Thursday, June 9, 2011

Great Land and Asset Grabs Pursued by Global Corporate and Financial Elite

The true contagion that has afflicted Europe is that of the austerity-driven “shock doctrine” of financial warfare (Klein, 2007). Countries such as Greece and Belarus are under extreme pressure to sell off national resources such as Greece’s Hellenic Telecommunications Organization and one of Belarus’ most valued state resource, Belaruskali, a potash company (Lawton and Stevens, 2011; Kolyandr, 2011). European assets are being acquired by wealthy transnational corporations, billionaire investors, and Chinese sovereign wealth funds. Acquisitions are reorganized to improve efficiencies, primarily by eliminating employees, or are simply stripped of assets and disassembled or resold.


Meanwhile, land grabs are occurring in Africa and India as Chinese and Saudi sovereign wealth funds compete with investment banks over fertile land in a bid to hedge against future scarcity. In India, land grabs are dispossessing people dependent upon farming for their livelihoods (Shiva, 2011). Ethiopia is one of the hungriest countries in the world with more than 13 million people needing food aid, but the government is selling at least 3m hectares of its most fertile land to rich countries and some of the world's most wealthy individuals to export food for their own populations (Vidal, 2010). African land grabs are epic and have been particularly pursued by the same investment banks (e.g., Goldman and JP Morgan) that broke the US and UK economies. Indeed, Blythe Masters, who invented the credit default swap, was spotted buying up land in Africa as early as 2008.

Additionally, speculators have been piling into food commodities. Corporate ownership of land and global production and distribution networks have the effect of making food commodities more visible, thereby enabling financial profiteering as previously informal local markets are captured, colonized, and transformed by global market operations.

Land grabs and commodity speculation are contribution to rising global food prices and exacerbating dire poverty. Many of the world’s poor populations spend approximately 75 percent of their income on food. Those growing populations living in urban slums are particularly vulnerable to this cycle of dispossession and utter impoverishment. The next 1 billion in population growth over next 12-15 years projected to occur in urban slums.

We are indeed, as Mike Davis has written, a planet of slums. However, the policies that have made us that way can be changed. Halt the disaster capitalism. Halt the land grabs. Halt the development of a neofeudal economy that feeds the few vampire like upon what is left of our limited global resources while the multitude are dispossessed.


References

Klein, N. (2007). The shock doctrine: The rise of disaster capitalism. New York: Metropolitan Books.

Kolyandr, Alexander (2011). Belarus Mulls Sale of Potash Produce. The Wall Street Journal, p. B3.

Lawton, C., & Stevens, L. (2011, June 7). Bargain Hunting in Greece. The Wall Street JOunral, p. B10.

Shiva http://english.aljazeera.net/indepth/opinion/2011/06/20116711756667987.html

Vidal, J. (2010, March 7). How food and water are driving a 21st century African land grab. http://www.guardian.co.uk/environment/2010/mar/07/food-water-africa-land-grab

On Blythe Masters http://www.jpmorgan.com/pages/jpmorgan/investbk/solutions/commodities/team/blythemasters

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