27 July 2006 |

The failure to stop the bloodletting in the Middle East, Exxon's record second-quarter profits and Iran's nuclear cat-and-mouse game have something in common -- it's the oil.

By Greg Palast
July 26, 2006

I can't tell you how it started -- this is a war that's been fought since the Levites clashed with the Philistines -- but I can tell you why the current mayhem has not been stopped. It's the oil.

I'm not an expert on Palestine nor Lebanon and I'd rather not pretend to be one. If you want to know what's going on, read Robert Fisk. He lives there. He speaks Arabic. Stay away from pundits whose only connection to the Middle East is the local falafel stand.

So why am I writing now? The answer is that, while I don't speak Arabic or Hebrew, I am completely fluent in the language of petroleum.

What? You don't need a degree in geology to know there's no oil in Israel, Palestine or Lebanon. (A few weeks ago, I was joking around with Afif Safieh, the Palestinian Authority's Ambassador to the US, asking him why he was fighting to have a piece of the only place in the Middle East without oil. Well, there's no joking now.)

Let's begin with the facts we can agree on: the berserkers are winning. Crazies discredited only a month ago are now in charge, guys with guns bigger than brains and souls smaller still. Here's a list:

-- Israel's Prime Minister Ehud Olmert's approval rating in June was down to a Bush-level of 35%. But today, Olmert's poll numbers among Israeli voters have more than doubled to 78% as he does his bloody John Wayne "cleanin' out the varmints" routine. But let's not forget: Olmert can't pee-pee without George Bush's approval. Bush can stop Olmert tomorrow. He hasn't.

-- Hezbollah, a political party rejected overwhelmingly by Lebanese voters sickened by their support of Syrian occupation, holds a mere 14 seats out of 128 in the nation's parliament. Hezbollah was facing demands by both Lebanon's non-Shia majority and the United Nations to lay down arms. Now, few Lebanese would suggest taking away their rockets. But let's not forget: Without Iran, Hezbollah is just a fundamentalist street gang. Iran's President Mahmoud Ahmadinejad can stop Hezbollah's rockets tomorrow. He hasn't.

-- Hamas, just days before it kidnapped and killed Israeli soldiers, was facing certain political defeat at the hands of the Palestinian majority ready to accept the existence of Israel as proposed in a manifesto for peace talks penned by influential Palestinian prisoners. Now the Hamas rocket brigade is back in charge. But let's not forget: Hamas is broke and a joke without the loot and authority of Saudi Arabia. King Abdullah can stop these guys tomorrow. He hasn't.

Why not? Why haven't what we laughably call "leaders" of the USA, Iran and Saudi Arabia called back their delinquent spawn, cut off their allowances and grounded them for six months?

Maybe because mayhem and murder in the Middle East are very, very profitable to the sponsors of these characters with bombs and rockets. America, Iran and Saudi Arabia share one thing in common: they are run by oil regimes. The higher the price of crude, the higher the profits and the happier the presidents and princelings of these petroleum republics.

This Thursday, Exxon is expected to report the highest second-quarter earnings of any corporation since the days of the Pharaoh, $9.9 billion in pure profit collected in just three months -- courtesy of an oil shortage caused by pipelines on fire in Iraq, warlord attacks in Nigeria, the lingering effects of the sabotage of Venezuela's oil system by a 2002 strike... the list could go on.

Exxon's brobdingnagian profits simply reflect the cold axiom that oil companies and oil states don't make their loot by finding oil but by finding trouble. Finding oil increases supply. Increased supply means decreased price. Whereas finding trouble -- wars, coup d'etats, hurricanes, whatever can disrupt supply -- raises the price of oil.

A couple of examples from today's Bloomberg newswire are:

"Crude oil traded above $75 a barrel in New York as fighting between Israeli and Iranian-backed Hezbollah forces in Lebanon entered its 14th day... Oil prices rose last month on concern for supplies from Iran, the world's fourth largest producer, may be disrupted in its dispute with the United Nations over its uranium enrichment ... [And, said a trader,] 'I still think $85 is likely this summer. I'm really surprised we haven't seen any hurricanes.'''

In Tehran, President Ahmadinejad may or may not have a plan to make a nuclear bomb, but he sure as heck knows that hinting at it raises the price of the one thing he certainly does have -- oil. Every time he barks, 'Mad Mahmoud' knows that he's pumping up the price of crude. Just a $10 a barrel "blow-up-in-the-Mideast" premium brings his regime nearly a quarter of a billion dollars each week (including the little kick to the value of Iran's natural gas). Not a bad pay-off for making a bit of trouble.

Saudi Arabia's rake-in from The Troubles? Assuming just a $10 a barrel boost for Middle Eastern mayhem and you can calculate that the blood in the sand puts an extra $658 million a week in Abdullah's hand.

And in Houston, you can hear the cash registers jing-a-ling as explosions in Kirkuk, Beirut and the Niger River Delta sound like the sleigh-bells on Santa's sled. At $75.05 a barrel, they don't call it "sweet" crude for nothing. That's up 27% from a year ago. The big difference between then and now: the rockets' red glare.

Exxon's second-quarter profits may bust records, but next quarter's should put it to shame, as the "Lebanon premium" and Iraq's insurgency have puffed up prices, up by an average of 11% in the last three months.

So there's not much incentive for the guys who supply the weaponry to tell their wards to put away their murderous toys. This war's just too darn profitable.

We are trained to think of Middle Eastern conflicts as just modern flare-ups of ancient tribal animosities. But to uncover why the flames won't die, the usual rule applies: follow the money.

Am I saying that Tehran, Riyadh and Houston oil chieftains conspired to ignite a war to boost their petroleum profits? I can't imagine it. But I do wonder if Bush would let Olmert have an extra week of bombings, or if the potentates of the Persian Gulf would allow Hamas and Hezbollah to continue their deadly fireworks if it caused the price of crude to crash. You know and I know that if this war took a bite out of Exxon or the House of Saud, a ceasefire would be imposed quicker than you can say, "Let's drill in the Arctic."

Eventually, there will be another ceasefire. But Exxon shareholders need not worry. Global warming has heated the seas sufficiently to make certain that they can look forward to a hellacious -- and profitable -- season of hurricanes.

Democracy and Oil

20 July 2006 |

Ukraine had Orange revolution to save their democracy. Mexico is now fighting to save their democracy and freedom...

Realvoice Podcast

Greg Palast in Mexico

14 July 2006 |

Boom town

13 July 2006 |

The fastest-growing city on earth, Dubai is spending mind-boggling sums on construction and is about to swallow up P&O in its bid to be a global maritime power. Given the scale of its ambition, could it become the most important place on the planet? Adam Nicolson reports from 'Mushroom City'

Adam Nicolson
Monday February 13, 2006

It looks like a hot Grozny. On the vast invented islands offshore and in the even vaster building sites that stretch in a wide band the whole length of Dubai's now famous riviera, acre on acre of grey-faced, concrete, hollow-eyed buildings, fenced in with scaffolding and overhung by tower cranes, stare at each other across the sands. Tower blocks look abandoned rather than half-made. It is said that a fifth of the world's cranes are now at work here. An army of some 250,000 men, largely from India and Pakistan, are labouring to create the new glimmer fantasy, earning on average £150 a month, and living in camps, four to a room, 12ft by 12ft, hidden away in the industrial quarters of al Quoz. One night in one of the luxury hotels would cost six months' wages of one of the men who built it. Below and around their work sites, the new streets are chaotic with rubble and piles of steel.

The traffic is already as bad as Los Angeles. The city authorities are now giving priority to new roads, hundreds of millions of dollars are being spent on bridges across the Dubai Creek, five lanes in each direction, but still a taxi ride that might take 10 minutes at midday lasts an hour at either end of it. If you ask a driver to take you to some places, he laughs. "Do you want to have a very long talk?" he says.

Dubai is growing faster than any city on earth. "Mushroom City", Ravi Piyush, a plumply content dealer in the Gold Souk, said to me. "Nothing today, everything tomorrow." The World Bank reckons that the reconstruction of Iraq is going to cost $53bn. Here, along the strip of footballer-friendly sand that stretches 25 miles or so along the shores of the Persian Gulf, there is, at a rough estimate, about $100bn worth of projects either underway or planned for the near future. That is a numbing figure, ungraspable. It is the equivalent of every single dollar invested in the United States from abroad last year; almost twice the foreign investment in China.

There are the three famous offshore "palms", man-made peninsulas laden with more hotels and more "signature villas" than the entire Premiership might ever dream of. The 7,000-man workforce on one of them is too large to get on to the palm each morning without creating its own traffic jam: they are shipped in by sea from further along the coast. There's to be a Giorgio Armani Hotel and a Palazzo Versace. There's the tallest building in the world under construction, Burj Dubai, costing $800m and expected to be 800m tall when complete, but the precise figure is being kept secret in case New York's new Freedom Tower tries to top it. A billboard the size of Piccadilly Circus stands out in the desert showing the pencil-thin rocket of a tower alongside a simple rubric: "History Rising." The biggest shopping mall in the world is already here. Another, bigger, the world's largest retail development, is under construction.

There's to be an underwater hotel ($500m). One indoor ski resort, with real snow and its own black run, exists already, a weird, looming presence on the city's southern skyline. There is to be a second, with a revolving mountain. Plans are mooted for a Chess City, with 32 tower blocks of 64 floors, each in the form of a chess piece. There's to be a 60-floor apartment block in the shape of Big Ben. One company selling flats is giving away a free Jag with each one. There will be a pyramid and a building called Atlantis that will cost $600m and include a "swim-with-the-dolphins encounter programme". An Aviation City and a Cargo Village, an Aid City and a Humanitarian Free Zone, an Exhibition City and a Festival City, a Healthcare City and a Flower City, a $4bn extension to the airport and another entirely new airport along the coast towards Abu Dhabi, for which no figures are available but you can take a guess at a few billion: six runways, annual capacity 120 million passengers, 12 million tonnes of cargo.

Next to it, as the Dubai government's Department of Tourism and Commerce Marketing puts it, "There will be several smaller cities that will cater to the financial, industrial, service and tourism industries." To fill these airports, Emirates, the national airline, has just placed the biggest order that Boeing has ever had: $9.7bn for 42 777s, each capable of carrying 300 passengers non-stop more than 9,000 miles across the world. They have also ordered a fleet of the biggest Airbuses on offer, each capable of carrying 555 people.

The Middle East's answer to Disneyland, called Dubailand, which is far larger than Monaco, is costing $4.5bn. It will employ 300,000 people in the various joylands, servicing 15 million visitors. A new urban railway, with 37 stops, begins construction soon. Dubai is to have its own Silicon Oasis ($1.7bn) for computer companies. A mixed development called Dubai Waterfront/Arabian Canal covers an area larger than Barbados and will house, when completed ($6bn), more people than Paris.

There's another side to Dubai. Drive south along the Gulf, away from the glamour zone of the great hotels, past the giant malls and the huge gas-fired power stations, almost to the western border of Dubai, and you come to the largest man-made harbour in the world. The unapproachably vast quays of the modern port at Jebel Ali were dredged out of the desert sands in 1979 at a place where the present emir's father, Sheikh Rashid, used to come for evenings camping with his friends. Abdulla bin Damithan, one of the port managers, showed me around in his red Audi. (This was a replacement; the BMW was in for service.) The 1.5 mile-long quays are so enormous that to look the length of them is to stare into a desert haze. Halfway along, the metal bodies of the ships and cranes disappear like mirages.

But it is no dreamy place: every minute, every towering gantry crane lifts another container off the high-stacked decks of the bulbous ships alongside, lowers it to a waiting truck that delivers it to another part of the site, or transfers it from the unimaginably huge motherships, which travel the world oceans, to the slightly less huge feeder ships that service the Gulf, the Indian trade and the Mediterranean. Nothing interrupts the movements, day and night, 365 days a year, even in July at 90% humidity, an air temperature usually over 49C and when even the seawater in the docks approaches 38C. No one works outside. More than seven million containers are moved here in the course of the year, a figure that grew 23% last year, and is set to triple within the next six years, serving a market of two billion people. It's like looking at the guts of the world, the usually hidden machinery by which things actually happen. Over on the other side of the harbour, two diminutive destroyers are tied up, the stars and stripes hanging off their sterns. This is where the American carrier battle groups patrolling the Gulf come for service - and shopping. It's the port most visited by the US navy outside the United States.

Like almost everything of any significance in Dubai, the port system belongs to the state, or to the Maktoums, the ruling family. The two are indistinguishable, and in some ways, Dubai is like Poundbury writ large - and rich: a princely vision of how the world might be. The Maktoums came here as Bedouin chieftains in the 1820s, to a small, palm-fringed trading creek, where political control was in the hands of the British. Only in 1971 did Dubai gain independence as part of the United Arab Emirates. It was already known that Abu Dhabi, by far the biggest and richest of the Emirates, was sitting on a vast mineral reserve. At current rates of production, Abu Dhabi has more than 120 years' supply of oil and gas still untapped. Dubai is nothing like so well endowed, and so from the 1960s onwards, the Maktoums have been consciously shaping Dubai as the trading and financial motor of the Emirates, and the Dubai ports system is central to their vision.

Dubai sits on the all-important strategic routeway of the modern world: China, India, Middle East, Europe and the US. That is where the money is going to be. China has just become the third biggest economy in the world and it is the fastest growing. India is set for its own acceleration. The Maktoum plan is to make Dubai the centre of a global strategic network of port facilities to rival Singapore and the huge Hong Kong-based conglomerate of Hutchison-Whampoa. They have been acquiring hard and fast and now control massive facilities in China, Hong Kong, Australia, South Korea, India, Yemen, Djibouti, Saudi Arabia, Romania, Germany and Latin America. In a profoundly symbolic move, Dubai Ports are now manoeuvring to make a bid for the great harbours in southern Iraq.

They want more, and that desire for global control is what lies behind their bidding war for P&O, the British ports and shipping combine, which has a powerful European presence (including the giant London Gateway, planned to be Britain's biggest container port at Thurrock on the Thames), exactly what Dubai wants. Singapore wanted it too and the two commercial city states' rival bids drove up the price, adding 80% to the value of P&O's shares and valuing the company at a reported $6.8bn (just short of £4bn), an unprecedented 40 times P&O's profits last year. At the weekend, Singapore pulled out and all the signs are that when P&O's shareholders vote today, they will accept Dubai's offer. This bid alone is a measure of the hunger, the money and the drive of what is happening in the emirate. And the Arab world has backed the bid. When Dubai Ports issued a bond for $2.8bn last month to help it buy P&O, it found itself drowning in $11.4bn of subscriptions.

Why is Dubai doing this? And why so fast? What can the hunger be traced to? I spent a morning on The World, one of the big prestige projects, consisting of 300 artificial islands made of sand dredged from the sea floor and either dumped or pumped into forms that vaguely mimic the shape of the world's continents. Every week between five and 10m cubic metres of sand are delivered to the site. The islands will cost up to $30m each, and that is for the sand alone. Making the lumps habitable for the world's island-hungry rich will cost half as much again.

I was somewhere in Greenland with Hamza Mustafa, the man who is running it for Nakheel, the state-owned developer. It was another invented moment: we were there for a photo. Vijay Singh, the Fijian golfer, was going to fire some shots from Greenland over a narrow channel to Iceland, still nothing but sand, on which one of Nakheel's PR men had put a golf flag. There were helicopters, artificial grass, English marketing girls, Singh's personal trainer in shorts, his agent in shades, two photographers, their assistants, cooks, waiters and barmen, boatmen, people from a Nakheel golf development and Singh's personal course designer, who told me in detail how sewage makes courses greener. It's a perfect symbiosis: houses need golf courses and golf courses need the sewage the houses produce. How happy is that? "As long as it's got the nutrients, grass loves sand," he said.

While Singh stood beneath the chopper firing his shots, I talked to Mustafa, in the sleek Arab-modernist villa he's had built on Greenland. He has already sold 30% of the $3bn project, mostly to "local money, from the region", the rest, he says, to British and Americans. Australasia has been sold to a developer from Kuwait. Why are they buying? "No tax, good weather, an easy life, a comfortable life, affordable. I don't have to push the sales. I've got 10 islands left of the ones I want to sell at the moment. They are clamouring for them. And then I'll stop for a while. We don't want a glut." He smiled, complicit, knowing as well as I did what sales talk amounts to. "By 2015, there will be 250,000 people living here. It'll be like Venice."

I asked him why Dubai was going through this world-busting surge. One might have expected the straightforward business answer, which goes something like this: Dubai, unlike other parts of the Gulf, has little of its own oil or gas. A great deal of Arab money, invested in the US, came back from there after 9/11 and needed an outlet. The fact that oil is now pushing $70 a barrel means that the Gulf is awash with liquidity. There is clearly a role for a strategic financial centre in the Middle East: Beirut played it once, Dubai could do so now. Money has been draining out of Iran for years and Dubai, just across the Gulf, has always been a traditional place for Iranians to put their money to work. Mohammed Noor Taleb, a 75-year-old textile trader I spoke to in the souk, who had lived with his mother as a child in a tent made of palm leaves and now owned a business in Indian cottons turning over $5.2m a year, told me an old Dubai joke. A young boy is asked by his father "What is two add two?" "Am I buying or am I selling?" the boy says. Commerce is in the blood.

But Mustafa's reply came from another place entirely, evidence of the extraordinary hybridisation of cultures that is going on here: traditionalist, modernist, Arabist, internationalist, market-based, bowing to authority. For Mustafa, it all stems from the Emir of Dubai himself, Sheikh Mohammed bin Rashid al-Maktoum. Mohammed only became Emir on January 4, when his elder brother Sheikh Maktoum bin Rashid al-Maktoum, died after a long illness. But Mohammed has had his hand on the tiller for years. "Sheikh Mohammed has had a vision," Mustafa said, "which is that Dubai should become a fully developed city, with the best life of any city that has ever been created. The whole city is growing as a single organism. We have planned this, very carefully, he is a leader who has bestowed a great vision on us, so that in time Dubai is going to become the first ever Arab modern metropolis." Was this really about an Arabist dream of perfection? "No, this is not Arab nationalism. But what Dubai is trying to do is set an example of how Arabs should be represented. After 9/11, Arabs suffered from a lot of bad publicity. Dubai is trying to come back with the right kind of publicity. It will be a fully modern state. It will be setting the standards. It will be a place that people will look up to."

You might have to take that with a few bucketloads of salt. There is no hint of democracy in Dubai. There is a consultative council whose members are nominated by the ruling family. A group of five old Arab families control the entire emirate. The working and living conditions of the construction labourers and the domestic servants from south Asia are notoriously bad. Thirty-nine building workers died on sites last year, 22 of them simply by falling, as provision of slings and ropes is inadequate. The Dubai press is full of stories criticising companies for late payment, no payment, the confiscation of passports, imposition of penalties for minor infringements, the manoeuvrings of loan sharks and all the other expectable abuses of a poorly regulated employment system. The property laws are explicitly racist: no non-UAE national can own land outside the designated free zones. No foreign company can operate in the country without paying a UAE "sponsor" to be their local representative. No one except UAE nationals can get one of the plum jobs in a government department. Education and healthcare are free for all UAE nationals but no one else. The local press will never be seen to criticise the government and when, for example, I tried to interview the director of strategic planning in the offices of Dubai municipality, I was told I could only do so "if we have checked you out first and seen that what you will write will be favourable". Not much hybridisation there.

And yet it is not Saudi Arabia. Brokeback Mountain is soon to open in Dubai cinemas, which it never could in Saudi Arabia. There is no problem with bikinis and sunbathing on the beaches. And on a more substantial level, there is a determined effort to de-monopolise the economy, to make market competition the driver for this new model world. Local customs must be respected: no loud music during Ramadan, no eating in front of Muslims on fast days, no possibility of making a political claim on the direction of the state. And in return for those limits, the state delivers a sense of wellbeing. That is the trade-off on which Dubai is relying. A booming market, with a consciously courteous social culture and a tight police system (panic buttons in the thousand gold shops in old Dubai bring the police in two minutes) deliver a better wage than would be available at home - all this in return for surrendering anything resembling a political right.

Eduardo Ferrari, an Argentinian cameraman who has lived in Dubai for the last eight years, says he couldn't "give a damn for democracy. I live here in the most democratic country in the world. Why? Because the economy is taking you by the tip of your head and pulling you up. Every year I have more and more. In Argentina, every year I have less and less." Vishal Khemani, a 26-year-old from Mumbai, who imports Indian and Japanese textiles for Dubai wholesalers, says he loves Dubai simply because it is "very disciplined, very neat, very clean. Everything is going to timetable. I have a good job, good food. It is a cheap country." And extremely safe. There has been no hint, so far, of any terrorist attack, although you would have thought it was due for one. A western businessman, surveying the most luxurious of the Jumeirah beach hotels, said simply to me: "Everything about this place smells of western women, right? It looks like an al-Qaida target to me." There are rumours in Dubai that a terror plot was foiled last year but the processes of government are so opaque that there is no confirming that. It may be that the levels of government control in Dubai are high enough to make any terrorist operations very difficult.

Bob Gogel, CEO of Liberata, an international company specialising in the outsourcing of financial services, probably speaks for the business community as a whole. "Dubai is an unpolished gem polishing itself very quickly. You could look at it as a CD compilation - the best of London, Sydney, Miami, Las Vegas - and you have to give them the benefit of the doubt. Where else in the Middle East is going to do it? Turkey? Saudi Arabia? Lebanon? Egypt? Kuwait? You can't see it. Nowhere in the world do you get such good service. Certainly not in London. And business people like that. They've got a good plan, it's tightly controlled, they've managed to pull in some good people, they've got the oil money, and that price is not going to drop very far. The property market in Dubai is probably overheated and the Dubai stock market is due for a correction. But you try poking holes and I have trouble poking that big a hole."

This is the Dubai sandwich: at the bottom, cheap and exploited Asian labour; in the middle, white northern professional services, plus tourist hunger for glamour in the sun and, increasingly, a de-monopolised western market system; at the top, enormous quantities of invested oil money, combined with fearsome social and political control and a drive to establish another model of what modern Arabia might mean in the post-9/11 world. That is the intriguing question: can Dubai do what Libya, Egypt, Palestine, Lebanon, Syria, Iraq, Yemen, or almost anywhere else in the Arab world you might like to mention, have failed to do? Is Dubai, in fact, the fulcrum of the future global trading and financial system? Is it, in embryo, what London was to the 19th century and Manhattan to the 20th? Not the modern centre of the Arab world but, more than that, the Arab centre of the modern world.

Guardian Unlimited © Guardian Newspapers Limited 2006

I sincerely hope it is not a case of -- Boom! Bang! Crash!

French team's rainbow connection

07 July 2006 |

Can the rise again of Zinedine Zidane and his multicultural French team illuminate a fresh path towards unity for their racially divided nation? Michael Lynch reports from Berlin.

BEFORE many of the big matches in this World Cup, the two captains of the competing teams have been called on to read out FIFAprepared statements condemning racism and highlighting the potential of soccer to ease racial, ethnic and cultural tensions in countries whose populations resemble a patchwork quilt of nationalities.

Nowhere, perhaps, might those statements — contrived as some might claim them to be — be heard with more clarity than in a French dressing-room that has endured criticism not just about its age and its halting start to the competition but, fundamentally, about its racial composition.

Eight years ago, when the peerless Zinedine Zidane led Les Bleus to a historic World Cup triumph on home soil, the national team was held up as a wonderful mirror for a harmonious and multicultural French society.

There was Zidane, the maestro at the heart of the team, the midfi eld genius of Algerian extraction who grew up in the socially deprived La Castellane district of Marseilles, the man whose two goals in the final set up the 3-0 win over Brazil.

There was Patrick Vieira, born in Senegal, but now a mainstay of Le Tricoleur; Lilian Thuram, from the Caribbean island of Guadeloupe; Marcel Desailly, whose family origins were in Ghana; midfi elder Youri Djorkaeff, of Armenian heritage; and Basque defender Bixante Lizarazu.

There were the black strikers Thierry Henry and the Argentinianborn David Trezeguet, as well as striker Sylvain Wiltord.

But the main man, then as now, was Zidane, whose chiselled features, calm demeanour, balding crown (which gave him the appearance of a monk) and sublime ability made him the poster boy for a united France.

"L’Effet Zidane" was shorthand for this new-found sense of inclusion that was engendered by what was, truly, the rainbow team.

Well, it was for nearly everyone except the controversial right-wing French nationalist politician Jean- Marie Le Pen, who complained that there were too many black men in the team and that it was not representative of the France that should be portrayed on the world stage.

Le Pen was howled down then. The party mood — encapsulated after that fantastic triumph when black and white and brown, young and old, newcomer and longestablished resident, poured onto the Champs Elysees for an all-night celebration — was still strong.

Such was the emotion that a young Henry was told by an elderly woman that she had not felt such elation since the time of liberation after World War II.

But much has happened in French society in the eight years since the evening when a nation came together.

Economic performance has slumped, unemployment has risen and racial and religious tensions have intensifi ed, leading to a fracturing in social cohesion.

While France remains one of the wealthiest countries in the world (in 2004, its per capita GDP was $40,000) and it is a key member of the powerful G8 group of industrialised nations, the old problems, masked briefl y by the success of the French team in the 1998 World Cup and the subsequent European championship success of 2000, have resurfaced.

Unemployment is about 10 per cent and almost one in four youths does not have a job. Images of blazing cars and pitched battles with police and authorities were beamed around the world late last year as the tension simmered, and then boiled, among the alienated youth of Paris’ outer suburbs. The rioting was attributed to the failure of the integration policies hailed as a success in 1998.

Just before France took on Brazil in the quarter-final match in Frankfurt, Le Pen popped up again, claiming once more that France "would not recognise itself in this team".

Les Bleus responded in the best possible fashion, by smashing the South Americans in a superb team effort orchestrated by a virtuoso performance from Zidane, and continued the dream with a semi- fi nal victory over Portugal that has set up the much-anticipated fi nal with Italy.

The winning goal came from Zidane, who calmly slotted home the penalty that gave France a 1-0 win.

That Zidane was once more at the heart of the affair brings a wonderful symmetry to a World Cup campaign that social commentators and politicians who hope that soccer can once more unite the country will be quick to seize on.

He was tempted back into the national colours last year by coach Raymond Domenech, who feared that Les Bleus might not qualify without his aid.

Zidane was tired. He was old (he is now 34), and he was winding down, preparing for a life in which he would no longer be known as a "Galactico" of Real Madrid, nor as the talisman of French soccer.

But Domenech — who once aspired to be an actor — used his powers of persuasion to woo him back. Not only did Zidane return to the colours, so, too, did two other key members of France's rainbow squad, defender Thuram and Chelsea midfielder Claude Makelele, the trio making a pact to put all on the line for their country one last time.

It was Thuram himself, France's most capped player with 120 games for Les Bleus, who took it upon himself to stare down Le Pen, and address the question of social integration, the role of black players in the national team and the impact Les Bleus can have on French society.

At a news conference where, in a huge departure from tradition, the French media applauded a player, the Juventus defender pointed out that more than two-thirds of France's 23 World Cup players were non-white.

"What can I say?" he told the website of French sports daily L'Equipe.

"Obviously, Jean-Marie Le Pen is unaware there are black Frenchmen, like there are blond ones and brown ones. He has for a long time been a candidate to be French president and he does not know French history, that's the most serious and surprising thing.

"It's almost as if someone looked at the American basketball team and said: 'There are blacks in the team, what's going on?' Unless you can prove otherwise, all you need is French people on the pitch.

"When we take to the field, we do so as Frenchmen. All of us. It doesn't matter if we're black or not because we're French. I've just got one thing to say to Jean-Marie Le Pen. The French team are all very, very proud to be French. So vive la France, but the true France. Not the France that he wants."

Zidane has preferred to let his performances do the talking, reasoning that the eloquence of his feet will communicate more than anything he can say.

Whether his genius will be able to ease, if only temporarily, the issues confronting his homeland is beside the point on this occasion as the former world player of the year, the man who glides effortlessly through a game finding space and time on a pitch where so little of either commodity exists, prepares for his final game.

Rarely do heroes get the chance to exit centre stage on their own terms.

Diego Maradona was chased out of the 1994 World Cup on a drugs bust. Dutch genius Johan Cruyff refused to play in Argentina in 1978, citing political opposition to the regime in Buenos Aires. George Best, who never even got to play in a World Cup, saw his career, and then his life, disintegrate in an alcoholic haze.

But Zidane will be different, as he takes on the role of star player in a drama few would have had the nerve to script even a month ago when France began its World Cup campaign with a listless scoreless draw against Switzerland.

It was a game in which he looked old, out of sorts and not on the same wavelength as his teammates, although the occasional glimpses Zidane's magic were there before he was substituted after he had been given a yellow card.

France was equally unimpressive next time out, drawing 1-1 with South Korea, Zidane again receiving a card that kept him out of the last group game, a 2-0 win over Togo.

It was in the first knockout game that Zidane, and Les Bleus truly came to life, dispatching the highly-fancied Spaniards 3-1 after coming from behind.

Important though his contribution was there, it was a prelude to the commanding performance against Ronaldinho, Cafu and company when France shocked Brazil. Although more muted against the Portuguese, Zidane was the go-to man when the penalty was awarded, and he will relish the chance to go out on the biggest stage of all.

"Now that we are here, after all the effort we have made, we will try and bring it (the World Cup) home," Zidane said after the semi-final.

"We don't want to stop now. This is so beautiful — we want to carry it on. It won't be easy, it will be hard, but we have the weapons to do it and we have the will to do it."

No one can gainsay him on either count. His fellow veterans (Thuram, Vieira, Makelele, Wiltord) all have lifted, and with the exciting Franck Ribery running at the Italian defence, trying to create chances for the predatory Henry, France will present the canny Italians with the sort of opposition — a mixture of proven success, experience and technical ability — they have rarely faced so far in this competition.

There is no doubt that the players will be galvanised to send off their leader in fairytale fashion, not the least because they hold him in such high esteem for his ability.

His former teammate Christophe Dugarry, a member of the 1998 team, said this week: "Zizou plays football in another dimension. For the rest of us, it can only be fantasy."

Henry — often said to have an ambivalent on-pitch rapport with Zidane — told Paris-based academic Andrew Hussey in an Observer article earlier this year that Zidane can simply "do things with his feet that some people can't even do with their hands". "Sometimes when he plays the ball, it seems like he is dancing."

The last word, perhaps, should belong to the vanquished. Carlos Alberto Parreira presided over a Brazilian side tipped to take home its sixth World Cup, until it was undone by Zidane.

"Zidane made the difference, even more than in the 1998 World Cup final," he said.

"He showed a lot of personality and creativity.This was probably his best performance in the last eight years."

“Senor Blank-o” wins in Mexico


By Greg Palast

And the winner in Mexico’s presidential contest is… Senor Blank-o!

The official count of the ruling party is: 36.38% for the ruling party and 35.34% for the challenger.

Or, to put names and numbers to it: The Bush-o-philiac candidate, Felipe Calderon, collected 402,000 more votes than Bush-bashed Andres Manuel Lopez Obrador. But the big winner was Mr. Blank — the 827,000 ballots without a mark for president.

I smell something rotten… eau d’Ohio, vintage 2004. In that state, as in Mexico this week, the presidential “winner,” George Bush, had victory margin smaller than the combined “undercount” (blank ballots) and rejected and mangled ballots.

Blank ballots are rarely random — in the USA, nearly 88% were cast in 2004, notably, in minority areas, the result of bad voting machines. That is, Democrats’ ballots “spoil” and “blank out” a heck of a lot more often than Republican ballots. What about in Mexico?

I intend to find out. As soon as I saw the “official” vote count, I booked a plane to Mexico City. I’ll be there to tomorrow to join our investigators on the ground — and to fill in the blanks.

And what about the “spoiled” vote — ballots rejected, lost, mangled? Well, some are sitting in dumpsters in Veracruz State which is controlled by the old ruling PRI. (There’s a darn good chance that the PRI, hoping to stave off its extinction, played a bigger role than Calderon’s PAN in shoplifting votes from challenger Lopez Obrador.)

In a prior missive, I noted that the Bush Administration, under the guise of a secret War on Terror contract, hired ChoicePoint Inc. to filch the voter and citizen files of Mexico. These are the same characters (the Bushes and ChoicePoint) who helped purge Florida’s voter rolls of African-Americans before the 2000 race. Were the Mexican rolls “scrubbed” with Dubya’s help? And what exactly was the International Republican Institute, the imperial arm of the GOP, doing down there? Shouldn’t someone ask? Shouldn’t someone investigate?

Too many uncounted votes, too many blocked voters, too many statistics missing from the official tallies to jump to the automatic conclusion of US mainstream media, that this election was Mexico’s first “clean” vote. It may look clean and neat from the Intercontinental Hotel in Mexico City where reporters shuttle from bar to press conference. But sniffing into the garbage piles and ballot piles of Veracruz, it smells more like Ohio con salsa.

The Assassination of Hugo Chávez

04 July 2006 |

Book Excerpt - Armed Madhouse by Greg Palast

Here is an extract from Greg Palast's new book Armed Madhouse, to be published in Britain on July 1 2006. Get Armed Madhouse at Greg Palast will be signing copies of his new book Armed Madhouse on Tuesday 4th July from 8pm at the NUJ headquarters (308 Grays Inn Road, London WC1, nearest tube: Kings Cross) with Hands Off Venezuela and the NUJ book branch. For more information see the press release Greg Palast talks to Hands Off Venezuela.

On August 26, 2005, the Lord spoke to His servant on cable television and His servant told the faithful watching in TV land: "Hugo Chávez thinks we're trying to assassinate him. I think that we really ought to go ahead and do it."

Reverend Pat Robertson has a tough time with the separation of church and hate. But Pat Robertson is not crazy. He is, in fact, one of the most ingenious, un-crazymen I've ever met. And the most calculating and viperous. Those who dismiss him as some cornpone, Bible-thumping Elmer Gantry fruitcake have dangerously underestimated him and his reach into political and financial power centers in Washington and abroad.

He never speaks for himself. Whether he speaks for God, I can't say, but certainly Dr. Robertson uses his television platform to preach the evangel of the elite to which he was born. His father, U.S. Senator Absalom Willis Robertson, was the mentor of Senator Prescott Bush. "I am not a 'televangelist,'" he told me. "I am a businessman."

And when he spoke of taking down Hugo Chávez, President of Venezuela, Robertson was all business. The hit the Reverend proposed was calculated for risks and rewards like any investment: "It's a whole lot cheaper than starting a war, and I don't think any oil shipments will stop. This is a dangerous enemy to our South controlling a huge pool of oil that could hurt us very badly ... We don't need another $200 billion war ... It's a whole lot easier to have some of the covert operatives do the job and then get it over with."

When I met with President Chávez in Caracas, in April 2002, he offered to write the introduction to the Spanish translation of my last book. I'm not crazy about politicians endorsing journalists, but I agreed on condition he meet the deadline: He'd have to write it before he's dead. Chávez wasn't overly concerned. "It's a game of chess, Mr. Palast. And I'm a very good chess player."

He's more than that. He is, as Robertson says, a dangerous man. But dangerous to whom? Mr. Beale, the Arabs have taken billions of dollars out of this country, and now they must put it back. It is ebb and flow, tidal gravity.

In October 2005, Hugo Chávez defied gravity and withdrew $20 billion of Venezuela's petro-dollars from the United States Federal Reserve and deposited the money in an account with the International Bank of Settlements for investment in Latin America. There is no Third World, there are no nations, Mr. Beale, there is only IBM and Exxon. Maybe.

At the beginning of 2001, Venezuela instituted a new "Law of Hydrocarbons." Henceforth, Exxon, British Petroleum and Shell Oil, the major oil extractors in Venezuela, would get to keep only 70% of the sales revenues from the Venezuelan crude they sold.

The oil majors had grown accustomed to their usual take - 84%. The reaction to the reduction in Big Oil's share of the Venezuelan pie was swift. Otto Reich, Assistant Secretary of State for Western Hemispheric Affairs, met with Venezuelan "dissident" billionaires and shortly thereafter, on April 11, 2002, Chávez was kidnapped. The President of Venezuela's Chamber of Commerce, an oil industry lawyer, declared himself President of the nation - giving a whole new meaning to the term "corporate takeover."

The coup d'état against the elected president, Chávez, was endorsed by The New York Times. On April 12, banking and oil industry chiefs held an inaugural party in Venezuela's Presidential Palace. The U.S. Ambassador rushed down to have his picture taken with his arms around the partying coup leaders. But within twenty-four hours, the party was over.

I learned later that Chávez, geopolitical grandmaster, had expected the coup and planted commandoes inside secret passages of the Presidential Palace. When informed that Chávez had secretly moved his knights into kill position, the partygoers took off their custom-made Presidential sashes and costumes and returned the real President to his desk, without bloodshed, within 48 hours of his capture.

The Times apologized. But not the White House. Bush's spokesman conceded Chávez "was democratically elected," but, he added, "legitimacy is something that is conferred not just by a majority of the voters." I see.

Chávez was just warming up. Exxon had begun tapping into Venezuela's heavy tar oils in the Orinoco Basin. Despite rising oil prices, Exxon figured the government should be satisfied with a 1% tax on the profits. Chávez changed that to a 16.6% tax. Shell Oil and other foreign extractors had made a habit of not paying taxes on their oil windfalls.

Shell, when handed the back-tax bill, balked and was surprised to find itself, in 2005, bounced out of a lucrative natural gas project. Chávez redirected the gas, meant for export, back to Venezuela's own consumers.

Venezuela has landless citizens by the millions. It also has unused land by the millions of acres locked up in fallow plantations on which a tiny elite had squatted for four centuries. In 2001, a new law required selling untilled land to the landless. It was a program long promised by Venezuelan politicians at the urging of John F. Kennedy as part of his Alliance for Progress. Progress waited for Chávez.

Heinz Ketchup's Venezuela division didn't like the new terms for doing business and shut its plant in the state of Maturin. Venezuela seized the multinational's property and put the workers back to work.

Pat Robertson was not the first to suggest terminating Chávez with prejudice. In response to previous threats, the very good chess player instituted a kind of "assassination tax" on U.S. oil companies. Every time a new plot to shoot the President was foiled, Chávez' tax authorities would send another bill for those "back taxes." Shell was hit with a new $130 million tax bill and got the point.

In June 2004, neo-con Otto Reich, friend of the coup plotters, was dis-employed by the U.S. State Department. And what does Chávez do with Shell Oil's tax money? In Caracas, I met with a reporter for the TV station whose owner is generally credited with having backed the failed 2002 coup. She pointed to the "ranchos," the slums, above Caracas where shacks, most made of cardboard and tin, were quickly transforming into homes of cinder blocks and cement.

"He gives them bread and bricks, so they vote for him, of course." She was disgusted. By "them," she meant the 80% of Venezuela that is "negro e indio" (Black and Indian). This poor, dark 80% had, until Chávez ran for President, left the running of government, and the spending of the nation's wealth, to the minority white 20%. The bread and bricks, and jobs and new health clinics, are intimately tied to the "ebb and flow" of capital; and now Chávez was standing in its way.

In early 2003, his government overturned the keystone of borderless globalization and imposed controls on the movement of capital. The Wall Street Journal reported, with surprise, that instead of economic doom: "... the controls trapped liquidity within the economy, which in part led to reduced interest rates and helped boost economic activity."

Lots of economic activity. In 2005, their economy grew by 9.4%, the highest in the Western Hemisphere, following a blazing 17.9% in 2004, with the biggest boosts occurring in the non-oil sector. Government services for health, education and food subsidies didn't drain the economy, as "flat world" globalizers predicted, but added to economic demand and productivity.

Chávez then waded further into the rushing flow of international finance to build another economic dam. His backers in Venezuela's Congress voted to require all private banks to dedicate 20% of their lending portfolio to "micro-loans" for small businesses and small-plot farmers. As a result, a large portion of the oil wealth in Venezuela would have to stay there, barred from flowing northward as is the custom with petro-dollars. Most important, 20% of the working class's savings would be channeled back to it rather than rising upward to fund the extravagant high-rises in Caracas.

There's no question that Chávez's largesse to the "negros e indios," for the bricks and medicine and loans abroad, is made possible only by wildly high prices of petroleum. That still makes Chávez one of a rare breed. After all, the new oil riches of Kazakhstan ended up, at least $51 million of it, in the Swiss bank account of its President (according to the bagman who deposited it). At the same time, pensions in Kazakhstan are half of what they were in 1993. Despite the windfall of receipts from privatization of the Kazakh oil fields, the Red Cross reports that the unequal distribution of the nation's oil wealth has pushed "three-quarters of Kazakhstan's 15.7 million population below the poverty line." Tuberculosis is now epidemic in the oil-rich nation. Kazakhstan's manufacturing employment has fallen by 36% and its GDP has imploded. Other developing oil states - Nigeria, Indonesia, Sudan - show just as little interest in distributing their petroleum wealth to the mass of their citizenry.

And, after all, Venezuela itself was a wealthy oil exporter long before Chávez, without much to show for it except massive international debts. Three decades ago, I wrote about the "peasants under the bridges in golden Caracas in shacks made of packing boxes." That was after the real price of oil hit $80 a barrel. Then, in the 1970s, in Caracas, no one passed out bricks and bread.

Chávez is called a Marxist and a socialist. He is neither. His reformist, cooperative and redistributionist program, and his handling of oil wealth, is clearly "Norwegian-ist." Chávez is a dramatist, calling his Scandinavian-style reforms the "Bolivarian revolution." It seems to drive Washington just crazy that brown people are demanding Nordic privileges. It's one thing to be kind to poor folk, another to rearrange the global flow of petroleum.

After bouncing Shell from one project, Chávez signed major development deals with the state oil companies of Brazil, China and India. Now, for the first time, a flow of crude would bypass the oil majors. Chávez was cruising for a bruising. And it was Chávez, of course, who played Latin Lone Ranger to Ecuador and Argentina, writing checks to support their bond sales. And when Ecuador's indigenous population seized Occidental Petroleum's fields, it was Chávez who arrived in Quito with two million barrels of oil products in tow to keep the nation on wheels.

The point was clear: Petroleum and petro-dollars could ebb and flow without Occidental or Chevron. And without the IMF and World Bank. It was The Wall Street Journal that dubbed Chávez "a tropical version of the International Monetary Fund, offering cut-rate oil-supply deals and buying hundreds of millions of dollars of bonds from financially distressed countries such as Argentina and Ecuador."

The un-tropical International Monetary Fund in Washington was not amused, nor were money center banks of New York and London. Petro-dollars are supposed to move from Venezuela to New York and only then return to Latin America as loans carrying interest rates up to 16%. Chávez, bypassing the side trip to New York, showed that the costly financial cycle is not, Mr. Beale, "tidal gravity ... an immutable law."

And to underscore the point, Chávez traveled to more Third World nations with gifts of low-cost oil: the Bronx, New York, and Chicago's West Side. In September 2005, Chávez offered these poor racial Bantustans within the USA (Hispanic neighborhoods in Chicago, African-American 'hoods in the Bronx) discounted heating oil through CITGO, the U.S. retail outlet of Venezuela's oil company. A public relations gimmick? Undoubtedly. But Chávez is making a point: The public, American public included, does not have to remain hostage to the Saudi-Houston cartel.

Chávez is a wily gamester. He pushes only so far. He may tax the oil majors, sell to their Brazilian competitors and spend oil loot in Ecuador, but his state oil company has, at strategic moments, waived most of the higher royalties and signed lucrative contracts with Exxon and Shell to extract offshore gas reserves. His government sells tantalizing morsels of concessions in the Orinoco Basin to keep industry majors mollified. Nevertheless, Chávez has challenged the great ebb and flow of international finance capital and petro-dollars. If Chávez were president of Kazakhstan, he could play Robin Hood with his nation's oil money without incurring the fanatic wrath of the White House.

Venezuela is a different matter altogether. Chávez is, correctly, seen as a class warrior, a crafty opponent of what George Bush calls "the impressive crowd, the Haves and the Have-Mores." Chávez wanted me to film him under the larger-than-life oil painting of Latin America's "Great Liberator," Simon Bolívar. Chávez sees himself as Bolívar, taking his class war beyond his borders, from Argentina to the Bronx, tilting the flat world back to level.

Can he? The difference between a grandiose nut and a grand visionary is the economic power to impose the vision.