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      US, NATO and the Question of Russia

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      If the question of a rising China and its possible collision with the United States is a central issue in world affairs today, then the rivalry between Russia and the US is the most pressing security challenge in the European theater. From the second half of the Obama administration, through Donald Trump’s first term and now President Joe Biden’s initial mandate, the US has ramped up pressure on Russia. Washington has imposed sanctions, expelled Russian diplomats, strengthened the North Atlantic Treaty Organization (NATO), rotated troops through Poland and the Baltic states and conducted military drills next to the Russian border. Defender Europe 2021, “One of the largest US-Army led military exercises in decades,” will run until June, with 28,000 total troops from 27 nations taking part.

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      If we are to believe the prevalent narrative that Beijing is Washington’s most dangerous rival, then the US and its allies who fear Russia and are hell-bent on defending Europe from supposed Kremlin interference are misguided — or are they?

      Security Dilemma

      Much like the tensions around the status of Taiwan, for instance, Ukraine is a hotspot for the complex power struggle between East and West on the European continent. Ukraine as a sovereign state and Taiwan as a self-governing entity share common features: Both are located in dangerous geopolitical regions on the periphery of the US-led order, and both are increasing their military spending. Furthermore, the US provides no explicit security guarantees for either. In somewhat different ways, both Beijing and Moscow do not think that Taiwan (in case of China) and Ukraine (in case of Russia) have a right to self-determination, especially in the domain of foreign policy.

      However, there is a major difference between the two. When it comes to Ukraine, events have probably passed a point of no return, especially with regards to Crimea, which Russia annexed in 2014 in what some argue was a preemptive effort to prevent the peninsula from becoming a potential NATO naval base in the future.

      Supposedly defensive moves by Russia to increase its own security in areas along its periphery are perceived by the US and NATO member states as offensive, compelling countervailing actions. These include increased US military presence in the Baltics and elsewhere along NATO’s eastern borders and further expansion into southeastern Europe. The measures, in turn, provoked retaliatory steps from Moscow, such as nuclear military modernization, taking aggressive positions toward neighboring states or fanning the flames of internal crisis in Montenegro in 2015-16 and the Republic of Northern Macedonia in 2017-18. This month, Russia and Serbia launched joint military exercises to coincide with the Defender Europe drills being held in neighboring Balkan states.

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      The US-Russia dyad in Europe is not only about a security dilemma. Moscow keeps its adversaries in check with ambiguity as well. For example, Russian President Vladimir Putin has openly warned the West of undeclared red lines. He amassed and then begun the withdrawal of more than 100,000 troops from Ukraine’s border to demonstrate Russia’s capacity to both escalate and de-escalate the conflict in eastern Ukraine but without revealing Moscow’s strategic plans.

      Moscow is on a mission to correct “the greatest geopolitical catastrophe of the century,” as President Putin once described the collapse of the Soviet Union. Russia is seriously interested in replacing the existing US-led liberal order, primarily the one extended beyond the Iron Curtain, with favorable and less democratic European regimes that fit Russia’s mold. These ideas were widely propagated by Russia’s neo-Eurasian movement since the 1990s. Igor Panarin, professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, advocated in favor of a Eurasian Union with four capitals, for example, including one in Belgrade.

      More recently, Anton Shekhovtsov, the director of the Centre for Democratic Integrity, has highlighted a critically important tendency: the growing links between Russian actors and Western far-right politicians to gain leverage over European politics and undermine the Western liberal order. In so doing, as David Shlapak writes for RAND, “Russia would seek to divide the [NATO] alliance to the point of dissolving it, break the transatlantic security link, and re-establish itself as the dominant power in Eastern and Central Europe.”

      Power Projection

      Some may argue that Russia’s goals are tangential. What really matters is Moscow’s capability to project hard power across the European continent. In this regard, skeptics largely question Russia’s ability to challenge the European nations in a scenario where the US stops extending protection to its European allies. Their typical point of reference is that Russia is but a “giant gas station” or that its annual GDP is “smaller than Italy’s.” However, what is usually overlooked here is Russia’s nuclear capability “to destroy the United States — and, not incidentally, its European allies — as a functioning society.” While it is highly unlikely that Moscow will ever resort to such an extreme, the fact that it does have the nuclear option should serve as a reminder of its power potential.

      Russia’s sheer size, vast natural resources and an impressive cyberweapons arsenal have also enabled the Kremlin to punch above its weight and pursue not just defensive policies, as we have seen in Georgia in 2008, and in eastern Ukraine and Crimea in 2014. Russia has sent troops into Syria and mercenaries into Libya, and provided support to Venezuela’s embattled president, Nicolas Maduro. Then there was the alleged interference in the 2016 US presidential election and the more recent SolarWinds cyberattack attributed to Russian hackers. Moreover, according to Rand Corporation analysis, Russia could inflict a decisive defeat on NATO forces in the Baltic region and reach the outskirts of Tallinn and Riga within 60 hours.

      If the US decided to diminish its presence in the European theater, much like it has done in the Middle East under Donald Trump, Russia would face little pushback to the expansion of its sphere of influence in eastern Europe. The European continent would no longer be unified and free in accordance with collective security and liberal principles. Populist and nationalist governments in central and southeastern Europe would be tempted to seek other security solutions. One can only imagine a European subsystem in Russia’s image, divided between European poles trying to balance against each other.

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      Skirmishes over new borders in the Balkans, for example, recently discussed in a “disputed non-paper,” could potentially spin out of control and into new regional wars. America’s allies in western Europe would not only be disappointed but fearful for their own future. Finally, other US allies around the world, especially members of the balancing coalition in Asia Pacific, such as Australia, would also know that they could no longer count on Washington.

      So far, no US administration has shown any intention to leave Europe as a vital area of America’s global footprint in which it had invested a vast amount of blood and treasure over the past century. Russia also wants what every nation wants — security and the absence of competition along its borders. This brings us to what the historian Michael Howard once called “the most dangerous of all moods,” in which the US would not accept relegation to the second rank in the European subsystem. Russia would also never tolerate a similar outcome for itself in its own neighborhood.

      Thus, Ukraine, which the US is not treaty-bound to defend, will remain a hotspot. The most exposed states — Latvia, Lithuania and Estonia — to which the US does have an obligation under NATO’s Article 5, will remain vulnerable largely for reasons of their geography. Other central and eastern European countries, such as Poland, Romania or Bulgaria, will continue to harbor fears of Russian geopolitical ambitions. The only question is how long this strategic rivalry may mitigate the most dangerous outcome and evade a spiral toward a wider European disorder.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Rebalancing the Power Asymmetry Between Israel and Palestine

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      Shortly after the International Criminal Court announced its decision to investigate Israel for war crimes committed in the Occupied Palestinian Territories, Tel Aviv continued its annexation of East Jerusalem through forced expulsions in the neighborhood of Sheikh Jarrah. The residents protesting their eviction were met with excessive force from the Israeli military, including the storming of Al-Aqsa Mosque compound, the third holiest site in Islam, in the midst of the holy month of Ramadan, and attacking peaceful worshippers. Hamas, a Palestinian faction that controls Gaza, reacted by launching thousands of rockets into Israel, approximately 90% of which were intercepted by the Israeli Iron Dome defense system.

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      In retaliation, Israel launched hundreds of airstrikes on Gaza, killing over 200 Palestinians, including 65 children. On May 14, an airstrike leveled a Gaza tower block housing media organizations, among them Al-Jazeera and Associated Press. This attack on press freedom caused an uproar around the world, including in the United States. A week later, Israel and Hamas agreed to a ceasefire brokered by Egypt. Meanwhile, the Israeli occupation of the Palestinian Territories continues.

      The Power Imbalance

      This series of events demonstrates the power imbalance between Israel and Palestine. This asymmetry is a result of decades of British and US support — political, economic and military — for the Zionist settler-colonial project. Over the decades, the Israeli-Palestinian conflict has, in essence, consisted of Israel carrying out ethnic cleansing against Palestinians and being met with resistance. The latest bout of fighting emphasizes Washington’s tendency to justify Israel’s behavior while perpetuating the false narrative that Palestinian violence is terrorism. As such, there is an urgent need to rebalance the equation to protect Palestinian rights and lives through changing the narrative, supporting Israeli civil society and ending US weapons sales to Israel.

      Embed from Getty Images

      US leaders typically bring up the legitimacy of armed violence only when violence is being perpetrated by Palestinians. For instance, instead of condemning Israel’s bombing of civilian areas, President Joe Biden, like all of his predecessors, claimed that Israel has a right to self-defense. Although he did call for a ceasefire, Biden’s words fall flat. First, the US has repeatedly blocked UN Security Council resolutions calling for a ceasefire. Second, on May 5, Biden went on to approve a whopping $735-million sale of precision-guided weapons to Israel. Third, the ceasefire brokered by US Secretary of State Antony Blinken and Egypt does not address the core issues of Palestinian statehood and Israeli occupation. Rather, it manages armed violence in the short term, promising to rebuild the same Gaza that was destroyed by US weapons.

      Emboldened by Israel’s actions and the context of impunity, some Israeli settlers in the occupied territories have formed mobs to sporadically attack Palestinians in the streets. With ethnic clashes engulfing the country, the Israeli settlers will get to have their day in a civil court while Palestinians are subject to Israeli military courts. In fact, Israel has arrested over 1,550 demonstrators since May 9, many of whom are children. Among those detained, over 70% are Arab citizens of Israel. This disproportionality exemplifies the impunity of Jewish Israeli citizens vis-à-vis Palestinians and highlights the power imbalance inherent in Israel’s judicial system.

      Palestinians, often armed only with rocks, are commonly condemned as terrorists by Israel. Yet a nuclear Israel, backed by the most powerful country in the world, is always justified in its self-defense. Hamas is a security threat to Israel, but the damage it inflicts is usually contained to the few rockets that manage to get through the Iron Dome. Furthermore, conflating Palestinians, especially Gazans, with Hamas is a dangerous assumption that has a direct cost for Palestinian lives.

      As part of this power asymmetry between Israel and Palestine, Tel Aviv has long controlled the narrative around the conflict, resulting in a paradigm in which any criticism of Israel is perceived as anti-Semitism. This makes legitimate dialogue and policy reevaluation challenging. However, the narrative is slowly changing thanks to long-standing Palestinian activism.

      Peace Beyond Borders

      How can the power imbalance be offset and peace achieved? A simple answer would be ending the illegal occupation of the Palestinian territories, restoring the 1967 borders and respecting the rights of Palestinians. Short of this, there are three additional steps that can go a long way in improving the facts on the ground for Palestinians.

      First, human rights activists, and especially journalists, have a moral responsibility to counter the narrative that opposing Israeli apartheid is anti-Semitic, that Tel Aviv’s actions are justified in the name of self-defense, and that Palestinian resistance is terrorism. Thanks to social media, Palestinian activists have slowly shifted this narrative, with many leaders and protesters around the world denouncing Israel’s actions and advocating for Palestinian rights.

      Second, Israeli citizens themselves must recognize the atrocities upon which their state was built. Human rights groups within Israel, such as B’Tselem, voice concern and attempt to raise awareness, but it is up to ordinary citizens to decide if ethnically cleansing Palestinians is the right way to build a nation. Israelis committed to a democracy built around values of liberty, equality and reciprocity have a responsibility to oppose their government’s policy, including the targeting of NGOs that promote Palestinian rights.

      Third, the US must halt weapons sales to Israel and push for the protection of Palestinian rights. Currently, Israel receives $3.8 billion in military aid from the US annually and is equipped with high-technology defense systems such as the Iron Dome.

      In a marked shift of mood, US congress members are standing up for Palestinian rights. For instance, Rashida Tlaib (herself a Palestinian-American), Ilhan Omar, Cori Bush and Alexandria Ocasio-Cortez have condemned Israel’s use of armed force against civilians, as well as its annexation policy. On April 15, these representatives co-sponsored Betty McCollum’s bill defending the human rights of Palestinian children and families living under occupation. Senator Bernie Sanders also introduced a bill to block a weapons sale recently approved by President Biden.

      These are positive steps toward rebalancing the power dynamic between Israel and Palestine, but without a comprehensive shift of the narrative to more accurately reflect the complex reality on the ground, correcting decades of asymmetry will be hard to achieve.

      *[Fair Observer is a media partner of Young Professionals in Foreign Policy.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      America’s True Hyperreal Heroes

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      At the very moment that US President Joe Biden is busy demonstrating how little power he wields, whether in reigning in the neocolonial and militaristic behavior of the Israeli government or in attempting to push key legislation through Congress, Elon Musk, who has never been elected to any public office, is flaunting his unchallenged personal power over what may be the most disruptive force in today’s global economy: cryptocurrency.

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      Gregory Barber, writing for Wired, notes that through his tweeting, Musk has become a self-contained agent of volatility. He can send the value of different cryptocurrencies north or south, whenever he feels like it. As Barber frames it, “Musk is creating and destroying small fortunes, 280-characters at a time.” In his email promoting the article, Barber speculates: “Perhaps it’s strategic, or just whimsy, or maybe it’s a kind of performance art to inspire us all to wonder at the value of things. We might never know Musk’s true motives.”

      Today’s Daily Devil’s Dictionary definition:

      True motives:

      In the current society built on the principle of hyperreality, intentions that though detectable, will never be exposed in public, even by the media who understand that reporting on reality could only confuse their consumers who have become addicted to the manipulated representation of reality rather reality itself.

      Contextual Note

      Elon Musk is a true hyperreal hero, whose only serious rival on the world stage has been Donald Trump. Both are committed to finding ways to obscure the public’s ability to understand some serious public issues. But, contrary to Barber’s assertion, their true motives have never been in doubt. They can be summarized in two words — money and power — and two pathologies — greed and narcissism.

      Because most people in the United States have been taught to revere money and power — money as the key to power, power as the means of obtaining wealth — for all their obvious faults, their admirers not only continue to admire them but also celebrate their consummate ability to epitomize hyperreality. In the Calvinist tradition, wealth and power in the community were signs of divine favor. With the fading of the Puritan ethic of sober achievement, in their excess, Musk and Trump have attained the status of secular gods.

      Embed from Getty Images

      American culture struggles helplessly with the idea of truth. Where the condition for basic survival is to be constantly selling something to other people (ideally by creating a marketplace), truth tends to disappear into a misty horizon, spawning a destabilizing doubt that it even exists. But rather than resigning themselves to the absence of truth, Americans now want to reduce it to the question of facts. Fact-checking is all the rage.

      But serious philosophers and psychologists have always understood that the idea of truth means much more than establishing facts. Paradoxically, facts themselves can represent a convenient way of burying the truth. Journalists and public figures know this. A typical New York Times article on a potentially controversial issue typically contains a breathless series of short paragraphs citing facts, events and expert statements.

      The authors avoid providing logical connections between the paragraphs in an effort to let the facts accumulate. After aligning litanies of factoids and well-chosen quotes, the authors can be certain that no reader will be capable of stitching together anything that leads them towards an underlying meaning. “True motives” will be lost in the onslaught. Here at The Daily Devil’s Dictionary, we have cited examples of these logicless developments, for instance here and here.

      Both of our hyperreal heroes have been publicly disciplined for tweeting irresponsibly. Perceived as less dangerous, Musk still has a Twitter account whereas Trump had his taken away just before leaving the White House. Musk once declared that “Twitter is a war zone,” whereas Trump was accused of using it to foment civil war. His “true motive” appears to have been an attempt to create enough havoc to justify remaining in the White House. It didn’t work for Trump, but Israeli Prime Minister Benjamin Netanyahu may have been inspired by Trump’s example after failing to form a new majority earlier this year.

      According to Barber, Musk’s tweets “drop from the sky without warning. He controls the narrative, and thus the market effect.” This is not just hyperreal posturing or playing an expected public role with melodramatic or comic effect, as both Trump and Musk are wont to do on practically any occasion. Musk’s tweets concerning cybercurrency give him a power to make money instantly, at the expense of millions of other people. It sounds dangerous and downright unethical, but as a lawyer quoted by Barber explains, “You can’t police based on what you think is somebody’s subjective heart-of-hearts intent.” Is “heart-of-hearts intent” a synonym of “true motive”? In US culture, people tend to think so.

      Barber notes that only “a small number of people” possess something comparable to Musk’s hyperreal power. He cites Warren Buffett and the Federal Reserve chair, Jerome Powell. Neither of them is addicted to tweeting. But what is the true source of irresponsibility in this story? Is it Musk himself? Or is it Twitter as an institution that facilitates manipulation? Could it be cryptocurrency, which, as a pure product of purchasers’ greed, with no direct link to anything of substance, might justifiably be called hypercurrency? All three combine to define the hyperreal landscape that surrounds us, along with our media who amplify the drama the others generate.

      Historical Note

      Throughout history, political leaders have managed to control events by influencing the behavior of tens of thousands, and sometimes millions, of people. Think of Julius Caesar, Genghis Khan, Napoleon and Hitler. Whatever extraordinary narrative their culture invented for them and whatever personal charisma on their part contributed to their success, what these figures from the past did was rooted in the reality of government, administration, coercive force and concrete economic relationships.

      Hyperreality today sits atop all those features of power but thrives in an independent world of its own. It may be that without the example of Hollywood we never would have reached this stage. Musk and Trump alike are more like entertainment figures — both writing the script and playing the role — than to leaders of social, political or cultural movements.

      Two centuries ago, P.T. Barnum provided the model for hyperreality that would fully blossom in the 20th century thanks to the disruptive technology of movies, television and finally the internet. Barnum invented an entire sector of entertainment based on the misrepresentation of facts when, after purchasing an aging slave, Joice Heth, put her on display, claiming she was 161 years old and had been young George Washington’s nurse. Barnum understood how facts and symbolism combine to draw the public to his spectacles.

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      George Washington was already known as “the father of the nation.” Barnum provided an exotic, black mothering figure for the father of the country. At the same time, the supposed relationship served to justify slavery and racism by promoting the idea that blacks in a situation of service could nurture whites, and whites would protect and nurture blacks.

      Barnum later became famous for organizing his three-ring circus, but before that he built his reputation around presenting facts or the appearance of facts. He created the American Museum in Manhattan. It featured both authentic historical artifacts and a freak show, prolonging the spirit of deception he developed around Joice Heth. With his partner James Bailey, he launched hyperreality’s ultimate theme with a circus they called “The Greatest Show on Earth.” Barnum himself never sought to be a hyperreal hero. He simply propagated the values of the culture of American hyperreality that would be refined by a later generation of architects of hyperreality.

      William Randolph Hearst modeled the modern idea of the news. Sigmund Freud’s American nephew, Edward Bernays, invented the art of public relations built around the science of advertising designed as a form of mind control. Trump and Musk have come to represent the ultimate hyperreal heroes, but they have built their identities around the culture created by geniuses like Barnum and Bernays combined with the culture of Hollywood’s larger-than-life screen heroes. They are not alone. There are plenty of hyperreal supporting actors and extras who give depth to the representation. But they are the ones talented enough and sufficiently narcissistic to occupy center stage and ultimately influence the audience’s behavior.

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Europe’s Thirst for Virtual Water: Blueberry Fields Forever?

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      Blueberries have long established themselves among the superfoods. They are tasty, low in calories and full of beneficial nutrients. Most importantly, they are a rich source of antioxidants that serve to protect against a range of diseases, most notably cancer. This might explain why the demand for blueberries has steadily increased over the past few years. Between 2015 and 2019, Europe’s blueberry imports increased from 45,000 tons to 113,000 tons. Between 2018 and 2019 alone, the volume of imports rose by more than 40%.

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      Blueberries consist mostly of water. In fact, some 85% of the fruit is H2O. And that’s where the problem starts. In Western Europe, most of the blueberries you find in supermarkets today are imported from Spain; more precisely, from one province in the autonomous region of Andalusia, Huelva, located in the southwest, where Spain borders Portugal. Andalusia is known for the beauty of its major cities like Seville, Granada and Cordoba, and its beach resorts of Marbella, Torremolinos and Malaga.

      Andalusia also happens to be among the poorest autonomous regions in Spain. In 2019, it ranked close to the bottom with respect to GDP per capita; only Estremadura and Melilla ranked lower. In 2016, around 40% of the population lived in poverty; among children, the poverty rate stood at 44%.

      The Blueberry Dark Side

      Andalusia has also been the launching pad for Vox, Spain’s radical populist right. In the regional elections of 2018, Vox gained 11% of the vote, which put the party in a pivotal position. Since neither the left nor the right commanded a majority in the region’s parliament, Vox found itself in a position of kingmaker. At the time, Vox came out in favor of the center right. In Huelva, like across Andalusia, Vox is a major political player. In the November national election of 2019, Vox garnered more than 20% of the vote in Huelva, second only to the socialists who won 36%.

      Vox is a political force to be reckoned with. The party promotes itself as an ardent defender of ordinary hardworking people and of the unity of the Spanish state, threatened by Catalan and Basque independence aspirations. At the same time, the party has vigorously rejected any human responsibility for climate change. Environmental concerns are certainly not on the party’s agenda.

      This brings us back to blueberries from Spain. Over the past several years, the cultivation of blueberries in Huelva province has progressively expanded. Between 2016 and 2020, blueberry spring exports (February to May) increased by more than 80% in volume and more than 40% in value. At the same time, land devoted to blueberries increased from 4.4 squared miles to roughly 14 square miles. As a result, production more than doubled, from 20,815 tons in 2014-15 to 45,506 tons in 2019-20. Altogether, the cultivation of the three major “red fruits” produced in Huelva — blueberries, strawberries and raspberries — provides employment to over 100,000 people, generating roughly €1 billion ($1.2 billion) in revenue.

      Embed from Getty Images

      This is one side of the equation, one that Huelva’s authorities like to propagate. Unfortunately for them, the other (dark) side has once again been making international headlines. Here the focus is on the disastrous impact that cash crops have had on the natural environment, in particular on the Donana national park, a wetland reserve and UN Heritage site that is a refuge for over 2,000 different species of wildlife and serves as a way station for millions of migratory birds every year.

      The national park was already on the receiving end of an environmental catastrophe that severely affected its delicate ecological balance. In 1998, a dam burst at a mine near Seville, releasing up to 5 million cubic meters of toxic slush into the Guadiamar River, the main water source for the park. Cleaning up the mess cost the Spanish state some €90 million. It spent a further €360 million to restore parts of the park. Some of the money came from the European Union. It took several years for the park’s wildlife to recover.

      Yet little was learned from the disaster. By 2016, UNESCO threatened to put the park on its danger list. And for good reason: As The Guardian reported at the time, Donana was “said to have lost 80% of its natural water supplies due to marsh drainage, intensive agriculture, and water pollution from the mining industry.” The article cited a report from the World Wildlife Fund (WWF) that charged that farmers had been drilling more than 1,000 illegal wells that accelerated “the park’s destruction, as drought-resistant plants replace water-dependent ones in the region.”

      Ecological Crisis

      The expansion of cash crop cultivation in Huelva has only added to the ecological crisis, once again ringing alarm bells not only in individual countries that are among Huelva’s most important customers, such as Germany and the United Kingdom, but also in Brussels. A recent report on the website of Germany’s premier news program, ARD’s “Tagesschau,” set the tone: “Spain’s national park is drying out.” The main reason: Huelva’s red fruit industry has not only encroached on park land but, more importantly, has systematically starved the park of its most important lifeline — water. According to the report, estimates are that roughly 1,000 of the wells dug to irrigate the plantations are illegal. In other words, nothing had changed since 2016.

      By 2020, the European Commission had had enough. It took Spain to court. In December, it charged that Spain had looked the other way and allowed the continued illegal appropriation of groundwater, in the process inflicting serious damage to the nationally and internationally protected Donana wetlands. For all practical purposes, the failure lay largely with the regional Andalusian government. Five years ago, the regional government advanced a plan to protect Donana; five years later, according to an article in Spain’s leading newspaper El Pais, only 17% of the measures had been realized, 43% were incomplete, the rest — nada.

      What’s “Natural” on the Galapagos Islands?

      WATCH

      The regional government has, however, made an effort to go after Huelva’s most egregious water thieves. In March, two ex-mayors — one a socialist, the other a conservative — were put on trial together with 13 farmers, all of them accused of illegal appropriation of water. At the same time, the government has tried to shut down illegal wells. But with over a thousand currently in operation, the backlog is great, and more often than not the authorities have met with determined resistance.

      At the same time, however, the regional government has continued to license new water rights. In 2017, for instance, the government conceded more than 270,000 cubic meters of public groundwater to a cooperative society, which allowed the cooperative to more than double its production of blueberries in the Sierra de Huelva. All this, as a public official in charge of water management claimed, was done in the name of “sustainable development.” Donana’s endangered wildlife would probably disagree. But then, they don’t have a voice, and those speaking in their name, such as the WWF, have to a large degree been unheeded.

      Virtual Water

      Spanish blueberries produced in Huelva are a prime example of the ludicrousness of a development strategy based on international trade. Spain is a semi-arid, water-poor country. The distribution of water across the national territory is highly unequal. Water is relatively abundant in the north and relatively scarce in the south. Agriculture accounts for a large junk of the country’s total water use, roughly 60%. Yet agriculture contributes just 3% to the country’s GDP and employs roughly 4% of the active workforce. Particularly in the south, decades of agricultural practices have exhausted the soil and turned once fertile land into desert, shrinking the supply of arable land.

      Under the circumstances, producing a crop as water-intensive as blueberries in a semi-arid region borders on the absurd. The amount of water required to produce a certain amount of a product is generally referred to as a water footprint. The water footprint of blueberries is around 840 liters per one kilogram of fruit. This means that embedded in every kilo of blueberries for sale in the local supermarket are more than 800 liters of water. This is what is nowadays known as “virtual water” — the amount of water hidden from and invisible to the end consumer. Virtual water has become an increasingly important concept in international trade theory. What it means in practical terms is that with every kilo of blueberries we import from Spain, we bring in more than 800 liters of water.

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      By now, the absurdity of the situation should be obvious. Not only do we import water from a water-scarce region, but by importing the virtual water embedded in blueberries, we contribute to the depletion of a scarce resource in the exporting region which, in turn, is a major cause of the gradual destruction of one of Western Europe’s largest natural wetlands. And things are likely to get even worse. The upsurge in demand for blueberries and other red fruits has brought new producers into the market.

      As a result, prices have substantially declined, compelling producers to expand production and explore new market opportunities. Just the other day, after years of negotiations, Brazil gave a green light to the importation of blueberries from Huelva after the red fruits industry passed an on-the-ground inspection by a delegation of Brazilian authorities. And Brazil might only be the beginning. Huelva authorities have already set their eyes on even larger markets, notably China and India. In the meantime, environmental advocates are pinning their hopes on the European Court of Justice, which is supposed to consider the case over the next few months. Judgments rendered by the court are binding. Member states are obliged to comply with court decisions without delay. If found guilty, Spain might have to pay heavy fines.

      The WWF, which has been among the most vocal and determined advocates of the Donana national park, is confident that the court will rule in its favor. As Juan Carlos del Olmo, the secretary general of WWF Spain, put it, “Spain is about to be condemned for allowing the destruction of Doñana, a heritage that belongs to all Europeans.” He emphasized that the “Spanish authorities and especially the Regional Government of Andalusia, which have both turned a blind eye to this situation for years,” need “to take real measures to halt the degradation of Doñana.” This means, above all, closing the illegal wells that are “looting the aquifer and destroying biodiversity.”

      2020 marked the fifth anniversary of the United Nations Sustainable Development Goals, to which Spain has committed itself “at the highest level.” This includes ensuring “the lasting protection of the planet and its natural resources.” It is not entirely obvious how the export of massive amounts of virtual water from Huelva’s blueberry fields is supposed to contribute to the latter goal.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Radical Republicans Are Not Conservatives

      by

      The House Freedom Caucus is routinely described as conservative, by its members, by the mainstream media and by Wikipedia. The caucus, which draws together 45 Republican Party members of the House of Representatives, is the furthest to the right of any major political formation in the United States. The most extreme and flamboyant politicians in America, like scandal-plagued Matt Gaetz of Florida and gun-toting Lauren Boebert of Colorado, are proud to call the caucus their political home. Even Marjorie Taylor Greene of Georgia, after threatening to form an explicitly racist “America First” caucus, chose ultimately to continue promoting her nativist, QAnon-inspired beliefs from within the Freedom Caucus.

      By any reasonable measure, the Freedom Caucus and its members are not conservative. Because of their disruptive tactics and rhetoric, their contempt for bedrock conservative values like the rule of law and their embrace of the most radical populist in modern US history, they are more akin to European far-right politicians like those in the Alternative for Germany and Fidesz. Traditional Republicans recognize that the caucus and its members have nothing to do with the party they joined many years ago. Former House Speaker John Boehner, a more traditional Republican, gave an apt description of the caucus when he said in 2017, “They’re anarchists. They want total chaos. Tear it all down and start over. That’s where their mindset is.”

      Can the US Really Rally Other Nations?

      READ MORE

      The misidentification of the Freedom Caucus as “conservative” is not the only example of the misuse of this term. At various points over the last four years, Donald Trump was called a “conservative” president. Certain policies, like the dismantling of environmental regulations or the promotion of laissez-faire economics, have also been erroneously called “conservative.” Various media outlets and personalities, from One America News to Glenn Beck, have likewise been mislabeled “conservative.” When The Washington Post tries to rectify the problem by labeling far-right activist Ali Alexander an “ultraconservative,” it only makes matters worse. An ultraconservative should be even more determined to uphold the status quo rather than, like Alexander, trying to undermine it.

      The recent ouster of Liz Cheney from her position as the third highest-ranking Republican in the House has only further muddied the waters of this definitional quagmire. True, Cheney has upheld law and order in defending the integrity of the 2020 election against the revolutionary fervor of the “Trump Firsters” in her party. Prior to her recent stand, however, Cheney herself flouted many of the principles of conservativism by embracing the more radical policies of the Trump-inflected Republican Party, voting with the former president over 92% of the time on such issues as gutting the environment.

      The misuse of the term “conservative” is the result not only of a structural quirk of American politics, but also the evolution of political ideology in the United States.

      The Europeans

      In Europe, multi-party systems allow for greater nuance in political labeling. Thus, conservatives in the various Christian Democratic parties compete for votes against far-right populist parties that embrace anti-democratic, racist and even fascist positions. America’s two-party system, on the other hand, collapses such distinctions into a binary opposition between a single “liberal” and a single “conservative” party. If a faction emerges within the Republican Party, therefore, it is by definition “conservative” even if it so obviously isn’t. It’s as if politics in America is digital — either one or zero — while European politics reflect all the messy gradations of the analog realm.

      At the same time, ideologies have evolved considerably in the United States over the last half-century. “Conservative” once stood for preserving traditional arrangements in society such as family, faith, community and small business against the modernizing forces of the market. Conservatives have also adopted the British philosopher Edmund Burke’s distaste for the Enlightenment project of human rights and egalitarianism. Conservatives were also once conservationists (remember: it was Richard Nixon who, in 1970, created the Environmental Protection Agency and signed the Clean Air Act Extension).

      Embed from Getty Images

      The Reagan/Thatcher revolution changed all that. Conservatives suddenly became ultra-liberal in the economic sense. They wholeheartedly embraced the free market in their eagerness to deploy any powerful force against what they considered to be the primary evil in the world: big government. They supported laissez-faire economics — essentially, no government controls on the economy — even though unrestrained market forces tear apart communities, break apart families, undermine faith, destroy family farms and sweep away small businesses. But since such a market served as a counterforce to government authority, the neo-liberal conservatives prepared to throw out whatever babies were necessary in order to get rid of the bathwater.

      A further revolution in conservative thought came with the neoconservatives. These foreign policy hawks discovered a fondness for human rights and a taste for revolutionary change, as long as it was in countries the United States opposed. Overthrowing the Taliban, Saddam Hussein and Muammar Qaddafi, which required a revolutionary destruction of the status quo, became a new addition to the conservative agenda.

      In some respects, Trump attempted to purge the conservative movement of these two newer tendencies through his rejection of both the cherished free trade of the neoliberals and the “forever wars” of the neoconservatives. In their place, the new president reverted to the older right-wing ideology of nationalism, populism and racism of the Know-Nothing Party of the 1850s and the America First movement of the 1940s. At the same time, however, Trump retained the allegiance of these newfangled conservatives by slashing government involvement in the economy and championing higher Pentagon spending.

      As a result, the current Republican Party features a dog’s breakfast of right-wing ideologies. You can still find ardent neoliberals like Senator Rob Portman of Ohio who espouse free-trade economics and a few neocons like Senator Tom Cotton of Arkansas who rail against neo-isolationism. A solid majority of the party, Cheney notwithstanding, backs Trump no matter how much he deviates from conservative values.

      The Media

      Given the inability of Republicans to define themselves with any degree of precision and their preference for hiding behind labels like “conservative,” it’s no wonder that the media has difficulty parsing right-wing terminology. If the Freedom Caucus calls itself “conservative,” and the American Conservative Union agrees, should it really be the job of The New York Times to correct the record?

      And yet, that’s precisely what the mainstream media does for other ludicrously inapt designations. No major newspaper believes that North Korea is democratic simply because its official name is the Democratic People’s Republic of Korea. No mainstream journalists would mistake the far-right Sweden Democrats for the US political party of the same name. As for Russia’s Liberal Democratic Party, it is nothing of the sort, since it’s only the personal political vehicle of the raving extremist Vladimir Zhirinovsky, and pity the poor reporter who takes the party at face value.

      It’s long past time for the mainstream media to apply these common-sense rules of nomenclature to American politics.

      There are several efforts ongoing to wean the Republican Party of its addiction to Donald Trump. Perhaps a more important first step would be to reclaim the term “conservative” so that it applies in the United States to the same system of values that inspires conservative parties in Europe. Only then will the Republican Party have a chance of becoming once again a defender of the status quo rather than its chief wrecking ball.

      *[This article was originally published by FPIF.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Can the US Really Rally Other Nations?

      by

      On May 25, US Secretary of State Antony Blinken appeared alongside Israeli Prime Minister Benjamin Netanyahu in an effusive demonstration of love and mutual admiration. The show the two men put on in the aftermath of a shaky ceasefire looked like a private celebration of a threefold victory for Israel thanks to its aggressive show of force. The rockets from Gaza have stopped; Israel is still in control; the US will stand by Netanyahu, thick or thin.

      Is Israel an Apartheid State?

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      What has emerged from Blinken’s visit for Americans is a “mission accomplished” feeling. The US will now be able to write the entire event off as insignificant and return to their normal activities. These include arguing about how much not to spend on infrastructure, discovering the truth about UFOs or getting vaccinated so that people can start partying again as summer approaches. Hamas has been disarmed. The disaster in the Holy Land has been avoided.

      The problem for any serious observer is that their comforting discourse is in total dissonance with the historical context. The media across the globe have noticed that for the Biden administration, the Israeli-Palestinian conflict is a low priority, an unwanted distraction from the real business of the hour: creating a positive image for the recently elected president, young in the office (a mere 125 days) but old in years and inevitably stale in his thinking.

      Embed from Getty Images

      What does all this tell us about President Joe Biden’s policy with regard to Israeli-Palestinian relations? Some have hinted that, under pressure from progressives and some centrist Democrats, the Biden administration might consider modifying its ever-forgiving relationship with Israel by, for the first time, imposing conditions on the generous military aid the US provides year after year. No trace of that pressure appeared in Blinken’s discourse. Instead, the policy he hints at sounds like an anemic version of the Trump-Kushner peace plan. Biden talks about achieving stability by encouraging trade and investment. This essentially means the US will release enough cash for the rebuilding required for the Palestinians to function minimally within the Israeli economy.

      In his meeting with Mahmoud Abbas, the president of the Palestinian Authority, Blinken evoked a gift of $360 million, not quite half of the appropriation of $735 million in supplementary military aid to Israel the Biden administration requested earlier this month and which some Democrats in Congress are currently contesting. Despite meetings with leaders in Egypt and Jordan, there is no indication that Washington may seek to address the historical causes of a never-ending series of conflicts. That will be left to others. Blinken summed up his intention in these words: “The United States will work to rally international support.”

      Today’s Daily Devil’s Dictionary definition:

      Rally:

      Incite a group of people and, in extreme cases, a mob to back or participate in a project that may or may not be in their interest but which reflects the goals and interests of the one who incites

      Contextual Note

      The style section of The New York Times features an article about a high school student named Adrian in California who, on May 17, produced a flyer to invite kids from his school to an open beach party for his 17th birthday. A friend spread the invitation to Snapchat and TikTok, whose “For You” algorithm turned it into a national event. Thousands of people responded and arranged to travel to Huntington Beach to be part of the event. The response ballooned uncontrollably, leading the two young friends to seek a willing commercial partner and turn it into an organized, paying event in Los Angeles, simply to avoid being accused of provoking a riot. It ended with a fracas on the beach, clashes with the police and hundreds of unhappy customers when no party materialized in Los Angeles. It did, however, instantly turn Adrian into an internet influencer.

      Adrian now understands what it means to rally his contemporaries and indeed how easy it is to do it with the right plan. The Biden-Blinken plan to rally international support not only seems more modest and vague than Adrian’s, but it is far less likely to succeed. Blinken’s promise contains the principal themes of the discredited Trump-Kushner plan, without the ambition. The countries he appears to be rallying are either part of last year’s Abraham Accords initiated by Donald Trump or sympathetic to its goals. They essentially consist of Israel’s neighbors to the south: the United Arab Emirates, Bahrain, Saudi Arabia, Qatar and Egypt.

      The Trump-Kushner plans rallied these nations around the idea of collaborating with Israel to create a prosperous business zone in the Middle East. It promised to turn the Occupied Palestinian Territories into a prosperous tourist attraction, allowing it to participate in the kind of glitzy commercial culture that has triumphed in Dubai and provided a model for Neom, Saudi Arabia’s futuristic city in the desert. Jared Kushner and friends imagined that Gaza could become one giant beach resort like Waikiki, Acapulco or Cancun.

      Historical Note

      This may be what was at the back of Antony Blinken’s mind when he proposed to “promote economic stability and progress in the West Bank and Gaza, more opportunity, to strengthen the private sector, expand trade and investment, all of which are essential to growing opportunity across the board.” The underlying logic is the same as the Trump-Kushner peace plan, once touted as the “deal of the century,” a game-changer destined to transform the economy of the Middle East, consolidate an objective alliance between Israel and Saudi Arabia and isolate Iran. For historical and cultural reasons that should have been obvious to anyone familiar with the region, no one apart from the ruling class of those Middle Eastern countries took the plan seriously. Even they did so mainly out of diplomatic politeness toward Donald Trump and deference to the always redoubtable economic and military might of the US.

      The difference between the Trump-Kushner plan and Blinken’s vague proposal is that in the first case, the cash would be counted in billions. Most of it would have been provided by the Saudis, allowing them to gain cultural control over the Palestinians. The Palestinians would inevitably be beholden to the Israeli-Saudi alliance’s money and technology on the simple condition that they humbly accept their supporting role in an economy designed to further the interests of the ruling class in the US, Israel and the Arabian Peninsula. The Palestinians, with or without an identifiable state, would have their role in the neo-liberal economy assured, ensuring peace on earth forever after.

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      Blinken appears to have accepted the collaborative vision that Jared Kushner imagined, but in stating it, he unwittingly reveals its fundamental flaw. “Asking the international community, asking all of us to help rebuild Gaza only makes sense if there is confidence that what is rebuilt is not lost again because Hamas decides to launch more rocket attacks in the future,” Blinken said. The US has never reconciled the contradiction that comes from the fact that Hamas, which it classifies as a terrorist organization, came to power in a legitimate democratic election in 2006. Some might judge that the US, with a history of sending its mighty military into different regions of the world on false pretexts and prolonging its assaults on other populations for decades, could also be classified as a terrorist organization despite its democratically elected government.

      There is something chilling when Blinken evokes the idea “that what is rebuilt is not lost again because Hamas decides to launch more rocket attacks in the future.” He is telling the Palestinians that if they choose to react to any perceived injustice and repression with the limited weapons at their disposal, they should expect everything that is built or “rebuilt” to come toppling down on their heads once again. This is a threat, not a peace proposal. It is a cynical affirmation of might over right. It is also an explicit denial of democracy and respect for the outcome of democratic elections.

      The test of Biden’s ability to influence events in the Middle East will come very soon with the result of the Vienna talks concerning the United States’ eventual return to the Joint Comprehensive Plan of Action (JCPOA), the nuclear deal with Iran. Benjamin Netanyahu is using the occasion to put pressure on the US to abandon the talks. Joe Biden promised during the 2020 election campaign to return to the JCPOA. If the US fails to do so, some will see it as a sign of Israel’s continued power to dictate US foreign policy.

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Syria’s Bashar Al-Assad votes in Douma, former rebel town, site of chemical attack

      by

      Syria’s President Bashar al-Assad voted on Wednesday in an election set to tighten his grip over a country mired in more than a decade-long conflict.Al-Assad cast his ballot in the former rebel stronghold of Douma, the site of a suspected chemical weapons attack in 2018, which, in retaliation, saw heavy military strikes by the US, UK and France.After voting, Assad said, “Syria is not what they were trying to market, one city against the other and sect against the other or civil war. Today we are proving from Douma that the Syrian people are one.”Since March 2011, scores have died, forcibly disappeared, and tortured. More than 11 million people – about half the country’s population – fled from their homes.While Syrians at home and some scattered internationally believe the presidential election is a sham, others say the polls will cement Assad’s fourth seven-year term and extend his family’s rule to nearly six decades. His father, Hafez al-Assad, ruled Syria for 30 years until his death in 2000.For Monther Etaky, a Syrian who fled Aleppo in 2017, now living in Gaziantep in southeastern Turkey, the elections are no different from those in 2014. “This criminal regime and its allies are trying to act like they didn’t kill one Syrian citizen,” he said, adding that these elections cannot reliably define the future of Assad or Syria. Etaky fled the airstrikes, hunger and fear of torture with his two young children after the Assad regime brutally seized his properties. Meanwhile, the opposition is boycotting the vote. Assad’s presidential rivals are deliberately low-key: former deputy cabinet minister Abdallah Saloum Abdallah and Mahmoud Ahmed Marei, head of a small, officially sanctioned opposition party.Addressing his critics, including the West, Assad said Syrians had made their feelings clear by coming out in large numbers. “The value of your opinions is zero,” he said.Assad’s choice of Douma for voting, northeast of the centre of Damascus, is of great significance, says Taleb, a Syrian living in Germany, who only shared his first name. A Sunni Muslim town in eastern Ghouta, Douma was for long beseiged by the Assad regime. “He is trying to send a strong political message of victory to the radical Islamic militant groups, including the Al Nusra Front who once controlled Douma,” said Taleb.Douma was the main base for the groups and of vital strategic importance in the East of Damascus with a road linking Damascus and Homs. “The elections are rigged and it is a show for the international media to show that they are holding elections,” Taleb said.In the southern city of Deraa, cradle of the uprising against Assad in 2011 and an opposition bastion until rebels there surrendered three years ago, local leaders called for a strike.The election went ahead despite a U.N.-led peace process to call for a new constitution and a political settlement.At Damascus University’s Faculty of Arts and Economics, hundreds of students lined up to vote, with several buses parked outside.”With our blood and soul we sacrifice our lives for you Bashar,” groups of them chanted before the polls opened, in scenes repeated across the 70% of Syria now under government control.Zainab Hammoud, a freelance photographer and journalist in Damascus said Assad after all these years in the war has proved he is still there and infact has emerged much stronger. “He has carried out several military operations against the Islamic groups and has made progress against corruption, ” she said. By choosing Douma, Hammoud said Assad is sending a strong message, not an aggressive message but a love message to its people. “This is the time is to fix everything inside Syria. The entire world had closed its doors to Syria, but now they are opening their doors to the country economically. It is important to re-energise Syria’s economy and with Assad it is possible,” she said. “Yesterday Syria’s Tourism minister was in Saudi to attend a tourism exhibition and that is a good starting point for Assad,” Hammoud added. Gauging from the number of people donning t-shirts carrying his name and photograph, Hammoud is certain of his win. His campaign promise read “Al Amal Amal”, which translates to “Hope with work“. Even the elderly were out in force to show their support, Hammoud said. Officials said privately that authorities had organised large rallies in recent days to encourage voting and the security apparatus that underpins Assad’s Alawite minority-dominated rule had instructed state employees to vote.”We have been told we have to go to the polls or bear responsibility for not voting,” said Jafaar, a government employee in Latakia who gave his first name only, also fearing reprisals.In parts of the southern city of Deraa, local figures opposed the election and called for a general strike. Former rebels in the area said there were several incidents of gunfire on vehicles carrying ballot boxes, and shops in many towns were closed.Graffiti scribbled across several towns in the south read, “All people reject the rule of the son of Hafez.”In the northwestern Idlib region, the last rebel enclave where at least three million of those who fled Assad’s bombing campaign are sheltering, people took to the streets to denounce the election “theatre”.In northeast Syria, where U.S. backed Kurdish-led forces administer an autonomous oil-rich region, officials closed border crossings with government-held areas to prevent people from heading to polling stations.They said the election was a setback to reconciliation with a Kurdish minority that has faced decades of discrimination from one-party rule and Arab nationalist ideology. More

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      India Is Slowly Evolving Into a Market Economy

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      India has come a long way since its independence from colonial rule in 1947. It started as a mixed economy where elements of both capitalism and socialism coexisted uneasily. Jawaharlal Nehru, India’s first prime minister, was a self-declared Fabian socialist who admired the Soviet Union. His daughter, Indira Gandhi, amended the constitution in 1976 and declared India to be a socialist country. She nationalized banks, insurance companies, mines and more. 

      Gandhi tied Indian industry in chains. She imposed capacity constraints, price controls, foreign exchange control and red tape. India’s colonial-era bureaucracy now ran the commanding heights of the economy. Such measures stifled the Indian economy, created a black market and increased bureaucratic corruption. The Soviet-inspired Bureau of Industrial Costs and Prices remains infamous to this day.

      Expect an Uneven Rebound in MENA and Central Asia

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      India also adopted the Soviet five-year plans. A centralized economy emerged with the state controlling the media and telecom, financial, infrastructure and energy sectors. Even in seemingly private sectors such as consumer and industrial, the state handled too many aspects of investment, production and resource allocation.

      Opening Up the Economy

      In the 1980s, India took gentle strides toward a market economy and opened many sectors to private competition. In 1991, the Gulf War led to a spike in oil prices, causing a balance-of-payments crisis. In response, India rolled back the state and liberalized its economy. The collapse of the Soviet Union that year pushed India toward a more market-oriented economy. 

      Over the years, state-run monopolies have been decimated by private companies in industries such as aviation and telecoms. However, India still retains a strong legacy of socialism. The government remains a major participant in sectors such as energy and financial services.

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      After years of piecemeal reforms, the Indian government is again unleashing bolder measures. These involve the opening up of several state monopolies to private competition. They are diluting state ownership of public sector units. In some cases, they are selling these units to domestic or foreign buyers. In due course, professionals, not bureaucrats, will be running this sector.

      The government’s bold move to privatization is because of two reasons. First, India’s public sector has proved notoriously inefficient and been a burden on the taxpayer. Second, the COVID-19 pandemic has made the economy shrink and caused a shortfall in tax revenue. Privatization is a way for the government to balance its books.

      As Shwweta Punj, Anilesh S. Mahajan and M.G. Arun rightly point out in India Today, the country “will have to rethink how it sells” its public sector units for privatization to be a success. India’s track record is poor. The banana peels of political opposition, bureaucratic incompetence and judicial proceedings lie in waiting.

      Potential Benefits of Privatization

      Yet privatization, if managed well, could lead to several benefits. It will lead to more efficiently managed businesses and a more vibrant economy. Once a state-controlled firm is privatized, it could either be turned around by its new owner or perish. In case the company fails, it would create space for better players. Importantly, privatization could strengthen the government’s fiscal position, giving it greater freedom to invest in sectors like health care and education where the Indian government has historically underinvested. Furthermore, privatization could increase investable opportunities in both public and private markets.

      Given India’s fractious nature and labyrinthine institutions, privatization is likely to lead to mixed results and uneven progress. One thing is certain, though. Privatization is inevitable and cannot be rolled back. Sectors in which market forces reign supreme and shareholder interests are aligned are likely to do well. State-controlled companies that prioritize policy goals over shareholder value are unlikely to do so. Similarly, sectors that have experienced frequent policy changes are unlikely to thrive. 

      There is a reason why savvy investors are constructing portfolios weighted toward consumer and technology sectors. So far, companies in these sectors have operated largely free of state intervention. They have had the liberty to grow and function autonomously. Unsurprisingly, they have delivered good returns.

      The state-dominated financial services sector also offers promise. Well-managed private companies have a long runway to speed up on. Among large economies, India’s financial services sector offers unique promise. In the capitalist US, the state has limited presence and private players dominate. This mature market offers few prospects of high growth. In communist China, state-controlled firms dominate financial services, leaving little space for the private sector. With the Indian government planning to reduce its stake in a state-controlled life insurance company, as well as sell two state-owned banks and one general insurance company, the financial services sector arguably offers a uniquely important opportunity for investors.

      Just as India did well after its 1991 balance-of-payments crisis, the country may bounce back after the COVID-19 pandemic. The taxpayer may no longer need to subsidize underperforming state-owned companies holding the country back. Instead, market competition may attract investment, create jobs and increase growth.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More