Peter Koenig interview: The Economic Development and Resistance Economy of Iran
The Opinion Desk of the Khamenei.ir journal of Iran asked Peter Koenig recently for an interview on economic development and in particular about the concept of “Resistance Economy” currently adopted by Iran. The interview was published in two parts. Part two will be published here tomorrow.
Europe in particular, has enslaved, plundered and raped Asia, Africa and Latin America for centuries. So, what the World Bank does today is but a modern continuation of colonialism disguised as development assistance.
In an exclusive interview with Khamenei.ir, Mr. Koenig enlightens us on his experience with the World Bank and IMF, plus his own perspective on US domination over the global economy.
The following is part one of the interview:
Based on years of working as a staff in World Bank, does the organization help poor countries to develop?
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PK: The World Bank was always dominated by the United States, but in its earlier years and up to the 1980’s – the time when neoliberalism and the Washington Consensus – started their merciless ascent, the World Bank financed and carried out some real ‘grass-roots’ projects, i.e. in rural areas, expanding drinking water and sanitation systems, bringing drinking water to the villages, thereby increasing productivity for local communities, increasing school attendance especially for girls, and reducing intestinal and diarrheal diseases, thereby reducing child mortality and morbidity. In the health sector rural health centers were built; and small-holder agriculture was promoted and funded – all for the benefit of the marginalized rural population. – Of course, the hidden agenda was that these communities would support the central government that provided them with these basic needs services.
These times of social improvement projects have long since gone. Starting in the 1980’s so-called ‘structural adjustment’ loans would gradually replace the poverty alleviation targeted projects described before. The proportions of ‘structural adjustment’ (SA) type loans – I call them ‘blank checks’ – to governments have rapidly increased throughout the nineties.
Today these ‘blank checks’ go under different euphemisms of SAs (which has become a bad term even in the mainstream media – MSM). They are called, ‘sector loans’, ‘program loans, ‘budget support’ – whatever suits the purpose – all ‘blank checks’ with the same objective: enslaving the borrowing countries with debt. And that even more so, when the country disposes of natural resources that the West covets to maintain its oligarchy’s luxury way of life – and, not to forget – to feed the armament industry.
But this World Bank and IMF ‘official’ indebting does more harm than just increasing the national debt from these Bretton Woods Institutions. These international financial institutions’ loans represent a green light for private banking to lend even more money to countries with corrupt leaders. Thus the leverage effect of WB / IMF lending is a multiple of their own lending. Here the question ought to be asked – who is worse, the corruptor or the corruptee? – In my opinion, the one who scrupulously offers money or goods to vulnerable leaders – often leaders the west has put in place as puppets – bears the bulk of the blame.
After all, that’s how the west, Europe in particular, has enslaved, plundered and raped Asia, Africa and Latin America for centuries. So, what the World Bank does today is but a modern continuation of colonialism disguised as development assistance.
Today, SA type blank checks account for nearly 90% of the World Bank’s lending portfolio. They have become hardly anything else than instruments to buy corrupt government officials with unaccounted for blank checks – loans or credits that increase national debt and increase dependence on the western predatory corporate and finance system. Its neocolonialism at its best – nothing to do with ‘development of poor countries’. To the contrary – its debt-dependence for easy exploitation.
How does international monetary system help United States to keep its dominance over global economy?
PK: The current US dollar-based western fiat monetary system was specifically designed by the US to dominate global economy. The Euro was also created by the US, modeled after the dollar, as a fiat currency (Fiat money has no backing what-so-ever; it is money with a value established by [government] decree and can be produced at will with a mouse click by private banks, as debt).
Perhaps we have to be reminded at this point, that neither the European Union (EU) or the Euro are products of Europe; they are purely constructs of the United States; ideas fostered and developed during and especially after WWII. Churchill, in his famous ‘Speech to the academic youth’ held at the University of Zurich in 1946, said: “There is a remedy which … would in a few years make all Europe … free and … happy. It is to re-create the European family, or as much of it as we can, and to provide it with a structure under which it can dwell in peace, in safety and in freedom. We must build a kind of United States of Europe.” He was then as Cameron is today a mouthpiece for the United States, expressing Washington’s ideas as a Trojan horse in Europe.
In 1944 Washington created the so-called Bretton Woods Institutions, the World Bank and the IMF. The WB was to administer the Marshall Plan funds – US$ 13 billion (in today’s terms about US$ 130 billion) from the US side and for this purpose newly created Kreditanstalt für Wiederaufbau – German Bank for Reconstruction and Development – on the German side. The Marshall Plan funds were the first common development funds for Europe.
The IMF was to ‘regulate’ the convertible currencies of Europe, Canada, Australia, New Zealand and Japan, then tied to the US-dollar via the gold-standard established by the IMF at the order of the FED, i.e. US$ 35 per troy-ounce of gold. In fact, the IMF was to watch over adherence to the gold standard to strengthen the link or dependence of other currencies to the dollar.
When in 1971 Nixon abandoned the ‘gold standard’ – the US dollar became de facto the reference currency for the world, meaning the main reserve currency for nations around the globe. This was a smart but Machiavellian move giving the FED basically unlimited power to print dollars as they pleased. Simultaneously, Father Busch (George H. W.), a friend of the House of Saud, made sure that Saudi Arabia remained at the head of OPEC and would not allow hydrocarbons to be traded in other currencies than the US dollar. As compensation the US would militarily protect Saudi Arabia – which was followed by the implantation of several military bases.
As a result of all hydrocarbons being traded in US-dollars, the demand for US-dollars increased further, almost exponentially – leaving virtually unlimited space to produce dollars as required for US-instigated wars and conflicts, for funding lie- and slander propaganda and for financing proxy wars around the globe. That every dollar created meant new US debt was irrelevant for at least two reasons, (i) the entire world would carry the debt, as their reserve coffers were filled with dollars, and (ii) the US debt was never meant to be paid back. As Alan Greenspan, former chief of the FED once answered a journalist’s question on how the US was ever able to repay their debt – Greenspan said, ‘we never will pay our debt, since we can just print new money’. This confirms the pyramid principle of the dollar based monetary system: You create dollars as debt which bears interest which you pay by new debt.
One of the most flagrant of such cases is Greece, now strangled into misery by a fraudulent monetary system. Other fraudulent uses of the dollar denominated pyramid or ‘Ponzi’ scheme, are ‘sanctions’ dished out on countries that do not submit to the tyrannical dominance of the empire, or the confiscation of assets abroad, the blockage of foreign currency accounts abroad – and-so-on. All this is possible, because the world is based on the fraudulent dollar which dominates all international trade. With these hundreds of trillions of dollars floating the globe, it is of course possible to manipulate any currency, including gold. This is best done through the Basle-based BIS (Bank for International Settlement), which is entirely private, dominated by Rothschild and Co, as is the FED, also entirely privately owned.
The good news is that this is changing rapidly. BREXIT is hope for change, not only for the UK and Europe, but for the world at large. BREXIT is a conscious decision of a majority of UK citizens that they have enough of the corrupt monetary and economic system that reigns the world and of which the European Union is a mere puppet. According to different polls, a considerable majority of the people throughout Europe, regardless of the member countries they belong to, are fed-up with the EU, its Euro monetary policy and its impositions of laws and regulations which are gradually but surely depriving European nations of their sovereignty.
Of course Washington is surprised and don’t like this new BREXIT revelation one bit. Obama is sending Kerry to talk to Cameron on how to avoid or prevent BREXIT. Kerry has already said to the press, there are many ways of avoiding or circumventing the UK leaving the EU. An obvious one is that the referendum is not binding and has to be approved by the British Parliament – which could decide that BREXIT is not good for the UK and not good for Europe. I believe, such a decision could cause a revolt in Britain. A subtler way would be extending the ‘exit negotiations’ for the allowed 24 months (or more by mutual agreement), time enough for launching a new referendum for which according to BBC already 2.3 million signatures have been collected.
Whatever may happen – and I don’t doubt one bit in Washington’s capability to strong-arm a country or an entire people into doing what Washington wants – a signal has been set; a signal that says ‘yes we can’ to others who are weary of external domination. People are also aware of the Washington – Brussels incited 2007 / 2008 – and counting – crisis in Europe, to safe the dollar from declining against the Euro and being gradually replaced by the Euro as world reserve currency. Suffocating Greece, the denominated culprit for its ‘high’ debt of at that time about 109% of GDP, was a mere farce, an outrageous manipulation of the truth. Greece, a strategically located Mediterranean European NATO country, with barely 2% of the Eurozone’s GDP, had a debt ratio totally manageable without outside interference. Accusing it for the EU crisis was and still is an outright lie. The EU has demonstrated that it has no sense of solidarity towards fellow member countries, and therefore is not really a ‘union’, but rather a predatory association of a bunch of corporate-finance dominated nations. Such a ‘union’ is by definition not sustainable – and less so its common currency the euro. Through the infamous troika (ECB, EC and IMF), the finance and corporate elite can do whatever they want with Europe. Especially targeted are the strategic southern countries bordering the Mediterranean Sea. – But BREXIT was a wakeup call. Awareness is growing. A momentum, I trust, that cannot be stopped.
And there is more good news. Dollar-denominated reserves around the world, close to 90% about 20 years ago, have dropped to below 60% today, fluctuating, of course, depending on the manipulated value of the dollar. When it drops to below 50%, a more rapid shift by reserves into other currencies, including the Chinese Yuan, may take place. The Yuan is now formally admitted as one of the five IMF reserve currencies making up the basket of currencies determining the value of the IMF’s Special Drawing Rights (SDR).
In addition, a couple of years ago China and Russia have abandoned the western banking ‘order’ of trading hydrocarbons in US dollars, using their own currencies. Other SCO (Shanghai Cooperation Organization) countries have joined this trend. Russia and China have also largely detached themselves from the US-dollar monetary and international transfer system, SWIFT, using their own, the China International Payment System – CIPS .
When the world demand for dollars falls below a critical point around the globe, a trend that has started, then the US-dollar system and by extension the US economy is truly on the ropes.
Peter Koenig is an economist and geopolitical analyst. As a former World Bank staff member, he has thirty years of global experience in the fields environment and water resources; Koenig has earned several publications on various news websites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed; he is also co-author of The World Order and Revolution! – Essays from the Resistance.