It is my intention to highlight to Nigerians, the issue of post electoral litigations. Its cost(s) and threats to our democracy. Owning to our fraudulent electoral system in Nigeria , election results are seriously contested in the law courts and electoral tribunals. Starting with the last presidential election which produced the Yar’ Adua administration. The opposition parties cried foul and went to court. Muhamadu Buhari, Atiku Abubarkar, and Odumegwu Ojukwu went to court to seek annulment of the presidential election. The Presidential Election Petition Tribunal sitting in Abuja struck out the petition filed by AGPA Presidential candidate, Dim Emeka Odumegwu Ojukwu. That of Atiku Abubarkar and Muhamadu Buhari dragged on till December 2008 when the Supreme Court gave judgement in favour of Yar’Adua. This was 19 months after the government had started.
In Abia State , Chief Onyema Ugochukwu of (PDP) went to election tribunal to challenge the election of the incumbent governor chief Orji. In Imo State , there is a legal battle going between Senator Ifeanyi Ararume of (PDP) and Governor Ikedi Ohakim of the (PPA). This is in addition to the case instituted by Martin Agbaso of APGA against the annulment of April 14 2007, governorship election in Imo State .
The case of Anambra State in special. Starting with the ex-governor Ngige, who was photographed naked in a shrine. Later he was abducted from the state house. Finally he was deposed and replaced by Peter Obi. But before he was sacked by the court, a lot of government properties were destroyed in the tussle between him and his god father (Chief Chris Ubah). Andy Ubah was sworn in as governor after the fraudulent elections of 2007, but again the courts threw him out and reinstalled Peter Obi again.
In River State , ex-governor Omehia was sacked by the court and was replaced by governor Amaechi. In Edo State , Professor Oserheimen Osunbor was sacked on Tuesday, November 11 2008. Adams Oshiomhole was declared the rightful winner. This particular court case lasted for about 18 months. In Kogi State , the story is the same. The list is endless. As your reading this article, many state governors are facing one legal battle or the other as a result of fraudulent elections.
In the senate, the court of appeal sitting in Jos has given the Independent National Electoral Commission (INEC) order to issue Brig-Gen John Shagaya Certficate of Return, whose election was earlier nullified. Many more other senators are in courts battling their electoral results. Members of the House of Representatives, state Houses of Assembly, local government chairmen, and Counsellors all over the country are in one court or the other contesting their election “victories”
Only God knows the legal costs of all these litigations. The time wasted on all these cases cannot be captured on monetary terms. The setbacks to the nation as a result of these cases cannot be quantified. This is also a serious threat to our democracy and nation at large. It is an unwanted distraction on the part of government. The effects of all these are that the masses are denied the dividends of democracy. Government abandons its primary responsibility and only face litigations. When we factor in electoral violence/deaths, Nigeria comes in parity with countries like Kenya , Zimbabwe etc.
Have you wondered, how long we will continue having this? Another question is whether Nigerians are prepared for these problems. The answer is no. Without doubts, an average Nigerian is simply too tired for this kind of setbacks. The solution is simple, adopt the Option A4 electoral system and we will have a smooth, transparent and fair elections. Nigerians are yet to see a system better than Option A4.
Using the Option A4 electoral system, winners will emerge without recourse to the election tribunals. The system was adjudged the fairest and freest in Nigeria . The financial costs of conducting elections and litigations in Nigeria should be enough to create meaningful jobs for at least about 100,000 Nigerians. Option A4 is the cheapest, therefore resources will not spent on litigations. Time will not be wasted going to the courts/tribunals. INEC will spend less, compared to what they are spending now. Since electoral reforms are non negotiable, kindly join my group to campaign for the reintroduction of Option A4 electoral system in Nigeria .
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
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Tuesday, December 23, 2008
Tuesday, December 16, 2008
Religious Organizations as Catalyst for Change.
Religious organisations in Nigeria have done very well. I so much hold them in highest esteem. Part of the things, most of us in Diaspora miss so much about Nigeria is the free and daily evangelism on out televisions, radio, newspapers, magazines, leaflets etc. Everyday, you will be sure to a listen to a preacher in one of our media channels. Blessings and spiritual enrichment always follow after each preaching. Sermons are preached to both Christians and Moslems. This preaching’s mean a lot to Nigerians; at least it has given hopes were the Nigerian government (past and present) have dashed our aspirations.
The branch network of most of our churches and mosques shows how massive and strong they are. It also shows there wider spread and reach. Their influences on our lives are enormous and there large membership cannot be disputed. The significance of our Churches has spread to our educational sector, where churches are building many universities and higher institutions.
The decision of our churches to invest more in building universities is highly appreciated. This must be a relief for most Nigerians, especially with the near collapse of the government schools. Am sure these church schools and universities are designed in a way to produce graduates of international standard. The management of your organisations should be a lesson to the government.
Religious organisations have added positive values to our society, whereas our government is busy adding negative values (pain and misery) to the masses. No doubt, churches, mosques and other religious organisations are an integral part of the Nigerian society. It becomes difficult to separate the two. Men and women of God have always been called upon to pray each time there is a political function. Prayers are usually offered before the start of any event, be it government function or otherwise.
Men and women of God have held political appointments in Nigeria. They have also carried out government assignments. An example was when Rev Father Kuka was appointed to the Oputa Panel as a member. We all knew what his contributions were. Rev Mbaka from Enugu Catholic dioceses used to be a strong critic of then Enugu State government under Chimaroke. I remember prelate Sunday Mbang who uses to criticize the government. The Christian Association of Nigeria used to be a strong critic of Babangida administration. In 2003, Rev Chris Okotie contested for the Nigerian presidential election. Am sure many more other men of God have participated in one way or the other in running the affairs of Nigeria. The list is endless. There is nothing wrong with this. The truth is that religion cannot really be separated from the Nigerian politics.
The Nigerian political terrain needs more honest men and women of God. Therefore I am using this medium to appeal to religious leaders to increase their participation in the governance of Nigeria. Your participation will be highly appreciated. The reason for my appeal is simple. A lot has gone wrong with the governance in Nigeria. Besides, whatever wrong policy that is made by the politicians will affect all of us. No person will be exempted. Maladministration affects the entire populace whether you’re a man or woman of God. The mismanagement of our resources is a problem to all. Another example is the bad road network which affects every person that drives on the road. The chaotic situation of things in Nigeria demands your immediate participation in governance so as to help in salvaging our motherland.
Religious organisations have tremendous influences on our lives including that of the politicians. That is why I am so sure that if they join hands together to ask for electoral reforms, it will be achieved without much delays. Our problem in Nigeria is the electoral system. Even the president has acknowledged this. Since we are clamouring for change in our electoral system, my position is that Option A4 system is the best for Nigeria. At least there was no single person killed when this system was used. In contrast, I have lost count of how many people killed as a result of electoral violence, starting from 1999 to 2007 elections, not to talk of properties destroyed.
My Lords spiritual (All men and women of God), I wish to remind you that your failure to support positive electoral reforms might mean your continued presiding over funerals, occasioned by political violence. Jos crisis being the latest. Alternatively with your prayers and fasting, electoral reformation will be achieved quicker. Please may you critically examine the advantages and disadvantages of Option A4 electoral system in line with the Nigerian society. This I believe will make you support the campaign for the reintroduction of this system. May God continue to bless Nigeria.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
The branch network of most of our churches and mosques shows how massive and strong they are. It also shows there wider spread and reach. Their influences on our lives are enormous and there large membership cannot be disputed. The significance of our Churches has spread to our educational sector, where churches are building many universities and higher institutions.
The decision of our churches to invest more in building universities is highly appreciated. This must be a relief for most Nigerians, especially with the near collapse of the government schools. Am sure these church schools and universities are designed in a way to produce graduates of international standard. The management of your organisations should be a lesson to the government.
Religious organisations have added positive values to our society, whereas our government is busy adding negative values (pain and misery) to the masses. No doubt, churches, mosques and other religious organisations are an integral part of the Nigerian society. It becomes difficult to separate the two. Men and women of God have always been called upon to pray each time there is a political function. Prayers are usually offered before the start of any event, be it government function or otherwise.
Men and women of God have held political appointments in Nigeria. They have also carried out government assignments. An example was when Rev Father Kuka was appointed to the Oputa Panel as a member. We all knew what his contributions were. Rev Mbaka from Enugu Catholic dioceses used to be a strong critic of then Enugu State government under Chimaroke. I remember prelate Sunday Mbang who uses to criticize the government. The Christian Association of Nigeria used to be a strong critic of Babangida administration. In 2003, Rev Chris Okotie contested for the Nigerian presidential election. Am sure many more other men of God have participated in one way or the other in running the affairs of Nigeria. The list is endless. There is nothing wrong with this. The truth is that religion cannot really be separated from the Nigerian politics.
The Nigerian political terrain needs more honest men and women of God. Therefore I am using this medium to appeal to religious leaders to increase their participation in the governance of Nigeria. Your participation will be highly appreciated. The reason for my appeal is simple. A lot has gone wrong with the governance in Nigeria. Besides, whatever wrong policy that is made by the politicians will affect all of us. No person will be exempted. Maladministration affects the entire populace whether you’re a man or woman of God. The mismanagement of our resources is a problem to all. Another example is the bad road network which affects every person that drives on the road. The chaotic situation of things in Nigeria demands your immediate participation in governance so as to help in salvaging our motherland.
Religious organisations have tremendous influences on our lives including that of the politicians. That is why I am so sure that if they join hands together to ask for electoral reforms, it will be achieved without much delays. Our problem in Nigeria is the electoral system. Even the president has acknowledged this. Since we are clamouring for change in our electoral system, my position is that Option A4 system is the best for Nigeria. At least there was no single person killed when this system was used. In contrast, I have lost count of how many people killed as a result of electoral violence, starting from 1999 to 2007 elections, not to talk of properties destroyed.
My Lords spiritual (All men and women of God), I wish to remind you that your failure to support positive electoral reforms might mean your continued presiding over funerals, occasioned by political violence. Jos crisis being the latest. Alternatively with your prayers and fasting, electoral reformation will be achieved quicker. Please may you critically examine the advantages and disadvantages of Option A4 electoral system in line with the Nigerian society. This I believe will make you support the campaign for the reintroduction of this system. May God continue to bless Nigeria.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
Sunday, December 14, 2008
Capturing The Casualties From The Global Credit Crunches .
Introduction;
The present global economic crunches started around August 2007 in the United States of America, but first reports emerged on the press on December 20th 2006, predicting US sub-prime mortgage crisis. It specifically started in the sub prime sector that is the housing sector. A boom was created in the US housing sector way back since 2001/2002 when the Federal Reserve Bank reduced the short term interest rates. This was done with intents to boost the economy and to avoid recession. With this reduction in short term interest rates, banks went into looking for clients and potential borrowers. As a result of this, banks and other financial companies in the US started to lend money to the poorest section of the societies. People without good credit records were lent money to; even people on social benefits had access to loans.
This created a sub prime sector with heavily indebted people who hadn’t adequate means of offsetting their debts. This type of lending by the US financial institutions quickly spread to other parts of the world. The European banks did similar thing, but not in same magnitude as in the United States.
Prior to the economic crisis, about 20% of the loans in the US went into the sub-prime markets. As the US governments pushed up the short term rates to curb inflation, loan defaulting increased. Banks and major financial institutions started having problems. The peak came at the summer of 2007, when inter bank lending stopped, as banks were afraid of which one will go under.
Another contributing factor to the global economic crunches was the two US wars in Iraq and Afghanistan which has led the US government to exceed its resources. The US economy is in deficit as a result of so much spending. Its estimated that both wars are costing American government an average of $3 billion dollars a week.(The Times Newspaper, Saturday 8 2008, page 2). The war in Iraq was partly responsible for the increased in oil prices witnessed much of this year 2008. The barrel of crude oil reached its record high of $147.27 in July 2008. The high cost of crude oil added to the worsening global economy. Most affected were airline industries. Some of then closed down. It further drove the global economy into recession.
The impacts of all these are, credit crunches, falling profits, job loses, company closures, mergers and acquisition, tax increase, layoffs, personal and corporate bankruptcies, recession, etc. I will look at the global losers or the casualties so far from the present economic crunches.
Tax Payers Burden
“Investment bankers, hedge fund managers, private equity bosses have strutted in their huge townhouses, tossed away thousands at charity auctions, held court at polo matches and racecourses, launched fleets of yachts and squadrons of Lear jets in a fashion which many of history’s dictators would have envied”… “Their universe is crumbling. They rule from the summits of glass towers, but now many can scarcely afford the rents. Markets are tumbling, currencies trembling, great companies begging for lifelines. The money men have made fools of us. In the years of their dominance, they insisted that the markets were the highest judges and must be left free to rule. Now that the markets signal their downfall, they are running sobbing to governments and taxpayers, begging for our money to save them from the poorhouse” (Daily Mail, Tuesday, September 16 2008, page 12).
In every difficult circumstances and hard times, the masses always suffer. As always, it is usually the poor, weak and the vulnerable people that are hardest hit. The Present credit crunches are not an exception. People have started to bear the brunt of wrong policies, which the banks made. The governments all over the world have had to use taxes payers’ money to bail out the banks and other financial institutions in this economic crisis.
In the United Kingdom, the government made available £500 billion pounds in aid of the banks. Alistair Darling, the Chancellor of the Exchequer packaged this lifeline. “But the chancellor admitted that it might not be enough” (Metro Newspapers, Thursday, October 9 2008, page 1). The money that would have been used for other benefiting projects for the tax payers are used to rescue banks, which made wrong investment decisions. According to the British government, the tax payers will become the shareholders in these banks.
This scheme has been described as the biggest nationalisation in modern times. The British government took a wonderful step to make this huge amount available to the banks, but what happens if it fails to work as planned. Tax payers will have to pay more taxes to repay for this money the government of Britain is spending on banks. There will certainly be an increase in taxes in future to meet these costs. The Chancellor, Alistair Darling, announced a new top rate of tax of 45 percent for those earning more than £150,000 during his pre-budget report. This rise in taxes will not come into effect until after the general election. It’s among the deferred tax rises. National insurance contributions will rise by 0.5% from April 2011. £1 billion available for lending to small and medium businesses. The British government will continue borrowing during the last remain days of this 2008 and next year (2009). According to pre-budget briefing by Alistair Darling, government will borrow about £78 billion this year. She will borrow £118 billion next year. £3 billion of the capital spending to be brought forward for schools, roads, and energy efficiency measures. £9,705 is the long term cost to every family of the Chancellor’s fiscal stimulus. (Times, Monday November 24 2008).
If also those banks fail to lend to each other, the deep recession will be inevitable. These government initiatives will benefit the tax payers only if the banks survive and make profits. It also exposes the taxpayers to the risk of losing their money if anything goes wrong. The banks must be careful to make profits so as to avoid more burdens on the taxpayers. But no one can guarantee that the banks can make profits.
The European Central bank pumped into the economy whopping 95bn euros (£63 billion) into the banking system. It added another 109bn euro. This was to stabilize the banking sector using the tax payer’s money.
In Iceland the authorities used taxpayers fund in the region of 500 million euros about (£680 million pounds) to rescue Kaupthing, which is the country’s biggest bank. This is pay back time for Iceland which has been enjoying boom. This economic boom saw some of Iceland’s companies acquiring shares in most companies and banks all over Europe. Her banking sector was also exposed to the sub prime financial crisis in the US. The Icelandic government also used the taxpayer’s money to nationalize its country’s second largest bank that is the Landsbanki. In addition the IMF approved a loan of $2.1 billion to help Iceland’s battered economy.
The US government voted $700 billion dollars (£394 billion pounds) taxpayers money as a rescue fund for the struggling banks. The bill for this law was initially turned down by the US House of Representatives, but was passed at the second time. Additional $800 billion (£500 billion) was voted into the mortgage and consumer credit markets owning to further confirmation of a deteriorating situation. This latest moved exceeded the initial $700 billion Troubled Asset Relief Programme (TARP) that was used to rescue banks. The Federal Reserve Bank that is the US central bank has also indicated willingness to buy up to $600 billion worth of mortgage-backed assets. This is an attempt to free mortgage lending market, with the intension to bring down cost of home loans.
The German government voted 50 billion euros ($68 billion dollar, £38.7 billion pounds) of taxpayer’s money to rescue the ailing German biggest banks. Denmark’s approach was to give 100% guarantee on savings. South Korea was not left behind. She made available $130 billion dollars from the taxpayers as a rescue plan for her banks. The Swedish authorities budgeted the sum of £117.2 billion pounds ($205 billion dollars) as her rescue package. This instrument was mainly in form of bank guarantees to banks; mortgage lenders etc.
The Chinese government made available the $586 billion dollars rescue package to boost the economy. China has slashed interest rates and cut the amount of money that banks must set aside as reserves in a bid to bolster the economy which is facing the down turn. The People’s Bank of China, their central bank, cut interest rates by 1.08 percentage points to 5.58%. This is their largest cuts in a decade. The EU gave a loan package of about 20 billion euro to save the Hungary’s economy, whereas the Hungarian government prepared an aid package worth up to 600 billion forints (£1.9m) to boost domestic bank capital and to assist them refinance debts. The Brazilian government launched an $8.6 billion rescue package to provide liquidity to companies and boost car sales which were affected by the credit crunches. The Irish government announced a bank guarantee scheme of about 440 billion euros (£386 billion). This measure is with a view to save the Irish banks from collapsing and liquidity problems.
In a bid to recover from this great global economic recession, the Denmark’s central bank lowered its main rate by half a percentage point. The bank of England slashed its main base rate from 4.5% to 3%, which is the lowest since 1954. The European Union has packaged a spending budget worth 200 billion euros (£170 billion). This is the plans for the harsh economic crunches. The European Commission president, Jose Manuel Barroso, while unveiling the plans said, “The plans could transform a crisis into an opportunity”. This is the biggest initiative ever taken by Barroso as the Commission’s president. “The plan proposes a counter-cyclical macroeconomic response to the crisis in the form of an ambitious set of actions to support the real economy. The aim is to avoid a deep recession” (Guardian newspapers, Thursday November 27 2008, page 38).
Mexican authorities proposed 65.1 billion pesos ($5.26 billion) stimulus package to boost the ailing economy.
The World Bank has announced that she was preparing to lend $100 billion to the developing economies to cushion the effects of economic crunches. The World Bank revealed that, it expected almost 40 million people to fall into poverty as a result of the global credit crunches. The World Bank has planned to speed up grants and long-term interest free loans to the world’s 78 poorest countries, 39 of which are in Africa.
The World Bank has said it expected growth in developing countries to be 4.5% next year (2009) against the 6.4% it originally forecasted. The bank further said that each percentage point off growth rates means 20 million people slipping into poverty. This is in addition to about 100 million people already pushed below poverty line by the sharp increases in food and energy prices since the last two years. The World Bank is seriously concerned about the negative impact this would have in the developing nations.
The world trade ministers are expected to meet in Geneva before the end of year 2008. The aim is to try to free up global trade and help prevent an economic slump. Ministers are also hoping to conclude the Doha round of talks. It is estimated that this could inject up to $1 trillion (£654 billion) into global trade in order to avoid global depression. All these are measures to combat the global economic down turn. All the budgetary allocations are meant to be tax payer’s money in one way or the other. This money would have better been used in other more benefiting sectors had it not been for this credit crunches.
Collapsed Banks and Other Financial Institutions.
The present global financial crisis have collapsed most banks and left other banks and major financial institutions closer to collapse. The world has never witnessed this magnitude of economic hard times since the end of the second world wars. Below are details of hardest hit banks, financial institutions, mortgage lenders etc.
New Century Financial.
New Century financial was one of the largest sub prime lenders in the US. She was greatly affected by the crisis in the sub prime sector in the US. As a result of this, she filed for bankruptcy and sought protection from creditors. The company made it clear that over half of her work force of about 3,200 will be lost. Shares of this company were suspended when it became clear that the company was collapsing as a result of bad debts and higher rates of loan defaulters. New Century Financial sold most of her debts to other banks around the world. Therefore the sub prime crisis in the US began to have impact around the world.
Sachsen Landesbank.
This bank was saved from a near collapse by the Landesbank Baden-Wuerttemberg LBBW. The reason for this was because this bank was involved with the US sub prime lending. It showed how wide the US crisis has spread to other parts of the world. The deal to rescue Sachen Landesbank in Germany was worth about 250m euros. Irregularities were suspected in her near collapse and the German authorities investigated these problems. The fear of this crisis in Europe led the European Central bank to pump in billions of taxpayer’s money to rescue the banking sector.
IKB Industriebank .
IKB Industriebank gave indication of her impending losses of about $1b (£500m), as a result of her exposure to the US sub prime crisis. She has restructured now and is more focussed on national investments. The chief executive, Stefan Ortseifen resigned at the wake of this crisis. This bank had projected a growth in revenue and profits, but ended up losing massive amount of money due to the credit crisis. She was amongst the European banks that invested and benefited from the once lucrative US sub prime markets. When the US sub prime markets came crashing, they also crashed along with it.
Northern Rock.
Northern was involved with the US sub prime markets. She is the fifth largest mortgage lender in the UK. She accounts for about 19% of all mortgage lending in the UK. She has loans and other assets on her balance sheet of £113b. Northern Rock was forced by her involvement with the US sub prime market crisis to go cap in hand begging for money from the bank of England.
Swiss Bank UBS.
This Swiss bank has its share of the losses occasioned by the problems of the US housing markets. She made major investments and were badly hit by the crisis. She was forced to write off losses of about 4bn Swiss Francs ($3.4bn, £1.67bn). The banking management were set to cut jobs and restructure management.
Freddie Mac.
Freddie Mac is a household name in the US mortgage market. She is a mortgage finance giant. She declared a huge quarterly loss of $25 billion dollars this 2008. This was the result of the US sub prime crisis. This massive losses prompted immediate government intervention using the taxpayer’s money. She instantly benefited from the US government bail out plans. The US treasury department invested a staggering $13.8b so as to avoid collapse. Preferential shares will be made available to the treasury department because of the funds invested. The Federal Home Finance Authority announced the take over of this giant mortgage company.
Fannie Mae.
Another great US mortgage lender declared a loss of $29 billion dollars. The two biggest US mortgage lenders Freddie Mac and Fannie Mae back up house loans of about $5 trillion dollars. As the house prises began to fall and the rate of defaulters started to increase, both lenders lost a total of about $12 billion dollars in last year. The firm is hoping to draw on the rescue fund made available by the US government. The US Treasury Department took control of this mortgage giant.
AIG Insurance Company.
AIG insurance is the world’s largest insurer. She is the third biggest insurer for life and personal accident in Britain and the sponsor of Manchester United football club. She was exposed to the US sub prime financial crisis. She made terrible mistakes and is facing a possible collapse. Her efforts to raise £11 billion pounds through private equity failed; therefore she approached New York Federal Reserve for £22 billion pounds loan. She is among one of the world’s first 20 companies. Her assets are worth more than £557 billion pounds and she has operations in 130 countries. AIG’s trouble started when people who were buying mortgages were together tied with home insurances. Many of them bought one kind of insurance or the other from AIG insurance. The idea was that if they worse happen, the customer will have a fall back options. Since the problem of the US sub prime sector, the AIG has reported losses of about $14 billion dollars.
Landbanki.
This is Iceland’s second largest bank. She was nationalized by the Iceland’s government due to the credit crunches. Icesave which is the internet operation of the bank also closed, leaving about 300,000 of its UK customer’s without their cash. In order to avoid the untold hardship, this might cause, the Bank of England made a loan of £100 million available to her UK branches to help repay the UK customers whose money were trapped there. Accordingly, this loan will help the bank to ensure smooth winding down of the company. Many councils and charities in England had millions of pounds tied up with the failing bank. Kent council had £50 million in the bank as at when the institution collapsed. Following the collapse, the British government seized £4 billion worth of her assets using the anti-terror laws to achieve this.
Lehman Brothers.
Lehman Brothers also had its share of the crunches. She has total staff strength of about 26,000 with operational bases in all the continents of the world. A global investment banker. Only last year, the influential Fortune magazine named them most admired securities firm. In London, for the third year running they were the biggest traders on the stock exchange. She filed for bankruptcy protection in the United States when the economic crunches forced her to collapse.
Merrill Lynch.
Merrill Lynch was the Wall Street’s street third largest bank and operated globally. Founded in 1914, and the motto of the organization was “I have no fear of failure, provided I use my heart and head, hands and feet and work like hell” she like other financial institutions invested on the US housing market. When the sub-prime market came crashing, she also crashed along. Its headquarters are in New York. Plans were announced on September 14 2008, that Bank of America will acquire it. Her total market capitalization stood at US$26.07 billion as at 2008. Total assets as at 2007 were US$1.020 Trillion. Total equities as at 2007 was; US$31.932 billion. Her total employees worldwide as at 2008 were 60,000.
Bradford & Bingley.
The bank was formed in December 2000 with headquarters in West Yorkshire UK. She was into mortgage business. Had about 2862 employees. She was also a victim of the credit crisis. The British government nationalised her on September 26 2008, and sold the savings section of her business to Abbey bank including her 200 branches. Abbey bank is owned by the Spanish banking giant, Santander. Bradford & Bingley’s £50 billion mortgages and loan business is to be taken into public ownership.
Circuit City Stores.
Circuit City Stores which is the second largest electronics retailer in the US has filed for bankruptcy protection, under chapter 11 of the bankruptcy code. The company is also hoping to cut about 700 jobs. Her problem is in connection with the credit crunches.
Citigroup.
Citigroup was previously the world’s largest bank, but that has disappeared now courtesy of the credit crunches. It used to be the world’s most valued bank. Just two years ago, it was worth about $250 billion. The bank took a total hit of about $60 billion from the credit crisis. Most of it came from investments in bonds, backed by sub-prime mortgages. Citigroup acquired a lot of bonds that it became one of the biggest owners of these toxic securities. It recorded serious losses. The Citigroup has about $60 billion total write downs in last year related to credit crunches. She still has about $20 billion mortgage backed bonds. More than 50,000 jobs will go as a result of these problems.
London Scottish Bank.
London Scottish Bank announced on December 1 2008, that she has gone into administration. She has about 10,000 depositors and specialises in lending to people with low income earning capacity who find it difficult to obtain credit else where. The fate of it’s over 700 staffs are not bright. Most likely there will be job losses as a result of this collapse. Credit crunches have been blamed to this misfortune.
New Star.
New Star is a fund management company. Following the economic down turn, she will delist from the stock exchange and to be taken over by banks that will relieved her of £240 million worth of debts. About 60 jobs will go following the take over.
Other Struggling Companies and Organizations.
I will start this section by looking at companies, firms, organisations and industries that are struggling, to cope as a result of the global economic crunches. This will include companies that have already cut jobs and others who have indicated their willingness to cut jobs due to the global economic crunches which has plunged most economies into deep recession. This recession was explicitly revealed by Mervyn King, the Governor of Bank of England, who warned “that the British economy had entered a recession that would be deeper than had previously been anticipated, with the economy expected to contract by more than two percent, signalling that thousands more jobs could be lost” (The Daily Telegraph, Friday November 14 2008 page 4). This section will capture the trapped companies, firms and organizations.
S.O.S Letter From The Federation of Small Businesses.(The UK’s Leading Business Organisations).
The Rt Hon. Alistair Darling MP
Chancellor of the Exchequer.
Dear Chancellor,
£1 billion Small Business Survival Fund.
I am writing to you ahead of your pre-budget report next week, urging you to take action on behalf of this country’s 4.7 million small business.
Today, one in three small businesses is unable to obtain finance and has seen the cost of existing finance increase dramatically. A similar number of businesses say that they are seriously considering closing should the current credit climate continues. With more than 13 million people working within small firms, these figures represent a serious threat to our economy.
You have already moved to protect the big banks to the tune of over £500 billion. The Federation of Small Business (FSB) is now asking you to put in place a survival fund for small firms.
The FSB has been calling for a £1 billion Small Business Survival Fund. This will help both established businesses and start up firms, which urgently need working capital now.
This proposal represents just 0.2 percent of the funds you have used to safeguard the banks.
The FSB urges you to act next week to save thousands of small businesses and many more jobs.
Yours Sincerely
John Wright
National Chairman
www.fsb.org.uk
(Guardian Newspapers, Wednesday November 19 2008, page 20). This is a serious red alert about the economy, indication the dangers facing the UK economy. The global economic crunches are like a financial tsunami sweeping across the British and global economies.
Bizz Energy.
Bizz Energy has called in the administrators. She is amongst the top leading independent energy suppliers in the UK. In 2007, she recorded a turn over of £175 million. So far, 150 people are number of her total workforce. Her woes were as a result of the credit crunches which saw a similar company (E4B) go out of business. In a similar development the credit crisis has halted plans for underground gas storage in Dorset. The project was supposed to cost about £500 million.
Royal Worcester & Spode.
Royal Worcester & Spode is a leading name in British pottery industry. She has gone into administration. Her employees are 388 people in the UK. She fell victim to the global crisis. She has three sites in the UK with one in America. Its main trading subsidiary in the UK (The Porcelain and Fine China Companies Ltd) is also in administration.
Woolworths.
Woolworth is in deep financial distress. The company has been trading for 99 years old, and has 840 high street stores. Woolworths has 30,000 employees and job losses are inevitable whether it goes into administration or if it’s bought over by another company. Talks are currently going for a take over by Hilco, a distressed business specialist. The crises at Woolworths have really caused problems for several supermarkets, because EUK the UK’s biggest distributor of CD’s and DVD’s collapsed together with Woolworth. The both went into administration together. A company called Deloittes was formerly appointed the administrator. Woolworths at the time of going into administration owned £385 million to lenders such as GMAC and Burdale. Woolworths usually makes profits during December periods. In the past she used to make about 80% of its annual business in the six weeks before Christmas. Woolworths have been struggling for years. It was squeezed between supermarkets, online retailers and specialist shops. All attempts to reinvent itself as a specialist shops for children and families failed.
MFI.
MFI is a specialist on kitchen and furniture’s; she went into administration because of credit crunches. She has about 111 stores all over the UK and an estimated 1,200 jobs are to be lost. She was established in 1960’s.
Expected Job loses.
Unemployment is becoming more wide spread as the recession starts to bite. I will examine companies that have sacked their staffs and workers.
The owners of Independent titles (Independent News and Media that is Independent Newspapers) have announced that they are expecting to cut about 90 jobs out of the total work force of about 430. The expected job cuts are as results of drop in revenue which is a function of the credit crunches. ITV is hoping to cut about 1,000 jobs because it has been hit by severe down turn in advertising revenues. The Telegraph media group have plans to cut about 50 jobs. Trinity Mirror has plans to shed about 78 jobs in the north-west of England.
More than 390 people are expected to loose their jobs at the London branch of the collapsed Lehman Brother. Many more people will also loose their jobs at the Merrill Lynch offices in the UK.
Avis Europe indicated readiness to cut 315 jobs from its Europe work force. This car rental company is experiencing financial difficulties. The Citigroup which is the world’s biggest bank are set to reduce it global workforce by 50,000. It has faced serious money losses as a result of US housing markets. Posted a record loss of $20 billion.
The British job losses so far are as follows, Northern Rock UK 2,500, Citigroup UK 2,400, Barclays UK 1,800, UBS London 900, Bear Stearns London 750,HBOS London 650, HSBC London 500, Lloyds TSB London and Manchester 445, Merrill Lynch London 400, Lehman Brothers London 390, Morgan Stanley London 350, Bradford & Bingley Borehamwood 300. (Guardian Newspapers, Tuesday November 18 2008, page 28).
Sir Fred Goodwin, the chief executive of the Royal Bank of Scotland lost his job in the wake of extreme pressure by the bank’s new investors which is the British government, acting on behalf of taxpayers. The credit crunches paved way for the changes in the board room which exited Sir Fred Goodwin.
The Metro newspapers of Thursday, November 20 2008, reported that Insulation specialist SIG, announced job cuts in the neighbourhood of 900. She indicated her readiness to shut about 65 cites. The company is based in Sheffield. Another company in the construction industry, Wolseley announced that she was also going to cut about 2000 jobs. Quoting the Guardian, BASF the world’s largest chemicals group announced that she was cutting 20,000 jobs and halting or scaling back production at nearly 200 plants. This was the result of the credit crunches. “About 20,000 workers in Asia, North America and Europe will be directly affected by the production cuts, including 5,000 at its headquarters in Ludwigshafen, Germany. BASF employs 95,000 people worldwide” (The Times Newspapers, Thursday November 20 2008, page 69).
British Telecoms (BT) announced that 10,000 jobs would go. According to the Daily Telegraph, “the company has already shed 4,000 workers this financial year (2008), and a further 6,000 will go back by March, it said.(The Daily Telegraph, Friday November 14 2008, page 4). Most of these jobs will go from UK. The chief executive Mr Ian Livingston also hinted that further job cuts were likely.
Virgin media announced that it would cut 2,200 jobs. Yell, owners of Yellow pages classified business directories said that she will slash 1,300 jobs in the next coming 18 months. Psion indicated that 220 would go. Taylor Wimpey admitted that she would shed 1,000 employees. GlaxoSmithKline, the second biggest drug maker in the world is closing down its factory in Dartford which will lead to the loss of 620 jobs. So far Glaxo has already cut jobs this year in the tune of 1,850 due to falling revenues. (The Guardian, Wednesday November 12 2008, page 24 and 25).
Jaguar Land Rover hopes to extend a voluntary redundancy scheme which might likely lead to about 600 job cut at their plants in Merseyside and West Midlands. BMW is planning to cut about 9,000 vehicles at its Oxford plant. Homebase is expecting to cut about 200 jobs out of its total workforce of about 20,000 in the UK.
Neptune Orient, the biggest shipping firm in Singapore has slashed about 1,000 jobs as a result of the credit crisis. British Polythene Industries (BPI) will be closing with estimated job loss of about 165 jobs. The company produces heavy duty sacks and industrial films. About 40% of their outputs are used by the construction firms which have been affected by the economic down turn. ArcelorMittal, the world’s largest steel maker is planning to cut about 9,000 jobs in a bid to save $1 billion a year, in response to the global crunches. SpeedFerries, a cross channel ferry company has also gone into administration. More than 100 jobs are expected to go.
3i which is Europe’s largest buyout firm will be laying off 15% of her staff strength. 3i is the only private equity firm listed on the FTSE 100 will cut about 100 out of 660 jobs. 3i is suffering from the economic down turn
The Auto Industry.
The auto industry was affected by the credit crunches. The magnitude is enormous. This section will examine the effects of the credit crunches on the auto industries.
British car industry has appealed for help from the government. This is coming due to the increasing concerns over the future of Vauxhall’s Ellesmere Port Factory, including component makers and dealerships.
The British Society of Motor Manufacturers and Traders (SMMT) have written to the Chancellor of the Exchequer Alister Darling and the business secretary, Lord Mandelson. They are looking for access to credit and loans that will run into billions. It needs government support for manufacturers, leasing companies, parts suppliers and dealerships. New car sales slumped in the UK by 23% in the month of October 2008. This made it the biggest fall in 17 years. Last Octobers new car sales in the UK totalled 128,352 compared with 166,797 in October 2007, with the fall over the past three months running at 21.4 %( Guardian Friday November 7 2008, page 39).
There are a lot of worries about Vauxhall. The SMMT wants car manufacturers to have access to special liquidity arrangements like the ones made available to banks.
The Vauxhall plant in Merseyside has been described as the most vulnerable car plant in England, because it’s owned by the General Motors (GM) of America. We should remember that General Motors is struggling for cash in America and has given warnings that it could soon run out of cash except funds are made available to her. This money problem will obviously affect their plant in the UK. In like manner, OPEL, a GM subsidiary in Germany has asked the German government of money in the neighbourhood of 1 billion euros (£838 million). This is to keep operations going in case the funds from America run dry.
General Motors in Europe has performed badly due to the credit crunches. Sales are low. There are speculations that the company could consider production cuts, with plants at Ellesmere Port or the Antwerp likely to be closed.
“All of the British car industry is now on short-time working to reduce output and job cuts have begun among temporary staff and several hundred permanent staff”… “The motor industry faces a set of unprecedented market conditions. The dramatic falls in demand for new vehicles in the UK, Europe, and around the world, combined with limited availability of funding and liquidity now puts at risk valuable industrial capability”(Times, Thursday November 20 2008, page 70).
The European car manufacturers are desperately in need of cash. As a way to assist the car industry, the British government has decided that the new rates of car tax are to be phased in and increases will be lower.
Jaguar Land Rover.
Jaguar Land Rover is facing a financial crisis. She has approached the UK government for a life line of £1 billion. This is because of plunging car sales and lack of credit. Jaguar was bought by Tata conglomerates of India. She wants this life line for two years after which she hopes to pay back, because Jaguar is hoping that by then, the global car market would have recovered. Jaguar and other UK car makers want the government to pressure the banks to free up capital for them or alternatively the government can act as a guarantor for them. Jaguar operations are known to be suffering significant cash flow pressures. Sales of its major brand, Land Rover have plunged down seriously. Jaguar Land Rover is trying to avoid total shutdowns of its plant. So far she is cutting shifts in her Midlands and Merseyside factories to reduce output. It is hoped that several hundred jobs will be lost as a result of this. Another serious concern is that car making has a multiplier effect on supply-chain jobs. “It is estimated that for every job in a car-assembly factory, there are four of five in the supply chain” (Times, Monday November 24 2008, page 39).
Aston Martin.
Aston Martin which manufactures luxury and expensive cars announced reduction in car sales as a result of the global economic down turns. The company is based in Gaydon, Warwickshire United Kingdom. The car company is facing tough challenges. She has announced plans to cut about 600 jobs.
European Motor Industry.
The European motor industry has asked the European Union for a lifeline of about 40 billion euros (£34 billion). This is because sales of cars and Lorries are collapsing as the recession hits harder. European car makers are expected to have an extended holiday this December 2008 Christmas break. It might be up to a month’s holiday. Car plants will be shut down. In the month of October 2008, new van sales fell by 18.3%. The crisis in the car industry is not confided there alone, it is also hitting automotive component manufacturers as well. Hopes that the Eastern European markets will bail out the EU car industry disappeared. An example is the Polish sales of new cars which dropped by 43.2% in October 2008. New car sales also dropped in Europe to 14.5% in October 2008. European car makers are now pressing for subsidies to encourage owners to scrape dirty cars and replace them with new ones. Meanwhile the European Commission has made a case for 5 billion euros (£4.2 billion) of extra funding for Europe’s car makers to help them develop more eco friendly cars and green technology.
America’s Car Industry.
The Detroit three, that is General Motors, Ford and Chrysler are asking for a $25 billion bail out or bankruptcy. Times are really tough in the global car business. Car businesses are much worse in the United States because of the credit squeeze, compounded by the high cost of fuels experienced this year. The big three have also been blamed for most of there problems, like having too many brands, too late in developing small cars, not been able to use their money wisely and falling to be alive to threat from the Asian competitors. Another problem is that Americans are also driving less due initially to high cost of fuel. Americans are switching from gas-guzzling luxury vehicles to more fuel efficient smaller models. The new “green” agenda endorsed by Obama also contributed in the problems of American car industry.
The big three companies have given warnings that about three million jobs could go, if they go under. General Motors which is the world’s biggest car company announced that it would run out of cash and would be in worse position unless it gets government help, or sell assets, or the economy improves. General motors lost $4.2 billion on third quarter of 2008. As a result of the crisis the General Motors have abandoned merger talks with Chrysler. This year has witnessed the lowest car sales in America in 25 years. The dramatic sales decline has been driven by unstable market conditions, instability in the credit markets and a dramatic retraction in consumer demands around the globe
Airlines and Airline Industry.
The airline industry has been tragically hit by the economic down turns and the high cost of fuel prises. The industry continues to face tough operating conditions on the heels of weak economic conditions. The 2008 half yearly profits of British airways fell by 91.6%. The British Airways pre-tax profit was £52 million between April and September 2008, less than the previous year which was £616 million. The airline is hoping to reduce its number of flights by about 1% in 2009, in anticipation of low passenger turn outs. The British Airways is hoping to suspend flights from Heathrow to the following destinations, Dhaka and Kolkata. Gatwick to Dublin and Zurich. Most of their problem was due to the high cost of aviation fuel which was increasing side by side with the crude oil prices. Crude oil prices reached a record high of $147 per barrel in July 2008 that meant higher cost of aviation fuel.
Easyjet witnessed a fall in profits this financial year. This was attributed to high cost of fuel and economic down turn. The airline had forecasted tough future business ahead. She made losses as the crude oil prises soared. Ryanair airlines have also witnessed fall in profits. Net profits in the six months to the end of September 2008 stood at 214.6 million euros compared to 407.6 million euros the previous year.( http://news.bbc.co.uk/1/hi/business/7705500.stm).
Spanish based airline, LTE international suspended its operations due to economic downturns. The airline said so many passengers would be affected by the suspension of its operations. She runs flights to UK, Italy, and Saudi Arabia. The company operated for about 20 years with maximum dedication to its passengers. Alitalia was saved from total collapse by its new investors.
The turbulence in the aviation industry did not spare the XL Airways and its parent tour operator, which is the UK’s third largest tour operator. At the time of going under, the company left about 85,000 people stranded abroad and disrupted about 200,000 holiday plans. About 1,700 jobs were lost as a result of the collapse of XL airways. Several other smaller airlines such as; Maxjet, Eos airlines, Silverjet, Oasis, and Zoom have all gone under.
Zoom Airlines.
Zoom airlines is a budget airline that flies across the Atlantic. She started operations in 2001. The airline had two main bases in United Kingdom and Canada. She has a total work force of about 710 in both Canada and the United Kingdom. Operates from about 5 airports in the UK namely Gatwick, Glasgow, Manchester, Cardiff, and Belfast. She also flew to about 2 other European capital, which is Paris and Rome. The airline blamed high cost of aviation fuel and economic down turn for her problems.
References.
Daily Mail Newspapers, Tuesday September 16 2008.
The Daily Telegraph, Friday November 14 2008
The Times Newspapers, Saturday November 8 2008.
The Times Newspapers, Thursday November 20 2008
The Times Newspapers, Monday November 24 2008
Guardian Newspapers, Monday November 3 2008.
Guardian Newspapers, Wednesday November 5 2008.
Guardian Newspapers, Wednesday November 7 2008.
Guardian Newspapers, Tuesday November 11 2008.
Guardian Newspapers, Wednesday November 12 2008.
Guardian Newspapers, Tuesday November 18 2008.
Guardian Newspapers, Wednesday November 19 2008.
Guardian Newspapers, Wednesday November 26 2008
Guardian Newspapers, Thursday November 27 2008
Guardian Newspapers, Friday November 28 2008.
Metro Newspapers, Thursday, October 9 2008
Metro Newspapers, Monday October 13, 2008.
Metro newspapers, Thursday November 20 2008
Metro Newspapers, Tuesday, November 25 2008
http://www.scottishsocialistparty.org/economic-crisis/market-money-madness.html printed on 13/11/8
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Authors Biography
Name: Chinedu Vincent Akuta.
Contact Information: 37a Larch Street, Leicester. LE5 0ES. UK.
Email: akutachinedu@yahoo.com
Blog: http://briefsfromakuta.blogspot.com/
Present Job: Lecturer Assistant, Leicester International College. 132-134 London Rd, Leicester, LE2 1EB. www.leicesterinternationalcollege.co.uk
Education/Universities;
MSc, International Relations. Department Of Politics, International Relations and European Studies. Loughborough University Leicestershire, LE11 3TU. UK. Tel: +441509222991/222981. Fax: +441509223917. (2005-2007).
MSc, Economics. School of Postgraduate Studies. University of Lagos, Akoka-Yaba. Lagos-Nigeria. (2000-2001).
MBA, Marketing. Postgraduate School, Lagos State University. Badagry Expressway, OJO, P.M.B. 1087, Apapa. Lagos-Nigeria. (1998-2000).
BSc, Economics. Nnamdi Azikiwe University. P.M.B. 5025 Awka, Anambra State. Nigeria. (1989-1994).
Publications: E.U. Trade with Sub-Sahara African Countries, Nigeria as a case study, 1990-2006. MSc dissertation Loughborough University, 2007.
Other Publications, Please view my blog. http://briefsfromakuta.blogspot.com/
The present global economic crunches started around August 2007 in the United States of America, but first reports emerged on the press on December 20th 2006, predicting US sub-prime mortgage crisis. It specifically started in the sub prime sector that is the housing sector. A boom was created in the US housing sector way back since 2001/2002 when the Federal Reserve Bank reduced the short term interest rates. This was done with intents to boost the economy and to avoid recession. With this reduction in short term interest rates, banks went into looking for clients and potential borrowers. As a result of this, banks and other financial companies in the US started to lend money to the poorest section of the societies. People without good credit records were lent money to; even people on social benefits had access to loans.
This created a sub prime sector with heavily indebted people who hadn’t adequate means of offsetting their debts. This type of lending by the US financial institutions quickly spread to other parts of the world. The European banks did similar thing, but not in same magnitude as in the United States.
Prior to the economic crisis, about 20% of the loans in the US went into the sub-prime markets. As the US governments pushed up the short term rates to curb inflation, loan defaulting increased. Banks and major financial institutions started having problems. The peak came at the summer of 2007, when inter bank lending stopped, as banks were afraid of which one will go under.
Another contributing factor to the global economic crunches was the two US wars in Iraq and Afghanistan which has led the US government to exceed its resources. The US economy is in deficit as a result of so much spending. Its estimated that both wars are costing American government an average of $3 billion dollars a week.(The Times Newspaper, Saturday 8 2008, page 2). The war in Iraq was partly responsible for the increased in oil prices witnessed much of this year 2008. The barrel of crude oil reached its record high of $147.27 in July 2008. The high cost of crude oil added to the worsening global economy. Most affected were airline industries. Some of then closed down. It further drove the global economy into recession.
The impacts of all these are, credit crunches, falling profits, job loses, company closures, mergers and acquisition, tax increase, layoffs, personal and corporate bankruptcies, recession, etc. I will look at the global losers or the casualties so far from the present economic crunches.
Tax Payers Burden
“Investment bankers, hedge fund managers, private equity bosses have strutted in their huge townhouses, tossed away thousands at charity auctions, held court at polo matches and racecourses, launched fleets of yachts and squadrons of Lear jets in a fashion which many of history’s dictators would have envied”… “Their universe is crumbling. They rule from the summits of glass towers, but now many can scarcely afford the rents. Markets are tumbling, currencies trembling, great companies begging for lifelines. The money men have made fools of us. In the years of their dominance, they insisted that the markets were the highest judges and must be left free to rule. Now that the markets signal their downfall, they are running sobbing to governments and taxpayers, begging for our money to save them from the poorhouse” (Daily Mail, Tuesday, September 16 2008, page 12).
In every difficult circumstances and hard times, the masses always suffer. As always, it is usually the poor, weak and the vulnerable people that are hardest hit. The Present credit crunches are not an exception. People have started to bear the brunt of wrong policies, which the banks made. The governments all over the world have had to use taxes payers’ money to bail out the banks and other financial institutions in this economic crisis.
In the United Kingdom, the government made available £500 billion pounds in aid of the banks. Alistair Darling, the Chancellor of the Exchequer packaged this lifeline. “But the chancellor admitted that it might not be enough” (Metro Newspapers, Thursday, October 9 2008, page 1). The money that would have been used for other benefiting projects for the tax payers are used to rescue banks, which made wrong investment decisions. According to the British government, the tax payers will become the shareholders in these banks.
This scheme has been described as the biggest nationalisation in modern times. The British government took a wonderful step to make this huge amount available to the banks, but what happens if it fails to work as planned. Tax payers will have to pay more taxes to repay for this money the government of Britain is spending on banks. There will certainly be an increase in taxes in future to meet these costs. The Chancellor, Alistair Darling, announced a new top rate of tax of 45 percent for those earning more than £150,000 during his pre-budget report. This rise in taxes will not come into effect until after the general election. It’s among the deferred tax rises. National insurance contributions will rise by 0.5% from April 2011. £1 billion available for lending to small and medium businesses. The British government will continue borrowing during the last remain days of this 2008 and next year (2009). According to pre-budget briefing by Alistair Darling, government will borrow about £78 billion this year. She will borrow £118 billion next year. £3 billion of the capital spending to be brought forward for schools, roads, and energy efficiency measures. £9,705 is the long term cost to every family of the Chancellor’s fiscal stimulus. (Times, Monday November 24 2008).
If also those banks fail to lend to each other, the deep recession will be inevitable. These government initiatives will benefit the tax payers only if the banks survive and make profits. It also exposes the taxpayers to the risk of losing their money if anything goes wrong. The banks must be careful to make profits so as to avoid more burdens on the taxpayers. But no one can guarantee that the banks can make profits.
The European Central bank pumped into the economy whopping 95bn euros (£63 billion) into the banking system. It added another 109bn euro. This was to stabilize the banking sector using the tax payer’s money.
In Iceland the authorities used taxpayers fund in the region of 500 million euros about (£680 million pounds) to rescue Kaupthing, which is the country’s biggest bank. This is pay back time for Iceland which has been enjoying boom. This economic boom saw some of Iceland’s companies acquiring shares in most companies and banks all over Europe. Her banking sector was also exposed to the sub prime financial crisis in the US. The Icelandic government also used the taxpayer’s money to nationalize its country’s second largest bank that is the Landsbanki. In addition the IMF approved a loan of $2.1 billion to help Iceland’s battered economy.
The US government voted $700 billion dollars (£394 billion pounds) taxpayers money as a rescue fund for the struggling banks. The bill for this law was initially turned down by the US House of Representatives, but was passed at the second time. Additional $800 billion (£500 billion) was voted into the mortgage and consumer credit markets owning to further confirmation of a deteriorating situation. This latest moved exceeded the initial $700 billion Troubled Asset Relief Programme (TARP) that was used to rescue banks. The Federal Reserve Bank that is the US central bank has also indicated willingness to buy up to $600 billion worth of mortgage-backed assets. This is an attempt to free mortgage lending market, with the intension to bring down cost of home loans.
The German government voted 50 billion euros ($68 billion dollar, £38.7 billion pounds) of taxpayer’s money to rescue the ailing German biggest banks. Denmark’s approach was to give 100% guarantee on savings. South Korea was not left behind. She made available $130 billion dollars from the taxpayers as a rescue plan for her banks. The Swedish authorities budgeted the sum of £117.2 billion pounds ($205 billion dollars) as her rescue package. This instrument was mainly in form of bank guarantees to banks; mortgage lenders etc.
The Chinese government made available the $586 billion dollars rescue package to boost the economy. China has slashed interest rates and cut the amount of money that banks must set aside as reserves in a bid to bolster the economy which is facing the down turn. The People’s Bank of China, their central bank, cut interest rates by 1.08 percentage points to 5.58%. This is their largest cuts in a decade. The EU gave a loan package of about 20 billion euro to save the Hungary’s economy, whereas the Hungarian government prepared an aid package worth up to 600 billion forints (£1.9m) to boost domestic bank capital and to assist them refinance debts. The Brazilian government launched an $8.6 billion rescue package to provide liquidity to companies and boost car sales which were affected by the credit crunches. The Irish government announced a bank guarantee scheme of about 440 billion euros (£386 billion). This measure is with a view to save the Irish banks from collapsing and liquidity problems.
In a bid to recover from this great global economic recession, the Denmark’s central bank lowered its main rate by half a percentage point. The bank of England slashed its main base rate from 4.5% to 3%, which is the lowest since 1954. The European Union has packaged a spending budget worth 200 billion euros (£170 billion). This is the plans for the harsh economic crunches. The European Commission president, Jose Manuel Barroso, while unveiling the plans said, “The plans could transform a crisis into an opportunity”. This is the biggest initiative ever taken by Barroso as the Commission’s president. “The plan proposes a counter-cyclical macroeconomic response to the crisis in the form of an ambitious set of actions to support the real economy. The aim is to avoid a deep recession” (Guardian newspapers, Thursday November 27 2008, page 38).
Mexican authorities proposed 65.1 billion pesos ($5.26 billion) stimulus package to boost the ailing economy.
The World Bank has announced that she was preparing to lend $100 billion to the developing economies to cushion the effects of economic crunches. The World Bank revealed that, it expected almost 40 million people to fall into poverty as a result of the global credit crunches. The World Bank has planned to speed up grants and long-term interest free loans to the world’s 78 poorest countries, 39 of which are in Africa.
The World Bank has said it expected growth in developing countries to be 4.5% next year (2009) against the 6.4% it originally forecasted. The bank further said that each percentage point off growth rates means 20 million people slipping into poverty. This is in addition to about 100 million people already pushed below poverty line by the sharp increases in food and energy prices since the last two years. The World Bank is seriously concerned about the negative impact this would have in the developing nations.
The world trade ministers are expected to meet in Geneva before the end of year 2008. The aim is to try to free up global trade and help prevent an economic slump. Ministers are also hoping to conclude the Doha round of talks. It is estimated that this could inject up to $1 trillion (£654 billion) into global trade in order to avoid global depression. All these are measures to combat the global economic down turn. All the budgetary allocations are meant to be tax payer’s money in one way or the other. This money would have better been used in other more benefiting sectors had it not been for this credit crunches.
Collapsed Banks and Other Financial Institutions.
The present global financial crisis have collapsed most banks and left other banks and major financial institutions closer to collapse. The world has never witnessed this magnitude of economic hard times since the end of the second world wars. Below are details of hardest hit banks, financial institutions, mortgage lenders etc.
New Century Financial.
New Century financial was one of the largest sub prime lenders in the US. She was greatly affected by the crisis in the sub prime sector in the US. As a result of this, she filed for bankruptcy and sought protection from creditors. The company made it clear that over half of her work force of about 3,200 will be lost. Shares of this company were suspended when it became clear that the company was collapsing as a result of bad debts and higher rates of loan defaulters. New Century Financial sold most of her debts to other banks around the world. Therefore the sub prime crisis in the US began to have impact around the world.
Sachsen Landesbank.
This bank was saved from a near collapse by the Landesbank Baden-Wuerttemberg LBBW. The reason for this was because this bank was involved with the US sub prime lending. It showed how wide the US crisis has spread to other parts of the world. The deal to rescue Sachen Landesbank in Germany was worth about 250m euros. Irregularities were suspected in her near collapse and the German authorities investigated these problems. The fear of this crisis in Europe led the European Central bank to pump in billions of taxpayer’s money to rescue the banking sector.
IKB Industriebank .
IKB Industriebank gave indication of her impending losses of about $1b (£500m), as a result of her exposure to the US sub prime crisis. She has restructured now and is more focussed on national investments. The chief executive, Stefan Ortseifen resigned at the wake of this crisis. This bank had projected a growth in revenue and profits, but ended up losing massive amount of money due to the credit crisis. She was amongst the European banks that invested and benefited from the once lucrative US sub prime markets. When the US sub prime markets came crashing, they also crashed along with it.
Northern Rock.
Northern was involved with the US sub prime markets. She is the fifth largest mortgage lender in the UK. She accounts for about 19% of all mortgage lending in the UK. She has loans and other assets on her balance sheet of £113b. Northern Rock was forced by her involvement with the US sub prime market crisis to go cap in hand begging for money from the bank of England.
Swiss Bank UBS.
This Swiss bank has its share of the losses occasioned by the problems of the US housing markets. She made major investments and were badly hit by the crisis. She was forced to write off losses of about 4bn Swiss Francs ($3.4bn, £1.67bn). The banking management were set to cut jobs and restructure management.
Freddie Mac.
Freddie Mac is a household name in the US mortgage market. She is a mortgage finance giant. She declared a huge quarterly loss of $25 billion dollars this 2008. This was the result of the US sub prime crisis. This massive losses prompted immediate government intervention using the taxpayer’s money. She instantly benefited from the US government bail out plans. The US treasury department invested a staggering $13.8b so as to avoid collapse. Preferential shares will be made available to the treasury department because of the funds invested. The Federal Home Finance Authority announced the take over of this giant mortgage company.
Fannie Mae.
Another great US mortgage lender declared a loss of $29 billion dollars. The two biggest US mortgage lenders Freddie Mac and Fannie Mae back up house loans of about $5 trillion dollars. As the house prises began to fall and the rate of defaulters started to increase, both lenders lost a total of about $12 billion dollars in last year. The firm is hoping to draw on the rescue fund made available by the US government. The US Treasury Department took control of this mortgage giant.
AIG Insurance Company.
AIG insurance is the world’s largest insurer. She is the third biggest insurer for life and personal accident in Britain and the sponsor of Manchester United football club. She was exposed to the US sub prime financial crisis. She made terrible mistakes and is facing a possible collapse. Her efforts to raise £11 billion pounds through private equity failed; therefore she approached New York Federal Reserve for £22 billion pounds loan. She is among one of the world’s first 20 companies. Her assets are worth more than £557 billion pounds and she has operations in 130 countries. AIG’s trouble started when people who were buying mortgages were together tied with home insurances. Many of them bought one kind of insurance or the other from AIG insurance. The idea was that if they worse happen, the customer will have a fall back options. Since the problem of the US sub prime sector, the AIG has reported losses of about $14 billion dollars.
Landbanki.
This is Iceland’s second largest bank. She was nationalized by the Iceland’s government due to the credit crunches. Icesave which is the internet operation of the bank also closed, leaving about 300,000 of its UK customer’s without their cash. In order to avoid the untold hardship, this might cause, the Bank of England made a loan of £100 million available to her UK branches to help repay the UK customers whose money were trapped there. Accordingly, this loan will help the bank to ensure smooth winding down of the company. Many councils and charities in England had millions of pounds tied up with the failing bank. Kent council had £50 million in the bank as at when the institution collapsed. Following the collapse, the British government seized £4 billion worth of her assets using the anti-terror laws to achieve this.
Lehman Brothers.
Lehman Brothers also had its share of the crunches. She has total staff strength of about 26,000 with operational bases in all the continents of the world. A global investment banker. Only last year, the influential Fortune magazine named them most admired securities firm. In London, for the third year running they were the biggest traders on the stock exchange. She filed for bankruptcy protection in the United States when the economic crunches forced her to collapse.
Merrill Lynch.
Merrill Lynch was the Wall Street’s street third largest bank and operated globally. Founded in 1914, and the motto of the organization was “I have no fear of failure, provided I use my heart and head, hands and feet and work like hell” she like other financial institutions invested on the US housing market. When the sub-prime market came crashing, she also crashed along. Its headquarters are in New York. Plans were announced on September 14 2008, that Bank of America will acquire it. Her total market capitalization stood at US$26.07 billion as at 2008. Total assets as at 2007 were US$1.020 Trillion. Total equities as at 2007 was; US$31.932 billion. Her total employees worldwide as at 2008 were 60,000.
Bradford & Bingley.
The bank was formed in December 2000 with headquarters in West Yorkshire UK. She was into mortgage business. Had about 2862 employees. She was also a victim of the credit crisis. The British government nationalised her on September 26 2008, and sold the savings section of her business to Abbey bank including her 200 branches. Abbey bank is owned by the Spanish banking giant, Santander. Bradford & Bingley’s £50 billion mortgages and loan business is to be taken into public ownership.
Circuit City Stores.
Circuit City Stores which is the second largest electronics retailer in the US has filed for bankruptcy protection, under chapter 11 of the bankruptcy code. The company is also hoping to cut about 700 jobs. Her problem is in connection with the credit crunches.
Citigroup.
Citigroup was previously the world’s largest bank, but that has disappeared now courtesy of the credit crunches. It used to be the world’s most valued bank. Just two years ago, it was worth about $250 billion. The bank took a total hit of about $60 billion from the credit crisis. Most of it came from investments in bonds, backed by sub-prime mortgages. Citigroup acquired a lot of bonds that it became one of the biggest owners of these toxic securities. It recorded serious losses. The Citigroup has about $60 billion total write downs in last year related to credit crunches. She still has about $20 billion mortgage backed bonds. More than 50,000 jobs will go as a result of these problems.
London Scottish Bank.
London Scottish Bank announced on December 1 2008, that she has gone into administration. She has about 10,000 depositors and specialises in lending to people with low income earning capacity who find it difficult to obtain credit else where. The fate of it’s over 700 staffs are not bright. Most likely there will be job losses as a result of this collapse. Credit crunches have been blamed to this misfortune.
New Star.
New Star is a fund management company. Following the economic down turn, she will delist from the stock exchange and to be taken over by banks that will relieved her of £240 million worth of debts. About 60 jobs will go following the take over.
Other Struggling Companies and Organizations.
I will start this section by looking at companies, firms, organisations and industries that are struggling, to cope as a result of the global economic crunches. This will include companies that have already cut jobs and others who have indicated their willingness to cut jobs due to the global economic crunches which has plunged most economies into deep recession. This recession was explicitly revealed by Mervyn King, the Governor of Bank of England, who warned “that the British economy had entered a recession that would be deeper than had previously been anticipated, with the economy expected to contract by more than two percent, signalling that thousands more jobs could be lost” (The Daily Telegraph, Friday November 14 2008 page 4). This section will capture the trapped companies, firms and organizations.
S.O.S Letter From The Federation of Small Businesses.(The UK’s Leading Business Organisations).
The Rt Hon. Alistair Darling MP
Chancellor of the Exchequer.
Dear Chancellor,
£1 billion Small Business Survival Fund.
I am writing to you ahead of your pre-budget report next week, urging you to take action on behalf of this country’s 4.7 million small business.
Today, one in three small businesses is unable to obtain finance and has seen the cost of existing finance increase dramatically. A similar number of businesses say that they are seriously considering closing should the current credit climate continues. With more than 13 million people working within small firms, these figures represent a serious threat to our economy.
You have already moved to protect the big banks to the tune of over £500 billion. The Federation of Small Business (FSB) is now asking you to put in place a survival fund for small firms.
The FSB has been calling for a £1 billion Small Business Survival Fund. This will help both established businesses and start up firms, which urgently need working capital now.
This proposal represents just 0.2 percent of the funds you have used to safeguard the banks.
The FSB urges you to act next week to save thousands of small businesses and many more jobs.
Yours Sincerely
John Wright
National Chairman
www.fsb.org.uk
(Guardian Newspapers, Wednesday November 19 2008, page 20). This is a serious red alert about the economy, indication the dangers facing the UK economy. The global economic crunches are like a financial tsunami sweeping across the British and global economies.
Bizz Energy.
Bizz Energy has called in the administrators. She is amongst the top leading independent energy suppliers in the UK. In 2007, she recorded a turn over of £175 million. So far, 150 people are number of her total workforce. Her woes were as a result of the credit crunches which saw a similar company (E4B) go out of business. In a similar development the credit crisis has halted plans for underground gas storage in Dorset. The project was supposed to cost about £500 million.
Royal Worcester & Spode.
Royal Worcester & Spode is a leading name in British pottery industry. She has gone into administration. Her employees are 388 people in the UK. She fell victim to the global crisis. She has three sites in the UK with one in America. Its main trading subsidiary in the UK (The Porcelain and Fine China Companies Ltd) is also in administration.
Woolworths.
Woolworth is in deep financial distress. The company has been trading for 99 years old, and has 840 high street stores. Woolworths has 30,000 employees and job losses are inevitable whether it goes into administration or if it’s bought over by another company. Talks are currently going for a take over by Hilco, a distressed business specialist. The crises at Woolworths have really caused problems for several supermarkets, because EUK the UK’s biggest distributor of CD’s and DVD’s collapsed together with Woolworth. The both went into administration together. A company called Deloittes was formerly appointed the administrator. Woolworths at the time of going into administration owned £385 million to lenders such as GMAC and Burdale. Woolworths usually makes profits during December periods. In the past she used to make about 80% of its annual business in the six weeks before Christmas. Woolworths have been struggling for years. It was squeezed between supermarkets, online retailers and specialist shops. All attempts to reinvent itself as a specialist shops for children and families failed.
MFI.
MFI is a specialist on kitchen and furniture’s; she went into administration because of credit crunches. She has about 111 stores all over the UK and an estimated 1,200 jobs are to be lost. She was established in 1960’s.
Expected Job loses.
Unemployment is becoming more wide spread as the recession starts to bite. I will examine companies that have sacked their staffs and workers.
The owners of Independent titles (Independent News and Media that is Independent Newspapers) have announced that they are expecting to cut about 90 jobs out of the total work force of about 430. The expected job cuts are as results of drop in revenue which is a function of the credit crunches. ITV is hoping to cut about 1,000 jobs because it has been hit by severe down turn in advertising revenues. The Telegraph media group have plans to cut about 50 jobs. Trinity Mirror has plans to shed about 78 jobs in the north-west of England.
More than 390 people are expected to loose their jobs at the London branch of the collapsed Lehman Brother. Many more people will also loose their jobs at the Merrill Lynch offices in the UK.
Avis Europe indicated readiness to cut 315 jobs from its Europe work force. This car rental company is experiencing financial difficulties. The Citigroup which is the world’s biggest bank are set to reduce it global workforce by 50,000. It has faced serious money losses as a result of US housing markets. Posted a record loss of $20 billion.
The British job losses so far are as follows, Northern Rock UK 2,500, Citigroup UK 2,400, Barclays UK 1,800, UBS London 900, Bear Stearns London 750,HBOS London 650, HSBC London 500, Lloyds TSB London and Manchester 445, Merrill Lynch London 400, Lehman Brothers London 390, Morgan Stanley London 350, Bradford & Bingley Borehamwood 300. (Guardian Newspapers, Tuesday November 18 2008, page 28).
Sir Fred Goodwin, the chief executive of the Royal Bank of Scotland lost his job in the wake of extreme pressure by the bank’s new investors which is the British government, acting on behalf of taxpayers. The credit crunches paved way for the changes in the board room which exited Sir Fred Goodwin.
The Metro newspapers of Thursday, November 20 2008, reported that Insulation specialist SIG, announced job cuts in the neighbourhood of 900. She indicated her readiness to shut about 65 cites. The company is based in Sheffield. Another company in the construction industry, Wolseley announced that she was also going to cut about 2000 jobs. Quoting the Guardian, BASF the world’s largest chemicals group announced that she was cutting 20,000 jobs and halting or scaling back production at nearly 200 plants. This was the result of the credit crunches. “About 20,000 workers in Asia, North America and Europe will be directly affected by the production cuts, including 5,000 at its headquarters in Ludwigshafen, Germany. BASF employs 95,000 people worldwide” (The Times Newspapers, Thursday November 20 2008, page 69).
British Telecoms (BT) announced that 10,000 jobs would go. According to the Daily Telegraph, “the company has already shed 4,000 workers this financial year (2008), and a further 6,000 will go back by March, it said.(The Daily Telegraph, Friday November 14 2008, page 4). Most of these jobs will go from UK. The chief executive Mr Ian Livingston also hinted that further job cuts were likely.
Virgin media announced that it would cut 2,200 jobs. Yell, owners of Yellow pages classified business directories said that she will slash 1,300 jobs in the next coming 18 months. Psion indicated that 220 would go. Taylor Wimpey admitted that she would shed 1,000 employees. GlaxoSmithKline, the second biggest drug maker in the world is closing down its factory in Dartford which will lead to the loss of 620 jobs. So far Glaxo has already cut jobs this year in the tune of 1,850 due to falling revenues. (The Guardian, Wednesday November 12 2008, page 24 and 25).
Jaguar Land Rover hopes to extend a voluntary redundancy scheme which might likely lead to about 600 job cut at their plants in Merseyside and West Midlands. BMW is planning to cut about 9,000 vehicles at its Oxford plant. Homebase is expecting to cut about 200 jobs out of its total workforce of about 20,000 in the UK.
Neptune Orient, the biggest shipping firm in Singapore has slashed about 1,000 jobs as a result of the credit crisis. British Polythene Industries (BPI) will be closing with estimated job loss of about 165 jobs. The company produces heavy duty sacks and industrial films. About 40% of their outputs are used by the construction firms which have been affected by the economic down turn. ArcelorMittal, the world’s largest steel maker is planning to cut about 9,000 jobs in a bid to save $1 billion a year, in response to the global crunches. SpeedFerries, a cross channel ferry company has also gone into administration. More than 100 jobs are expected to go.
3i which is Europe’s largest buyout firm will be laying off 15% of her staff strength. 3i is the only private equity firm listed on the FTSE 100 will cut about 100 out of 660 jobs. 3i is suffering from the economic down turn
The Auto Industry.
The auto industry was affected by the credit crunches. The magnitude is enormous. This section will examine the effects of the credit crunches on the auto industries.
British car industry has appealed for help from the government. This is coming due to the increasing concerns over the future of Vauxhall’s Ellesmere Port Factory, including component makers and dealerships.
The British Society of Motor Manufacturers and Traders (SMMT) have written to the Chancellor of the Exchequer Alister Darling and the business secretary, Lord Mandelson. They are looking for access to credit and loans that will run into billions. It needs government support for manufacturers, leasing companies, parts suppliers and dealerships. New car sales slumped in the UK by 23% in the month of October 2008. This made it the biggest fall in 17 years. Last Octobers new car sales in the UK totalled 128,352 compared with 166,797 in October 2007, with the fall over the past three months running at 21.4 %( Guardian Friday November 7 2008, page 39).
There are a lot of worries about Vauxhall. The SMMT wants car manufacturers to have access to special liquidity arrangements like the ones made available to banks.
The Vauxhall plant in Merseyside has been described as the most vulnerable car plant in England, because it’s owned by the General Motors (GM) of America. We should remember that General Motors is struggling for cash in America and has given warnings that it could soon run out of cash except funds are made available to her. This money problem will obviously affect their plant in the UK. In like manner, OPEL, a GM subsidiary in Germany has asked the German government of money in the neighbourhood of 1 billion euros (£838 million). This is to keep operations going in case the funds from America run dry.
General Motors in Europe has performed badly due to the credit crunches. Sales are low. There are speculations that the company could consider production cuts, with plants at Ellesmere Port or the Antwerp likely to be closed.
“All of the British car industry is now on short-time working to reduce output and job cuts have begun among temporary staff and several hundred permanent staff”… “The motor industry faces a set of unprecedented market conditions. The dramatic falls in demand for new vehicles in the UK, Europe, and around the world, combined with limited availability of funding and liquidity now puts at risk valuable industrial capability”(Times, Thursday November 20 2008, page 70).
The European car manufacturers are desperately in need of cash. As a way to assist the car industry, the British government has decided that the new rates of car tax are to be phased in and increases will be lower.
Jaguar Land Rover.
Jaguar Land Rover is facing a financial crisis. She has approached the UK government for a life line of £1 billion. This is because of plunging car sales and lack of credit. Jaguar was bought by Tata conglomerates of India. She wants this life line for two years after which she hopes to pay back, because Jaguar is hoping that by then, the global car market would have recovered. Jaguar and other UK car makers want the government to pressure the banks to free up capital for them or alternatively the government can act as a guarantor for them. Jaguar operations are known to be suffering significant cash flow pressures. Sales of its major brand, Land Rover have plunged down seriously. Jaguar Land Rover is trying to avoid total shutdowns of its plant. So far she is cutting shifts in her Midlands and Merseyside factories to reduce output. It is hoped that several hundred jobs will be lost as a result of this. Another serious concern is that car making has a multiplier effect on supply-chain jobs. “It is estimated that for every job in a car-assembly factory, there are four of five in the supply chain” (Times, Monday November 24 2008, page 39).
Aston Martin.
Aston Martin which manufactures luxury and expensive cars announced reduction in car sales as a result of the global economic down turns. The company is based in Gaydon, Warwickshire United Kingdom. The car company is facing tough challenges. She has announced plans to cut about 600 jobs.
European Motor Industry.
The European motor industry has asked the European Union for a lifeline of about 40 billion euros (£34 billion). This is because sales of cars and Lorries are collapsing as the recession hits harder. European car makers are expected to have an extended holiday this December 2008 Christmas break. It might be up to a month’s holiday. Car plants will be shut down. In the month of October 2008, new van sales fell by 18.3%. The crisis in the car industry is not confided there alone, it is also hitting automotive component manufacturers as well. Hopes that the Eastern European markets will bail out the EU car industry disappeared. An example is the Polish sales of new cars which dropped by 43.2% in October 2008. New car sales also dropped in Europe to 14.5% in October 2008. European car makers are now pressing for subsidies to encourage owners to scrape dirty cars and replace them with new ones. Meanwhile the European Commission has made a case for 5 billion euros (£4.2 billion) of extra funding for Europe’s car makers to help them develop more eco friendly cars and green technology.
America’s Car Industry.
The Detroit three, that is General Motors, Ford and Chrysler are asking for a $25 billion bail out or bankruptcy. Times are really tough in the global car business. Car businesses are much worse in the United States because of the credit squeeze, compounded by the high cost of fuels experienced this year. The big three have also been blamed for most of there problems, like having too many brands, too late in developing small cars, not been able to use their money wisely and falling to be alive to threat from the Asian competitors. Another problem is that Americans are also driving less due initially to high cost of fuel. Americans are switching from gas-guzzling luxury vehicles to more fuel efficient smaller models. The new “green” agenda endorsed by Obama also contributed in the problems of American car industry.
The big three companies have given warnings that about three million jobs could go, if they go under. General Motors which is the world’s biggest car company announced that it would run out of cash and would be in worse position unless it gets government help, or sell assets, or the economy improves. General motors lost $4.2 billion on third quarter of 2008. As a result of the crisis the General Motors have abandoned merger talks with Chrysler. This year has witnessed the lowest car sales in America in 25 years. The dramatic sales decline has been driven by unstable market conditions, instability in the credit markets and a dramatic retraction in consumer demands around the globe
Airlines and Airline Industry.
The airline industry has been tragically hit by the economic down turns and the high cost of fuel prises. The industry continues to face tough operating conditions on the heels of weak economic conditions. The 2008 half yearly profits of British airways fell by 91.6%. The British Airways pre-tax profit was £52 million between April and September 2008, less than the previous year which was £616 million. The airline is hoping to reduce its number of flights by about 1% in 2009, in anticipation of low passenger turn outs. The British Airways is hoping to suspend flights from Heathrow to the following destinations, Dhaka and Kolkata. Gatwick to Dublin and Zurich. Most of their problem was due to the high cost of aviation fuel which was increasing side by side with the crude oil prices. Crude oil prices reached a record high of $147 per barrel in July 2008 that meant higher cost of aviation fuel.
Easyjet witnessed a fall in profits this financial year. This was attributed to high cost of fuel and economic down turn. The airline had forecasted tough future business ahead. She made losses as the crude oil prises soared. Ryanair airlines have also witnessed fall in profits. Net profits in the six months to the end of September 2008 stood at 214.6 million euros compared to 407.6 million euros the previous year.( http://news.bbc.co.uk/1/hi/business/7705500.stm).
Spanish based airline, LTE international suspended its operations due to economic downturns. The airline said so many passengers would be affected by the suspension of its operations. She runs flights to UK, Italy, and Saudi Arabia. The company operated for about 20 years with maximum dedication to its passengers. Alitalia was saved from total collapse by its new investors.
The turbulence in the aviation industry did not spare the XL Airways and its parent tour operator, which is the UK’s third largest tour operator. At the time of going under, the company left about 85,000 people stranded abroad and disrupted about 200,000 holiday plans. About 1,700 jobs were lost as a result of the collapse of XL airways. Several other smaller airlines such as; Maxjet, Eos airlines, Silverjet, Oasis, and Zoom have all gone under.
Zoom Airlines.
Zoom airlines is a budget airline that flies across the Atlantic. She started operations in 2001. The airline had two main bases in United Kingdom and Canada. She has a total work force of about 710 in both Canada and the United Kingdom. Operates from about 5 airports in the UK namely Gatwick, Glasgow, Manchester, Cardiff, and Belfast. She also flew to about 2 other European capital, which is Paris and Rome. The airline blamed high cost of aviation fuel and economic down turn for her problems.
References.
Daily Mail Newspapers, Tuesday September 16 2008.
The Daily Telegraph, Friday November 14 2008
The Times Newspapers, Saturday November 8 2008.
The Times Newspapers, Thursday November 20 2008
The Times Newspapers, Monday November 24 2008
Guardian Newspapers, Monday November 3 2008.
Guardian Newspapers, Wednesday November 5 2008.
Guardian Newspapers, Wednesday November 7 2008.
Guardian Newspapers, Tuesday November 11 2008.
Guardian Newspapers, Wednesday November 12 2008.
Guardian Newspapers, Tuesday November 18 2008.
Guardian Newspapers, Wednesday November 19 2008.
Guardian Newspapers, Wednesday November 26 2008
Guardian Newspapers, Thursday November 27 2008
Guardian Newspapers, Friday November 28 2008.
Metro Newspapers, Thursday, October 9 2008
Metro Newspapers, Monday October 13, 2008.
Metro newspapers, Thursday November 20 2008
Metro Newspapers, Tuesday, November 25 2008
http://www.scottishsocialistparty.org/economic-crisis/market-money-madness.html printed on 13/11/8
http://news.bbc.co.uk/1/hi/business/6519051.stm printed on 16/11/8
http://news.bbc.co.uk/1/hi/business/6967400.stm printed on 16/11/8
http://news.bbc.co.uk/1/hi/business/6976517.stm
http://money.cnn.com/2008/11/14/news/companies/freddie_mac/index.htm?iref=werecommend printed on 16/11/8.
http://money.cnn.com/2008/11/10/news/companies/aig/index.htm?postversion=2008111009
http://edition.cnn.com/2008/BUSINESS/10/07/iceland.loan.collapse.ap/index.html printed on 16/11/8
http://news.bbc.co.uk/1/hi/business/7664007.stm printed on 16/11/8
http://news.bbc.co.uk/1/hi/business/7021529.stm printed on 16/11/8
http://news.bbc.co.uk/1/hi/business/7521250.stm printed on 16/11/8
http://en.wikipedia.org/wiki/Merrill_Lynch printed on 20/11/8 http://www.globalenvision.org/2008/10/10/us-economic-problems-have-ripple-effect-mexico 29/11/8.
http://news.bbc.co.uk/1/hi/business/7714763.stm printed on 29/11/8 http://news.bbc.co.uk/1/hi/business/7675962.stm printed on 29/11/8 http://news.sky.com/skynews/Home/Business/London-Scottish-Bank-Specialist-Financial-Services-Company-Goes-Into-Administration/Article/200812115168645?lpos=Business_First_Home_Article_Teaser_Region_4&lid=ARTICLE_15168645_London_Scottish_Bank_Specialist_Financial_Serices_Company_Goes_Into_Administration printed on 1/12/8
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Authors Biography
Name: Chinedu Vincent Akuta.
Contact Information: 37a Larch Street, Leicester. LE5 0ES. UK.
Email: akutachinedu@yahoo.com
Blog: http://briefsfromakuta.blogspot.com/
Present Job: Lecturer Assistant, Leicester International College. 132-134 London Rd, Leicester, LE2 1EB. www.leicesterinternationalcollege.co.uk
Education/Universities;
MSc, International Relations. Department Of Politics, International Relations and European Studies. Loughborough University Leicestershire, LE11 3TU. UK. Tel: +441509222991/222981. Fax: +441509223917. (2005-2007).
MSc, Economics. School of Postgraduate Studies. University of Lagos, Akoka-Yaba. Lagos-Nigeria. (2000-2001).
MBA, Marketing. Postgraduate School, Lagos State University. Badagry Expressway, OJO, P.M.B. 1087, Apapa. Lagos-Nigeria. (1998-2000).
BSc, Economics. Nnamdi Azikiwe University. P.M.B. 5025 Awka, Anambra State. Nigeria. (1989-1994).
Publications: E.U. Trade with Sub-Sahara African Countries, Nigeria as a case study, 1990-2006. MSc dissertation Loughborough University, 2007.
Other Publications, Please view my blog. http://briefsfromakuta.blogspot.com/
Friday, December 12, 2008
Mr President (Musa Yar’Adua), Your Comments Must Be Marched With Action.
I was glad when I read the Guardian and Thisday newspapers of Monday 8th December 2008, online version. My happiness stems from the fact that Mr President on his sallah message to Nigerians reconfirmed that his administration was committed to electoral reforms, so that we can have peaceful and transparent elections in the country. Quoting my source (Thisday newspaper) “Mr President said his administration would take very seriously, the issue of electoral reform programme. “I want to assure all Nigerians that the federal government is fully resolved and committed to the electoral reform programme so that we can have peaceful and transparent elections in this country”.
This is a clear indication that Mr President understands, that our major problem in Nigeria is our electoral process, which never allows a true leader to emerge. Even our president was not our popular choice. Mr President, apologies to you.
Mr President, your views about transparent elections are in consonance with what the ex-vice president, Atiku Abubakar said in one of his interviews were, “He urged that the nation’s politicians and everyone else should aim for a time when elections are so transparent that there would be no need for petitions”. (Guardian newspapers of Sunday, November 23 2008, online version). Nigerians know that our problem is our electoral process, which our unfortunate less visionary leaders have used to their advantage. What the authorities do in Nigeria is selection, instead of elections? The country cannot move forward at this rate, rather we will retrogress.
The solution to our problem is not rocket science, neither do we need expatriates to educate us on how to conduct transparent elections in Nigeria. The solution is the re-introduction of Option A4 electoral system, because Nigerians are yet to see a method better than this system. Our previous experiences with this method should guide us. If Nigeria is serious about electoral reforms to guarantee transparency, I strongly recommend this method to the federal government of Nigeria. I have also spoken about this in all international forum/seminars that I found myself in.
People have pointed to me about the fact that this system allows people to know who is voting for them or not. My answer is yes, people will vote for whoever they trust, that will make a popular candidate to emerge. The system will prevent the imposition or selection of candidates, which is the order of the day in Nigeria. It will also check bribing voters in a way, because people will see who you’re voting for. Unpopular candidates will not go far with this method. An example was when the ex military Head of State of Nigeria, General Yakubu Gowon lost an election in his constituency, because Option A4 electoral system was used at that time. His people at the constituency level didn’t vote for him because he was not popular and there was no avenue for rigging. That is Option A4 system for you. I have always argued that the short falls of this system is better than the methods we are using now.
Nigerians must seize this opportunity of the current electoral reform programme to ask the committee in charge of electoral reforms to give us the Option A4 method. Its economical, little or no logistics problem. No question of ballot papers and boxes. People just line up behind who they want to vote. Results are known there and then after voting. The money used in printing ballot papers alone in previous elections is enough to create employment for about 10000 Nigerians. Yet this ballot papers are meaningless because of electoral frauds.
Mr President, you need to match your words with action. It’s not enough to promise electoral reforms without backing it with action. Mr President, I am aware that the opposition parties (AC and CNPP) have accused you of being double faced when it comes to electoral reforms. They said you should not be taken serious because your administration is paying lip service to electoral reforms. Part of their reason for this accusation, was because you’re vice Jonathan Goodluck, was seen showering praises on Maurice Iwu who conducted the 2007 elections. Jonathan described Iwu as a patriot, despite the fact that 2007 elections have been described as a total fraud. (Details of this accusation appeared on Thisday newspaper of Tuesday, 9th December 2008, online version).
My President, you must prove critics wrong. You need to disprove the opposition parties. This is the time for you to show that you really mean what you say. Nigerians are tired of promises and failures from past administrations. You will be writing your name in gold if you help Nigeria to achieve the reformation our electoral laws to Option A4. Generations unborn will surely remember you, if our electoral laws will be such that will allow true leadership to emerge.
Mr President, many Nigerians in Diaspora will likely come back home with their wealth of experiences if things are right. Things can never be right, if the right people cannot emerge to lead. Right people cannot emerge, with a system that can never allow them.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
This is a clear indication that Mr President understands, that our major problem in Nigeria is our electoral process, which never allows a true leader to emerge. Even our president was not our popular choice. Mr President, apologies to you.
Mr President, your views about transparent elections are in consonance with what the ex-vice president, Atiku Abubakar said in one of his interviews were, “He urged that the nation’s politicians and everyone else should aim for a time when elections are so transparent that there would be no need for petitions”. (Guardian newspapers of Sunday, November 23 2008, online version). Nigerians know that our problem is our electoral process, which our unfortunate less visionary leaders have used to their advantage. What the authorities do in Nigeria is selection, instead of elections? The country cannot move forward at this rate, rather we will retrogress.
The solution to our problem is not rocket science, neither do we need expatriates to educate us on how to conduct transparent elections in Nigeria. The solution is the re-introduction of Option A4 electoral system, because Nigerians are yet to see a method better than this system. Our previous experiences with this method should guide us. If Nigeria is serious about electoral reforms to guarantee transparency, I strongly recommend this method to the federal government of Nigeria. I have also spoken about this in all international forum/seminars that I found myself in.
People have pointed to me about the fact that this system allows people to know who is voting for them or not. My answer is yes, people will vote for whoever they trust, that will make a popular candidate to emerge. The system will prevent the imposition or selection of candidates, which is the order of the day in Nigeria. It will also check bribing voters in a way, because people will see who you’re voting for. Unpopular candidates will not go far with this method. An example was when the ex military Head of State of Nigeria, General Yakubu Gowon lost an election in his constituency, because Option A4 electoral system was used at that time. His people at the constituency level didn’t vote for him because he was not popular and there was no avenue for rigging. That is Option A4 system for you. I have always argued that the short falls of this system is better than the methods we are using now.
Nigerians must seize this opportunity of the current electoral reform programme to ask the committee in charge of electoral reforms to give us the Option A4 method. Its economical, little or no logistics problem. No question of ballot papers and boxes. People just line up behind who they want to vote. Results are known there and then after voting. The money used in printing ballot papers alone in previous elections is enough to create employment for about 10000 Nigerians. Yet this ballot papers are meaningless because of electoral frauds.
Mr President, you need to match your words with action. It’s not enough to promise electoral reforms without backing it with action. Mr President, I am aware that the opposition parties (AC and CNPP) have accused you of being double faced when it comes to electoral reforms. They said you should not be taken serious because your administration is paying lip service to electoral reforms. Part of their reason for this accusation, was because you’re vice Jonathan Goodluck, was seen showering praises on Maurice Iwu who conducted the 2007 elections. Jonathan described Iwu as a patriot, despite the fact that 2007 elections have been described as a total fraud. (Details of this accusation appeared on Thisday newspaper of Tuesday, 9th December 2008, online version).
My President, you must prove critics wrong. You need to disprove the opposition parties. This is the time for you to show that you really mean what you say. Nigerians are tired of promises and failures from past administrations. You will be writing your name in gold if you help Nigeria to achieve the reformation our electoral laws to Option A4. Generations unborn will surely remember you, if our electoral laws will be such that will allow true leadership to emerge.
Mr President, many Nigerians in Diaspora will likely come back home with their wealth of experiences if things are right. Things can never be right, if the right people cannot emerge to lead. Right people cannot emerge, with a system that can never allow them.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
Wednesday, December 3, 2008
Letter To The British Prime Minister.
The reports drawn up by the Commission on National Security in the 21st Century which was sponsored by the Institute for Public Policy Research in the UK came out on the Guardian Newspaper of Thursday November 27 2008 page 23,(Please the Guardian newspaper referred to here is the UK Guardian). The report said that Britain faces a greater threat from the rising number of weak states.
Part of the report said thus; “The list of 20 failed states is headed by Somalia, where drought and al-Qaida influences are now compounded by the increasing threat of piracy, and includes Ethiopia, Zimbabwe, Haiti, Bangladesh, Afghanistan, Pakistan, and Nigeria. The huge concentration of weak states that poses a threat to Britain’s national security is in sub-Sahara Africa, it says”. The report went further to say that “Weak, corrupt and failing states have become bigger security risks than strong states” and will remain a highly visible feature of the security landscape for decades to come. They are targets of transnational criminal networks which are expanding their drugs, arms and people trafficking operations”.
Mr Prime Minister please am more concerned about the fact that Nigeria appeared on this report as one of the failed states, which is posing a threat to the United Kingdom. The reason for my concerns is simply because am a Nigerian and also because of the obvious fact that Nigeria is massive with its huge population. A failed Nigeria is not only a threat to United Kingdom as the report suggests, but a threat to the world.
The Report also gave useful suggestions on the best approach. It said “Britain must engage much more positively with these countries through financial, economic and diplomatic means, or what the report calls non-military preventative action, and by promoting good governance”.
Mr Prime Minister, I agree totally with the suggestions made by this think tank. But I would wish to add a few suggestions in line with the above. I am giving these suggestions based on my experiences of the Nigerian situation. The Nigerian problem is the political system, most importantly the electoral process. The present electoral process as it is, cannot guarantee the emergence of a true leader. What am simply saying is that the Nigerian electoral process is not transparent and it’s subject to abuses. Because of this singular factor, the entire country has been denied true leadership and credible candidates have never been allowed to emerge. The Nigeria political system has been hijacked by god fathers who hold the country in captivity. This is part of the reason why Nigeria appeared as one of the failed states.
The report suggested promoting good governance. How does Britain promote good governance in the case of Nigeria? The answer is very simple. Ask the Nigerian authorities to re-introduce the Option A4 electoral process. Mr Prime Minister, this system was used in the Nigerian elections in 1992/1993. This system was judged to be the fairest and freest system in the Nigeria electoral history. Foreign observers from European Union, Commonwealth etc gave 100% approval of this system. This system remains the best for Nigeria. Unfortunately the military government that truncated the Nigerian democracy in November 1993 cancelled this method of election. Since then till now our electoral process has been hijacked by god fathers and marred by electoral fraud and violence of highest magnitude. The so called god fathers decide who should govern Nigeria.
I also believe that you have what it takes to influence a country like Nigeria to adopt back this system. Please attach the adoption of Option A4 electoral system as a future pre-condition for loans, grants, trade, and economic support. Nigeria is strategic in the sub-Sahara Africa countries. Nigeria is the sixth largest oil producer in the world and has a larger population of about 140 million people. A stable Nigeria will benefit the British economy and the world at large. A failed Nigeria will continue to be a threat to Britain. It might come to a time when Britain might have to commit her resources to save Nigeria if you fail to heed to this advice.
A politically stable and transparent Nigeria will influence a lot of countries in the sub-Sahara African Continent. Mr Prime Minister, I have heard you say, a stitch in time saves nine, if your efforts can help achieve this objective in Nigeria, then Nigeria can in turn influence other smaller African countries. By so doing, the threat posed to Britain will disappear. As you already know the major problems of the sub-Saharan African countries are political in nature. Example is Kenya, Zimbabwe etc. It will cost Britain less to achieve this objective in Nigeria, but more if Nigeria finally collapses.
I am currently leading a group called “Support Option A4” we are campaigning for the re-introduction of this system back into our Nigerian electoral law. We will be willing to offer any suggestions to you, should you consider my advice above. Please acknowledge the receipt of this letter.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
Part of the report said thus; “The list of 20 failed states is headed by Somalia, where drought and al-Qaida influences are now compounded by the increasing threat of piracy, and includes Ethiopia, Zimbabwe, Haiti, Bangladesh, Afghanistan, Pakistan, and Nigeria. The huge concentration of weak states that poses a threat to Britain’s national security is in sub-Sahara Africa, it says”. The report went further to say that “Weak, corrupt and failing states have become bigger security risks than strong states” and will remain a highly visible feature of the security landscape for decades to come. They are targets of transnational criminal networks which are expanding their drugs, arms and people trafficking operations”.
Mr Prime Minister please am more concerned about the fact that Nigeria appeared on this report as one of the failed states, which is posing a threat to the United Kingdom. The reason for my concerns is simply because am a Nigerian and also because of the obvious fact that Nigeria is massive with its huge population. A failed Nigeria is not only a threat to United Kingdom as the report suggests, but a threat to the world.
The Report also gave useful suggestions on the best approach. It said “Britain must engage much more positively with these countries through financial, economic and diplomatic means, or what the report calls non-military preventative action, and by promoting good governance”.
Mr Prime Minister, I agree totally with the suggestions made by this think tank. But I would wish to add a few suggestions in line with the above. I am giving these suggestions based on my experiences of the Nigerian situation. The Nigerian problem is the political system, most importantly the electoral process. The present electoral process as it is, cannot guarantee the emergence of a true leader. What am simply saying is that the Nigerian electoral process is not transparent and it’s subject to abuses. Because of this singular factor, the entire country has been denied true leadership and credible candidates have never been allowed to emerge. The Nigeria political system has been hijacked by god fathers who hold the country in captivity. This is part of the reason why Nigeria appeared as one of the failed states.
The report suggested promoting good governance. How does Britain promote good governance in the case of Nigeria? The answer is very simple. Ask the Nigerian authorities to re-introduce the Option A4 electoral process. Mr Prime Minister, this system was used in the Nigerian elections in 1992/1993. This system was judged to be the fairest and freest system in the Nigeria electoral history. Foreign observers from European Union, Commonwealth etc gave 100% approval of this system. This system remains the best for Nigeria. Unfortunately the military government that truncated the Nigerian democracy in November 1993 cancelled this method of election. Since then till now our electoral process has been hijacked by god fathers and marred by electoral fraud and violence of highest magnitude. The so called god fathers decide who should govern Nigeria.
I also believe that you have what it takes to influence a country like Nigeria to adopt back this system. Please attach the adoption of Option A4 electoral system as a future pre-condition for loans, grants, trade, and economic support. Nigeria is strategic in the sub-Sahara Africa countries. Nigeria is the sixth largest oil producer in the world and has a larger population of about 140 million people. A stable Nigeria will benefit the British economy and the world at large. A failed Nigeria will continue to be a threat to Britain. It might come to a time when Britain might have to commit her resources to save Nigeria if you fail to heed to this advice.
A politically stable and transparent Nigeria will influence a lot of countries in the sub-Sahara African Continent. Mr Prime Minister, I have heard you say, a stitch in time saves nine, if your efforts can help achieve this objective in Nigeria, then Nigeria can in turn influence other smaller African countries. By so doing, the threat posed to Britain will disappear. As you already know the major problems of the sub-Saharan African countries are political in nature. Example is Kenya, Zimbabwe etc. It will cost Britain less to achieve this objective in Nigeria, but more if Nigeria finally collapses.
I am currently leading a group called “Support Option A4” we are campaigning for the re-introduction of this system back into our Nigerian electoral law. We will be willing to offer any suggestions to you, should you consider my advice above. Please acknowledge the receipt of this letter.
Chinedu Vincent Akuta
An activist and leader of “Support Option A4 Group”
akutachinedu@yahoo.com
http://briefsfromakuta.blogspot.com/
Monday, December 1, 2008
Jos Killings, High Time For Change.
Jos Killings, High Time For Change.
This is in response to the recent politically motivated killings in Jos, Plateau State Nigeria, where over 200 people have been reportedly killed. As usual the government sources put the number of dead people to about 50. In the UK where the writer lives, Sky news reported 200 people dead. Houses, churches, mosque and other properties worth millions of naira were destroyed. As always the case, political violence in the northern parts of Nigeria usually turn into tribal and religious riots.
Now who can tell Nigerians when this kind of killings and political violence will stop? Who can guarantee us when politically motivated riots can stop? The truth is that, there is no end to political violence in Nigeria in as far as our electoral system remains the same. I stand to be corrected.
I strongly believe that had the option A4 system been used in Jos Plateau state, this mayhem would have been avoided. I wasn’t in Jos at the time of the crisis, but suspicion of electoral malpractices between the rival political parties that is, People’s Democratic Party otherwise known as Peoples Destruction Party (PDP) and All Nigerian Peoples Party alias Against Nigerian Peoples Party (ANPP) were the root cause of this problem. The two rival candidates are not genuine leaders at all, otherwise one of them wouldn’t have been involved with rigging in the first place and the supposedly loser wouldn’t have subscribed to violence. It is because they have a different agenda from true leadership that this crisis happened, otherwise losers should accept failure in good faith and winners rejoice with good heart. It’s a question of winner takes all (greed and looting). If people are genuinely seeking a selfless service to mother land, there wouldn’t be any need for rioting and killing. Am glad Nigerians know the reason behind this.
Nigeria is not new to electoral malpractices and political violence, but are we all going to support the electoral system that guarantees us violence and killings. How many more Nigerians do we want killed through electoral violence before we can ask for change? Where is our civilization, enlightenment, and knowledge? Must we fold our hands and watch this kind of system that will continue to kill Nigerians. Political violence and killings does not know who is a wealthy man or poor man. The high profile politically motivated murders such as late Engineer Funsho Williams (former Lagos state governorship aspirant), Bola Ige (former Nigeria attorney general and minister of Justice), Harry Marshall (former PDP South South Leader), etc are examples of losses accrued from political killings. Can we ever quantify in monetary terms the value of these men and other Nigerians? It’s impossible.
The problem with this kind of Jos killings is that, there will be a multiplier effects or a chain reaction. There are higher chances that these killings might spread to other parts of Northern states in Nigeria if care is not taken. As usually this kind of riots are usually hijacked by criminal elements that will turn it into religious and tribal wars. As soon religion is attached to it, it will spread like wide fire. Innocent people will suffer. Hardworking Nigerians will bear the heaviest burden. A particular section of Nigerians will pay the greatest price, as has always been the case since the 1960’s. The Ibo tribe has paid the costliest price whenever there is a problem in the Northern part of Nigeria. Am sure this Jos crisis would not be an exception. A reprisal attack might likely follow these Jos killings in some South East and South South region as a spill over effect.
Our electoral system in Nigeria is the primary cause of all these problems. Its not transparent, it’s prone to manipulation and abuse. Therefore in the process of cheating, people resort to violence and killings. Now to save Nigeria, is to reform our electoral system so that true leaders can emerge. The present system cannot allow any honest person to emerge. Our electoral system is over due for changes and reformations. The only proven method Nigerians know is the Option A4 electoral process.
Records have it that, there was no single political killing/violence when this method was used. Progressive Nigerians need to join voices and ask for the re-introduction of this electoral method. Let’s go the way of Option A4 method and hence stop electoral violence and killings. If we fail to put an end to political violence, political violence will put to an end the entity called Nigeria.
Finally, let’s not forget that the cost and effects of political violence affects all of us directly or indirectly. An example is, if someone is displace by violence. The victim might never recover to sustain him/herself financially. The victim might become frustrated and hopeless. Such person might end up being a criminal or a hired assassin thereby becoming a threat to the larger society. This is the time to start asking for this change, because a stitch in time saves nine, prevention is better than cure. Please speak out now and join the crusade for change of our electoral system to Option A4. This way, our future will become brighter again. God bless Nigerians.
Your comments, compliments, contributions or criticism of this article will be highly appreciated .Apologies for any grammatical error
Chinedu Vincent Akuta
An activist based in Leicester.
http://briefsfromakuta.blogspot.com/
This is in response to the recent politically motivated killings in Jos, Plateau State Nigeria, where over 200 people have been reportedly killed. As usual the government sources put the number of dead people to about 50. In the UK where the writer lives, Sky news reported 200 people dead. Houses, churches, mosque and other properties worth millions of naira were destroyed. As always the case, political violence in the northern parts of Nigeria usually turn into tribal and religious riots.
Now who can tell Nigerians when this kind of killings and political violence will stop? Who can guarantee us when politically motivated riots can stop? The truth is that, there is no end to political violence in Nigeria in as far as our electoral system remains the same. I stand to be corrected.
I strongly believe that had the option A4 system been used in Jos Plateau state, this mayhem would have been avoided. I wasn’t in Jos at the time of the crisis, but suspicion of electoral malpractices between the rival political parties that is, People’s Democratic Party otherwise known as Peoples Destruction Party (PDP) and All Nigerian Peoples Party alias Against Nigerian Peoples Party (ANPP) were the root cause of this problem. The two rival candidates are not genuine leaders at all, otherwise one of them wouldn’t have been involved with rigging in the first place and the supposedly loser wouldn’t have subscribed to violence. It is because they have a different agenda from true leadership that this crisis happened, otherwise losers should accept failure in good faith and winners rejoice with good heart. It’s a question of winner takes all (greed and looting). If people are genuinely seeking a selfless service to mother land, there wouldn’t be any need for rioting and killing. Am glad Nigerians know the reason behind this.
Nigeria is not new to electoral malpractices and political violence, but are we all going to support the electoral system that guarantees us violence and killings. How many more Nigerians do we want killed through electoral violence before we can ask for change? Where is our civilization, enlightenment, and knowledge? Must we fold our hands and watch this kind of system that will continue to kill Nigerians. Political violence and killings does not know who is a wealthy man or poor man. The high profile politically motivated murders such as late Engineer Funsho Williams (former Lagos state governorship aspirant), Bola Ige (former Nigeria attorney general and minister of Justice), Harry Marshall (former PDP South South Leader), etc are examples of losses accrued from political killings. Can we ever quantify in monetary terms the value of these men and other Nigerians? It’s impossible.
The problem with this kind of Jos killings is that, there will be a multiplier effects or a chain reaction. There are higher chances that these killings might spread to other parts of Northern states in Nigeria if care is not taken. As usually this kind of riots are usually hijacked by criminal elements that will turn it into religious and tribal wars. As soon religion is attached to it, it will spread like wide fire. Innocent people will suffer. Hardworking Nigerians will bear the heaviest burden. A particular section of Nigerians will pay the greatest price, as has always been the case since the 1960’s. The Ibo tribe has paid the costliest price whenever there is a problem in the Northern part of Nigeria. Am sure this Jos crisis would not be an exception. A reprisal attack might likely follow these Jos killings in some South East and South South region as a spill over effect.
Our electoral system in Nigeria is the primary cause of all these problems. Its not transparent, it’s prone to manipulation and abuse. Therefore in the process of cheating, people resort to violence and killings. Now to save Nigeria, is to reform our electoral system so that true leaders can emerge. The present system cannot allow any honest person to emerge. Our electoral system is over due for changes and reformations. The only proven method Nigerians know is the Option A4 electoral process.
Records have it that, there was no single political killing/violence when this method was used. Progressive Nigerians need to join voices and ask for the re-introduction of this electoral method. Let’s go the way of Option A4 method and hence stop electoral violence and killings. If we fail to put an end to political violence, political violence will put to an end the entity called Nigeria.
Finally, let’s not forget that the cost and effects of political violence affects all of us directly or indirectly. An example is, if someone is displace by violence. The victim might never recover to sustain him/herself financially. The victim might become frustrated and hopeless. Such person might end up being a criminal or a hired assassin thereby becoming a threat to the larger society. This is the time to start asking for this change, because a stitch in time saves nine, prevention is better than cure. Please speak out now and join the crusade for change of our electoral system to Option A4. This way, our future will become brighter again. God bless Nigerians.
Your comments, compliments, contributions or criticism of this article will be highly appreciated .Apologies for any grammatical error
Chinedu Vincent Akuta
An activist based in Leicester.
http://briefsfromakuta.blogspot.com/
Tuesday, November 25, 2008
To Batter or Better Nigeria, Choose One?
Every Nigerian whether living at home or in the Diaspora has got to worry a lot about home. The reasons are obvious. The ship of state is seriously drifting, and the destination is unknown. Matters are made worse by the fact that we don’t know how long our country will drift.
I am writing this piece in respect to recent publications/interview about Nigeria by two prominent Nigerians, one being former ex vice president (Atiku Abubakar) and the present Edo state Governor (Adams Oshiomhole). I will start with Atiku, since I consider him a senior politician.
According to Guardian newspapers of Sunday, November 23 2008, online version. Atiku said that, “This government has failed; he described the Yar’Adua’s administration as a failure, since nothing positive is happening in the country”. He told the Guardian in the interview that, “I have no business with this government, the only thing I know is that nothing works, no electricity, how many towns and cities in this country that have pipe borne water? There are no roads, nothing is going on”. He was kind enough to admit that the past administration which he served as the Vice president didn’t do much, alleging that the attention of their own administration was diverted. I think Atiku did a good job here to refresh the minds of Nigerians, and also to reinstate the obvious about the wastages and setbacks their administration caused us. Nigerians know that Obasanjo/Atiku administration was a total failure and a big misfortune for us.
Over to the interview by Edo state governor, Comrade Adams Oshiomhole. He said that the country is experiencing increasing social tension. Which is threatening socio economic activities? Oshiomhole said the tension is being expressed in crime wave in the country, noting that no number of police could quell the tension, until the youths are fully engaged. This interview was published by Vanguard newspapers of Sunday 23 November 2008, online version. Firstly let me thank the two men for speaking out the truth even though Atiku was part of the previous government that has caused Nigeria setbacks. Many more honest voices are needed.
Truly Nigeria is in trouble, and our problem is leadership. We have not had a true leader. Our so called leaders have all been imposed on us. This makes the whole country to be sick. Instead of moving forward, we are speeding backwards. The futures of many Nigerians have been damaged as a result of this. All our dreams of a great country have been shattered. Imagine a country where nothing works. Even the government doesn’t work. Crime rate is too high, unemployment is every where, and road networks are simply not effective. The only thing working is corruption. May be Nigeria government should officially legalize corruption.
We Nigerians know how we got to this point in our country. The question now is how do we change this ugly scenario? How do we bring changes to our political system? The situation now is critical. Every person should be worried about the future of Nigeria. This is the time for Nigerians to rise up and say enough is enough. Forward ever, backward never.
The alternative is to watch Nigeria collapse or better still help in battering what is still remaining of her. But please let’s remember that we have no other country. If we sit idle and watch Nigeria destroyed by wrong people, then we all will have ourselves to blame. Time to act is now. Nigeria needs rebuilding and the way forward is thus; reforming the electoral process so that true leaders will emerge.
Atiku Abubakar made a very useful statement in that same interview. “He urged that the nation’s politicians and everyone else should aim for a time when elections are so transparent that there would be no need for petitions”. The only electoral system we know that has guaranteed transparency is Option A4 electoral system. This system will be the best method for Nigeria, since it has been tasted and trusted. The June 12 1993 election was a good example for all. Above all, this system is violence free and cheapest in terms of funding.
Therefore I ask every Nigerian to support my Option A4 Group. Our aim is to seek the reformation of our electoral system through campaigning for the re-introduction of the Option A4 electoral system. This is the best way out of our present situation. I ask every Nigerian to be involved with this campaign. This is the time to better Nigeria or batter her. I have chosen to build her, and as such I need the support of Nigerians in this campaign for change. Membership of this group is free and our campaign is self participatory.
This is the most important reform that Nigeria needs. There are many ways people should participate in this campaign or any other change process. Not participating at all is not in the best interest of our country at this critical period. Your comments, compliments, contributions or criticism of this project will be highly appreciated .Apologies for any grammatical error
Chinedu Vincent Akuta
An activist based in Leicester.
http://briefsfromakuta.blogspot.com/
I am writing this piece in respect to recent publications/interview about Nigeria by two prominent Nigerians, one being former ex vice president (Atiku Abubakar) and the present Edo state Governor (Adams Oshiomhole). I will start with Atiku, since I consider him a senior politician.
According to Guardian newspapers of Sunday, November 23 2008, online version. Atiku said that, “This government has failed; he described the Yar’Adua’s administration as a failure, since nothing positive is happening in the country”. He told the Guardian in the interview that, “I have no business with this government, the only thing I know is that nothing works, no electricity, how many towns and cities in this country that have pipe borne water? There are no roads, nothing is going on”. He was kind enough to admit that the past administration which he served as the Vice president didn’t do much, alleging that the attention of their own administration was diverted. I think Atiku did a good job here to refresh the minds of Nigerians, and also to reinstate the obvious about the wastages and setbacks their administration caused us. Nigerians know that Obasanjo/Atiku administration was a total failure and a big misfortune for us.
Over to the interview by Edo state governor, Comrade Adams Oshiomhole. He said that the country is experiencing increasing social tension. Which is threatening socio economic activities? Oshiomhole said the tension is being expressed in crime wave in the country, noting that no number of police could quell the tension, until the youths are fully engaged. This interview was published by Vanguard newspapers of Sunday 23 November 2008, online version. Firstly let me thank the two men for speaking out the truth even though Atiku was part of the previous government that has caused Nigeria setbacks. Many more honest voices are needed.
Truly Nigeria is in trouble, and our problem is leadership. We have not had a true leader. Our so called leaders have all been imposed on us. This makes the whole country to be sick. Instead of moving forward, we are speeding backwards. The futures of many Nigerians have been damaged as a result of this. All our dreams of a great country have been shattered. Imagine a country where nothing works. Even the government doesn’t work. Crime rate is too high, unemployment is every where, and road networks are simply not effective. The only thing working is corruption. May be Nigeria government should officially legalize corruption.
We Nigerians know how we got to this point in our country. The question now is how do we change this ugly scenario? How do we bring changes to our political system? The situation now is critical. Every person should be worried about the future of Nigeria. This is the time for Nigerians to rise up and say enough is enough. Forward ever, backward never.
The alternative is to watch Nigeria collapse or better still help in battering what is still remaining of her. But please let’s remember that we have no other country. If we sit idle and watch Nigeria destroyed by wrong people, then we all will have ourselves to blame. Time to act is now. Nigeria needs rebuilding and the way forward is thus; reforming the electoral process so that true leaders will emerge.
Atiku Abubakar made a very useful statement in that same interview. “He urged that the nation’s politicians and everyone else should aim for a time when elections are so transparent that there would be no need for petitions”. The only electoral system we know that has guaranteed transparency is Option A4 electoral system. This system will be the best method for Nigeria, since it has been tasted and trusted. The June 12 1993 election was a good example for all. Above all, this system is violence free and cheapest in terms of funding.
Therefore I ask every Nigerian to support my Option A4 Group. Our aim is to seek the reformation of our electoral system through campaigning for the re-introduction of the Option A4 electoral system. This is the best way out of our present situation. I ask every Nigerian to be involved with this campaign. This is the time to better Nigeria or batter her. I have chosen to build her, and as such I need the support of Nigerians in this campaign for change. Membership of this group is free and our campaign is self participatory.
This is the most important reform that Nigeria needs. There are many ways people should participate in this campaign or any other change process. Not participating at all is not in the best interest of our country at this critical period. Your comments, compliments, contributions or criticism of this project will be highly appreciated .Apologies for any grammatical error
Chinedu Vincent Akuta
An activist based in Leicester.
http://briefsfromakuta.blogspot.com/
Thursday, November 20, 2008
The Russia's Nuclear Missle Threats;America and Her Allies As Agents of Provocation
Abstracts.
The Month of August 2008, witnessed for the first time, since the end of the cold war an open threat of nuclear bomb attack by Russia to her former ally, Poland. The obvious reason being the US missile defence agreement with Poland. The US plans to build silos for 10 ballistic missile interceptor rockets in Northern Poland, and a radar base South of Prague in the Czech Republic. The US claims this missile defence programme is for rogue states like Iran, North Korea etc.
Russia on its own has condemned the US action and has gone further to issue a threat of nuclear attack if the US goes ahead. As a result of this, Russia has decided to deploy Iskander M-short range missile in Kaliningrad, Russia’s western most garrison. This is located at a point between Poland and Lithuania. Tensions are been generated and panic attacks sent through out the world. Questions are been raised if this could led to a nuclear war and thus bring to the end of civilization and enlightenment. Therefore, this article will look at the causes, costs and effects of eventual nuclear war in the making. It will argue that American and her allies are actually the agents of provocation and double standards hence the nuclear threat. Using the Realism international relations theory, this article will explain the actions of America and her allies. Finally suggestions to avoid a nuclear war will be provided.
Introduction.
The world has become more dangerous now than it was during the cold war. At least the containment policies of then super powers ensured peace. The demise of communism marked the beginning of the unipolar world with America emerging as the only super power. Unchecked by any rival, with decisive reach in every corner of the globe including its massive wealth and influences, American has truly become a bully.
The increase in the US military power has created insecurity for other nations like, Russia, Iraq, Iran, Afghanistan etc. More so the emergence of America as the only super power has enabled the US and her allies (EU and NATO) to display double standards in the international political arena. These double standard practises is what is truly threatening the global peace. This article will focus more on the Russian threat of military attack on Poland, which I will argue is as a result of acts of provocation by US and her allies.
Following the out break of hostilities between Russia and Georgia on August 8, 2008. The US and her allies have done more to provoke the Russians, hence the Russian threat of nuclear bomb attack on Poland. I will outline the double standard nature of America actions globally, which goes to explain that the current stand of America and her allies on the Russian Georgian conflicts is only an act of provocation.
The lessons to be learnt here is that the American foreign policies are not only immoral, but are helping to create an unsafe world. This paper will comment on the Russia Georgian conflict, which the Russian prime minister, Vladimir Putin has accused the US of provoking. “Putin suggested the Georgian war had been cooked up in Washington to create a neo-cold war climate that would strengthen Republican candidate John McCain’s bid for the white house”(The Guardian, Friday, 29th August 2008 page 1). The writer will ask the world to hold America and her allies responsible if they succeed in provoking Russia into a nuclear war.
Russian Georgian Conflicts; the American’s Involvement.
There has been serious tension between Russia and Georgia for a very long time, due mainly to the Russian support for the breakaway provinces of South Ossetia and Abkhazia. There have been occasional skirmishes in the past. Georgian has always accused the Russians of supporting the breakaway regions.
Interestingly in 2006 there was an independence referendum in South Ossetia which was supported by nearly 99% of its population. Russia recognised this referendum but America and her allies did not. On September 13, 2006, the Secretary General of the Council of Europe at that time, Terry Davis described the referendum as a waste of time and effort which no nation will recognize. On his part the then chairman of the Organization for Security and Co-operation in Europe (OSCE) Mr Karel De Gucht described the idea of South Ossetia holding a referendum as a counter productive exercise which will not be recognized by both international community and the OSCE. He made the remarks on October 2, 2006. On November 11, 2006, the NATO Secretary General at that time, Jaap de Hoop Scheffer said “On behalf of NATO, I join other international leaders in rejecting the so called “referendum” and election conducted in the South Osettia/Tskhinvali region of Georgia…Such actions serve no purpose other than to exacerbate tensions in the South Caucasus region”( http://en.wikipedia.org/wiki/South_Ossetian_independence_referendum,_2006).
At about the same time, May 2006 specifically, Montenegro held an independence referendum to break away from Serbia. This referendum was recognized by the US and her allies, including the independence aspirations of other nations that make up former Yugoslavia. The latest being the US recognition of Kosovo. The question is, why did the US and her allies refused to recognise the will of the people of South Ossetia/Abkhazia. Why will American tell the whole world that they are defending human rights, democracy and will of the people when they could not recognise a referendum conducted in South Ossetia.
Another contrast to the America’s claim of defending democracy and the will of the people, was when President Bush gave a speech demanding that late Arafat step down as the chairman of Palestinian Authority of which he was duly elected.(Curtis, 2003). To me America and her allies have lost every moral standard to claim to be defending human rights and democracy. Citing another example of American human right abuses, are the case of al Qaeda prisoners. Article 17 of the third Geneva Convention of 1949 forbids the use of physical or mental torture, nor any other form of coercion on the prisoners of war (Newsweek,2005). But the American government interprets this international convention differently, “On January 22nd 2002, in a memo to the White House and Pentagon, the justice department says Geneva would not apply to “the detention conditions of al Qaeda prisoners” and customary international law has no binding legal effect on either the president or the military because it is not a federal law as recognized by the U.S. Constitution”(Newsweek, November 21, 2005 P 46).
In their remarks about President Bush, the UK Sunday Times has this to say, “He has unilaterally suspended the Geneva conventions and unilaterally violated American law in sanctioning wire-tapping and torture. By any rational measure, he and Cheney have committed war crimes and their only defence is that they are above such laws and so incapable of committing any crimes in the defence of the nation” (Sunday Times, August 28th 2008, P 4). In fact America is the chief violator of people’s right.
The primary source of the Russian Georgian conflict is the US support for Georgia to join NATO. The Bush administration has formed close relations with the government of President Mikheil Saakashvili, of Georgia. This romance gained momentum since the “Rose Revolution” of 2003 that brought the Georgian president to power. The US has offered military and economic assistance, while encouraging Georgia to behave in manner that looked as if she was already a member of the NATO and EU. This false encouragement by the US was part of the reason why Tbilisi decided to attack South Ossetia on the August 8, 2008. Georgia felt she was under the protective custody of the US and that America and her allies would come to her support whenever she attacks South Ossetia. The Georgian attack on the breakaway region of South Ossetia elicited the Russian intervention to assist South Ossetians and Abkhazia, 90% of whom claim to be Russians. Many lives were lost as a result of the conflict. Therefore America should take responsibility for the people killed in this conflict.
The US started training Georgian troop in 2002 firstly to be used in her fight against terrorism and secondly for the US led war in Iraq. The Bush administration gave Georgia $151 million as security aid between 2004 and 2006. Georgia was also a beneficiary of Millennium Challenge Corporation. A fund established by the Bush government to reward countries for effective governance. Georgia came among the top five beneficiaries with funds totally $295 million. Some of the America’s economic aid has been useful in the development of Georgia. The credit should go to America. But some of these economic developments are geared towards preparing the Georgian economy for market economy to benefit the west.
However economic imperialism can be described as the major US interest in the region. There are natural resources in Georgia which America has so much interest on, and that is the oil. The Baku-Tbilisi-Ceyhan oil pipeline runs through Georgia allowing the US access to oil not pumped through Russia in the North and Iran through the south. The US has interest in the Caspian Sea resources of oil and natural gas, and wants to use Georgia as a route towards shipping these resources without going through Russia and Iran. This is the main attraction of the US and to further unveil the true interest of the US in the region are the following statements; “A Kazakh government source has been quoted as saying that, it is clear that the continuing war in Afghanistan is no more than a veil for the US to establish political dominance in the region. The war on terrorism is only a pretext for extending influence over our energy resources”…., “In December 2001 the US Assistant Secretary of State, Elizabeth Jones, said that when the Afghan conflict is over we will not leave central Asia. We have long-term plans and interests in this region”(Curtis,2003,P80).
Russia has never hidden her opposition to the US involvement with Georgia and US supports for Georgian membership of NATO. Reason being that, this is her sphere of influence and Russia considers the move to be against her security interest. I will agree with Russia, owning largely to manner the US is going about it, which amounts to security threat for Russia. Authorities in Moscow have sent several protests again the US involvements in the region. According to the Guardian Newspapers “Moscow has been complaining for years that the west and the US in particular, ignores its concerns. Medvedev said it again on Wednesday. Then he reeled off a litany of grievances including claims that Washington deliberately provoked last summer’s Georgian conflict, that NATO is intent on encircling his country with bases, and that planned American missile defence facilities in Poland and the Czech Republic are targeted at Russia. Hence in his view, the need for the Kaliningrad build up”(Guardian Newspapers, Friday November 7 2008, page 28).
Some proponents of NATO expansion have argued that, it will deter Russia from attempting to engage in territorial reacquisition to recover lost territories or to intimidate its smaller neighbours. They proponents of this expansion maintains that it could enhance and promote security and stability in the region by providing assurances to other non NATO members in the area (Jackson and Sorensen ,2003). I will tend to disagree with this idea of NATO expansion enhancing peace. Rather I see it as destabilising the existing balance of peace in the region.
NATO is also on the vanguard of organisations abusing human rights. Drawing from the lessons of NATO’s bombing of the former Yugoslavia and consequent deaths of innocent people caused by NATO, we will begin to understand the concerns of Russia. NATO is simply a tool for oppression, cohesion, suppression, imperialism and destabilization in the hands of the US. NATO used the pretext of humanitarian intervention to drop bombs on the former Yugoslavia. Whereas in actual fact, it was NATO that caused the humanitarian crisis. There was no humanitarian disaster until NATO started bombing. Drawing inference from what, “General Naumann, Chairman of NATO ‘s Military Committee in 1999, said on channel 4 that the humanitarian disaster may have been accelerated by NATO, and definitely some of the atrocities which happened were caused by NATO bombs, since [these provoked] this vendetta feeling”(Curtis,2003,P136). Please note the channel 4 mentioned above is a UK television channel.
Witnessing the above atrocities from NATO and realising that, its willing tool at the hands of the US, one will begin to understand the Russian opposition to Georgian joining her, especially being a close door neighbour to Russia. At the same time we also need to examine the failed American promise not to extend NATO eastwards. Just towards the end of the cold war, there was a promise by the US leadership not to extend NATO east, “The American in the end, made only one concession to Gorbachev, they promised, in the words of Secretary of State James Baker, that there would be no extension of NATO’s jurisdiction one inch to the east. A commitment later repudiated by Bill Clinton’s administration, but only after the Soviet Union had ceased to exist”(Gaddis,2005,P251). While the truth remains that the US and her allies (EU and NATO) is still suspicious of Russia. My view is that Russia is no longer a threat to the US. This fact can be made clearer from a statement from the last president of the Soviet Union, Gorbachev. He said, “An end has been put to the cold war, the arms race, and the insane militarization of our country, which crippled our economy, distorted our thinking and undermined our morals. The threat of a world war is no more”( Gaddis,2005,P251). Terrorism is what I believe is the threat the US is facing. Parts of these were caused by the American foreign policies.
Just recently also, western concerns about global energy markets began to rise, simply because Russia, Iran and Qatar announced that they will form an OPEC –style gas cartel. The west is already suspecting that Russia and Iran are planning to use energy to pursue political goals. The European Union is not comfortable with this new Russia’s idea, reason being that she depends on Russia for nearly half of its natural gas importations. The following comments were made as a result of the Russia’s concept to form a gas cartel. “The European Commission said last night that it would oppose the creation of any organization that could restrict competition”(The Guardian newspapers, Wednesday October 22 2008, P23).
America, EU, and NATO do not want to see any thing good coming from Russia. They are ever so ready to sabotage any move made by Russia, even the ones made in good faith. It is simply the American greed, capitalism and imperialism that are pushing them to meddle in the affairs of Georgia.
War actually broke out on the August 8 2008, when Georgian attacked South Ossetia. Russia intervened to help the South Ossetians whom were being massacred by the Georgian military. Interestingly the Georgian military used weapons supplied by the America to kill both innocent civilians and their enemy forces. As the war raged, the western propaganda machinery, that is the media rallied support in favour of Georgia. Russia was accused of being the aggressor and called all sorts of name. The western public were deceived through false information via the mass media. The media campaign and negative propaganda is still going. The US activities in Georgia helped the Georgian government to bring about insecurity and human right abuses in the troubled region of South Ossetia and Abkhazia. The conflicts resulted in refugee crisis as people left their home for fear of being killed. Many people were killed on both sides of the conflicts, properties were destroyed and people displaced. All these were as a result of US foreign policies which has created serious tension between, Russia and Georgia, Russia and NATO, Russia and the EU and Russia and the US.
During the few days the conflict lasted, the US did more to aggravate the volatile situation between Russia and Georgia. As the war was going on the US decided to sign a missile shield treaty with Poland. Russia responded by threatening a nuclear attack on Poland if the US goes ahead with the proposal. As is it now, Russia has proposed to deploy its short range missiles in Kaliningrad. I will examine what I consider acts of provocation by US and her allies, (EU and NATO).
Acts of Provocation by US and Her Allies (EU and NATO).
Increased tough rhetoric and speeches by the US authorities to Russia. The first speech by the US president was toughly worded speeches were he warned that Russia was damaging its relations with the US, Europe and the world at large. Part of his speech was that “Russia has invaded a sovereign neighbouring state and threatens a democratic government elected by its people, such an action is unacceptable in the 21st century”( http://news.bbc.co.uk/1/hi/world/europe/7551576.stm).
Following a ceasefire deal brokered by the European Union through the French president, Sarkozy, President George Bush sternly warned Russia again to keep its words and act to end the conflicts immediately. The US vice president, Dick Cheney visited Tbilisi the Georgian capital and described Russia’s act as “illegitimate attempts to change Georgian boarders. He added that Russia’s action had cast doubts on its reliability as an international partner. He also said that, the US was fully committed to Georgia’s efforts to join NATO” (http://news.bbc.co.uk/1/hi/world/europe/7597336.stm).
Secretary of State, Condoleezza Rice said Moscow seriously over stretched itself in Georgia. Russia responded with its own tough rhetoric, by accusing the US of treating Georgia like a virtual project. Russia further warned that the US may have to choose between a partnership with Tbilisi or Moscow. The US used its air force and naval vessels to deliver humanitarian aid to Georgia. The Russian authorise considered these humanitarian aids to be weapons in disguise. These conflicts led America to suspend its civilian nuclear accord with Russia. More so, the Georgian president joined the US in her provocative statements, he said, “Russia’s actions are an attempt to militarily annex a sovereign nation, in direct violation of international law. The Russian Federation is seeking to validate the use of violence, direct military aggression, and ethnic cleansing to forcibly change the borders of a neighbouring state” (The Guardian Wednesday, August 27 2008 P 1).
NATO’s backing of Georgia at the heat of the crisis. NATO secretary General Jaap de Hoop Scheffer paid a solidarity visit to Georgia where he commented that he hoped for Georgians accelerated integration with NATO and condemned Russia conduct in Georgian affairs during the August 2008 conflicts. The Georgian president, Mikhail Saakashvili welcomed the visit as a serious show of solidarity. His comments were that “Your presence sends a signal to the world that Georgia, together with its friends and allies, does not stand alone” On his own part, the Secretary General of NATO Jaap de Hoop Scheffer said, “Russia’s use of force was disproportionate and Russia must now comply with all elements of the six-point plan, referring to the EU brokered ceasefire deal that calls for all forces to withdraw to positions occupied before the conflicts”( http://news.bbc.co.uk/1/hi/world/europe/7616576.stm). The European Union on its own quickly announced 500 million euros in aid to Georgia, whereas the US authorities announced $1billion dollar aid package to Georgia.
The French president Nicolas Sarkozy who is the current, European Union’s president convened the first emergency summit since February 2003; in the summit the United Kingdom’s Prime Minister Gordon Brown took a touch position, echoing the US position. He said the Russia’s membership of the G8 grouping of big industrial democracies could be frozen. Citing a further comment credited to Gordon Brown, he said, “In the light of Russian actions, the EU should review root and branch our relationship with Russia. Russia’s unilateral action in recognizing the independence of Georgia’s two breakaway regions of South Ossetia and Abkhazia was dangerous and unacceptable. Brown said that he has told the Russian president at the weekend to expect a determined European Response” (The Guardian, Monday September 1 2008, P17).
David Miliband the British foreign secretary said that he wanted to forge “The widest possible coalition against Russian aggression in Georgia. We fully support Georgia’s independence and territorial integrity, which cannot be changed by decree from Moscow”(The Guardian, Wednesday August 27 2008, P 2).
The US chose this period to sign a nuclear shield treaty with Poland. This action directly provoked Russia. One should remember, that Russia has protested against this project right from the onset. Therefore for America to chose to sign this deal, at the heat of the Russian-Georgian conflicts is the height of act of provocation.
The points raised above goes to show that America and her allies have actually done more to increase the existing tension between Russia and Georgia. These actions are capable of prolonging the conflicts with its negative consequences on the innocent population, including its devastating economic damages. Actions like this will make Russia to be apprehensive, especially when it comes to Georgia joining the NATO. I will add further that America seems to be ignoring the sensitivity of their nuclear shield project with Poland, and as such have gone ahead to pursue this idea. Russia on its own has threatened Poland with nuclear attack should America go ahead with this project. The point is will Russia actualise her threats? I will use Realist International Relations theories to explain the America’s behaviour.
Explaining America’s Action Using Realist International Relations Theory.
The politics among nations is the struggle for power, whatever the ultimate aims of international politics, power is always the immediate aim,(Morgenthau,1993). This is made worse by fact that, there is no world government and international politics being anarchical. Realists view international politics as power politics between states, as an arena of wars, conflicts, and rivalry.
Realists operate with a core assumption that global politics operates in a situation of international anarchy, that is a system with no global authority, no world government.
“International society is …a society without central authority to preserve law and order, and without an official agency to protect its members in the enjoyment of their rights. The result is that individual states must make the preservation and improvement of their power position a primary objective of their foreign policy”(1942,7)… In international society all forms of coercion are permissible, including wars of destruction. This means that the struggle for power is identical with the struggle for survival, and the improvement of their relative power position becomes the primary objective of the internal and the external policy of states. All else is secondary”.(1942,18)[cited in Nardin and Mapel,1992, P 89].
International relations to the realist mean primarily a struggle among the great powers for domination, control and security. The idea of states pursuing their national interest means that no country or state can be trusted or relied upon completely. All international treaties and agreements are not binding; it’s conditional upon the willingness of states to observe them.
According to the realist, there is no morality in international politics. Morality and human society should be confined to the state, and moral principles do not guide state behaviour in foreign policies,(Burchill and Linklater,1996 ; Nardin and Mapel,1992 ; Jackson and Sorensen,2003).
Every state under the realist theory must be ready and prepared to sacrifice international obligations on the alter of their own national interest. In the event of conflicts between international interest and national interest, national interest should prevail. This makes international treaties, agreements, conventions, laws etc a mere arrangements which can be set aside when the conflict with the national interest, thus the only responsibility of the state is to advance its national interest. The pursuits of national interest appear as a fact of international political life imposed by the existence of an anarchical society of states.
The realist believes that states faces security threat because of the absence of international government, therefore each state must provide its own protection through self help, either by using its own powers or drawing upon the powers of their allies and friends. The realist lives in a situation of permanent fear and suspicion, the fear that neighbours or other countries will dominate or attack them.
The above international relations theory explicitly explains the motives behind the America’s act of aggression towards Russia. The fact that there is no global government and authority to protect states, have given America the leverage to bully any nation she considers to be unfriendly. The situation has been made worse now that America is the only super power. The fear of Russia resurrecting has become a night mare to America and her allies.
Am quite sure that they will leave no stone unturned in their attempt to permanently cripple the Russian Federation. America has set aside must of her international treaties since she started pursuing this act of aggression towards Russia. Just like the Realist international relations theorist will draw upon his powers or powers of friends and allies. America has relied much on this. America uses NATO and the EU to pursue her national interests in Europe and Asia. America’s support for Georgia to join the NATO and EU were amongst the primary reasons for the Russian-Georgian conflicts. Another good example is the America’s war in Iraq. During their first gulf war with Iraq in 1991, America relied both on its powers and powers of their allies to defeat Iraq. Presently America is using the NATO forces to fight in Afghanistan and Iraq as well. All these are pointers to the atrocities America is committing around the world, all in the name of spreading democracy and fight against terrorism. Having explained the America’s action using the realist’s international relations theory, I will highlight the possible effect of a nuclear war between Russia verses America and her allies.
Nuclear attack, costs and effects.
The question worth asking is, what if America and her allies succeed in provoking Russia into fulfilling her threats of nuclear strike on Poland? The first reaction that would happen will be NATO forces will attack Russia due to article 5 of NATO which says that, “The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defense recognized by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area”( http://www.nato.int/docu/basictxt/treaty.htm). What this clause means is that America and all her allies will declare war on Russia. Since Russia would have attacked with nuclear bomb, NATO will retaliate with its nuclear bomb as well. The Hiroshima and Nagasaki’s experience will be a child’s play compared to what will happen in the event of such incident.
Till date the only nuclear bomb attack known in history is the Hiroshima and Nagasaki. Over 220,000 people died instantly in both cities. Till present people are still dying and suffering from exposures to radiation. Greater percentage that died was civilians. Comparing it to what might happen if ever there is a nuclear war between the two giants. My guess will be that Western Europe might be wiped out of the world map as well as Russian federation. The human causalities will be unimaginable, western economies will crumble. The effects will be felt all over the world. Third world and developing countries will suffer greatly as a result of this, should it ever happen.
No one can capture the real picture of what will happen in the event of such an attack. This is the threat America is exposing the world to. This is despite the global economic crunches that originated from America. The present global economic crunches which have drastically affected the whole globe will be no where near the dangers of what will happen should a nuclear war erupt between Russia and America and allies. The poorest people of the world will not be spared should any thing like this happen. Am afraid this will be the third world war which will be solely fought with nuclear bombs.
Conclusion.
What I set out to do in this essay is to add to the available voices, which have pointed out that America’s foreign policies are making this world unsafe. America is using her powers wrongly. She is exercising undue influences over her allies in the NATO and EU. American influences are so enormous that her allies have failed to see the dangers in the America’s foreign policies. Her allies have failed to speak out the dangers America is exposing the world to. The present global economic crunches would have been an eye opener to criticize America and her policies. The mistakes made in America’s banking decisions led much to the almost collapse of the Wall Street and global financial markets. The effects have led to recession in most European economies like the UK, Germany etc. Like in any every bad situation the poor people are now suffering.
In the same vein, the America’s foreign policies have brought pains to several families. The innocent people killed in Afghanistan and Iraq wars with NATO are not mentioned. The pains caused this families are never noticed. The support America gave to Georgia is partly responsible for her conflicts with Russia. In this last conflict, several innocent civilians including children died. Those that died with the weapons supplied to Georgia by America should be classified as being killed by America. America owes the world apology for all the atrocities she has caused the world. America should be held responsible for all innocent civilians killed, in Iraq, Afghanistan, South Ossetia and Abhkazia, including the British and American soldiers that have lost their lives in these unnecessary wars.
The world has suffered a lot under the deceitful nature of America’s foreign policies. Truths are never told to the public, the media has all be been manipulated to sing American praises. The dangers arising from this is awful. America’s allies, that is NATO and EU should be careful of the American leadership and influences. EU and NATO should begin to critically analyze the US foreign policies especially as it involves the present situation between Russia, Georgia and the west. Should the EU and NATO be misled, the whole world will have no choice but to hold America responsible. Should America push Russia into a nuclear attack on Poland, the entire world would pay a costly price for it. Russia should be allowed to live by America. America should have no interest in decimating the Russian federation and Russian influences. America should desist from causing unnecessary tensions through its foreign policies.
The Polish authorities should understand that they are being used as an instrument by the American authorities. The Polish public should rise and stop this unnecessary America’s defense pact (nuclear shield) with Poland, which looks likely to cause another world war. Polish people should exactly replicate what the Czechs did. While the Czechs government is eager to host the missile bases, two thirds of Czechs are against it. The government has been trounced in the local elections which has shifted the balance of power in the Czech upper house. “The scheme is strongly opposed by the social democratic opposition and may not survive the necessary parliamentary ratification process, which has been indefinitely shelved”(The Guardian Newspapers, Friday November 7 2008, page28).
Reference.
Burchill,S (1996) Realism And Neo-realism In Burchill,S., Linklater, A., Devetak, R., Peterson, M and True, J.(eds) Theories Of International Relations, London, Basingstoke. Macmillan Press Ltd. PP 67-92.
Curtis, M (2003) Web of Deceit, Britain’s Real Role In The World. London, Vintage Press.
Gaddis, J.L.,(2005) The Cold War, The Deals, The Spies, The Lies, The Truth. London, Penguin Books
Jackson, R. and Sorensen, G. (2003) Introduction To International Relations, Second Edition, Oxford, Oxford University Press.
Morgenthau, H.J. (1993) Politics Among Nations, The Struggle For Power, Brief Edition. London, New York, McGraw-Hill Inc.
Nardin, T. and Mapel, D.R. (1992) Traditions Of International Ethics, Cambridge, Cambridge University Press.
Newsweek Magazine, November 21, 2005.
Sunday Times newspapers, August 28th 2008,
The Guardian newspapers, Monday September 1 2008.
The Guardian newspapers Wednesday, August 27 2008.
The Guardian newspapers, Wednesday October 22 2008.
Guardian Newspapers, Friday November 7 2008
http://en.wikipedia.org/wiki/South_Ossetian_independence_referendum,_2006(printed on 5/9/8)
http://news.bbc.co.uk/1/hi/world/europe/5083690.stm printed on 6/9/8
http://english.aljazeera.net/news/americas/2008/08/2008812204333715324.html Printed on the 6/9/8
http://www.telegraph.co.uk/news/worldnews/1553593/Putin-in-nuclear-threat-against-Europe.html Printed on the 9/9/8
http://news.bbc.co.uk/1/hi/world/europe/7551576.stm printed on 3/10/8.
http://www.nato.int/docu/basictxt/treaty.htm printed on 5/11/8
Authors Biography
Name: Chinedu Vincent Akuta.
Contact Email: akutachinedu@yahoo.com
Present Job: Lecturer Assistant, Leicester International College. 132-134 London Rd, Leicester, LE2 1EB. www.leicesterinternationalcollege.co.uk
Education/Universities;
MSc, International Relations. Department Of Politics, International Relations and European Studies. Loughborough University Leicestershire, LE11 3TU. UK. Tel: +441509222991/222981. Fax: +441509223917. (2005-2007).
MSc, Economics. School of Postgraduate Studies. University of Lagos, Akoka-Yaba. Lagos-Nigeria. (2000-2001).
MBA, Marketing. Postgraduate School, Lagos State University. Badagry Expressway, OJO, P.M.B. 1087, Apapa. Lagos-Nigeria. (1998-2000).
BSc, Economics. Nnamdi Azikiwe University. P.M.B. 5025 Awka, Anambra State. Nigeria. (1989-1994).
Other Publications: E.U. Trade with Sub-Sahara African Countries, Nigeria as a case study, 1990-2006. MSc dissertation Loughborough University, 2007.
The Month of August 2008, witnessed for the first time, since the end of the cold war an open threat of nuclear bomb attack by Russia to her former ally, Poland. The obvious reason being the US missile defence agreement with Poland. The US plans to build silos for 10 ballistic missile interceptor rockets in Northern Poland, and a radar base South of Prague in the Czech Republic. The US claims this missile defence programme is for rogue states like Iran, North Korea etc.
Russia on its own has condemned the US action and has gone further to issue a threat of nuclear attack if the US goes ahead. As a result of this, Russia has decided to deploy Iskander M-short range missile in Kaliningrad, Russia’s western most garrison. This is located at a point between Poland and Lithuania. Tensions are been generated and panic attacks sent through out the world. Questions are been raised if this could led to a nuclear war and thus bring to the end of civilization and enlightenment. Therefore, this article will look at the causes, costs and effects of eventual nuclear war in the making. It will argue that American and her allies are actually the agents of provocation and double standards hence the nuclear threat. Using the Realism international relations theory, this article will explain the actions of America and her allies. Finally suggestions to avoid a nuclear war will be provided.
Introduction.
The world has become more dangerous now than it was during the cold war. At least the containment policies of then super powers ensured peace. The demise of communism marked the beginning of the unipolar world with America emerging as the only super power. Unchecked by any rival, with decisive reach in every corner of the globe including its massive wealth and influences, American has truly become a bully.
The increase in the US military power has created insecurity for other nations like, Russia, Iraq, Iran, Afghanistan etc. More so the emergence of America as the only super power has enabled the US and her allies (EU and NATO) to display double standards in the international political arena. These double standard practises is what is truly threatening the global peace. This article will focus more on the Russian threat of military attack on Poland, which I will argue is as a result of acts of provocation by US and her allies.
Following the out break of hostilities between Russia and Georgia on August 8, 2008. The US and her allies have done more to provoke the Russians, hence the Russian threat of nuclear bomb attack on Poland. I will outline the double standard nature of America actions globally, which goes to explain that the current stand of America and her allies on the Russian Georgian conflicts is only an act of provocation.
The lessons to be learnt here is that the American foreign policies are not only immoral, but are helping to create an unsafe world. This paper will comment on the Russia Georgian conflict, which the Russian prime minister, Vladimir Putin has accused the US of provoking. “Putin suggested the Georgian war had been cooked up in Washington to create a neo-cold war climate that would strengthen Republican candidate John McCain’s bid for the white house”(The Guardian, Friday, 29th August 2008 page 1). The writer will ask the world to hold America and her allies responsible if they succeed in provoking Russia into a nuclear war.
Russian Georgian Conflicts; the American’s Involvement.
There has been serious tension between Russia and Georgia for a very long time, due mainly to the Russian support for the breakaway provinces of South Ossetia and Abkhazia. There have been occasional skirmishes in the past. Georgian has always accused the Russians of supporting the breakaway regions.
Interestingly in 2006 there was an independence referendum in South Ossetia which was supported by nearly 99% of its population. Russia recognised this referendum but America and her allies did not. On September 13, 2006, the Secretary General of the Council of Europe at that time, Terry Davis described the referendum as a waste of time and effort which no nation will recognize. On his part the then chairman of the Organization for Security and Co-operation in Europe (OSCE) Mr Karel De Gucht described the idea of South Ossetia holding a referendum as a counter productive exercise which will not be recognized by both international community and the OSCE. He made the remarks on October 2, 2006. On November 11, 2006, the NATO Secretary General at that time, Jaap de Hoop Scheffer said “On behalf of NATO, I join other international leaders in rejecting the so called “referendum” and election conducted in the South Osettia/Tskhinvali region of Georgia…Such actions serve no purpose other than to exacerbate tensions in the South Caucasus region”( http://en.wikipedia.org/wiki/South_Ossetian_independence_referendum,_2006).
At about the same time, May 2006 specifically, Montenegro held an independence referendum to break away from Serbia. This referendum was recognized by the US and her allies, including the independence aspirations of other nations that make up former Yugoslavia. The latest being the US recognition of Kosovo. The question is, why did the US and her allies refused to recognise the will of the people of South Ossetia/Abkhazia. Why will American tell the whole world that they are defending human rights, democracy and will of the people when they could not recognise a referendum conducted in South Ossetia.
Another contrast to the America’s claim of defending democracy and the will of the people, was when President Bush gave a speech demanding that late Arafat step down as the chairman of Palestinian Authority of which he was duly elected.(Curtis, 2003). To me America and her allies have lost every moral standard to claim to be defending human rights and democracy. Citing another example of American human right abuses, are the case of al Qaeda prisoners. Article 17 of the third Geneva Convention of 1949 forbids the use of physical or mental torture, nor any other form of coercion on the prisoners of war (Newsweek,2005). But the American government interprets this international convention differently, “On January 22nd 2002, in a memo to the White House and Pentagon, the justice department says Geneva would not apply to “the detention conditions of al Qaeda prisoners” and customary international law has no binding legal effect on either the president or the military because it is not a federal law as recognized by the U.S. Constitution”(Newsweek, November 21, 2005 P 46).
In their remarks about President Bush, the UK Sunday Times has this to say, “He has unilaterally suspended the Geneva conventions and unilaterally violated American law in sanctioning wire-tapping and torture. By any rational measure, he and Cheney have committed war crimes and their only defence is that they are above such laws and so incapable of committing any crimes in the defence of the nation” (Sunday Times, August 28th 2008, P 4). In fact America is the chief violator of people’s right.
The primary source of the Russian Georgian conflict is the US support for Georgia to join NATO. The Bush administration has formed close relations with the government of President Mikheil Saakashvili, of Georgia. This romance gained momentum since the “Rose Revolution” of 2003 that brought the Georgian president to power. The US has offered military and economic assistance, while encouraging Georgia to behave in manner that looked as if she was already a member of the NATO and EU. This false encouragement by the US was part of the reason why Tbilisi decided to attack South Ossetia on the August 8, 2008. Georgia felt she was under the protective custody of the US and that America and her allies would come to her support whenever she attacks South Ossetia. The Georgian attack on the breakaway region of South Ossetia elicited the Russian intervention to assist South Ossetians and Abkhazia, 90% of whom claim to be Russians. Many lives were lost as a result of the conflict. Therefore America should take responsibility for the people killed in this conflict.
The US started training Georgian troop in 2002 firstly to be used in her fight against terrorism and secondly for the US led war in Iraq. The Bush administration gave Georgia $151 million as security aid between 2004 and 2006. Georgia was also a beneficiary of Millennium Challenge Corporation. A fund established by the Bush government to reward countries for effective governance. Georgia came among the top five beneficiaries with funds totally $295 million. Some of the America’s economic aid has been useful in the development of Georgia. The credit should go to America. But some of these economic developments are geared towards preparing the Georgian economy for market economy to benefit the west.
However economic imperialism can be described as the major US interest in the region. There are natural resources in Georgia which America has so much interest on, and that is the oil. The Baku-Tbilisi-Ceyhan oil pipeline runs through Georgia allowing the US access to oil not pumped through Russia in the North and Iran through the south. The US has interest in the Caspian Sea resources of oil and natural gas, and wants to use Georgia as a route towards shipping these resources without going through Russia and Iran. This is the main attraction of the US and to further unveil the true interest of the US in the region are the following statements; “A Kazakh government source has been quoted as saying that, it is clear that the continuing war in Afghanistan is no more than a veil for the US to establish political dominance in the region. The war on terrorism is only a pretext for extending influence over our energy resources”…., “In December 2001 the US Assistant Secretary of State, Elizabeth Jones, said that when the Afghan conflict is over we will not leave central Asia. We have long-term plans and interests in this region”(Curtis,2003,P80).
Russia has never hidden her opposition to the US involvement with Georgia and US supports for Georgian membership of NATO. Reason being that, this is her sphere of influence and Russia considers the move to be against her security interest. I will agree with Russia, owning largely to manner the US is going about it, which amounts to security threat for Russia. Authorities in Moscow have sent several protests again the US involvements in the region. According to the Guardian Newspapers “Moscow has been complaining for years that the west and the US in particular, ignores its concerns. Medvedev said it again on Wednesday. Then he reeled off a litany of grievances including claims that Washington deliberately provoked last summer’s Georgian conflict, that NATO is intent on encircling his country with bases, and that planned American missile defence facilities in Poland and the Czech Republic are targeted at Russia. Hence in his view, the need for the Kaliningrad build up”(Guardian Newspapers, Friday November 7 2008, page 28).
Some proponents of NATO expansion have argued that, it will deter Russia from attempting to engage in territorial reacquisition to recover lost territories or to intimidate its smaller neighbours. They proponents of this expansion maintains that it could enhance and promote security and stability in the region by providing assurances to other non NATO members in the area (Jackson and Sorensen ,2003). I will tend to disagree with this idea of NATO expansion enhancing peace. Rather I see it as destabilising the existing balance of peace in the region.
NATO is also on the vanguard of organisations abusing human rights. Drawing from the lessons of NATO’s bombing of the former Yugoslavia and consequent deaths of innocent people caused by NATO, we will begin to understand the concerns of Russia. NATO is simply a tool for oppression, cohesion, suppression, imperialism and destabilization in the hands of the US. NATO used the pretext of humanitarian intervention to drop bombs on the former Yugoslavia. Whereas in actual fact, it was NATO that caused the humanitarian crisis. There was no humanitarian disaster until NATO started bombing. Drawing inference from what, “General Naumann, Chairman of NATO ‘s Military Committee in 1999, said on channel 4 that the humanitarian disaster may have been accelerated by NATO, and definitely some of the atrocities which happened were caused by NATO bombs, since [these provoked] this vendetta feeling”(Curtis,2003,P136). Please note the channel 4 mentioned above is a UK television channel.
Witnessing the above atrocities from NATO and realising that, its willing tool at the hands of the US, one will begin to understand the Russian opposition to Georgian joining her, especially being a close door neighbour to Russia. At the same time we also need to examine the failed American promise not to extend NATO eastwards. Just towards the end of the cold war, there was a promise by the US leadership not to extend NATO east, “The American in the end, made only one concession to Gorbachev, they promised, in the words of Secretary of State James Baker, that there would be no extension of NATO’s jurisdiction one inch to the east. A commitment later repudiated by Bill Clinton’s administration, but only after the Soviet Union had ceased to exist”(Gaddis,2005,P251). While the truth remains that the US and her allies (EU and NATO) is still suspicious of Russia. My view is that Russia is no longer a threat to the US. This fact can be made clearer from a statement from the last president of the Soviet Union, Gorbachev. He said, “An end has been put to the cold war, the arms race, and the insane militarization of our country, which crippled our economy, distorted our thinking and undermined our morals. The threat of a world war is no more”( Gaddis,2005,P251). Terrorism is what I believe is the threat the US is facing. Parts of these were caused by the American foreign policies.
Just recently also, western concerns about global energy markets began to rise, simply because Russia, Iran and Qatar announced that they will form an OPEC –style gas cartel. The west is already suspecting that Russia and Iran are planning to use energy to pursue political goals. The European Union is not comfortable with this new Russia’s idea, reason being that she depends on Russia for nearly half of its natural gas importations. The following comments were made as a result of the Russia’s concept to form a gas cartel. “The European Commission said last night that it would oppose the creation of any organization that could restrict competition”(The Guardian newspapers, Wednesday October 22 2008, P23).
America, EU, and NATO do not want to see any thing good coming from Russia. They are ever so ready to sabotage any move made by Russia, even the ones made in good faith. It is simply the American greed, capitalism and imperialism that are pushing them to meddle in the affairs of Georgia.
War actually broke out on the August 8 2008, when Georgian attacked South Ossetia. Russia intervened to help the South Ossetians whom were being massacred by the Georgian military. Interestingly the Georgian military used weapons supplied by the America to kill both innocent civilians and their enemy forces. As the war raged, the western propaganda machinery, that is the media rallied support in favour of Georgia. Russia was accused of being the aggressor and called all sorts of name. The western public were deceived through false information via the mass media. The media campaign and negative propaganda is still going. The US activities in Georgia helped the Georgian government to bring about insecurity and human right abuses in the troubled region of South Ossetia and Abkhazia. The conflicts resulted in refugee crisis as people left their home for fear of being killed. Many people were killed on both sides of the conflicts, properties were destroyed and people displaced. All these were as a result of US foreign policies which has created serious tension between, Russia and Georgia, Russia and NATO, Russia and the EU and Russia and the US.
During the few days the conflict lasted, the US did more to aggravate the volatile situation between Russia and Georgia. As the war was going on the US decided to sign a missile shield treaty with Poland. Russia responded by threatening a nuclear attack on Poland if the US goes ahead with the proposal. As is it now, Russia has proposed to deploy its short range missiles in Kaliningrad. I will examine what I consider acts of provocation by US and her allies, (EU and NATO).
Acts of Provocation by US and Her Allies (EU and NATO).
Increased tough rhetoric and speeches by the US authorities to Russia. The first speech by the US president was toughly worded speeches were he warned that Russia was damaging its relations with the US, Europe and the world at large. Part of his speech was that “Russia has invaded a sovereign neighbouring state and threatens a democratic government elected by its people, such an action is unacceptable in the 21st century”( http://news.bbc.co.uk/1/hi/world/europe/7551576.stm).
Following a ceasefire deal brokered by the European Union through the French president, Sarkozy, President George Bush sternly warned Russia again to keep its words and act to end the conflicts immediately. The US vice president, Dick Cheney visited Tbilisi the Georgian capital and described Russia’s act as “illegitimate attempts to change Georgian boarders. He added that Russia’s action had cast doubts on its reliability as an international partner. He also said that, the US was fully committed to Georgia’s efforts to join NATO” (http://news.bbc.co.uk/1/hi/world/europe/7597336.stm).
Secretary of State, Condoleezza Rice said Moscow seriously over stretched itself in Georgia. Russia responded with its own tough rhetoric, by accusing the US of treating Georgia like a virtual project. Russia further warned that the US may have to choose between a partnership with Tbilisi or Moscow. The US used its air force and naval vessels to deliver humanitarian aid to Georgia. The Russian authorise considered these humanitarian aids to be weapons in disguise. These conflicts led America to suspend its civilian nuclear accord with Russia. More so, the Georgian president joined the US in her provocative statements, he said, “Russia’s actions are an attempt to militarily annex a sovereign nation, in direct violation of international law. The Russian Federation is seeking to validate the use of violence, direct military aggression, and ethnic cleansing to forcibly change the borders of a neighbouring state” (The Guardian Wednesday, August 27 2008 P 1).
NATO’s backing of Georgia at the heat of the crisis. NATO secretary General Jaap de Hoop Scheffer paid a solidarity visit to Georgia where he commented that he hoped for Georgians accelerated integration with NATO and condemned Russia conduct in Georgian affairs during the August 2008 conflicts. The Georgian president, Mikhail Saakashvili welcomed the visit as a serious show of solidarity. His comments were that “Your presence sends a signal to the world that Georgia, together with its friends and allies, does not stand alone” On his own part, the Secretary General of NATO Jaap de Hoop Scheffer said, “Russia’s use of force was disproportionate and Russia must now comply with all elements of the six-point plan, referring to the EU brokered ceasefire deal that calls for all forces to withdraw to positions occupied before the conflicts”( http://news.bbc.co.uk/1/hi/world/europe/7616576.stm). The European Union on its own quickly announced 500 million euros in aid to Georgia, whereas the US authorities announced $1billion dollar aid package to Georgia.
The French president Nicolas Sarkozy who is the current, European Union’s president convened the first emergency summit since February 2003; in the summit the United Kingdom’s Prime Minister Gordon Brown took a touch position, echoing the US position. He said the Russia’s membership of the G8 grouping of big industrial democracies could be frozen. Citing a further comment credited to Gordon Brown, he said, “In the light of Russian actions, the EU should review root and branch our relationship with Russia. Russia’s unilateral action in recognizing the independence of Georgia’s two breakaway regions of South Ossetia and Abkhazia was dangerous and unacceptable. Brown said that he has told the Russian president at the weekend to expect a determined European Response” (The Guardian, Monday September 1 2008, P17).
David Miliband the British foreign secretary said that he wanted to forge “The widest possible coalition against Russian aggression in Georgia. We fully support Georgia’s independence and territorial integrity, which cannot be changed by decree from Moscow”(The Guardian, Wednesday August 27 2008, P 2).
The US chose this period to sign a nuclear shield treaty with Poland. This action directly provoked Russia. One should remember, that Russia has protested against this project right from the onset. Therefore for America to chose to sign this deal, at the heat of the Russian-Georgian conflicts is the height of act of provocation.
The points raised above goes to show that America and her allies have actually done more to increase the existing tension between Russia and Georgia. These actions are capable of prolonging the conflicts with its negative consequences on the innocent population, including its devastating economic damages. Actions like this will make Russia to be apprehensive, especially when it comes to Georgia joining the NATO. I will add further that America seems to be ignoring the sensitivity of their nuclear shield project with Poland, and as such have gone ahead to pursue this idea. Russia on its own has threatened Poland with nuclear attack should America go ahead with this project. The point is will Russia actualise her threats? I will use Realist International Relations theories to explain the America’s behaviour.
Explaining America’s Action Using Realist International Relations Theory.
The politics among nations is the struggle for power, whatever the ultimate aims of international politics, power is always the immediate aim,(Morgenthau,1993). This is made worse by fact that, there is no world government and international politics being anarchical. Realists view international politics as power politics between states, as an arena of wars, conflicts, and rivalry.
Realists operate with a core assumption that global politics operates in a situation of international anarchy, that is a system with no global authority, no world government.
“International society is …a society without central authority to preserve law and order, and without an official agency to protect its members in the enjoyment of their rights. The result is that individual states must make the preservation and improvement of their power position a primary objective of their foreign policy”(1942,7)… In international society all forms of coercion are permissible, including wars of destruction. This means that the struggle for power is identical with the struggle for survival, and the improvement of their relative power position becomes the primary objective of the internal and the external policy of states. All else is secondary”.(1942,18)[cited in Nardin and Mapel,1992, P 89].
International relations to the realist mean primarily a struggle among the great powers for domination, control and security. The idea of states pursuing their national interest means that no country or state can be trusted or relied upon completely. All international treaties and agreements are not binding; it’s conditional upon the willingness of states to observe them.
According to the realist, there is no morality in international politics. Morality and human society should be confined to the state, and moral principles do not guide state behaviour in foreign policies,(Burchill and Linklater,1996 ; Nardin and Mapel,1992 ; Jackson and Sorensen,2003).
Every state under the realist theory must be ready and prepared to sacrifice international obligations on the alter of their own national interest. In the event of conflicts between international interest and national interest, national interest should prevail. This makes international treaties, agreements, conventions, laws etc a mere arrangements which can be set aside when the conflict with the national interest, thus the only responsibility of the state is to advance its national interest. The pursuits of national interest appear as a fact of international political life imposed by the existence of an anarchical society of states.
The realist believes that states faces security threat because of the absence of international government, therefore each state must provide its own protection through self help, either by using its own powers or drawing upon the powers of their allies and friends. The realist lives in a situation of permanent fear and suspicion, the fear that neighbours or other countries will dominate or attack them.
The above international relations theory explicitly explains the motives behind the America’s act of aggression towards Russia. The fact that there is no global government and authority to protect states, have given America the leverage to bully any nation she considers to be unfriendly. The situation has been made worse now that America is the only super power. The fear of Russia resurrecting has become a night mare to America and her allies.
Am quite sure that they will leave no stone unturned in their attempt to permanently cripple the Russian Federation. America has set aside must of her international treaties since she started pursuing this act of aggression towards Russia. Just like the Realist international relations theorist will draw upon his powers or powers of friends and allies. America has relied much on this. America uses NATO and the EU to pursue her national interests in Europe and Asia. America’s support for Georgia to join the NATO and EU were amongst the primary reasons for the Russian-Georgian conflicts. Another good example is the America’s war in Iraq. During their first gulf war with Iraq in 1991, America relied both on its powers and powers of their allies to defeat Iraq. Presently America is using the NATO forces to fight in Afghanistan and Iraq as well. All these are pointers to the atrocities America is committing around the world, all in the name of spreading democracy and fight against terrorism. Having explained the America’s action using the realist’s international relations theory, I will highlight the possible effect of a nuclear war between Russia verses America and her allies.
Nuclear attack, costs and effects.
The question worth asking is, what if America and her allies succeed in provoking Russia into fulfilling her threats of nuclear strike on Poland? The first reaction that would happen will be NATO forces will attack Russia due to article 5 of NATO which says that, “The Parties agree that an armed attack against one or more of them in Europe or North America shall be considered an attack against them all and consequently they agree that, if such an armed attack occurs, each of them, in exercise of the right of individual or collective self-defense recognized by Article 51 of the Charter of the United Nations, will assist the Party or Parties so attacked by taking forthwith, individually and in concert with the other Parties, such action as it deems necessary, including the use of armed force, to restore and maintain the security of the North Atlantic area”( http://www.nato.int/docu/basictxt/treaty.htm). What this clause means is that America and all her allies will declare war on Russia. Since Russia would have attacked with nuclear bomb, NATO will retaliate with its nuclear bomb as well. The Hiroshima and Nagasaki’s experience will be a child’s play compared to what will happen in the event of such incident.
Till date the only nuclear bomb attack known in history is the Hiroshima and Nagasaki. Over 220,000 people died instantly in both cities. Till present people are still dying and suffering from exposures to radiation. Greater percentage that died was civilians. Comparing it to what might happen if ever there is a nuclear war between the two giants. My guess will be that Western Europe might be wiped out of the world map as well as Russian federation. The human causalities will be unimaginable, western economies will crumble. The effects will be felt all over the world. Third world and developing countries will suffer greatly as a result of this, should it ever happen.
No one can capture the real picture of what will happen in the event of such an attack. This is the threat America is exposing the world to. This is despite the global economic crunches that originated from America. The present global economic crunches which have drastically affected the whole globe will be no where near the dangers of what will happen should a nuclear war erupt between Russia and America and allies. The poorest people of the world will not be spared should any thing like this happen. Am afraid this will be the third world war which will be solely fought with nuclear bombs.
Conclusion.
What I set out to do in this essay is to add to the available voices, which have pointed out that America’s foreign policies are making this world unsafe. America is using her powers wrongly. She is exercising undue influences over her allies in the NATO and EU. American influences are so enormous that her allies have failed to see the dangers in the America’s foreign policies. Her allies have failed to speak out the dangers America is exposing the world to. The present global economic crunches would have been an eye opener to criticize America and her policies. The mistakes made in America’s banking decisions led much to the almost collapse of the Wall Street and global financial markets. The effects have led to recession in most European economies like the UK, Germany etc. Like in any every bad situation the poor people are now suffering.
In the same vein, the America’s foreign policies have brought pains to several families. The innocent people killed in Afghanistan and Iraq wars with NATO are not mentioned. The pains caused this families are never noticed. The support America gave to Georgia is partly responsible for her conflicts with Russia. In this last conflict, several innocent civilians including children died. Those that died with the weapons supplied to Georgia by America should be classified as being killed by America. America owes the world apology for all the atrocities she has caused the world. America should be held responsible for all innocent civilians killed, in Iraq, Afghanistan, South Ossetia and Abhkazia, including the British and American soldiers that have lost their lives in these unnecessary wars.
The world has suffered a lot under the deceitful nature of America’s foreign policies. Truths are never told to the public, the media has all be been manipulated to sing American praises. The dangers arising from this is awful. America’s allies, that is NATO and EU should be careful of the American leadership and influences. EU and NATO should begin to critically analyze the US foreign policies especially as it involves the present situation between Russia, Georgia and the west. Should the EU and NATO be misled, the whole world will have no choice but to hold America responsible. Should America push Russia into a nuclear attack on Poland, the entire world would pay a costly price for it. Russia should be allowed to live by America. America should have no interest in decimating the Russian federation and Russian influences. America should desist from causing unnecessary tensions through its foreign policies.
The Polish authorities should understand that they are being used as an instrument by the American authorities. The Polish public should rise and stop this unnecessary America’s defense pact (nuclear shield) with Poland, which looks likely to cause another world war. Polish people should exactly replicate what the Czechs did. While the Czechs government is eager to host the missile bases, two thirds of Czechs are against it. The government has been trounced in the local elections which has shifted the balance of power in the Czech upper house. “The scheme is strongly opposed by the social democratic opposition and may not survive the necessary parliamentary ratification process, which has been indefinitely shelved”(The Guardian Newspapers, Friday November 7 2008, page28).
Reference.
Burchill,S (1996) Realism And Neo-realism In Burchill,S., Linklater, A., Devetak, R., Peterson, M and True, J.(eds) Theories Of International Relations, London, Basingstoke. Macmillan Press Ltd. PP 67-92.
Curtis, M (2003) Web of Deceit, Britain’s Real Role In The World. London, Vintage Press.
Gaddis, J.L.,(2005) The Cold War, The Deals, The Spies, The Lies, The Truth. London, Penguin Books
Jackson, R. and Sorensen, G. (2003) Introduction To International Relations, Second Edition, Oxford, Oxford University Press.
Morgenthau, H.J. (1993) Politics Among Nations, The Struggle For Power, Brief Edition. London, New York, McGraw-Hill Inc.
Nardin, T. and Mapel, D.R. (1992) Traditions Of International Ethics, Cambridge, Cambridge University Press.
Newsweek Magazine, November 21, 2005.
Sunday Times newspapers, August 28th 2008,
The Guardian newspapers, Monday September 1 2008.
The Guardian newspapers Wednesday, August 27 2008.
The Guardian newspapers, Wednesday October 22 2008.
Guardian Newspapers, Friday November 7 2008
http://en.wikipedia.org/wiki/South_Ossetian_independence_referendum,_2006(printed on 5/9/8)
http://news.bbc.co.uk/1/hi/world/europe/5083690.stm printed on 6/9/8
http://english.aljazeera.net/news/americas/2008/08/2008812204333715324.html Printed on the 6/9/8
http://www.telegraph.co.uk/news/worldnews/1553593/Putin-in-nuclear-threat-against-Europe.html Printed on the 9/9/8
http://news.bbc.co.uk/1/hi/world/europe/7551576.stm printed on 3/10/8.
http://www.nato.int/docu/basictxt/treaty.htm printed on 5/11/8
Authors Biography
Name: Chinedu Vincent Akuta.
Contact Email: akutachinedu@yahoo.com
Present Job: Lecturer Assistant, Leicester International College. 132-134 London Rd, Leicester, LE2 1EB. www.leicesterinternationalcollege.co.uk
Education/Universities;
MSc, International Relations. Department Of Politics, International Relations and European Studies. Loughborough University Leicestershire, LE11 3TU. UK. Tel: +441509222991/222981. Fax: +441509223917. (2005-2007).
MSc, Economics. School of Postgraduate Studies. University of Lagos, Akoka-Yaba. Lagos-Nigeria. (2000-2001).
MBA, Marketing. Postgraduate School, Lagos State University. Badagry Expressway, OJO, P.M.B. 1087, Apapa. Lagos-Nigeria. (1998-2000).
BSc, Economics. Nnamdi Azikiwe University. P.M.B. 5025 Awka, Anambra State. Nigeria. (1989-1994).
Other Publications: E.U. Trade with Sub-Sahara African Countries, Nigeria as a case study, 1990-2006. MSc dissertation Loughborough University, 2007.
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