Transcript of 'Democracy Now!' For August 1, 2007

Salvadorans Face Terror Charges For Opposing Water Privatization

Transcript from Democracy Now!:

AMY GOODMAN: We turn to El Salvador, where protests against water privatization early last month ended with the arrest of fourteen protesters, thirteen of whom were subsequently charged with committing acts of terrorism.

On July 2, hundreds of people had gathered in the Suchitoto municipality to protest President Antonio Saca’s plan to decentralize water distribution. They saw the plan as an attempt to privatize municipal water resources as stipulated in a 1998 World Bank loan. The protesters were met with heavily armed riot police, who fired rubber bullets and tear gas on the crowd and detained fourteen people. Among those arrested was a journalist covering the protest and members of CRIPDES, the Association of Rural Communities for the Development of El Salvador. They were on their way to attend the rally in Suchitoto.

Last week, the prisoners were released on bail as a result of national and international pressure. But the charges of terrorism remain, and if found guilty, they could face up to sixty years of prison time. El Salvador's antiterrorism law came into effect last year and is modeled on the USA PATRIOT Act. Human rights groups have condemned the government’s response and application of this draconian law. Human Rights Watch said yesterday the law criminalizes a wide variety of acts most of which “do not fall within any reasonable definition of terrorism.”

Today, Krista Hanson joins us, also from Boston, to tell us more. She's the program director at CISPES, the Committee in Solidarity with the People of El Salvador. Welcome to Democracy Now!, Krista. Explain what's happening in El Salvador.

KRISTA HANSON: Well, I think that what's really important to know about that event on July 2 in Suchitoto is that it comes from -- I mean, the resistance that was happening there comes from a long history in El Salvador of -- first, of this implementation of privatization. People in El Salvador know what privatization of public resources looks like. The telecommunications, electricity, other industries have been privatized, and the rates go up so much that people have no access anymore to those. And so, you can't have that with water, right?

So over the last couple of years people have been out in the streets. And community by community, really, going out, and a common protest tactic is to shut down a street and demand access to water, to demand that it not be decentralized or privatized, or that there even be water. People pay water bills right now, and water comes out one hour a day in their taps, or one day a week or two days as a week, so people have been doing this for the last couple of years.

What was different on July 2 is that we're getting a lot closer to the government pushing forward this general water law that would privatize the currently public water system. So people were out there defending their right to water, defending, trying to stop the announcement of this first step in decentralization.

AMY GOODMAN: And explain the response of the state, of the police, and who the people are who have been arrested.

KRISTA HANSON: So on July 2, the people that went out were the community that lives there in Suchitoto, this fairly rural community, as well as people who are involved nationally in this rural development organization, CRIPDES, the local water union, FMLN representatives. They were all out there trying to stop the announcement of the privatization or what -- the government knows they can't call it “privatization,” so President Saca was there to announce “decentralization,” which, of course, is the first step.

So people were protesting. They were protesting in the street, you know, with signs saying, you know, “Water is a human right.” And the police went in in full, full force, as you were saying, full riot gear, rubber bullets, shooting rubber bullets at close range, shooting tear gas at kids, at old people. And then, actually, four of the people who were arrested were actually in a car a few miles away, driving to the protest. And there's video of this that was shown in court, and it's on our webpage, the CISPES webpage, if people want to see it. And you can really see the police dragging people out of their car who were on their way to the protest. And those are the people that they arrested and are currently charging with terrorism.

AMY GOODMAN: With terrorism.

KRISTA HANSON: They are being charged with terrorism for attempting to go to a peaceful protest against the privatization of water. It's really terrifying, because, as you said, it is exported from the United States. I mean, when this law was passed -- it's not a coincidence, just stepping back a little bit, that CAFTA passed -- CAFTA was implemented, excuse me, in March of 2006. It was September of 2006, last fall, when the rightwing government passed this law called the Antiterrorism Law that would define broadly, broadly define things like occupying a public road as terrorism and allow people to be imprisoned for up to sixty years, which is what these people from Suchitoto are facing. Not coincidentally, the US was behind the passing -- the US government was behind the passage of CAFTA, pushed really hard to get it implemented, because even after it passed, there was resistance. And then in September the US ambassador in El Salvador congratulated the Salvadoran government for passing that law and said, you know, “This is proof that we're partners in the war on terrorism.” So that's the law.

And this is really one of the first times that this law is being used, and it’s being used, not coincidentally, not against any terrorists, but against peaceful protesters. And so, people see this as really precedent-setting, this case that's going to come before the courts in September, of seeing whether or not the government really will move forward in imprisoning people and whether or not they actually -- you know, they're declared guilty of -- you know, supposedly of terrorism. Everyone is really clear that this is about scaring people out of protesting and criminalizing protest to the extent that people are afraid to go out and defend their right to something that's so clearly a human right.

AMY GOODMAN: CAFTA stands for Central American Free Trade Agreement. We only have thirty seconds, but, Krista, what does this have to do with the World Bank? How is the World Bank identified with this so-called “decentralization” program?

KRISTA HANSON: The World Bank gave the loan in 1998 that first pushed decentralization and brought in the element of private corporations having a say in this. And maybe just to conclude, also I think that because the World Bank is a part of this, because the US government is pushing this, that's why as solidarity we're so concerned about accompanying people out there. And the US government is going to continue to be involved through their major elections in 2009 in El Salvador. Whether it's the Democrats or the Republicans in power here, they need to maintain their ally, this rightwing government in El Salvador that's going to push privatization, push the neoliberal model, through repressive policing, through calling protest terrorism and criminal acts.

AMY GOODMAN: We're going to have to leave it there. Krista, I want to thank you very much for being with us.

KRISTA HANSON: Thank you.

AMY GOODMAN: Krista Hanson, program director of CISPES, the Committee in Solidarity with the People of El Salvador, and Gigi Kellett with the Corporate Accountability International, both speaking to us from Boston. Corporate Accountability International is the incarnation of Infact. Link to the video of the Salvador protest.

Battling Over The World's Oil Reserves

Alistair Tice looks at the rivalry for access to the world's oil supplies and assesses the likely consequences for the world economy, and the continued dominance of US imperialism.

Alistair Tice reports:
George Bush invaded Iraq for power, prestige and oil. Whilst the catastrophe of the occupation has dealt a huge blow to the prestige of US imperialism around the world and its power in the Middle East has been severely undermined, US and British oil companies are still set to get their hands on Iraq's oil.

Iraq's pro-western cabinet has approved a Hydrocarbon Law that will hand over long-term control of the country's untapped energy fields to foreign multinationals, with profit rates of up to 75 per cent! Iraq has the world's second largest known oil reserves and the Middle East currently supplies two-thirds of the world's oil.
Bush's war for oil was driven by his administration's close links to the major oil companies and by the United States' oil import needs. US oil production peaked in 1970 at ten million barrels per day (bpd); today it is less than five million bpd and the US consumes 20 million bpd. That is 25% of the world's oil consumption, yet the US only has 5% of the world's reserves.

Imports have risen from 36% of its oil needs in 1970 to two-thirds today. A recent submission to the Senate Committee on Energy and Natural Resources stated "there is no economically plausible scenario for a strategically meaningful reduction in the dependence of the Unites States and its allies on imported hydrocarbons during the next quarter century."

The major oil companies, mostly US-owned, are collectively known as 'Big Oil'. Closely connected to the Bush regime, many were originally based in the key oil state of Texas and are an essential element in the 'military-industrial complex'. Their profit-driven objectives have played a decisive role in Bush's aggressive, interventionist policy in the Middle East and Central Asia. Big Oil makes huge profits. In 2005, ExxonMobil became the world's biggest company, overtaking Wal-Mart. Five of the world's top ten corporations are now oil majors.

However, they face long term problems. Last year, the private oil corporations only replaced 75% of their reserves and now they only control 10% of world oil reserves.

State ownership
Despite two decades of neo-liberalism, national oil companies (wholly or partly state owned) control 90% of world oil reserves. And that share is rising.

On 1 May 2006, Evo Morales, the recently elected leftist president, announced the nationalisation of Bolivia's gas industry. Whilst it ended up as only partial state ownership, it was hugely significant after two decades of privatisation and was referred to as "the first nationalisation of the 21st century." Hugo Chávez, the radical president of Venezuela, has announced that by 1 May 2007, PDVSA (the Venezuelan state oil company) will take a 60% majority stake in the extra-heavy oil fields in the Orinoco Basin.

Vladimir Putin, the Russian president, has taken state-capitalist measures against the oil multinationals to increase his government's revenues and standing internationally.

Shell was forced to accept reduced shares in joint ventures in the giant Sakhalin oilfield. And now BP is under pressure from Gazprom, the Russian state gas company, over a new gas field project in Eastern Siberia.

The oil companies are having to accept lesser shares in future profits or risk expropriation and miss out altogether.

Even in the central African country Chad, last year the government created a new national oil company and threatened to expel Chevron for not paying taxes. In less than three years of exploitation of Chad's recently discovered oil resources, in a deal brokered by the World Bank, the foreign consortium had earned $5 billion for a $3 billion investment and Chad only got $588 million!

Globalisation
This retrenchment from globalisation is likely to increase with more governments nationalising or at least taking majority state holdings in their energy resources. Russia is now the world's biggest oil exporter (it overtook Saudi Arabia last year) and Gazprom is now the highest valued company outside the US.

But the Big Oil companies, and through them US imperialism, still control the international oil market: trading, transportation (tankers and pipelines) and refining. So Russia and China are trying to challenge their domination, and their state-owned energy companies could even make hostile takeover bids for Big Oil companies.

These would not be successful for political reasons. Last year for example, the US Congress blocked an attempted take-over of US energy company Unocal by the Chinese state oil company.

However, Russia and China have made a number of bilateral energy agreements and are planning to open their own oil and gas market exchanges to rival the US.

The world oil price peaked at around $80 per barrel last year but has now fallen back to $50-$60, still way above the $20 per barrel before the Iraq war started four years ago.

In the coming world economic slowdown or recession, the oil price is likely to fall further as energy demand falls, although probably not back to $20. However, any significant fall in the oil price below $50 a barrel will cause big economic and social problems for producer countries. It would also lead to another slump (as in the 1990s) in oil exploration and production (the economic viability of reserves is very much conditioned by the oil price) - paving the way for further shortages of supply and refining capacity later.

Would the leftist governments in Bolivia and Venezuela cut back on their social programmes for the poor or would they be forced into more radical policies of expropriation of capitalist interests?

Similarly, would Putin threaten to cut off western energy supplies if the west did not pay more for its gas and oil?

70% of Iran's state revenues comes from its oil exports so any fall in price would undermine President Ahmadinejad's already failing social promises and popular support. Saudi Arabia and the Gulf states too would face big social upheavals.

Whilst these would be the likely consequences of a fall in oil prices in the short term, in the longer run the price is likely to increase and could jump dramatically in response to internal crises.

The four biggest oilfields in the world (which account for 14% of world supplies) are all over 30 years old and in decline.

Saudi Arabia's Ghawar field, the world's largest, is over 50 years old and over half depleted (some observers say 90% depleted but the Saudi oil industry is shrouded in secrecy).

Daqing is the largest oil field in China and its major source of domestic oil; its decline will only make China even more desperate for imports. China is now the world's second biggest oil importer after the US, hence its deals with Iran, Sudan and Venezuela.

Last year, two senior US senators initiated a computerised simulation exercise called ShockWave to study the effects on the US economy if the oil price rose to $100 a barrel. Their inescapable conclusion was that it would lead to recession.

Many analysts believe that due to 'Peak Oil', prices could rise as high as $125-$150 a barrel. The Peak Oil theory is that a time will come when half the discovered and produced oil in the world has been consumed and after then the oil supply will decline. Some oil experts believe that time has already come, others that it may not be for another 30 years.

Either way, the reaction against neo-liberalism already evident in Latin America will spread to other continents as workers and poor people demand action against the super-profits of Big Oil.

There will be pressure from the masses for more windfall taxes and outright nationalisation.

The intensified rivalry between the declining and desperate US empire and energy-rich Russia and energy-hungry China will intensify, most immediately over Iran, and in Central Asia and Africa, leading to trade wars and further military conflicts.

As a consequence oil prices will become increasingly volatile, with falls and big rises, each with the potential to cause economic crises and social upheaval.

Just before the invasion of Iraq, media magnate Rupert Murdoch expressed his support for war to maintain oil prices at $20 a barrel and help sustain world economic growth (and his profits!). Like most things in his media, Murdoch got that one wrong and Iraq and oil will prove to be sources of world economic and political instability for years to come.

Video of 'Democracy Now!' Interview with John Perkins, July 7, 2006

Confessions of an economic hitman: