  its  GDP  increasing  at  an  annual  rate of 7.6 per cent. Most of both Indonesia’s raw materials and finished goods were supplied to Japan. Indeed, Japan has come to play an increasing role in the  Indonesian economy. By the 1980s Japan had become simultaneously  the main market for Indonesia’s oil and natural gas and the chief source  of investment. 

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Fear of China’s rising military and economic power, in part a legacy  of  Sukarno’s  sympathy  for  the  People’s  Republic,  was  the  corollary  of  the  Suharto  regime’s  tight  embrace  of  Japan.  Relations  between  Indonesia  and  China,  which  remained  rocky  through  the  1970s  and  1980s, were nonetheless normalized in 1989. This underlines the continuities that run through Indonesia’s post-war history, one of which is  the  utter  decline  of  Western  influence  in  the  region.  The  decline  in  Western  influence  became  more  emphatic  with  Indonesia’s  joining  the Association of Southeast Asian Nations (ASEAN), the regional common market organization that became the focus of the country’s foreign  policy, too. typhoons

Crisis hit in 1997. Even before this there had been subterranean rumblings. As  early  as  1976  a  formal  protest  against  corruption  and  the  degradation of civil life had been sent to the president. Mass arrests of  those suspected of being associated with the protestors followed. One  of their number, Sawito Kartowibowo, deemed to be at the head of a  conspiracy, was put on trial. On the dock, he arraigned the government:  “It is not unusual to hear of police who are thieves, soldiers who pillage and murder the people, watchmen who always sleep, cashiers who  embezzle money, customs officers who smuggle, teachers who become  prostitutes,  leaders  who  are  corrupt;  of  …  the  poor  being  asked  for  donations, the rich being given credit, the destitute being preyed on …  bosses overeating while subordinates go hungry, and leaders getting fatter while the people grow more afraid.”24 Sawito was sentenced to eight  years and served five, but the middle class had been mildly politicized  and Suharto had been warned. After  Sawito  came  others,  like  the  notables  who  organized  the  “Petition of 50” in the mid-1980s. Politicians, soldiers, and the like had  become concerned about the corruption and degradation of the state.  Suharto heard them and so did many young men, some who were students  in  Muslim  schools  and  some  simply  unemployed.  In  September  1984 between eighteen and sixty-three Muslim students were shot by  soldiers  while  protesting.  Protests  continued,  but  for  Suharto  and  his  gang it was business as usual. In the absence of an effective politics of opposition, a politicized and  populist  Islam,  such  as  that  which  was  growing  in  the  Maghreb  and  the Middle East, was becoming the vehicle for protest by both the disgruntled and the disinherited. But Indonesian Islam differed from that 

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of the Middle East in that Indonesians were, on the whole, more inclined  to secular nationalism. “The independence struggle had imbued many  Indonesians with nationalist, democratic, and socialist ideals that were  decidedly  secular.  Secular  nationalism  was  particularly  influential  among  Muslim  members  of  the  largest  ethnic  group,  the  Javanese.”25  By  destroying  the  communists,  however,  the  Indonesian  generals  had  cleared the ground for an even more tenacious plant – political Islam.  Aware of the rising role of militant Islam, in January 1985, General  Suharto named “terrorism” as the enemy of the state. A few weeks later  a  bomb  seriously  damaged  Indonesia’s  major  Buddhist  shrine,  and  in  the years that followed there were sporadic clashes between the armed  forces and Muslim groups.  By  the  1980s  it  was  clear  that  Islam  was  an  issue  that  needed  to  be  spoken  to  by  power.  Concessions  would  have  to  be  made  to  keep  Muslims sweet. Girls in Muslim schools were now allowed to wear the  hijab, and Islamic education crept into secular schools. Islamic courts  were given extended powers. In 1990 an attempt was made to co-opt  the Muslim middle class behind the regime, and a new umbrella organization (initialled ICMI) was formed. For certain Muslims, the doors of  opportunity now swung open more widely. The next year the general,  for the first time in his life, went on a pilgrimage to Mecca. He came  back with a new name: Hajj Muhammed Suharto.26 This was the year  that  Soviet  communism  in  Europe  collapsed,  weakened  by  the  resistance of mujahidun with missiles in Afghanistan. It was also a time during  which  democratic  revivals  were  toppling  dictatorial  regimes  from  South Korea to Latin America. If Suharto and company were alarmed by this or by the flight from the  Philippines in 1986 of the nearby engrossing dictator, Fernando Marcos,  they remained complacent. Not so for the international press. Perhaps  more than any other event, the televised massacre of pro-independence  activists by the Indonesian army in Dili on the formerly Portuguese colony on East Timor on 12 November 1991, concentrated their attention.  family property

Still, time seemed to be on the side of Suharto; Indonesia was, above all,  stable  and  profitable.  When  the  Dutch  protested  to  the  international  consortium  that  had  delivered  aid  to  Indonesia  for  twenty-five  years,  they were rebuffed, and in 1992 aid, under the aegis of the World Bank,  was increased. In March 1993 Suharto was elected for his sixth term  of office. His daughter became the vice-chair of the party and his son 

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became  treasurer.  Earlier  in  the  year,  President  Bill  Clinton  (r.  1993– 2001)  had  taken  office  in  Washington.  Human  rights  activists,  trade  unionists,  and  others  found  him  to  be  more  concerned  with  human  rights issues than his predecessor George H.W. Bush.  In February 1994 Toronto’s Globe and Mail featured a story headlined “Economic Miracle Bears Fruit – For the Few.” Canada’s national  newspaper noted that “rampant nepotism, cronyism and lavish displays  of luxury are fuelling bitterness in Indonesia about President Suharto  and his family.” A few months later the Guardian (London) commented  that indulgent Western attitudes may change now that Suharto can no  longer  guarantee “stability.”27  Since  an  overhaul  of  the  whole  system  was  unthinkable,  sacrifice  was  necessary. A  leading  Chinese  businessman  in  Indonesia,  Eddy  Tansil,  was  the  scapegoat.  He  was  given  a  seventeen-year  prison  sentence  over  a  fraudulent  $430  million  letter  of credit he had obtained from a state bank. But this was not enough:  the Berlin-based Transparency International, a corruption watchdog,  elected Indonesia as the world’s most corrupt country. In a feature on the Suharto family in November 1994, the Observer  of  London  estimated  the  fortune  of  Suharto  père at  £10  billion. The  paper reported that his eldest daughter, Tutut, vice-president of the ruling party, had managed to combine money-making and jet-setting with  a love of politics. Her principal company, Citra Lomtoro Gung, managed a system of deeply unpopular toll roads. Her other interests ranged  through wood pulping, educational TV, radio, publishing, and pharmaceuticals. Suharto’s sons, Sigit and Tommy, were partners in the manufacturing and trading Humpuss Group. Bambang, yet another son, had  become the most successful of all family members in business: “His firm  Nusantara owns hotels, coal mines, property, paper mills. He made a  fortune out of a monopoly on the import of plastics; he got a monopoly  of the trade in oranges in Kalimantan but lost money when his excessive  greed caused farmers to revolt.” The Observer was perhaps too gallant  to mention Suharto’s wife, Tien, a queenly figure with a taste for diamonds, referred to by some as “Tien Per Cent.” In an article in Time magazine  in  May  1999,  it  was  claimed  that  the  Suharto  family  controlled $15 billion.28 earthquake

The end of the Cold War (c. 1990) marked a global climate change in  politics.  Neoliberalism  and  globalism,  thriving  since  the  1980s,  could 

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live  with  dictators  but  they  no  longer  could  excuse  them  so  readily.  Moving  with  the  increased  democratization  of  the  times,  in  the  late  1980s  the  Indonesian  government  proclaimed  a  new  doctrine:  openness.  Laws  were  changed  to  make  foreign  capitalists  feel  better;  they  could  buy  land,  open  businesses,  and  even  compete  with  the  firms  owned by Suharto’s cronies. Money flowed into the country; the economy climbed to an annual growth rate of 7 per cent per annum. There  was talk of a new Asian Tiger. The World Bank, which had loaned the  regime about $25 billion during Suharto’s three decades of rule, treated  the country as a poster child of economic development. In Indonesia,  claimed a World Bank report of 1994, “the poor have been doing well,  and  far  better  than  in  most  other  developing  countries.”29  Indeed,  in  1970 Indonesia’s per capita income had been two-thirds of that of India  and Nigeria; by 1996 it had risen to $1,090, four and a half times that  of Nigeria and triple that of India.  The middle class filled the new malls while their children sought rapture in global consumer culture. And after the long night of censorship,  the  media  became  relatively  freer.  People  in  Indonesia  joined  the  jet  stream of news that was flowing around the world and thus, for instance,  became aware of the massacre in Dili. They now began to believe anything, so long as the government didn’t claim that it was true. Among the other news they heard was that Dr B.J. Habibie, brilliant,  pious, a protégé of Ibnu Sutowo (of Pertamina fame) and a likely figure  to succeed Suharto, had brought an entire navy from the former East  Germany for $482 million without consulting his admirals and generals  and at great profit to himself. Its refurbishment, done, unsurprisingly, by  one of Habibie’s own firms, was to cost more than its original purchase  price. But the publication of news of this was going too far; the journals  that reported it were closed down. They shifted to the Internet. There was also talk of Suharto’s replacement. The Indonesian Democratic  Party  (PDI),  which  had  existed  in  the  late  1960s  and  had  been  associated with Sukarno’s children, promoted his eldest daughter, Megawati Sukarnoputri, who became an activist on the part of the poor and  dispossessed. Students, the urban middle class, and peasants, desperate  for a leader who could show them the way out of the New Order swamp,  all flocked around her. The supporters of Suharto attempted to repress  support for Megawati through violence, intimidation, and victimization,  but these strategies backfired and drove even more into opposition.  Then, in 1997, came the East Asian economic crisis. No country was  worse  affected  by  it  than  Indonesia  where  the  rupiah  crashed  to  one 

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fifth of its earlier value against the US dollar. Social disorder increased.  Businesses that had borrowed dollars – like Suharto’s crony, the banker  and  noodlemaker,  Liem  Sioe  Liong,  who  was  in  debt  to  the  tune  of  $600 million – were in crisis. The IMF was called in. Its misjudgements  led to a worsening of the crisis. The New Order boom of the 1990s had been based on huge inflow of  foreign  capital.  Now  capital  fled  and  crisis  arrived. As  industries  collapsed,  unemployment  rose  and  the  numbers  of  poor  multiplied.  On  the  whole,  however,  the  Suharto  clique  suffered  little  financially.  Its  members  did  lose  out  in  terms  of  credibility  and  control,  for  as  the  crisis deepened, those demanding reform, in spite of intimidation, were  emboldened. Students moved to the political foreground. At the private  Trisakri University in Jakarta, troops shot and killed four of them in a  demonstration.  The  middle  class  was  outraged  and  Suharto  became  unnerved. He resigned on 21 May 1998, handing power to the faithful  Habibie,  purchaser  of  the  ruinous  East  German  navy.  Ravaged  by  declining health, by 1999 Suharto, ill, weak, and sallow, had become a  shadow of his former self. Even though it was widely felt that Habibie’s reign was temporary, in  a desperate attempt to please the IMF and to distance himself from the  regime of his patron, the new president undertook a number of surprising reforms. Still, he was unable to wash away the stains of the regime  under which he had previously served. When presidential elections took  place  in  1999  the  blind  Muslim  reformer Abdurrahman Wahid,  who  had been a regular critic of the regime since the 1980s, became head of  state. Wahid stumbled on chaotically until mid-2001, by which time an  alliance of the military and more militant Muslims forced him out of  office. He was replaced by Megawati Sukarnoputri, his vice-president.   In  the  years  that  followed  there  rose  an  ever-enveloping  cloud  of  crisis accompanied by the global background music of reform: “democratization,” “good governance,” “transparency,” “inclusion,” “empowerment,” “leadership  teams,”  and  so  on.  At  the  level  of  society,  life  became more difficult, and social tensions accordingly grew. The simultaneous  growth  of  Christian  churches,  attracting  especially  the  rural  Chinese  in  the  outer  islands  (Ambon  and  Central  Sulawesi),  and  of  political  Islam  led  to  greater  conflicts,  in  the  form,  for  instance,  of  church burnings. In October 1996 nine Christian churches were burned  in east Java. Even at the top, extremist solutions were mooted. General  Prabowo,  Suharto’s  son-in-law,  who  believed  in  a  “Jewish-JesuitAmerican-Chinese” plot to topple Suharto, publicly charged his fellow 

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Muslims “to drive all the Chinese out of the country even if that sets  back the economy twenty or thirty years.”30 The Chinese Indonesians  in the urban areas, where most of them lived, became once more targets of violence.  The greatest violence was reserved for East Timor, which had become  independent after a referendum in August 1999. Here the army refused  to give up and carried on a murderous rearguard action by means of  local militias that resembled the contras of Central America. After some  2,000  people  had  been  killed,  Habibie  called  in  a  multinational  UN  force of peacekeepers commanded by an Australian. As they withdrew  under pressure, members of the Indonesian military destroyed as much  of the infrastructure of Timor as they could. In the urban centres there was an efflorescence of political Islam and  an increase in bombings. Muslim preachers, inspired by the phenomenon that had grown right across Eurasia, demanded less religious tolerance and a stricter and narrower interpretation of the central texts of  Islam. I shall discuss the growth of religious Islam further in Chapter 6.  In Indonesia, political Islam was given a wide berth by politicians who  sought the votes of Muslims. On 12 October 2002, in imitation of the  events of 11 September 2001 in New York and Washington, terrorists  bombed the tourist Mecca of Bali, killing over 200, mainly Westerners.  Other bombings took place in Jakarta in 2003 and 2004. The organizer  of  most  of  these  outrages  seemed  to  be  Abu  Bakar  Basyir,  a  radical  Muslim  preacher,  who  was  inspired  by  the  Muslim  Brotherhood  of  Egypt. Baysir maintained that Islam was under threat from a Westernbased  international  conspiracy.  The  prosecution  of  the  followers  of  Basyir led to a generalized disenchantment with radical Islam but also  to a yearning for more and better security, which only the army, hitherto  the backbone of the new order, could provide. The situation here was  more than superficially similar to that in Algeria where military terror  was the price of keeping radical Muslims out of power. Megawati  proved  to  be  an  uninspired  choice.  Lacking  in  political  acumen  and  indecisive,  she  failed  to  prevent  the  growth  of  regional  movements of autonomy (especially in East Timor, Irian Jaya, and Aceh)  that increased localized corruption and even the break-up of the country. Disillusioned with her rule, in September 2004 Indonesians voted  into  power  the  retired  General  Susilo  Bambang  Yudhoyono,  who   surprisingly managed to stabilize the economy and assure the security  of  democracy.  Running  again  for  election  in  2009,  Yudhoyono  won  an  easy  victory.  Meanwhile,  the  fortunes  of  the  rich  minority  were 

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undisturbed  while  Indonesia’s  environment  continued  to  be  degraded  through the unrestricted felling of the country’s forests. At other levels, too, there were magnifying problems. The heyday of  economic  development,  the  boom  years  from  1990  to  1995  when  Indonesia’s economy grew at the remarkable rate of 7.6 per cent, had  passed.  Not  only  did  Indonesia  seem  unlikely  to  recover  the  rate  of  growth that it had enjoyed in the 1980s, but, roughly from the moment  that Habibie replaced Suharto in 1998, it seemed headed for disaster. Environmentally, too, Indonesia was being consumed by the fires of  avarice. At  the  moment  of  its  independence,  the  country  had  an  estimated 152 million hectares of tropical forest. By 1989 this had fallen by  nearly 30 per cent to 109 million hectares, not all of which were in good  condition. The laissez-faire exploitation of the forests had been one of  the centrepieces of the New Order and the source of immense profits for  several of the Suharto gang. By 1980 Indonesia had become the world’s  largest exporter of hardwoods. Vast areas of Kalimantan were devastated  and  the  people  that  inhabited  them  driven  out.  In  the  press  in  1981 it was reported that there broke out in Kalimantan the worst forest fire in recorded human history. In 1997–98 a new factor emerged –  the clearing of forests for palm oil plantations, a lucrative area of profit  urged upon foreign investors by the International Monetary Fund. Even  wider areas were ablaze. In July 1998 the haze caused by the burning of  forests of Indonesia reached Malaysia and Singapore and Prime Minister  Mahathir  of  Malaysia  declared  a  state  of  emergency.  What  was  the  cause of this environmental holocaust? Logging companies from neighbours such as Malaysia were given  huge concessions to turn the giant rainforests into pulp for  Japanese paper mills. While world environmental attention turned  to areas such as Brazil, Indonesia’s forests disappeared, their  removal concealed by official statistics that showed that they were  being managed efficiently. The real situation was only revealed  when forest fires began during annual dry seasons in the areas that  had been stripped. Since much of the forest area of Kalimantan is  on peat soil, once started the fires took months to be extinguished.  As areas larger than the whole of Tasmania burned, huge palls of  smoke engulfed neighbouring Singapore and Malaysia. Some of  those fires were encouraged by Suharto cronies who set up palm  plantations in the cleared areas, to provide cooking oil for international fast food chains.31

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When China decided to ban logging in the late 1990s in order to  control  flooding, the Chinese building industry turned to Indonesia for timber.  “The result was predictable,” writes the environmentalist Peter Dauvergne.  “Indonesia saw deforestation rates soar: from 2000 to 2005, the outer  islands experienced the world’s highest rates of  forest loss.”32 Then there was oil, or rather the diminishing supplies of oil. In 2004  the New York Times reported that Indonesia’s oil wells were drying up  faster than new wells were being tapped. The largest and most accessible oil deposits having been tapped, the government was having difficulties, under the terms that it offered, to find oil companies willing  to  explore  remote  sites.  The  following  year  there  was  speculation  that Indonesia might become a net importer of oil. The $4 billion that  the IMF  reported as  having been misappropriated  from  Pertamina  by  Suharto  and  company  in  1997–98  alone  meanwhile  had  presumably  been squandered. On 9 July 2007 Indonesian state prosecutors filed a $1.5 billion civil  suit against Suharto. The Economist reported:  They allege that for 20 years the retired general, who was toppled  in 1998 after 32 years in power, forced state banks and others  to plough hundreds of millions of dollars into the Supersemar  Foundation. Much of this money, rather than being used for promised social work, was allegedly siphoned off to companies run by  members of the first family and their cronies … On July 10th the  attorney-general’s office announced it would soon prosecute  [Suharto’s son] Tommy for allegedly embezzling money from the  nation’s clove management agency. Lawsuits against at least six  other Suharto foundations are being considered.33 Suharto died of multiple organ failure on Sunday, 27 January 2007.  A decade earlier he had been named the most powerful man in Asia. His  legacy is varied. Some may remember him as the architect of modern  Indonesia, others as up there with Mobutu of Zaire in the global kleptocrat  league.  Whatever  the  verdict,  his  fortunes,  his  friends,  and  his  foreign allies were all bound together by a single export commodity –  oil. As the value and availability of oil diminished, the regime that had  been bound together by its exploitation came apart.

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5 Tigers: Export-Led Industrialization in South Korea, Taiwan, Hong Kong, and Singapore Growth first started accelerating in East Asia, in Japan’s former colonies of  Korea and Taiwan. Then it spread to Southeast Asia … It rose steadily in the  city-states of Singapore and Hong Kong … China and India awoke, having  once been great in their own right … [N]ot for a long time to come will an  empire reign the way the United States reigned after World War II. Alice Amsden, The Rise of the Rest

introduction

The Asian Tigers – South Korea, Taiwan, Hong Kong, and Singapore –  also known as the East Asian newly industrialized economies (NIEs) and  “late industrializers,” comprise an archipelago of physically small countries that developed beyond all expectation in just a few decades.1 From  1960 to 1970 the GDP growth of Singapore was 8.8 per cent, of Hong  Kong 10 per cent, of Taiwan 9.2 per cent; from 1975 to 1984 growth in  these archipelagic states held firm at 8.5, 10, and 9.2 per cent respectively. Thereafter, while their expansion continued at a remarkable rate,  they  were  joined  by  other  Southeast  Asian  states  like  Malaysia  and  Thailand, all of which benefited from investment from Japan. Finally,  from the late 1980s, China rose – the Goliath of all of the NIEs. What explains the boom of these miniature Japans? In the conventional argument, having first tried import substitution industrialization  (ISI) in the footsteps of Latin America,2 from the mid-1960s and with  the encouragement of the IMF, the Tigers switched development strategies  and  modelled  themselves  on  Japan’s  export-led  industrialization  (ELI). Accelerated takeoff followed almost immediately, leaving behind  states, like those in Latin America, which did not learn the ELI lesson.

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The story as told by Alice Amsden, the chronicler of South Korea’s  industrialization is, however, different. She writes that although writers  in the West have tended to disparage ISI, the NIEs actually stuck with it  and from it moved on to ELI slowly and deliberately. “Despite all the  bad press, even the most efficient mature high-tech industries now practice import substitution. In Asia, assemblers of calculators, computers,  and cell phones first buy hundreds of their parts and components from  overseas, mostly from Japan. Then step-by-step they selectively importsubstitute  them.  Protection  never  enters,  but  its  equivalent  does.  The  government  provides  assemblers  with  science  parks,  semiconductor  design services, spillovers from government labs, cheap credit, and joint  R&D … The whole idea that export-led growth and import substitution  were at odds proved to be mismeasured and false.”3  Here, as elsewhere, comparisons are invidious; for the Asian states in  question and those of Latin America have so little in common historically  that  the  similarities  are  like  those  of  apples  and  oranges.  Let  us  consider this fruit salad of Third World polities. For starters, as we shall  see in Chapter 10, in the immediate post-World War II years, Argentina,  untouched  by  fighting  with  its  economy  stimulated  by  a  remarkable  demand for its exports, had the fastest growth rate in the world. In the  aftermath of the war, Hong Kong and Singapore, on the other side of  the world, had economies that were quite ravaged, having barely recovered from Japan’s wartime exactions. Korea’s moment of agony was to  come and was to last from 1950 to 1953 when it was devastated by the  Korean War. Taiwan  from  1945  was  an  occupied  state,  overrun  by  a  nationalist  Chinese  army  from  the  mainland,  which,  as  we  shall  see,  may have been more brutal than the Japanese forces that had retreated.  All  of  the Tigers  were,  thus,  victims  of  imperialism,  British,  Japanese,  and even mainland Chinese, and of the war between rival imperial powers that included the Americans. All of them, except Singapore, were, at  most,  shards,  broken  off  from  prewar  independent  states;  none  were  historical  states  in  themselves.  During  the  Cold War,  especially  in  the  1950s, South Korea and Taiwan had been turned into client regimes of  American military power, like Japan, aircraft carriers that were anchored  off the shores of the People’s Republic. It would simplistic, however, to  see them simply as victims of US imperialism; for, like Japan and the  Europe  of  the  Marshall  Plan,  they  benefited  to  a  remarkable  degree  from US economic charity. Thus, in an attempt to win hearts and minds,  the Americans opened their doors and their markets to their products,  showing an almost oblivious attitude to any possibility of commercial 

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competition. Here was neocolonial modernism at its most benign. With  American  encouragement,  and  looking  with  apprehension  over  their  shoulders at China, both South Korea and Japan went so far as to follow Japan’s agrarian reforms, remarkable undertakings in societies in  which peasants comprised the largest element in the population. Even by the 1960s all of the Tigers had begun to excite notice from  developmentalists. The pattern of their development, it became obvious,  was roughly this: one after another, thanks to heavy government intervention including subventions and protectionism, all of the Tigers organized their economies to target the markets of the West, especially that of  the  United  States.4 “Organized”  is  the  key  word  here;  for  among  the  Tigers one planning decree followed another, Soviet-style. These plans  were typically called “the Second National Development Plan,” or, more  simply “the Third  Plan,”  the  latter  being  invoked  by Taiwan  between  1961 and 1964 where it was emphasized that heavy industry held the  key to industrialization. Often, as in the case of the South Korean textile  industry, governments legislated protectionism to keep out rivals from  more  advanced  economies.  In  Taiwan  access  to  the  highly  protected  domestic market for indigenous firms was conditional upon a certain  share of production being sold overseas. At the same time, the governments acted to support local infant industries. Amsden relates the following anecdote regarding the genesis of Korean shipbuilding: “In the  late 1960s, the United States opposed Korean’s investment in a shipyard  on  the  grounds  that  it  was  too  big  … The  shipyard  is  now  the  largest and possibly most efficient in the world, having diversified into  steel  structures,  overhead  cranes,  and  offshore  platforms  to  absorb  capacity.  Ship  designs  were  procured  by  Korea’s  ambassador  to  the  United  Kingdom,  who  drove  around  Scotland  buying  the  designs  of  bankrupted Scottish shipbuilders.”5 In  South  Korea  a  kind  of  economic  Darwinism  prevailed;  if  firms  failed, government subventions were cut and they perished. Still, neither  low wages nor imitation were sufficient in themselves to raise productivity in fields where innovation was the standard. Research and constant  improvement was thus essential. In South Korea, for instance, the government  established  a  textile  department  in  Seoul  National  University.  Laissez-faire capitalism was thus honoured, if at all, in the breach: development was never left to market forces. The state was ubiquitous; “the  Plan” was its hallmark. America’s wars in Korea and Vietnam, however appallingly brutal they  were for their victims, had the subsidiary effect of stimulating regional 

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local  economies. The  Korean War  that  we  shall  look  at  below  was  a  tonic to Japan’s takeoff and also gave work to the South Korean firm  Hyundai. The war in Vietnam in the 1970s, which may have derailed  American politics and any hope for the creation of a more just society,  benefited the economies of all of the Tigers. By the time of the fall of  Saigon in 1975 these were advancing at rapid speed thanks to draconian domestic policies that repressed labour costs by restricting trade  unions – as well as virtually all forms of political organization. Simultaneously, they suppressed domestic demand and ignored human rights  while encouraging accumulation on the part of the small class of national  capitalists, imitators of the Japanese zaibatsu, and all kept the value of  their currencies low while benefiting from the global free trade regime  that kept rich foreign markets more or less open. The same practices did  not apply to their own markets, however, for these were kept sealed and  neither  labour  markets,  nor  currency  valuation,  nor  trade,  was  left  unmonitored.  In  South  Korea,  for  instance,  the  shadow  of  the  noose  hung over those who might have considered the illegal transfer overseas  of funds, that is, “capital flight.” In the 1960s even the smoking of foreign cigarettes was regarded as unpatriotic.  What comes around goes around. After a couple of decades of rapid  growth, by the late 1980s South Korea, Taiwan, and Hong Kong all had  labour costs that were far too high for basic manufacturing, especially  as compared to China. An increase in the value of their currencies made  matters  worse.  Investment  had  now  shifted  to  the  less-developed  but  promising labour markets of coastal China and Southeast Asia, including Indonesia, Thailand, and Malaysia. (Later, in its endless search for  cheap labour, industry was to shift from China’s coast to its interior.)  Jobs  in  industry  were  succeeded  by  jobs  in  the  service  sector.  Thus,  although  as  early  as  the  1930s  Hong  Kong  had  been  one  of  China’s  leading industrial centres, by the mid-1990s the service sector provided  75 per cent of Hong Kong’s GDP and 70 per cent of its employment. Our story might end in the 1990s, by which time all of the Tigers had  developed  economically.  Collectively,  they  had  come  to  enjoy  highly  efficient education systems as well as superior standards of healthcare;  and  they  had  passed  from  brutal  authoritarianism  to  some  form  of  democracy. The pioneering historian of US “declinism,” Paul Kennedy,  writing in the late 1980s, a time of soaring Japanese success, was forcibly struck by the dramatic changes to the health of the citizens of two  of  the  Tigers,  Taiwan  and  South  Korea: “A  Taiwanese  child  born  in  1988 could expect to live seventy-four years, only a year less than an 

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American or a West German, and fifteen years longer than a Taiwanese  born  in  1952;  a  South  Korean  born  in  1988  could  expect  seventy  years  on  earth,  up  from  fifty-eight  in  1965.  In  1988  the  Taiwanese  took in 50 per cent more calories each day than they had done thirtyfive  years  earlier.  They  had  two  hundred  times  as  many  televisions,   telephones and cars per household; in [South] Korea the rise in the possession  of  these  goods  was  even  higher.”6 True,  like  Japan,  the Tigers  were democracies only in a particular sense, and so it obviously cannot  be  argued  that  democracy  or  economic  and  political “freedom”  by  Western European or North American standards was essential to economic growth. But we must ask: How important was democracy, given  the other gains? For those interested in the industrial development of other parts of  Asia, it remained to be seen how far, and under what circumstances, it  would be possible to duplicate the example of the Tigers. Certainly, it  had seemed unlikely at first that the economic development of small  island states might be reproduced in the case of giants such as China,  India, or even Indonesia. But, as it turned out, certain nasty surprises  were in store for the naysayers and the complacent commentators in  the West. In the chapter that follows I shall give pride of place to South Korea,  the state that became, after Japan, the industrial giant of East Asia. We  will see that South Korea’s fortunes were closely tied to those of Japan,  and for that reason its road to development has remained exceptional,  if not actually inimitable. korea : occupation , division , destruction , rehabilitation

Historically, Korea had more than a little in common with the early civilizations of China and even Persia and nothing in common with such  parvenu states as Taiwan (est. 1948) and Singapore (est. 1965). Korean  civilization emerged during the Bronze Age (c. 700 BCE) when it was  strongly  influenced  by  China,  especially  in  the  north.  In  the  Three  Kingdoms  Period  (300–668  CE)  the  first  consolidated  Korean  states  rose, and between 668–900 CE, one of them, Silla, became dominant.  The state religion of Silla was Buddhism, its capital was modelled on  the Chinese capital of Changan, and its scholars were educated along  Confucian  lines.  The  Confucian-trained  scholars  of  the  court  soon  regarded  the  Buddhist  monks  as  rivals  and  worked  to  destroy  them, 

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although  the  state  ideology  did  not  become  officially  Confucian  until  1392. The dynasty that brought about this change was the Choson (Yi)  dynasty that ruled from 1392 to 1910. Even by the exalted standards of  Chinese history, such longevity is awesome. Korea, thus, was a unified  state throughout most of the Modern period of history. We should recall  this when we speak of the divided Korea that has existed since 1945. The Choson state was remarkable in several respects, one of which  was that fact of its division into several tiers – at the top, a strata of  land-owning  Confucian  scholar-officials,  the  yangban,  brahmins  who  did  no  physical  work.  Immediately  below  them  was  a  broad  layer  of  commoners  who  were  the  main  producers  and,  finally,  below  them  a  strata of slaves, comprising up to a third of the population between the  twelfth  and  seventeenth  centuries.  In  Seoul,  the  political  and  cultural  capital of the kingdom, the proportion of slaves was as high as 60 per  cent. “No society can be understood without knowing where it came  from,”  writes  the  pre-eminent  Western  historian  of  Korea,  Bruce  Cumings. “Modern Korea emerged from one of the most class-divided  and stratified societies on the face of the earth, almost castelike in its  hereditary hierarchy.”7 In the nineteenth century, Korea was known to the West as the Hermit  Kingdom, mainly on account of its truancy in being penetrated by the  economic forces of globalization. In 1876, however, the Japanese forced  Korea  to  open  its  borders,  and  in  1910,  five  years  after  defeating  the  Russians in the Russo-Japanese War, the Japanese invaded Korea outright and turned it into a colony. Japanese colonialism, over the next  couple  of  decades,  spread  to  Manchuria  and  from  there  into  north  China. As we have seen, for the first decades of the twentieth century, it  was Japan rather than any Western country that attempted to establish  itself as the leading regional power in East Asia.  For  Japan,  the  takeover  of  Korea  was  a  compelling  proposition.  Cultural factors aside, Korea had a strong central government, a peasantry  disciplined  by  centuries  of  servitude,  and  a  reasonably  well-  educated and competent bureaucracy. It also had considerable resources,  including water power, iron, and coal in the north, and agriculture in  the  south. All  of  these  factors  Japan  had  harnessed  to  its  strategy  of  industrial growth so that by the 1930s Japanese investment had turned  Korea into an industrialized colony with a partly commercialized agricultural economy focussed on rice production.  The social consequences of the colonial development of Korea by the  Japanese were profound; high taxes, high rents, and increasing Japanese 

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ownership drove the Koreans off their own land and often out of their  own  country  to  seek  work  in  Manchuria  or  Japan,  where  they  were  cruelly treated by the racist Japanese. Other Koreans were absorbed in  industry, mines, or railway work. As a consequence, although in 1910  Korea had practically no working class, by 1941 it had nearly 1.3 million industrial workers. Over half of industry and some 86 per cent of  heavy industry was located in the north of the country. Simultaneous  with  the  birth  of  a  working  class,  there  developed  a  Korean colonial elite that sought personal gain by associating with the  Japanese. This stratum, common in every colony, provided much of the  leadership,  and  especially  the  military  leadership,  for  the  Republic  of  South Korea (ROK) after World War II. Park Chung Hee, the strongman  president of South Korea between 1961–79, who Time magazine dubbed  extravagantly, “an Asian version of Hitler,” was among them. Most Koreans were from the beginning hostile to Japanese imperialism. The first Korean nationalist parties appeared in the 1920s, at the  same  time  that  they  emerged  in Vietnam. The  nationalists  were  often  connected  to  Christian  churches  that  had  been  spawned  by  foreign,  especially American,  missionaries. The  Korean  Communist  party  was  formed  in  1925  and  was  supported  by  communists  in  China  and  the  Soviet Union. Over the course of the 1930s, the Japanese killed as many  as  200,000  Koreans  who,  in  one  way  or  another,  attempted  to  resist  Japanese rule. During World War II, as in Vietnam, the screws were tightened down  in the interests of the Japanese Co-Prosperity Sphere. Higher taxes and  price inflation were used as fuel for the Japanese war economy. By 1942  the tax rate was three times higher than in 1936, and the Japanese were  conscripting  hundreds  of  thousands  of  Korean  men  and  women  for  military,  industrial,  and  other  purposes.  The  other  purposes  included  sexual services to which between 50,000 and 200,000 Asian and mostly  Korean women were forcibly recruited. In an attempt to stifle the inevitable rising tide of nationalism, the Japanese interdicted the use of the  Korean language, even compelling the Koreans to change their family  names  into  Japanese.  These  repressive  measures  backfired,  fanning  rather than quenching the nationalist flames. the birth of two koreas

Japan collapsed as an imperial power in August 1945. From September  the  country  was  under  US  occupation. The  effects  of  this  occupation 

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were several: one of them was that Japan became the US headquarters  for  an  informal  sphere  that  spread  over  East  and  Southeast  Asia.  America had replaced both Britain and Japan as the dominant European  power in East Asia.  With the collapse of the Japanese empire a power vacuum was created  in Korea. Into it from the north rushed the Korean communists, thousands  of whom had fought alongside the Chinese in Manchuria and China. On  6 September 1945, four days after the Declaration of Inde pendence had  been  promulgated  in  Hanoi,  the  Korean  communists,  backed  by  Soviet  forces that had crossed the border on 9 August, announced in Seoul the  formation of the Korean Democratic People’s Republic (KdPR).  Meanwhile,  on  the  other  side  of  the  Pacific  Ocean,  different  plans  were being formulated. At several stages during World War Two, including at the Cairo Conference in 1943, the Koreans had been referred to  by the Americans as a people enslaved by Japanese imperialism. There  had  been  loose  talk  about  liberation.  Now  the  tune  changed  and  the  argument was made that Korea might be made into a trusteeship administered by the victors of World War II. When the Japanese surrendered,  a revised version of this plan was offered by Washington to Moscow;  the Americans  and  the  Russians  should  divide  the  peninsula  between  them,  it  was  proposed. The  38th  parallel  was  to  be  the  dividing  line.  North Korea was to fall within the Soviet sphere, and South Korea was  to become an American political satellite. Both the Soviet Union and the  United States wanted to deny as much territory as possible to their rivals  and to secure their own strategic interests. American troops arrived in South Korea on 8 September, two days  after the announcement of the formation of the KdPR. They imposed  the United States Army Military Government (USAMG) in the southern  half of the country. This was in effect an occupation authority that was  based on the implicit assumption that the Koreans in their zone were a  defeated enemy. Under the USAMG, Syngman Rhee was installed as de  facto head of state, supported by the KDP. Rhee was a Protestant pastor  and a long-time resident and lobbyist in the United States. He had much  in common with other exiles who had spent their lives in America to be  returned home to run their countries as reliable proconsuls lacking any  local bases of power. Reactionary, manipulative, duplicitous, and, necessarily,  ardently  pro-American,  Rhee  formed  the  Korean  Democratic  Party (KDP), around which rallied the forces of conservatism, including  many of the large landowners and both industrial capitalists and officials who had profited from, and served, the Japanese occupation. He 

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banned  the representatives of  the People’s  Committees that sought to  root out the old order and create a new progressive state, claiming that  they were part of a “communist front.” This was the mirror opposite of what was happening both in North  Korea  and  Eastern  Europe  where  pro-Soviet  regimes,  with  the  Red  Army behind them, were being implanted. In fact, it was a phenomenon  evident right across the war-torn world, with the Americans and their  allies assuring that rightists would be installed in countries under their  control and the Soviets and their allies assuring that communists would  be installed in theirs. Rhee  and  the  Americans  effectively  declared  war  on  the  Korean  nationalist left, attacking trade unions while stemming the tide of land  reform. Although  his  victory  was  not  easy,  it  was  complete.  By  1949  Rhee’s  supporters  had  effective  control  over  the  Republic  of  Korea  (ROK) Army,  the  police,  and  the  judiciary  while  the  jails  were  full  of  nationalists and reformers of every stripe; political violence, carried out  by  the  army  and  right-wing  youth  squads  had  executed  100,000  by  1950. With  the  formation  of  the  Republic  of  Korea  in  July  1948  the  United  States  had  withdrawn  its  occupation  forces.  Its  advisors  were  nonetheless  active  in  the  counterinsurgency  campaign  –  protest  being  stimulated  by  huge  inequalities  between  a  tiny  elite  of  the  rich  and  the  masses  of  the  poor  –  that  Rhee  unleashed  against  the  people  of  Cheju island and the mainland opposite. The campaign was marked by   “nauseating atrocities … Americans organized and equipped the southern counterinsurgent forces, gave them their best intelligence materials,  planned their actions, and often commanded them directly.”8  In North Korea the Soviets had been the occupation force. Upon receiving the Japanese surrender they handed government over to Kim Il-Sung,9  a communist guerrilla leader who had spent the war alongside the Chinese  Communists, fighting the Japanese in Manchuria. Surrounding him were  other  guerrilla  veterans  of  the  war  against  the  Japanese  in  occupied  Manchuria.10 Within a few months of liberation, a number of reforms  had  been  enacted,  including  land  redistribution,  industrial  nationalization, and formal equality for women. At the political level, a powerful  mass party enrolling hundreds of thousands of Koreans and a rudimentary army had emerged. In 1948 the Korean Democratic People’s Republic  (kdpr) and the Korean People’s Army (KPA) were formed; thousands of  the  KPA’s  soldiers  had  fought  as  guerrillas  on  the  side  of  the  Chinese  People’s  Liberation Army  (PLA),  especially  in  Manchuria.  It  was  these  former guerrillas who became the rulers of the DPRK for the second half  of the twentieth century.

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the korean war, 1950–1953

“The Korean War was a civil war that foreign intervention turned into  a surrogate world war.”11 Its origins are still debated. But what remains  clear is this: it was, as Gavan McCormack stresses, a civil war, not an  invasion by one country of another. Thus it should be seen in the same  light as the American Civil War, not the Japanese invasion of Korea or  the German invasion of France or Poland. Still the question remains: did  the South provoke the North? Did Kim Il-Sung think he could get away  with a blitzkreig? Where were Moscow and Beijing in all this? Was this  another example of the spread of global communism at the expense of  freedom-loving peoples? From  25  June  1950  the  flow  of  events  was  as  follows:  the  KPA,  equipped with Soviet tanks, crossed the 38th parallel. In the weeks that  followed it drove the ROK army tumbling southwards, practically into  the sea. It captured some 95 per cent of the national territory of Korea  and 98 per cent of the population. This provoked an international crisis,  all  the  more  grave  since  the  existence  of  the  neighbouring  People’s  Republic  of  China  had  been  declared  in  October  1949.  The  United  States called an emergency meeting of the UN. A vote was taken and it  was decided to form a UN army under US command. The UN secretary  general,  Trygve  Lie,  lobbied  for  an  American  resolution  denouncing  the attack by North Korea and threatening to have member states of the  UN respond forcefully. The Soviet Union might have blocked the resolution through its veto in the Security Council but it was boycotting the  UN. Thus was formed a UN army, comprising forces from a rainbow of  nations including Canada, Britain, France, Australia, New Zealand, and  Turkey. Never again, until the invasion of Afghanistan, would the US  receive such broad support for its overseas expeditions. The US and South Korean armies blocked the North Korean advance  at Pusan on the southern coast of Korea. In a brilliant amphibious landing in Inchon on the west coast, the US army drove the KPA army back  across the 38th parallel and then northwards right up the length of the  peninsula to the Yalu River, the frontier of Korea and China. Under the  aegis of the UN, civilians suspected of communist leanings were slaughtered in the thousands by the advancing army of South Korea.12 Then,  in November 1950, the Chinese, threatened by the presence of the US  on one of its most vulnerable borders, intervened in a surprise assault  and drove the UN forces back southwards across the 38th parallel. The  war now raked up and down the peninsula until an armistice was agreed  upon in July 1953. Korea, North and South, had meanwhile been torn 

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apart; three million North Koreans and a million South Koreans were  killed and half that many were missing. As well, between 500,000 and  a million Chinese soldiers were killed in pushing the NATO forces out of  the north. In the process of the American carpet-bombing of the peninsula, over 300,000 homes had been destroyed. According to the US air  force general, Curtis LeMay, “We burned down every … town in North  Korea  and  South  Korea.”13  The  infrastructure  of  the  industrialized  north had been pulverized – dams, factories, bridges were all rubble. In  fact, the scale of urban destruction exceeded that of Germany and Japan  in World War II. In the view of Cumings, this counts as genocide.  The big winners of the war were the Japanese economy and Syngman  Rhee. Japan became a forward military base and arsenal for operations  in  Korea  with  American  military  spending  and  stockpiling  meaning  orders for machinery, steel, chemical products, and armaments. The surviving farmers of South Korea were inadvertent beneficiaries; during the  occupation of the south the KPA had carried out land reform. This was  not undone. This reform had two main effects; first, it redirected capital  away from the land towards industry, and, second, it uprooted the conservative landlord class and created greater income equality. Rhee’s hold  on power was consolidated. capitalist development of the republic of korea

Rhee’s regime thus became a dictatorship oiled by US military aid. Yet,  corruption became the undoing of Rhee himself, and he was forced to  resign  in  April  1960.  His  whole  clan  was  thrown  out  of  power  and  influence – like the Diem clan in South Vietnam in 1963 and the Marcos  clan  in  the  Philippines  in  1986.  After  a  brief,  faltering  attempt  on  the part of oppositional parties to form a government, in May 1961 a  military dictatorship under General Park Chung Hee was installed and  lasted until 1979.  Park was the founder of the Third Republic, the state that emerged  from the developmental wilderness to become one of Asia’s industrial  giants. In some respects, in fact, his rule seems quite revolutionary; for  he  swept  away  the  entirety  of  Rhee’s  corrupt  machinery,  threatening,  dismissing, and even jailing thousands of those accused of incompetence  and the “illicit accumulation of wealth” and built the modern state. In  the 1960s South Korea’s per capita GDP matched that of Ghana; both  stood at $230. By the early 1990s, South Korea was ten to twelve times  more prosperous. Historical differences aside, the analogies with Latin 

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America here are also tempting because what stands out is how closely  South  Korea  fits  into  the  Latin  American  Cold  War  timetable,  with  nearly  three  decades  of  military  dictatorship  (1960–87)  and  the  profound economic crisis (1997) that followed. What is emphatically different is South Korea’s remarkable success, which is in large part due to  the launching of the Third Republic right in the middle of the Golden  Age of capitalism when international trade seemed to be on the verge of  limitless ascent. Stimulated by US military spending, but now independent of US economic control, South Korea, in the two decades of the dictatorship of  General Park, enjoyed a period of unprecedented industrialization; so  remarkable was it, in fact, that South Korea has acquired iconic status  as an instance of state-led development. The growth involved extensive  military intervention: dirigisme ruled, backed up by an inflated military,  and  an  ubiquitous  system  of  spies.  Vital  to  this  militarized  dirigisme  was Park’s nationalization of the banking system. The government also  implemented severe price controls and it strictly controlled capital flight.  Protectionism was everywhere. According to plan, exports took off: in  1963 they registered $86.8 million a year; by 1971 they had reached  $1.067 billion. Yet, far from the case of South Korea being an example  of enlightened military rule, it was the civilian directors of the country’s  great, integrated, state-backed firms (including Hyundai, Daewoo, and  Samsung), the chaebols, who remained firmly in the driver’s seat. If we  wanted a name for South Korea under Park, we might call it a “national  capitalist developmental dictatorship”; actually, it had a great deal in  common with late-nineteenth-century Germany and Japan.  The state-chaebol alliance was critical to rapid growth, and the chaebols were  to  become  some  of  the  world’s  leading  industrialists.  This  alliance was based on state-provided loans at low interest rates and the  exclusion  and  repression  of  labour.  Repressive  labour  policies  kept  workers’ wages much lower than those of their counterparts in other  nations  and  prohibited  labour  unions.  By  1984  sales  by  the  top  ten  chaebols accounted for 67 per cent of the Korea GNP. The growth rate  in the period of dictatorship stood over 12 per cent. By December 1987, when democratic elections were held for the first  time since the Park coup in 1961, the recipe of export-led growth directed  at the US market seems to have succeeded in South Korea as in few other  places.  In  common  with  other Asian  economies,  it  was  often  claimed,  South Korea had achieved the fastest reduction of poverty for the greatest number of people in history. As the Economist summarized,

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South Korea’s expansion, like that of other Asian tigers, resembled  the rapid development of communist states. In the 1950s some  Eastern European economies achieved spectacular growth by  squeezing more and more savings and labour out of their people.  But this kind of authoritarian advance is neither pleasant or  sustainable. South Korea’s labour policies were especially unpleasant. The  country was built by men who worked appalling hours, led by  obsessive bosses … Kim Woo Choong, who found the Daewoo  industrial group in 1967, never took a day off until his son was  killed in a car crash in 1990. His employees were expected to work  6 days a week, 12 hours a day, until the mid-1980s. Anyone who  protested got fired, or jailed. Under Park Chung Hee as well as  under South Korea’s next soldier president, Chun Doo Hwan,  labour disputes were normally resolved by troops, tear gas  and truncheons.14 Even as late as 1986, South Korean manufacturing employees worked  the longest hours in the world with wages that were lower in their counterparts in Brazil, Mexico, Hong Kong, and Singapore. As political commentator Perry Anderson asked, “Is it proper to speak about development  if  it  creates  as  politically  repulsive  a   society  as  South  Korea?”  The  answer  seems  to  be  a  qualified “yes.”  In  the  mid-1990’s  on  a  visit  to  Seoul, Anderson noted: “What a Londoner notices first is the ways in  which the city [Seoul] is more advanced than his own.”15 Following  disorders  in  Pusan  and  Masan  in  the  summer  of  1979,  Park  was  assassinated  in  public  view  in  October  by  the  maddened  head of the Korean CIA, whom he had offended. By this time the great  chaebols were up, running, and proliferating, and Korean capitalism  no  longer  required  state  support. “In  purely  quantitative  terms,  the  average number of subsidiaries under each  chaebol rose  from  4.2 in  1970 to 17.9 in 1990 … Perhaps even more important was that this  rise was accompanied by a diversification into new sectors; the average  number of industries in which each conglomerate owned subsidiaries  rose from 7.7 in 1970 to 14 in 1989.16 As in Japan, the business of the  state was business. Park’s  successor,  General  Chun  Doo  Hwan,  ruled  South  Korea  as  president for a seven-year term from 1980 to 1987 and then was succeeded by his hand-picked successor, General Roh Tae Woo, who held  office until 1993. Despite their despotic rule and the violence that they 

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were able to mete out against any form of popular protest – exemplified  by  the  bloody  repression  that  was  visited  on  protesters  in  the  city  of  Kwangju in May 1980 – a democracy movement had continued to grow  to the point of the June Uprising of 1987, which mobilized hundreds of  thousands of students, workers, farmers, and even middle-class professionals  to  demand  Chun’s  resignation  and  establish  democracy.  One  enthusiastic commentator refers to this mobilization with the accolade  that it was “one of the most extensive, organized and courageous cultures  of  political  protest  in  the  world.”17  It  was  this  movement  that  brought an end to South Korea’s Cold War dictatorship and opened the  door to the democracy that was manifest in the presidential election of  December 1987. A democratic revolution had thus taken place. Roh Tae  Woo’s presidency may be considered as the bridge leading away from  dictatorship towards democracy. An even more defining break with the  system installed by the Americans in 1945–48 came with the election of  Roh Moo-hyun in 2003.  This  was  not  all.  Another  shift  had  also  taken  place  by  the  late  1980s: South Korea’s industrial workforce had become more like those  in  the  West,  skilled,  organized,  and  highly  paid.  The  country  thus  would  no  longer  be  able  to  subsist  on  the  export  of  garments,  footwear,  and  textiles,  and  the  economy  would  have  to  move  to  more   capital- and knowledge-based industries. South Korean capitalists had  by now begun to invest in Southeast Asia where labour was cheap and  governments welcoming. During  the  subsequent  civilian  presidency  of  the  conservative  Kim  Young-sam (r. 1993–98), the first elected civilian head of state since 1961,  prosecutors brought charges of corruption and bribery against both generals. During the ensuing trials, it was disclosed that Chun had shaken  down South Korean firms for $1.2 billion and Roh for $630 million. In  1996 a court found both generals guilty of sedition. Chun was sentenced  to death and Roh to twenty-two and a half years in prison. Both were  later  pardoned  by  Kim  Dae-jung  (r.  1998–2002),  who  succeeded  Kim  Young-sam.  Kim  Dae-jung’s  election  was,  especially  for  Washington  and  Wall  Street, a nasty surprise: America had, after all, been a stalwart supporter  of dictatorship. As Charles K. Armstrong notes The role of the United States in the process of South Korea’s democratisation has been ambiguous. On the one hand, the US provided  the most important model of democratic political institutions for the 

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Republic of Korea from the latter’s founding in 1948, and the idea  of democracy on the American model was often the inspiration for  anti-authoritarian protests in South Korea. On the other hand, the  actual behaviour of US military and government representatives  within South Korea, from the 1945–48 military occupation until  the 1990s, was often in support of repressive political leaders in   the name of security and the defence against communism. After the  May 1980 massacre of civilian demonstrators in Kwangju, for which  many Koreans held the US partly accountable, anti- government   protests in Korea took a distinctly anti-American tone for the   first time.18 What is more, spokesmen openly suggested that Kim Dae-jung (known  as “DJ”) might not be able to deal the both the transition to democracy  and  fallout  from  the  East Asian  financial  crisis  of  1997  that  affected  South Korea deeply and forced it into the arms of the IMF.19 Earlier, he  had narrowly missed being assassinated by the secret police working for  the military regime. Left-of-centre, and a subtle critic of Washington, he  was an open admirer of the neoliberal British prime minister, Tony Blair  (r. 1997–2007). His aim was to balance the demand for increased political and economic justice on the one hand against the demands of the  monopolist chaebols on the other. This was made all the more difficult  by the 1997 Asian financial crisis, which was caused in large part by the  over-borrowing and then bankruptcy of some of the largest chaebols.  This financial crisis put South Korea in the debt of the IMF from which  it had been forced to borrow $57 billion in the form of a rescue package. The IMF, consistent in its support for neoliberalism, demanded not  only fiscal deregulation and the removal of restraints on foreign financial services firms but also fiscal austerity. Behind the IMF was the US  Treasury. “The US saw this as an opportunity, as they did in many countries, to crack open all these things that for years have bothered them.”20  Yet, despite the door being opened to “market forces,” the stranglehold  of the monopolistic chaebols was hardly reduced. As part of his role as a conciliator from June 2000, Kim Dae-jung had  pursued  a “Sunshine  Policy”  of  reconciliation  with  North  Korea  (the  DPRK). For this he was awarded a Nobel Peace prize and a high level of  scepticism  from  the  State  Department  of  President  George  W.  Bush,  which insisted on seeing North Korea as part of an “axis of evil.”  Kim Dae-jung was succeeded by his protégé, Roh Moo-hyun, a lawyer who was also part of the 1980s human rights movement. Although 

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Roh’s  ties  were  to  the  democracy  movement,  his  policies  led  him  to  advance a neoliberal agenda. By late 2007 the Roh regime, like the military  dictatorships  that  had  preceded  it,  became  itself  haunted  by  the  spectre of corruption. Roh, who had become unpopular for his willingness  to  throw  himself  at  the  feet  of Washington21  –  not  only  for  the  bilateral free trade agreement that he signed but also for his volunteering troops for the invasion of Iraq – himself barely survived impeachment proceedings. “A slew of bribery scandals, some of them involving  Mr. Roh’s aids, has underlined the extent to which money still talks in  Asia’s third largest economy,” reported the Financial Times. “Corruption  remains endemic in Korean society,” it added.22 In December 2007, Lee Myung-bak, “The Bulldozer,” former head of  Hyundai  Construction,  a  branch  of  one  of  the  great  chaebols, was  elected president of South Korea in a landslide. Amid the by now almost  inevitable questions of corruption and protests against Lee’s right-wing  agenda, within a hundred days of his inauguration in February 2008,  the new president’s support had collapsed. The streets of Seoul echoed  to the cries of “Dokje Tado!” (“Down With Dictatorship”). In June he  threw himself on the mercy of the electorate: “I reproach myself for not  serving the public properly,” he apologized, cancelling his program for  privatizing  water,  gas,  and  electricity  and  offering  sops  to  small  businesses and low-income families. guerrillas in power : the democratic people ’s republic of korea , 1953–2005

Before we consider the second of the Asian Tigers, we should round off  our history of Korea with an account of the northern half of the country, the DPRK, which is the mirror opposite to the capitalist success story  in the south.  The DPRK followed the same revolutionary path of land reform and  collectivization  that  had  been  undertaken  in  the  Soviet  Union  in  the  1930s and China in the 1950s. Under the Japanese, the mass of Korean  peasants were tenants living at a level of bare subsistence; millions had  no land at all while others had hardly enough to survive. Land reform  was  thus  immensely  popular,  not  the  least  among  women,  who  were  doubly oppressed. As one American observer noted, “half the population of north Korea was given a tangible stake in the regime and at the  same  time  the  north  Korean  government  gained  an  important  propaganda weapon in its campaign against the south.”23 In the wake of the 

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land reform of March 1946 state farms became dominant and cooperatives disappeared; private plots were limited to 100 square metres. For  women and the poor peasant majority, benefits were huge and tangible:  “North  Korean  women  …  experienced  a  genuine  liberation  greater  than women in any East Asian society of the time.”24 Between 1945 and 1948, with education no longer restricted to the  children of the elite, enrolment in primary school quadrupled. In fact, a  kind of affirmative action program applied whereby the children of the  lower  class  were  favoured  over  those  of  their  betters.  Even  teachers  were  selected  according  to  their  class  backgrounds;  in  one  province,  over half were of “poor peasant” origins. The possession of the kinds of  social capital that comes with class privilege was at a stroke thus discounted as the class pyramid was turned on its head. The industrial development of the north followed the Stalinist model.  According to Charles Armstrong,  In the 1940s, the Soviet-Stalinist model of development was still  very attractive to many people in what would be known as the  “Third World.” The Soviet experience appeared to be the single   successful model of rapid industrialization in a backward agrarian  society that was capable of maintaining political independence and  freedom from the capitalist world economy … Two years after liberation, North Korea embarked on an ambitious project of planned  economic growth, concentrating on construction, steel, chemicals,  mining, and other heavy industries. The regime remained committed  to the Stalinist path of production thereafter. For more than twenty  years, a program of heavy industry, limited consumer goods, withdrawal from the capitalist world-economy, and planned production  seemed to work well, giving North Korea an impressive rate of economic growth far beyond that of the South. By the 1970s, however,  such a development path was showing limited returns, and by the  1990s the North Korean economy was in a seemingly intractable  state of crisis.25 For several decades, thus, after the end of the war in 1953, the North  Korean economic picture looked rosy. As one British sociologist opined,  “The achievements of the Korean Workers Party [the governing party of  North Korea] are clearly remarkable and will be remembered long after  the tottering neo-colony in South Korea has finally collapsed.”26 By the  1960s Marxism-Leninism had been supplanted as the official doctrine 

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by juche, “self-reliance.” According to a 1978 CIA report, grain production had grown more rapidly in the DPRK than in South Korea, living  standards  in  rural  areas  were  higher,  agriculture  was  mechanized,  and  fertilizer use was the highest in the world. “North Korea’s average food  intake was higher than South Korea’s in 1982, averaging 3,051 calories  compared with 2,936; both were well over UN base levels.”27 Under the  banners  of  juche,  heavy  industry  had  continued  to  expand  and  North  Korea had become an impressive source of all kinds of industrial goods  from cars to arms. What was the secret? First, in common with the case  of South Korea, the ruthless organization of labour. Second, the dampening down of consumer demands. Third, huge foreign aid from the Soviet  Union in the form of technical assistance, loans, and subsidized oil. Yet, from the 1980s the government in the North, guided by the principles of Kimilsungism became acutely conscious that production was  falling behind the South. Joint ventures, especially with Korean capitalists  abroad,  were  encouraged.  One  unsolved  aspect  of  North  Korea’s  economic development is the fact that there was a fall in capital imports,  especially  from  the  Soviet  Union,  from  the  mid-1980s.  By  the  end  of  that  decade,  Moscow  began  its  dramatic  disengagement  from  an  ally  that it had supported for five decades.  By the 1990s the crisis of the North was compounded by famine, in  part caused by floods and drought in 1995–97. In some estimates, these  conditions had led to between half a million and a million deaths. This  natural disaster was made worse by the fact that Soviet aid and markets  were no longer available; oil now had to be bought at world prices. The  decline  in  petroleum  imports  led  to  a  drop  in  industrial  production,  especially fertilizers. By the late 1990s the economy of North Korea was  running at less than 50 per cent of capacity. Even agricultural production subsided. According to UN estimates, agricultural production stood  at 4 million tons in 1995 and dropped to 2.8 million for each of the next  two years before rising to 3.5 million in 2001. In the late 1990s famine  was  widespread,  although  there  was  some  recovery  in  the  next  few  years. By 1994 income per head in North Korea had fallen to one-eighth  of the income in South Korea. From 1995 China provided between half  and one million tons of food aid annually. In  that  year  Kim  Il-Sung,  “the  Great  Leader,”  the  “Respected  and  Beloved Leader,” the “Iron-Willed and Ever Victorious Commander,” and  the world’s longest-surviving head of state, died. Under his son and successor Kim Jong-Il (b. 1942), the DPRK’s “Dear Leader,” policy changed;  on 1 July 2002 a radical set of economic reforms was undertaken that 

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hinted  at  the  kind  of  changes  already  well  entrenched  in  China.  Four  special economic zones were created and rationing as well as state subsidies were ended. “We are reforming the economic system on the basis of  productivity,”  explained  a  North  Korean  economist.  The  Asian Wall Street Journal went on: “With the DPRK economy in a shambles and the  state  system  of  production  and  rationing  in  disarray,  the  government  has had no choice but to let the people fend for themselves in the open  market.”28  Production  for  the  export  market  now  followed  the  path  of  certain  other  non-Western  economies  as  earnings  from  arms  and  drugs  (heroin,  cocaine,  and  meta-amphetamines)  delivered  as  much  as  $100 million to North Korea’s economy. The hermit kingdom had thus  become the pusher kingdom, the world’s third largest producer of opium.  In June 2000, without consulting Washington, the president of South  Korea, Kim Dae-jung undertook a breakthrough mission to Pyongyang.  A few months later, in October, talks opened in Pyongyang involving the  US secretary of state; these talks were sabotaged, however, when George  W. Bush succeeded Bill Clinton as president in early 2001. When Kim  Dae-jung visited Washington in March 2001, Bush brushed him off. The  US  media  had  little  trouble  with  this  new  bellicosity;  on  its  13  January  2003  cover,  Newsweek carried  a  photo  of  Kim  Jong-Il,  above the inscription, “North Korea’s Dr Evil.” Later, in his State of the  Union address President Bush denounced Pyongyang as “an oppressive  regime [that] rules a people living in fear and starvation whose ‘blackmail’ would not be tolerated.”29 Although North Korea now appeared  to  be  in  the  crosshairs  of  the  huntsmen  of  the  US  State  and  Defence  departments, the successor of Kim Dae-jung, Roh Moo-hyun, pledged  to continue Kim’s policy of openness to the North. Conscious of a political climate change in Washington and watching  the US invasion of Iraq, the regime in Pyongyang feared that it might be  next. In April 2003 it announced that only by arming itself with a tremendous  military  deterrent  could  it  guarantee  its  own  security;  this  deterrent took the form of nuclear-tipped missiles, which could probably have reached not only South Korea, where there were nearly 38,000  American troops still stationed, but also Japan and the giant US military  base on Okinawa. It was this possibility that entitled North Korea to be  included, if only fleetingly, in the “axis of evil.”  The demise of North Korea, like that of Pakistan, as we shall see, is  frequently predicted. In the June 2003 words of the US deputy defence  secretary, Paul Wolfowitz, infamous as one of the planners of the invasion  of  Iraq, “North  Korea  is  teetering  on  brink  of  collapse.” “When 

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does the statute of limitations run out on being systematically wrong?”  Cumings has wondered.30 taiwan

Taiwan did not become a part of the Chinese Empire until the early seventeenth century, as Jonathan Spence explains: “In the later years of the  Ming dynasty (1368–1644), Taiwan was still largely unknown: dangerous seas, typhoons, and sandy shoals protected its coasts; flat, malarial  plains  along  the  west,  backed  by  inhospitable  mountain  ranges  sealed  its  isolation.  Taiwan’s  unfriendly  aboriginal  populations  further  discouraged exploration or settlement by outsiders.”31 After he had attained  power in 1644, the Manchu emperor sought to extend his rule over the  whole of China. In 1683 he sent a fleet under Admiral Shi to rid Taiwan  of pirates, and from that year Taiwan became an offshore annex of the  Chinese empire. It remained part of the empire for over two centuries  until it was handed over to the Japanese victors in the aftermath of the  Sino-Japanese War of 1894–95. Taiwan remained under the control of  Tokyo and sent up to 90 per cent of its exports of mainly foodstuffs to  Japan until the Japanese defeat in 1945. In this period the fate of Taiwan  resembled that of Korea in that its economic development was organized  around  the  needs  of  Japan  and  its  people  educated  in  the  values  of  Japanese life. The difference was that, whereas in Korea the local elite  became engaged in commerce and industry, in Taiwan the emergence of  such an elite was suppressed as long as Japan ruled. Still, by 1945, having  escaped the war on the mainland, it was relatively prosperous. Taiwan’s  future  had  been  determined  during  World  War  II  by  the  Allied leaders, amongst whom was Jiang Jieshi, who we met in Chapter 2,  the  leader  of  the  Chinese  Nationalists  (Guomindang);  the Americans  and the British agreed that Taiwan was to revert to Chinese rule after  the defeat of Japan. Thus, from late 1945 a second colonial occupation  began under a military administration installed by Jiang. This occupation was as corrupt and heavy-handed as Jiang’s mainland government  and led to anti-government riots in February 1947. Nationalist troops  responded by firing on the demonstrators and then by rounding up and  executing anti-Nationalist dissidents; between 10,000 and 20,000 were  killed and the island’s indigenous social and economic elite was largely  eliminated. Their repressive task successfully completed, Jiang’s minions  now cleared the way for the full-scale occupation of the island by the  retreating  Nationalist  government.  From  1948  the  officer  corps  still 

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loyal to Jiang, together with elite regiments and hangers-on, crossed the  Formosa  Strait  in  a  forlorn  mass  exodus,  together  with  the  bullion,  priceless art, and even archives that had been removed from Beijing. By  1949 there were a million Nationalist troops on the island, backed up  by the tattered remnants of Jiang’s navy and air force.  From  this  point  both  the  society  and  economy  of  the “Republic  of  China,” as Taiwan was now dubbed, became transformed. First of all, it  became  a “developmental  state,”  rather  like  South  Korea  under  Park.  Since  there  existed  on  the  island  no  capitalist  class  to  contend  with,  Jiang and his court had a carte blanche on which to write the rules of  industrial development. Like the followers of Rhee in South Korea and  Suharto in Indonesia, his supporters become the privileged recipients of  government economic assistance. The indigenous Taiwanese were temporarily frozen out although they, too, benefited from the land reform  policies of the Guomindang government and the generalized boom that  the island enjoyed after 1950.  As a consequence of US military investment and land reform, the economy from the 1960s began to pass out of its cocoon stage of economic  growth  into  the  next  era  of  light  industrial  development  increasingly  aimed at overseas, especially US, markets. As exports took off per capita  income began to rise dramatically. By 1970, 50 per cent of South Korean  exports had been aimed at America,  but  by 1985 this had  dropped to  under 40 per cent and thereafter continued to fall. By 2000–01, exports  from both Taiwan and South Korea, by now mainly in the high technology field, suddenly began to experience a sharp decline. The higher cost  of labour and the increase in competition from late-arriving industrializers now meant that exporters had to find new products or new markets. Any  thoughts  that  the  government  of  the  People’s  Republic  of  China  (PRC) might have had concerning attacking Jiang’s island refuge were  permanently  sidelined  with  the  outbreak  of  the  Korean  War  in  June  1950. As  a  consequence  of  the  war, Taiwan  was  recruited  to  become  part of the American glacis of bases stretching from Japan southwards  and included Okinawa, Taiwan, the Philippines, and Thailand that were  intended to block any expansionism of Beijing. Guarding the Formosa  Straits, and keeping Taiwan safe for the Guomindang dictatorship, was  an armada in the form of the US Navy’s Seventh Fleet.  In 1954 the US signed a mutual defence pact with Taiwan similar to  the one already signed with the Philippines in the same year. Shelving  any plans for invading the island, Zhou Enlai, the foreign minister of 

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the People’s Republic, announced in May 1955 that Beijing would strive  for the liberation of Taiwan by peaceful means. Ignoring this, in 1957  the US deployed missiles in Taiwan that could deliver nuclear warheads  to China. The Cold War in East Asia was now at its peak; whether it  would become a hot war was anybody’s guess. Taiwan  remained  under  the  authoritarian  rule  of  the  Guomindang  until  Jiang  Jieshih  died  in  1975.  He  was  succeeded  by  his  son,  Jiang  Ching-kuo, who remained president from 1978 until he died. But while  Jiang  still  lived,  the  wintery  winds  of  the  Cold  War  had  become  less   chilling. The first sign of spring took the form of negotiations between  Canada  and  the  People’s  Republic  in  1970.  In  November  the  first  Canadian  diplomat arrived in Beijing, and in February 1971 the Chinese  opened their embassy in Ottawa. Later that year the General Assembly of  the UN voted narrowly, and against pressure from Washington, to remove  Taiwan from the Chinese seat on the Security Council and give it to the  People’s Republic government instead. More dramatically came the visit  to Beijing of President Nixon, previously a furious anti-communist, on  21 February 1972, a year after the embassy in Ottawa had been opened.  In a joint communiqué issued a week later, the Americans conceded that  Taiwan was a part of China and that they, too, were interested in a peaceful settlement of the issue. Yet on the issue of present status of Taiwan,  neither side went any further. Meantime, a remarkable shift was about to  sweep over the People’s Republic and this had more to do with the passing of time and less with US initiatives. For gradually in Beijing the revolutionary Old Guard had begun to die off, starting with the death of the  premier, Zhou Enlai, in January and continuing with the passing of Mao  Zedong in September 1976. More than Nixon’s visit in 1972, it was that  of the Grim Reaper four years later that changed the Chinese world. Three years later, in 1979, Beijing and Washington “normalized” relations and agreed that all American military personnel would be withdrawn  from  Taiwan.  Beijing  then  announced  that  Taiwan  would  be  brought “back to the embrace of the motherland” but when and how  was left unstated. In the same year, Deng Xiaoping opened up China’s  Special  Economic  Zones  along  the  south  coast  to  attract  investment  from the Chinese diaspora, particularly Taiwan. In fact, Beijing offered  special incentives to attract Taiwanese investment and trade as well as  welcoming visits to the mainland by the Taiwanese themselves. Since then, the ties between Taiwan and the Mainland have multiplied dramatically. Taiwan firms, beginning with small labor-intensive 

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shoe and toy producers and gradually extending to large high-tech  companies like Taiwan Semiconductor … moved their factories to  the Mainland to find cheaper land, facilities, and labour. The   economic attraction was so strong that businesses evaded Taiwan  governments regulations designed to limit the island’s economic  dependence on China. China has become Taiwan’s number one  export market, and Taiwan the second-largest source of foreign  investment in China … By the end of 2005, Taiwan’s exports to  China (including Hong Kong) exceeded its exports to the United  States, Japan, and Europe combined … More than one million of  Taiwan’s twenty-three million people now live, work, go to school,  and get married in China.32 With  economic  transformation  came  political  change.  In  the  years  before  his  death  in  1988,  Jiang  Ching-kuo  had  begun  a  process  of   democratic reform. His successor, the native Taiwanese, Lee Teng-hui  (r. 1996–2000), who was the first president to be elected in a popular  vote, abandoned the anti-PRC rhetoric of his predecessor although his  successor,  Chen  Shui-bian  (r.  2000–08)  dropped  a  bombshell  when  in 2002 he mentioned his “two states theory,” affirming the effective  independence of Taiwan. Thus  the  debate  over  the  relationship  between  the  two  states  continued  with  Beijing  repeating  the  lines  of “one  country,  two  systems”  and stressing the “one-China principle” and Taiwan continuing to insist  on independence and to bristle with imported arms; in the years 1993  through 1997, for instance, Taiwan became one of the world’s five leading arms importers – alongside Saudi Arabia, Turkey, Egypt, and South  Korea, all of which were closely bound to US strategic designs. China  meanwhile  has  failed  entirely  to  reconcile  itself  to  the  independent  existence of Taiwan. hong kong and singapore

Hong Kong and Singapore share similar features: both are islands off  the shore of mainland Asia, both are predominantly Chinese and both  were British colonies. Further, most of the Chinese in Singapore were  recruited in the nineteenth century when Hong Kong became the centre  of the global trade in indentured Chinese labourers, that is, “coolies.”  Most of these labourers came from Guandong and Fujian provinces on  the mainland and were shipped from Hong Kong.

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Hong Kong was removed from China in 1842 as part of the spoils  that went to the British victors of the Opium Wars. It was expanded in  two stages, first, with the addition of the adjacent mainland peninsula  of Kowloon  in 1860, and second, in 1898, when  the  New Territories  were  added  on  the  basis  of  a  ninety-nine-year  lease.  This  expanded  Hong Kong lasted until the British relinquished the colony in 1997. The British in Hong Kong boasted that it was their laissez-faire policy  that  was  essential  to  the  prosperity  of  the  colony. This  policy  included  privileging  British  commercial  firms,  discouraging  manufacturing  and  neglecting both education and Chinese participation in local government.  In spite of this, with the decline of Shanghai in the 1950s, Hong Kong  became China’s new centre of both trade and industry. Its population of  a starving 600,000 in 1945 increased to a well-fed six million fifty years  later and the standard of living of its inhabitants had gone from marginal  to comfortable. That the continued possession of Hong Kong was acceptable by the PRC was signalled in 1971 when the Chinese premier, Zhou  Enlai, reassured the British that China would not seek to recover Hong  Kong until the expiry of the lease on the New Territories in 1997.  Even before World War II Hong Kong had been not merely a standalone  commercial  centre  but  a  vital  link  in  the  chain  of  expatriate  Chinese  communities  running  across  the  South  China  Sea  to  Taipei,  Manila,  Singapore,  and  beyond.  In  the  late  1970s  when “reformism”  began  to  supersede  “Maoism”  in  the  PRC,  Hong  Kong  capitalism   further  expanded  to  spread  its  influence  across  the  boundaries  of  the  colony to the mainland. By the early 1980s, three of the four million  workers  employed  by  Hong  Kong  firms  actually  worked  across  the  frontier in Guangdong Province. Under Deng Xiaoping four Special Economic Zones were opened in  the Pearl River Delta area, adjacent to Hong Kong, specifically to attract  the  capital  and  skills  that  had  been  amassed  in  the  colony.  By  1985  Hong Kong had become the main trading partner of the PRC as well as  being its main foreign direct investor, accounting for 60 to 80 per cent  of the total capital invested in China. Most of this was, in fact, invested  in  Guangdong  Province.  Hong  Kong  had  now  become  the  classroom  where  would-be  capitalists  under  Deng  learned  their  lessons,  lessons  that  the  reformers  of  a  century  earlier  had  summed  up  in  the  words,  Zhong xue wei ti, Xi xue wei yong (“Chinese learning for the essentials  and Western learning for the practicalities”). When Hong Kong became independent on 1 July 1997, the whole of  the colony was handed over to the government of the People’s Republic, 

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the  rulers  of  which  guaranteed  to  the  British  the  face-saving  promise  that in Hong Kong the preservation of a high degree of autonomy would  be assured. In common with most colonial territories, as we shall see,  the British had been reluctant to educate the natives in the arts of government  until  the  eleventh  hour.  Thus,  before  the  1990s,  the  highest  level of the colonial administration was still dominated by British expatriates. The first elections to the Legislative Council (“Legco”) of Hong  Kong  did  not  come  until  1991,  three  decades  after  most  of  British  Africa, a colonial world that had far lower levels of literacy and business  experience,  had  become  independent.  Although  these  elections  hardly amounted to a “transfer of power,” they did have considerable  symbolic value. A scant six years later, when the British left, they effectively  abandoned  the  colony  as  they  had  Palestine  forty  years  earlier,  bands playing, bunting fluttering, and tears flowing. As for the people of Hong Kong, in 1997 when the British steamed  away  and  the  representatives  of  Beijing  took  over  the  colony,  the  majority  saw  themselves  as “Hongkongers,”  not  citizens  of  the  PRC.  In  certain  respects  their  sentiments  resembled  those  of  the  people  of  Taiwan, and in others, such as the combination of advanced economic  opportunities  and  retarded  democratic  practice,  they  were  more  like  the people of Singapore. Singapore, initially merely a British entrepôt, became a formal Crown  colony  in  1842  on  the  basis  of  a  treaty  between  the  British  and  the  Dutch  that  divided  Malay-speaking  Southeast Asia  into  two  separate  spheres: “British Malaya” and the “Dutch East Indies.” British Malaya  included the whole of the Malay peninsula and notably the large towns  of  Penang,  Melaka  (Malacca),  and  Singapore.  Later  this  collection  of  possessions became known as the “Straits Settlements.” Singapore itself  was to become Britain’s key commercial and military base east of Suez,  especially after the opening of the Suez Canal in 1869. Between 1824  and 1872, its trade had grown eightfold.  Not only Singapore’s trade had grown – its population increased from  10,000 to 97,000 between 1824 and 1872, especially due to the migration of Chinese “coolies.” Most of the Chinese migrants had gone first to  Malaya to work in British-owned tin mines and rubber plantations and  only later moved to Singapore as labourers and petty merchants.  By  the  early  twentieth  century  the  migrants  had  come  together  to  form  voluntary  organizations  that  cut  across  linguistic  and  cultural 

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boundaries and unified the migrants providing them with social assistance and economic support despite their varied background. The Straits  Chinese  British  Association  was  formed  in  1900  and  the  Singapore  Chinese Chamber of Commerce in 1906. These organizations blossomed  into lobbies that were to strengthen the government-business nexus that  flourished  after  independence.  Only  a  small  minority  of  the  Chinese  became  capitalists,  however,  the  majority  remaining  as  petty  entrepreneurs or workers. The  fall  of  Singapore  in  January  1940,  after  a  surprisingly  short  resistance,  was  seen  as  calamitous  and  its  return  to  British  hands  in  1945, after 1,297 days in Japanese hands, was viewed with relief. The  British, who now returned to Asia as conquerors determined to rehabilitate  their  imperial  estates,  barely  recognized  how  the  war  had  transformed the scene and, especially, how it had stimulated nationalism. In  fact, colonialism in Asia in the postwar era was to have a surprisingly  short shelf life. Singapore, as part of a federated state put together by  the British, was christened “Malaysia” in 1962. Malaysia became independent a year later, less than two decades after it had been reoccupied.  More  surprises  followed:  after  a  turbulent  two  years,  Singapore  was  more or less evicted from Malaysia and became, on 9 August 1965, an  independent state (or, actually, a “city state”; for the total land area of  Singapore is a mere 704 square kilometres, not quite half the size of the  urban area of Montreal, 1,677 square kilometres, another island city).  The rest of Malaysia, including a mainland centre and archipelagic territories (Sabah and Sarawak on Kalimantan) remained united. Whereas  the  government  of  Malaysia  became  resolutely,  and  even  vindictively  Malay,  Singapore  remained  overwhelming  Chinese.33  Perhaps  more  importantly, it was not until Singapore became independent that Chinese  economic  interests  anywhere  in  Southeast  Asia  became  fully  secure.  There had been anti-Chinese riots in Indonesia; in 1969 they broke out  in Malaysia where the role of the substantial Chinese population was  resented by the Malay majority. The success of Singapore in economic and political terms was dazzling.  In the two decades after 1965, it fully completed the transition from a  colonial entrepôt to Southeast Asia’s most thriving capitalist state – in  sum,  the  Hong  Kong  of  Southeast  Asia.  In  the  process  its  per  capita  income rose from $1,000 in the early 1960s to $15,000 in 1995; it had  thus been transformed from a poor backwater into a workers’ paradise  where a generous range of social and even cultural amenities, including 

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health care and housing, were provided to its population of 4.68 million  (2007) and where unemployment was virtually non-existent. By the mid1990s infant mortality levels were half of those of the United States.  Over  the  earlier  decades  of  this  period  the  majority  of  its  citizens  remained poorly educated or not educated at all, while its ruling elite,  comprising  a  mixture  of  senior  civil  servants  and  rich  businessmen,  were both highly educated and politically cohesive. The political process bears a limited resemblance to that of the People’s Republic, including the obligatory reference to “People,” but minus the rhetoric about  communism and the billion plus population. The party machine had from its early years been carefully selective  in vetting and approving its parliamentary candidates, who were   frequently hand-picked by the prime minister and senior cabinet colleagues. By the 1980s most Singapore members of parliament … had  backgrounds in the state bureaucracy, business management, law, and  the universities rather than direct experience in grass-roots politics.  Once in parliament they underwent training regimes, mentored by  senior colleagues, that laid great emphasis on policy-making skills  and the importance of party loyalty and teamwork. Promising members were groomed for junior and, later, higher office.34 This elite was moulded by Lee Kuan Yew, a Cambridge-educated lawyer  who headed the People’s Action Party (PAP). From the late 1960s the  PAP  won  every  election  with  substantial  majorities,  at  least  until  the  elections of 1980s when its popularity slumped, relatively, to a low of  62  per  cent  of  the  popular  vote.  Throughout  the  1980s  not  a  single  opposition member sat in the Singapore parliament. Lee remained prime  minister from the victory of the PAP in 1959 to 1990. His successor was  Goh  Chok Tong,  a  businessman  who  was,  like  Lee,  English-educated  and a party stalwart. In 1991 Goh appointed as his deputy prime minister Lee’s Cambridge- and Harvard-educated son, Lee Hsien Loong,  who succeeded him in 1994. Under Goh the party continued its gradual  shift  rightwards  from  authoritarian  welfarism  to  a  more  liberal  one-party dictatorship where, from the beginning, globalization was  embraced  rather  than  shunned. Thus  the  planners  of  the  economy  of  Singapore, while dirigistes, have never been economic nationalists much  less socialists. The economic strategy that they thus repudiated was ISI,  that  which  they  embraced  from  the  late  1960s,  an  “export-oriented  industrial”  (EOI)  programme.  Singapore  in  fact  pioneered  the  retreat 

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from  ISI  towards  EOI  in  the  whole  region.  Following  Singapore  in  adopting  the  EOI  program  were  Malaysia  in  the  early  1970s  and Thailand and to a lesser extent the Philippines in the late 1970s  and ’80s.  So rapid was Singapore’s development that by the mid-1970s there  was  already  a  shortage  of  labour  on  the  island.  By  the  mid-1980s  Singapore  had  moved  to  capital-intensive  industries,  driving  out  lowend, labour-intensive industries to its Southeast Asian neighbours and  to  China.  It  was  to  these  neighbours  that  Singapore’s  investors  also  moved their capital. This was in the hands not only of private investors  but  also  firms  with  strong  links  to  the  government.  Singapore  thus  became one of the region’s major capital exporters. In the collapse of the Asian economies in 1997 that we have already  mentioned in the previous chapter, the GDP increase of Singapore tumbled from 8.7 per cent in 1997 to 0.4 per cent in 1998. Yet, in the elections  of  2001,  the  PAP  still  captured  eighty-two  out  of  eighty-four  parliamentary seats. By 2006 Singapore’s economy was growing at the  rate  of  7.9  per  cent  and  the  city-state  had  become  the  world’s  seventeenth largest economy, boasting of the world’s busiest port (in terms of  tonnage shipped) and the fourth largest foreign exchange centre (after  London,  New  York,  and  Tokyo).  Plans  to  turn  Singapore  into  Asia’s  premier financial centre were on the drawing boards from the 1990s. There  remained  two  unsettling  corollaries  of  Singapore’s  stellar  economic performance. The first was its Orwellian authoritarianism. Both  religious and political groups perceived as threatening the hegemony of  the People’s Action Party have been relentlessly harassed. In the words  of  Diane  Mauzy  and  R.S.  Milne,  “What  everyone  can  agree  upon,  include the PAP leaders, is that Singapore is not a liberal democracy.”35  State  security  agencies  have  persecuted  at  different  times  religious  groups such as the Jehovah’s Witnesses and Falungong, Christian human  rights activists (described as “Marxist conspirators”), as well as Chineselanguage  chauvinists  who  have  threatened  the  city-state’s  fine  ethnic  balance. Singapore’s draconian laws have limited the circulation of foreign journals – including the business-oriented Far Eastern Economic Review – and led to the country having one of the highest rates of capital punishment in the world, although most of its victims are Thais and  Malaysians convicted of smuggling drugs.  The second apparent consequence of prosperity is a fertility rate that  seems almost to have gone into free-fall dropping from 3.5 to 1.7 over 

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the period from 1965 to 1990. By the beginning of the twenty-first century with a birthrate of 10.1 per 1,000 (2006), it had the third lowest  fertility rate in the world. This prompted the government in the direction not only of pro-natalist policies but sex advisory clinics. Although  serious studies are not yet able to confirm any hypotheses, it could be  argued, tentatively, that improved living standards, secured by regimentation and guarded by repression, may discourage sexual practice. realignments

As China came to eclipse Japan as the most competitive Asian exporter,  the four Tigers were forced to rapidly revise their economic plans. As  The Economist noted, “Japan,  South  Korea  and Taiwan  fear  a ‘hollowing  out’  of  their  industries,  as  factories  move  to  low-cost  China.  Southeast  Asia  worries  about  ‘dislocation’  in  trade  and  investment  flows … China is no [flying] goose … because it makes simple goods  and sophisticated ones at the same time; rag nappies and microchips …  [It] makes goods spanning the entire value chain, on a scale that determines world prices. Hence East Asia’s anxiety. If China is more efficient  than everything, what is there left for its neighbours to do?”36 Ho-Fung  Hung  explains  that  whereas  in  1985,  Japan  sent  a  mere  7.1 per cent of its exports to China and a whopping 37.6 per cent to the  United  States,  by  2005,  the  exports  to  China  had  nearly  doubled  (13.5 per cent) and those to the United States nearly halved (22.9 per  cent). South Korea’s exports to China had gone from zero in 1985 to  21.8  per  cent  in  2005,  while  exports  to  the  US  had  dropped  from  35.6  per  cent  to  14.6  per  cent  while  Taiwan’s  exports  to  China  had  increased also from zero per cent in 1985 to 22 per cent in 2005 while  exports to the United States had dropped from 18.1 to 14.7.

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6 A Tryst With Neoliberalism: India after the Permit Raj Consider India. India fought for, and won independence from colonial rule  in 1947, and since then has been trying to write its own rags to riches story.  At one level, it has succeeded. Today, India is, in the imagination of many   outside the country, the place where all the jobs have flown, a Neverland of  highly skilled workers willing to toil for very little. The new maharajas of the  IT industry routinely trumpet the industry’s growth rate (19 per cent per year  between 2004 and 2008) and hail the pool of talent created by the government’s investment in education. Much has been banked on this myth.  Raj Patel, Stuffed and Starved: The Hidden Battle for the World’s Food System

introduction

Of Europe’s colonial fiefs, none surpassed India in size or wealth. Ruled  from 1526 by the Muslim Mughals, a dynasty with origins in Afghanistan  and  cultural  and  political  roots  in  Persia  and  Central Asia,  India  had  been  conquered  piecemeal  by  the  British  East  India  Company  from  1757. After  a  century  of  rule  by  the  company,  in  1857  a  widespread  revolt took place that shook British domination to its foundations. As a  consequence, India was put under the direct rule of the British Crown.  In reaction to the revolt, the British liquidated the family of the former  Mughal emperor and sent the emperor himself packing off to exile. Not  only  was  the  tolerant  but  haphazard  administration  of  the  company  now at and end but, more significantly, Muslim rule in India was extinguished. Not since the extirpation of the last Muslim emirate in Spain in  1492 had such a catastrophe befallen the Muslim world. Although the  Muslims of India would become marginalized and impoverished, unlike  the  case  of  Spain,  they  would  hardly  be  extinguished.  But  with  the 

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destruction of the Muslim rulers of the raj rose others – some Bengalis,  others Punjabis, Parsis, Gujeratis, and even dalits, all struggling to adapt  to  a  world  still  dominated  by  Brahmins  and  always,  in  one  form  or  other, capitalist. In celebration of the re-establishment of British rule after the revolt  of 1857 and to advertise Britain’s now extensive empire, Queen Victoria  (r. 1837–1901) was given the grandiose title, “Empress of India.” Under  the queen and her descendants, the British continued to rule India until  1947. Although in the past imperial historians liked to see the Indians  as  having  benefited  from  the  enlightenment  that  British  rule  brought  them  after  centuries  of  medieval  ossification,  an  alternative  view,  one  that  I  will  refer  to  below,  is  that  the  British  actually  retarded  India’s  modernity by insisting on colonialist autocracy and assuring continued  social stagnation and distorted economic development.  British India included what we now know as Pakistan and Bangladesh,  both of which were wrenched from India’s flanks as a condition of independence in 1947. Even before this, however, India had never been an  absolutely fixed physical entity; centred in the north in the great valleys  of the Indus and the Ganges, under the Mughals and the dynasties that  preceded them, India had expanded southwards and eastwards, spreading  the  particularly  syncretic  Muslim  culture  that  it  incubated.  The  British  pushed  it  further  into  the  Himalayas  where  “British  India”  absorbed parts of Nepal and Bhutan and grasped at, but failed to hold,  Afghanistan. To the east of the subcontinent, wars in 1826 and 1886  had  added  to  India  the  hill  country  that  had  previously  been  part  of  Burma; while from the colonial capitals of India, first Calcutta and then  New Delhi, the British sent officials to govern the Arab statelets of the  Persian Gulf to the west and Burma to the east and dispatched colonial  soldiers to secure places as far afield as Egypt, Libya, Italy, East Africa,  Mesopotamia, Burma, Indonesia, Malaya, and Indochina. No colonial  centre in the modern period – not Hanoi or Cairo or Dakar – radiated  influence as powerfully and broadly as the colonial capital of India. And  in no European colonial territory, other than the white dominions and  South Africa, was the influence of the colonizer as ineradicable as was  British influence in India. While it is obvious that the British were, by present standards, racists  and plunderers, there is no way of knowing what India might have been  without them. Certainly the forces of international trade were already  at work before the British takeover – old crops like indigo and sugarcane were being commercialized and new ones like tobacco and maize 

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had been introduced. Banking, credit, and even money itself were all in  the  process  of  transformation  as  the  whole  region  was  stimulated  by  swelling  global  demand. The  same  demand  had  led  to  a  greater  tendency towards regional autonomy and this had weakened Mughal control over its provinces. Following the death of the emperor Aurangzeb  in 1707, Mughal rule went into rapid, although perhaps not irreversible, decline. There were even deeper structural shifts that weakened the  Mughals. Although India was overwhelmingly agricultural, by comparison to China or Japan its agricultural technology was remarkably backwards. The mass of the population thus lived in great poverty, paying  their native rulers huge rents even by Chinese standards.1 Mughal India  was thus a remarkable structure, a huge state apparatus comprising an  opulent  court  decorated  by  an  immense  population  of  richly  attired  flunkies and hangers-on, massive elephant-borne armies, material riches  beyond imagination, resting on a population capable of high levels of  artisanal production in some areas, such as textiles, but whose condition varied from merely immiserated to chronically starving. Tirthankar Roy provides a simple but clear image of the effects on the  weakened structure of the Mughals by the imposition of British rule. The rise of British rule was not just a political change. The new   rulers did not arise from the established ruling class. They were foreigners. The British were a mercantile population turning industrial  by the end of the eighteenth century, whereas India was overwhelmingly agricultural. Being foreigners and merchants, the new  regime could initiate economic policies and principles of governance that upset the established (agrarian) order as never before. In  science and technology, political organization, and economic activity, eighteenth century Europe was modernizing at unprecedented  speed. Europeans had the military and the ideological means, the  “hardware” and the “software,” necessary to create a far more   centralized and bureaucratic state in India than what the region had  seen before. Politics aided the integration of India into world trade  and an unfolding international division of labour. The British had  access to superior knowledge about industry and trade, which the  empire bought within reach of Indians. Thus, major forms of   transformation – class structure, commercialization, formation  of a modern state, technology – had roots in the colonial encounter.  Independent India took over from the political-economic-  administrative structure created by British rule.2

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The  superior  knowledge  brought  within  reach  of  Indians  produced  a  remarkable  strata  of  Indians,  some  of  great  and  others  of  middling  wealth,  and  most  of  whom  owed  the  preservation  of  their  status  to  British rule. These wanted a voice in the governing what they, if not the  British,  saw  as  the  emerging  Indian  nation.  Many  of  them  spoke  and  read English and by this means had access to a wider world and a more  advanced  economic  culture  than  did  the  colonial  subjects  in  the  East  Indies, for instance, who spoke and read only Dutch.  the indian national congress

Unlike the case of Indonesia or Vietnam, the emergent national political  culture of India, informed, tainted, and even distorted by colonialism as  it  was,  had  been  continuous  from  1885  when  the  Indian  National  Congress was formed. This party, at first little more than an elite talking  shop,  but  always  resolutely  modernist  and  thus  secular,  monopolized  discussions about the future of India from the time of its founding until  independence  in  1947.  And  between  independence  and  the  present,  except for short breaks, it has remained the governing party of India. Its  longevity is thus exceptional: it was founded before nationalist or communist parties anywhere else in Asia and has outlived many of them.  That  said,  even  in  spite  of  pressures  within  to  move  in  more  radical  directions, it has remained implacably reformist and never revolutionary  for  the  plain  reason  that  it  has  normally  been  dominated  by  the  owners of property, rural, urban, agricultural, industrial, and commercial  while  its  leadership  has  largely  been  recruited  from  the  Brahmin  caste. Its capacity for leading the kind of radical transformation that we  have seen in China and Vietnam, and even in Korea, in which agrarian  relations  between  rich  landowners  and  poor  peasants  was  dissolved,  was thus severely inhibited. If Congress hasn’t actually owned India for all the years since the late  nineteenth century, it has gone, in stages, from being a respectful spectator, to a noisy minority shareholder, to a full-time proprietor, back to  being a minority shareholder. And unlike the Chinese Communist Party,  which  had  risen  and  fallen  –  at  one  time  dominating  a  small  part  of  China in the 1920s, then nearly losing even that part in the 1930s and  then grabbing it back in the 1940s – India has remained, astonishingly,  a democracy sustained by a free press, the intelligence and freedom of  which puts most Western, and especially North American, countries to  shame.  But  it  is  a  democracy  of  an  unusual  kind  in  which  a  single, 

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bourgeois, political party, run by lawyers and magnates and supported  by a prosperous farmers and a large urban middle class, has maintained  a  vice-like  grip  over  an  immense  and  surprisingly  illiterate  rural  and  urban populations who, election after election, despite disappointments,  continue to vote in the hopes of changing the status quo. Although  in  the  twentieth  century  there  have  been  wars,  pogroms,  and famines in India, there have been no major breaks or reversals, thus  no civil wars such as the one that ravaged China until 1949, no invasions  such  as  that  which  gutted  Korea  between  1950  and  1954  or  bloodied Vietnam in the American era (1954–75). Nor have there been  palace coups that put an end to regimes, such as those that punctuated  the regime of South Korea’s General Park Chung Hee, bringing him into  power in 1961 and destroying him in 1979, or national bloodbaths such  as destroyed the Indonesian Communist Party in 1966. Even the wars  against  Pakistan  (1947,  1965,  1971)  and  China  (1962),  have  been  as  brief as they have been sudden. This unusual imperturbability is no less  true  at  the  political  level;  for  although  we  see  the  periodic  ouster  of  Congress  from  power  and,  more  significantly,  the  move,  overseen  by  Congress  itself,  from  statism  to  neoliberalism  in  the  closing  decades  of the twentieth century, really radical breaks are unknown. And even  these  shifts  lack  the  deadly  drama  of  regime  change  elsewhere,  much  less  the  catastrophic  introduction  of  liberalization  in  Russia  in  the  1990s. Thus, even the meltdown that struck the Southeast Asian economies in 1997 and sent the managers of the South Korean economy running into the arms of the IMF barely afflicted India. Compared to other  postcolonial states from Burma to Bolivia, then, India’s stability measures up to the sternest standards of the postwar West.  independence

In January 1930 the Indian National Congress passed a resolution in  support  of  purna swaraj, “complete  independence.”  Seventeen  years  later  India  became  an  independent  state.  The  moment  of  transfer  of  power,  at  midnight  on  14–15  August  1947,  was  a  time  of  rejoicing,  widespread tension, and irremediable tragedy. It was overseen, as it had  been guided in the previous decades, by Jawaharlal Nehru (1889–1964),  the dazzlingly gifted, Cambridge-educated Brahmin, whose leadership of  the nationalist movement had guaranteed him the status as India’s first  prime minister. No other politician could have seized the moment with  the  eloquence  that  Nehru  did  in  his  speech  celebrating  the  midnight 

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dawning of Indian independence: “Long years ago we made a tryst with  destiny, and now the time comes when we shall redeem our pledge, not  wholly or in full measure, but very substantially. At the stroke of the  midnight hour, when the world sleeps, India will awake to life and freedom … It is fitting that at this solemn moment, we take the pledge of  dedication to the service of India and her people and to the still larger  cause of humanity.” But the birth of India was bloody and uncertain and took place at a  time of complex tensions between workers, peasants, and capitalists, on  the one hand, and between the major religious communities, and especially Hindus, Muslims, and Sikhs, on the other. This tension was underpinned in part by the desperation caused by widespread hunger; in the  aftermath of the great Bengal famine of 1943 in which three million had  died as a consequence of incompetent food allocation, nearly half the  Indian population was still subject to food rationing. On the other part,  it was driven by an anti-imperial populism. As the possibility of a separate state for Muslims turned into a reality  – one that we shall trace in more detail in the next chapter – old rivalries  between  Muslims  and  Hindus  and  between  rich  and  poor  had  been  stoked up to lead to a cauldron of bloody enmities. Such were hardly  new, although their intensity was. This intensity had been magnified by  the  catalytic  effects  of World War  II  in  which  two  and  a  half  million  Indians – Hindus, Muslims, Sikhs, and others – had fought, mainly as a  part  of  British  imperial  forces,  in  campaigns  that  raged  across  North  Africa,  in  Europe,  the  Middle  East,  and  Southeast  Asia.  The  Indians  enlisted in these conflicts, like the Africans who fought beside them, had  learned that freedom was a central issue in the war and assumed that  with freedom would come equality and economic progress. With  the  surrender  of  Japan  in August  1945,  then,  India  was  in  a  turmoil of expectations. During the war key figures in the leadership of  the nationalist Congress had been jailed while their rivals, members of  the secessionist Muslim League – a party of limited political influence  even in predominately Muslim areas before the war – had increased its  grassroots appeal. Thus, by the end of 1945, a degree of separation and  self-determination on the part of at least some of India’s tens of millions  of Muslims had become a major and inescapable political assumption.  “Partition” had entered the political vocabulary but what, exactly, did  it entail? No one yet knew. Besides changes in India’s political topography, the war had changed  the British political scene. To universal astonishment, the British Labour 

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Party had won the national elections of July 1945. Not only was Labour  more sympathetic to Indian independence than its Conservative predecessor, it was now faced with ruling over a homeland that was verging,  as we have seen in Chapter 1, on economic ruin. More than any illusions about staying on in India as rulers – an impossibility in any case  – Britain’s new governors became preoccupied with evacuating as expediently as possible.  By 1946 the British had resigned themselves to Indian independence in  the very near future. This stimulated the elevated expectation of Indians  and especially the level of political contestation that had been both incubated and suppressed during the war. Under mounting pressure both at  home and in India itself, feverish attempts by the British government to  establish  a  smooth  handover  got  nowhere;  their  solutions  for  powersharing between Congress and the Muslim League fell on stony ground  while, throughout the country, political agitation and even class conflict  increased.  To  give  but  few  examples  of  this  agitation  and  conflict:  in  1946  there  was  a  naval  mutiny  among  sailors  of  the  Royal  Indian  Navy  as  well  as  serious  police  mutinies;  in  the  same  year  there  were  1,629  industrial  disputes  involving  almost  two  million  workers;  in  Bengal, where the British had first established their supremacy two centuries earlier, there were communal killings in August 1946; in Calcutta,  the capital of Bengal, “the worst riots between Hindus and Muslims ever  remembered  in  India  broke  out.”3  In  the  next  years  riot  zones  were  declared not only in the cities of Delhi, Bombay, Karachi, and Quetta but  in towns right across the country – although more in the north than the  south. The motives for riots varied from place to place; in late 1946 in  northern Bengal there were uprisings against Hindu landlords by Muslim  tenants, and between 1946 and 1951 there were land seizures in the feudal state of Hyderabad. In Travancore in Kerala, where communists led  attacks on big landlords, 800 demonstrators were killed.  Punjab, the breadbasket of India, the dense population of which comprised Hindus, Muslims, and Sikhs, became the epicentre of violence. In  early  1947  violence  erupted  in  Lahore,  Amritsar,  and  in  the  villages  throughout the province. Worse was to come at the midnight hour of  independence,  as  we  shall  see. Together  with  other  outbreaks  of  violence, often directed against their rule, these confrontations reinforced  the  British  view  that  delay  in  granting  India  independence  would  be  unbearably costly. On 3 June 1947, less than two years after the war in Asia had ended,  Indians learned for the first time that the British Raj would be partitioned 

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– divided, in fact, into two, later three, political entities. Two months later,  as imperial power continued to decompose, a British judge, with no previous familiarity with India at all, was hustled in and out of India to settle  the question the division of the raj into separate, religiously based spheres.  Sequestered in a chamber with no opportunity to actually visit the lands  that he was dividing, and often using inaccurate information, the judge  demarcated  frontiers  that  would  trifurcate  the  country,  two  parts  of  which, separated by a thousand miles, were to be the homes of very culturally distinct Muslim populations. Neither Indians nor Pakistanis would  know where the border actually existed until after partition; nor could  anyone predict the horrific consequences, either in the long or short term,  of the judge’s lucubrate pencillings. Once again, but not for the last time in history, it was the West that,  behind  closed  doors  and  in  secret,  designed  the  rest.  The  division  of  Africa in the late nineteenth century had been known as “the Scramble”;  the division of the Ottoman empire that we shall see below was callous  but nameless, while the vivisection of South Asia was to become known  as “the Partition.” The process of hasty and ill-conceived retreat against a background  of semi-starvation and incipient civil war, and with the British hastily  washing their hands of any responsibility for the lives of South Asians,  was dignified in the annals of imperial history by the term “transfer of  power.” The outcome of the transfer from the British to the Congress  Party  of  India  and  the  Muslim  League  of  Pakistan  was,  in  terms  of  political geography, just the opposite of the accession to power of the  Communist  Party  in  China  in  1949;  in  China  historic  territory  was  regained, in India it was lost; in China a revolutionary party bent on the  extirpation of owners of land and capital came to power; in India power  was consolidated by a bourgeois party determined to protect landlords,  merchants, and industrialists. And in both countries, although as a consequence of different intentions, the rural masses were sacrificed. partition and exodus

On the eve of Indian and Pakistani independence, thus, based on hasty  and  half-baked  British  cartographical  improvisations  that  divided  British  India  into  three  elements  under  two  hostile  governments,  millions of Muslim Indians migrated westwards towards the newly created  Muslim  state  of  Pakistan,  and  tens  of  thousands  of  Hindu  and  Sikh  Indians  trekked  eastwards,  out  of  Pakistan,  to  India.  This  move  was 

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stimulated by the pull of a search for a promised land and by the push  of forms of religious hatred cooked up by fanatics and politicians on  both sides. It was the greatest mass migration in history. “Ten million  refugees were on the move, by foot, by bullock cart, and by train, sometimes travelling under army escort, at other times trusting to fate and  their respective gods. Jawaharlal Nehru flew over one refugee convoy  that had 100,000 people and stretched for ten miles. It was travelling  from  Jalandhar  to  Lahore,  and  had  to  pass  through  Amritsar,  where  there  were  70,000  refugees  from  West  Punjab  ‘in  an  excited  state.’  Nehru suggested bulldozing a road around the town, so that the two  convoys would not meet.”4 In the great exodus tens of thousands were assaulted by gangs and  killed as they fled across borders, and enmities were created that were  to last into the twenty-first century.  Even by the standards of the violent twentieth century, the Partition  of India is remembered for its carnage, both for its scale – which may  have involved the deaths of half a million to one million men, women  and children – and for its seemingly indiscriminate callousness.  Individual killings, especially in the most ferociously contested province of Punjab, were frequently accompanied by disfiguration, dismemberment, and the rape of women from one community by men  from another. Muslims, Sikhs, and Hindus suffered equally as victims  and can equally be blamed for carrying out the murders and assault.5 The British bad faith that led to the Balkanization of India was compounded  by  the  question  of  Kashmir,  the  northern  province  from  which Nehru had come. Kashmir was over 75 per cent Muslim in population, and, since it was contiguous with Pakistan, had logic ruled, it  would have been made a Pakistani province. Although it was assumed  that it should join Pakistan, its ruler, the Hindu Hari Singh, hesitated.  When  guerrillas  from  Pakistan  infiltrated  the  frontiers,  Hari  Singh  invited  the  Indian  army  to  secure  his  patrimony. The  guerrillas  were  dispersed  and  Kashmir  was  claimed  by  India.  For  the  new  rulers  of  Pakistan this was an outrage. So, in the very first moments of its life,  independent  India  had  taken  an  unwilling  hostage.  A  problem  was  thereby created that was to be the cause of three wars between India  and Pakistan and was to undermine any claims the Indians might have  to being above the sordid business of territorial engrossment. Kashmir  thus became India’s Tibet.

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At independence the economy of India resembled that of China in that  it was overwhelmingly rural and agricultural. Just as most of China’s  peasants  recalled  the  poverty  and  terror  associated  with  warlordism  and Japanese invasion, most of India’s were haunted by the memory of  famine and dearth. Although the two major states of Asia had much in  common  in  the  run-up  to  independence,  they  diverged  sharply  in  the  years that followed.  Pre-independence [i.e., pre-1947] India and pre-liberation China  [i.e., pre-1949] were both near the bottom of the international system. Indian life expectancy in 1931 was around twenty-seven years,  while a survey of rural China in 1929–31 yields calculations of a  lifespan of 23.7 for females and 24.6 for males, probably a similar  overall rate if urban areas are added. The Chinese then entered a  period of Japanese occupation and civil war, more devastating than  anything experienced in India during the same time … The pre-1949  Chinese lifespan was thirty-five years, compared to just around  thirty-two years in India in 1941, still roughly comparable. Yet  Indian life expectancy four years after independence, in 1951, was  still only 32.1 while a similar postliberation period, as of 1953,  found China with a lifespan of 40.3.6 A further portrait of India’s economy on the threshold of independence  provides us with a closer view of rural conditions and reminds us that  under  the  British,  although  impressive  infrastructural  developments  (especially  in  the  form  of  railways  and  canals)  had  been  completed,  rural life and industrial development was virtually stagnant. Nearly 85 per cent of the people lived in villages and derived their  livelihoods from agriculture and related pursuits using traditional,  low productivity techniques. Fertilizers and other modern inputs,  which are the key to high productivity, were hardly in use; and irrigation facilities were available only for about one-sixth of the area.  Industries employed less than a tenth of the labour force, the great  bulk of them in traditional cottage and small-scale processing activities. Modern factory industry, employing some 3 million workers  out of a total of 140 million, was also dominated by jute and cotton  manufactures and other agriculture-based industries. While there 

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were factories producing steel, cement, paper, basic chemicals and  light engineering products, their range of output and contribution to  total output was quite limited. Capital formation (around 6 per cent  of NDP) was inadequate to bring about rapid improvement in per  capita income which was about one-twentieth of the level attained  in developing countries. The average availability of food was not  only deficient in quantity and quality but, as recurrent famines  underscored so painfully, also precarious. Illiteracy was a high 84 per  cent and the majority (60 per cent) of children in the 6 to 11 age  group did not attend school; mass communicable diseases (malaria,  smallpox and cholera) were widespread and, in the absence of a  good public health service and sanitation, mortality rates … were  very high. The problems of poverty, ignorance and disease were  aggravated by the unequal distribution of resources between groups  and regions.7 So much for what imperial promoters once referred to as the incalculable benefits of British rule. Why  had  the  Indian  economy  stagnated  even  as  capitalist  growth  expanded universally in the first decades of the twentieth century? The  explanation  is  not  far  to  seek. The  drain  of  surplus  from  backward  countries  to  advanced  ones  has  continued  throughout  the  history  of  capitalism. The British transmitted wealth from India in the form of a  vampiric levy known as “home charges,” that is, the fees paid by the  Indians for having been colonized. By 1933 home charges had risen to  27 per cent of public expenditure. While the high level of home charges  contributed  to  a  foreign  exchange  surplus,  this  surplus  was  being  deposited  in  Britain  and  was  therefore  lost  to  investment  in  India.  When  India  became  independent  the  Indian  foreign  reserves  that  remained in London were returned. Further,  the  British  also  spent  the  money  they  raised  by  taxes  and  other means in India on security, that is, in maintaining a huge “Indian”  army,  mainly  recruited  from  the  areas  that  were  later  to  become  Pakistan. This army included not only the Indian and British troops that  were  garrisoned  in  India  but  also  British  troops  in  Britain  as  well  as  overseas.8 In World War II the largely British-officered Indian army had  fought  the  Japanese  in  Asia  and  the  Germans  in  North  Africa  and  Europe. Once the war had ended and the loss of India became inevitable, the loss of the Indian army meant the end of British domination on  mainland Asia.

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In terms of economic development, independent India moved forward  at  an  apparently  blameless  pace,  maintaining  a  comfortable  distance  from both the communism of the Soviet Union and China and laissezfaire capitalism advocated by many Western advisors. Always, the Indian  bourgeoisie  remained  firmly  in  control,  using  the  threat  of  the  withdrawal of their capital to remind the politicians and state managers that  any program for India’s economic future would have to satisfy their perceived needs. Congress was for them the necessary means of maintaining  control of a state that, in the immediate aftermath of World War II, was  challenged by widespread industrial and political militancy. Thus India industrialized, not like China, under the direction of the  state, but rather through the state yet under the actual control of its own  massively  powerful  indigenous  capitalists.  It  was  these,  the “kings  of  industry”  as  Nehru  had  called  them,  who  drew  up  India’s  economic  agenda simultaneously in the interests of the nation and the ruling elite,  not excluding themselves. Their point man in the government of Nehru  was the Gujarati strongman, V.B. Patel, the deputy prime minister and  main fund raiser and organizer of Congress, who fought consistently to  weaken the radical influence of India’s main labour organizations and  to increase the influence of big business. In the view of the kings of industry, a strong state role in the economy  was consistent with assuring their own monopolies within the domestic  economy. The state would thus provide a trellis of economic regulations  up which certain Indian industries might climb. “From the very earliest  discussions of Indian industrial planning, the domestic capitalist class  was given every assurance that the new state would be singularly committed to using public monies as a means of accelerating the development of private industry.”9 And climb they did. In spite of Nehru’s claims that he was a socialist  and,  therefore  by  implication,  the  economy  of  India  was  socialist,  it  was not. In fact, it might be more accurately called “state capitalist,”  inasmuch as the state and the big capitalists existed in a symbiotic but  not equal relationship. Thus, while in the case of South Korea we may  speak  of “state-led  industrial  policy,”  in  India  we  must  acknowledge  that the role of the state was, from the very beginning in 1947, subordinate to capital. Licensing, which protected the monopolies of domestic capital, was a  major feature of the Indian economy as presided over by the Nehrus; it 

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was, in fact, the essence of “the Permit Raj.” Omniscient licenses therefore  regulated  not  only  how  much  could  be  invested  and  where,  but  how much could be produced and even with what technology. Investment  licenses, requiring up to eighty permissions, were necessary before an  industry could be set up. At  the  same  time,  despite  claims  about  freedom  and  equality,  the   leaders of Congress seemed unable to find a way out of the world of  landlordism,  caste  and  gender  oppression,  and  grinding  poverty  that  immobilized the mass of the Indian people. Indian agriculture was unreformed; it had thus nothing in common with that of China, or, indeed,  with other Asian imitators of the Soviet Union, such as North Korea,  Taiwan, Vietnam, or even Japan. Largely unreformed, thus, in spite of  limited initiatives taken by Nehru, peasants continued to live in immobile and illiterate poverty, squeezed not by the state, as in China, but by  landlords  and  moneylenders.  There  were  exceptions  to  this  pattern  where  rich  peasants  invested  in  land  and  increased  production  and  profit, but for the most part those involved in agriculture were among  the  most  wretched  of  the  adults  of  the  Indian  world. The  millions  of  child labourers were possibly even worse off. The “Green Revolution”  of the late 1960s did little to ameliorate the intolerable poverty of the  majority; it did help enrich a range of wealthy farmers and landlords,  most of whom were from the huge middle caste of peasants. India was  thus  moving  in  the  exactly  the  opposite  direction  to Vietnam  in  precisely the same period.  On the macroeconomic, national scale significant change was evident  within the first decade of independence. In one survey of Indian economy and society published at the end of the 1960s, a number of improvements are thus evident. First, the Indian economy had expanded much  faster than in the previous colonial period. In the last half century of  colonial rule, national income had grown at 0.7 per cent per year; from  1948  to  1969  it  grew  by  3.3  per  cent  per  year. This  growth,  in  fact,  became the Plimsoll Line of economic growth and was known, with a  trace of condescension, as the “the Hindu Rate of Growth.”  As the Indian government now spent more on research and technological  transfer  than  the  colonial  government  had,  independent  India benefited from the acceleration of postwar technological innovation. The most spectacular improvements were a result of the more  extensive use of antibiotics and DDT, which had cut mortality, and  the adoption of new kinds of seeds, which resulted in increased farm  incomes.

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The final factors that explain this more rapid economic growth relate  to the changes that were sweeping the global economy generally, namely,  more foreign trade and, as a consequence of the politics of development  in  the  West,  more  aid.  And  finally,  there  was  accelerated  population  growth  that  translated  into  a  growth  in  output.  Life  expectancy  rose  from thirty years to fifty: the caps of medievalism and colonialism, it  now became apparent, had stolen life away. In sum, the government that Nehru led, and the India that he in large  part fashioned, subscribed to the idea of high levels of dirigisme, and, in  common with many of the states of Asia (and Latin America), followed  the doctrines of import substitution industrialization (ISI). Even before  China,  in  1951  India  launched  its  first  Five Year  Plan,  taking  a  page  from the Soviet manual of rapid industrialization by privileging heavy  industry over the production of consumer goods. Its markets, like those  of other economies that were statist, were likewise closed to all but the  most necessary imports, with the result that a huge range of Indian consumer goods, from cars to ceramics, continued to be Indian-made. And  always, from first to last, and in spite of apparent dirigisme and fiveyear  plans,  launched  one  after  another  with  diminishing  fanfare  until  the last trailed off into the sunset in the 1980s, unheralded, the same  class remained dominant while the monopolies that it controlled grabbed  an increasingly large share of the economy. foreign affairs

Like China after 1949, upon independence, India turned to the Soviet  Union  for  planning  inspiration,  military  aid,  and  diplomatic  support.  Under Nehru (r. 1947–64) and, later, his daughter, Indira (r. 1966–84),  therefore, relations with the Soviet Union were normally warm and continued  to  be  cordial  until  the  Soviet  Union  finally  voted  itself  out  of  existence. With  China,  they  were  at  first  cordial  and  then  declined  to  calamitous, reaching the point of a war between the two countries in  October 1962 over disputed territory in the Himalayas. Poorly armed  and fighting in the punishing environment of the world’s highest mountains, after a few skirmishes the army of India was sent reeling backward in defeat. There was talk in India of the Chinese actually emerging  onto the plains. This military defeat was a source of great humiliation for both Nehru,  who had put so much store in relations between the great Asian neighbours,  as  well  as  for  India.  In  fact,  it  was  the  most  decided  failure  in  his fifteen years as prime minister and caused him great disillusionment 

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regarding the possibility of Third World solidarity and non-alignment.  Fear of China led India to hastily seek improved relations with the United  States, which provided the Indian army with the much-needed arms it  required at a time when the Soviet Union sat on the fence. Instrumental  in  this  rapprochement  was  the  American  ambassador,  John  Kenneth  Galbraith, not only one of the brightest lights in the US economics profession, but a figure of unusual broadmindedness and savoir faire. With the United States, after all, relations were normally cool. Indians  of the elite tended to despise Americans as being uncouth and materialistic. Here they were, unconsciously or not, imitating the prejudices of  the British ruling class, many whose values, educational, and military  especially,  they  continued  to  reproduce.  Many  Americans,  in  turn,  detested Nehru for his neutralism and claimed that he was a communist. Because the Americans distrusted the Indians, from the time of the  Pakistani military strongman Ayub Khan (r. 1958–69), as we shall see in  the next chapter, they turned to the various khaki claudillos on India’s  northwest  frontier  and  lavished  upon  them  largess,  especially  in  the  form of stockpiles of arms. This guaranteed a permanent arms race on  the  frontiers  of  India  and  Pakistan.  But  for  the  Pakistani  military,  American aid was manna from heaven; for it allowed them to parade as  India’s equals. That they were not was shown in 1971 when they were  unable to crush the secessionist movement that led to the break-up of  Pakistan and the birth of Bangladesh. politics : gandhistan

India was ruled by Jawaharlal Nehru, his descendants, and their colleagues from independence until 1996 and then again from 2004 until  the present (2011). Given the ineradicable role of the Nehrus, in fact,  it  could  easily  be  argued  that  Congress  was  not  a  real  party  at  all;  rather, it was a coalition that had coagulated around a family oligarchy.  Having  successfully  delivered  independence  to  India,  this  party  became  as  ideologically  slippery  as  any  conventional  class-based  Western  political  party,  and  certainly  as  willing  to  accept  profound  levels  of  corruption.  In  this  light,  India  can  be  seen  as  a  hereditary  republic  like  North  Korea  or  Syria,  or  as  Egypt  or  Iraq  might  have  been,  although,  of  course,  hardly  a  dictatorship;  for  alongside  and  often  competing  with  the  Nehrus,  we  see  some  of  the  world’s  most  durable  communist  parties  plus  a  clamorous,  roiling,  and  mutating  range of religious, ethnic/tribal, and caste-based alliances, all eager for  their share of the spoils of government.

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Let us look back to consider the founder of the Nehru clan. It is easy  to forget that under Nehru India was humiliated by China and that the  non-alignment that he professed was essentially a non-starter. And it is  easy  to  remember,  on  the  other  hand,  why  Jawahalal  Nehru  was  so  widely admired in his own time and how he has come to be regarded  with  almost  unalloyed  affection  ever  since.  By  any  standards  he  was  remarkable  for  his  ideals,  which  were  those  of  a  reforming  patrician  socialist  of  the  British  Fabian  variety,  and  for  his  attempts,  however  ultimately  unsuccessful,  to  create  for  India  a  leading  role  as  an  nonaligned Third World state, keeping at arm’s length from both the US-led  West and the Soviet-Chinese East. Nor is it difficult to see why a number of American leaders and a large part of the US press disliked and  distrusted  him.  Independent Third World  leaders  with  confident  and  urbane bourgeois manners, articulate and voluble in English, and with  no taste for deference in spite of the poverty of their countries, were a  rarity. Most of those who flirted with the Soviet Union and its allies, or  showed the slightest interest in any form of socialism, both indulgences  of Nehru, indeed met sticky ends. Yet, in spite of the dangerous politics  that he espoused, there is no doubt of Nehru’s political steadfastness  and his sincerity. In his own words: “I must freely confess that I am a  socialist and a republican and am no believer in kings and princes, or  in the order which produces the modern kings of industry, who have  greater  power  over  the  lives  and  fortunes  of  men  than  even  kings  of  old,  and  whose  methods  are  as  predatory  as  those  of  the  old  feudal  aristocracy.”10 The same political commitment is reflected in the preamble  to  the  Indian  Constitution,  enacted  in  1949  under  Nehru’s   guidance, which begins, “WE, THE PEOPLE OF INDIA, having solemnly  resolved  to  constitute  India  into  a  SOVEREIGN  SOCIALIST  SECULAR  DEMOCRATIC REPUBLIC.” Yet the undoing of Nehru was the work of the Chinese, whom he had  cultivated,  not  the  Americans,  whom  he  had  shunned.  The  Chinese  invasion of India’s Himalayan territories, and their easy defeat of the  Indian armies, caused unendurable shock. It drove him into the arms of  Washington in search of the modern arms and mortally wounded the  already fragile ideas of Non-Alignment and of Third World solidarity.  Thus it was that he died in office in May 1964 and was succeeded after  a brief intermission by his daughter, Indira Gandhi.11 Indira,  educated  in  Switzerland  and  England,  was  a  fully  paid-up  member of the Indian bourgeoisie. Like her father, she was committed  to a kind of statism within the limits imposed by the owners of capital. 

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Having  split  with  the  ruling  clique  of  the  Congress  Party  in  1969,  in  1971 she won an overwhelming personal electoral victory and became  the second member of the Nehru family to hold the reins of power. In August 1971 Indira’s government signed a Treaty of Peace, Friendship  and  Cooperation  with  the  Soviet  Union,  and  between  1972  and  1975 she carried out a series of nationalizations, at the same time tightening her grip on the Indian political process. Unlike her father, she had  no taste for compromise and a decided taste for authoritarianism; so,  instead of acquiring any kind of broad political base, she was insulated  from the electorate by her cronies and her family. Under these circumstances, the fortunes of her eldest son, Sanjay, a wastrel with few real  abilities and a taste for conspiracy and self-aggrandizement, rose meteorically to the point that it is possible to speak of the mother and son,  Indira-Sanjay, regime. By 1974 Indira Gandhi’s popularity was sinking, and in June 1975  the Allahbad High Court found her guilty of electoral malpractice. In  reply,  she  declared  a  state  of  emergency,  neutralizing  the  constitution  and  imprisoning  over  100,000  people  without  trial.  At  this  point,  between 1975 and 1977, with 400 million living on the knife-edge of  starvation  and  its  democratic  annulled,  India  seemed  fated  to  follow  Brazil along a road of mass destitution and overcrowded prisons. Then,  assuming that she had regained control over her rivals, Indira called an  election. She was thrown out of office. “In voting Mrs Gandhi out in  1977, Indians showed that while they can put up with much economic  injustice, they would not tolerate tyranny. In accepting defeat gracefully,  Mrs Gandhi confirmed that the norms of democratic transition of power  had  been  internalized  at  the  highest  levels  of  India’s  political  elite.” 12  Although one may doubt whether “putting up with” economic justice  satisfactorily  explains  the  response  of  the  impoverished  majority,  it  seems likely that India’s large middle class, informed by its remarkably  free press, had no taste at all for dictatorship. Indira’s successor, Morarji Desai, a barely focused octogenarian, ruled  briefly  and  chaotically.  Indira  herself  was  back  after  the  elections  in  early 1980. Her autumnal years were hardly peaceful. Inflamed by her  sending the Indian army to occupy their Golden Temple in Amritsar, a  sect  of  radical  Sikhs  organized  her  assassination.  In August  1984  she  was gunned down by two of her own security guards. In response there  was a pogrom against the Sikhs; at least 3,000 died and another 25,000  were left homeless. Vivek Chibber provides an epitaph for the IndiraSanjay decade.

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A … strategy Indira and Sanjay Gandhi used was to intervene in the  normal practices of promotion and circulation of top-level bureaucrats, so that the plum posts and perquisites went to those most  loyal to them personally … This was a change of momentous consequences for Indian political development. Internal conspiracy,  Byzantine intrigues, shifting alliances – all this had always been a  staple of Congress internal politics, even in the time of Nehru …  But the politicization of the bureaucracy was an innovation for  which Indira and Sanjay could take all the credit. The natural consequence of such interference was a drastic demoralization of top level  bureaucrats, since, under this dispensation, the criterion on which  decisions were assessed was no longer their conformity to rules but  the fidelity to the ruling family … [I]t is impossible to deny that the  changes the Indira-Sanjay regime wrought set into motion a process  whose full implications have yet to be realized.13 Because Sanjay accidentally killed himself, Indira was succeeded by  her second son, Rajiv (1944–1991) who was elected as prime minister  as a “sympathy wave” washed over the country. His huge majority “was  the last hurrah of a single-party majority governments, Indira Gandhi’s  posthumous gift to party and country.”14 The grand old party of Indian  nationalism  would  never  again  rule  alone;  when  it  returned  it  would  need more than a little help from its friends who represented a rainbow  of regions, castes, and classes.  But  Rajiv,  too,  was  assassinated,  not  by  Sikh  men  from  the  north  with guns but by a Tamil woman from Sri Lanka to the south, with a  bomb, in protest against the involvement of the Indian army in the civil  war in her homeland. Dynastic rule now looked like it had exhausted  itself, although behind the scenes, Sonia, Rajiv’s Italian wife, like some  foreign-born infanta in absolutist Europe, continued to incubate dynastic dreams. Meanwhile Nehru’s socialist India was to continue down  the road to neoliberal transformation almost in tandem with that of  another socialist state, China. the road to liberalization

This world of the “development state” – characterized by the “Hindu  Rate of Growth” – gradually dissolved under regimes of liberalization  that were launched from 1984 by Rajiv Gandhi. Rajiv, like his mother  and  brother,  depended  on  patronage  rather  than  merit  and  was 

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surrounded  and  advised  by  cronies  from  the  private  sector  at  whose  prompting  he  kicked  off  a  process  of  liberalization.  His  model  was,  ostensibly  at  least,  Japan,  although  neither  the  Indian  economy  nor  Indian  politics  had  anything  in  common  with  the  leading  East Asian  capitalist  state.  In  early  1985  the  first  moves  were  made  towards  delicensing, removing restrictions on the import of foreign technology and  lowering tariff barriers. The older strategy of import substitution industrialization  (ISI)  was  attacked  by  the  prime  minister  himself,  on  the  advice of the World Bank. In early 1986 new measures were introduced  that aimed at opening up India’s economy to the forces of global trade  and  finance.  These  measures  included  the  reduction  of  subsidies  on  petroleum, petroleum products, food, and fertilizer. The Indian business  press  applauded. “Towards  a  New  Era,”  cheered  the  Times of India. The Wall Street Journal was pleased to refer to Rajiv as “Rajiv Reagan,”  naming him after the icon of neo-conservative America. But opposition  to  Rajiv’s  neoliberal  economic  strategies  soon  mounted. The  needs  of  the  poor  were  being  sacrificed,  their  spokesmen  argued.  Nationwide  protest followed with the government being accused of being pro-rich  and  anti-poor.  Rajiv  backed  down  and  began  to  make  compromises.  The  further  liberalization  of  the  economy  was  now  stalled.  In  the  1980s India’s per annum rate of GDP growth had increased to around  5.6 per cent. There it stayed, as we shall see, until 2003 when it began  to improve again. By the end of the first quarter of 2006 it had leaped  up to 9.3 per cent. Here was a sign taken as a wonderful proof of the  new doctrine. The  really  significant  changes  to  the  Indian  economy  took  place  from  1991.  In  that  year  there  had  been  a  run  on  foreign  exchange  reserves that forced India to turn to the IMF and the World Bank for  bail-out loans. Liberalization of the economy in the form of the reduction of trade protection – Indian protectionism being at a level comparable with the Soviet Union – and the abandonment of ISI headed the  list of conditions demanded. In 1991 Congress was, as usual, in power,  but  in  a  minority  government,  and  the  prime  minister  was  Rajiv’s   successor,  Narasimha  Rao  (r.  1991–96). The  minister  of  finance  was  Manmohan Singh, a former World Bank economist, who was later to  refer  to  Rao  as  “the  father  of  India’s  economic  reforms.”  Whereas  Rajiv had de-licensed a few industries, the Rao government de-licensed  all  but  a  few;  tariffs  were  lowered,  the  rules  for  foreign  investment  and  ownership  were  slackened  and  corporate  taxes  were  lowered.  India’s economy had finally entered a new era. Praise from economic 

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journalists  and  officials  from  Western  institutions  was  intoxicating.  Manmohan Singh’s hour would soon toll. the rise and demise of the bjp

Why had this happened under Rao and not under Rajiv, and whence did  it draw it necessary support? The answer to the first part of the question  is that politics had changed. Whereas before 1990 Indian politics had  been “bi-polar,” that is, a contest between Congress, the normal party of  government on the one side and all of its rivals on the other, after 1990  politics had become triangular. Radhika Desai has traced this change to  the decisive effects of the Green Revolution of the late 1960s and to the  phenomenal  rise  of  Hindu-chauvinism,  in  the  form  of  the  Bharatiya  Janata Party (BJP).15  One potent political event, above all else, had served as a catalyst: the  movement that aimed at the destruction of the Babri mosque in Ayodha  that, the BJP’s propagandists alleged, had been built over a sacred Hindu  shrine. This movement first surfaced in 1990 and completed its work,  the  destruction  of  the  mosque,  in  1992. This  provocative  desecration  was part of a campaign to establish a fundamentalist political party that  would  serve  to  create  a  new,  hegemonic,  Hindu  India.  The  BJP  was  explicitly antagonistic towards Muslims but offended a wide range of  Indians of all political and religious persuasions.  In the lower house of parliament the BJP had had only two seats in  1984–89, against 415 held by Congress. From 1991 it had 120, against  between 220 and 232 for Congress. The effect of this was to push other  parties, especially those on the left but also those supporting minority  groups, into coalitions on the side of Congress, their previous antagonist. These parties disliked Congress but they despised the Hindu fundamentalists. So when the Rao government moved in the direction of  liberalizing the Indian economy, they did not vote against it. As for the  BJP, its members were divided.  The second part of the question is answered by Jayati Ghosh, who  makes the point that the neoliberal reform process could not have taken  place  without  the  support  extended  to  it  by  various  elements  of  the  domestic large capitalist class, along with other social groups with substantial political voice, such as the middle class.16 Yet,  even  those  elements  of  big  business  that  had  earlier  benefited  from state controls became persuaded that it would do better without  state  controls,  while  rich  farmers  saw  that  they  might  benefit  from 

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exporting to the international market. Thus, both capitalists who had  previously  limited  themselves  to  the  domestic  market  and  those  who  had worked within the international marketplace, together with Indians  from outside the country (the Indian equivalent to the diaspora Chinese  whom we have seen in the previous chapter), felt that a bonfire of controls would benefit them. In 1997, to the shock of many secular and non-fundamentalist Indians  – Muslims, communists, Congress liberals, and Hindus alike – the BJP  was elected to power. Its overriding goal was to consolidate and expand  its  appeal  and  to  extend  support  for  its  sectarian  ideology,  Hindutva (“Hindu-ness”).  Its  interest  in  neoliberal  reform  was  less  urgent  than  that  under  the  preceding  Congress  government,  although  it  did  not  reverse any of the changes that Rao and Singh had initiated and boasted  of India’s liberalized future. “India Shining” became its slogan. But the BJP, as much through the willingness of some of its members  to  use  violence  against  Muslims  as  due  to  its  economic  policies,  had  alienated the electorate, especially its poorer members. In May 2003 it  was  defeated  at  the  polls  and  a  Congress-led  coalition  known  as  the  “National Democratic Alliance” was returned. The new prime minister  was the same Manmohan Singh, the World Bank servant who had been  Rao’s  minister  of  finance.  It  was  clear  from  the  beginning  that  Singh  intended to continue liberalizing the economy of India, but the extent  that this would be possible was another question. malls and slums

Yet,  we  might  ask,  what  had  been  the  actual  effects  of  liberalization  over the two decades since it had first been introduced by Rajiv Gandhi?  The  good  news  is  that  between  1980  and  2002  the  Indian  economy  grew at 6 per cent per year and from 2002 to 2006 at 7.5 per cent per  year. The middle class, at least by one definition, grew to 250 million. At  the same time, population growth slowed from 2.2 to 1.7 per cent. In  large  part  because  of  this  population  growth,  per  capita  income  has  increased  from  $1,178  to  $3,051  per  year  since  1980.  The  secret  to  India’s  success  has  been  attributed  to  the  policy  of  providing  for  the  domestic market rather than for exports.  And then the other news: first of all, in the heavy and light industry  sectors  of  the  economy  there  has  been  little  significant  growth;  the  “Hindu  rate”  (3.5  per  cent)  was  not  surpassed  in  the  primary  sector,  while growth in the secondary sector was little different over the whole 

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period 1981–2000. It was in the tertiary, services, sector that dynamism  was to be found. “India Shining” therefore referred not to shiny industrial  goods  but  to  the  shine  associated  with  international  call  centres  and  IT  parks  in  places  like  Bangalore,  Hyderabad,  and  Pune  and,  of  course, to the shopping malls, well patrolled by security guards to keep  the inquisitive poor at bay. The entire IT sector employed only 1.3 million people out of a total workforce of more than 400 million. At the same time, there were very low rates of employment generation, half the level of the period of the “Hindu rate” and well below the  rate  of  growth  of  the  rural  population.  The  quality  of  employment  worsened with the number of people in full-time work decreasing while  those in part-time work increased. Agricultural employment showed the  sharpest deterioration of all: “rural employment in the period 1993–94  to  1999–2000  grew  at  the  very  low  annual  rate  of  less  than  0.6  per  cent … lower than any previous period in post-Independence history,  and  well  below  (only  one-third)  the  rate  of  growth  of  rural  population.” In urban India “the deceleration and even decline in organized  sector  employment  was  one  of  the  more  disturbing  features  of  the  period after 1990.”17  Indian growth, then, may remain more illusory, or at least more limited, than is at first apparent. Ghosh also explains this growth and its  limits: “the role of the state [has] remained crucial, since it was the state  that determined the contours of tax reductions, deregulation and other  policies that allowed for economic growth based on a relatively small  and dominant urban section of the population. The explosion in consumption  by  the  upper  quintile  of  the  population  …  fed  this  growth,  and meant that it involved increased inequality, both across regions of  India and within regions across different economic and social categories. There was also a widening gap between incomes in agriculture and  non-agriculture.”18 The crisis in the agricultural sector has resulted in  over a hundred thousand suicides by farmers over the past decade. So, in spite of claims of wondrous economic growth, there remains in  India, according to Amit Bhaduri a population of 303 million in “utter  misery.” “Nearly  half  of  Indian  children  under  six  years  suffer  from  under-weight and malnutrition, nearly 80 per cent from anaemia, while  some 40 per cent of Indian adults suffer from chronic energy deficit … [M]ore than three in four Indians do not have a daily income of $2.”19 A  small  part  of  Indian  society  has,  nonetheless,  prospered  fantastically. According to Forbes, the magazine of the rich and wannabe rich,  in 2007 India had the distinction of having forty billionaires; Japan had 

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only twenty-four, China seventeen, and France fourteen. “The combined  wealth of Indian billionaires increased from $106 to $170 billion in a  single year.”20 Here we have an unsurprising explosion in consumption,  one of the more egregious elements being the interest in wine drinking,  which was never a compulsion of the Indian middle class. A New York Times article in August 2007 noted that, “while more than a third of all  Indians live on less than $1 a day, the country’s nose for wine, an outgrowth of new wealth and world travel among India’s swelling ranks of  the  rich,  can  be  discerned  in  the  wine  clubs  sprouting  across  India’s  new-money citadels, the wine tours of the young Indian vineyards and  the  wider  variety  of  wines  now  available  at  upmarket  restaurants.”  “Thus India is said to be poised to become a power in the 21st century,  with the largest number of homeless, undernourished, illiterate children  coexisting with billionaires created by … rapid growth.”21

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7 Storms over Afpak: Permanent War in Pakistan and Afghanistan The general [Gen. Stanley McChrystal] has reportedly long thought of  Pakistan and Afghanistan as a single battlefield, which means that he was a  premature adherent to the idea of an Af-Pak – that is, expanded war. Tom Englehardt, “How the Most Powerful Nation Disabled Itself” Remember my words: if the ISI is not with you and Pakistan is not with you, …  you will lose Afghanistan. President Musharraf qtd. in Imtaz Gul, The Most Dangerous Place By now, almost all the likely outcomes of US strategy in Afghanistan are  bad ones. Anatol Lieven, “How the Afghan Counterinsurgency Threatens Pakistan”

introduction

Pakistan and Afghanistan stand at the crossroads of the Middle East,  Central, East, and South Asia with Iran to the west, the newly independent,  formerly  Soviet,  sovereign  republics  of  Kazakhstan,  Kyrgyzstan,  Tajikistan, Turkmenistan, and Uzbekistan to the north, and just beyond  them, Russia, Tibet, and Xianjiang to the north and east, and India to  the south.1 While several of the frontiers of Central Asia are imperial  creations, drawn up by the British and the Russians, others embracing  Tibet and Xianjiang represent a much older expansionism. Most of the  newly independent republics are less than two decades old, having been  born after the dissolution of the Soviet Union in December 1991. In  1996 China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan formed a  multilateral partnership called the Shanghai Cooperation Organization 

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(SCO), a source of some concern for those who would play a new Great  Game in the neighbourhood.2  The  territory  of  Pakistan  before  its  creation  in  August  1947  comprised  several  distinct  elements.  At  its  centre  was  the  Indus  and  the  northwest, the lands of the Harappan city states, which existed in the  second  and  third  millennia  BCE  and  were  the  very  hearth  of  Indian   civilization. Here the rich and well-irrigated agricultural heartlands of  Punjab and the Sind, hugging the Indus like Upper Egypt cradled the  Nile, were, like Egypt, renowned for cotton production. This area had  been conquered by the Mughals in 1590, and, under them, the region  had  become  increasingly  commercialized.  The  second  element  was  peripheral, comprising the poorer hinterlands of Baluchistan and what  the British called “the Northwest Frontier Province” (NWFP) and “the  Federally Administered Tribal Areas”  (FATA). The  former  was  mostly  desert, the latter, arid and mountainous.3  A quite distinctive element in the newly conjured Pakistan in 1947  was East Bengal, at the other extreme of India and torn from its side in  the partition. Its population was more consistently South Asian and less  Middle Eastern than that of West Pakistan, although it became part of  the  Muslim  world  at  the  beginning  of  the  second  millennium  of  the  common era. Here Islam was at the very end of its continental tether  and, as a consequence of being on the frontier, was more strongly influenced  by  Hinduism.  The  Bengali  part  of  Pakistan  was  slightly  more  populous than West Pakistan and had little in common with it, other  than  religion.  Yet,  Islam  has  remained  an  ideology  of  inestimable  potency in the history and politics of the India and Pakistan, in the past  as now. In the view of Stephen Cohen, “No question is more contentious,  or  of  more  contemporary  political  relevance,  than  that  of  how  Islam  spread  within  South Asia. The  entire  state  of  Pakistan  rests  on  certain interpretations of that expansion.”4 In both Punjab and Sind, which are the most populous and richest  parts of West Pakistan that the British had sustained and expanded on  the basis of an extensive network of irrigation canals, there existed a  class of rich peasants and landlords (zamindars) and a mass of poor,  tenureless  sharecroppers  and  labourers.  On  the  other  hand,  both  of  these  provinces  saw  their  other  opportunities  shrink.  “Prior  to  the  [British] annexation [in 1843], Sind was a participant in a wide-ranging  system of interregional and international trade. Under British rule, its  function was increasingly reduced.”5

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Much of the area that was to become Pakistan was thus agriculturally  highly productive but, in comparison to India, quite devoid of modern  urban centres and trade and industry. Only a small, educated, modernist, middle class emerged there. The most progressive capitalists were in  fact the Muslim emigrants (muhajirs) who moved there from India after  Pakistan’s independence in 1947. The Pakistan that was created as the last act of a dying colonialism in  1947  was  gone  by  the  end  of  1971.  It  was  designed  in  haste  and  its  people were abandoned to their fate by their erstwhile British rulers in  the postwar scramble to decolonize. While it existed, it was dominated  by  West  Pakistani  Punjabis  and  Sindhis,  although  the  majority  of  its  people, who were Bengalis, lived in the East. It was also from the East,  and especially from the export of jute, that most of the united Pakistan’s  foreign  currency  earnings  had  come.  After  the  civil  war  that  divided  them, East Pakistan became Bangladesh. The  land  of Afghanistan,  the  second  subject  in  this  chapter,  has  an  extraordinary past by any standards. Its entry into world history came  when  it  was  incorporated  as  a  province  of  the  Persian  Achaemenid  Empire (550–330 BCE). After he had wrecked this empire in 331 BCE,  Alexander  the  Great  passed  through Afghanistan  on  the  way  to  the  Indus  where  he  arrived  in  326. Thereafter,  while  it  lacked  the  same  kind of chronicling that allowed for coherent histories of its Persian  and Indian neighbours to be written, Afghanistan, by whatever name,  remained  in  the  imaginations  of  both  the  rulers  of  Iran  and  those  of  India.  Afghanistan’s  permanent  place  in  history  was  assured  by  the  establishment of the dynasty of Babur, who, from Kabul, established the  Indian Mughal Empire in 1526. Babur’s advent coincides with what was once regarded as the beginning of the modern period in Euro American history. Yet, we can hardly  attach  the  term “modern”  to  the  Mughal  Empire;  it  was  a  perfect  instance  of  an  Asian  empire  of  the  un-modern  kind,  decidedly  less  affected  by  modernizing  West  Europe  than  the  Ottoman  Empire,  for  instance,  and  immeasurably  more  backward  in  terms  of  science,   engineering, and agriculture than the Celestial Empire. By the 1520s it  stretched from Kandahar, the urban matrix of the Pashtuns, to the Bay  of Bengal on the boundaries of Southeast Asia. By the time India and  Pakistan  were  created  in  1947,  a  recognizable  and  unconquered,  if  hardly  modern,  state  of  Afghanistan  had  existed  for  half  a  century.  Under the Pashtun king, Zahir Shah (r. 1933–73), Afghanistan slowly 

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crept in the direction of the modern world. When Zahir was overthrown  in a coup, the impetus behind Afghanistan’s slow forward march was  dissipated  as  one  lot  of  communists  overthrew  another  and  civil  war  ravaged the country. The destinies of Pakistan and Afghanistan have been intimately interwoven with those of both Persia and Muslim India. While Afghanistan  was  never  incorporated  within  the  Raj,  the  area  of  Pakistan  from   Baluchistan on the Persian frontier to the Indus became from the nineteenth century an integral part of British India. When the British drew  up the frontier of their Indian empire, they included in it the North West  Frontier  Province  (NWFP)  and  the  FATA  that  were  historically  part  of  Afghanistan.  The  Afghanis  have  never  accepted  this  arrangement  because it splintered the Pashtuns into several jurisdictions with three  million Pashtuns in Pakistan’s FATA, twenty-eight million mainly in the  NWFP, and fifteen million in Afghanistan as of 2008.6 pakistan

In British-ruled India the Muslim League had been formed in 1906 to  argue for a separate Muslim political jurisdiction. Never becoming the  voice of all Indian Muslims, neither did the league have the talent nor  the following of Congress, although it often had the ear of certain of  India’s British rulers. From 1930 there began to be talk about a separate  Muslim political entity; this was to be called “Pakistan,” “the Land of  the  Pure.”  The  boundaries  of  this  jurisdiction  were  vague  and  some  thought they might even include Bombay (Mumbai). Increasingly, from  the late 1930s, as we have seen in the previous chapter, the leaders of  Congress  and  Muhammed  Ali  Jinnah  (b.  1876),  who  dominated  the  Muslim League, were on a collision course. Yet, in spite of his undertakings with Muslim leaders, Jinnah was no  more devout a Muslim than Nehru was a fastidious Hindu. Neither had,  after all, imagined Israels on the banks of the Indus; both sought secular  states that were both religiously and ethnically plural. Like Nehru, Jinnah  spoke English virtually as a first language, and, like Nehru, he had received  his legal training in England. In fact, he barely spoke Urdu, which he had  no time to learn because he died on 1 September 1948.7 The last British  viceroy of India, Lord Louis Mountbatten, who organized the partition of  India and Pakistan, predicted  that this arrangement would  not last for  more than twenty-five years. Still, this would not be a British problem.

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Pakistan,  thus,  was  born  at  midnight  on  14–15  August  1948,  in  the  form of a sickly set of twins removed from Mother India by Caesarean  section.  Britain  was  its  genitor,  and  Muslim  League,  led  by  Jinnah,  its midwife.  The  western  half  of  the  new  Pakistani  state  comprised  Muslims  of  several  distinct  cultures  (Punjabis,  Sindhis,  Baluchis,  Pushtuns,  and   others, including seventeen major tribes in Baluchistan alone) linked by  the common language of Urdu, closely related to Hindi and previously   spoken  in  the  Mughal  court.  Urdu  was  spoken  as  a  first  language  by  the  muhajirs,  the  migrants  who,  in  1947,  trekked  into  Pakistan  from  Uttar Pradesh, Gujerat, and Bombay but by few others; Bengalis spoke  Bengali, Sindhis, Sindhi, and Punjabis, Punjabi. On the whole, the muhajirs spoke better English than the other newly minted Pakistanis; this  gave them a significant advantage over their new countrymen. Pakistan’s  emergence  had  been  foreshadowed  by  communal  strife  between Hindus and Muslims immediately following the end of World  War II. Almost immediately upon the separation of Pakistan from India  there was cataclysm as Muslims trekked from India into Pakistan and  Hindus and Sikhs fled in the opposite direction.  Although there had been evidence of growing violence in places as far  apart as Bengal and Kerala, the British did not foresee the bloodbath at  partition; nor did the forces that they still commanded do anything to  maintain  order  or  prevent  it.  As  they  were  to  do  in  Palestine,  they  washed their hands of the whole calamity. It was against the background  of this carnage that Nehru made his famous speech on the midnight of  Indian independence. natal formations

Pakistan’s traumas came early. With 23 per cent of the total land mass of the Indian subcontinent  and nearly 18 per cent of the population – or more precisely  68.6 million out of the 295.8 million in British India – the new state  had less than 10 per cent of the industrial base in the two dominions  and just a little over 7 per cent of the employment facilities …  In 1947 Pakistan’s total industrial assets were worth only …  approximately $112 million … of which the better part was owned 

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by non-Muslims who had fled to India. Potentially self-sufficient only  in foodgrains, Pakistan was the quintessential agrarian economy.8 According  to  the  colonial  division  of  labour,  the  lands  within  the   borders of West Pakistan were to be principally agricultural, and their  people, simple peasants and soldiers. Although in Mughal times Lahore  in Punjab had been one of the largest cities of the empire, no attempts  were made to develop the region industrially, as its single textile and its  single sugar mill attested. Canals had been built across the region and  ex- soldiers had been settled on them, but this was the limit of British  investment.  In  the  words  of  Imran Ali, “the  colonial  authority  in  the  Pakistan  area  succeeded  in  retarding  the  very  process  that  had  expedited the transition to agricultural capitalism in Britain itself.”9 What  Ali is arguing here is that the transition from feudalism through agricultural capitalism to industrial capitalism that was to take place in many  parts of the developing world was stifled in India’s northwest. The outcome of imperialism here was, therefore, economic involution. In addition to its designer backwardness and to the crippling loss of  the  Hindu  and  Sikh  merchants,  Pakistan  suffered  from  a  lack  of  any  form of political organization. In India, the influence and organization  of Congress had spread downwards to the grassroots of society for several decades. In Pakistan, on the contrary, the Muslim League had developed little in the way of popular support. For this reason, it remained  heavily dependent on the same vested interests that the British had supported – the zamindars, the religious leaders and the minor officials who  had served under the British. It is the descendants of the latter group, the  “salariat” who emerged at independence as the wielders of state power.  In fact, after the assassination of Liaquat Ali Khan (r. 1947–51), several  of  them  rose  to  the  office  of  prime  minister.10  Once  in  power,  they  upheld  the  British  policy  of  patronizing  the  landowners  and  the  religious leaders, blocking the way for popular participation in government  until  the  rise  of  the  military  government  of  Ayub  Khan  (r.  1958–72)  when  they  were  pushed  down  into  secondary  roles. Always  insecure  in  relation  to  India  and  determined  to  reclaim  the  lost  province  of  Kashmir, Pakistan allocated as much as 70 per cent of its first budgets  to defence. This guaranteed to the military a virtually unassailable role  in the country’s future.  Ruling  over  the  new  state  and  its  counterpane  of  ethnicities,  then,  were  four  main  social  and  political  groups.  The  first  of  which  were  the feudal landholders, a mere 2,000 of whom owned 70 per cent of 

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Pakistan’s cultivatable land. Four out of five seats in Pakistan’s national  assembly  were  normally  occupied  by  the  feudal  or  their  nominees.  Many of the feudals had degrees from the leading universities in Britain  and the United States. Alongside  the  feudal  landlords  in  the  countryside  were  the  middle  and rich peasants, such as the descendants of the veterans of Britain’s  Indian  Army  who  had  been  settled  on  empty  land  when  the  British  extended  the  canal  system  through  Punjab.  Together  these  landlords  and peasants were linked to form a mesh that held rural society in place.  The landless peasants who worked on the land were bound as tenants  and sharecroppers by a kind of feudal tenure. They have been described  as  shackled  to  their  places  of  work.  To  suggest  that  the  tenants  and  sharecroppers were voters in a democratic system would be, thus, ridiculous; normally, they voted as they were instructed – or else. In spite of  regularly  staged  elections,  Pakistani  democracy  has  little  in  common  with that of India. The  second  of  the  four  groups  comprised  the  industrial  and  commercial capitalists. Among them were the muhajirs (i.e., “migrants”). These formed only a small part of the population of Pakistan but were  highly  concentrated  in  Sind  and  especially  in  Pakistan’s  largest  city,  Karachi, where over half of the population of twelve to fourteen million is muhajir. Among them were the oligarchy of twenty-two families  who  dominated  commerce  and  industry.  It  has  been  estimated  that  these families owned 66 per cent of the total industrial assets, 70 per  cent of insurance, and 80 per cent of banking.  The third group was the bureaucracy, the “salariat.” This group ran,  if they did not actually own, the country. One part of the salariat, the  army, was in a class of its own, as we shall see. The civilian element of  the bureaucracy, including the police, totalled 2.9 million people, a disproportionately large group of whom were senior managers. At the top  of this group were the 800 leading civilian and police officials that ruled  the 9,500 administrative districts that the country was divided into by  the British. At their head were commissioners, possessing more absolute  local power and privileges than British colonial officials ever had. The  civilian  officials,  from  the  commissioners  downwards,  controlled  all  legal and tax records and worked in collaboration with the big landowners. The best rewarded of the civil servants were those involved in  customs  and  excise,  the  most  corrupt  branch  of  the  civil  service. The  bureaucratic  elite,  including  leading  army  officers,  comprised  around  500 people.

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degeneration

Muhammed Ali  Jinnah,  the  founding  father  of  the  country,  was  succeeded by Liaquat Ali Khan (b. 1905) who was assassinated in October  1951. In retrospect, his assassination was an ominous sign: “From 1954  to  1958  Pakistan’s  political  system  degenerated  into  a  farce,”  writes  Omar Noman.11 The farce was brought to an end by a charade: military  rule  was  first  established  in  a  coup  in  1958  authored  by Ayub  Khan  (r.  1958–1969)  whose  origins  were  feudal;  he  came  from  one  of  the  great landholding families of Punjab and clearly detested the muhajir commercial  and  industrial  families.  Suitably,  he  was  educated  at  the  British  military  college  at  Sandhurst,  even  in  post-imperial  times  a  hatchery for client martinets. Upon seizing power Ayub Khan snatched all the chief roles of state –  chief of the general staff, prime minister, and president. He clung on to  American coattails, enrolling Pakistan in the Central Treaty Organization  (CENTO),  an  anti-Soviet  alliance  of  Washington’s  valets  modelled  on  NATO.  In  return, Washington  blessed  his  military  dictatorship.  It  was  from a base in friendly Pakistan that the notorious U-2 spy plane had  been launched in the late 1950s – its mission to fly over and photograph  Soviet  military  installations  from  high  altitudes.  We  know  about  it  because the Soviets shot it down.  From 1958 the military occupied a role in Pakistani politics analogous to that of the Congress party in India; it was soon to become the  normal, if not entirely admissible, centre of politics. But unlike India,  Pakistan’s  foreign  policy  commitments  had  nothing  in  common  with  India’s non-alignment; for Khan bound Pakistan to the United States in  the kind of military clientage that was familiar in satrapies from Israel  to  Japan;  Pakistan,  Khan  promised,  would  become  America’s  “most  allied ally.”  Of  Ayub  Khan’s  contributions  to  the  deterioration  of  any  form  of  democracy in Pakistan, none were more important than his founding of  the Directorate for Inter-Services Intelligence, the ISI, to which I have  averred at the opening of this chapter. The ISI fulfilled the same purpose  as the FBI and the CIA in the United States; it was meant to spy both  domestically and internationally and to carry out “wet” tasks according to instructions. But it was a knife that could turn in the hand of its  wielder. Prime Minister Zulfikar Ali Bhutto used it to harass his political  opponents. The  army  chief  of  staff,  General  Zia  ul-Haq,  used  it  to overthrow Bhutto. The ISI grew hugely in the 1980s, as we shall see, 

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as  it  became  the  main  conduit  for  US  and  Saudi  funds  flowing  into  Afghanistan. Later it became the paymaster of the Taliban. Afghanistan’s  war  economy  thus  proved  essential  to  the  prosperity  of  Pakistan’s   military caste. collapse

Khan’s  years  were  Pakistan’s  golden  age,  such  as  it  was,  and  he  narrowly  missed  being  the  last  ruler  of  a  united  country.  Even  before  he  seized power, the Bengalis in East Pakistan had rioted against rule from  West Pakistan; as early as 1952 they had mobilized against the imposition of Urdu as a national language. Two years later at the ballot box  their nationalist party, the United Front, had devastated West Pakistan’s  Muslim League.  During  the  years  of Ayub  Khan’s  dictatorship,  the  successor  of  the  United  Front,  the  Awami  League,  under  Sheikh  Mujib  ur-Rahman  (r. 1971–1975), had begun campaigning for outright independence. The  people in Pakistan’s most populous province were convinced that their  relationship with West Pakistan was a form of colonialism; they even  used the term colonial exploitation. Not only was East Pakistan milked  for the foreign exchange that its exports produced, but it was kept out  of the circle of political power that was monopolized by politicians and  soldiers  from  the  East.  Thus,  although  the  Bengalis  were  the  largest   single ethnic group in Pakistan, no Bengali ever became head of government. The civilian and military elite of West Pakistan, according to  Ayesha  Siddiqa,  saw  the  Bengalis,  in  spite  of  their  being  Muslims,  as  “ethnically inferior.”12 As the temperature in the east rose, Ayub Khan responded first with  repression and then with despondency and resignation. In 1969, unable  to blunder on any further, he handed over his usurped responsibilities to  another general, Yahya Khan (b. 1917), who, emboldened by support  from Washington, partly in the form of a substantial World Bank loan,  decided to crush the Bengali dissidents. Troops were flown in to Dhaka,  the East Bengal capital, and martial law was declared in the east.  In  the  elections  of  December  1970,  the  secessionist Awami  League  won 288 of 300 seats in the East Pakistan legislature and an astonishing  167  out  of  the  300  seats  in  the  National  Assembly.  This  put  Sheikh  Mujib  ur-Rahman  in  position  to  rule  the  whole  country,  a  shocking  prospect in the eyes of the political elites in West Pakistan. The opening  of the National Assembly, scheduled for 1 March 1971, was postponed. 

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Emergency talks were held in Dhaka. After meetings with the sheikh,  the representatives from the west flew home, leaving the matter of who  would rule unresolved. Behind them in the east was the large, mainly  Punjabi, army of occupation, under the command of yet another general  named Khan, in this case Tikka Khan. On 26 March Mujib ur-Rahman  declared Pakistan dead and a new country, Bangladesh, born.  Tikka Khan reacted with savagery, although obviously not without  the  encouragement  of  the  leading  political  lights  of  West  Pakistan.  Chaos  and  civil  war  followed  as  his  Punjabi  and  Baluchi  soldiers  slaughtered Bengali civilians. Students were massacred in the university  and  women  in  the  markets.  Millions  fled  across  the  border  into  India where the Indians armed Bengali guerrillas who returned to their  new  country.  It  was  Partition  all  over  again,  yet  this  time  Pakistan’s  crisis was India’s opportunity. India and Pakistan had gone to war in 1947 at the time of Partition  and again, for three weeks, in September 1965. In both cases, Kashmir  was  the  apple  of  discord.  On  23  November  1971,  the  third  Indo-  Pakistani war broke out when Indira Gandhi ordered Indian divisions  to march into Bangladesh. The Indian soldiers outnumbered the Pakistanis  about  nine  to  one;  as  well,  there  were  100,000  armed  Bengali  guerrillas. Outgunned and even out-generalled, the Pakistani army was  soon  overwhelmed  and  on  15  December  1971  it  surrendered.  Some  100,000 Pakistani soldiers were now prisoners of the Indians. Mountbatten,  the  last  British  viceroy  of  India,  had  predicted  that  Pakistan  would not last for twenty-five years; it had lasted for twenty-four.  zulfikar ali bhutto

After  the  1965  war  with  India  had  shredded  the  credibility  of  Ayub  Khan, Zulfikar Ali Bhutto formed his own political party, the Pakistan  People’s Party (PPP). The rhetoric of the PPP was the essence of 1960s  populist Third Worldism: “Islam is our Faith, Democracy is our Polity,  Socialism is our Economy. All Power to the People.” He urged that his  followers and others in the Third World should “cooperate, collaborate,  get together, assist one another.” In the West he might have said, “love  one another,” but this was, after all, Pakistan. In the elections of 1970  his party swept the Punjab and Sindh, although it registered little success elsewhere in the country. In keeping with his claims to be a radical, Bhutto launched a campaign  against the feudalists and their accomplices who ruled the country: “They 

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have sucked the blood of the people and have mercilessly looted them,”  he ranted.13 Ayub Khan had him arrested and widespread protests followed. But when the armies of Pakistan were defeated by the Bangladeshis  and Indians, his star shone even brighter and he became the first civilian  ruler of Pakistan in twenty-five years.  No politician in the country’s history has ever enjoyed the same popular esteem. His credibility rested on his capacity to articulate the discontent of the majority of Pakistanis and especially his criticism of the  economic elites. In early 1972 he undertook a wave of nationalizations  that included not only heavy industry such as iron and steel and petrochemicals  but  also  banks.  In  response,  the  owners  of  capital,  feeling  persecuted, fled the country, and Pakistan’s international credit rating  went into free fall.  As the fiscal indicators moved towards the zero mark, tension rose.  Riots began to erupt between the muhajirs, who had established a powerful  hold  on  the  economy  of  Karachi  and  their  Sindhi  neighbours,  while animosity grew between the mujahirs and their economic rivals,  the Punjabis. Slowly it had become apparent that the hopes of the many  in Bhutto were to be in vain.  Bhutto increasingly turned to repression and blamed the West. Like  Suharto  under  duress,  in  1973,  following  the  October  war  between  Israel  and  its  neighbours,  he  also  ostentatiously  embraced  Islam.  By  1976 he had replaced many of the stalwarts of the PPP with Muslims,  and in 1977 he rigged and won another election. In the same year he  created the Federal Security Force, a praetorian guard of thuggish tendencies. But by this time, not only was the business bourgeoisie against  him, so too was the military. The muhajirs who had initially supported  him  had  now  abandoned  him  in  despair. The  feudal  landholders  and  tribal leaders whom he had sustained did not come to his rescue. Against a rising crescendo of political protest, on 5 July 1977 Bhutto  was  overthrown  in  an  army  coup  led  by  a  commander-in-chief  who  was his appointee. The justification of General Mohammed Zia ul-Haq  (r. 1977–88) was that of military despots everywhere – the country had  to be saved from chaos. And as in other army coups, the general who  was  to  guarantee  salvation  claimed  to  have  no  long-term  political  ambitions.  Power,  he  promised,  would  be  returned  to  the  civilians  within ninety days. On 4 April 1979, Zulfikar Ali Bhutto was hanged,  to   universal  protest,  in  Rawalpindi  jail.  “The  killing  of  an  elected  prime  minister  by  the  Zia  regime  indicated  the  military’s  immense  power, and provided a warning that the politicians must not question 

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the  organization’s  interests.”14  Once  the  man  himself  was  gone,  the  myth of Bhutto rose from the dead to dance on Zia’s grave. In 1981 the  PPP, with which he had been in a state of perpetual war, united with a  dozen other opposition parties to form the Movement for the Restoration  of Democracy (MRD). the opportunity of radical islam

Bhutto’s  hangman  had  advertised  himself  as  a  simple  soldier  and  an  ardent  Muslim.  Between  July  1977  and  January  1986,  Zia  ruled  Pakistan  under  martial  law,  fashioning  for  himself  the  title “Martial  Law Administrator.” The use of arbitrary arrest, torture, incarceration,  and executions cowed his critics. Independent sources of authority, such  as the judiciary, were neutralized.  Before  Zia,  Bhutto  had  flirted  with  Islamic  radicalism  in  order  to  enhance his own popularity. But in his last years the political geography  of  Islam  had  changed  and  the  most  unprecedented  change  had  taken  place on Pakistan’s western borders. First of all there was Iran. There, as  we shall see further in the next chapter, in the second part of the 1970s,  after years of repression, the forces of opposition to the shah had revived  and regrouped. By 1977, the year of Bhutto’s overthrow, they had begun  their relentless advance. Two years later the Iranian monarchy had been  replaced by an Islamic republic and the shah was dead. The Iranian revolution offered an irresistible opportunity for Zia; he  could  now  appeal  to  the  petro-potentates  in  the  Gulf  for  assistance  against the spread of a radical form of Islam that they abjured. What  was  more,  the  Iranians  were  Shi’as  (as  was  around  20  per  cent  of  Pakistan’s  population).  But  the  Iranian  revolution  was  not  the  only  major political shift that had taken place. In December 1979, while the  new Islamic state of Iran was emerging, the situation in Afghanistan had  become radically transformed – the Soviets had invaded to prop up the  foundering  communist  government  there.  The  capital  of  Pakistan,  Islamabad, was hardly 500 kilometres from Kabul.  With militant Shi’ism and communism rising up on the borders of the  Arab Middle East, the purses of the Saudis and their Gulf neighbours  snapped  open.  Arms  and  funds  flowed  to  Pakistan  –  $3.3  million  in  military and economic assistance. Washington now became involved in  two campaigns, the first to contain the Iranian revolution and the second to block the Soviet invaders of Afghanistan. Pakistan now served as  a Western outpost, like Japan had at the time of the Korean War. “After 

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December  1979,  the  military  not  only  ruled  the  roost  in  Pakistani   society but acted as defenders of a state deemed by the United States  and the Western allies to be on the ‘front line’ between Soviet Russia  and the ‘free world.’”15 During the last decade of the Cold War, the military elite of Pakistan had again struck it rich. Beneath  the  uneven  surface  of  the  Pakistani  dictatorship,  politics,  involving  contending  military  and  civilian  factions,  continued  to  ferment. The prizes were compelling: Pakistan was not only the recipient  of dazzling amounts of military aid but was also the beneficiary of huge  sums of humanitarian relief designed to sustain the three million Afghani  refugees who had fled from the Soviet invasion. There was also another  income stream for the Pakistani military: drugs. A large part of the guerrilla war against the Soviets in Afghanistan was financed from the sale  of heroin derived from Afghani poppies. Soon Afghani heroin was to  swamp the markets of the West. In the midst of this came tragedy or, at least, mystery and certainly  opportunity. In August 1988 Zia ul-Haq was assassinated by means of  a bomb planted in his Hercules C-130. With him on his final ride were  key military advisors and the US ambassador. Mystery surrounded the  crash. Benazir Bhutto and Muhammed Mian Nawaz Sharif now stepped  forward to fill the vacuum. benazir, sharif , musharraf : 1988–2008

Benazir Bhutto (b. 1953), the hanged prime minister’s daughter, had fled  to London upon her father’s death. In April 1986 she returned home.  Two years later, the army stood aside to allow elections; the Bhuttos,  incorporeal  and  real,  won  92  out  of  207  seats.  In  December  1988  Benazir Bhutto became prime minister at age thirty-five, the first woman  to  head  a  government  in  a  contemporary  Muslim  state.  Lacking  an  overall majority, her party was forced into alliance with the party of the  muhajirs,  the  MQM,  which  commanded  Karachi.  For  the  next  decade  Benazir and her rival, Sharif, the one a Sindhi and the other a Punjabi,  the  one  a  landlord  aligned  with  the  feudal  and  the  other  with  the   commercial/industrial class, and both unscrupulous plunderers, would  dominate  Pakistani  politics. The  country  meanwhile  lived  off  foreign  remittances and military aid. By the early 1990s the state was pouring  88 per cent of its current expenditure into defence, administrative costs,  and debt servicing, leaving little for social or economic investment. The  country’s economy in the 1990s remained primarily based in agriculture 

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– with 66 per cent of the population still living in rural areas in 1993  and  over  31  per  cent  of  these  living  in  poverty.  The  main  industrial  activity was the processing and manufacturing of cotton goods. And at  3.1 per cent Pakistan had one of the highest population growth rates in  the world.  Sharif was in power in October 1999 when there was another military coup, which this time installed General Pervez Musharraf in power.  Having tried to kill Musharraf by causing the plane in which he was  travelling to crash, Sharif was himself dismissed at gunpoint. It should be obvious by now that besides such major vested interests  as  the  landowners,  the  muhajir commercial  elite,  and  the  high-level  bureaucrats, the military has also played a decisive role in both domestic Pakistani politics and Pakistan’s foreign affairs. Ayesha Siddiqa suggests  that  the  military  is,  in  fact,  the  largest  political  party  in  the  country.16 Its role became firmly established during the dictatorship of  General Ayub  Khan  (r.  1958–69)  and  became  more  deeply  embedded  thereafter. Yet, the military was more than just a political party; for it is  also a major force in Pakistan’s economy, controlling, through its own  foundations,  billions  of  dollars  worth  of  assets,  including  textile  and  jute factories, cement, and fertilizer plants, sugar mills, power companies, hospitals, schools, a university, and nearly seven million acres of  farmland. These assets are not monitored or even taxed by the state. Musharraf remained in power through the events of 9/11, when the  Americans insisted that Pakistan should be 100 per cent for or 100 per  cent against them. He wisely decided on the former course – and continued ruling until the end 2007 while making efforts to deal with “terrorism”  on  the  Pakistani-Afghani  frontier  and,  increasingly,  in  Pakistan  itself.  In  2007  there  were  sixty  suicide  bombings  in  Pakistan,  leaving  770 people dead and nearly 1,600 injured. In his first major speech after  the coup that brought him to power, the general stared into the abyss  that  seemed  to  be  Pakistan’s  future: “Fifty-two  years  ago  we  started  with a beacon of hope and today that beacon is no more and we stand  in  darkness.  There  is  despondency  and  hopelessness  surrounding  us  with no light visible anywhere around. The slide down has been gradual  but  has  rapidly  accelerated  in  the  last  many  years.”17  According  to  the 2006 UN Human Development Index, Pakistan stood 134th out of  177 states, eight places below India and just two above Ghana, one of  the  few African  countries  to  have  made  it  into  the “Medium  Human  Development”  category.  More  than  30  per  cent  of  Pakistani  children   are born with a low birth weight (a figure higher than Burkina Faso or 

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Sierra  Leone),  and  over  half  of  the  adult  population  is  illiterate;  this  rises to 75 per cent for females. Schools are woefully inadequate; elite  English-language  schooling  is  beyond  the  reach  of  the  majority,  and  there are no social services. Almost no one pays taxes. Debt slavery, as  we have seen, and child bonded labourers are commonplace. The social and political elite, although often divided, seems united in  its dedication to its own wealth, its colossal corruption, and to the limited social mobility for the majority. Musharraf, encountering powerful  resistance to proposed reforms, seems to have given up in the face of  what in other instances has been called “savage capitalism.”  In December 2007 Benazir Bhutto returned to Pakistan, and on the  27th she was assassinated. A month earlier, London journalist Tariq  Ali had written gloomily, “In Pakistan … the long night continues.”18  Few states in Asia have suffered as much as Pakistan from predictions  of  imminent  morbidity. “There  is  a  sense  in  which  Pakistan’s  economy is living on borrowed time,” wrote one commentator over two  decades ago.19  In  the  elections  of  February  2008,  the  Pakistan  Muslim  League-F  (PML-F),  the  vehicle  of  General  Musharraf,  was  crushed,  as  were  the  religious  parties.  In  the  North-West  Frontier  Province,  largely  populated by Pashtuns, the Islamicist Mutttehida Majlis Amal (MMA) was  defeated by the secular Awami National Party. In the heart of the country,  Nawaz  Sharif’s  Muslim  League,  firmly  based  in  Punjab,  and  the  PPP, now in the hands of Benazir’s jailbird husband, Asif Ali Zardari,  and their son Bilawal, who had spent most of his life in England, triumphed and formed a coalition. Both of these parties were urban based,  mirroring  the  transformation  of  Pakistan  to  a  country  that  is  nearly  50 per cent urban.  In early 2011 Osama bin Laden was assassinated by American Special  Forces in his house in Abbotabad, near the Pakistani equivalent of West  Point. Together with the regular slaughter of Pakistani troops and civilians by American drones, this brought US-Pakistani relations to a new  low. The December 2011 cover of Atlantic Monthly referred to Pakistan  as “The Ally from Hell.”  afghanistan : losing the great game

In 1747 Ahmad Shah Durrani of Kandahar was chosen as king of the  Abdalis,  one  of  the  two  major  tribal  groups  of  the  Sunni  Pashtuns,  the largest Afghani ethnic group. The Pashtuns lived to the south of the 

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Hindu Kush mountain range that stretched right across the middle of  Afghanistan.  Scattered  among  them  were  other  groups,  Persian  and  Turkic-speaking, the Tajiks, Uzbeks, Hazaras, and Turkmens, some of  whom  were  Shi’a. The  attitude  of Ahmad  Shah  Durrani  towards  the  Shi’as  was  pragmatic;  they  were  to  be  accepted  as  a  part  of  the  new  multi-ethnic  and  multi-confessional  nation.  One  view  of  the  Durrani  Empire  shows  it  stretching  from  the Arabian  Sea  in  the  south  to  the  Amu  Darya  River  in  the  north  and  from  eastern  Iran  in  the  west  to  Pakistan in the east. The whole of the Indus valley as well as Baluchistan,  now part of Pakistan, was part of this empire. Defying the embrace of  Mughal India and Safavid Iran, Ahmad Shah united most of the Pashtun  tribes and soon gained control over much of southern Afghanistan and  Kashmir, even envisaging the whole of Iran as a Durrani client state. At this point it should be stressed that by the early seventeenth century the region of Afghanistan had long since been a crossroads for the  trade between India, Persia, and Central Asia. Far from being the backwater to which colonialism later relegated it, it was on its way to becoming  a  key  link  in  the  economic  life  of  the  region.  It  was  this  growing  commercialism, and the wealth that followed from it, that prompted the  Durranis  to  attempt  to  control  it.  The  peace  and  security  that  the  Mughals had brought to India and the Safavids to Iran from the late  sixteenth century might have led Afghanistan towards a greater degree  of stability and prosperity had the region not become, in the nineteenth  century, a buffer zone in the “Great Game” played by the British and  the Russians. Ahmad Shah’s son, Taimur Shah, the second of the Durrani dynasty,  moved  the  capital  of  the  emergent  Afghani  Empire  eastwards  from  Kandahar to Kabul. The Durranis continued to rule the Afghani core  area until 1973 when the last of their kings, Zahir Shah (r. 1933–73)  was deposed and Afghanistan was declared a republic.  In the nineteenth century the British in India had tried to expand their  control  in  all  directions.  On  three  occasions,  beginning  in  1839,  they  had  sent  armies  into Afghanistan  and  on  all  occasions  they  had  been  defeated – in one case, almost utterly destroyed. The First (1839–42),  Second  (1878–80),  and Third  (1919) Afghan Wars  proved  that  there  were limits to the success of even the most dogged colonial armies.  Having failed to subdue the Pashtuns militarily, the British thought  that they might buy, or at least rent, the allegiance of their most powerful leaders and create a buffer between themselves and the Russians.  This  policy  was  spectacularly  successful  in  the  case  of  Amir  Abdul 

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Rehman, the “Iron Emir,” who ruled from 1880 to 1901 and who not  only brought the rebellious Pashtun tribes to heel but conquered much  of northern Afghanistan, ending the independence of the Hazaras and  the  Uzbeks.20  Abdul  Rehman  did  not  scruple  to  embark  on  ethnic  cleansing when he found this useful, nor did the British, who subsidized  his political expansion. Two of the amir’s other practices  affected  the  political and ethnic landscape of Afghanistan: he resettled the Pashtuns,  who  were  loyal  to  him  in  the  conquered  lands  to  the  north;  and  he  developed and maintained a corps of police spies to ensure that rebellion might be anticipated and quashed.  One of the consequences of the international politics of the Age of  Empire was the drawing of the Durrand Line, devised in 1893 mainly  for British purposes to separate Afghanistan from India. The Pashtuns  never accepted this division. Thus, in spite of the gradual coalescence of  frontiers around what was to become Afghanistan, within these frontiers there was seething strife, often amounting to civil war.  After the Iron Emir, Afghanistan remained in the British orbit until  World  War  II.  Gradually,  its  small,  educated  elite  sought  to  move  the country into the modern world, but their efforts were opposed by  the entrenched influence of tribal and religious leaders, often one in the  same.  Far  from  being  swept  away  by  the  nationalism,  secularism,  and  even  communism  of  their  neighbours,  the  elite  dug  in,  rallying  their  heavily  armed  menfolk  in  periodic  revolts  against  any  form  of  centralized authority.  In 1933 King Zahir Shah came to power and held on until he was  deposed by his cousin, Sardar Mohammed Daud, head of the People’s  Democratic  Party  of  Afghanistan  (PDPA)  in  1973.  The  PDPA  was  a  wolf in sheep’s clothing: in spite of its name, it was a communist party.  Afghanistan  was  declared  a  republic  and  Mohammed  Daud  became  its president. Modernization, along communist lines, was at the top of  the agenda. By the late 1970s, the population of Afghanistan was estimated to be just over thirteen million peasants and three quarters of a  million nomads. communists

The  communists  remained  in  power  in  Afghanistan,  independently,  from  1973  to  1979.  Their  objects  were  to  modernize  the  country.  Bringing  about  changes  required  constant  battles  with  Afghanistan’s  Muslim  leaders  who  preferred  illiteracy,  the  subservience  of  women, 

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and their own control. As in most of the rural Muslim world, the position of women was beyond horror. Between 1956 and 1978 the rulers  of the Soviet Union backed their comrades in Afghanistan to the tune of  some $2.5 billion in civilian and military aid. Thereafter, as we shall see,  they took over the country. There were two factions among the communists, the ruling Parcham,  under  Mohammed  Daud,  and  their  rivals,  the  Khalq.  Daud  tried  to  extirpate the Khalq but his attempts backfired and, in a counter-coup on  27 April 1976, he was destroyed. The counter-coup was called the “Saur  (April)  Revolution.”  Afghanistan  now  came  under  Nur  Mohammed  Turaki as president. Turaki initiated a set of sweeping reforms. In  their  preoccupation  in  dealing  with  their  rivals  on  the  left,  the  Khalq leaders had ignored the rising tide of rebellion among the Islamic  feudalists in the provinces. In mid-March 1979 this took the form of an  outright revolt in the western city of Herat in which hundreds of PDPA  officials and military officers, alongside their Soviet advisors, were killed.  The  revolt  was  crushed  mercilessly  by  government  forces  using  tanks  and backed by jets flown by Russian pilots.  The  Herat  rebellion  had  been  brewing  for  more  than  a  year.  It  was  stimulated by the return to Afghanistan of Muslim radicals from revolutionary Iran. As the radicals flowed back, the Islamists who had fled to  the Pakistani city of Peshawar were busy forging new alliances and convincing rural people of different ethnic groups and clans that the communists were venal and, thus, unsupportable. The crushing of the Herat  rebellion convinced many that the country would have to be returned to  its own righteous, just, and, obviously, God-fearing past. The cause of an  Islamic state suddenly became attractive; those that struggled for it saw  themselves as mujahideen, “soldiers of the Holy War.”  Between the Herat rebellion in mid-March and the Soviet invasion of  Christmas Day 1979 both the situation in the countryside and the political situation in Kabul turned from bad to catastrophic. Washington,  seizing on the opportunity to injure its Soviet rival, had begun to aid the  anti-Soviet mujahideen; on 3 July 1979, President Carter had signed a  presidential decree authorizing secret aid to the Muslim rebels. Not to  put too fine a point on it, Washington was now backing one of the most  reactionary political movements in the Third World. Complicating  the  political  situation  in  the  capital  was  the  rivalry  between  president  Turaki  and  his  prime  minister,  Hafizullah  Amin.  During the summer, while the Americans were stimulating the forces of  reaction in the countryside, the Soviets had decided that Amin was an 

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obstacle to the reforms that they had felt were necessary to prevent the  disintegration of a valuable asset. They sought especially the broadening  of  the  base  of  the  government  by  the  inclusion  of  members  of  their  Parcham favourites. Amin would have to go: an attempt was made on  14 September to assassinate him but he escaped. Then came the moment  of blowback: Amin seized power and executed Turaki together with a  number of others, including imprisoned Parchamis. Relations between  Kabul and Moscow now crumpled, while in the provinces the Muslim  opposition turned up the offensive. As the Soviet ambassador in Kabul  later recalled, “Kabul was weakened. The army was deprived of a head  after Amin’s purges and reprisals. The clergy was against [the regime];  the peasants – against; the tribes – who had to endure much from Amin  – against. Around Amin there were only a few lackeys, who like parrots  repeated after him all kinds of nonsense about the ‘build-up of socialism’ and the ‘dictatorship of the proletariat.’”21 Faced with another impending disaster on its frontiers and alarmed  by the intelligence that the Islamicist regime in Tehran would attempt to  nullify  communist  influence  and  spread  its  own  doctrines  into  the  largely Muslim Soviet republics to the south, in December 1979 the Red  Army invaded. Soon there were 50,000 Soviet troops in the country. In October (1979) small detachments of Soviet troops from Central  Asia  had  already  been  moved  to  Afghanistan,  and  in  early  December  commandos  were  flown  to  the  Baghram  air  base  north  of  Kabul.  On  Christmas Day airborne units were landed in both Baghram and Shindand  in western Afghanistan. Motorized infantry crossed the border. Two days  later  special  units  attacked  the  Presidential  Palace  and  executed Amin  along with several of his followers and relatives. This was to be the last,  and the most expensive, Soviet coup d’état in history. Babrak Karmal, who had been exiled to Czechoslovakia by Amin,  was  flown  into  Kabul  and  proclaimed  himself  prime  minister  on  28  December.  By  the  beginning  of  1980  Afghanistan  had  become  a  Soviet satellite. According to President Carter, the Soviet invasion of  Afghanistan was the greatest threat to peace since the Second World  War. The Chinese were also upset and became one of the earliest suppliers of arms to the Muslim guerrillas.  The  Red Army  remained  in Afghanistan  for  a  decade,  increasingly  besieged  by  foes  near  and  far,  although,  on  the  whole,  perhaps  more  successful than the American-led International Security Alliance Force   (ISAF) forces that subsequently infested the country. In the summary of  a  former  British  ambassador: “Despite  their  losses,  the  Russians  won 

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most of their fights. They kept the main roads open, something we cannot always do today. They broke mujahideen attempts to besiege cities.  They mounted large operations, mustering up to 12,000 troops, to suppress mujahideen bases and formations. They put together an Afghan  army, armed with heavy weapons, which often fought well enough …  But the Russians never got over their basic weakness: they could take  the territory, but they never had enough troops to hold it.”22 Karmal sought to distance himself from the extremism of Amin but  proved  to  be  too  weak  and  indecisive  to  either  inspire  or  unite  the  Afghani communists. Moscow continued to support Karmal until May  1986  and  then  replaced  him  as  president  with  the  head  of  the  secret  police, Muhammed Najibullah, “the Ox.” By the time they left the country, Afghanistan was a ruin and the Soviet Union was on the verge of  extinction. Millions of Pushtuns had fled the country, settling across the  border in Pakistan.  islamists

We have seen that the Muslim offensive in Afghanistan was stimulated  by the advent of the People’s Democratic Party of Afghanistan (PDPA)  that  took  power  with  the  assassination  of  the  last  of  the  Durranis,  Muhammed Daoud Khan, in April 1978. By the time of the Herat rebellion  a  year  later,  the  Muslim  offensive  had  deepened  and  broadened.  With the decision in July 1979 by President Carter that Islamic resistance  would  be  funded  by  the  United  States,  its  future  was  assured,  even though its form remained undefined. After the Soviet invasion of  December 1979, it became an irresistible force.  Resistance to the communist regime had stiffened during the winter  of  1978–79.  One  of  the  first  organizations  to  rise  against  the  Kabul  regime was the Hizb e-Islami (“the Muslim Party”). The Hizb e-Islami  had  been  organized  among  the  mainly  Pashtun  Muslim  refugees  in  Pakistan, above all in Peshawar, and was supported by the Pakistani ISI.  The Pakistani dictator, General Zia ul-Haq, was firmly behind the ISI,  and  at  Zia’s  elbow  were  the  Americans:  in  February  1980  Zbigniew  Brzezinski,  the  US  national  security  advisor,  had  flown  to  Karachi  to  talk  about  expanded  “covert  action.”  The  most  unrelenting  of  Cold  Warriors, he gleefully clutched at the possibility that Afghanistan would  become the Soviet Union’s Vietnam. All the while, assassins of the Hizb  e-Islami had been liquidating PDPA leaders in Kabul. The communists  responded by hanging Muslim militants. 

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When the Soviet tanks had arrived in Kandahar in late 1979, resistance  coalesced  first  around  Pashtun  clan  chiefs  and  mullahs.  It  was  quite spontaneous and not remarkably well organized. It was not seen  as a religious war (jihad) so much as a war of national, or at least ethnic,  resistance – as had been the wars against the British a century earlier.  Loyalty in Pashtun-dominated southern Afghanistan depended in equal  parts on finance and ideology: finance provided arms and supplies; men  fought for those who provided them with hardware. Income from smuggling, especially of opium, was always important. Among the Pashtuns  there  were  normally  major  rifts,  for  instance  between  the  hard-line  Islamicists  who  dreamed  of  theocracy  and  detested  tribalism  and  the  others, mainly locals, who accepted the social status quo and yearned  for peace and, ideally, a Pashtun tribal renaissance. Many of the latter  fantasized  the  return  of  the  ageing  ex-king,  Zahir  Shah,  who  was  in  exile in Rome. There were also the opportunists who trimmed their sails  according to the prevailing winds. From late 1980 into 1981, some of the Afghani mujahideen became  influenced  by  advisors  who  were  themselves  graduates  of  the  schools  associated with Wahhabism in Saudi Arabia. These were “fundamentalists” in the sense that they rejected all forms of political and social organization  other  those  that  their  leaders  claimed  were  justified  by  strict  readings of the Quran and the Traditions. The rulers of Saudi Arabia,  grown  fat  with  rents  from  oil  since  they  had  nationalized  the  ArabAmerican Oil Company (ARAMCO) in 1978, had agreed to match any  contribution  to  the  Muslim  guerrillas  that  the Americans  made. “We  don’t do operations,” admitted the head of Saudi intelligence. “We don’t  know how. All we know how to do is write checks.”23  By the early 1980s, control of the countryside had slipped from the  hands  of  the  regime  in  Kabul.  Once  they  gained  control,  the  more  ardent Islamists destroyed the infrastructure that had been established  since the time of the monarchy – schools, hospitals, clinics, communications, transport, and organizations were all utterly extirpated. The  soldiers of the Afghan and Soviet armies were the special targets of the  guerrillas:  by  early  1984,  17,000  Afghan  and  around  8,000  Soviet  troops  had  been  killed.  Estimates  of  the  number  of  Afghanis  killed  stand at around 1.5 million. The army of the mujahideen continued to grow. Although thousands  of  guerrillas  had  been  killed  in  combat,  recruitment  never  faltered.  Between  1984  and  1986,  80,000  went  through  the  training  camps  where they were instructed in the use of American arms by Pakistanis  and Americans, using US military manuals. From 1986 the balance of air 

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power shifted when the guerrillas were armed with ground-to-air missiles – some from the Soviet Bloc – against Soviet helicopters. The guerrillas (now referred to as jihadis) came from forty-three different countries  and  especially  Saudi  Arabia,  Yemen,  Algeria,  and  Egypt.  By  1986  the  Saudis were providing them with as much as $240 million a year, half the  total that was being poured into the country. The $500 million in aid to  the guerrillas was double the amount available to Kabul that was being  stiffened  by  115,000  Russian  troops. Together,  the  Russians and the  Afghani army tried to secure the urban areas and the communications  centre and hold back the tide in the rural areas. By the end of the 1980s the Soviets had changed their minds about  Afghanistan.  Over  the  decade  since  they  had  invaded  they  had  lost  14,500  soldiers,  a  quarter  of  American  losses  in  Vietnam,  and  spent  $45 billion. Their final withdrawal, negotiated in May 1988 under UN  auspices  with Washington  and  Islamabad  on  the  basis  of  multilateral  non-interference  in Afghani  affairs,  took  place  on  15  February  1989.  Was it a coincidence that four months later that Zia ul-Haq, who backed  the jihadists, was assassinated? It might be tempting to think that the Soviets were defeated by the  Muslim  guerrillas  but  the  matter  is  not  so  simple.  In  the  late  1980s,  when the Soviets were attempting to put an end to the ruinous military  competition with the United States, the Soviet leader Mikhail Gorbachev  (r. 1985–91) decided that the campaign in Afghanistan was a wasteful  diversion. In the view of Patrick Cockburn, the Financial Times correspondent in Moscow, the Soviets could not win as long as Pakistan supported the guerrillas. And over the decade of the 1980s, given the Soviet  objective  or  reaching  détente  with America, Afghanistan  had  become  increasingly a political liability.24 In spite of the UN agreement, the Americans and the Saudis kept the  taps open, together agreeing to support the mujahideen with a billion  dollars a year – the export trade in opium also added to their war chests.  The Pakistanis reneged on the peace agreement and kept the training  camps and the transportation routes serviceable. The guerrillas thus had  every reason to fight on. From the US embassy in Islamabad a cable was  sent to the CIA headquarters in Langley, Virginia: “WE WON.” American  interest in Central Asia now went into rapid detumescence. the end of the affair

The regime of President Muhammad Najibullah was on its last legs and  those  legs  collapsed  when,  on  31  December  1991,  the  Soviet  Union 

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broke  up  and  military  and  economic  aid  ceased.  No  longer  could  Hajibullah  subsidize  his  tribal  allies.  Over  the  winter  of  1991–92  the  premier  Muslim  party  Hizb-e  Islami, under  Gulbuddin  Hikmatyar  (b. 1946), swept to power over southern Afghanistan – but not either  the north or the west where the militias of the non Pashtun parties, the  Tajiks, the Hazaras, and the Uzbeks, stood guard. In March 1992, after  negotiations with the UN, he decided to step down.  After having rocketed Kabul mercilessly throughout the year, Taliban  forces took the capital on 26 September 1996. On 27 September they  captured,  tortured,  and  executed  ex-president  Najibullah,  who  had  sought  safe  haven  in  the  United  Nations  compound.  Fifty  thousand  people had been killed in the attack. The Taliban now ruled southern,  but  still  not  northern,  Afghanistan.  Immediately,  their  government  issued a set of rules that reflected the values that had been proclaimed  in Kandahar: dress was prescribed, women were to be sequestered, all  forms  of  art,  music  (including  whistling  kettles),  and  public  pleasure  were to be interdicted. Non-Muslims were to wear yellow. In Pakistan, there was jubilation: the man the ISI had helped make  was now in charge. And in Washington, a State Department spokesman  had  said  that  there  was  nothing  objectionable  about Taliban  policies.  The tail was now wagging the dog: Washington was now following the  lead of Islamabad. Unsurprisingly, the head of the Unocal oil company  announced  that  they  regarded  the  Taliban’s  victory  as  very  positive.  “The Taliban will probably develop like the Saudis did. There will be  Aramco, pipelines, an emir, no parliament and lots of Sharia law. We  can live with that,” explained one US diplomat.25 The mujahideen, now in occupation of Kabul, formed a new government under Sibghatullah Mujaddidi, the head of a coalition of Muslim  groups known as the “Mujahedun Alliance.” Mujaddidi was a Muslim  scholar from an elite family that had been close to King Daud and that  was quite Westernized. During the years of opposition to the communists when he had headed the Islamic Revolutionary Movement (IRM)  he  had  visited Washington  on  a  regular  basis.  In  early  1983  the  IRM  joined Islamic Alliance of Afghan Mujahideen (IAAM), usually known  simply as “the Mujahideen.”  One  of  Mujaddidi’s  followers  was  Hamid  Karzai.  Karzai  was  the  chief of the Popalzai tribe of Pashtuns of Kandahar province. His father  had been murdered in 1999 by the Taliban, perhaps with the complicity  of the Pakistani ISI. Karzai was not merely a royalist but one who spoke  English fluently and had many friends among the Americans of the State 

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Department and the CIA. Two of his brothers had Afghani restaurants  in the United States. In mid-1994 he slipped out of Kabul and moved to  Quetta,  south  of  Kandahar  in  the  Baluchi  part  of  Pakistan. There  he  formed an association with the Taliban, many of whose leaders he had  fought alongside in the war against the Soviets. the mujahideen and the taliban to 11 september 2001

Although the Muslims had united against the communists, they were  divided among themselves both horizontally and vertically. Horizontally,  Afghanistan  was  still  fissured  between  tribes  and  clans,  each  commanding its own territory, asserting its own culture, and supporting  its  own  political  leadership. The  Karzai  clan  of  the  Pashtuns,  as  we have suggested, were royalists. Vertically, Afghani Islam was polarized between the “fundamentalists” and the “moderates.” The fundamentalists were those who were at war with modernism, that is, the  contemporary  world,  specifically  its  religious  slackness,  its  political  corruption, and its moral flabbiness, especially in relation to the control of women. They were especially incensed by the domination of the  lands  of  the  Muslims  by  Non-Believers,  especially Americans. All  of  this  led  them  to  radical  action  against  the  political  status  quo.  The  moderates  were  uneasy  about  corruption  but  were  more  willing  to  make accommodations. While  this  bifurcation  between  tribes  and  ideologies  seems  simple  enough, in reality it was not. First of all, people changed their minds,  first supporting one group, then shifting to its rival. This often depended  not on belief but on more material considerations. Secondly, there was  money; even the most righteous had to make alliances where necessary,  especially with political leaders whom they abjured. The radicals would  have  got  nowhere  if  they  had  not  accepted  handouts  from  the  Saudi  princes and American plotters that passed through the Pakistani fixers.  Although many of the Saudis, like King Faud (r. 1982–95), were notoriously venal, this could be overlooked. By the end of 1994, with Afghanistan in a state of almost total disintegration,  the  Pashtun  mullahs  in  southern  Afghanistan  had  decided  that they had seen enough civil and ethnic war and decided to form a  new party, at first unnamed, that came to be called the Taliban.26 The  founders of the Taliban became willing members of the global jihad that  sought  to  bring  peace  to  an  Afghanistan  that  was  to  be  resurrected  under Muslim (Sharia) law and was thus part of the global community 

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of  Islam,  the  umma. They  also  had  a  hidden  agenda:  to  unite  the   country under Pashtun rule.  Elected in the spring of 1994 as the head of the Taliban was Mullah Muhammad  Omar  Akhund  (1959–2001),  a  Pashtun  preacher  who  had  fought  as  a  guerrilla  against  the  communist  government.  His  first   campaign to restore law and order is now a matter of local legend: with  thirty men he attacked a military garrison, the commander of which had  raped two teenaged girls. Obviously gifted with a talent for political theatre,  when  Mullah  Omar  overcame  the  garrison,  he  hanged  the  commander from the barrel of a tank cannon. Soon after that, a party militia  was  formed,  backed  by  small  local  businessmen  yearning  for  security.  Warlordism, rampant in southern Afghanistan where it had had virtually  destroyed trade, was soon wiped out. The Pakistanis, who benefited from  trade  with  Afghanistan,  applauded.  Soon  both  the  powerful  Durrani  Pashtun chieftains and the ISI were backing the mullah’s side. Among the  Durranis  was  the  Popalzai,  the  tribe  of Ahmad  Shah  Durrani  himself.  The Taliban were thus, from the beginning, a very Pushtun affair. By the end of 1994 Kandahar with its huge arsenal of Soviet equipment,  including  tanks  and  jet  fighters,  was  in  the  hands  of  Mullah  Omar’s forces, by now numbering around 12,000, mostly madrasa students. By September 1995 the army of the Taliban, by now double in  strength, had conquered Herat, earlier pounded by the Soviets. Herat  was a city of half a million that was the centre of the three western,  Dari-speaking,  provinces  of  Afghanistan.  Its  adjacent  military  base  provided the Taliban with a rich hoard of forty-one aircraft. Once they  had secured the city and driven out the local leader, Ismael Khan, the  Taliban closed down all of its numerous schools. Herat was now ruled  by outsiders who not only did not speak the local language but had a  hostile regard for the social and educational progress that had taken  place there. Kandahar, the ancient Pushtun capital, now rose again to become the  centre of the Taliban universe. Dilip Hiro describes this brave new puritanical world. Settling down in Kandahar, Mullah Omar lost no time in disarming  civilians and irregular militias and imposing his exceedingly   puritanical version of the Sharia. He required women to wear the  head-to-toe shrouds, burqas, and men to don long shirts, loose  trousers and turbans, and grow bushy beards by not cutting or  shaving facial hair … while banning long hair in order to “prevent 

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British and American hairstyles.” He shut down all girls’ schools  and forbade women from working outside the home. His blanket  ban on music … and television resulted in the destruction of audio-  and video-tapes as well as television sets … The reason for prohibiting music, singing and dancing was that, in the view of Mullah  Omar and fellow clerics, they aroused lust and led to fornication,  thus undermining marital fidelity and the stable family structure  which were the foundations of a truly Islamic social order …  Mullah Omar also prohibited such leisure activities as chess, football and kite flying as well as keeping birds as pets.27 In April 1996 mullahs from all over southern Afghanistan assembled  in Kandahar to name Mullah Omar as Amir al-Muminen, “Commander  of the Faithful.” A few weeks later, Robin Raphel, a representative of the  US State Department (and ex-wife of the US ambassador assassinated at  the side of Zia ul-Haq) visited the mullah’s headquarters in Kandahar.  She  announced, “We  do  not  see  ourselves  inserting  in  the  middle  of  Afghan affairs, but we consider ourselves as a friend of Afghanistan …  We are concerned that economic opportunities here will be missed, if  political stability cannot be restored.”28 By “economic opportunities,”  Raphel was referring to the building of a gas pipeline from Turkmenistan  across Afghanistan to Pakistan, a project of the US oil giant Unocal.29  Her visit was seen as conferring recognition by the Clinton administration on the Taliban as a player in Afghani politics; indeed, according to  Ahmed Rashid, “the Clinton administration was clearly sympathetic to  the Taliban,”  all  the  more  since  it  seemed  that  Unocal  might  prosper  under the strict rule of the fundamentalists.30   Zalmay Khalilzad, later to become the Bush administration’s ambassador  to  Afghanistan,  Iraq,  and  the  United  Nations,  besides  being  a  leading member of the neo-conservative “Project for the New American  Century,” which advocated US “leadership” abroad, was a lobbyist for  Unocal. In early October 1996 he wrote an article in the Washington Post stressing that the Taliban in Afghanistan did not practice anti-US  fundamentalism like Iran. Rather, he argued, the Taliban’s fundamentalism, leavened by the culture of the Pashtuns, was of a gentler kind, like  that of the regime in Saudi Arabia. Obviously, the United States and the  new regime had common interests.  The World Bank, of course, preferred strict rule to chaos, and, without its assistance, the kind of economic development for which Unocal  and other foreign firms hungered simply could not proceed. So, with 

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the Taliban  secure  in  Kabul,  aid  from  Saudi Arabia,  the  Gulf  States,  the United States (via Pakistan), and the World Bank flowed even more  abundantly.  The formerly communist Russians and their formerly satellite republics to  the  north  of Afghanistan  were alarmed.  By  early  1997,  70  per  cent of Afghanistan was under Taliban rule. In May, Pakistan and Saudi  Arabia  recognized  the  regime.  Out  of  desperation,  in  June  1997  the  enemies of the Taliban, the Uzbekis and the Hazaras, formed the United  National  Islamic  Front  (UNIF).  “The  United  Nations  estimated  that  Taliban-ruled Kabul now held fifty thousand widows unable to work or  walk  in  the  street  without  the  risk  of  beatings  from  religious  police.  Those widows were the mothers of 400,000 children.”31  enter osama

In May 1996 Osama bin Laden, the millionaire scion of Saudi Arabia’s  most  successful  construction  magnate,  pledged  allegiance  to  Mullah  Omar. A convert to “political Islam,” bin Laden had gone to Peshawar  in  1982  to  join  the  fight  against  the  Soviets  alongside  the  Palestinian  preacher and mujahid, Abdullah Azzam.32 It was Azzam’s Maktab alKhidmat that  was  the  basis  of  al-Qaeda that  was  founded  in August  1988. In 1990 bin Laden left Pakistan and settled in Sudan (where he  organized the failed attempted assassination of President Mubarak of  Egypt). Forced to leave the Sudan, he returned to Afghanistan, where he  picked up where he had left off. It seems possible that the Pakistani ISI  may have facilitated bin Laden’s introduction to the Taliban; certainly,  it  facilitated  the  movement  of  journalists  across  the  frontier  between  Pakistan and Afghanistan. Unsurprisingly,  bin  Laden  had  few  followers  in  the  United  States,  where earlier in 1996 the State Department had described him as the  most significant financial sponsor of Islamic extremist activities in the  world today. Plans to assassinate him were drawn up but came to nothing. With  the  support  of  Mullah  Omar,  to  whom  he  offered  his  allegiance, bin Laden organized the establishment of training bases on the  frontier  between  Pakistan  and Afghanistan.  In  February  1998  he  and  his colleagues issued a fatwa, justifying war against Americans and their  allies  –  collectively  known  as “Crusaders,”  as  well  as  Jews,  especially  Israelis. “We believe the biggest thieves in the world are the Americans  and the biggest terrorists on earth are the Americans,” bin Laden claimed  in  a  television  interview  in  June  1998.  Despite  this,  Prince Turki,  the 

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head of Saudi intelligence, ostensibly an unwavering ally of Washington,  sent $5 million and 400 Toyota pickups to Kandahar to bolster Mullah  Omar’s grip.  Alongside  the  mullah’s  troops  were  those  of  bin  Laden,  Arabs,  Egyptians, and others, who had fought in foreign wars as far away as  Algeria,  Chechnya,  and  Bosnia. Together  they  attacked,  and  captured,  the Uzbek capital of Mazar e-Sharif on 8 August 1998. The Taliban now  controlled 85 per cent of the country, and bin Laden had become a figure  approaching world-historic stature, not to say infamy. On 23 August  1996 his supporters carried out a bomb attack at the US base at Al-Khobar  in Dharan on the Gulf, killing nineteen Americans. Two years later, on  7  August  1998,  suicide  bombers  of  the  al-Qaeda  organization  carried   out  devastating  bombing  attacks  of  US  embassies  in  Nairobi  and  Dar  es-Salaam. In Nairobi, 213 were killed and around 4,000 injured; in Dar  es-Salaam  eleven  died  and  eighty-five  were  injured. Around  the  world  Americans and their allies were horrified; nothing like this had happened  since the suicide bombing of a Marine barracks in Beirut in April 1983  that had killed sixty-three people, including seven members of the CIA.  Then, on 12 October 2000, suicide bombers in a small skiff attacked USS Cole, at anchor in Aden in Yemen, killing a further seventeen American  sailors and wounding thirty more. By this time it was widely concluded  that bin Laden was planning attack the United States and the Americans  had decided that he would have to be destroyed. The modalities of liquidation remained elusive.  To summarize: US policy towards the Taliban had changed dramatically in a few short years. In the analysis of Ahmed Rashid, “Between  1994  and  1996  the  USA  supported  the Taliban  politically  through  its  allies Pakistan and Saudi Arabia, essentially because Washington viewed  the Taliban as anti-Iranian, anti-Shia and pro-Western. The USA conveniently  ignored  the  Taliban’s  own  Islamic  fundamentalist  agenda,  its   suppression  of  women  and  the  consternation  they  created  in  Central  Asia,  because  Washington  was  not  interested  in  the  larger  picture.  Between 1995 and 1997 US support was even more driven because of  its backing for the Unocal project.” reversal of fortunes

The Taliban remained in power in Kabul from 1996 until 2001. To the  northeast of Kabul in the Panjshir valley, the Tajik guerrilla commander  Ahmed Shah Massoud retained control. 

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Then  came  9/11:  on  9  September  Massoud  was  assassinated  by  Taliban agents, and two days later New York and Washington suffered  the most devastating attack on the American mainland since the War  of 1812. President George W. Bush declared war on the Taliban as the  central  plank  of  his “War  on  Terror.”  The  Saudi  regime,  from  which  the Taliban had drawn support over the years, broke off relations with  the organization on 25 September. The first American units were inside  Afghanistan  by  28  September.  On  the  same  day  President  Musharraf  of Pakistan had urged the Taliban to hand over bin Laden; in the Gulf,  the  United  Arab  Emirates  severed  relations  with  the  regime.  Also  on  28 September the United Nations unanimously passed a US-drafted antiterrorist resolution (Resolution 1373) that gave it the status of international law. On 7 and 8 October, US and British air raids on Afghanistan  were launched from submarines, aircraft carriers, and land bases. Taliban  radar  and  air-defence  installations  and  its  tiny  air  force  were  quickly  smashed. President Bush was triumphant, and Osama bin Laden, in his  statement broadcast on the al-Jazira television station, was defiant. Right  across the West, there was support for the American-led attack. Not so in  the Middle East, an area normally smothered by press censorship. There,  reaction, other than that in the form of the official voice, could only be  assumed. Meanwhile, the Taliban, unpursued by American or any other  ground  troops,  slipped  across  the  frontier  into  their  safe  havens  in  Balochistan and Pakistan’s FATA. In the years to come, the latter was to  be al-Qaeda’s base area, and home to Osama bin Laden.  In  early  2002  the  Americans  were  joined  by  NATO  ground  forces,  including elements from the Canadian army operating as part of the ISAF  that had been authorized by the UN in late 2001. By this time the global  chorus of concern for the fate of Afghanistan had risen to a crescendo.  Security outside of Kabul was in a state of collapse while the drug trade  had  taken  off.  Warlords,  skimming  off  profits  from  foreign  aid,  arms  sales, and the blackmail of traders and drugs, had seized control of much  of the countryside. “Reconstruction” was the word that launched a thousand conferences and opened a score of purses in the West, not always to  useful effect. Ahmed Rashid comments on three of the many contributions to rebuilding: “Germany’s pathetic, next-to-useless performance in  rebuilding the police and Italy’s apathy in rebuilding the justice system  became the two weakest points in the international community’s efforts  to rebuild state institutions in Afghanistan … Between 2003 and 2005,  the United States was to spend some $860 million in training forty thousand policemen, but the results were almost entirely useless.”33

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In  December  2004  Hamid  Karzai  was  sworn  in  as  president  of  Afghanistan. As we have seen, Karzai had been deputy foreign minister  in the Mujaddidi government that had been backed by the Taliban. He  then changed his mind and became a supporter of the exiled king Zahir  Shah  in  Rome.  Just  before  Kabul  fell  (12–13  November  2001)  he  reentered Afghanistan. Karzai’s  election  was  just  in  time  to  see  the  American  funding  for  reconstruction  drop  off  sharply.  Afghanistan  was  now  a  sideshow,  Washington’s preoccupation being with Iraq – invaded in March 2002  –  and  in  catching  the  leaders  of  al-Qaeda  whose  disappearance,  and  thus survival, was a source of acute embarrassment. The American secretary of defence, Donald Rumsfeld, declared “the end of combat operations” in Afghanistan, and during the run-up to American elections in  2004 he announced that there was no insurgency. In March of that year  al-Qaeda announced its global reach by bombings in a railway station  in Madrid that killed nearly 200 people and wounded more than 1,500.  In 2005 the Taliban offensive escalated sharply. In late 2005 Canadian and other NATO troops were deployed to the  southern provinces – Helmand, Kandahar, Uruzgan, and Nimroz. This  was  the  Pashtun  and  Taliban  heartland,  which  the  Americans  had  ignored for several years. Taliban forces had been free to enter and withdraw to these areas from bases in Baluchistan (in Pakistan), unhindered  by the Pakistani regime. Taliban leaders and their troops also made the  mountains  that  separated  Pakistan  and Afghanistan  –  the  NWFP  and  FATA – their havens. They moved quite freely with the consent of the ISI  in Pakistani cities like Lahore. At some point, bin Laden set up residence  in Abbotabad, a suburb of Islamabad and home of Pakistan’s military  academy. None of this was very secret. “The army’s pro-extremist policies in Kashmir and Afghanistan strengthened its ties to Islamic fundamentalist parties at home, making any real curtailing of fundamentalism  impossible.”34  No  surprises  here  since  Pakistan’s  army  continued  to  reap the rewards of American support – to the tune of $700 million in  2004. To Washington, the obsessive interest was in catching the leaders  of al-Qaeda, and this required the uncritical dependence on the Pakistani  army and the Musharraf regime. Early in 2006 an agreement known as “the London Compact” authorized the expenditure of $10 billion in development funds for Afghanistan.  The Canadian expeditionary force operated in Kandahar, the first capital  of  both  the Afghani  state  and  the Taliban.  Its  foes  were  the  Pashtuns,  the first supporters of Mullah Omar. Afghanistan, a state since the time 

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of  Ahmed  Shah  Durrani  in  the  middle  of  the  eighteenth  century,  was  declared a “failed state.” In the Western press, the war the Canadians and  their  NATO  allies  were  engaged  was  called  a “counterinsurgency  war,”  “counterinsurgency” normally being the term applied to nationalist guerrillas during the period of decolonization and during the Cold War.  The regime installed by the United States and its NATO allies never  had  much  chance  of  success.  By  early  2007 Taliban  power  had  been  restored in much of southern, central, and eastern Afghanistan, and by  the end of 2007 talks had begun between representatives of NATO and  elements  within  the  Taliban.  Three  years  later,  with  their  militaries  stalled and their domestic populations disenchanted, the governments  of the NATO states who had sent their troops to Afghanistan were in a  state of despair.  And  Pakistan?  Pakistan’s  leaders  had  seen  the  jihad  as  a  means  of  mobilizing support on the part of South Asia’s Muslims against India.  “Elements  in  the  Pakistani  military  began  secretly  deploying  Muslim  terrorist  groups  in  Kashmir  against  Indian  troops  there  in  the  1990s,  and were happy enough for them to get training in the al-Qaeda camps  in  Afghanistan  late  in  that  decade  and  at  the  beginning  of  this  century.”35 To Pakistanis, it was now not either the Indians or the Islamists  that  were  the  main  threat  to  the  security  of  their  country.  It  was  the  Americans. “Almost half of all Pakistanis blame the United States for  most of the violence in their country, while 14 per cent think India is  stirring things up … Only one in six Pakistanis told pollsters in 2008  that al-Qaeda and the Pakistani and Afghan Taliban formed the greatest  threat to their country.”36 By 2010 there were 15,000 US, British, Canadian, and other troops  in Afghanistan fighting a war that its advocates claimed was required  to  “keep  America  safe.”  The  American  president  had  authorized  a  “surge” of 17,000 extra troops in late 2009, but still the ISAF troops  were on the defensive. They had tried counterinsurgency, the pet project of US General Stanley McChrystal, the “rising star” mentioned in  the introduction to this chapter, to no avail. The British and Canadians,  their populations having become increasingly indifferent to the claims  of  the  Karzai  regime  and  its Washington  godfathers,  had  now  gone  right off the crusade in Afghanistan. In July 1979 President Carter had  signed the first directive in support of the mujahideen who had taken  up arms against the pro-Soviet regime in Kabul. The mujahideen had  mutated  from  being  freedom  fighters  to  insurgents,  and  more  than  thirty  years  later  the Americans  and  their  legions,  not  forgetting  the 

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frontline Saudi cheque-writers, struggled on, despite steadily increasing cost in blood and cash. By August 2011 America’s allies had all beaten their way to the exits,  or were on their way. Canada’s combat mission had ended. Counterinsurgency had now obviously failed and Taliban had wiped out the proKarzai  political  rulers  of  Kandahar.  US  troops  were  being  killed  in  record numbers. Bin Laden had been killed in Pakistan, an American  ally and the recipient of $20 billion of foreign aid since 2011.37

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8 “Bomb, Bomb, Bomb, Bomb, Bomb Iran”: Dictators and Domination in the Middle East The “modern Arab state[s]”… and their ruling elites and regimes have been durable because in their early decades, they focused heavily on meeting human-development needs (schools, hospitals, telephone, roads, homes, jobs) in relatively successful state-building exercises, and in the past four decades they have focused on security that maintains the existing power configuration. Not a single Arab country can say with any certainty that the configuration of the state, the policies and values of the government, or the perpetuation of the incumbent ruling elite have been validated by the citizenry through any kind of credible, transparent and accountable political process. The Arab state has been transformed into a security system, and the Arab citizen has been downgraded into a mere consumer. Just about the only thing individuals are allowed … is to go shopping. Rami Khouri, “The Arab Paradox”

introduction

In the beginning is the intractable question of the location of the “Middle East.” What are its boundaries? Are Egypt, Sudan, Somalia, and the Maghreb, all in Africa but also in the Middle East, just as Turkey is in both Europe and Asia as well as being a original member of the North Atlantic Treaty Organization? And then there is Cyprus, part Turkish, part Greek, certainly Levantine, but a member of the European Union (EU) as well. Going much further back to the beginnings of agriculture circa 11,000 BCE, we find the genesis of “the West” in what we have since the nineteenth century called “the Middle East.”1 Plotting a clear date at which the Orient became separated geo politically from the West is a ticklish task. Perhaps it was in the eighth

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century  of  the  Common  Era  when  Muslim  Arabs  from  western  Arabia took over the Middle East, North Africa (al-Maghreb), Spain  (al-Andalus), and then moved on to the lands of the Indus (al-Hind).  Possibly, it was in the next century when this area began to come under  the sway of Turkish-speaking Muslims from Central Asia. Certainly, the  gap widened with the fall of Constantinople in 1453 and the occupation  of the Balkans. At any rate, by the beginning of the twentieth century,  the  broad  scimitar  of  states  running  clockwise  from  Thrace  across  Anatolia  and  then  southwards  through  the  Middle  East  and  finally  along  the  North  African  littoral  to  the  Straits  of  Gibraltar  –  with  a  notable gap where Algeria had been occupied by the French – was still  under the nominal sway of the Ottoman sultans of Istanbul.  And then, tumult. Continuously, for nearly a century after the cataclysms of World War I, the Middle East became the cynosure of Western  imperial  and  neo-imperial  designs  and  always  the  target  of  periodic  but continuous violence. Thus, in a region that had enjoyed an Ottoman  peace  for  several  centuries,  the  British,  French,  Italians,  Americans,  and  much  later,  the  Israelis,  have  bombed,  or  threatened  to  bomb,  shelled  or  machine-gunned  Turks,  Iraqis,  and  Syrians;  gassed  and  lynched Cyrenacians; gunned down Algerians; bombarded Lebanese;  Cruise-missiled  Baghdadis;  rocketed  Lebanese;  and,  more  recently,  from  March  2011,  dive-bombed  Tripoli.2  Complementing  this  violence, the same powers have sustained and supported venial and often  bumbling elites, overthrown reformers, decorated despots, celebrated  oligarchs and plutocrats, and schooled torturers. Exaggerated? Perhaps  a few more program notes. In the aftermath of World War I, the empire of the Ottomans, together  with those of their neighbours, the Hapsburgs and the Romanovs, was  declared bankrupt. The Ottomans and the Hapsburgs had been on the  wrong side of the war and now they had to pay with dismemberment.  (The Romanovs had been on the right side and so their successors, the  Bolsheviks, were able to keep their empire, at least for seventy years.)  In  the  place  of  the  Ottomans  was  created  polycentric,  polyphonic,  and  chaotic  web  of  independent  states,  protectorates,  colonies,  and  mandates, within which lived a clamorous mixture of Arabs, Persians,  Greeks,  Armenians,  Turks,  Kurds,  Jews,  Berbers,  and  others,  most  Muslim, a few Christians, and fewer still, like the Alawites of Syria and  the Druzes of Lebanon, a bit of both. During World War I the British  and French had secretly conspired to divide the Arab territories of the 

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Middle  East  between  themselves  as  protectorates. At  war’s  end,  Iraq,  Transjordan  (at  present  simply “Jordan”),  and  Palestine  were  handed  over  to  the  British  and  Greater  Syria,  out  of  the  side  Lebanon  was  prized, to the French.  The Arab  lands  seized  from  the  Ottomans  were  promised  progress  and given novel identities, being classified by the newly created League  of Nations as “Mandates.” Mandates were Great Power protégés, protectorates in all but name albeit on short leases. They were established  by Europe’s victorious powers on the assumption that the locals should  obey  the  rules  established  in  London  or  Paris  in  everybody’s  interest.  The local elites were to become anglophone or francophone and anglicized  or  francicisée;  sometimes  their  sons  learned  English  and  their  daughters,  French. As  an  added  bonus  they  were  to  become  modern.  This, elite acculturation and modernization, was the essence of colonialism whether adopted in Asia or Africa. “Civilization” was the accepted  word for what they were to get; the morbid hand of the Ottomans was  amputated  in  the  interests  of  world,  that  is,  Western,  civilization.  By  about 1920 “Western” no longer meant, implicitly, “Christian,” except  to missionaries.  The lands and resources of the mandates were thus, not incidentally,  added  to  the  wealth  and  domains  of Western  European  countries.  In  1925 or 1945 you could walk or drive from Jerusalem to Johannesburg  without leaving territory ruled by the British; the French owned or controlled the shores of the Mediterranean on all three sides. Thus, the situation in the mid-1920s was that the British and the French were the masters of the Middle East.  It was they who determined almost all of the new boundaries; they  who decided who should rule, and what form of governments  should be established, and it was also they, in association with the  Americans, who had a major say in how access to the region’s natural  resources should be allocated, particularly the oil fields that were  just beginning to be discovered along the Persian Gulf and in the  Mosul district of northern Iraq. Such was Britain’s and France’s  strength that even the ruler of nominally independent countries like  Turkey, Egypt and Persia … were forced to recognize the boundaries  and the new order, while those like Abd al-Aziz Ibn Saud, who  aspired to create a new state in Arabia … knew that he could only  achieve his goal with British assistance and support … [S]hort as  this period now seems, it was then that the framework for Middle 

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Eastern political life was firmly laid – together with many of its  still unresolved problems involving disputed boundaries, inappropriate political institutions or the existence of many national  minorities which either failed to obtain a state of their own, like  the Kurds, or were prevented from during so by force majeure, like  the Palestinians.3 During World War I the British had bargained with the al-Sauds, a  family of tribal rulers, offering them recognition, gold coins, and protection in return for petroleum; the British were thus, as they were elsewhere in the world, king-makers. They did the same with the rulers of  Kuwait, and other states in the Gulf, like Bahrain, as well as the mandates, Iraq, and Trans-Jordan. Control over the mandates seemed to be  a move of brilliant foresight.  If it was the British and the French who drove the Ottomans out and  recast the Middle East, in a short space of time they were soon joined by  the Americans and, especially after World War II, their wards, Jewish  settlers, usually hailing from Europe. These Jews became Israelis. Both  Americans and proto-Israeli Zionists had been slipping into the Middle  East since the nineteenth century, the Americans especially as missionaries and the Zionists as refugees seeking to create Zion, a homeland  where  Jews,  religious  or  secular,  could  live  in  peace.  Together,  in  the  years  after  World  War  II,  these  two  groups,  Americans  and  Israelis,  would mould the fate of much of the region. This caused anguish among  those who saw it and its wealth as rightfully belonging to themselves.  And who were these? The Muslim majority in the Middle East saw the  region  as  part  of  dar al-islam  (“the  abode  of  Islam”)  in  which  nonMuslims  might  be  tolerated,  or  even  welcomed,  but  would  never  be  completely  accepted. The  Christian  minorities  saw  it  as  belonging  to  themselves on the basis of their membership in communities that sometimes existed from the beginning of the Christian era. Nationalist political parties were mainly Muslim but often contained Christians at the  highest levels. Within  this  recast  post-Ottoman  universe  emerged  certain  lineages,  like  the  Hashemites  and  al-Sauds,  that  had  political  aims  that  were  essentially absolutist. They claimed that they owned the countries that  they  ruled  –  thus,  we  had “Saudi”  Arabia  and “Hashemite”  Jordan.  Nowhere else in the world were states named after proprietorial dynasties, dynasties so marked by their servility to Washington and London  that they easily qualify as “neocolonial.”

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Nationalists, on the other hand, imagined secular countries that they  themselves  might  resurrect  and  lead  towards  more  or  less  modern  futures: the Ba’ath party (whose very name means “resurrection”) that  sometimes ruled Iraq and Syria was first among these; the Wafd in Egypt  was  its  cousin. The  princes,  pashas,  and  mullahs,  on  the  other  hand,  were comforted, even cosseted. This cherishing of oligarchy and of piety  and the assurance of rural stagnancy as a consequence of unreformed  land ownership were among the besetting problem of the region. Obviously, the story of the Middle East can hardly be a simple one of  conquest, dispossession and resistance, for it is also one of collaboration  and connivance. The domestic oligarchies who dominate the region –  the princes or the colonels – have been able to remain in, or near, power  thanks  largely  to  two  policies:  first,  domestically,  a  combination  of  employment and bribes – satisfying what Khouri calls “human development needs”; secondly, the accommodations that they have made with  foreign powers – America and France in particular – which have then  propped them up with aid and arms. Of course there are no guarantees, even in compliance. Always, we  see regimes slipping, or at least transferring, their moorings. Algeria, for  example, fought a war of liberation to become free from French colonial  rule,  and,  after  the  briefest  of  autonomous  honeymoons,  saw  its  rulers, mainly officers from the French colonial army, cast themselves  once more into the arms of France. Egypt drove out the British and after  a  spasm  of Arab  nationalism  that  involved  going  to  war  with  Israel,  opened its doors to the Americans and made peace with Israel. Iranians  seized  their  own  oil  resources  and  then  became  Washington’s  most  faithful ally in the region – at least until they revolted in 1980. In the  decades  that  followed  their  revolution,  the  Iranians  turned  on  their   former Western patrons, backing organizations like Hizbullah and even  Hamas,  which  sought  to  destroy  the  foundations  of  Western  domination  in  the  Middle  East.  Iraq,  in  the  1980s  serving  as  a  Western   surrogate  against  the  Iranians,  a  decade  later  found  itself  victim  of  Anglo-American aggression, but actually defeated its invaders to become  finally independent. Futurists might say that the period that began with  the mandates in 1920 will probably have lasted only a hundred years.  Within this period, the American “moment” in the Middle East (1945– 2007)  will  have  been  only  a  little  longer  than  the  British “moment”  (1920–56).  This century-long moment has been one of insecurity for many and  profit for others. No one suffered more than the Palestinians and the 

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Kurds.  No  one  benefited  more  than  the  ruling  families  of  the  oil-rich  states.  In  the  period  under  study  here,  of  the  broad  arc  of  Muslim  Eurasian territories running from Thrace to the Indus, only Afghanistan  has  suffered  more  destructive  interventionism  than  the  states  of  the  Arab world. At the heart of this interventionism is oil. Its possession has  guaranteed oligarchy. Islam, in its radical or jihadi form, seemed to be  the antithesis of oligarchy, at least until the Arab Spring of 2011 when  new ideologies superseded it.  oil , islam , and oligarchs

Oil in the Middle East is as silver was to New Spain and gold to the  lands of the Moors – the ineluctable source of assured, but ultimately  non-renewable,  riches.  The  search  for  oil  in  the  region  had  actually  begun  in  the  late  nineteenth  century,  during  the  last  decades  of  the  Ottoman Empire. By 1920 the oil-producing lands, so far as they were  known  at  the  time,  had  been  apportioned  among  foreigners.  By  the  1930s British firms, early off the mark, had a monopoly of oil production  in  the  mandate  of  Iraq  and  in  independent  Iran  as  well  as  in  a  number of the principalities in the Gulf, such as Kuwait. In the same  decade, in 1938, the Americans found oil in Saudi Arabia. The French  barely had a look-in. In Saudi Arabia alone ARAMCO, the Arab American  Oil Company, formed by Chevron and Texaco, gave the Americans control over the world’s single largest untapped source of oil, quite obviously the most valuable resource of the twentieth century. Well  before  the  end  of  the  Second World War  it  was  plain  that  oil  would occupy a key role in the global economy; whoever controlled the  world’s oil distribution could be sure of a dominant role in world history. Postwar estimates accepted that the world’s oil reserves stood at  around 1.3 trillion barrels. During the period of postwar recovery, to  the surprise of many and the delight of those who controlled exploration and production, the demand for oil rose like a rich and over-egged  cake.  Between  1945  and  1960  oil  consumption  in  Europe  and  Asia  went from 6 million barrels a day to 21 million, US consumption from  1.8 billion barrels in 1946 to 5.4 billion barrels in 1971. Production  could hardly keep up; by 1960 the United States was producing only  7 million barrels a day; one-third of total world oil production.  In 1938 unsettling writing appeared rather suddenly on the wall. In  that  year  Mexico  nationalized  its  oil,  and  the  British,  whose  firms  thought that they owned it, stood by helplessly. Just over a decade later, 

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in 1950, the Saudis forced ARAMCO into a 50/50 profit sharing agreement,  while  from  1954  Iran  got  a  50  per  cent  share  of  the  profits  of  its oil. In 1963 Iraq took the first steps towards nationalizing the Iraqi  Petroleum Company (IPC), which was jointly owned by the Anglo-Dutch  Royal Dutch Shell, the Anglo-Iranian Oil Company, Total (French), and  a consortium of American companies, each owning 23.75 per cent of  the shares. The Iraqis created the Iraqi National Oil Company to compete with the IPC.  Oil was now increasingly in the hands not of foreigners but of national  oligarchies, and the politics of the Middle East was set on a new course.  The  price  of  oil  was  set  by  the  Organization  of  Petroleum  Exporting  Countries (OPEC),4 which took advantage of the 1973 Arab-Israeli War  to  quadruple  international  oil  prices.  Iran’s  oil  revenue  rose  vertiginously from $34 million in 1954–55 to $5 billion in 1973–74 and to  $23 billion in 1977–78. In an average year it would provide the government with 60 per cent of its revenues. With the oil revenue, the country’s  rulers were able to purchase the fifth largest army in the world. By the end of the 1970s both British and the American firms had been  forced to relinquish their direct ownership of Middle Eastern oil, while  by the beginning of the twenty-first century it was the nationalized oil  companies – not only those of the original OPEC members but also of  the Libyans, the Nigerians, and other Africans – that had become the  dominant producers on the world market. The Saudi-owned ARAMCO  came to control over 260 billion barrels of oil reserves;5 ExxonMobil,  the biggest of the private firms, controlled a mere twelve billion.  Without  the  oil  from  Saudi Arabia  and  the  other  Gulf  states, “the  United  States  and  its  European  allies  could  never  have  achieved  the  spectacular economic growth they posted in the postwar era. Nor could  Washington  have  sustained  the  great  armies,  navies,  and  air  forces  it  deployed  in  every  theatre  of  possible  confrontation  with  the  Soviet  Union and its allies.”6 Global consumption has continued its steady rise  with,  simultaneously,  new  fields  being  discovered  and  warnings  being  issued that the moment of “peak oil” would soon be reached, if it had  not already.7 The “peak oil” point would arrive when half of the world’s  supply had been sucked up. The peak moment was said, in one set of  predictions, to have arrived in 1970. In others, the dates 2000, 2005,  and 2010 were advocated. In 2009 the International Energy Agency, an  organization demonstrably susceptible to political pressure, said that it  would be possible to increase oil production from the current eightythree  million  barrels  a  day  to  105  million  barrels.  Skeptics  suggested 

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that this was a technicolour dream and that, if the truth were told about  the  future  supplies  or  even  the  cost  of  recovering  new  sources  of  oil,  there would be panics on the stock markets. Since 1995 the world has  used about twenty-four billion barrels of oil a year, in 2006 worldwide  total  production  was  eighty-four  million  barrels  a  day;  demand  is  expected to rise to around sixty-seven million barrels per day in 2020.  However, if the Chinese level of car ownership were to rise to that of the  Americans, it is estimated that China alone would need ninety-nine million barrels of oil a day.  Up to the beginning of the twenty-first century, oil was hardly a scarce  commodity. It had been found almost everywhere – in northern Alberta,  the Gulf of Mexico, off the coasts of Brazil, Nigeria, Gabon, Angola, and  Vietnam, in Indonesia, in Russia, and in the Caspian. Still, five out of the  top six of known deposits are found in the Middle East, where they are  likely to remain until at least 2025. Seen from the Washington viewpoint,  Saudi Arabia “is … the only major supplier we can be sure will significantly increase its deliveries to us in time of crisis … With no other supplier  capable  of  replacing  Saudi Arabia  in  this  critical  role,  the  United  States will remain dependent on the kingdom both for day-to-day imports  of oil and for increased supplies in times of crisis and conflict.”8 (This  comment suggests that the author does not consider Canada, the number  one source of US oil imports, entirely dependable.) There can be no doubt that the United States needs a Saudi Arabia  that is secure and predictable and that the rulers of Saudi Arabia pray  for a protector that is both dependent and dependable. Here then is the  basis  of a  relationship of mutual need  that  has  lasted  over the whole  period since 1945 but remains complicated by several factors: first, the  existence of an expansionist Israel; second, the rise of political Islam;  and third, and connected to the foregoing, the fact that in any free election anywhere in the Middle East except, perhaps, Lebanon, the Islamist  parties would win. “Even in Lebanon,” notes Eugene Rogan writing of  the  elections  of  2005, “parties  explicitly  hostile  to  the  United  States  fared well at the polls.”9  Essential to the manifestos of all of the political parties of the Middle  East, then, has been an inveterate hostility to the United States. Thus,  beneath the flourishes of colonial and neocolonial triumphalism, opposition  has  stirred  at  first  in  the  form  of  secular  nationalism  and  later  in the shape of what has been called variously “political Islam,” “radical Islamism,” and “Islamo-nationalism,” that is, political movements  grounded  in  religious  interpretation  but  set  in  motion  by  foreign 

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 domination.10 The politics of political Islam have shown themselves to 

be both postcolonial, in that they are a reaction to neocolonialism, and  precolonial in that they seek to reproduce a kind of caliphal Camelot. Secular  nationalism  had  remained  triumphant  until  the  1970s,  the  decade  that  had  begun  with  the  death  of  Nasser.  Political  Islam,  the  Egyptian antecedents, of which I shall detail below, was its successor.   It was the politics that rushed in to fill the void when secular politics,  especially in its nationalist and socialist form, showed itself unable to  resist  the  pressures  of  neocolonialism,  and  later,  neoliberalism,  right  across the region from Algeria to Afghanistan. The advent of political  Islam,  chronicled  in  a  thousand  learned  texts,  came  as  a  shock  to  Westerners, non-specialist, and academic pundits alike. Some of these,  falling back on the older tropes of Orientalism, put its advent down to  pathologies and atavistic urges inherent in Islam; others compared it to  fascism  in  Europe.  In  any  case,  political  Islam  turned  out  to  be  the  revenge on those who thought that after the death of the Soviet Union  (c. 1990) history would quietly come to an end and a Titanic America  would rule the waves.  oligarchs

The riches of the Middle East, especially but not only its oil, have generally been owned not by its people but by handfuls of oligarchs, virtually  all  of  whom  seek  to  control  wealth  in  their  own  interests  and  that  of their collaterals and descendants. Perhaps there is nothing new here;  the  Iranian  president,  Mahmud  Ahmadinejad,  who  sees  himself  as  a  defender of the rights of the wretched (mustaz’afin) and is not, strictly  speaking, a reliable source of statistics, has parroted the claim that his  country has been ruled by an oligarchy of a thousand families for centuries. The al-Saud family, at present (2012) comprising thousands of  indolent princes, has constituted itself as an exaggerated form of a family oligarchy. On a smaller scale are the ruling families of the Gulf emirates like Kuwait and Qatar who squander and accumulate conspicuously  and recklessly.  As it had been in Egypt, no less than other developing states, throughout  most  of  the  twentieth  century,  the  construction  sector  has  been  a  juicy source of capital accumulation and a rich field for every variety of  peculation. Alongside the kings, princes, princesses, and sheiks inhabiting palaces from Morocco to Dubai are a glittering collection of other  beneficiaries of the mineral wealth of the Middle East. We may recall the 

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bin Laden family, the numerous progeny of a shrewd, if illiterate, Yemeni  building  contractor.  Collectively,  the  bin  Laden  family  and  their  like  may be seen as a courtly class, as opposed to the military or “praetorian” class represented by the likes of  the family  of Saddam  Hussein,  now apparently extinct, whose power came from the barrel of a gun.  Military rulers, albeit somewhat less vicious, include the former leading  families of Egypt and of Algeria, Libya, and Syria, a list that at one time  included Mustafa Kamal of Turkey and the shah of Iran. As in the case  of  Iran,  with  a  little  luck  and  a  certain  longevity,  praetorians  might  become princes; the shah, Muhammed Reza Pahlevi (r. 1943–80) was  the  son  of  a  military  strongman  but  his  descendants,  no  longer  uniformed, now live in a gilded exile in the United States. Saddam Hussein  groomed his sons to succeed him, as did the rulers of a string of states  including Saudi Arabia, Syria, Jordan, Egypt, Morocco, Libya, and even  Pakistan. But not all sons proved to be as durable as their fathers. Finally, there is the priestly class – on the whole a comfortable and  secure, but not usually opulent – that is part of the small middle class of  the Muslim world. But, like the de Medicis of early modern Europe who  spanned the bourgeoisie and the Papacy, there are exceptions. The Aga  Khan IV, imam of the Ismaili branch of Shi’ism, whose family seat is  traditionally in a posh suburb on the outskirts of Paris, is probably the  best  contemporary  example  of  the  alchemy  whereby  prayer  is  turned  into gold through piety. In common with  other Middle  Eastern  notables, the Aga Khan’s rise was assured by his recognition by an imperial  power – in his case the British in 1887. But even anti-imperialists may  apply the same wealth-generating formula. The occupation of Hashemi  Ali-Akbar  Rafsanjani,  an  ayatollah  who  was  president  of  the  Islamic  Republic of Iran from 1989 to 1997, is described as “Hojjat al-Islam  and  Business.”11  He  may  actually  be  the  richest  man  in  the  country.  What we have here is something like Silvio Berlusconi as an archbishop.  Anoushiravan  Ehteshami  makes  the  point  that “in  the  late  1980s  the  top 10 per cent of households [in Iran] received nearly 42 per cent of the  national income and the bottom 20 per cent only about 4 per cent …  Rafsanjani’s policies have … sustained, even advanced the position of  [the top stratum].”12 Writing over a decade later on the subject of the  guardians of the Iranian revolution, Ray Takeyh is even more caustic:  “It  was  during  the  Rafsanjani  presidency  that  corruption  became  endemic. The new president’s penchant for self-enrichment, the granting  of  privileged  access  to  a  select  few,  and  increasing  class  stratification  undermined  the  Islamic  Republic’s  claim  of  virtuous  governance.  Just 

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as during the shah’s era, tales of the ‘thousand families,’ dominating the  economic realm became the order of the day.”13 Even given the global reach of neoliberal values there is nothing new  here; since the days of the empires of Mesopotamia and Egypt there has  always existed a class of self-engrossing priests. In fact, the very idea of  the venial, overfed priest may be another of the many institutional inventions that have spread westwards from the Middle East. The nexus of  wealth derived from minerals and profligacy of an astronomical order in  the Middle East, however, goes back only to the beginning of our period:  “In 1949 the king [of Saudi Arabia, Abd al-Aziz al-Saud (c. 1880–1953)]  received around $90 million, paid mainly in gold; it is estimated that by  November 1950 he received another $70 million. Officially these funds  go to ‘raise the living standards’ of his people; in fact all but 10 percent,  which he pays mainly to tribes to keep them quiet, goes into the bottomless pockets of the king, his immediate family and entourage.”14 Several but not all of the Middle Eastern oligarchies were anointed in  power during the colonial period and have been offered protective alliances,  usually  in  return  for  the  security  of  oil  supplies,  by  the  great  power  of  the  day.  Hence  one  of  the  sources  of  Middle  East  conflict:  while the advocates of political Islam deplore foreign intervention, the  rulers of the states that feed them, such as Saudi Arabia and those of  the  Gulf,  are  often  sustained  by  non-Muslim  outsiders. Where  would  the  Saudis  be  without  the Americans?  One  guess  would  be  in  exile,  like the former rulers of Egypt and Iran, or perhaps in the grave, like the  former rulers of Iraq and Libya. The system of externally backed oligarchies does seem vulnerable on  several  counts,  the  main  one  being  the  feebleness  of  their  economic  structures.  While  oligarchies  often  require  considerable  incomes  on  which to survive, few of the states on which they prey have solid economic  bases. Thus,  in  sum,  while  oil  continues  to  flow  and  oil  prices  remain high, the oligarchies remain secure and affluent. When the oil  dries up, or oil prices diminish or, as in Iran or Indonesia, there is simply  too much expenditure by elites, then crisis follows. egypt

Even in the recent epoch when it has been eclipsed by the garish wealth  of Arabia and the revolutionary glamour of Iran, Egypt has retained its  position as the intellectual and cultural heart of the Middle East. For this  reason,  domination  of  Egypt  has  remained  a  prize  for  foreign  powers 

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from Bonaparte to Bush. While accommodating Western ideologies of all  sorts, nationalism, fascism, feminism, and communism included, Egypt  has also remained a centre of resistance to foreign control – hence its role  as a seed-bed for political Islam and as the second centre, after Tunisia, of  revolution in 2011. In 1919, while the Ottoman Empire in the Arab lands was being torn  apart, the Egyptians rose up against the British who had turned it from  an Ottoman province to a British protectorate during the war. Although  the  British  killed  more  than  800  Egyptians,  it  became  apparent  to  London, where squeamishness regarding colonial slaughter had already  been  evident  before  1914,  that  some  greater  degree  of  autonomy,  embodied within some new kind of colonial arrangement, would have  to be worked out if Britain’s dominance was to remain entrenched. The  new colonial deal, that we might see as neocolonialism prefigured, was  to  be  overseen  by  the  British-approved  Egyptian  monarch  working  together with Egypt’s leading nationalist party, the Wafd, a collection of  relatively liberal landowners, businessmen, lawyers, and other members  of the country’s Westernized elite. But the Wafd advanced only haltingly  since its political efficacy continued to be hobbled by the British through  their  ambassadors  and  by  means  of  the  considerable  British  garrison  that was maintained in the country. “The British tended quietly to support the Palace in its efforts to curb the ambitions of the Wafd. They  were also prepared to apply direct force when, in their view, the situation demanded it.”15 Egypt in the 1920s and ‘30s, when it was regarded  as  a “Veiled  Protectorate,”  was  thus  like  other  neocolonies  that  were  nominally  independent  and  yet  effectively  dependent;  the  mandates,  Cuba, and the Philippines all come to mind.  The  Wafd  was  not  alone  in  facing  the  British.  In  1926  a  religious  party  called  al-Ikhwan  al-Musilmin, the  Muslim  Brotherhood, was  formed. The Brotherhood stood against Egypt’s pro-British landowners  as well as the domination of Muslim lands, in general, by non-Muslims.  Fundamentalist,  puritanical,  reactionary,  and  resolutely  anti-Western  and thus anti-revolutionary, it favoured religious renewal in the form of  a return to the imagined values of Islam of the seventh century and clerical dictatorship. Whereas the Wafd provided some degree of support for  Egypt’s nascent feminist movement, for instance, the Ikhwan, unsurprisingly, was entirely horrified of any form of women’s emancipation. The  Brotherhood,  influential  today  not  only  in  Egypt  but  throughout  the  Middle East, was the genitor of the modern family of jihadi organizations that we call “political Islam.”

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Political Islam did not expand in a vacuum. It only secured a place  in  the  Middle  Eastern  political  firmament  from  the  late  1970s,  after  the  failure  of  the  politics  of  secular  nationalism,  best  represented  by  Nasserism. In fact, what we see here is not the extinction of one kind of  political ideology but its mutation: “The same individuals who followed  Nasser  or  Marx  in  the  1960s  are  Islamists  today.”16  But  some  of  the Islamists were there early, coeval with, and not descended from, the  secular  Wafdists  and  the  communists.  In  Egypt  this  was  the  case  of  Hassan al-Banna (d. 1949), the founder of the Muslim Brotherhood in  1926. Everywhere that men like him looked in the domains of Islam,  from Morocco to the Ottoman Empire and through India to the East  Indies, they saw only defeat and desolation. Even before him, in colonial  India and elsewhere, others had recognized this, lamented, and sought  means to combat it. Of course, the combination of religion and nationalism  was  not  unique  to  the  Middle  East.  Buddhists  in  Tibet  and  Southeast Asia, led often by monks rather than mullahs, also became  nationalists.  In  fact,  once  it  became  apparent  that  gradualist,  parlor  nationalism of the Wafd or of Congress in India could never advance,  nationalism  was  forced  to  ally  with  either  religion  or  communism  in  order to prevail. The Muslim Brotherhood remained formidable from the 1920s to the  early 1950s when it occupied a key role in mobilizing the Egyptian street  against both the British presence in the cities and the web of bases on the  western side of the Suez Canal that were the eastern version of Cuba’s  Guantanamo.  But  when  political  power  was  seized  from  the  Egyptian  king, Faruq, by Gamal Nasser and his fellow Free Officers in 1952, secular socialists and étatists to the man, the Brotherhood came to be viewed  as a rival centre of politics and its leaders accordingly persecuted, alongside the communists. Banning followed, as Nasser formed a close relationship with the Soviet Union. In Egypt as in Afghanistan, the secularists,  communist  or  not,  detested  the  Islamists.  Reciprocally,  socialism  and  communism were both anathematized as being Western and thus corrupt  by the Brothers. Western-style reform liberalism, Nehru-ish patrician  statism,  or  populism  in  the  manner  of Argentina,  and  even  less  any  variety of gentle social democracy, hardly had a chance. In  the  early  1950s  the  leading  light  of  political  Islam  in  Egypt  was  Sayyid Qutb, an unrepentant radical who was martyred by Nasser in  1956.  As  a  Third  World  socialist  Nasser  had  an  acquired  taste  for  repression  that  he  presumably  picked  up  from  the  British  on  the  one  hand  and  the  Stalinists  of  Eastern  Europe  on  the  other.  Under  him  a 

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gulag of concentration camps rose in the desert, execution was routinized, and torture, even of women, was normalized. After Nasser died in  1970 and his successor, Anwar Sadat, moved Egypt out of the gravitational pull of Moscow, away from solidarity with other Middle Eastern  regimes and towards Washington, the Brotherhood, benefiting from a  remission of state repression, rose to a new prominence.  It is apparent that much of the appeal of the Brotherhood was connected to the relief it offered to the masses of urban Egyptians in the  face of uncertain living standards and the in-your-face consumerism of  the  Westernized  elite,  not  excluding  the  leading  politicians  and  army  officers. While we might assume that the Egyptians, as Muslims, were  more given to Islamic solutions, it was impoverishment and inequality,  perhaps more that piety and prayerfulness, that drove them to seek religious solutions. Inequality and even greater insecurity were magnified  under  Sadat,  who  had  removed  subsidies  on  bread  and  other  staples  in  early  1977.  In  the  food  riots  that  followed,  171  were  killed  and   hundreds injured.  Among the Brothers, anti-Americanism flourished for several reasons.  Most obvious was Washington’s unflinching support of Israel and the  plight of the Palestinians. There was also Washington’s firm support of  Egypt’s military elite – a part of the $2 billion a year in foreign aid that  Washington lavished on Cairo and Cairo lavished on the military, at the  head of which stood dictators like Sadat and, later, Mubarak. Egypt had  become,  in  fact,  one  of Washington’s  leading  aid  and  loan  recipients,  second only after Israel: a Nilotic pillar of American power.  Among Sadat’s besetting sins was his visit to Israeli-ruled Jerusalem  in October 1977 in search of a Middle East peace settlement that might  give  him  the  credibility  internationally  that  had  evaded  him  domestically. The agreement he signed with the Israelis in March 1979 was the  first between Israel and an Arab state. He hoped it would secure him a  place as an international statesman and transform his listless popularity  at home, yet he failed to secure any guarantee for Palestinian rights of  self-determination. This,  and  the  fact  that  the  common  front  of Arab  countries  against  the  Zionist  intruder  and  its  American  sponsor  had  now  been  breached,  guaranteed  him  apostate  status  among  thinking  Arabs everywhere.  Sadat was assassinated by a Muslim radical in 1981. “I have killed  Pharoah,”  he  gloated.17 To  pious  Muslims “Pharoah”  represented  the  excesses of the historical period before Islam – one of darkness, polytheism, and profligacy. After Sadat’s assassination no revolution followed. 

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Qutb’s hopes for regeneration that had spread so widely in the 1960s  and ‘70s remained stifled by repression. As in the case of Algeria in the  1990s, in the war between religious terror and state terror, the state with  generous budget for spies and informers, its bristling arsenal of military  hardware,  its  deep-pocketed  foreign  suppliers  and  its  control  of  the  media seemed likely to prevail. Sadat’s  successor  was  another  army  officer,  Muhammed  Hosni  Mubarak, who, from the 1980s, oversaw the continued decline of Egypt’s  living standards and the triumph of those who sought to increasingly  privatize the economy while binding the country to Washington, itself at  the peak of its power over the Middle East. Then, in early 2011, in an  astonishing  shift  that  caused  Middle  East  watchers  to  scratch  their  heads, first the rulers of Tunisia and then the Mubarak regime of Egypt  were overthrown. Mubarak himself was arrested and investigated. What,  then,  of  “Islamic  fundamentalism”?  Although  by  1987  the  Muslim Brotherhood had become the largest single opposition group in  the  National  Assembly,  Egypt  remained  far  from  Algeria,  a  country  swamped by the bloody conflict between the army, commanded by the  country’s secular ruling elite and the Muslims of the Islamic Front. In  spite of the violence that visited some parts of Egypt in the 1990s, on the  whole, “in 1995, a foreigner could live quite safely in Cairo; this was  out of the question in Algiers.”18 Having  made  its  debut  as  a  force  against  British  imperialism,  the  Brotherhood had over the decades become a populist but numerically  limited movement against Western materialism and its beneficiaries, the  businessmen and functionaries who were associated with the increasingly  discredited,  and  apparently  immoveable,  ruling  oligarchy.  It  remained implacably opposed to virtually all aspects of US foreign policy in the Middle East; the idea, promoted by Washington and echoed  by  its Western  allies,  especially  from  the  early  1990s,  that  democracy  and economic development should be prioritized among Arab regimes  was  viewed  by  the  Brothers  as  a  diabolical  absurdity.19  They  understood  quite  reasonably  that  developmentalism  was  Westernization  in  disguise. Although the Brothers failed to turn Egypt in the direction of  righteousness,  their  influence  in  the  Middle  East  remained  persistent.  (Osama  bin  Laden  became  a  Brother  while  still  at  school  in  Saudi  Arabia.) More importantly, the Muslim Brotherhood became the godfather of Hamas in Gaza and the West Bank. Yet, in the revolution of early  2011  that  overthrew  the  Mubarak  regime,  it  played  a  minor,  indeed  quite marginal, part.

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In the postwar years Islam was hardly perceived as being the threat to  Western interests that it became in the 1980s. “Given the prominence of  Islam in public life across much of the Arab world today, it is easy to  forget just how secular the Middle East was in 1981.”20 In fact, Islam  was seen as a safe bulwark against any kind of radical change. When it  was  explained  in  Washington  in  mid-1962  that  King  Faisal  of  Saudi  Arabia had organized the World Islamic Society as an antidote to communism  and  even  socialism  of  the  Nasserite  variety,  the  Americans  applauded. Islam, they assumed, quite erroneously, could be used as a  weapon  by  oligarchies  against  the  secular  ideologies  of  socialism  and  nationalism preached by their critics.  What we have here, thus, is a fairly simple formula: colonialism had  destroyed  the  anciens  régimes  but  left  the  door  open  to  nationalism,  which in the Cold War period was often attracted by the siren call of  Moscow;  neocolonialism  with  its  blather  about  modernization  and  development, attempted to block nationalism, undermining any secular  politics that involved criticism of the West. The failure of secular nationalist  politics,  for  largely  economic  reasons,  as  in  Latin America,  ultimately guaranteed the popularity of political Islam. There was obviously  a misinterpretation here; the Western powers that strove to undermine  secular nationalist politics assumed that Islam, especially in its hierarchical Sunni form, was an opiate. It wasn’t. But political Islam satisfied  only a minority. It showed itself not to be a winner except under extraordinary circumstances, such as Afghanistan and Somalia. So the political  situation  right  across  the  region  has  continued  to  be  uncertain  and  unsustainable with the West, until 2011, at least, backing regimes that  seem to guarantee the status quo and then, in a self-righteous chorus of  denunciation, disavowing them, and, in the case of Libya, even turning  to attack. iraq

Iraq, we have seen, was invented in 1921, carved out of the Arab territories of the Ottoman Empire on the basis of an agreement between the  British and the French. Consistent with their belief in monarchy as the  most desirable form of government, the British installed as rulers over  the mandate a member of the Hashemite family, claimants to descent  from the Prophet Muhammed and traditional rulers of the Two Holy  Cities, Mecca and Medina. During World War I, British agents had persuaded the Hashemites to rebel against the Ottomans, promising them 

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kingdoms in their own right. The Hashemite Faisal I (r. 1921–33) thus  became the king of Iraq. With their control over of the king of Egypt  and their influence in Iran and over the petty princes of the Gulf, the  future of the Middle East looked very British indeed. The overwhelming majority of Iraq’s people, some 80 per cent, were  Arab  speakers;  15  per  cent  spoke  Kurdish  and  the  rest  were  mainly  Turkomans who lived in the Kirkuk region. A commercially significant  population of around 100,000 Jews lived in Baghdad. There were, as  well, small communities of Christians, including the Assyrian Christians  who  were  recruited  in  significant  numbers  into  the  British-run  Iraqi  army. Of the Arabs, the population was divided between a majority of  Shi’as  and  a  minority  of  Sunnis;  in  an  official  census  taken  between  1920 and 1931, the Shi’as were shown to comprise 55 per cent of the  population, the Sunnis 22 per cent, and the Kurds 14 per cent. By 2008  the  Shi’as  numbered  sixteen  out  of  the  total  of  twenty-seven  million  Iraqis. For the first half of the twentieth century, most of this population  lived, in grim poverty, in the countryside where its members were ruled  by landlords, often in the form of tribal chiefs. Under the Ottomans the  Shi’as  had  been  excluded  from  public  office  while  their  tribal  leaders  suffered from a decline in their authority. Under the British they were  likewise kept away from power. “With the Sunnis in power, the British  could control the country through them; with the Shi’is (sic) in power  there could have been no British mandate.”21 One of the first problems of the Hashemite-ruled Iraqi state was that  it  did  not  exist  in  the  eyes  of  its  people.  In  1933,  the  year  after  Iraq  became officially independent according to the provisions of mandate  rule,  the  king,  Faysal  I,  complained, “In  Iraq  there  is  still  …  no  Iraqi  people, but unimaginable masses of human beings, devoid of any patriotic ideal, imbued with religious traditions and absurdities, connected  by no common tie, giving ear to evil, prone to anarchy, and perpetually  ready  to  rise  against  any  government  whatsoever.”22 The  meaning  of  “independence” here was ambiguous. Before conferring it in 1933 the  British  forced  the  Hashemite  monarchy  to  sign  a  treaty  guaranteeing  British  sovereign  rights  to  two  huge  bases,  one  at  Habbaniyya,  fifty  miles from Baghdad and the other at Sha’iba, near Basra. From these  two  bases,  together  with  the  bases  in  the  Canal  Zone  in  Egypt,  and  those  in  Cyprus  and  Aden,  the  British  were  able  to  triangulate  their  domination of the oil fields of the Middle East and to guarantee “imperial  communications,”  that  is,  the  air  route  to  India.  Of  course  they  claimed they were defending the region from communism, but in reality 

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they  were  defending  it  against  the  repossession  by  its  owners,  especially the Shi’as. In 1925, while they were still in full control, the British  had secured a seventy-five-year oil concession for the Iraq Petroleum  Company (IPC), which began production two years later. Iraqis owned  no shares in the company but were rewarded with a trickle of royalties  on the basis of the tonnage of oil extracted. The IPC was a nice complement to the British-owned Anglo-Persian Oil Company (APOC) on the  other side of the Euphrates, which had begun production in 1909. Faysal  I  was  succeeded  by  his  son,  Ghazi  (r.  1933–39)  and  Ghazi  by his son, Faysal II (r. 1939–58). The ruling dynasty of Iraq was, alas,  a line with only three stops, one more, as we shall see, than the ruling  Pahlevi  dynasty  of  Iran.  The  fate  of  Middle  East  monarchies  in  the  twentieth  centuries,  recalling  the  overthrow  of  Faruq  of  Egypt  in  1952  and  the  Sanussis  of  Libya  in  1969,  offered  little  justification  for complacency. Since Faysal II was only four years old when he inherited the throne,  a  regent  was  appointed  to  serve  as  the  effective  head  of  state.  Real  power  was  retained  by  a  clique  of  politicians,  the  most  durable  of  whom,  Nuri  al-Sa`id,  was  prime  minister  five  times  in  the  1930s  and  again when the monarchy was overthrown in 1958. He and most of his  cronies  had  been  educated  by  the  Ottomans,  some  having  served  in  the Ottoman armies. All were Sunnis. The wealth and power that they  appropriated allowed them to be assimilated to the ranks of the landed  elite  that  they  had  no  interest  in  dispossessing.  As  one  historian  of  Iraq has explained, instead of ruling over the ancien régime, they were  absorbed by it and thus had a stake in its perpetuation. By 1958, 60 per  cent of Iraq’s cultivatable land was in the hands of the large landowners;  in the same year there were one and a half million rural dwellers with  no land at all. Also by the same date, six of the seven largest landowners  were  Shi’as.  Thus,  although  the  Shi’as  were  underrepresented  in  the  state, they were hardly dispossessed. As  in  Pakistan  and  India,  nationalism  and  the  maintenance  of  the  agrarian status quo were hardly incompatible. From the death of Faisal,  Iraqi politics became characterized by struggles for power among the  “feudal”  landowning  class  with  political  parties  being  merely  labels  attached to interest groups. Army coups became commonplace – there  were half a dozen by the end of the 1930s. When the army had relinquished power after each coup, possession of the office of prime minister  became  the  stairway  to  a  material  heaven.  Here,  too,  was  a  resemblance to both Pakistan and Turkey in the future.

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Excluded  from  the  political  process  were  the  young  army  officers  who had been trained in the Baghdad military college and who wrapped  themselves in the new national flag. Some of these were idealists, others  were  no  different  from  those  in  power,  except  that  they  longed  for,  rather than possessed, high office and its trappings. Most were secular.  By  the  late  1930s,  the  appeal  of  fascism  that  had  swept  right  across  Europe  had  become  undeniable.  Iraq’s  national  director  of  education  hoped  that  Iraq  might  become  the  Prussia  of  the  Arab  world  with  schoolboys trained in the sport of goose-stepping. On 1 April 1941 proAxis  military  leaders  forced  the  pro-British  Nuri  from  power  and  opened the door for the pro-German Rashid Ali al-Gaylani to become  prime minister. All this of course alarmed the British, not because they had any inclination towards stimulating real democracy among their clients in the  Middle East, but simply because fascism, like communism, was a threat  to their own tenure. The British were hardly concerned that the majority Shi’a population was shut out of power. The Middle East in wartime  being no place for political subtlety, they threw Rashid Ali out of power  at gunpoint. Now, in common with King Faruq of Egypt, both Nuri and  Rashid Ali had been discredited. Among the politically literate nationalists it was becoming evident that both monarchy and foreign domination would sooner or later have to go. After the defeat of Germany in 1945, Pan-Arab nationalism as well as  communism spread rapidly, especially among the Sunnis. Both nationalists and communists demonstrated in January 1948 against the AngloIraqi Treaty of Portsmouth that sought to guarantee the British position  in Iraq. The government fell. By the 1950s, street politics had become  even  more  common  and  often  reflected  the  radicalism  of  the  Nasser  regime in Egypt. The Iraqi government showed itself too weak to control the street. In 1958 the Iraqi nationalists followed the example of the  Egyptians by overthrowing the monarchy; the golden glow of Nasserism  had  now  reached  its  maximum  wattage.  For  the  Hashemites,  unlike  King Faruq, there was no sailing off to sensuous exile in a yacht packed  with valuables; leading members of the royal family were slaughtered,  as were their supporters and Nuri al-Sa’id. The leader of the coup was  Brigadier  Abd  al-Karim  Qasim  (1914–1963).  Qasim  proclaimed  that  Iraq  was  from  now  to  be  a  republic.  Land  reform,  as  in  Egypt,  was  undertaken to break the power of the feudal class. This land reform was  only  partly  completed  while  Qasim  was  in  power,  however,  and  the  result was that an independent class of small landowners was stillborn.

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Following the 1958 revolution, two parties surfaced to dominate the  political landscape: the nationalist Ba’ath and the Communists. Worse,  at least as seen from the capitals of the West, the Iraqis moved in the  direction  of  neutralism,  withdrawing  from  the  Washington-designed  Baghdad Pact, which had been ostensibly intended as a kind of shield  against Soviet expansion in the region but in reality was another means  of entangling the Middle East in a web of American influence. Naturally,  the removal of Iraq from the pact came as a painful blow. The  Iraqi  revolution  of  1958  and  the  abandonment  of  Baghdad’s  role in the eponymous pact marked the end of any British role in the  Middle East and led Washington to the conclusion that a new system  of control, based on Israel, Saudi Arabia and Pakistan, together with  as  many  other  clients  as  could  be  mustered,  would  be  necessary  to  keep the region secure. Qasim established a military dictatorship that lasted until 1963 when  it was overthrown by a dissident faction of the army led by the Ba’athist  Colonel Abd al-Salam Arif. The Ba’athists had cleared their conspiracy  with the CIA before proceeding: “We came to power on a CIA train,”  admitted  the  incoming  Ba’ath  interior  minister.23 Washington  was,  of  course, content to see the end of the nationalizer Qasim and the Ba’ath’s  destruction of the Iraqi communist party, even though the new regime  did not overturn the decree that nationalized Iraqi oil.  Arif’s brother succeeded him, but his rule was short lived. He was overthrown  in  a  coup  organized  by  another  faction  of  the  ever-conspiring  Ba’ath Party. The new government was headed by Hasan al-Bakr, who  made  himself  both  president  and  prime  minister.  The  ruling  clique  around him was called the Revolutionary Command Council. Saddam  Hussein, a cousin of al-Bakr, took over command of the security and  intelligence services, that is, the secret police. His clansmen, members of  the Bejat clan of the Albu Nasir tribe from the town of Tikrit, slipped  into  the  high  offices  of  the  state.  From  1979  Saddam  became  Iraq’s  supreme ruler, staying in power until the US invasion of 2003. Under  him the government of Iraq became notorious for two qualities – nepotism and violence. Largely neglected in the West were Iraq’s advances in  health and public education. Ever  since  the  revolution  of  1958  the  leaders  of  Iraq,  of  whatever  political complexion, had tried to wrest control over the country’s oil  resources from the British-owned Iraq Petroleum Company (IPC). The  IPC had dug in its heels – increased profit-sharing to the benefit of the  Iraqis was, in the view of its directors, unacceptable. In 1972 the Ba’ath 

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Party had reacted simply and effectively – it nationalized all of Iraq’s oil.  This proved to be a brilliant stroke; for it was not only highly popular  but also highly profitable for the ruling regime. From this point, Iraq  became  a  major  player  among  the  world’s  oleocracies,  the  regimes  whose leaders depended on oil wealth to maintain their power. William  Cleveland outlines the sudden transformation that swept over the country, one which, coincidentally, took place at the moment of the oil price  spike that was the consequence of the 1973 Arab-Israeli war.  Enriched by the tremendous influx of oil revenues, the regime was  able to embark on an ambitious program of industrial development  and social reform. The Ba’athists of Iraq … were committed to a  socialist economy that allowed some scope for private enterprise.  The public sector took the lead with investments in heavy industries  as iron, steel, and petrochemicals. Although Iraqi industry suffered  from low productivity because of a shortage of skilled labour and  trained management, there was nevertheless sufficient progress to  prompt some to predict that by the year 2000 Iraq would join the  ranks of the minor industrial powers.24 Oil  revenues  not  only  facilitated  economic  development,  they  also  enabled social transformation. In 1970 a new agrarian reform law limited  the size of landholdings and authorized expropriations of large landholders. Between 1970 and 1982, 264,400 farmers received grants of land. As  a consequence of land redistribution and the formation of co operatives,  the power of the feudal elites, the so-called “old social classes,” was broken. In their stead rose an oil-based welfare state that featured subsidized  food, free health care, and free education up to and including university  level.  By  1991  it  had  one  of  the  best  health  services  in  the  region.  Ed  Harriman has pointed out that Baghdad’s  doctors and nurses provided  care often comparable to that of their counterparts in Tel Aviv or Cairo.  Naturally, as food became more assured and health measures more pervasive, the population as a whole began to enjoy benefits comparable to  middling Latin American and even certain European states.25 Among the greatest beneficiaries of this socially progressive universe  were  women,  for  whom  opportunities  in  education  and  employment  opened up. “In 1978, amendments to the personal status law outlawed  the  practice  of  forced  marriages,  expanded  the  grounds  on  which  women could obtain divorces, and made polygamy contingent upon  obtaining the permission of a judge. Women’s access to education was 

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also enhanced, and by 1982 over 30 percent of university students were  female. The regime sought to attract women into the work force by setting up child-care centres offering paid maternity leave, and requiring  equal pay for equal work.”26 A study of the role of women in contemporary Iraqi politics has verified that “Iraqi women have been among  the most liberated of their gender in the Middle East.”27 If the new Iraq fell short of a Western state, it had come a long way  since the days when the country was ruled by a landholding elite headed  by corrupt and squabbling politicians and the profits from its oil resources  flowed into the accounts of foreign shareholders. Yet,  although  Iraq  remained  a  dictatorship,  royal  at  first,  and  then  republican, it had little in common with, say, the ersatz theocracies of  Saudi Arabia and Iran, the latter which we shall consider below. Perhaps,  at its best, it resembled the brutal, if ultimately effective, developmentalist dictatorship of South Korea under Park Chung Hee (r. 1961–79), but  with oil revenues cushioning the need for the furious exploitation of the  working class. Iraq, run by a small tribe of Ba’athist functionaries who  had made their way to the top of the pile through cronyism and slippery  opportunity, was a slowly evolving model of economic and social, if not  political, development.  But there was a problem. Iraq’s rulers were far from the kind of cosmopolitans  that  might  have  risen  over  the  longer  term  –  and  did  in  Istanbul and Cairo. Having ascended the social ladder in just one or two  decades, they were rude provincials with little political experience outside their homeland and certainly no war-waging capacity. This, in part  at  least,  explains  the  foreign-policy  disasters,  especially  the  war  with  Iran that lasted from September 1980 to the spring of 1988. It was the  cost of this war that led Saddam to invade Kuwait in 1990, and brought  down the American holocaust on the heads of the Iraqi people, which  has lasted for two decades. We shall see more of this below. iran

The assiduous propagation of a conservative brand of Islam in Saudi  Arabia  and  the  tepid  acceptance  of  religious  reform  in  countries  like  Egypt  were  both  overtaken  by  the  wildfire  spread  of  radical  Islamic  nationalism, by any other name, in Iran. This took, above all, the form  of  resistance  to  the  rule  of  the  pro-American  shah,  Muhammed  Reza  Pahlevi (r. 1941–79) and the government of that country by an elite that  depended to a large extent upon his favour. 

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The shah, unlike the rulers of Egypt or Iraq, was conspicuously the  product of American machinations. Washington had contrived to overthrow the democratic and secular prime minister of Iran, Muhammed  Mossadeq,  in  1953.  Mossadeq  was  a  liberal  nationalist  from  an  old  aristocratic family – more of a Nehru than a Nasser. The US president,  Eisenhower,  however,  had  become  persuaded  that  he  was  a “pinko,”  that is, a communist supporter because the communist party of Iran, the  Tudeh,  supported  him.  At  first,  Washington  and  London  boycotted  Iranian oil, as they were later to boycott Iraqi oil. Then the CIA, with the  assistance  of  British  intelligence,  spread  money  around  the  country,  buying crowds and military leaders. Street protest and a coup followed.  Mossadeq was toppled, and members of the Tudeh liquidated in large  numbers,  as  reformers  were  later  to  be  from  Indonesia  to  Honduras.  “Over five decades later, in 2006, the Bush administration asked congress to appropriate $75 million for democracy-promotion programs in  Iran. Congress responded by funding them at a slightly lesser level of  $66.1 million. That is, the US government opined that its dearest wish  for Iran was the establishment of a parliamentary democracy, just like  the one the Eisenhower administration had overthrown.”28 The shah had been marginalized, in the late 1940s, in the process of  the  democratization  of  Iranian  politics.  Now,  after  the  CIA  coup  put  paid to democracy, he stepped out of the shadows to replace Mossadeq.  Yet, there were problems, insignificant at first, but growing with time as  Islamism  spread  throughout  the  whole  of  the  Middle  East.  That  the  shah’s regime was secular – like those of Egypt and Iraq – was the principal question, among several, that the flow of oil could not staunch.  The Americans were the second problem. Not only was Iran a key Cold War US ally in the Middle East, but it  was one saturated by a US military presence. The Americans, as in Japan  in the period of Occupation, benefited from “extra-territoriality,” that  is, exemption from national law. More to the point,  The United States … helped train [the shah’s] secret police, and  enabled one of the more repressive capitalist dictatorships in modern history. The shah became more and more megalomaniacal,  favoring gaudy costumes that would have put a Las Vegas lounge  lizard to shame. He built up a coterie of billionaire cronies, while  millions of villagers, unable to get government loans for their small  farms, were forced to migrate as day laborers to squalid urban  slums. A massive apparatus of domestic spying and surveillance 

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filled the shah’s jails with prisoners of conscience. The shah began  assaulting, in the name of secular nationalism and the monarchy,  key symbols of Islam.29 Under the shah, Iran’s considerable religious establishment was thus  put  on  a  short  leash.  Whereas  the  kings  of  Saudi  Arabia  represented  themselves as benefactors of Islam, that is, of the clerical establishment,  and protectors of religion against foreign ideologies, the shah, increasingly from the 1960s, was represented by the clerical establishment as an  enemy of Islam and a tyrant who oppressed the masses of poor Iranians,  the mustaz`afin. The clerics, who came in substantial numbers from traditional clerical families, did indeed have something to worry about since  the shah had replaced many members of the `ulama-dominated judiciary  with lay judges. The protest movement against the shah was thus a form  of  counterrevolution  against  the  American  form  of  secularism.  The  destruction of the shah was the opportunity for the establishment clerics to regain much of their power. The revolution, while it destroyed the  Americanized ruling group, preserved the monopoly of the conservative  clerical elite and, to a large extent, its business allies. The ties between  the mosque and the bazaar, which were often familial, were rebuilt by  the revolutionary regime. The most outspoken of the clerics was Ayatollah Ruhollah Mousavi  Khomeini,30 a distinguished scholar within the Shi’ite establishment who,  unlike others of his class, both reached out to the masses of his listeners  and commented on everyday politics using a language that stressed the  Western exploitation of the Third World and the complicity of a tyrant  whose rule was essentially in the interest of the few – and the Americans.  There had never been in the twentieth century another figure that carried  the same political weight within a universe that was not merely religious  but that argued for government by jurists; instead of “power to the people”  as  radicals  in  the  1960s  once  cried,  Khomeini  and  his  followers  advocated “power to the clergy” (vilayat-i-faqih). “A stream of speeches  denouncing  the  shah’s  excesses,  protesting  the  inequalities  of  his  economic  modernization  plans,  and  deprecating  Iran’s  alliance  with  the  United States made the imam, as his followers increasingly called him, the  central  figure  in  his  country’s  political  drama. Through  his  undisputed  charisma, incorruptible nature, and adroit use of leftist and religious slogans, he appealed to the Iranian people’s Islamic and nationalistic identities. As  the  revolution  unfolded,  all  eyes  were  fixed  on  Khomeini,  the  acknowledged leader of a vast coalition of disaffected Iranians.”31 But 

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for the foot soldiers of the Iranian Revolution, like the poor of Egypt or  Algeria, it was their poverty as much as their piety that made the flamboyant  squandermania  of  the  shah’s  regime  stink.  Here  was  the  third  problem of the shah’s regime. In few countries of the Third World was  wealth distribution so exaggerated as in Iran; even the Pentagon recognized  that  this  had  brought  the  country  to  the  boiling  point.  Between  1973 and 1975 alone “the income share of the richest 20 per cent of the  urban population had grown from 57 to 63 per cent … After two decades,  Iran still had one of the worst infant mortality and doctor-patient rates  in the Middle East. It also had one of the lowest percentages of the population  in  higher  education.  Moreover,  68  per  cent  of  adults  remained  illiterate, 60 per cent of children did not complete primary school … By  the 1970s, there were more Iranian doctors in New York than in any city  outside Tehran. The term ‘brain drain’ was first attached to Iran.”32 To the dismay of foreign affairs and developmental commentators in  the West, in 1979 the shah was overthrown by forces under the control  of  the  ayatollah  and  his  followers.  Over  the  next  decade  the  clerics  utterly destroyed all rival groups, especially those on the left, some of  which  had  attempted  to  combine  Islam  with  contemporary  political   ideologies. A final slaughter came in 1988 when the clerics turned to the  prisons  and  hanged  2,800  prisoners,  whom  Amnesty  International  called “prisoners of conscience.” “Leftists were executed for ‘apostacy’  on the grounds that they had turned their backs on God, the Prophet,  the Koran, and the Resurrection … This extraordinary bloodbath has  one plausible explanation. Khomeini, in his dying years, was eager to  leave  behind  disciples  baptized  in  a  common  bloodbath.  The  killing  would  test  their  mettle,  weeding  out  the  half-hearted  from  the  true  believers,  the  weak-willed  from  the  fully  committed,  and  the  wishywashy from the resolute. It would force them to realize that they would  stand or fall together.”33 With  the  destruction  of  the  shah’s  regime,  the  flames  of  anti-  Americanism,  which  rose  to  new  heights  as  the  1970s  progressed,   continued  to  be  fanned  by  a  pumped-up  clerical  hysteria: “Death  to  America” and “Down with the Great Satan” became the chants of his  foot soldiers. In November 1979, the US embassy in Tehran was occupied by the ayatollah’s supporters. American officials were turned into  hostages. The  shock  felt  right  across  the  United  States  was  palpable;  bewildered self-righteousness, underpinned by innocence, and massaged  by the media, peaked: “How could they do that to us?” But there was  worse to come over the next decades.

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In  the  meantime,  the  Americans  revenged  themselves  on  the  overthrow of the shah’s regime by supporting the invasion of Iran by Iraq in  1980. For nearly a decade, from 1980 to 1988, Washington threw its  weight behind Saddam Hussein as a counterweight to the clerics who  ruled the neighbouring Iran. Over this decade some 262,000 Iranians  and 105,000 Iraqis were killed.  Again, as on many earlier occasions, the tactic of divide and rule was  useful. The US-supported invasion of Iran was sustained by military aid  from  the  conservative  monarchies  of  the  Gulf;  Kuwait  gave  Saddam  $50 billion worth of assistance and Saudi Arabia $60 billion. Tactically  successful  to  the  extent  that  the  ayatollah’s  revolution  was  prevented  from exploding beyond the borders of Iran into Iraq or the Gulf, the  Iraqi invasion of Iran however failed on two major counts. First, it further fuelled Muslim anger against America and its allies, and second, it  led  Saddam  Hussein  to  believe  that  the Americans  would  tolerate  his  domination of Gulf oil production. Yet, in spite of the sacrifices and the martyrdom, while there had been  a coup in Iran, there was no revolution. The shah and his cronies were  driven into exile or killed and their enemies had seized power. But the  economic essence of Iran had not changed; capitalism had shifted gears  but survived regime change. This should have come as no surprise; for  the  ayatollah  himself  had  asserted  that  the  president  of  the  Islamic  Republic and the bazaaris were brothers and promised that “as long as  there is Islam there will be free enterprise.”34 By the time of the Iranian  Second Republic, the year of the ayatollah’s death in 1989, the country  was firmly in the hands not only of conservative clerics but, simultaneously,  an  elite  that  believed  in  business  as  usual. “It  is  perhaps  ironic  that since Ayatollah Khomeini’s death Iran’s new leaders have sought to  re-establish as far as possible the economic (as well as some of the politico-military)  ties  that  existed  between  Iran  and  the  West  during  the  shah’s regime.”35 The same elite had no misgivings about engrossing its  collective self; after the briefest of intermissions, venality was back and  the  chasm  between  rich  and  poor  began  again  to  widen.  In  the  late  1980s the top 10 per cent of households received nearly 42 per cent of  the national income and the bottom 20 per cent only about 4 per cent;  by the early 1990s, the share appropriated by the top stratum increased.  “After parliamentary elections in 1992, under the leadership of the …  Supreme  Guide,  Seyed  Ali  Khameini  …  the  government  reversed  the  nationalizations, which had reached their high-water mark in 1982, and  sold off state-owned industries in the industrial and service sector. This 

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approach  was  consistent  with  the  development  plan  for  1994  that  stressed privatization and marketization of the economy, including the  liberalization of foreign trade.”36 The government adopted macroeconomic policies favoured by the IMF and encouraged by the World Bank.  It welcomed foreign investors. The stock market in Tehran was opened.  By early 1995 Coke and Pepsi, formerly denounced, had returned. So in  spite of the rantings of the mullahs against the West, Iran had now been  integrated into the world of neoliberalism: New York had thus become,  like Karbala, a Holy Place, and Wall Street, a Holy Way. By  the  mid-1990s  messianism  had  run  out  of  steam.  Controlling  80 per cent of the economy, the clerics had shown themselves to be not  merely reactionary but often idle, incompetent, and corrupt. Agriculture  had  stagnated  and  small-scale  industry  was  stifled.  Effective  social  reform, in the form of better housing, education, and public health had  only  mixed  successes.  The  condition  of  women  was  appalling;  the   protection of their rights as guaranteed by the family protection laws  of 1967 and 1975 had been repealed; polygamy was back and unilateral divorce was again legally sanctioned. Under President Rafsanjani  (r.  1989–97),  probably  the  richest  man  in  the  country  and  the  leader  of  the  country’s  business  class,  the “free-market”  economy  expanded.  Abbas Amanat confirms the “corruption and racketeering of the Islam  Republic’s  elite,  the  failure  of  economic  policies  and  industrial  projects, massive institutional and individual kleptocracy, the striking levels of drug addiction, prostitution and other social ills [and] political  suppression.”37 The clergy and their allies, led by President Mahmud  Ahmadinejad, in office since August 2005, have had to resort to repression  and  terror  on  top  of  the  usual  doses  of  religious  obscurantism,  to keep a population disappointed over domestic decline and international isolation under control. With  the  events  of  11  September  2001  and  the  war  on  terror  that   followed,  the  view  that  Muslim  Iran,  in  spite  of  its  distinctive  Shi’ite  ideology, is a threat to the West and like Iraq and Afghanistan, would  have to be bombed and invaded once again, became popular in the US.  “Bomb,  bomb,  bomb  Iran,”  warbled  the  presidential  candidate  John  McCain, the man who had, on an earlier occasion, bombed Hanoi. armageddon and aftermath

In the aftermath of the 1980–88 Iraq-Iran war Saddam Hussein militarized his country further, spending millions on arms. In the end he 

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had  an  army  that  was  up  to  speed  by  the  standards  of  the  1980s.  In 1990 it still looked good; by 2003, however, it was showing signs  of obsolescence. On 2 August 1990, just two years after the end of the war with Iran,  Saddam’s armies, misreading American consent, invaded Kuwait. It was  pushover;  the  Kuwaiti  army  was  non-existent.  Kuwaitis  were  better  shoppers than soldiers. Iraq now claimed the kingdom as its nineteenth  province.  More  importantly,  it  controlled  an  enormous  share  of  the  world’s oil supply. Washington was outraged. After six months of noisy declamations about freedom and wild comparisons of Saddam Hussein to Adolf Hitler, the United States attacked  Iraq. The one-sided air war that followed was staged from Saudi Arabia,  the ruler of which, King Fahd, “Custodian of the Two Holy Places,” had  invited the Americans to establish bases in his kingdom. Pious Muslims  were  maddened.  Saddam  hit  the  nail  on  the  head  when  he  called  the  Saudi  kingdom  an  American  protectorate  and  proclaimed  the  Saudis  unfit to protect the Holy Places. Fahd, given that he may have been the  region’s  most  profligate  monarch  since  the  departure  of  King  Faruq,  with the Americans at his side, remained unmoved by Iraqi criticism. The air war against Iraq began on 16 January 1991, and, by means  of ceaseless pounding, the country’s infrastructure was pulverized. This  meant, of course, that hospitals were forced to function without power  and water for sanitation, and clean drinking water was unavailable. The  ground war fought by American units invading from the south lasted a  mere 100 hours before the poorly armed and demoralized Iraqi troops  surrendered. Those in Kuwait sought safety in flight back to Iraq. On the  highway from Kuwait to Basra, Iraq’s second city, along which much of  the Iraqi army retreated, the slaughter of the retreating army was stupendous. The Americans referred to the annihilation of the retreating Iraqis  as  a “turkey  shoot.”  On  27  February,  the  US  president,  George  H.W.  Bush, proclaimed Kuwait liberated and ordered an end to hostilities. By  this  time  the  Kurdish  north  of  Iraq  had  freed  itself  from  the  rule  of  Baghdad; an independent Kurdistan, effectively a new state protected by  Washington’s guarantees, now rose from the ashes of the crushed Iraq.  In March 1991 the Shi’as to the south, in response to the American  president’s call “to take matters into their own hands, to force Saddam  Hussein  …  to  step  aside,”  launched  an  intifada.  But  the  rebels  were  not  given  the  US  support  they  had  counted  on  and  were  crushed  by   still-intact units of the Iraqi army. “Hundreds of thousands died and no  Iraqi Shiite I know thinks this failure of US support was anything but 

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intentional,” said Peter Galbraith.38 Saddam and his lieutenants however lived to fight another day. It would not be for another dozen years  that the final doom of his regime would be sealed. On 11 September 2001, passenger jets, hijacked by men of mainly Saudi  origin, were flown into the twin World Trade Towers in New York and  the Pentagon, the headquarters of the US military, in Washington. Some  3,000  Americans  were  killed  and  the  world,  watching  on  television,  was aghast. “Islamicists,” the followers of a diabolical ideology that neoconservatives  called “Islamofascism,”  were  held  to  blame.  Retaliation  was imperative. Within  a  few  hours  of  the  attack  on  New  York  and  Washington,  American intelligence had identified al-Qaeda, the organization that we  have already seen emerging in Afghanistan in 1994, as behind the travesty. At the helm of the organization appeared the Saudi dissident, Osama  bin Laden, now resident somewhere in the caves of the Tora Bora mountains between Pakistan and Afghanistan. Osama’s videoed presentations  showed him weeping with joy while waving his Kalashnikov and offering prayers of thanksgiving for the effective destruction of the American  landmarks. He promised further revenge on “Crusaders” and Jews. The American response was awkward. First, they bombed Afghanistan  and destroyed, or at least dispersed, the Taliban army. Having failed to  liquidate  Osama,  they  turned  away  from  Afghanistan  altogether  and  back to Iraq. What seemed certain, at least to the recently re-elected  regime  of  President  George W.  Bush,  son  of  President  George  H.W.  Bush, was that there was a firm connection between al-Qaeda and Iraq.  Worse, claimed Washington, Saddam Hussein, in cahoots with al-Qaeda,  was conspiring to build weapons of mass destruction (WMDs) of several  sorts – chemical, in the form of poisonous gases; bacteriological, in the  form  of  deadly  viruses;  and  nuclear,  in  the  form  of  explosive  devices.  Paul Wolfowitz, deputy defence secretary, who had in the 1990s advocated American interventions globally, told journalists that the WMDs  were the one issue that everyone could agree upon in the White House,  and  the  core  reason  for  the  war  against  Iraq.  The  president  himself  claimed, “We found the weapons of mass destruction.” But both were  lying,  as  was  Tony  Blair,  the  British  prime  minister  who  supported  the attack on Iraq. There were no WMDs; nor was there any connection  between  Saddam  Hussein  and  al-Qaeda.  Governments  like  those  of  Canada, France, and Germany wisely stayed clear of the expedition of  Bush and Blair.

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The  story  of Washington’s  claims  and  the  willingness  of  certain  of  America’s allies to act on such claims and join in the invasion of Iraq  came to form a significant strand in the American political narrative of  the  early  2000s.  Following  a  propaganda  offensive  from  the  White  House, supported by a chorus of assent from Downing Street, the Iraqis  were  once  again  subjected  to  bombing  and  invasion. The  Iraqi  infrastructure, partly rebuilt, was again ravaged and its armies crushed and  disbanded. The health system that had been the pride of the country lay  in ruins; the water, sewage, and irrigation infrastructure were torn apart.  With the health ministry’s budget reduced by 90 per cent, the UN and  World  Bank  agreed  that  it  would  need  $1.6  billion  just  to  resume   normal  operations.  Iraq’s  new  ruling  body,  the  American-dominated  Coalition Provisional Authority set aside less than a quarter of that. On 1 May 2003, landing on the deck of an aircraft carrier in a fighter  jet  off  the  coast  of  California,  the  US  president  declared  the  end  of  “major combat operations.” Over the flight deck of the carrier a sign  had been hoisted: “Mission Accomplished.” In Iraq, with the evaporation of the Saddamite state, civil war broke out between Sunni and the  Shi’a militias. Thousands more were massacred. In the seven and a half  years of the Iraqi war, to mid-2010, at least 100,000 Iraqis had been  killed while two million were displaced inside the country and another  2.2 million were refugees in neighbouring countries. In April 2006 Nouri Kamal al-Maliki took power at the head of a  Shi’ite-Kurdish coalition. The Americans made one last attempt at pacifying the country. Bolstering the quilt of forces under their command –  US soldiers, allies, mercenaries from far and wide, Iraqi soldiers – they  launched a “surge.” Thomas E. Ricks, the historian of the surge writes,  “At the end of 2008 two years into the revamped war, the fundamental  problems facing Iraq were the same ones as when it began.”39 On  27  November  2008  the  Iraqi  parliament  approved  a  security  treaty, the Status of Forces Agreement (SOFA), by which the 150,000 US  troops would evacuate Iraqi towns and cities by June 2009 and withdraw from all of Iraq by the last day of 2011. Patrick Cockburn of The Independent testified that  The Status of Forces Agreement … signed after eight months of  rancorous negotiations, is categorical and unconditional. America’s  bid to act as the world’s only super-power and to establish quasicolonial control of Iraq, an attempt that began with the invasion of  2003, has ended in failure … Even Iran, which denounced the first 

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drafts of the SOFA, fearing that an agreement would enshrine a   permanent US presence in Iraq, now says that it will officially back  the new security pact … a sure sign that America’s main rival in the  Middle East sees the accord as marking the end of the occupation  and the end of any notion of Iraq being used as a launching-pad  for military assaults on its neighbours.40 The regimes of George W. Bush and Tony Blair had meanwhile only  been slightly grazed. As millions of Iraqi refugees began the long trek  home to a ruined country, both walked away from public office enriched  and unscathed, neither admitting to the calamity they had unleashed. In  the words of one analyst, “America will have bequeathed a highly unstable state to the Middle East and a great deal of suffering to the Iraqi  people, for nothing.”41 Polls in the United States in mid-2010 confirmed  the view that the war was a mistake that was not worth American lives.  In the “War on Terror” fought in Iraq and Afghanistan, 6,000 servicemen and women had lost their lives, and over 42,000 had been wounded.  More than 3,000 allied soldiers had died, among them 158 Canadians  killed in Afghanistan. 

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9 Africa Independent: Peaks of Progress, Troughs of Despond Written in the shadow of the gathering crises that hover over Africa’s institutions and society today, [this book] faces squarely the many disappointments  and breakdowns – social, economic and political – that have dulled the hopes  of the early successes of the post-colonial period. Yet, for all the sorrows of Africa in the 1990s, Davidson shows how much  has been achieved since decolonization. As independent Africa becomes more  truly African with the passing years, away from the inappropriate systems and  alien structures of her former masters, many of the long-term solution to her  present problems are developing organically within her. Basil Davidson, Can Africa Survive? With an average per capita income of roughly US$1 a day, sub-Saharan Africa  remains the poorest region in the world. Africa’s real per capita income today  is lower than in the 1970s, leaving many African countries at least as poor as  they were forty years ago … [While] the number of the world’s population  and proportion of the world’s people in extreme poverty fell after 1980, the  proportion of people in sub-Saharan Africa living in abject poverty increased  to almost 50 per cent.  Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa

introduction

By the early 1990s even in the view of Basil Davidson,1 the first of the  two writers cited above, and the doyen of anglophone Africanists, Africa  was a disaster on a unique scale. Long since disappeared was the élan  associated with  independence.  Now what remained was  an inventory   of  failure,  avarice,  and  worse  –  corrupt  elections,  consistent  political 

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malfeasance, economic retrogression, the stain of spreading poverty and  disease, civil war, and unshakeable dependency on foreign governments  and  firms.  Virtually  no  states  in  sub-Saharan  Africa  were  as  well  off  in the 1990s as they had been in the 1960s. Despondency concerning  Africa’s fate is reflected in the literature of lamentations that bemoans  conspiracy, betrayal, victimization, and despair, with optimism ascending briefly from the 1960s into the mid-1970s, faltering thereafter, rising  in the early 1990s with the end of apartheid and relapsing again. We can  trace the peaks of progress and the troughs of despondence in key works  of fiction and history, the lineal, if not immediate, descendants of Joseph  Conrad’s  1902  Heart of Darkness.2 We  see,  thus,  right  after  hopeful  beginnings, betrayal and despair. Optimism, thus, as Dilip Hiro has said  about US hegemony at the beginning of the twenty-first century, seemed  so over.3 A  step  behind  the  lamentations  regarding  national  and  continental  fates have come the troubled eulogies for developmentalism, or at least  its core component, aid.4 And then a sigh of resigned comment from the  Financial Times in  June  2012:  “After  decades  of  outside  assistance,  the continent is as dependent as ever on the whims of foreign donors.”  The one exception to this litany of despondency is the 2011 publication  by the World Bank’s Charles Kenny, titled Getting Better – a cheery narrative of progress unsullied by self-interest.5 genesis

The genesis of independent Sub-Saharan Africa is to be found in 1957,  with the independence of the British West African colony known as the  Gold Coast. Among those few in the West who actually thought seriously about Africa, this was the occasion of a release of a dizzying wave  of euphoria; a new world seemed to be rising from the ashes of timeless  stagnancy and exploitation. Young people especially wanted to surf the  wave, to go to Africa and assist in the heroic task of what was becoming  known as “development,” or to study the new continent, which seemed,  beneath the wallpaper of imperial self-congratulations, not only to have  a politics but even a history, one that demonstrated that Africa, too, had  an antiquity and even a kind of modernity with states, trade, and heroes.  Bliss it was to be alive and to be young, the very heaven.6 By 1975 when Portugal’s African colonies were released virtually all  of  the  continent  was  free  and  ostensibly  under  African  direction.  If  we argue that most of Africa became independent in the two decades 

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between Ghanaian independence and that of Angola and Mozambique,  that is, between 1957 and 1975, then it becomes evident that by 2012  most of the states of Africa have had about fifty years of autonomous  experience – perhaps, as we shall see, taking account of neocolonialism, not fifty years of effective autonomy but fifty years of recognizable  existence. Before that, Africa was represented as a black hole, a timeless political nullity, almost in its entirety ruled by foreigners and written  into  their  imperial  histories  –  mainly  British  foreigners  but  also  French, Belgian, Portuguese, and Spanish outsiders, alongside a race of  creoles known as Afrikaners whose ancestors had emigrated from the  Netherlands  and  France  to  the  Cape  of  Good  Hope  in  South Africa  from the middle of the seventeenth century.  Yet  beyond  South Africa,  foreign  rule  was  not  actually  long  established. Until the late nineteenth century, except for tiny coastal enclaves,  there were barely more than a few hundred foreigners along the whole  coast  from  Senegal  to  Angola,  likewise  between  Mozambique  and  Somalia. Most of Africa, like the populous and well-developed region  that became colonial Northern Nigeria, for instance, was not brought  under  colonial  rule  until  around  1900  and  was  independent  again  in  1960. Compare this to India of Ceylon, the most celebrated of British  colonial  possessions.  India  had  come  under  British  control  from  the  middle of the eighteenth century and remained under foreign rule until  the middle of the twentieth. Various foreigners held sway over parts of  Ceylon (Sri Lanka) for nearly four centuries. British rule over Northern  Nigeria, indeed, over most of Nigeria, was but a moment – indeed, a  single lifetime. Such a trite observation may be justified for two reasons:  first, that most of Africa was colonized only briefly, and thus lightly, at  least compared to India and Mexico, and, second, that the independence of most of Africa has by now (2012) been experienced for about  half as long as colonial rule was endured. By no stretch of imagination  thus can we say that the normal state of Africa is that of being dominated.  Most  of Africa,  for  most  of  the  modern  period,  has  been  free  from foreign rule.  But did any meaningful kind of political independence of Africa ever  exist? Was independence actually lost? In fact, sub-Saharan Africa prior  to the first European incursions in the middle of the fifteenth century  certainly  had  a  history  but,  with  a  couple  of  striking  exceptions,  was  devoid of durable states of any kind. Those, like “ancient” Ghana, Mali,  and Songhai in the Niger Bend region of Mali, had existed, but they had  been  destroyed  centuries  before  modern  colonialism  –  indeed,  before 

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the  beginning  of  the  modern  period  of  history  (c.  1500  CE).  True,  Ethiopia was eternal, or, at least, antique, and there had been a major  state  south  of  the  Congo  that  the  Portuguese  effectively  destroyed  –  rather like the Spanish had destroyed the state of the Mexica. The Hausa  states of northern Nigeria and Benin to the south were, too, centuries  old but they were, by comparison to states in Southeast or South Asia,  quite simple, and for the most part, even compared to states in Mexico,  virtually illiterate. The Sokoto Caliphate that emerged in the early nineteenth century was an exception; it sustained a literati that communicated  in Arabic  and  was  supported  by  a  string  of  statelets  with  their  own capitals and courts. The domestic slave trade was essential to their  existence.  Whether  the  caliphate  and  its  subordinate  emirates  might  have matured to resemble the medieval states of Asia had colonialism  not intervened is a matter for speculation. And  then,  in  the  late  nineteenth  century,  overlaying  this  gelatinous  situation, Europeans created a grid of colonies large and small: Sudan,  Algeria, Nigeria, Angola, Ethiopia, and the Congo occupied more than  a quarter of the continent and, while artificial, were potentially viable.  British  Kenya,  German  and  then  British  Tanganyika,  Belgian  Congo,  and  Portuguese  Mozambique  were  the  size  of  most  European  states.  They  were  surrounded  by  smaller  and  often  landlocked  colonies  that  took up a mere one per cent of the continent. In fact, only on the tiny  islands of the Pacific and the Caribbean were there states with populations so small and economies so marginal as the African mini-colonies  – Gambia, Portuguese Guiné, Togo, Benin, Mali, Niger, Chad, Equatorial  Guiné, Rwanda, Burundi, Lesotho, Swaziland, and Malawi. It was these  mini-colonies  that  would,  after  independence,  and  barring  the  fortuitous discovery of such resources as oil, be forced to live from hand to  mouth on foreign aid handouts. While obviously colonialism didn’t invent Africa, it did give form and  content  to  it  in  political  and  economic  terms.  While  the  colonialists’  predecessors, the great cartographers of the centuries after the sixteenth,  outlined  the  physiognomy  of  the  African  continent,  it  was  the  colonialists  themselves  who  drew  the  lines  on  the  maps  that  became  the  boundaries as we know them. If in Asia colonial structures were raised  on  ancient  foundations  and  were  sustained  by  indestructible  patterns  of  trade  and  culture,  including  literacy,  in Africa  such  structures  had  existed  only  evanescently;  politically  speaking,  Africa  had  quite  suddenly  became  a  trailer  park  with  states  towed  in  by  foreigners  and  parked on greenfield spaces in the savanna or the rain forest. If we think 

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of Mesopotamia/Iraq or India or Afghanistan or Korea, we realize how  their boundaries are, to a large extent, natural. Virtually no continental  African state has natural boundaries. And no sub-Saharan African state  has its present frontiers etched by African hands. Egypt is the exception. Having  towed  their  states  on  to  African  lands,  and  parked  them,  Europeans also improvised modern African social and political systems  to in order to effectively rule over them, sometimes on the basis of models from elsewhere; in the British case, India proved a handy example.  The capitalist economy of Africa that was constructed gradually from  the mid-nineteenth century was designed to fit the needs of industrializing Europe; Africans were encouraged, or forced, to build infrastructures and grow or harvest commodities, such as cotton and rubber, that  facilitated  capitalist  development  and  profit-making  in  Portugal  or  Britain.  All  African  roads  and  railways  in  colonial  Africa  ultimately  ended at ports that were built to export raw materials to Europe; there  was  no  Silk  Road  over  which  high-end  luxury  goods  were  shipped  across Africa; trans-African highways were non-existent.  Before colonial trade, the main export from Africa had been slaves,  dispatched across the Sahara or the Atlantic. The slave trade, organized  by Maghrebians, Egyptians, Arabs, Europeans, and Africans themselves,  was simultaneously the basis and the bane of African economic development.  Nowhere  else  on  earth  suffered  a  commerce  so  malevolent,  over such a territorial extent, for such a long duration as was visited on  the African continent.7  The development of Africa over the first colonial decades was hardly  a  burning  question  in  the  minds  of  the  continent’s  new  proprietors;  Africa, they obviously thought, was a continent where peasants toiled in  timeless routines in the sun or in mines to produce food or raw materials for one or other imperial economy. Period. Thus, if you were on the  colonial side, you wouldn’t see much point in education or elections or  inoculations, although you might nudge the transport network or allow  missionaries to make Christians out of heathens (but not Muslims, who  were out of bounds on account of their proven abilities, when threatened, to organize holy wars against non-believers). For purposes of systematizing their rule, the Europeans adapted social  forms from elsewhere. Africans were thus tagged as belonging to certain  races (Semites, Hamites, Nilotics, Bushmen), tribes (Yorubas, Zulus,  Kikuyus), and religious allegiances (Muslims and Christians, in several  varieties,  and  polytheists,  disparaged  as  “pagans”).  Most  indelible  was the matter of tribes; different tribes were given different essential 

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qualities.  Some  were  stigmatized  as  being  more  warlike,  others  more  commercial, some more willing to accept Christianity and thus Western  education, others “raw heathens” who were virtually beyond redemption. All colonial regimes had scales of tribal preference; certain tribes  could be trusted (especially with modern firearms), and were particularly  respected.  Other  tribes  were  hopelessly  backward  and  were  doomed  to  eternities  of  really  odd  practices,  dutifully  graded,  catalogued, and photographed. If Asia was a museum, Africa was a zoo in  which  the  inmates,  besides  spectacular  megafauna,  included  humans.  When African independence eventuated, tribalism became the drug that  stimulated  regional  disparities  and  enervated  national  coherence.  Its  affects  became  more  acute  as  state  revenues  declined,  and  in  some  places,  especially  in  the  1990s,  it  became  a  lethal  element  in  politics.  This was notoriously the case in Burundi and Rwanda, both of which  were swept by genocides, but also in Kenya and the Sudan.8 Unlike parts  of  Europe  or  Asia  where  tribes  had  been  assimilated  into  nations,  in  Europe’s African colonies, they were celebrated for their distinctiveness. The Europeans designed socioeconomic relations as well; labourers  from the interior were herded to the coastlands of Ivory Coast to work  on  the  cocoa  plantations;  landless  peasants  were  forced  to  labour  on  coffee  plantations  in  Kenya  for  settlers  (the  colonial  government  wouldn’t  allow  Africans  to  plant  independently);  mine  labourers  were compelled to move from one colony to another, the Portuguese  colonists  of  Mozambique  actually  selling  their  subjects  to  recruiters  from the mining centres of South Africa. Simultaneously, there was an  almost complete absence of attempts to educate Africans beyond the  lowest levels – in some colonies even up to a low level. Missionaries  did what colonial governments abjured; Canadian Protestants taught  Angolans in Portuguese, Quebec Catholics taught Malawians in English and Senegalese in French. Everywhere catechists were taught piety,  obedience  and,  like  talibs,  rote  babbling  of  memorized  scripture.  Obviously  few  of  these  missionary  protégés  were  equipped  at  independence  to  deal  with  such  arcane  matters  as  industrial  policy  or   balance of payments, nor had any ceased being “tribesmen.” In fact,  “detribalization”  was  a  great  fear  among  colonial  rulers;  in  Europe  while peasants became Frenchmen, in Africa peasants always remained  Hausas or Luos. To  reiterate:  Africa  was  formatted,  mapped,  investigated,  tagged,  priced, and regulated by Europeans who scrambled to grab territories 

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and  then,  in  less  than  a  century  and  often  in  unseemly  haste,  packed  up and went home. Odd Arne Westad, historian of the Cold War, commented, “For the great majority of colonized areas, especially in Africa,  liberation was a stunningly quick process. In the five years from 1957 to  1962 alone, twenty-five new states were created, in most cases after only  a  few  years  of  preparation.  Very  often  the  postcolonial  elite  moved  directly into the state that the colonial powers had set up … The whole  entity that the new leaders were trying to fill with their own content was  a colonial construct; its borders, its capital city, its official language. It  was  from  the  beginning  …  an  ‘imported  state.’”9  Joseph  E.  Stiglitz,  Nobel laureate and World Bank executive, recalls,  I was in East Africa during the early days of independence, in the  late 1960s. There was a sense of euphoria, although the countries  knew that colonialism had left them ill-prepared for development  and democracy. They didn’t have even a modicum of experience in  self-government – there were few trained individuals, and the countries lacked the infrastructure for growth. In Uganda, the British had  promoted Idi Amin within the military and so groomed him to be  one of the leaders of the future. But Britain’s legacy stood bright and  shining, when compared to the bloody history of Belgium’s activities  in the Congo.10 After less than a century of improvised, inconsistent, and often bumbling colonial rule, often mediated by paternalism, independence came  – actually, was imported – and the continent’s fate was put in the eager  hands of a small and select number of Africans. Educated and politically  experienced Africans were a rarity. “Throughout most of Africa today,  you  can  count  the  number  of  effective  African  businessmen  on  two  hands,” wrote Barbara Ward, a leading British development economist  of  the  1960s.11 When  I  arrived  as  a  teacher  in  the  British-designated  region of Northern Nigeria in 1962 – two years after Nigeria’s independence  –  Europeans  still  ran  much  of  the  regional  government  and  the  education  ministry. The  boys’  school  at  which  I  taught  had  just  been  built and was the second high school in a province of perhaps half a  million people. There was no public secondary education for girls. As in  much  of  the  continent,  progress  still  moved  on  all  fours. After  half  a  century, Africa was still in a virtually unique darkness so far as literacy  and numeracy, and also social development, were concerned. Economic 

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development,  other  than  in  South  Africa  where  it  was  sustained  by   racism and forced labour, was minimal. (One day some inventive student  will  compare  the  progress  and  environmental  costs  of  capitalist  colonialism  in  Africa  with  that  of  communist  colonialism  in  Central  Asia in the same period. Regarding education and economic development, my guess would be that the communists were far ahead.) Even after the states of Africa had been given their independence, they  continued to be dominated by either their former colonial rulers, or by  the United States, or by the two in combination – not directly, of course,  but  through  the  institutions  that  they  controlled,  including  the  commodities markets, development agencies, the IMF and World Bank, the  banks of the City of London, Zurich, and the Cayman Islands, the mining and oil companies, and so on. Prices for cocoa or tin or peanut oil  were determined in London and New York and were hardly responsive  to African demands. There was no OPEC for pineapples. But, of course,  economic dependency was planned: this is what Kwame Nkrumah and  the British communist writer, Jack Woddis meant when they spoke of  “neocolonialism.” From the point of view of the former colonial states  like Britain and France, neocolonialism – by any other name – is what  made apparent political independence acceptable. In the former French  colonies  where  the  franc  –  known  as  the  CFA  franc  –  was  still  used,  economic independence was not even a pretense. Agricultural development  in  the  former  colonies  of  France,  it  was  made  clear,  was  to  be  undertaken “from the perspective of a European community.” When the  former colonies went off the rails, their former proprietors intervened to  put them right. France thus sent in its paratroopers to former colonies  nineteen times between 1962 and 1995 and still, in 2012, has kept troops  garrisoned in Chad and Gabon, while Britain’s Royal Marines occupied  Sierra Leone in 1999.12 The kind of advocacy of neo-trusteeship that has  been suggested for Kosovo and Palestine in the last decades will surely  be recommended for Africa in the near future, probably under the heading of “responsibility to protect.” Neocolonialism  was  of  course  a  vice  that  did  not  know  its  own,  proper, name; usually it dressed itself up as some form of humanitarian  intervention or developmentalism. Developmentalism, in the language  of the Financial Times known as “outside assistance,” was one of the  most effective means by which Western governments retained control  over African futures. The Vatican of developmentalism was the World  Bank;  it  blessed,  consecrated,  and  beatified;  its  hymnals  were  its  volumes of reports and statistics.

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developmentalism

From before independence – but not long before – the keel had been laid  down for developmentalism to become the master narrative for Africa’s  future.  From  the  1960’s,  developmentalism  took  on  a  life  of  its  own,  being featured in thousands of book titles and conference papers, hundreds  of  professorial  appointments,  and  tens  of  dedicated  institutions.  The  term,  virtually  unknown  earlier,  quite  brusquely  elbowed  its  way  into demotic speech in virtually all Western countries; say “development”  and most educated people thought that they knew what you were talking  about,  whether  you  were  referring  to  northern  Canada  or  southern  Sudan. In general, they thought “progress” and “modern.” Development,  in Africa at least, was assured by “aid,” that is, charity. Aid, too, had a  peculiar meaning when applied to Africa; postmodernists might say that  it begs for deconstruction. It refers to subsidies, seldom without strings,  given  especially  to  compliant “partners,”  often  leading  politicians  and  usually urban dwellers (politicians, researchers, NGO employees, senior  civil servants) under special programs authored in Western capitals. “In  most African states, major financial institutions fell under the control of  the chief executive … [P]residents in Francophone West Africa kept the  ministry of planning in their portfolios, not because they were committed  to the formulation of development plans but rather because these ministries received, and disbursed, foreign aid; by controlling them the president controlled a major source of foreign exchange.”13 In the last fifty years the West has given Africa an estimated trillion  dollars in what is usually known as “development aid.”14 One major  source  of  US  development  aid  is  actually  called  USAID  (the  United  States Agency for International Development). Aid is thus charity with  a secular and scientific sheen, ostensibly aimed at modernization, but  usually with the purpose of assuring political conformity. This modernization bears the weight of self-interest and moralism and is highly  politicized. This is noticeably the case of US and Canadian aid, aimed  at preventing the spread of HIV/AIDS that eschews the use of contraceptives, not out of consideration of African susceptibilities but out of  calculations that connect to conservative electorates in North America.  From the point of view of development aid, Africa was never considered  as  a  whole;  as  we  shall  see  in  the  next  chapter,  there  was  no  equivalent to the Alliance for Progress (1961–70), the continent-wide  US program applied to Latin America after the Cuban Revolution as  a revolutionary firebreak.

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Among public intellectuals, it is usually only leftists and cranks who  criticize the good works of developmentalists who enjoy a status similar  to the UN’s peacekeepers. While all Western states, that is to say members  of  the  “international  community,”  devote  significant  budgets  to  developmentalism, much of this is dispersed in support of donor corporations  and  the  engrossed  cadre  of  aid  professionals.  To  fail  to  meet  development targets – canonized by the UN as 0.7 per cent of GNP – is  to admit to a kind of moral lassitude, a beggar-thy-neighbour meanness.  Of course, few countries actually met the 0.7 target even in the boom  times of capitalism. In  spite  of  their  remarkable  record  for  inachievement,  the  developmentalists  continue  to  plod  on,  a  little  like  the  communists  in  East  Germany before 1989, confident in the knowledge that, although certain mistakes may have been made in the past, their command over their  science,  i.e.,  economics,  and  their  good  intentions  justified  their  existence. Still, from the time that René Dumont wrote L’Afrique noire est mal parti in 1962,15 there have always been discordant voices insisting  that development is a sham, a cruel hoax, a form of exploitation posing  as charity. Or, more sobering, that Western philanthropy compensates  for  only  a  fraction  of  the  wealth  flowing  out  of  Africa  into  Western  banks in the form of legal and illicit financial flows. Peter Lawrence has  applied the term “developmentalist imperialism” to the aims and effects  of the practice.16 Now war is the negation or antithesis of development. If the Middle  East holds the record for the most invasions in the last two centuries  (most of them, as we have seen, from the West) there has been no part  of  the Third World  that  has  experienced  war  more  continuously  and  disastrously  in all of its forms since  1945  than  sub-Saharan Africa  –  neocolonial  wars,  civil  wars,  resource  wars,  genocides,  and  rebellions  stand out. Some were, like that which has devastated the Congo in the  early  twenty-first  century,  as  we  shall  see  below,  of  remarkable  virulence.  Virtually  all  African  wars  since  independence  have  been  connected with a crude kind of ethnic warlordism, sometimes sustained by  Western  mercenaries  and  always  supported  by  outside  arms  dealers.  Such wars have as their goal access, and especially monopoly access, to  raw materials, especially those of high value such as diamonds and oil.  In  some  cases  these  wars  have  often  been  fought  on  behalf  of  some  imaginary nation like Biafra or some providential force, like “the Lord.”  Neither  wars  that  seek  to  create  new  nations  nor  foreign-sponsored  warlordism are a particularly African phenomena. Wars to make nations 

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are ubiquitous throughout modern history, while warlordism plagued  China in the 1920s and ravages Afghanistan in the present. On the other  hand, parts of Africa like Ghana, as we shall see, have been spared the  horrors visited upon their neighbours. In more ways than one, Ghana is  in fact a model African state. inventing ghana

Kwame Nkrumah (1910–1972) of the Gold Coast, later Ghana, independent  Africa’s  first  head  of  state,  embodied  a  number  of  the  most  attractive  characteristics  of Africa’s  new  postcolonial  leaders.  First  of  all, he was a civilian, and well-educated at that. He was young, articulate,  and  urbane  –  Kennedy-ish,  in  fact.  Far  from  being  a  Moscowleaning nationalist like Nasser or Sukarno, or an aristocratic Fabian like  Nehru, or a black nationalist of any stripe, although influenced by AfroAmerican black nationalists, he was hardly anti-Western. Conscious of  the peaceful protests that had brought independence to India in 1947,  he audaciously exploited British uncertainty about the future value of  one  of  their  most  economically  and  educationally  advanced  African  colonies. He guessed correctly that neither the Labour Party in power  (1945–51) nor the postwar British public had the stomach for a colonial  war over cocoa, the Gold Coast’s main export. Westerners of all sorts  cheered  on  Nkrumah  –  progressive  churchpersons,  liberal  idealists,  black nationalists, socialists, communists. They saw in the Gold Coast  the new, postwar Third World dawn that they had longed for. But Nkrumah didn’t have much of an idea of how to create an independent state where none had existed before – of course, no one did. He  knew that the Gold Coast had certain sterling reserves kept in the Bank  of England and assumed that these, together with a rising demand for  cocoa could be used to pay for the construction of a new state sustained,  to some extent, by a degree of industrialization. And to his eternal credit,  he created in Ghana a platform for demands for independence in the  rest of the continent.  Nkrumah’s  vehicle  for  power  was  the  Convention  People’s  Party  (CPP).  In  elections  in  1951  and  1956  the  CPP  won  power,  and  on  6 March 1957, the Gold Coast, now renamed Ghana, became independent. All things considered, the British seem to have played their cards  wisely: in another favourite colony, Kenya, there had been an insurrection in 1952, and in the French colony of Algeria, an outright war since  late  1956.  But  then  in  both  of  these  colonies  there  existed  a  settler 

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population  that  pumped  up  racist  hysteria  in  the  interest  of  its  own  survival. This kind of hysteria was absent in Ghana. In fact, a literate,  Westernized,  Ghanaian  elite  had  massaged  a  strong  sense  of  its  own  political rights vis-à-vis the British since the late nineteenth century. The Ghana of Kwame Nkrumah barely lasted a decade, but in that  decade mass nationalist parties spread across the continent – to Nigeria,  Ghana’s  next-door  neighbour  that  became  independent  in  1960,  and  to  most  of  French  Africa,  which  was  freed  later  in  the  decade.  Only  Portugal’s African territories (Guiné, Angola, Mozambique), Namibia,  Southern  Rhodesia  (Zimbabwe),  and  South  Africa  remained  under  colonial or white-minority rule. As we have stressed, Portugal itself was  one  of  the  most  retarded  of  West  European  states;  even  the  Balkans  seemed modern compared to Portugal. Ghana meanwhile surged ahead. With £200 million in sterling reserves  to spend and the world price for cocoa on an apparently endless escalator,  there  was  every  reason  to  design  ambitious  programs  of  national  economic development. Of course, the whole of the world in the 1950s,  communist  as  well  as  capitalist,  was  dreaming  of  a  future  prosperity  somewhere, not so far away, over the rainbow. In Ghana, an extensive  harbor and industrial park were built at Tema, along the coast east of  Accra, and the massive Akosombo Dam was raised on the Volta River  to provide hydroelectric power for the country and its infant industries.  Ghana  was  now,  development  optimists  predicted,  moving  out  of  the  agricultural and into the industrial stage of development. Still, the future  was not without clouds; Ghana’s economy was resolutely peasant-based  and the peasants produced very little surplus that could be saved and  invested.  The  modern  elements  of  the  economy  were  few  in  number,  miniscule in size and almost entirely British-owned. In fact, it was the  continued hold of Britain over Ghana that led Nkrumah to argue, after  he had been deposed, that his country had gone from colony to neocolony without actually becoming independent.17 Other obstacles that stood in the way of Ghanaian development were  several and seem not to have been foreseen either by the Ghanaians or  their British advisors. One involved markets: who would buy Ghana’s  industrial goods? Not her francophone neighbours who remained tied  financially, militarily and even, at the upper levels, culturally, to France’s  apron strings. Nigeria, to the east, was a huge market but one in which  Ghanaian goods would have to compete with those sold by the British,  the  Indians,  and  the  Lebanese  whose  domination  of  the  markets  for  imported goods was of long standing. Then there was the commodity 

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roller coaster. Cocoa prices had climbed from £190 to £352 per tonne  between 1948 and 1958, and then, in the early 1960s, swooped sickeningly  downward.  Rising  export  prices  had  allowed  an  increase  in  imports that had stimulated a “feel good” atmosphere in the run-up to  independence.  Falling  cocoa  prices  and  diminishing  sterling  reserves  had just the opposite effect. As his critics both inside and outside the  country  moved  against  him,  Nkrumah,  fatally  convinced  of  his  own  messianism,  became  more  isolated  and  dictatorial.  In  1964  he  turned  Ghana into a one-party state; this only decreased his popularity.  While he was in China at a conference in February 1966, Nkrumah  was deposed in a military coup. There was dancing in the streets. In  London, the day after the coup, the Times wrote unctuously that if the  militarists  behind  the  coup  “generate  confidence,  and  want  help,  Ghana would be worth salvaging again.” Its editors didn’t have to say  in whose interest it would be “worth salvaging” but its readers knew.  On the same day Nkrumah sent a telegram from Beijing to his secretary: “Don’t forget that world imperialism and neo-colonialism hate  my guts and all I stand for. They know I am in the way.”18 When he  returned  to  Africa,  it  was  as  an  exile.  He  spent  the  remaining  few   years of his life living in Conakry in neighbouring Guiné. Sub-Saharan  Africa’s pioneer independent state had become one of the continent’s  first victim of a military intervention: “coup” now became a word in  the lexicon of Africa watchers.19 After the fall of Kwame Nkrumah the generals who overthrew him  failed  to “generate  confidence.”  They  were,  instead,  as  one  African  leader indicated, “musical comedy generals” who knew nothing of how  to manage an independent economy under the difficult conditions that  affected Ghana – especially the dependence on only a few resources and  with low levels of agricultural productivity. Yet, the generals marched  on,  wheeling  about  in  a  generally  rightish  direction,  one  group  succeeding  another,  each  changing  the  rubric  under  which  it  misruled:  a  “National Liberation Council” gave way to a “Presidential Commission”  that was succeeded by a “National Redemption Council” until the last  awkward squad was marched off the square and its beribboned officers  confined to their barracks. The generals’ nemesis was a young air force officer, Jerry Rawlings  (b. 1947), who, having turned them out in a coup, returned power to a  civilian  regime  before  deciding  that  it,  too,  was  incompetent  and  so  seized  power  himself  once  more.  Over  the  long  duration  of  his  rule,  from 1981 to 2001, Rawlings was, like Nkrumah, at first, if somewhat 

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briefly,  remarkably  popular  and  then  unmistakably  unpopular.  His  appeal diminished from 1983 when the “Structural Adjustment Program”  insisted  on  by  the  World  Bank  and  the  IMF  led  to  the  dismantling  of much of Ghana’s public health and welfare schemes and destroyed  any prospect of even modest import substitution industrialization. Yet,  overall, whether due to the programs of structural adjustment or not,  living standards in Ghana improved, in part because of lashings of aid  and borrowed money. As Paul Nugent notes, “[G]overnment revenues  covered only 56 per cent of spending in 2000, which meant that the  state  remained  heavily  dependent  on  external  aid.”20  According  to  the same writer, however, “in 1998, Ghanaian life expectancy stood at  50 years, which was above the African average and an improvement  on the average of 45 years in 1960. Moreover, over the ten-year period  from 1978 to 1988 infant mortality is estimated to have plunged from  77  to  60  per  thousand  while  the  percentage  of  immunized  children  is estimated to have risen from 31 to 56 per cent over the five years  after 1988.”21 Rawlings,  meanwhile,  remained  in  power,  promoting  his  relations  wherever possible, until he withdrew in favour of John Agyekum Kufuor  in January 2001. Kufuor was re-elected in 2004 and succeeded in 2008  by John Atta Mills. Some Western writers have been duly impressed at  what  one  former  Canadian  diplomat,  as  reported  in  the  press,  called  “the maturing democracy in Ghana … the envy of much of the continent.”22 Rather than emphasizing “maturing democracy,” which as we  have  seen  in  the  case  of  the Asian Tigers  is  hardly  essential  to  public  well-being, this commentator might better have spoken of the durability  of the public health system, which in spite of a stagnating economy has  managed to survive at a modest level. In spite of the attempts at industrialization by Kwame Nkrumah, the  Ghanaian  economy  has  remained  rooted  in  a  combination  of  subsistence agriculture that employed 85 per cent of the country’s work force,  on foreign aid, and on loans. As for the state, at least one writer makes  the point that it will have to be strengthened and neoliberal orthodoxies, particularly those advocated by the World Bank, abandoned.23 And  as for the elite – the politicians, senior civil servants, and employees of  international  institutions  like  the  NGOs  who  took  over  the  reigns  of  “governance”  from  the  colonial  rulers  –  they  continue  to  occupy  the  residential quarters built for an earlier generation of European rulers,  on the whole safe and secure from the turbulence of Ghana’s expanding  urban centres and especially their spreading slums.

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dark heart

In 1885, after negotiating with other Western European powers, Leopold  II (r. 1865–1909), king of the Belgians, a people whose little state had  existed for only half a century, took charge of one of the largest and richest territories in Africa as a personal domain. Now, although his contemporary, Queen Victoria, might have accepted the title “Empress of India,”  she  didn’t  actually,  personally,  own  the  subcontinent,  to  plunder  it  as  she saw fit. Leopold, on the other hand, actually owned the Congo and,  in  conscious  imitation  of  the  British  queen,  crowned  himself  “KingSovereign.”  He  boasted  of  his  possession  of “this  magnificent  African  cake” into which he plunged his sticky fingers.  For  Leopold,  owning  such  a  potentially  rich  estate  was  a  license  to  print,  or,  at  least  to  extort,  money. And  that  he  did:  rather  as  if Tony  Soprano  had  been  given  the  keys  to  the  US  mint  at  Fort  Knox.  The  exploitation  of  the Africans  of  the  Congo  in  the  decades  of  Leopold’s  proprietorship forms one of the most terrible chapters in the history of  modern European colonialism. The Belgians, beneficiaries of an outpouring of Western sympathy after they had been invaded by the Germans in  World War I, were, by any standards, colonial Huns themselves, flogging,  fleecing,  mutilating,  and  murdering  the  Africans  of  the  Congo  over  a  period of long decades, all to the simple end of enriching themselves by  plundering the colony’s ivory, rubber, and later industrial commodities  like  tin,  gold,  copper,  diamonds,  and  uranium. What  happened  in  the  Congo was indeed mass murder on a vast scale. The Anglo-Polish novelist, Joseph Conrad, has his Heart of Darkness character, Kurtz, shout the  order, “Exterminate the brutes!” The brutes in question were Leopold’s  African subjects. Even as late as the 1950s, by which time the colonial  officials  of  British  and  French  Africa  were  resigned  to  undertaking  a  peaceable and pensionable withdrawal from the continent, the Belgians  were flogging away at their colonial subjects to make them work harder  in the interest of profit for Belgian colonial monopolies. The scandals of their king’s rapacity were, in the end, too much for  the parliamentarians of Brussels. After paying him a king’s ransom, in  1908 the Belgian state took over the colony and created what has been  called “a Leviathan state,” one that controlled the colony at a far deeper  level than was common elsewhere in the colonial world. “Domination  – pervasive, systematic, comprehensive – characterized all aspects of …  the colonial situation.”24 For the Belgians this maximal domination was  meant to come at minimal cost: “hegemony” and “revenue” were the 

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keywords  of  Belgian  colonialism.  “Mass  terror”  in  the  Congo  was  simultaneous with the devastations carried out in the Balkan Wars and  prefigured  the  later  barbarisms  visited  on  Poland  and  Byelorussia  by  Belgium’s near neighbour, Germany. independence

When  the  chill  winds  of  change  blew  across Africa  in  the  1950s,  the  Belgians were caught with their shorts down. In the Congo, dozens of  parties rose, each with its own leader, its own supporters and its own  goals.  Of  the  leaders,  two  initially  stood  out,  Joseph  Kasavubu  and  Patrice  Lumumba.  Kasavubu  was  a  Bakongo  tribalist  educated  in  a  Catholic  seminary.  The  Congo  was  named  after  the  tribe  to  which  he  and  most  of  his  followers  belonged. They  had  been  divided  in  the  colonial scramble between the French Congo, the Belgian Congo, and  Angola. He promised them a united Bakongo nation. Patrice  Lumumba  was  more  secular  and  cosmopolitan,  a  bit  like  Kwame Nkrumah but without the educated intelligence. He had in fact  visited Ghana in December 1958 and was swayed by Nkrumah’s speech  at  the  All-African  Peoples’  Conference.  Infatuated  with  the  idea  of   independence and excited by Nkrumah’s rhetoric, he was determined to  lead a united Congo to independence. His vehicle was the mass-based  Mouvement National Congolais (MNC), a southern cousin of the Gold  Coast’s  CPP.  A  month  after  he  returned,  there  was  rioting  in  the  Congolese capital Léopoldville (later Kinshasa) and the Belgians, now  trapped in the headlights of a global anti-colonialism, panicked. They  advanced the timetable for local elections. More anti-colonial violence  followed. Again the Belgians pushed the deadline for independence forward;  it  came  on  30  June  1960.  They  consoled  themselves  that  they  would remain in control of the economy, especially the mining monopoly.  In  any  event,  here  was  one  of  the  largest  and  richest  countries  in  Africa where the total number of educated people, including priests, was  in the hundreds. In the year of independence there were only 136 children in secondary schools, fewer than in any one of several secondary  schools in Ghana and fewer than in a single graduating class of any secondary school in any middling Canadian city.  Just before independence, elections were held. The party of Lumumba,  the  MNC,  won  the  largest  number  of  seats  and  he  was  therefore  in  a  position  to  become  the  first  prime  minister.  In  July  an  army  mutiny  swept the country. Lumumba became caricatured by the Belgians, and 

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more importantly by the Americans, as a maddened stooge of Moscow.  Lè yo vle touye chen yo di’il fou (“When people want to kill a dog, they  say  it’s  rabid”  is  the  appropriate  Haitian  aphorism.)25  Washington  decided that he would have to be removed. In December, by which time  chaos had spread even further, he was arrested, and in January 1961,  with the agreement of Brussels and Washington and to the satisfaction  of his African political rivals, he was tortured and then shot by a firing  squad  commanded  by  a  Belgian  officer. When  the  news  got  out  there  were demonstrations across the Third World. Africa had now its own  martyr to stand beside other victims of the Cold War. For the Congo,  decades  of  repression,  civil  war,  invasion,  and  plunder  would  follow.  The West had created a Haiti in Africa. Its Papa Doc was Joseph-Désiré  Mobutu (1930–1997).26  Franz Fanon (1925–1961) had feared as much. Fanon, a West Indian  from Martinique trained as a psychiatrist, was a war hero in the fight of  the Free French against fascism. Serving with the French army, he witnessed  the  vengeful  cruelty  of  France  in  its  dealing  with  its  colonial  subjects  and  weighed  the  costs  of  colonialism  on  the  self-esteem  of   the colonized. Abandoning the French to work for Algeria’s liberation  movement,  the  Front  de  la  Libération  Nationale  (FLN),  he  saw  firsthand the effects of the systematic torture  that  the French  inflicted on  their victims. His analyses, anticipating the French admission of their  practices by as much as three decades, was most persuasively rendered  in his The Wretched of the Earth, the study banned in France but read  by students right across the First World in the 1960s.27 While Fanon’s  hope for an African revolution was undimmed in his lifetime, he had  earnest  doubts  about  many  of  the  African  leaders  who  would  take  over from the European colonialists. Likening the heads of their various West African one-party states to “chairmen of the board of a society  of   impatient  profiteers,”  he  commented: “Scandals  are  numerous,  ministers grow rich, their wives doll themselves up, the members of parliament feather their nests and there is not a soul down to the simple  policeman or customs officer who does not join the great procession of  corruption.”28  Franz  Fanon  died  five  years  after  the  independence  of  Ghana and just a year before the French withdrew from Algeria. Had he  lived  a  little  longer  he  might  have  witnessed  the  fuller  blossoming  of  francophone  Africa’s  mawkish  neocolonial  elite.  As  Time magazine  reported admiringly about the Houphouet-Boignys, the first family of  Côte  d’Ivoire, “The  Ivory  Coast’s  First  Lady  is  coiffed  by  one  of  the  most exclusive Paris hairdressers … and dressed by Dior whose salon is 

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strategically  located  across  the  street  from  the  Houphouet-Boigny’s  apartment … The affluent Houphouet-Boignys also have a villa in the  stylish Swiss resort of Gstaad [as] her six-year-old adopted daughter …  is attending school in Switzerland.”29 mobutu ’s zaire

But it was in the former Belgian Congo that Fanon’s mere misgivings  became  nightmares.  In  the  place  of  the  murdered  Patrice  Lumumba,  after an interval of several years, rose Joseph-Désiré Mobutu, a former  soldier in the Belgian colonial army who had been on the local CIA payroll. During his thirty-year rule, Mobutu rose to become the most monumentally corrupt African leader of the twentieth century. The darkness  and backwardness that his years in office ensured remained in full and  unprotesting view of the foreign and mainly Western governments that  supported  him.  Adam  Hochschild  recalls  Mobutu’s  reign  –  and  his  friends: “US military aid helped Mobutu repel several attempts to overthrow him. Some of his political enemies he ordered tortured and killed;  some he co-opted into his ruling circles; others he forced into exile. The  United States gave him well over a billion dollars in civilian and military  aid during the three decades of his rule; European powers – especially  France – contributed more. For its heavy investment, the United States  and its allies got a regime that was reliably anti-Communist and a secure  staging  area  for  CIA  and  French  military  operations,  but  Mobutu  brought his country little except a change of name, in 1971, to Zaire.”30 Since Mobutu’s corruption was beyond parody, we are bound to ask  further how he was able to endure – that is, other than with the support  of the United States, Belgium, and France. His secrets to success were  several. Leaving aside terror, Mobutu was able to mobilize the support  of both local and foreign allies by giving them crumbs from the cake of  national wealth. He covered up corruption to some extent by appealing  to the self-interest of Zaire’s midget elite. In 1973, for instance, he “indigenized” agricultural estates and small businesses, removing them from  their foreign owners and handing them over to the “sons of the country.” Thus, ownership by expatriates – Belgians, Greeks, Portuguese, and  even Pakistanis – was terminated and a new class of Zairois propertyowners was born. He also took over a golden goose in the form of the  Union Minière de Haut Katanga – the great Belgian monopoly that was  to become the mainstay of the economy. Assets worth as much as a billion dollars were distributed to those whom he favoured, especially to 

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those from his own Ngbandi tribe. Mobutu himself did well out of the  process,  taking  over  fourteen  estates  and  thus  paving  the  way  for  his  becoming the fourth largest employer in the country. Of course, many  of the beneficiaries of the distribution of spoils were incompetent, transforming  their  boons  into  consumer  goods,  like  Mercedes  Benzes,  or  rental properties. From 1974, due to corruption and mismanagement,  the economy of Zaire regressed slowly into the pre-capitalist era. Yet,  while it regressed, its civil service payroll grew as those who were loyal  to the regime were rewarded for their fidelity.  Besides local allies, Mobutu had built up a network of foreign friends,  most of whom licked their lips over the prospects of Zaire’s mineral and  petroleum  wealth  and  what  remained  of  its  domestic  markets.  Thus,  mining speculators, oil explorers, and manufacturers all crowded into  the president’s palace anxious to make deals. General Motors, British  Leyland, and French Renault all assembled cars while Goodyear made  tires. Krupp manufactured palm oil and soap, and, in 1975, Gulf began  to produce oil from offshore deposits. The mineral producers and the  oil  wells,  of  course,  were  largely  in  foreign  hands  and  thus  produced  limited wealth for the state and its rulers. The assemblers and manufactures were no less limited in their value as the goods they produced were  more expensive than imports.  The 1974 nationalizations may be seen as the beginning of the end of  Zaire as a viable national economy. Of the approximate $800 million  the nationalized copper mines produced annually, officials stole as much  as $270 million. The situation worsened in the 1980s and ’90s as corruption deepened, copper profits dipped, export costs increased, and the  countryside could no longer feed the swelling urban population. Even  by 1980, 36 per cent of the population was urban and by the end of the  century this had risen to nearly a half. Despite talks about rehabilitating  the  agrarian  economy,  virtually  nothing  was  done  as  roads  from  the  countryside became more impassable and transport vehicles collapsed.  Nor was there any attempt at agrarian rehabilitation through the normal means of rural credit or investment in improved practices and seeds.  As certain sectors of the agricultural economy went into decline – such  as cotton and palm oil exports that had thrived under the colonial state  –  imports  took  their  place.  By  1980,  then,  there  was  simultaneously  economic stagnation and population growth. And to shift the country  down a gear from bad to worse, there was structural adjustment, first  laid on the country by the IMF in 1977 and then brought down again a  decade later. More retrenchment, further sales of public assets, removal 

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of exchange controls, and a massive loss of jobs as the civil service was  slashed  and  industries  closed  down.  By  the  early  1990s  the  national  economy was in complete ruins.  In May 1997 Laurent-Désiré Kabila, a rebel general, ousted Mobutu,  who died a few months later in exile. The dictator was spoiled for retirement  choice  since  he  had  homes  in  Paris,  Switzerland,  and  Portugal,  farms in Cape Town, Madrid, Marbella, and Marrakech, and a villa on  the Riviera. Fittingly, the villa had formerly belonged to King Leopold. Kabila  renamed  the  country “the  Democratic  Republic  of  Congo”  and ruled it autocratically until January 2001 when he was assassinated  by one of his bodyguards. His son Joseph took over from him. Meanwhile, regional leaders, some of whom having been associated with the  genocide in Rwanda in 1994, seized power in key regions, and ethnic  tensions,  leading  to  mass  killings,  multiplied.  In  2006  Joseph  Kabila  won  the  country’s  first  democratic  elections,  while  in  the  east  of  the  country  a  breakaway  party  formed  under  General  Laurent  Nkunda.  Kabila refused to talk to Nkunda, calling him a “terrorist.” In January  2008  another  civil  war,  one  with  its  origins  in  1998,  a  year  after  the  overthrow of Mobutu, broke out that led to the deaths of as many as  5.4  million  people,  making  it,  according  to  the  International  Rescue  Committee  the  deadliest  conflict  since  World  War  II.31  Foreign Policy magazine  referred  to  Kabila  as “Congo’s  New  Mobutu,”  stressing  the  ruthlessness of his reign of terror (“one of the world’s worst human rights  records”), the wretchedness of the lives of the Congo’s citizens, and the  unflagging support he continues to claim and receive from the leaders of  the West.32 No longer invisible, behind the scenes lurked those who were  interested  in  the  Congo’s  rich  minerals,  like  Western  multinationals,  always with their eyes wide open for advantage at any price. It is a simple matter to point the finger at the Belgians, and at Mobutu  in particular, and to lay the tragedies that have befallen the Congo at  their feet. In fact, as we shall see in the following section, the problems  of Africa in the postcolonial epoch have affected even the most stable  and developed of African states. What is more, the problem of tyranny  has never been particular to the Congo. Mobutu’s rivals in the rogue’s  gallery  of  political  criminals,  Idi Amin  (r.  1971–79)  of  Uganda,  JeanBedel  Bokassa  (r.  1965–79)  of  the  Central  African  Republic,  and  Francisco Macias (r. 1968–79) of Equatorial Guinea have been perhaps  more  malevolent  than  Daniel  arap  Moi  of  Kenya  (r.  1978–2002)  or  Robert  Mugabe  of  Zimbabwe  (1980-present),  but  hardly  less  avaricious. All have had delusions of grandeur and some have been clinically 

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unbalanced. Just as the Belgians underwrote Mobutu,33 the French supported the Bokassa regime and the whole of the West, following the lead  of  the World  Bank  and  the  IMF,  sustained  arap  Moi,  long  after  they  began to be embarrassed by their excesses. What  remains  in  many  places  from  Somalia  to  the  Congo  thus  is  a  fetid  and  emaciated  ruin.  Of  Kinshasa,  the  slum  that  was  once  Léopoldville, it has been lamented:  [it] has been wrecked by a perfect storm of kleptocracy, Cold War  geopolitics, structural adjustment, and chronic civil war. The Mobutu  dictatorship, which for 32 years systematically plundered the Congo,  was the Frankenstein monster created and sustained by Washington,  the IMF, and the World Bank, with the Quai d’Orsay in a supporting role. The World Bank – nudged when needed by the State  Department – encouraged Mobutu to use the collateral of his  nation’s mineral industries to borrow vast sums from foreign banks,  knowing full well that most of the loans were going straight to   private Swiss bank accounts.34 On  the  UN’s  Human  Development  Index  (2007)  –  an  exercise  of  invidious comparisons if ever there was one – Ghana stands as a middling sort of country, 152nd in a pecking order that has South Africa as  129th, the Congo, unbelievably, at 136 and Nigeria at 158. In relative  terms Ghana’s exalted status is impressive, although, while it is not as  poor as the most miserable states in Africa, it hardly compares to most  of Southeast or South Asia or even all but the poorest states of Latin  America.  In  any  case,  it  is  ultimately  meaningless  to  compare  Africa  with Asia or even Ghana with the Congo, a country, perhaps unfortunately, overflowing with resources but chronically despoiled and destitute, or with South Africa, a country in a category of its own. south africa

South Africa remains the richest, most developed country in Africa and  the last to be ruled by non-Africans. Between 1652 when the first Dutch  settlers arrived and 1994 when the last white ruler stepped down, South  Africa became Africa’s preeminent colony of white settlement on which,  until they were abandoned by their foreign rulers, Kenya and Southern  Rhodesia (Zimbabwe) were modelled. But unlike these, or Algeria, which  became the home for French settlers for a century, the roots of European 

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and Asian settlement in South Africa extend over three centuries with  the Europeans ruling invariably over the rest and establishing a strict, if  leaky, hierarchy of races for most of the time.  Remarkably  for  Africa,  between  the  time  of  the  Anglo-Boer  War  (1899–1901) and World War II, under the banner of Volkskapital (the  people’s economy), the white settlers, through their domination of the  state, took control of key sectors of the economy of the country, from  its  insurance  companies,  through  its  armament  manufactures,  to  its  mines. South Africa in fact exemplifies a kind of Third Reich model of  tropical economic development, seen nowhere else in the twentieth century. Its central political doctrine was one of white supremacy known as  apartheid (“apartness”). This was a kind of pseudo-philosophy, rooted  in nineteenth-century British colonial mining ordinances and sustained  by the teachings of the local Calvinist Church. Its central object was to  prop up and enforce extreme inequality on the basis of spurious criteria of race, as we shall see below. It took the idea of “Indian” reservations, as we know them in Canada, and applied it to a country where  two-thirds of the population were Africans. Following the logic of this  idea  there  were  created  some  ten  widely  dispersed  reserves  called  “Bantustans” or “Homelands,” one for each designated “tribe.” These  Homelands the Africans were meant to call their own; beyond them in  the cities and on the white-owned farmlands and mines, Africans had  no rights and had to carry passes if they wanted to avoid prison and  the ordeals of forced labour. The  crowning  of  the  South African  apartheid system  was  constitutionally secured in 1948, the year after much of South Asia had become  independent, when a new white-racist Nationalist Party was installed in  power.  The  Nationalists,  predominately  boers, that  is,  speakers  of  a  Dutch-related  dialect  called  “Afrikaans,”  ruled  over  a  population  of  12.5  million  of  which  the  boers  and  the  English-speakers,  formed  21  per  cent,  Coloured  and  Asians  another  11  per  cent,  and  Africans  68 per cent.35 From 1948 to 1972, and especially from 1964 to 1972,  the South African economy boomed with the country experiencing one  of the highest growth rates in the capitalist world – an average annual  growth of 6 to 8 per cent. Foreign investment flooding into the country  permitted South African defence expenditures to increase from $63 million  to  $1  billion  between  1960  and  1975, “defence”  in  this  context  referring  to  the  role  of  the  state  in  both  sustaining  apartheid  and   destabilizing  neighbouring Angola  and  Mozambique,  which,  after  the 

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Portuguese colonial regime collapsed in 1975, came to be ruled regimes  that were anti-colonial and even, ostensibly, socialist.  To those, white settlers and foreign investors alike, despairing of the  crisis afflicting the rest of the continent, South Africa was a haven where  investments could be assured of peaceful increase. This was so at least  until the 1980s when the implacable tide of African protest, a debt crisis, and international pressure, especially from the United States, caused  the more enlightened members of the white ruling class to re-examine  the premises of white rule and call for democratic elections. In February  1990  Nelson  Mandela,  the  leader  of  the  African  National  Congress  (ANC),  a  common  front  of  Africans  and  whites,  was  freed  from  the  prison in which he had been held for twenty-seven years. The ANC itself,  previously outlawed, was unbanned. For many, this was a gobsmacking  turn of events. In South Africa’s first democratic elections, held on 27–29 April 1994,  the ANC acceded to power with 62 per cent of the vote. The supporters  of the Nationalist Party, mainly whites together with some sectors of the  Coloured population, won 20 per cent. The Nationalist Party soon disappeared  altogether. The  new  head  of  state  was  Nelson  Mandela,  by  now  aged  seventy-six. A  negotiated  transition,  with  remarkably  little  strife, took place bringing to an end nearly three and a half centuries of  white advance and black defeat. Nowhere in Africa were Africans now  ruled by non-Africans; racial politics now seemed to be dead. Even  before  the  end,  the  writing  was  on  the  wall.  In  an  article  in  January 1989, Professor J.L. Boshoff, himself an Afrikaaner, had confessed, “What  an  appalling  human  tragedy  apartheid  has  been.  The  Afrikaners’  Frankenstein;  their  own  creation  has  degenerated  into  a  monster which now threatens to destroy them … How reasonable and  intelligent people could have voted for this laughable conception and  endorsed it with ever increasing majorities, is one of the great mysteries of democracy. I am guilty myself. I voted for it.”36 Others had anticipated the end even before Boshoff; for from 1984 secret negotiations  had  been  taking  place  between  proxies  of  the  Nationalists  and  the  ANC. Mandela himself, like the leaders of the Indian National Congress  in the prelude to Indian independence, had been in talks while still in  prison. Not before time, the leaders of some of the grandest of the capitalist  firms  in  South Africa  had  realized  that  the  apartheid  state  had  reached the end of its tether. Profits would have to be assured according to other arrangements.

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Several questions may be asked, one of which is why did the whites  under their leader, President de Klerk (r. 1989–94), surrender political  power. R.W. Johnson explains: [de Klerk defied] all predictions that Afrikaners would draw their  wagons in a circle and fight to the last. Had de Klerk been willing to  pay this price, the apartheid state could have fought on for another  decade. But de Klerk and the modernizing Afrikaners he represented  wanted to be part of the cosmopolitan Western middle class …  The reason why [he] could give away one bargaining counter after  another was that the real bet he was making was that if he made the  best of what was by now a thoroughly bad job, at least his volk  [people] would be able to carry on living in South Africa in relative  peace – the fundamental deal – and the logic of the capitalist economic system in place would carry the black elite along with it.  “It’s not just the ports and the roads and the airports,” he told me …  “Look at our big companies. We’re not a satellite economy. Look  at our banks, our financial infrastructure. We have built well.” …  Ten years on from liberation, with a burgeoning new black capitalist  elite very much to the fore, one can see that … de Klerk probably  won his long-term bet.37 The 1994 election was a moment of great euphoria, not only in South  Africa but right across Africa. As a beginning, the new ANC government  introduced  an  ambitious  Reconstruction  and  Development  Program  aimed at redressing social inequalities; all South Africans were now to  enjoy the fruits of emancipation. The program abolished all of the ten  homelands and extinguished the legal residues of apartheid. And above  all of this stood Nelson Mandela. If the “miracle” of South Africa’s transformation was contrived, Mandela’s saintly status was genuine. “Mandela  spoke from the heart about the need for reconciliation and for everyone  to pull together for the sake of the country. Coming from a man who had  spent over a third of his life in jail and who had refused all compromise  in order to be free, this was magical stuff. Moreover, the man had grace,  a sense of humour and a complete lack of grandeur … The country and  the world embraced him for all that.”38 In 1999 Thabo Mbeki (b. 1942) replaced Mandela. Mbeki, who had  become  the  effective  head  of  the  ANC  after  independence,  had  spent  his whole life in the party. Indeed, he was a consummate apparatchik,  doctrinaire, manipulative, vindictive, secretive. Brushing aside Mandela’s 

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pleas for reconciliation between all of the races, Mbeki brought back  racial politics by stressing the existence of two separate nations, black  and white. And, he claimed, it was the turn of the black nation, or at  least the black members of the ruling party and the small black middle  class, to prosper.  But while there was prosperity for the few, for the mass of Africans,  especially the poor in the rural areas, times were as bad as ever they had  been  under  apartheid.  By  early  2003,  on  one  measure,  unemployment  stood at 42.1 per cent and was rising. Among African women it was over  50 per cent. This was a partial explanation of the rise of prostitution and  the spread of HIV/AIDS  that we shall mention below. In spite of all the  brave talk about transferring wealth from whites to blacks, then, what  was really happening was a transference of some wealth from a mainly  white to mixed black and white minority. One of the world’s most unequal  societies, usually mentioned in the same breath as Brazil, another multiracial society, became, as a consequence, even more unequal.  As  for  the  whites,  on  the  whole,  they  either  migrated,  mainly  to  English-speaking countries like Canada, or stayed at home, still in possession  of  most  of  their  wealth. The  flight  of  capital  was  nonetheless  marked. Many of South Africa’s great corporations, in which de Klerk  had been so confident, showed little faith in the new social experiment  and moved their headquarters out to the country. Nor was the confidence of foreign capital much different. Thus, both domestic and foreign direct investment fell off precipitously. The  most  egregious  disgrace  of  the  Mbeki  regime  has  not  been  its  failure to improve the living standards of black South Africans; it has  been its refusal to deal with the catastrophe of the HIV/AIDS epidemic  that  has  devastated  the  country.  “Every  senior  UN  official,  engaged  directly or indirectly in the struggle against AIDS, to whom I have spoken  about  South  Africa,  is  completely  bewildered  by  the  policies  of  President  Mbeki,”  Stephen  Lewis,  the  UN  Special  Envoy  to Africa  for  HIV/AIDS, has written.39  The HIV/AIDS epidemic has, in fact, had a short if lethal history. The  first significant group of sufferers was reported among Malawian workers in South Africa’s mines. Thereafter, the sexually transmitted disease  spread rapidly. Mandela’s government promised to give the AIDS campaign high priority but, in fact, did little about it. Mbeki and his colleagues at first even denied its existence. One of his ministers actually  claimed to a parliamentary caucus that it was a plot by the CIA in alliance with the drug companies.

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By mid 2003 the AIDS pandemic had secured its millionth victim  and the death rate of 1,000 was rising fast. Another 5.3 millions  South Africans were HIV positive and by 2010 there would be  2.5 million AIDS orphans. Despite this the government was still   trying by every means to delay and postpone the delivery of antiAIDS drugs. The sheer callousness of the new ANC elite towards the  black unemployed and those suffering from AIDS is difficult to  describe, surpassing the cruelties of … the old [Nationalist] elite.  Take the simple statistic that in 2002 91,000 babies (almost all  of them black) were born HIV positive and that at the very least  50 per cent of all of these babies could have been saved had antiretroviral drugs been made available, as they were, for example,  in neighboring Botswana. Even on these minimalist terms, the  Mbeki government was allowing 45,000 black babies to die   unnecessarily every year – far more than were lost in the whole  period of apartheid.40 As AIDS deaths and unemployment both increased and wealth flowed  from the many to the few, skilled whites emigrated with their intellectual capital. One government report was forced to concede that at some  point in the near future “we could soon reach a point where the negatives start to overwhelm the positives. This could precipitate a vicious  cycle  of  decline  in  all  spheres.” “Something  has  gone  wrong  with  the  post-Mandela government,” commented Lewis.41 In  September  2008  Thabo  Mbeki  was  defeated  as  head  of  South  Africa’s ruling party. His successor was Jacob Zuma. envoi

For better or worse, through thick and thin, writing on Africa remains,  in simplistic terms, bipolar, divided on the dark side between the pessimists, like Leys, Milanovic, and Lawrence, whom we shall see below.  On the sunny side are the Western and African liberal optimists, or, at  least hopefuls, like Lewis, whom I have quoted above. The former tend  to hold the West to account – especially its leaders in the United States  and France – and its institutions like the World Bank and the IMF. The  latter tend to live in hope and to show confidence either in African leadership or in Western generosity. A visible minority of these, sometimes  connected  to  the  world  of  rock ‘n’  roll,  see African  regeneration  as  a  celebrity  cause.  While  the  pessimists  are  on  the  ascent  in  the  more 

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academic  media,  the  optimists  continue  to  command  the  attention  of  the mass media, which often represents Africa on the cusp of some sort  of renaissance. Since I am obviously on the dark side, let me consider a couple of  the pessimists’ interventions. In 1994, writing on the “the collapse of  development” in the New Left Review, Colin Leys explained: “We now  know  that  [predictions  of  steady  African  economic  growth  were]  a  tragic delusion, and that after the ‘development decades’ most people  in sub-Saharan Africa are poorer than they were thirty years ago, while  a chronic dependency on ‘aid’ has made a mockery of their countries’  formal sovereignty.”42 A decade later Branko Milanovic of the World  Bank, presumably speaking out of turn, added his voice: “We should  not  …  be  surprised  if  marginalization  of  many  countries,  and  of  the  whole African continent, deepens. Like some social or ethnic groups in  affluent countries, they would be excluded from progress. At some regular intervals, debt would be forgiven … we know that debt forgiveness  is simply a palliative solution, and – unless the structural conditions are  changed – one debt forgiveness only follows another. In the long term it  solves little” (my italics).43 Milanovic has divided the world into four parts: twenty-nine of the  sixty-one countries in the Fourth World are in Africa. Only four African  countries  are  in  the  next  highest  category  which  he  calls  the  Third  World: Algeria, Tunisia, Egypt, and South Africa. None are in the highest category. Five years after Milanovic and fourteen years after Leys,  Peter  Lawrence  explains:  “The  trajectory  of  much  of  sub-Saharan  Africa over the past thirty years has been a standing rebuke to advocates of the free-market Washington Consensus. Successive waves of  structural  adjustment  programmes,  international  conflict  mediation,  good-governance monitoring and the best effort of numerous westernfunded  NGOs  appear  to  have  done  nothing  to  halt  rural  crisis,  ethnic  conflicts and spreading shanty towns. In the eyes of many critics, they  have merely exacerbated the situation.”44 In 2001, as Africa spiraled downwards, certain African leaders came up  with a scheme for billions more in development aid from the West, to be  known  as  the “New  Partnership  for Africa’s  Development”  (NEPAD).  Behind it were Nigeria’s president (1999–2007) and one-time military  dictator,  Olusegun  Obasanjo,  and  South  Africa’s  president  Thabo  Mbeki.  Of  Obasanjo,  the  Financial Times commented, “In  Nigeria,  a  cabal of tycoons benefited from an unabashed blend of raw capitalism 

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and economic nationalism under former President Olusegun Obasanjo,  who believed the emergence of national business titans … was an important  step  if  Nigeria  was  to  emerge  as  a  global  economic  power.”45  Unsurprisingly, NEPAD has come to little. New initiatives, sustained by  billions  of  development  dollars  from  the  “international  community”  (especially the supporters of the IMF, the World Bank, and subsidiary  institutions) are doubtless in the process of being launched. Globalization  and  neoliberalism  remain,  despite  being  roundly  condemned  by  their  critics, barely more tarnished in the eyes of Western developmentalists  than they were thirty years ago when they were launched. game changers i

“We see Africa as probably the greatest open field of manoeuvre in the  worldwide  competition  between  the  [communist]  bloc  and  the  noncommunist,” affirmed President John F. Kennedy in 1962.46 It was the  Soviets, of course, that the American president had in mind, and they  were everywhere – in Egypt, Algeria, Guinea, Angola, Tanzania, Somalia,  and even South Africa. The Chinese, communists of a different gravity  internationally,  were  an  insubstantial  presence:  Zhou  En-lai  visited  Africa  between  December  1963  and  February  1964  but  Beijing  was  hardly either a commercial or military threat to the continuing domination by the West. Although the Chinese premier proclaimed that Africa  was ripe for revolution, the African policy of Beijing was distressingly  uninformed and opportunistic. Upon the withdrawal of the Portuguese  from  Angola  in  1975,  for  instance,  Beijing  backed  Holden  Roberto,  the  right-wing  and  tribalist  military  adventurer. This  absurd  and  discreditable move was entirely in reaction to Moscow’s support for the  left-wing government of the Movimento Populare Libertação de Angola  (MPLA), which ruled the capital, Luanda, and part of its hinterland. The  MPLA guerrillas had been successful at doing what guerrillas are supposed to do – making foreign intervention unbearably costly. Together  with the guerrillas in Guiné and Angola they had driven the Portuguese  out  of Africa,  and  established,  briefly  as  it  turned  out,  three  Marxist  states. Roberto, aided by the People’s Republic, was also backed by his  in-law Mobutu and the CIA. The Chinese from the 1950s through the 1980s, were obviously bewildered by African politics. Counterproductively, their presence stimulated  the Soviets to redouble their efforts in favour of the Marxist MPLA whose  leaders managed to hang on to power and oil until the peace agreement 

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of 1992. Bewilderment was made worse by the fact that the MPLA government, faced by an invasion force from South Africa, was rescued by  the Cubans. The boers, who had illusions of supremacy over the whole  of southern Africa, were backed by Washington and London. Nowhere  in this political maelstrom do we see concern for the security of Africans  being weighed into the equation, much less advanced. Nor, when peace  came, did the situation improve: “[W]hile the MPLA speaks of the ‘needs  of the people,’ it in fact channels little of Angola’s oil wealth to them.  The president has retreated to his palace; the party elite to their villas,  and their Mercedes and Land Cruisers course through streets of Luanda,  which is [sic] strewn with garbage and broken glass and inhabited by  maimed soldiers.”47 Until the Chinese signed an oil deal with the Sudan  in 1995, Beijing’s presence was little more consistent and hardly more  principled. Finally, after a further decade of watching and waiting, not  least for American moves in the Gulf, came the moment of conspicuous  change. In April 2006 the Chinese President Hu Jintao visited Morocco,  Nigeria,  and  Kenya.  In  June  the  prime  minister,  Wen  Jiabao,  flew  to  Egypt,  Ghana,  Congo,  Angola,  South  Africa,  Tanzania,  and  Uganda.  Next,  the  culmination  of  the  new  forward  policy,  the  China-Africa  Forum, was held in Beijing in November 2006. All forty-eight of Africa’s  leaders  were  there.  Within  only  two  months,  in  January  2007,  the   minister of foreign affairs, Li Zhaoxing, was on the road, selling China  in  Benin,  Equatorial  Guinea,  Guinea  Bissau,  Chad,  Central  African  Republic, Eritrea, and Mozambique. A year later, in January 2008, his  successor, Yang Jiechi, went to South Africa, the Congo, Burundi, and  Ethiopia. A total of thirty-one countries visited in less than two and a  half years.   Dilip  Hiro  makes  it  clear  that  the  motives  of  Beijing  are  hardly  a  mystery, even if Chinese diplomacy is at variance from that of the West.  An underdeveloped continent three times the size of China, Africa  was rich in natural resources. The continent contained one-third  of the globe’s uranium, half its gold, two-thirds of its manganese,  nine-tenths of its platinum and cobalt, and almost all of its chromium. The PRC [People’s Republic of China] was eager to gain  access to these minerals to feed its fast-growing industry …  For hydrocarbons, the PRC focused on Angola, Gabon, Nigeria,  Somalia, and Sudan. Its copper supplies came from Zambia, iron ore  from South Africa, platinum from Zimbabwe, and tropical timber  from Congo Brazzaville. Little wonder that China’s trade with 

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Africa had almost quadrupled to $48 billion in the six years before  the 2006 China-Africa Forum, and that five hundred Chinese companies were active in Africa.48 In return for the raw materials sold by their leaders, ordinary Africans  got  a  mixed  basket  of  cheap  manufactured  goods  like  plastics  and  enamelware together with an increasing amount of technical assistance.  In 2006 Hu Jintao had announced that development aid to Africa was  to be doubled and Beijing moved forward to finance and build railways,  hydroelectric dams, schools, ports, and roads. This aid, which exceeded  that of the World Bank, came without political or moral conditions –  the Chinese did not insist that African leaders accept either the tenets of  neoliberalism or the principles of human rights. Hu Jintao had spoken,  tellingly in oil-rich Gabon, about aid “without strings attached.”49 Now,  by the end of the first decade of the twenty-first century, trade between  Africa  and  China  had  taken  off. Amounting  to  nearly  $10  billion  in  2001 and $50 billion in 2006, it was expected to reach $100 billion by  2010. As Dambisi Moyo emphasizes by the middle of the twenty-first  century’s  first  decade, Angola  had  surpassed  Saudi Arabia  as  China’s  biggest  single  supplier  of  oil  while African  countries  as  a  whole  provided around 30 per cent of China’s crude oil imports.50 In the promotional literature to attract British settlers, Kenya around  1950 had been formatted as a “White Man’s Country.” Sixty years later  (in 2010) the fantasy of white settlement and rule in Africa had long  since  been  forgotten.  But  another  emigration  had  eventuated.  There  were now as many as 100,000 Chinese in Nigeria, 30,000 in Angola,  40,000 in Zambia, and 200,000 to 300,000 in South Africa, and tens of  thousands more scattered in the capitals and markets of the continent.51  In some places, indeed, Chinese merchants set up stalls in marketplaces,  just as, at the beginning of the twentieth century, Lebanese, Greek, and  Indian merchants seeking profit in the interstices of European colonialism,  had  done  the  same. The  difference  was  while  the  Lebanese  sold  textiles and simple metal goods from Europe, the Chinese were selling  goods made in China. So too are African merchants, many of whom go  to China to buy goods to export to Nigeria or Burkina Faso. It has been  estimated that there are between 30,000 and 100,000 Africans living in  Guangzhou, the huge city on the Pearl River inland from Hong Kong. But the story of the relationship between Africa and China is in its  early stages. While it may be that Chinese merchants and investors have  thus  far  been  seen  to  be  less  intrusive  and  more  sensitive  than  those 

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from the West, there is reason to think that this has begun to change. In  November 2010 coal miners in Zambia, a country in which the Chinese  have invested as much as $1.2 billion over a decade, protested against  the  callousness  of  Chinese  managers  who  speak  neither  Tonga  nor  English. According to the New York Times, the managers fired on the  workers, wounding thirteen of them.52

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10 The Chimera of Progress in Latin America By the last decade of the twentieth century Latin America had reached the end  of an era. The countries with the most advanced economies had undergone an  industrial revolution and many of the others had tended to follow in their  train. This revolution was impelled by a desire for independence: the international economy, it was argued, was based on a form of “neo-colonialism”  because raw materials and foodstuffs were traded for high-value industrial  imports, an exchange that was thought to entail subordination to the interests  of the developed world. Edwin Williamson, The Penguin History of Latin America 

introduction

Africa  and  Asia  had  been  tinctured  with  colonialism  from  the  mideighteenth to the mid-twentieth centuries, and direct foreign rule had  lasted until after World War II. By contrast, the Age of Empire in Latin  America had ended, for the most part, by the 1820s.1 Thereafter, for  the  rest  of  the  century,  the  republics  of  South  and  Central  America  enjoyed  a  slow  swelling  of  demographic,2  political,  and  economic  growth, sometimes with surprising spurts, but still marked by a social  system that reflected the values of pre-industrial times and an economy  that  was  essentially  still  mercantilist.  Indeed,  into  the  twentieth  century all Latin American economies remained resolutely based on food  and beverage processing and textile production. We might think of the  nineteenth and early twentieth centuries as the Golden Age of cocoa,  copper, and corned beef. Industry was still waiting for leadership from  a class of national capitalists. In  1800,  according  to  Victor  Bulmer-Thomas,  Latin  America  had  been the richest part of the Third World.3 A century later, following a  surge in the growth of world trade that had begun in the middle of the  nineteenth century, many of the states of Latin America, especially those 

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that had substantial populations, such as Mexico, Argentina, and Brazil,  still enjoyed glittering prospects. Argentina had the highest GDP growth  rate in Latin America; in 1913, its per capita income was higher than  both France and Germany. Its agricultural labour force had shrunk to  34.2  per  cent  of  the  total;  that  of  Canada,  by  comparison,  was  37.1.  And like Canada, a limitless agrarian frontier could only make farming  more successful. But Canada had nothing to compare to the capital of  Argentina: “Buenos Aires was comparable only with New York in vitality  and  modernity  in  the  New World,  a  thriving  cosmopolitan  centre  unique in Latin America.”4 By 1919 it had a population of two million.  In 1921 Montreal, Canada’s largest city, had a population of 619,000. Brazil,  the  largest  state  in  Latin  America,  was  more  populous  and  prosperous than Portugal by 1800. Like Argentina, that both Uruguay  and Chile looked good to prospective European emigrants was in part  due  to  their  homogeneous  and  largely  European  populations,  their  swelling  urban  centres  and  their  substantial  agricultural  and  mineral  exports. Brazil’s population was, by contrast, remarkably mixed because  of its former slave population, yet, like Argentina in the 1880s, it attracted  200,000 emigrants a year.5 Between 1939 and 1945 Chile’s rate of GDP  growth  was  an  impressive  4  per  cent  and  Mexico’s  a  sizzling  6.2  per  cent. In Latin America, Chile had an exemplary tradition of democratic  elections, while Mexico avoided the fate of dictatorship altogether after  1910.  Europe  in  the  first  decades  of  the  twentieth  century  was  lashed  by  hurricanes  of  political  turbulence  and  economic  uncertainty:  rising  nations, collapsing empires, teetering states, seething enmities, civil wars,  fugitive  populations,  financial  crisis.  No  wonder  Europeans  as  well  as  Levantines (especially Syrians) fled in their millions to the New World. In spite of Latin America’s independence, however, both the smaller  states and the larger ones continued to be the victims of foreign, and  especially  US,  intervention.  Here  we  might  again  usefully  apply  the  word “neocolonial,”  as  Williamson  does  (in  quotation  marks)  in  the  opening  paragraph  of  this  chapter.  What  the  term  refers  to  in  Latin  America  was  control,  by Washington  and Wall  Street,  of  local  oligarchies willing to accept the American Way, but not actual colonial government.  Given  the  impulsion  to  independence,  some  arm-twisting  if  not actual dismemberment was always necessary. Amputation had been  the  fate  of  Mexico,  which  lost  its  northern  provinces  to  the  United  States in the mid-nineteenth century. It was the fate, too, of Columbia  in 1903; for it was from Columbia that Panama was torn by force so  that the Americans could build and control a canal there. Panama thus 

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became  an  American  invention,  the  Washington  equivalent  to  the  British-controlled Canal Zone in Egypt, over the control of which, as we  have seen, the British and their French and Israeli allies were willing to  go to war in 1956. In  the  decades  that  followed  the  Spanish-American War  (1897–98)  Washington held on to Puerto Rico outright and continued to exercise  neocolonial  control  over  Cuba.  Elsewhere  in  the  Caribbean  Basin  it  came and went at it pleased. How many times did the United States send  its gunboats and Marines to Latin America, often to topple reforming  governments? In the enumeration of Greg Grandin, over six thousand times and perhaps a dozen times since 1945.6 Any comparison between the Old World and the New, or, at least, the  New World south of the Rio Grande, has to take into account the matter  of  social  status,  that  is,  the  connection  between  class  and  race.  In  Brazil race mattered most, and whiteness was especially treasured. Yet,  in Spanish America as a whole, only 18.2 per cent of the population was  defined as being white in 1825, while 28.3 per cent were seen as mulatto,  or  mixed-blood. The  Indian  population  was  still  as  high  as  41.7  per  cent. The point here is that Latin America on the cusp of independence  was hardly pure laine European in its pigmentation. This influenced the  attitudes  towards  race  that  Latin  American  intellectuals  adopted,  fitfully, from Europe. And ideas of race were not all that was imported  by Latin America’s ruling groups: dreams of Progress and fears of what  we now call “underdevelopment” too preoccupied them. “Throughout  Latin America the landowners, merchants, entrepreneurs and intellectuals who constituted the local ruling classes and elites dreamed only of  achieving  that  progress  which  would  give  their  countries,  which  they  knew to be backward, feeble, unrespected and on the margins of western  civilization  of  which  they  saw  themselves  as  an  integral  part,  the  chance to fulfil their historic destiny.”7 As we have seen elsewhere in the Third World, virtually all improvements on the road towards Progress were thus tied to economic development.  Development  meant  change  and  this  was  problematic  for  the  oligarchs such as the rural landowners and, of course, their allies in the  Catholic Church, as well as the established middle class. But it was just  the opposite for the urban workers and immigrants. For much of the first  half of the twentieth century, even in spite of nascent industrialization,  the middle class, in between the oligarchs and workers, remained relatively small, the working class even smaller, and the peasantry, including  especially landless peasants, massive and apparently immovably large. In 

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Argentina, for instance, where the middle class was the largest, it comprised only 30 per cent of the total population, and in Mexico, while the  middle class of clerks and small proprietors numbered about a million,  and the working class about a third of this number, there were eight million tenants, sharecroppers, and agricultural labourers. As for the bourgeoisie, in no country was its membership even 1 per cent of the total.  Yet,  the  wealth  of  its  bourgeoisie  sometimes  remained  spectacular  –  which we are reminded of by the fact that the richest man in the world,  Carlos  Slim  Helú,  who  made  his  fortune  through  the  privatization  of  Mexico’s telecommunications, is a Mexican of Syrian origin.  Another similarity between Latin America and Western Europe was  the difference between states, that is, national differences, and this too  was connected to national economic development. Between the richer  and the poorer Latin American countries there has normally existed a  chasm almost as great as between, say, the middle class and the landless  agricultural  majority.  So  while  some  states  like Argentina,  Chile,  and  Uruguay  were  in  economic  and  cultural  terms  equal  to  the  middling  states of Europe, others were shockingly backward in economic terms  – more Albanian or African than European. Ecuador, for instance, had  never had a census; Bolivia in the early 1960s not had one since 1900,  and even Uruguay had not had one since 1910. The  gap  between  advanced  and  backward  states  has  taken  a  long  time  to  close. To  leap  ahead  to  the  present  century,  according  to  the  UNDP  Human Development Report 2007/2008,  while  the  per  capita  GDP of Mexicans was $10,751, that of Guatemalans was less than half  of that ($4,568) and Nicaraguans even less again ($3,674). Nowhere in  Europe, especially since 1945, has the chasm between states remained  so great.8  To continue to discuss the second half of the twentieth century, a further difference relates to the matter of Latin America’s share of world  exports. While Europe’s global exports increased from the end of World  War II, those from Latin America, even given the strong growth of the  world  economy  in  the  1960s,  actually  dropped  in  the  three  decades  between 1946 and 1975. In 1946 Latin America produced 13.5 per cent  of  the  world’s  exports.  By  1975  this  percentage  had  fallen  to  4.4  per  cent.9 What we are left with, then, is a sense of continuing inequalities  between social classes, between the states of Latin America and between  the rich states of Latin America, like Argentina and Chile, and those of  the  advanced  capitalist  world,  for  instance  the  G7,  like  Canada  and  Italy.  Such  inequalities  are  hardly  decreasing  for,  except  for  a  narrow 

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strata of the very rich and a part of the middle class, Latin Americans  have become, compared to Euro Americans, relatively poorer. In 1970  there were 116 million people classified as poor in Latin America, that  is, 40 per cent of the total; in 1999 this number had risen to 211 million,  44 per cent of the total. More than half the population of urban Mexico  and nearly a third of the rural population lived below the poverty line  in 2001.10 The increase in poverty is bound to be connected to other  changes. By the first decades of the twentieth century two shifts had in  particular matured. First of all, throughout the late nineteenth century,  agriculture  had  become  increasingly  commercialized  while  ownership  had  become  more  concentrated.  Fewer  owners  thus  possessed  larger  holdings,  a  class  of  middling  farmers  had  emerged,  and  the  landless  were reduced to either selling their labour in the agricultural sector or  migrating  to  the  cities.  This  urban  migration  was  relentless;  in  1919  Buenos Aires, the largest city in Latin America, had two million inhabitants.  By  1950  it  had  4.6  million,  and  by  2004,  12.6  million.  Mexico  City  had  2.9  million  in  1950  and  22.1  million  in  2004.  Millions  of  these lived in slums. Of Brazil’s urban population, 36.6 per cent, that  is,  51.7  million  people,  lived  in  slums;  the  figures  for Argentina  are  33.1 per cent and 11.1 million.11 Among other changes, urbanization  sounded  the  knell  for  the  control  the  Catholic  Church  had  over  the  rural population. The second change was that in parts of Latin America the plantations  on which such commodities as sugar, bananas, and coffee were grown  had come to be owned by foreign firms, such as United Fruit in Central  America, one of the earliest American multinational food companies. So  powerful were these companies that they overshadowed and dominated  the host governments of smaller countries like Guatemala or El Salvador.  These became “banana republics,” countries dependent on one or two  export crops that were held in bondage by foreign owners who collaborated with oligarchies, an extreme example being the fourteen families  (“los catorce”) that ruled El Salvador. The  members  of  the  landowning  gentry  in  most  Latin  American  countries like Argentina were typically, if not inevitably, conservative, in  that they feared social and gender equality and democracy and looked  upon industry, and the nascent working classes, as a threat to the status  quo. They naturally detested the reforms implemented by Juan Perón in  Argentina and Getúlio Vargas, “the father of the poor,” in Brazil after  World War II. Among their allies was the clergy in the upper reaches of  the  local  Church  and  the  army.  Behind  the  Church  was  the  Vatican, 

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politically  as  well  as  architecturally  still  living  in  the  Baroque  Age  of Absolutism and the Counter-Reformation. Even when the popular  priests of El Salvador, Guatemala, and Nicaragua were being murdered  by thugs supported by landowners in the 1980s, the Church in Rome  remained  diplomatically  mute.  Rome’s  backing  of  the  status  quo  wavered for a decade from 1968 to ’78 during the period of “liberation theology” but then returned with the certainty of a habit of centuries to its antagonism of any threat of change. the meanings of development

From the end of World War II up to the present Latin America has been  a cauldron of relentless and violent struggles. Whereas Western Europe,  including Spain, Portugal, and even Greece, as they prospered over the  decades  after  the  1970s,  became  increasingly  democratic  and  stable,  Latin America  has  been  visited  by  a  continuous  turbulence  at  several  levels that reminds us of persistent social inequality, uncertain economic  development,  exaggerated  demographic  change,  unremitting  foreign,  and especially US interference, and even, considering the drug wars in  both Columbia and Mexico, civil war.12 Prior to the Depression in the 1930s Latin American economic development had been based on the economic theory of comparative advantage that celebrated free trade based on the export of minerals, sugar,  stimulants,  beef,  and  cereals.  Free  traders  despised  protectionism.  By  contrast, the Canadians had established high tariffs as early as 1879 and  behind protective walls had built the steel industry that sustained the  national  railway  system  and  turned  Canada  into  one  of  the  world’s  leading farm equipment manufacturers. The British called the system by which they had dominated the economies of Argentina and Uruguay up to World War II “free trade imperialism.” The British were the main global importers of meat, comprising,  in 1921, 94 per cent of the global market. Some 90.7 per cent of British  beef came from Argentina.13 The British ambassador in 1929 boasted  that “Argentina  must  be  regarded  as  an  essential  part  of  the  British  empire.”14 Washington took up free trade as it gradually became preponderant in the whole of Latin America. It is easy to see why; free trade  made countries dependent on export markets, and the domestic market  of the United States was the world’s largest. Free trade theory, especially  in the case of the more advanced Latin American economies, gradually  gave  way  to  the  rival  theory  of  import  substitution  industrialization 

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(ISI) that became the most influential and durable nationalist strategy  for industrialization in the decades between the 1930s and the 1970s.  As  a  program  for  economic  development,  ISI  had  become  popular  due to the falling prices of staples and the corollary unavailability and  rise in the price of imported industrial goods during the Depression and  World War II. It became apparent that if countries were to break the  chains of agrarian backwardness and feebleness, if the increasing numbers of Latin American urban dwellers were to have employment, and,  if  all  classes  were  to  have  the  basic  manufactured  goods  for  which  they  yearned,  these  would  have  to  be  made  at  home,  not  imported.  “Industrialize” thus became the mantra, and ISI, the blueprint. The success of ISI was ambiguous and is still the subject of debate.  Most liberal economists and historians have consigned it to the oblivion  of  failed  economic  theories,15  although Alice  H. Amsden  has  recently  provided a forceful rebuttal that has made the point that its successes  have been systematically diminished by its opponents, notably including  the World Bank and the IMF, both of which have advanced their own  programmes in favour of neoliberalism.16 And Dani Rodrik has affirmed  that  “the  overall  record  of  ISI  was  in  fact  rather  impressive.  Brazil,  Mexico,  Turkey,  and  scores  of  other  developing  nations  in  Latin  America,  the  Middle  East  and Africa  experienced  faster  rates  of  economic growth under ISI than at any other time in their economic history. Latin America grew at an average rate exceeding 2.5 per cent per  capita between 1965 and the early 1980s – a pace that far exceeds what  the region had registered since 1990 (1.9 per cent).”17 Yet, Raúl Prebisch  (1901–1986), the Latin American economist who most resembled J.M.  Keynes, and who was prominent over the whole epoch from the 1940s  to the 1980s, while acknowledging that all economies needed protectionism  in  some  form  in  the  early  stages  of  industrialization,  thought  that import substitution industrialization in the form that it had been  advocated by Juan Perón in Argentina was a disaster. It  is  at  least  arguable,  thus,  that  ISI  worked.  The  more  advanced  economies  did  industrialize  although  as  late  as  2000  primary  commodities still accounted for two-thirds of the Latin American exports.  Mexico  was  the  exception;  its  exports  of  primary  products  dropped  from 87.9 to 16.5 per cent between 1980 and 2000. In the same period  Argentina’s primary products exports dropped from 76.9 per cent to  67.9 per cent, although Argentina remained, as in the nineteenth century, linked to the rest of the world by means of the main components  of hamburgers – beef and wheat. Over the same period (1980–2000) 

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Brazil’s primary product exports dropped from 62.9 per cent to 42 per  cent and Chile’s only from 88.7 to 84. ISI, as much in Latin America as in Turkey or India, involved, as a first  step,  substituting  basic  imports  for  locally  produced  light- industrial  equivalents. These often required the most limited of technologies and  were for the lowest end of the markets. Typical early ISI manufactures  were soap, beer, matches, shoes, textiles, and metal goods. At the next  step came the more complex products of heavy industry in which massive investments from the state were necessary; refrigerators and cars,  for  instance,  required  steel,  and  steel  mills  needed  state  subventions.  The  problem  remained,  however,  that  even  heavily  subsidized  goods  were of low quality or unfashionable – like the Ambassador motor cars  made in India or the Skodas of Czechoslovakia. They could not compete internationally so could not be exported. Since ISI industries were  usually uncompetitive, they had to be kept on life support by state loans.  These would have to come from the export of primary products, at least  in the short term, and on loans, usually from foreigners. On the other  hand, ISI did yield gains in other respects. Among these was the nurturing of a working class that not only enjoyed the benefits of full employment  but  was  bound  to  become  more  healthy,  better  educated,  and  politically more quiescent. Throughout Latin America during the heyday of ISI, informal employment – that is, employment that was insecure and less than full-time – was reduced from 29 per cent to 21 per  cent. By the end of the twentieth century, with the abandonment of ISI,  these employment rates had swung back as informal employment rose  vertiginously to 57 per cent of the work force of Latin America and four  out of five newly created jobs.  ISI  worked  most  obviously  in  the  larger  economies.  In  the  period  1950–60, for instance, average GDP growth for the twenty largest Latin  American economies was 5.3 per cent. By the 1970s manufacturing had  become  a  significant  sector  in Argentina,  Brazil,  Chile  and,  especially,  Mexico. The growth rate of communist Eastern Europe in this period  was 4.0 per cent, Southern Europe’s was 4.8 per cent, and Asia 2.6 per  cent. The gap between Latin America and East Asia widened thereafter,  with the Asians abandoning ISI and adopting export-led industrialization. In the last quarter of the twentieth century, the gap between Latin  American and East Asia growth rates widened dramatically.  Should  we  describe  ISI  as  “socialistic”?  Strictly  speaking,  no;  we  should distinguish between “statism” or “dirigisme” and “socialism.”  “Statism”  or “state  capitalism”  refers  to  the  role  of  the  state  in  an 

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economy  that  is  capitalist.  In  many  Latin  American  states,  the  state  owned the oil and mining companies, banks, railways, and elements of  heavy industry. To develop these productive facilities the state borrowed  heavily on international markets which, on the whole, loaned willingly,  even enthusiastically.  One striking exception to the spread of ISI: neither under the Batista  dictatorship  nor  under  that  of  Castro  did  the  Cubans  implement  its  strategies. Until the late twentieth century, the Cubans remained dependent on the export of a single commodity, sugar, the export of which to  its  natural  US  market  had  been  closed  off  by  an  embargo  for  five  decades. For three of those decades, Cuba was sheltered by trade agreements  with  the  Soviet  Union. With  the  abandonment  of  communism  and the implosion of the Soviet Union, the Cubans were forced to switch  from sugar to tourism as the major source of foreign exchange. Cuba’s  exports now included sunburned Canadians.18 The 1980s, a “lost decade” in Latin America as well as Africa, marked,  simultaneously, the last gasp of the Cold War and the last hurrah of a  period of nationalist developmentalism as, under the powerful influence  of the Washington Consensus, ISI went out the door and neoliberalism  was  welcomed  in. Those  who  had  been  the  beneficiaries  of  ISI,  especially  the  unionized  employees  of  state-owned  enterprises,  had  their  security, their incomes, and their political rights wrenched from them by  military dictators and their successors. Having lost both, these workers  came to be at the mercy of market forces. Celebration  of  the  market  as  the  most  rational  and  therefore  most  irresistible force in the economic life of humankind had become universal from the 1970s. By the 1990s, even in the formerly statist economies  of Eastern Europe “the market” replaced the idea of “the plan” (as in  the form of the “Five Year Plan”). In Latin America, it was Chile, ruled  from 1973 by a military junta that had seized power from reforming  socialists  that  became  the  first  and  the  most  famous  example  of  the  new  orthodoxy.  Its  practitioners  were  graduates  of  US  economics  departments, especially that of the University of Chicago, where Milton  Friedman,  the  Moses  of  neoliberalism,  ruled.  Economic,  not  political  ideology,  had  thus  taken  over  from  ISI  as  the  pennant  under  which  national capitalism marched. It had required violent political force with  the usual subjects being tortured and murdered to destroy both working  class power and ISI, to clear the path for its triumph of neoliberalism.  While Chile thus became neoliberalism’s Latin American role model, it 

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was Brazil, however, that was to overshadow the rest of the continent in  terms  of  economic  growth  and  to  become  in  the  twenty-first  century,  alongside Russia, India, and China, fellow members of the BRIC group,  a global power. dictators

Now as the quest for development ran into increasingly heavy weather  from the 1960s, the temptation to turn to the strict rule of the military  increased, especially among large and small businessmen. Dictatorship  had been as common in independent South America in the nineteenth  and early twentieth centuries as it was in Eastern and Southern Europe.  While receding in most of Europe, it flickered on and off again in Latin  America between the mid-‘50s and mid-‘70s. Its military form came to  be known as “praetorianism.” As in Spain and Portugal, the Church and  much of the middle class stood foursquare behind the praetorians. We  shall  mention  in  a  separate  section  below  the  case  of  the  army  overthrowing the elected governments in Argentina in 1955 and 1976,  Brazil in 1965, and Chile in 1972. Any perusal of the backgrounds of  the army officers who assassinated democracies and tortured dissidents  will provide us with haunting reminders of the ideologies that sustained  fascist regimes in the Europe of the 1930s from that of Franco in Spain,  through  Mussolini  in  Italy  to Antonescu  in  Romania:  Catholic  piety,  unflinching  patriarchism,  social  insecurity,  and  especially  the  loss  of   status, class, and race hatred, fear of the popularity of communism and  socialism. The parallels between the military regimes of Latin America  of  the  1970s  and ‘80s  and  the  fascist  dictatorships  of  Europe  in  the  1930s and ‘40s were obvious to the officers within US military intelligence who – while supporting repression in Latin America – described  DINA,  the  Chilean  secret  police  organization,  as  a  “modern  day  Gestapo.”19 Like General Francisco Franco, who ruled Spain from 1939  to  ’75, Augusto  Pinochet  who  seized  power  in  Chile  in  1973,  bathed  himself in Catholic piety: “Everything that I did, all that I carried out,  I dedicate to God,” he professed. The most profound political effect of the coups of the dark period of  military authoritarianism that lasted from the 1960s to the early 1980s  was  the  suppression  of  political  populism,  that  is,  the  ideology  that  sought to include and incorporate the working class in partnership with  a tamed bourgeoisie and a paternalistic state. As Patricio Silva writes,  “The military dictatorships inaugurated in the 1970s inflicted a major 

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blow to the politics of populism, based on clientelistic relations between  the state and civil society. Indeed, populism suffered a significant psychological defeat as many people, right or wrong, internalised the view  that  populism  had  been  one  of  the  main  causes  of  the  economic  and  political crisis that had preceded the breakdown of democracy.”20  But  the  praetorians  who  took  power  in  their  own  hands  in  Latin  America had a shorter life span than their brethren in Iberia. Once populism had been destroyed, the political left murdered or jailed, and the  ISI system dismantled, their job was done. It was just a matter of time  before  oblivion  beckoned.  But  it  was  obviously  difficult  for  them  to  know when their time was up and their usefulness to Washington at an  end.  Thus,  when  the  Argentine  generals  went  to  war  with  Britain  in  1982 over the Falklands (or “Malvinas,” to give them their Argentine  name),  it  was  Margaret  Thatcher,  Reagan’s  ideological  twin,  that  Washington backed, abandoning the generals to auto-destruction and  the ultimate ignominy of being reviled and then put on trial. democratization

One after another, the dictatorships that characterized the larger states  of  Latin America  in  the  1980s  were  thus  dissolved  by  a  combination  of  their  own  incompetence  –  military  and  economic  incompetence  in  the  case  of  Argentina  –  the  disapproval  of  the  West  and  especially  Washington where under President Jimmy Carter (r. 1976–79) human  rights were especially stressed. Military rule thus ended in Argentina in  1983, in Brazil in 1985, and in Chile in 1988, while the Duvalier regime  in Haiti had come to an end two years earlier. The decade of Third and  Second World democratic change – the “third wave of democratization”  – had thus washed against the shores of Latin American. Would democracy lead to economic betterment to the poor and the destitute? The  civilian  regimes  that  followed  the  militaries  were  led  by  politicians  who  became  the  prefects  of  the  new,  post-ISI,  developmental  regimes centred on neoliberalism. These regimes acted under the supervision of the World Bank and the IMF but most of all served the multinationals. The neoliberalism that they installed disparaged any kind of  economic protectionism and opened up all economies to the unfettered  penetration of foreign capitalism. In return, the promise of neoliberalism was that trade now loosened from the fetters of statist interference  would stimulate foreign investment and, no less importantly, new loans  to pay off earlier loans. More capital would be made available by the 

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selling off, that is, privatization, of state-owned enterprises; the family  silver  would  go  to  pay  off  the  mortgage.  This  global  phenomenon,  which began in most countries in the 1980s and continued more vigorously with the “shock therapy” that was applied to the former USSR,  peaked  at  the  beginning  of  the  twenty-first  century  (but  not  in  Chile,  where it had been applied right after the 1972 coup) with Latin America  selling  off  more  public  assets  than  any  other  region.  Ownership  and  control  of  banks,  telecommunications,  oil,  gas,  petrochemicals,  and   utilities such as water, transport, and electricity, were sold as part of a  squandermania  that  was  visited  on  Argentina,  Brazil,  Mexico,  Peru,  Bolivia,  Venezuela,  and  Paraguay.  The  few  grew  fabulously  rich;  the  global  oligarchy  expanded  as  never  before.  The  master  blueprint  of  the World Bank showed that, in Russia and Eastern Europe as well as  Latin America, there would be “irreversible reform,” that is, the virtual  annihilation  of  the  state  as  a  player  in  developing  economies.  This  would amount to what was effectively the end of history, or at least a  chapter of history. But what eventuated by the beginning of the twentyfirst century was greater inequality, widespread protest, and galloping  anti-Americanism.  Intervention and the “transition to democracy” was a double-stroke  mechanism. While Washington urged its former right-of-centre favourites  to  relinquish  the  power  that  they  had  usurped,  it  also  gave  short  shrift to reformers that it distrusted, all the more so if they ruled over  the tiny and virtually defenceless states of the Caribbean Basin. Thus,  while over the decade 1979–90 the CIA continued to support “contras”  against the revolutionary government of Nicaragua, in 1989 it made it  clear that a “free” election was expected. This was an election that the  revolutionary Sandinista regime could not win, since Washington let it  be  known  that  if  they  did,  blood-letting  would  continue.  Earlier,  in  1983,  the  US  had  launched  a  full-scale  air  and  sea  invasion  of  tiny  Grenada, and in December 1989 US forces invaded Panama and “took  out”  its  corrupt  dictator,  Manuel  Noriega,  a  drug-dealer  and  moneylaunderer and  formerly a key US ally. Later, in 2004 the US and its allies,  including  Canada,  deposed  the  popular  and  reforming  president  of  Haiti,  Jean-Bertrand Aristide,  while  few  years  later,  in  2009,  the  State  Department  was  active  in  the  overthrow  of  the  democratically  elected  regime in Honduras. It failed, however, in its attempt at “regime change”  in Venezuela, as we shall see below.21  From the decade that began with the first invasion of Iraq in January  1991  and  which  continued  through  the “War  on Terror”  in  Iraq  and 

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Afghanistan, Latin America ceased to be, in the minds of the strategists  in Washington,  a  zone  of  crisis,  a “hot”  place.  It  had  obviously  been  decided,  as  President  Nixon  had  once  suggested,  that  Latin  America  didn’t really matter, at least by comparison to the Middle East and what  later became known as “Afpak,” the northern tier of South Asia. And  then there was North Korea and China. For Latin Americans, on the other hand, the  sense  of  crisis has persisted. Although the dictators and the death squads had disappeared, the  questions of debt, of economic development, and of national sovereignty  lingered on. In the pages below I will give an account of Argentina (population:  40.5  million  [2010]),  Brazil  (population:  195  million  [2010]),  and Mexico (population: 113.5 million [2010]) that together comprise  60 per cent of Latin America’s 500 million people. I will add a note on  Cuba (population: 11.25 million [2010]) mainly on account of its radical  exceptionalism to the rule of hemispheric capitalism. iou

By  1980  Brazil’s  foreign  debt  represented  259  per  cent  of  its  annual  foreign  earnings.  In  common  with  other  governments  in  the  region,  civilian  and  military,  the  Brazilians  had  fallen  into  deep  debt  while  attempting to industrialize and/or modernize their military and keep the  population contented or, at least, under control. Right across the region,  spending  increasingly  came  to  rely  on  loans.  Runaway  inflation  followed and financial ruin beckoned. By mid-1982 the economic fortunes  of Latin America had hit bottom. Growth fell from 5.8 per cent in 1980  to 1.2 per cent in 1981. “From a region of global promise Latin America  became  synonymous  with  problems  –    debt,  dictatorship,  depression,  and drugs – and its leverage became the humiliating threat of international financial insolvency.”22 The  IMF  and  the Western  banks  were  now  in  the  driver’s  seat  and  stepped in with programs of structural adjustment – often referred to as  “free market reform” – which offered more loans only in return for a  commitment to financial stringency and deregulation, notably the withdrawal of the state from the economy. In the short term, at least, this  worked. By the 1990s, inflation had been reduced, public debts diminished,  and  subsidies  phased  out.  Those  who  supported  the  new  economic  regimes  applauded  noisily  in  the  media  and  on  the  political  hustings.  Gone,  however,  were  the  dreams  of  industrialization  –  the  key words became “comparative advantage” and “cheap labour.” Latin

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Poverty and destitution in Latin America, 1980–2002, as a percentage   of total population  Below Poverty Line

Below Extreme Poverty Line

Year

Total

Total

1980

40.3

18.6

1990

48.3

22.5

2000

42.5

18.1

2002

44.0

19.4

Comparison of growth by regions (% average annual growth rate) 1965–80

1980–89

1990–2000

World

4.1

3.1

2.6

Latin America

6.1

1.6

3.3

Sub-Saharan Africa

4.2

2.1

2.4

East Asia

7.3

7.9

7.2

South Asia

3.7

5.1

5.6

(All figures from Robinson, Latin America and Global Capitalism, 252, 254, 255)

America’s  fate  was  now  to  revert  to  production  for  export,  using  unskilled manpower, of cheap food, and raw materials – copper, iron  ore,  grapes,  soy,  beef,  fish,  as  well  as  oil  and  gas.  In  the  cities,  now  devoid of public services, unemployment increased and slums festered.  In the countryside, agribusinesses increasingly took over the land while  smallholders were driven into the cities, as well, in the case of Mexico  and  Central  America,  across  the  Rio  Grande  into  the  United  States.  Some,  in  Bolivia  and  Columbia,  found  salvation  in  coca  production.  Yet, as we shall see in the case of Argentina, economic crisis continued. Brazil and all the countries that subscribed to this program were now  leaner  and  meaner;  some  businessmen  had  made  monstrous  profits  from  purchasing  state  assets  at  fire-sale  prices;  and  the  poor  were  on  their own. So were the workers whose jobs had disappeared or had been  turned from full to part time; this struck the Chileans first, of course, as  Chile  was  the  nursery  for  continental  neoliberalism.  And,  of  course,  inequalities became even more manifest. “Chile, one of the richest countries with the best record of free-market reform, had an index of inequality  worse  than  Nicaragua  or  Honduras  and  roughly  the  same  as  Guatemala, the three poorest and most backward countries, and Brazil,  the region’s economic giant, was the third most unequal after Paraguay 

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and Bolivia.”23 Nevertheless, if the situation appeared stable, especially  as a consequence of the expansion of world trade from 2002, it changed  quite dramatically as capitalism lurched into crisis in 2007. argentina

Argentina  has  claim  to  a  certain  fame  as  the  home  of “Peronism,”  a  populist  ideology  that  stressed  cooperation  as  opposed  to  conflict  between the state, capital, and the unionized working class. Juan Perón,  a colonel who was first elected in 1946 and then again in 1951 and,  after an exile of eighteen years, in 1973, stressed the division between  the rich and the poor: “Argentina was a country of fat bulls and undernourished peons,” he said in 1946. To fatten the peons he allowed wage  hikes – 12.6 per cent in 1947 and 5.3 per cent in 1948 – while fixing  the prices of farm products. Naturally, the burguesía pampeana detested  him,  never  more  than  when  a  Perónista  crowd  pillaged  the  Jockey  Club, their cherished haven, or Perón abandoned his alliance with the  Church, legalized divorce, and put parochial schools under state control. Slightly more reasonably, they blamed him for the farming crisis  of the late 1940s and early ‘50s. Nor was he a favourite of foreigners;  he nationalized the albeit run-down British-owned railway system, the  American-owned  telephone  company,  and  the  French-owned  dock  facilities. In 1947 he paid off the whole of Argentina’s foreign debt. All  of these nationalist and of course popular moves were, as we shall see,  later reversed, and Argentina became, once again, foreign-owned and  profoundly indebted.  Perón  had  succeeded,  at  least  for  a  brief  moment,  in  guiding  the  Argentine state along a developmental path that saw the country continue as an economic leader in Latin America. He did this during the  first decades of the Cold War when local conservatives, largely within  the  upper  and  middle  class  and  especially  within  the  army  and  the  Church,  were  preoccupied  with  preventing  the  radicalization  of  the  working class, and especially its shift in the direction of nationalism and  socialism. The undoing of Peronism came when he, and his third wife,24  Isabel,  who  succeeded  him,  were  overthrown  in  a  military  coup  in  March 1976, a dozen years after that in Brazil in 1964. But  Peronism  was  more  than  developmentalism  plus  anti-American  populism,  and  this  is  why  certain  quite  liberal  economists,  as  well  as  nationalists, disliked it. While Latin America’s most eminent economic 

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planner,  Raúl  Prebisch,  supported  import  substitution  he  looked  askance  at  Perón’s  actual  program  that  involved  printing  money,   subsidies, a bloated public sector, unrestrained military spending, and  the support for uncompetitive small industries throughout the country.  It  was,  he  thought,  a  sure  recipe  for  inflation,  debt  and,  ultimately,  economic constipation. Isabel Perón was replaced by the army chief of staff, General Jorge  Videla, who turned out to be one of the most implacable monsters in the  political history of Latin America. The years between 1976 and 1983  were the most agonizing in Argentine history; for this was the sunless  age of military rule, dungeons, and mass terror. Of Videla, the American  columnist Jack Anderson claimed that he was “one of the most flagrant  violators of human rights since the mad dictator of Uganda, Idi Amin.”25  In these few years, roughly the same span of time in which the Nazis  dominated  Germany  (1934–45),  as  many  as  30,000  Argentines  were  murdered  by  state-supported  death  squads  while  hundreds  were  tortured and thousands were terrorized. For those whom they destroyed, a  new term was invented, los desaparecidos (“the disappeared”).26 In the  view of Edgar Dosman, Argentina’s descent into barbarism under Videla  and his successor was worse than that of Chile.27 The military hierarchy of Argentina and the death squads that they  commanded were linked to their opposite numbers in Chile, Uruguay,  Brazil, and Paraguay through Condor, a Washington-supported state  terrorist organization that served as a continent-wide Gestapo in the  Southern  Cone.  Through  the  Condor  organization  these  five  states  became involved in “committing human rights violations on a massive  scale never before seen in Latin America.”28 Washington may have been  on  the  whole  uneasy  about  dictatorship  and  about  the “Dirty  War”  waged by the Condor organization but for the most part accepted both,  as a Cold War necessity, at least until assassination of Latin American  dissidents  moved  to  US  soil.  The  matter  of  the  long  arm  of  Latin  Americas dictatorship came to a head when Orlando Letelier, Chilean  minister  of  foreign  affairs  under  Allende,  was  assassinated  by  a  car  bomb in the middle of Washington, DC in September 1976. The bomb  was  placed  by  an  agent  of  the  Chilean  secret  service,  DINA,  that  was  connected with the Condor organization. Beneath the politics of repression lay the economics of crisis. Already  by the mid-1950s, Argentina had entered a period of increased uncertainty with per capita income barely growing at the low rate of 1.3 per  cent, less than half of that of India. By the 1960s, inflation had reached 

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30 to 40 per cent. As incomes and purchasing power dropped, the spectre  of stagnation loomed and political confrontation increased. The generals  who stepped in could not solve the problem of stagnation; they could,  however, try to hold the lid down on protest and thus on the incomes of  the working class. But even here their capacity for problem-solving was  bound to be limited. Running out of options, they finally went too far  by engaging Britain in a war over the Falkland Islands (las Malvinas) in  1982. The chant “Las Malvinas son Argentinas” was bound to fall short  against the British military, which was one of NATO’s most practiced and  well-armed and had long traditions of slaughtering people in the global  South. The war, an oddity inasmuch as it was between two of America’s  most dogged allies, was calamitous for the generals who trooped off the  stage in disgrace to later be indicted on charges of crimes against humanity. With its termination came the return of the same cycle of ineffective  politics that had been suspended when the military intervened.  The first civilian politician to become the president of Argentina after  the period of military rule was Raúl Alfonsin, who took office in December  1983.  Two  years  later  a  civil  court  sentenced  five  of  Argentina’s  former military leaders to prison.  By this time – with the “lost decade” of the 1970s behind them – neoliberalism was being touted globally. Its advocates? Locally, the Peronista  faithful,  now  marching  behind  the  banners  of  the  newly  invented  Justicialist Party, and the leadership of Carlos Menem (r. 1989–99), a  conservative infatuated with the ideas of Margaret Thatcher, one of the  new ideologies’ main proponents. Following the neoliberal program of  Thatcherism  and  Reaganism,  the  Argentine  economy  was  now  flung  open to foreign investment  and  ownership and the assets of the state  sold off at bargain prices – when Menem came to power, thirty-six of  the country’s most important firms were owned by foreigners; in 1998  when he exited, foreigners owned sixty-seven. “By 1994, 90 per cent  of all state enterprises had been sold to private companies, including  Citibank, Bank Boston, France’s Suez and Vivendi, Spain’s Repsol and  Telefonica.  Before  making  the  sales  Menem  …  had  generously  performed a valuable service for the new owners: they had fired roughly  70,000 of their workers.”29 The opening up of the Argentine economy after the years of nationalism and military rule saw a flood of foreign goods enter the country and  the possession of those with cash and credit. The middle class rejoiced,  the national debt, underpinned by IMF loans, skyrocketed, and corruption increased. Job losses went through the roof.

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Menem went down to defeat in 1999 and was followed by a succession of governments that could do no more than worsen Argentine’s economic problems. Riots and looting ensued while debt and capital flight  drained wealth from the country and the incomes of both the middle and  the working class – 24 per cent of bank deposits actually fled the country.  According to the daily La Nación, 56 per cent of the population lived in  poverty while 17 per cent found it difficult to have a single meal daily.  “Consumption even of basic foodstuffs has been declining in Argentina,  which is both a reflection of the continuing recession and one of the elements that is keeping it going; declining consumption has led to a string  of failures of businesses producing consumer goods. The IMF meanwhile  stepped in to bail the country’s economy – later admitting that this was a  mistake. “Argentina, once the wealthiest land in Latin America, was now  a showcase of economic and political bankruptcy.”30  “Comes the moment, comes the man.” After a fiscal crisis in 2002 during which the spectre of loan default loomed and anti-Americanism (in  the form of a revulsion for the IMF and Argentina’s US creditors) rose  from its grave, a new president arrived to save the day. This was Nestor  Kirchner,  a  minor  Peronist  functionary,  who  defaulted  on  Argentina’s  international debt,31 and later renegotiated it with lower payments, and  shifted the country’s foreign policy in a nationalist and radical direction  by  conspicuously  embracing  Fidel  Castro  and  Hugo  Chavez.  In  2006  GDP growth rose to a healthy 7.9 per cent, and the next year Kirchner  was succeeded by his wife, Cristina Fernandez Kirchner.  Yet  Perón’s  earlier  dream  of  greater  equality  was  still  far  short  of  realization. According to a 2007 survey, “of every $100 generated by  the process of economic growth [since 2003], $62.5 went to the wealthiest 30 per cent, leaving $37.5 to be shared out between the remaining  70 per cent of the population, the poorest 70 per cent of the population  gain[ing]  only  $12.8.”32  Poverty  remained,  in  2008,  at  34  per  cent,  higher  than  it  was  in  the  1990s. And  as  far  as  the  role  of  the  United  States  in  the  world  (including,  presumably,  Argentina),  a  Chicago  Council on Global Affairs Multinational Survey of 2007 disclosed that  84 per cent of Argentines rejected the idea that the United States “should  continue to play the role of pre-eminent world leader.”33 brazil

Brazil is the India of the Americas: massive, rich, unequal, invariably capitalist,  intellectually  radiant,  and  ecologically  disastrous.  The  difference 

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between the two is Brazil’s recent history of militarism and the forms of  child abuse: India is famous for its exploitation of child labour, Brazil  for its child sex tourism. Both are members of the BRIC group of emergent large economies. Under President Getúlio Vargas (r. 1930–45, 1951–54), a populist in  the image of Perón, a program of ISI was implemented that moved the  country  away  from  dependency  on  exports  like  coffee  and  towards  greater  industrial  production. This  led  to  a  shift  from  the  countryside  towards the cities like Sao¯ Paulo and Rio de Janeiro and to the growth of  both an urbanized working class and an expanded middle class. For the  rural oligarchs this was nothing if not bad news. For the state bureaucracy,  which  swelled  with  Vargas’s  dirigisme, the  news  was  all  good.  Vargas, however, could not keep his fingers out of the till; he committed  suicide while on the radio when his corruption was exposed. In Cuba,  Prío Socarrás had done the same thing in May 1947, but for a different  reason.  Vargas’s  attempts  to  sell  off  such  valuable  possessions  as  the  state-owned oil company, Petrobras, had met with resolute opposition.  “O Petroleo e Nosso” (“the petroleum is ours”), cried the nationalists.  Vargas’s  successor  was  Juscelino  Kubitschek  (r.  1954–60),  an  economic  modernizer  with  an  erector  complex  who  promised  fifty  years  progress in five and who built the new capital of Brasilia deep in the  country’s  hinterland.  Brazil  now  entered  one  of  its  periods  of  turbodriven economic growth with both the production of intermediate and  capital goods expanding. In 1964 a report for the Economic Council for  Latin America (ECLA) commented on the Brazilian state’s achievements:  it  owned  and  operated  most  inland  rail  and  waterway  transport,  its  petroleum  production,  its  steel  making  capacity,  its  electrical  energy  production, and its iron and steel production.  The end of Kubitschek’s tenure overlapped with the Cuban revolution and the corollary panicky shift of Washington’s attitude to Latin  America. This was made all the more critical by Brazil’s growing antiAmericanism. Janos Quadros (r. 1960–61) did nothing to quell American  fears when he legislated a tax on profits exported to the United States  and  cold-shouldered  the  American-inspired  “Alliance  for  Progress,”  meant to be an antidote to the inspiring effects of the Cuban Revolution  that  we  will  discuss  below.  Quadros’s  award  of  a  notable  honour  to  Che  Guevara  did  little  to  quell  the  fears  of  the  anti-communists. Yet  Quadros’s  tenure  as  president  lasted  a  mere  six  months  and  saw  the  beginnings of an intensification of CIA activities in Brazil. He was succeeded  by  his  vice-president,  the  populist  Joao “Jango”  Goulart,  who 

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saw himself as Vargas’s spiritual successor in the struggle to free Brazil  from foreign domination. Goulart was overthrown in a military coup  on  1 April  1964.  He  was  replaced  by  the  pro-American  reactionary,  General Humberto de Castelo Branco, a close friend of the CIA chieftain  General Vernon Walters. darkness

Dictatorship in Brazil lasted for two decades from 1964 and has been  considered the most dismal period in the history of the nation. Tens of  thousands were arrested, many of whom were tortured and murdered,  while the programme of ISI was abandoned in favour of opening up the  country  to  foreign  capital  and  especially  multinational  firms.  Growth  was furious; one spoke at the time of the “Brazilian miracle.” Business  writers hinted that the sacrifice of democracy was an acceptable price  for growth. The major beneficiaries of the miracle were, unsurprisingly,  those  in  the  top  deciles  of  the  population,  that  is,  the  rich.  The  top  10 per cent of the population absorbed a full 75 per cent of the total  gain in Brazilian income in 1964–75. By 1983 a government study was  able  to  show  that  70  per  cent  of  the  population  had  a  daily  caloric  intake “lower than necessary for human development.”34 One study in  the 1970s showed that the number of abandoned and needy children  was  as  high  as  fifteen  million.  Another,  focusing  on  the  north  of  the  country,  showed  that  nearly  45  per  cent  of  children  had  been  abandoned by their families.35 This was worse than India. The generals were shopaholics. Between 1974 and 1977 Brazil’s debt  went  up  from  $12  billion  to  $50  billion.  The  IMF  had  loaned  more  money to Brazil than to any other single country in Latin America. By  1980 Brazil’s debt payments represented 259 per cent of its total earnings.  Fearful  of  their  declining  popularity,  the  junta  began  to  release  their  grip  on  society.  Protests  increased;  even  the  bourgeoisie  was  unnerved. Regime collapse was inevitable. Military  rule  ended  in  1985.  Old  politicians,  José  Sarney  and  Fernando  Collor  de  Mello,  ruled  in  the  1990s,  the  first  hour  of  neoliberalism, when the idea of selling off state assets was thought to be a  brilliant solution to debt. Meanwhile, in 1982 a new political party had  emerged; in fact, the party was one of the few new political organizations globally in the late twentieth century. The Workers’ Party (Partido  dos Trabalhadores) increasingly commanded the votes of the big cities  and for a time even the middle class. Yet, the poor and destitute remained 

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afraid that radical change would decrease their security and gave their  votes  to  Collor,  who  won  the  elections  of  1989,  defeating  Inácio  da  Silva, called “Lula,” of the Workers’ Party. Then, gradually, came a shift  with the middle class abandoning the Workers’ Party and the poor rushing towards it. Collor’s impeachment for corruption in 1992 meant that  in the elections of 1994, a surprising candidate won: Henrique Cardoso,  celebrated for his Marxist critique of developmentalism. He had paid  $41 million to get into the Presidential Palace, which he occupied for  eight years. Yet, for all his professions of Marxism, Collor proved, in a  remarkably  short  time,  to  be  little  different  from  the  neoliberals  who  were emerging right across the planet. By the mid-1990s, during Brazil’s  worst stagnation of the century, he had come to preside over one of the  most socially polarized countries anywhere. On his third try, Lula, surfing on a remarkable social movement, won  the presidential election of 2002. In spite of early corruption scandals,  Lula  won  two  more  elections  with  astonishing  results.  To  his  good   fortune,  the  early  years  of  the  twenty-first  century  were  those  of  the  insatiable commodity boom with Chinese demand for Brazil’s primary  exports – soya and iron ore – seeming limitless. But more essential to his  popularity  was  Lula’s  commitment  to  helping  the  poor  through  the  Bolsa Familia, a monthly stipend sent to mothers of the lowest income,  given on the proviso that the children had their health checked and were  sent to school.  When  Lula  finally  stepped  down  in  2010,  he  was  one  of  the  most  popular democratic politicians in the world (a Nelson Mandela on the  other South Atlantic shore). The status of Brazil had been transformed;  it was now considered one of the BRIC countries, the head of a pack  that included Russia, India, and China. His successor in the presidential  elections of 2011 was Dilma Roussef, a former guerrilla who had been  captured and tortured by the military. By the time of her election the  Workers’  Party  had  come  to  enjoy  thumping  majorities  in  both  the  Brazilian Congress and Senate. mexico

Just as Turkey is both in Europe and in Asia, and Egypt is in Africa and  the Middle East, Mexico is both in North America (as defined by NAFTA,  the  North  American  Free  Trade  Agreement)  and  Latin  America.  Its   history is also woven with that of Central America and the Caribbean.  Mexico’s claim on being part of North America is reinforced by the fact 

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that up to the time of the Mexican-American War (1846–48) the southwest of the United States, including New Mexico, Colorado, Arizona,  and  parts  of  California  and  Texas  were  part  of  greater  Mexico.  But  rather than be assimilated into mainstream American culture, the mainly  Mexican “Latino” Americans have become a visible minority of surprising  proportions.  It  has  been  estimated  that  by  2050  there  will  be  as  many  Latinos  as  there  are  Anglo-Americans  in  the  United  States.  (Incidentally, then, taking Quebec into account, a large part of Canada  and the United States will become part of Latin-speaking America.) Postwar Mexican history, as we shall see, has been marked by several  contradictory currents, but the one most obvious in the past decades is  that marked by an accelerating shift away from the goals of the Mexican  revolution towards those of neoliberalism. The revolutionary period in  Mexican history began in 1910, and its final phase was marked by the  1934 ascension of General Lázaro Cárdenas del Rio (r. 1934–40). From  1938, these reforms were carried out in the name of the Partido de la  Revolución  Mexicana  (PRM). They  were  both  wide-ranging  and  deep  and, by and large, beneficial to the peasants and workers who supported  him. It was he who broke the power of the great landowners and redistributed as much as fifty million acres to a peasantry that had subsisted  on agricultural labour and small plots, vesting these confiscated lands  in communally owned collectives known as ejidos. By 1940 the ejidos encompassed 47 per cent of Mexico’s cultivated land. Cárdenas’s agrarian reform was the first in Latin America and preceded similar reforms  by revolutionary regimes worldwide in Cuba as well as China, Korea,  and Vietnam. With it the Mexican form of feudalism, based on the haciendas established by the Spanish conquerors, was stifled.  The international ramifications of Cárdenas’s radicalism, as we have  seen in the previous chapter on the Middle East, came with the nationalization  of  Mexico’s  oil  in  1942.  Here,  too,  was  an  initiative  to  be  emulated  around  the  world.  The  nationalized  Mexican  oil-producer,  Petróleos Mexicanos (PEMEX), has remained a key element in Mexico’s  political economy up to the present. At the conclusion of his six-year presidential term (sexenio), Cárdenas  was succeeded by Avila Camacho (r. 1940–45). In common with Canada  and the United States, the demands of World War II had accelerated the  industrialization of Mexico, increasing both its output and the size of its  working class while assuring its place as the most industrialized of Latin  American economies. But, while industrialization was a major force in  increasing per capita income, pushing it up from 325 pesos per year in 

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1940 to 838 pesos per year in 1946, it simultaneously led to the skewing  of the social ladder so that Mexico now established itself firmly, alongside  Brazil,  as  a  leader  on  the  road  to  social  inequality. As  though  to  signal the changes that had taken place in the country, the PRM changed  its name to the Partido Revolucionario Institucional (PRI), signifying, as  it became apparent in retrospect, that the revolution had not only been  stabilized, but ossified. No longer a coalition of left-leaning intellectuals  (among  whom  most  notably  was  the  artist  Freda  Kalho),  agrarian  reformers, and champions of labour, it was now on the way to becoming  a  coalition  of  big  businessmen,  bureaucrats,  and  technocrats,  the  latter especially connected with the oil sector. The  presidents  of  Mexico  in  the  prosperous  postwar  years,  Miguel  Aléman (r. 1946–52), Adolfo Ruiz Cortines (r. 1953–58), Adolfo López  Mateos (r. 1958–64), and Gustavo Diaz Ordaz (r. 1965–70) oversaw a  shift away from support for the ejidos in the south and centre of the  country to the expanding, export-oriented, capitalist, agrarian sector to  the  north  and  northwest.  Most  of  these  agricultural  exports,  initially  directed at American markets, are the ones that we have come to enjoy  in Canada, especially since NAFTA. This shift in the direction of capitalist Big Agriculture was underpinned by state support for easy credit,  hydrological  improvement,  and  increased  technical  support.  By  the  1960s the exit from reformism and the more visible domination of the  state by capital was a fait accompli; so, by the time that neoliberalism  had become the dominant dogma of developmentalism, Mexico was  securely  in  the  hands  of  the  moneyed.  Still,  until  the  early  1970s  the  economy  of  Mexico  boomed. With  the  increase  in  manufacturing   output, the GDP increased at a rate of around 6 per cent, comparable  to the fast-growing export economies of West Germany, South Korea,  and Japan. But in Mexico, however, a Malthusian spectre loomed: the  improvement  to  the  public  health  of  the  rural  dwellers  had  led  to  a  sharp rise in population. With the increased mechanization of agriculture  there  was  less  work  to  keep  the  peasants  down  on  the  farm;  so,  whereas in 1940 agriculture had occupied over 65 per cent of the economically active part of the population, by 1970 it employed as little as  37 per cent. And between 1960 and 1979 the contribution of agriculture to the GDP had fallen from 16.2 to 9.0 per cent. The  fate  of  most  of  those  forced  to  leave  the  land  was  low-wage  employment, partial employment, or unemployment. The new generation, particularly if they were landless, left the rural areas to seek often  non-existent  jobs  in  the  urban  industrial  sector. The  towns  and  cities 

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expanded  phenomenally.  Industry  was  able  to  employ  about  10  per  cent of a labour force that increased by 500,000 annually. From the  mid-1930s to the mid-1950s, Mexico’s population doubled from 16 to  32 million. By the mid-1990s it was 93.7 million. The population of the  Federal District, which contains Mexico City, increased from 3 million  in 1952 to 4.5 million only six years later. By the time of the 1990 census it was over 14 million. As well, the country’s wealth was distributed  only slightly less equitably than wealth in Brazil. “In 1963, half the population received 15.5 per cent of the income – down from 19 per cent  in 1950 – while the top 10 per cent continued to receive approximately  50 per cent of the income. The income of the lowest fifth of the population did not increase in absolute terms between 1950 and 1963.”36 In 1970 Luis Echeverría (r. 1970–76) was elected president. A populist  and reformer in the mode of others in the final age of reform statism from  Michael Manley in Jamaica (r. 1972–80) to Zulfikar Ali Bhutto in Pakistan  (r. 1970–77), he wanted to turn the clock back to a time of statism and  social equality. But a combination of economic recession and an increase  in US tariffs put an end to his dream and drew a line under reformism in  Mexico. The state would now attempt to seek its final accommodation  with  capital.  Echeverría’s  successor,  José  López  Portillo  (r.  1976–82),  accordingly retreated from any confrontation. His economic strategy was  facilitated by the discovery of huge new oil fields  in  1976.  It  was now  apparent  that  Mexico  possessed  as  much  as  5  per  cent  of  the  world’s  proven oil reserves and around 3 per cent of its natural gas reserves.  Like  others,  on  the  basis  of  increased  oil  revenues,  in  the  1970s  Mexico borrowed heavily on capital markets. Alas, by 1981 oil prices  were dropping fast and interest rates were rising. A foreign debt increasing from $6.8 billion in 1972 to $58 billion a decade later had to be  serviced by declining incomes. Rampant inflation was accompanied by  capital flight. An age of crisis, first of one kind and then of another, had  begun  –  debt,  inflation,  declining  living  standards,  declining  employment, drug wars. In August 1982 Mexico declared a moratorium on debt repayment,  thereby  launching  a  global  debt  crisis.  Between  1980  and  1991  the  World Bank handed Mexico a total of thirteen loans, more than any  country  had  ever  received.  In  return,  in  1984,  for  the  first  time  anywhere, it demanded than Mexicans drink the bitter medicine of “structural  reforms”  that  included  the  opening  up  of  Mexico’s  markets  to  foreign investors. As prices rose and employment increased, wages were 

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frozen. Employment in the state sector was cut in half between 1988  and  1994.  Subsidies  like  those  provided  through  the  Mexican  Food  System were cut. The privatization of key sectors of Mexico’s economy  now became a source of tremendous profit for those with the means,  financial and political, to invest. “Accumulation by dispossession” is the  term that was soon to be current; the citizens were dispossessed of ownership while the elite, often close friends of the president, enriched themselves at their expense. According to David Harvey,  In 1994, Forbes magazine’s list of the richest people in the world  revealed that Mexico’s economic restructuring had produced  twenty-four billionaires. Of these, at least seventeen participated  in the privatization programme, buying banks, steel mills, sugar  refineries, hotels and restaurants, chemical plants, and a telecommunications firm as well as concessions to operate firms within newly  privatized sectors of the economy, such as ports, private toll highways, and cellular and long distance telephony. Carlos Slim, Mexico’s richest man, was twenty-fourth on the  Forbes list, and he controlled four of Mexico’s twenty-four largest  firms … By 2005 Mexico ranked ninth in the world (ahead of Saudi  Arabia) for the number of billionaires.37 The elections of 1988 had seen the victory of the PRI candidate, Carlos  Salinas de Gotari, the author of Mexico’s advanced program of privatization  –  sometimes  called “PRIvatization.”  It  was  under  him  that  the  negotiations  for  the  North  American  Free  Trade  Agreement  (NAFTA)  were begun and finalized, coming into effect on 1 January 1994. At the  moment that it became effective, a peasant rebellion broke out in the  southern state of Chiapas that shook the status quo. Why Chiapas?  [The] contrast between extreme wealth and poverty in Chiapas is, in  large part, the result of the capitalist revolution that has ravaged the  state. For the past twenty-five years, Chiapas has been convulsed  by unprecedented economic transformations that have torn up the  traditional agricultural economy and devastated the indigenous cultures. The Mexican state, responding to the interests of the country’s  emergent bourgeoisie and the demands of the international marketplace, has treated Chiapas as an internal colony, sucking out its  wealth, while leaving its people  – particularly the overwhelming  majority who live off the land – more impoverished than ever.38

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Convulsion  followed  upon  the  Chiapas  uprising  at  several  levels.  Within the PRI civil war broke out with assassinations and defections  threat ening to end party rule. The peso crashed. Uncertainty thrived. To  the rescue of the status quo came Ernesto Zedillo Ponce de Léon, a PRI  party stalwart and technocrat with a Yale degree. Zedillo massaged the  elections of 1994 to ensure victory for himself and his party, which was  being torn apart by factionalism. At the moment he entered the presidential palace, Mexico’s foreign reserves hit the bottom of the bucket.  Devaluation was deemed the only solution. And as the peso devalued  Mexico’s  foreign  debt  skyrocketed,  now  reaching  $166  billion,  a  sum  greater than at the time of Mexico’s 1982 “debt crisis.” Horribly, only  ten  out  of  the  twenty-four  Mexican  billionaires  listed  in  Forbes  1994  survived. And the poor were worse off: “The Secretary of Social Development calculates that 2.5 million Mexicans crossed the line from poverty  to extreme poverty since January 1 [1995] adding to the 13 million to  18  million  citizens  who  cannot,  by  United  Nations  standards,  satisfy  their daily nutritional needs. That is to say, nearly a fifth of the population  is  going  to  bed  hungry  every  night.”39  In  1995  the  IMF  loaned  Mexico  $18  billion  and  the  US  government  offered  the  Mexicans  a  $6  billion  line  of  credit. The “miracle  economy”  proclaimed  in  1994  had reached its sad end. In 1995, although nearly 60 per cent of foreign  multinationals made profits, the party that had welcomed their participation in the economy was dissolving. In David Harvey’s autopsy, neoliberalism was the poison that paralysed the party.40 At this point, ex-president Salinas fled the country, preceded by the  estimated $120 million he is said to have appropriated. Several members of his family were, however, arrested, including his brother, who  was accused of murder. It was widely believed that the PRI was now at  the  point  of  committing  suicide,  an  assumption  underpinned  by  the  presidential elections of 2000 when, for the first time, it lost. The vanquisher of the PRI was Vicente Fox, an ex-Coca-Cola executive  and  rich  rancher  from  northern  Mexico.  His  party  was  the  PAN  (Partido  Acción  Nacional), a  centre-right  formation  in  the  tradition  of  the  Christian  Democrat  parties  of  Europe.  Proposing  to  liberalize  Mexico’s  economy,  Fox  was  frustrated  by  the  fact  that  he  controlled  neither of the houses in the Mexican congress. By the end of his term in  2006,  even  though  the  Mexican  economy  had  recovered  to  a  large  extent,  Fox  had  been  unable  to  leave  any  kind  of  deep  mark  on  the  country’s  political  economy.  Even  the  maquiladoras,  the  factories  on  Mexico’s border with the United States that were established with such 

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fanfare had shown themselves of declining value, their products overtaken by cheaper imports into the United States from China. In the elections of 2006, the PAN won again, with the party’s candidate, Felipe Calderón barely defeating the candidate of the more leftleaning  Partido  de  la  Revolución  Democratica (PRD),  whose  founder,  Cuauhtémoc Cárdenas, was the son of Lázario Cárdenas. The PRD candidate,  López  Obrador,  complained  of  electoral  fraud,  which  seems  likely, but Calderón clung to office. Having been delegitimized for electoral fraud, it seemed unlikely that Calderón would be anything but a  weak president ruling over a decomposing state divided and bloodied  by  what  was  virtually  a  civil  war  between  government  forces  and  narcotraficantes. The main threat to Mexico’s survival had been, by the end of the first  decade of the twenty-first century, the drug trade. It has been estimated  that ninety per cent of all of the cocaine produced in the Andes entered  the United State through Mexico and was handled by the several gangs  whose capacity for violence and whose influence over the institutions  of law and order threatened the whole country, especially its northern  states. The precise tonnage of cocaine that passed through Mexico cannot be known, although the quantities seized can; in the 1970s around  100 kilograms were seized annually, and in 1985 this had risen to four  metric  tons  and  in  1990,  fifty  metric  tons.  Mexico-based  groups  also  controlled the production of between 70 and 80 per cent of the methamphetamines  imported  into  the  United  States.  The  trade  in  drugs  increased dramatically when NAFTA came into effect in 1984; free trade  obviously included illegal drugs.  In the two years between late 2006 and 2008, 450 Mexican policemen  and  soldiers  had  been  killed  in  drug-related  shoot-outs,  and  in  2008 alone there were over 5,000 drug-related killings in Mexico. By  this  time  other  woes  had  afflicted  the  country;  the  recession  in  the  United States, to which 80 per cent of Mexico’s exports were sent, and  the diminution of remittances from often illegal Mexican workers in the  United States, meant that the Mexican economy had shrunk by nearly  10 per cent in the first half of 2008. cuba and hugo

It  is  possible  to  encapsulate  Cuba’s  twentieth  century  history  briefly  under a handful of slightly contradictory headings: mediated independence, revolutionary dependency, Cold War peace, and fraternal amity. 

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Under the first we see the Cuba of sugar, corruption, and casinos presided over by a venial collection of American placemen directed from  the  US  embassy;  one  is  reminded  of  the  Middle  East  during  Britain’s  moment of glory (c. 1920–56). In the second, we see the Cuban revolution,  a  development  of  potent  hemispheric  importance  and,  to  Washington, if less so for Western Europe and hardly at all for Canada,  horrifying  implications.  In  the  third,  we  see  Cuba  as  a  client  of  the  Soviet Union, semi-independent, to be sure, and hardly subservient but,  nonetheless, deeply behoven. It is this Cuba, indestructible because of  Soviet support, that became the refuge for Latin America’s political rebels on the run and quite surprisingly the main agent for the destruction  of South Africa’s colonial ambitions in Angola. There is after this the  Cuba of the 1990s that was plunged into destitution with the break-up  of the Soviet Union but survived the end of Soviet support due to significant economic aid from fraternal Venezuela, and, finally, the Cuba of  the present, a dazed survivor of the Cold War and of neoliberalism, yet  still underdeveloped and destitute if, by Third World standards, slumless and secure but shabby. From  the  moment  of  its  release  from  control  by  Spain  in  1898,  Cuba  became  dominated  by  the  United  States. “The  people  here  …  aren’t ready for self-government,” insisted the first American ambassador  to  Havana.  In  the  decades  that  followed  independence,  Cuba  became  not  merely  a  major  source  of  sugar,  largely  produced  on  American-owned plantations, but also an important source of tourist  pleasure got from drugs, prostitution, and gambling – a “Babylon” of  the reggae songwriters.  Patriots and idealists, and particularly students, were disgusted by the  Cuba of the dictators Machado (r. 1925–33) and Batista (r. 1934–44,  1952–58),  of  vice  and  sugar  dependency  and,  most  of  all,  of  foreign  control. They organized themselves into political groupscules and talked  earnestly  about  revolution,  a  particularly  Latin  American  vocation.  Chief among them was Fidel Castro (b. 1927), a law student who was  blessed with towering stature and inexhaustible verbosity. On 26 July  1953 Fidel and his pals organized an attack on the Moncado military  barracks  in  Santiago  in  eastern  Cuba  in  order  to  get  firearms  and  to  make a splash. The attack was a disaster although Fidel survived. At his  trial he gave the speech of a lifetime that was turned into a pamphlet:  “History Will Absolve Me” (for the attack), it was called. He and his  surviving comrades were put away for several months but not shot, the  usual fate of failed revolutionaries. As mistakes go, this was a giant faux 

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pas for the Batista regime. The date of the failed attack gave the party  its name “the 26 July Movement” or simply “M26.” Fidel  and  his  stalwarts,  including  his  brother  Raoul  and  Che  Guevara, then decided to invade Cuba from the outside. Their landing  craft  was  the  unlikely  named  Granma (“Grandmother”) on  which  they sailed from Mexico to the southeastern shore of Oriente Province  in November 1955. Like the attack on the barracks, the invasion was a  fiasco. Once more, Castro and a few of his followers managed to survive  and  slowly  began  a  guerrilla  campaign  in  the  Sierra  Maestra  against  the regular, if shambolic, military forces of Havana. Their insurrection  spread  and  became  increasingly  successful.  Batista’s  forces  gradually  shrunk across the island until after a gala party to commemorate the  New Year’s (1959), the dictator, his cronies, and as much wealth as they  could  pocket,  fled  in  yachts  and  private  planes.  The  year  1959  now  joined the years 1947, the independence of India; 1949, the independence of China; 1954, the fall of Dien Bien Phu and the beginning of the  war  in  Algeria;  1956,  the  Suez  invasion;  and  1962,  the  end  of  the  Algerian war, as great moments in the history of the Third World. When the Americans tried to use a boycott on sugar imports to pressure  the  new  Cuban  regime  to  abandon  its  program  of  nationalism,  Havana  turned  to  the  Soviet  Union,  which  not  only  bought  Cuba’s  sugar  but  provided  the  country  with  modern  arms  and  industrial  imports. The  Bay  of  Pigs  invasion  (1961)  was  one  outcome  and  the  Cuban  Missile  Crisis  (1962)  was  another.  On  both  occasions,  the  Americans threatened and then backed off. In recognition of its dependency on the Soviet Union, Cuba became officially communist. It is not  difficult to imagine how this played in Washington and in the American  media. Life Magazine (2 June 1961) quoted Castro: “The Andes will be  converted into one vast Sierra Maestra of revolt.” From the time of the invasion of the Bay of Pigs in April 1961 until  the  roll-up  of  the  Soviet  Union  at  the  end  of  1991,  communist  Cuba  unfolded,  not  at  any  particular  pace  but  in  spasms  according  to  the  pressures  of  world  events,  the  price  of  sugar,  and  the  inspirations  of  the  Cuban  leadership.  Sugar  prices  boomed  in  the  early  1970s  and  then slumped, leaving Cuba in serious debt. In 1980, to the dismay of  the leadership, 100,000 emigrated, mainly to the United States. On the whole, by world standards, the Cubans became healthy and  sufficiently fed, irrespective of what their social class might have once  been and where they stood in relation to the ruling party. Sugar, exported  to the communist bloc, was never superseded – by 1989 at 73.2 per cent 

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of  exports  Cuba  was  nearly  as  dependent  on  sugar  as  it  had  been  in  1959. It was complemented by tourism, of which sun-starved Canadians  were the main customers. Nonetheless, by the early 1990s Cuba was in  crisis. It had to sell off some of its resources while prostitution became  familiar in the shabby streets of Havana. Yet, by the beginning of the twenty-first century Cuba, and its lider maximo, had survived. Indeed, it had found new inspiration, especially  in foreign relations. The isolation that had marked the 1990s had come  an end with the emergence of new allies in Latin America: Hugo Chávez,  elected in Venezuela in 1998, Evo Morales elected in Bolivia in 2005,  and Rafael Correa elected in Ecuador in 2006. Other governments, less  leftish and nationalist, showed sympathy for Havana – Brazil, Argentina,  Chile, and Nicaragua. Hugo  Chávez,  like  Fidel  before  him  became  a  radical  nationalist  (rather than a Marxist of any stripe) and, unsurprisingly, a staunch foe  of neoliberalism and globalism, both of which remained solvents of the  nation-state  in  the  interests  of  the  market.  Ironically,  however,  it  was  the  market,  in  the  form  of  the  price  for  oil,  that  provided  Chávez  with his clout. If Venezuela, like Cuba before it, had had to rely on the  price of agricultural commodities, there would have been no “Bolivarian  Revolution,” which we shall see below. But Venezuela did have oil and  boycotting oil was a stickier proposition than embargoing sugar; after  Canada, Mexico, and Saudi Arabia, Venezuela was the fourth largest oil  exporter to the US.41 When Chávez became president in February 1999,  he  and  his  oil  minister,  Rafael  Ramirez,  persuaded  the  ministers  of  OPEC,  as  well  as  Mexico,  Norway,  Oman,  and  Russia,  to  cut  output.  Prices shot up. Venezuelan oil profits were used to subsidize oil exports  to  other  Latin American  and  Caribbean  countries