Wednesday, September 22, 2010

Russia Reneges on Iran S-300 Deal

The Guardian newspaper reports that Russia has decided not to supply the S-300 air defense system to Iran.

General Nikolai Makarov, the armed forces chief of staff, told Russian media today that delivery of the S-300 high-precision weapons system would violate the UN sanctions imposed on Iran because of concerns about its nuclear programme.
"A decision was taken not to supply S-300s to Iran," Makarov was quoted as saying by the state-run RIA. "They definitely fall under sanctions. There has been an instruction from the leadership to stop the shipment, and we are obeying it."

US State Department has already conceded that the UN sanctions resolution does not prohibit the S-300 sale to Iran.

RIA Novosti reported in June that Russia's Foreign Ministry said the sale of the S-300 would proceed.

Since both the US and Russia know that the S-300 is not included in the sanctions regime--and each knows that the other knows--there must be some secret agreement operative in the cancellation of the S-300 deal.

Potential responses by Iran should perhaps include certain inconveniences for Russia in its Caspian dealings

Saturday, September 11, 2010

Taking Advantage of Pakistan Disaster

Pakistan was due to receive a $1.3 billion tranche from an IMF loan of $11.3 billion as part of an aid package following the massive flooding of that country.
However, the IMF delayed release of the funds after Pakistan failed to meet various IMF performance targets. The disastrous flooding conditions have so damanged the country that the credit rating agency Moody’s Investor Service changed its outlook for Pakistan’s five biggest banks from stable to negative, due to concerns that the banks will be vulnerable because of nonperforming loans.
Pakistani officials hoped the IMF could be convinced to relax its criteria for extending the sixth tranche of the 2008 loan, considering the scale of damage inflicted on the country. But when they met with IMF leaders in Washington for ten days at the end of August and the beginning of September they were curtly rebuffed.
According to an account published in the September 8 issue of Dawn, IMF authorities took “a very strong position” during the talks, affirming “that the IMF executive board would not be interested in considering Pakistan’s request for more funds unless it made tangible progress” on implementing the IMF-dictated economic restructuring program.
The World Bank, which like the IMF is a US-dominated organization, added to the pressure. Speaking on 1 September 2010, following a meeting with Finance Minister Shaikh, World Bank President Robert B. Zoellick emphasized the need for Islamabad to implement pro-market reforms before all else. “We need,” said Zoellick, “to respond strongly to the crisis at hand, but we need to do it without losing sight of important economic reforms.”
Zoellick then went on to threaten the Pakistani government and the people of Pakistan, declaring “the response of donors to the floods will also depend on the government’s ability to deliver in this area.”

A disaster of the magnitude of the Pakistan flooding is too good an opportunity for exploiters to squander. Relief for the flooded millions of Pakistan constitutes for the imperialist financial institutions a bludgeon which they can wield brutally in order to impose the market reforms that will facilitate profit-making by domestic and especially international capital.

The reforms that the IMF and World Bank are demanding include:

•The transformation of a General Sales Tax into a 15 percent Value Added Tax or VAT.
The new tax will shift the burden of taxation from business to working people.

•The complete elimination of energy price subsidies.
Previously the government had committed to increase the cost of electricity by at least 25 percent in three phrases over 6 months beginning this October 1. (The World Bank and Asian Development Back estimated earlier this year that a 49 percent increase would be required to meet the government’s pledge to end all electricity subsidies.)

•Full autonomy for the country’s central bank and the cessation of loans from the State Bank of Pakistan to the government