economic crisis: latvia’s everyday struggle for survival is nothing new p2-3

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SEPTEMBER 2009

MARK KOSTABI – ‘Faustian grip’(1990)

US healthcare sham

ARepublican Congress and President Bill Clinton abolished a welfare programme in 1996 under the (largely fallacious) pretext that it bred fraud, waste and abuse. Thirteen years on, the reforms that Barack Obama is proposing will not fundamentally change the United States’ abysmal healthcare system because those who profit from it have been able to buy protection from the lawmakers. The welfare programme ditched in 1996 absorbed about 1% of the US budget; today’s well-ensconced private insurance companies swallow most of the 17% of the budget set aside for healthcare.

Paradoxically, the US president is one of the most spirited prosecutors of the system he has chosen to retain. Day after day he recounts how “we are held hostage by health insurance companies that deny coverage, or drop coverage, or charge fees that people can’t afford for care they desperately need… We have a healthcare system that too often works better for the insurance industry than it does for the American people” (1).

Obama’s project initially set out with two important objectives. It proposed compulsory health cover for the 46 million Americans outside the system while funding the poorest amongst them. It also suggested the creation of a public insurance system with less prohibitive tariffs than private companies (2), which commit huge resources to finding legal loopholes (“preexisting conditions”) allowing them not to pay out when their insured clients fall ill.

What is it that so alarms the right? Bobby Jindal, the Republican governor of Louisiana, claims that “any government plan will benefit from taxpayer subsidies and be able to operate at a financial loss, competing unfairly in the marketplace until private plans are driven out of business” (3). Other more telling tales of distress might have concerned him, particularly in Louisiana, one of the poorest US states.

American politics is so poisoned by money flowing from industrial and financial lobbies

that the only proposals ensured a smooth ride through Congress are those that cut taxes. Banks, insurance companies and the pharmaceutical industry have almost nothing to fear. Max Baucus, the Democrat chairman of the Senate finance committee, whose approval is needed for reforms to be adopted, is also the lawmaker who receives the most money from private hospitals, insurance companies and doctors. However, his largest donors are hardly worried about the problems of Montana, the small rural state he represents, since 90% of their contributions come from elsewhere in the country, in a perfectly legal and accountable way. Will anyone be surprised to hear that Baucus opposes a complete overhaul of the current medical system?

A year after the crash of neoliberalism, the (small-scale) panic that gripped the ruling classes has vanished. The political system remains locked in their favour. From time to time, a more corrupt or unlucky operator goes to jail; the mantra – morals, ethics, regulation, G20 – is chanted; then it all starts again. Questioned recently about the huge bonuses awarded to traders at BNP-Paribas, Christine Lagarde, France’s economy minister and a former Chicago business lawyer, had only this to say: “If we say no more bonuses, the best trader teams will simply move elsewhere.”

Cradled in a political system that protects them (and which they in turn protect) and profiting from the public’s widespread cynicism and all-round despair, traders and medical insurance companies can only pursue their parasitic ways. “Abuse” is not some aberration in their practice, it’s their essence. So a “reform” they could agree to will not do: what we need is their disappearance.

SERGE HALIMI

TRANSLATED BY ROBERT WATERHOUSE

(1) Town hall meeting in Montana, 14 August 2009. (2) In 15 of the 50 states, more than half of the “market” is held by one private healthcare company. See “The Tight Grip of Health Insurers,” Business Week, 3 August 2009. (3) Bobby Jindal, “How to Make Health-Care Reform Bipartisan”, The Wall Street Journal, 22 July 2009.

CHINESE SWAP CASH FOR METAL

Democratic Republic

of Congo: the sale

of the century

The IMF has warned the DRC that its new barter deal with China – money for investment in infrastructure in exchange for mined minerals – may jeopardise a crucial

agreement on debt relief

BY COLETTE BRAECKMAN

Yu Jian and Jeng, young Chinese engineers, are not having a good time. Stuck all day on the road above the port of Matadi, the capital of Kongo Central province, their faces burn in the sun, despite their straw hats. Sometimes in the early morning they find snakes coiled in the ditch at the side of the road. They often have to negotiate boulders, wade across streams or, worse, grapple with local bureaucracy. But nothing will stand in the way of their mission: to lay a fibreoptic cable across the Democratic Republic of Congo (DRC).

Their boss, “Hunter” Xie, the local representative of China Intertelecom Constructions, a subsidiary of China Telecom, has similar determination. He has only taken seven days leave in the three years he has been in the DRC. He plans to use his salary of $1,500 a month to pay for the education of his only son back in China.

The cable is part of the West Africa Cable System, originating in South Africa, which will run from Muanda on the Atlantic to the capital Kinshasa, where it will go along the river as far as Kisangani before joining another cable which has come from the Indian Ocean: a total of 5,650km. Installing fibreoptic cable, capable of transmitting sounds and images at the speed of light, is a significant technological leap for the DRC – a country as big as western Europe, with few roads but many mobile phone masts. The cable will reduce the cost of mobile calls and allow financial transactions over the internet, the transmission of medical images, and distance learning.

Locals, however, are less interested in surfing the net than in having access to clean drinking water; they would like not to have to light their homes with candles because all the energy from the Inga hydroelectric dams is being sold to neighbouring countries.

The Congolese government has invested |$85m in the cable project, which is being administered by its office of post and telecommunications. The first instalment of $31m has come from a development aid loan from the Chinese government. The loan

stipulates that private telephone companies pay a cable connection tax (which could raise $100m a year) to the government.

The companies are resisting: Vodafone is claiming the right to control the cable entry point in Muanda, arguing it was the first to invest in the DRC’s mobile phone sector and has four million subscribers. It doubts the Congolese are capable of managing the opportunities the cable provides. Xie disagrees. He says that while 2,500 Congolese workers are currently being supervised by 80 Chinese, 20 Congolese engineers are being trained in China and will be able to supervise the second phase of the works.

While they dig in Matadi, in Kinshasa giant stone crushers make hardcore for the foundations of the capital’s new roads, and hundreds of diggers wait to go into action. Commissioned by the local governor, the Chinese have transformed the main thoroughfare, 30th June Boulevard, into a fast four-lane motorway. Western companies are arguing over the contracts the DRC signed with China, but work has already started. Every week President Joseph Kabila opens a new building site.

Barter deal

The minister of public works Pierre Lumbi (who founded the Peasant Solidarity Association in the 1980s) made a discreet visit to Beijing in 2007. The result was an agreement with China for $9bn investment to develop infrastructure and revive the mining sector. A joint venture, Sicomines, was created; DRC holds 32% of its shares. Two huge enterprises, China Railway Engineering Corporation and Synohydro Corporation, are to build or restore 3,000km of roads and railways, 31 150-bed hospitals, 145 health centres, four universities and 50,000 units of social housing. These commercial loans also give access to Chinese development aid, which is repayable at very low interest rates over a long term.

It is hoped these works will help revive DRC’s economy, ravaged by three decades of dictatorship and 10 years of plunder and civil war. In return, the Chinese will be given access

Continued on page 7

inside this issue Israel shrugs off war crime allegations with worrying ease page 4 Can Unesco’s reputation be restored after elections for the top job? page 6 Sizing up the opposition: India flexes its military muscles towards China page 8

Rich man’s hobby: America’s obsession with incarceration page 10 The West has never been a stranger to jihadist tactics of its own page 12 John Berger causes a security stir at the National Gallery page 15 Colette Braeckman is a journalist with the Belgian newspaper Le Soir