This article appeared in the Star newspaper on Tuesday February 10, 2009
Is Obama being reckless?
By DR. MOHD NAZARI ISMAIL
The president’s proposed stimulus package may worsen US’ indebtedness
LESS than a week after the departure of arguably the worst president of the US, the new president appointed Tim Geithner as his new Treasury Secretary.
During the swearing-in ceremony, Barack Obama expressed his optimism that his appointee will be able to solve the current economic crisis.
His optimism is based on the fact that not only is Geithner very experienced, being a past president of the Federal Reserve Bank of New York, he is also being assisted by very experienced economists including former Treasury Secretary Larry Summers.
Many Americans and probably many more people around the world are hoping that Obama’s optimism will prove to be justified.
They are sadly oblivious to the fact that if Geithner is able to solve the current crisis, it will simply mean that Geithner has only succeeded in postponing the full brunt of the crisis to a future period.
It will also mean that Geithner has prepared for them or for their children pain and suffering on a much bigger scale in that future period.
Obama’s expectation of Geithner is actually very monumental.
Geithner is not only expected to solve the current economic problem but he is also expected to come up with a mechanism to prevent the problem from recurring.
Obama’s discussions with his economic advisory team must have been cursory so far.
Otherwise he would have been informed that no economist has ever dared to promise that his or her suggested policies will prevent future economic crises from happening again, not even Nobel laureates in economics.
Actually the step needed to solve an economic crisis is not rocket science at all.
Every one who has studied basic macro economics knows the concept of “economic cycle”.
As the name implies, the economy will always go through periods of ups and downs.
In other words, regardless of how bad the economy is, it will eventually bottom out and slowly go through a recovery period.
After all, at the core of all economic crises, the problem is over-indebtedness or over-borrowing.
All Geithner needs to do is to wait for the over-indebted firms or individuals to disappear from the system and then allow new players to come into the economy and soon it will slowly move.
However, the problem facing Obama is that the American public is impatient and expects him to solve the problem before he seeks re-election in 2012.
One very important aspect of the US economy is its size. It is HUGE.
As a result it behaves not very differently from a huge ocean-liner. To make it change direction requires lots of effort and resources, especially if the change needs to be done quickly.
For Obama, he has no choice but show the American public, in less than four years, that the economy is picking up.
Otherwise, his name will appear alongside Jimmy Carter, George Bush Sr and others on the list of one-term presidents, a prospect that he obviously will not relish.
And that is exactly the reason why from an economic perspective, I foresee Obama is going to be the most reckless president in the history of the United States.
He has pushed for Congress’ approval for his US$825bil stimulus package.
The problem is, as stated earlier, the US economy is huge and therefore nobody really knows whether that amount is enough or not.
What we do know is that since December 2007 till now, the US government has spent US$3.3 trillion of the allocated US$7.8 trillion.
Unfortunately, so far there has been no discernible positive outcome.
In fact, the situation is getting worse.
On the same day that Geithner was sworn in, CNN Money reported announcements of over 71,400 job cuts by US firms.
Clearly if Obama is serious about being re-elected in four years, he needs to spend more – much more than what has been announced.
Just as nobody really knows when the economy is going to rebound, nobody also really knows the total amount that needs to be spent to turn the US economy around.
One thing is for certain, it is going to be massive.
As is well known, the current problem of economic crisis is mainly due to over-indebtedness of companies and individuals. This indebtedness is yet to be resolved.
Therefore, the huge stimulus package being rolled out by Obama in order to secure his re-election is going to worsen the indebtedness situation.
Moreover this time it is going to involve both the public and private sectors.
By the time the US economy turns around due to the efforts of Obama’s administration, the amount of debt hanging around each taxpayers’ neck will be too scary to imagine.
The United States at the moment is being choked by a huge amount of indebtedness and that is why it is suffocating.
By the time all spending has been undertaken to get the US economy to move, American taxpayers will be completely wrapped up by debt to the point of being “mummified”.
The truth of the matter is, as long as the debt-based system does not change, there is no solution to the problem.
Henry Paulson, the previous Treasury Secretary, left his post without solving the problem even though he tried his level best.
But he should be happy because he will not be remembered as the person who recklessly worsened the US economic crisis by increasing the debt burden of the US taxpayers to unmanageable levels.
That dubious honour is likely going to be Geithner’s.
If Geithner is lucky, the honour may go to the person who appointed him.
Dr Mohd Nazari Ismail is a professor at the Faculty of Business and Accounting, Universiti Malaya. His latest book is “The Globalisation Debate: A Case of Barking up the Wrong Tree” published by University of Malaya Press.
Wednesday, April 29, 2009
Lending-for-profit factor
This article appeared in the Star newspaper on Tuesday January 13, 2009
The lending-for-profit factor
By Dr MOHD NAZARI ISMAIL
As long as there is such an industry, there will always be financial crises
THE present financial crisis which started in the US is now fast spreading to the rest of the world. Some people are puzzled as to why experts in academia and experienced policy makers are unable to prevent it from happening in the first place.
Their puzzlement actually stems from a failure to realise that financial crises at their core are problems of over-leveraging, over-lending and over-borrowing.
Unfortunately history has shown that regardless of efforts to prevent the occurrence of financial crises, as long as the lending-for-profit industry exists, problems of over-leveraging, over-lending and over-borrowing will always be with us.
Take the Asian currency crisis of the late 1990s. The cause of that crisis was over-investment in the Thai real estate sector which was financed by massive foreign borrowings.
The resulting current account deficits put pressure on the baht. The Thai authorities were unable to support the baht which later depreciated.
This led to a ballooning of the country’s foreign-denominated debts. The crisis spread to other South-East Asian countries with some having to resort to International Monetary Fund’s assistance.
Another example is the Argentinean financial crisis of 2001. It was caused mainly by fiscal indiscipline by successive governments using foreign debt. In 1983, Argentina’s foreign debt was US$46bil. By 1999, it was US$130bil.
This dependence on foreign borrowings, combined with severe unemployment, rampant corruption and political instability led to massive capital flight by companies and individuals.
By 2001, the government of the day was forced to take drastic measures including freezing all bank accounts, leading to violent riots.
The Japanese market crash of the late 1980s stemmed from a speculative stock and property markets bubble. These were financed by loans from Japanese banks. When the bubble burst, trillions of yen were wiped out in those markets.
Ever-cautious Japanese consumers withheld spending because of the poor economic conditions and this slowed down the economy even more. The Japanese economy has never recovered fully from this crisis till today.
It is widely agreed that the current global financial crisis is a case of a market crash followed by a banking crisis followed by economic slowdown, which is spreading worldwide from the US. The problem originated from the low interest rates in the late 1990s.
This encouraged over-borrowing, especially in the housing market. When interest rates rose from 1% to more than 5% between 2004 and 2006, the less-than-sound borrowers, i.e. the subprime sector, defaulted.
Many lending institutions which specialised in subprime mortgage went belly-up. This has a knock-on effect, which is ongoing, throughout the financial markets of the US and beyond.
In all the above cases, the fundamental common features are problems of over-lending, over-borrowing and over-leveraging.
It may surprise some people but these problems never existed before lending-for-profit became an industry.
This was because “usury”, as lending-for-profit is also called, was condemned by all major religions and philosophers such as Aristotle and Cato.
The practice of usury was looked down upon in ancient Greece and Rome and by Hindu and Buddhist teachings.
Judaism prohibited usury against fellow Jews while the medieval Christian Church forbade it completely. Islam forbids it to this day.
What changed in 16th century Europe was the emergence of Christian scholars such as John Eck and John Calvin who argued that Christianity permits the charging of interest on loans and that the term “usury” refers only to “excessive interest”.
With the advent of the Industrial Revolution, interest-charging gained further respectability with the arguments put forward by the champions of capitalism such as Jeremy Bentham and Adam Smith.
It is to be noted from that period onwards the phenomena of financial crises came into existence.
It is my contention that the active existence of the lending-for-profit industry will inevitably and unavoidably lead to excessive lending, excessive borrowing and leveraging.
As long as there is a lending-for-profit industry, there will always be financial crises of varying magnitudes.
What is particularly worrisome is that some of the solutions offered, especially the fiscal stimulus policy, in my opinion may worsen the situation in the long run.
It is true that fiscal stimulus may boost the economy in the short run. However, this will inevitably result in the government taking up ever greater debt burden.
It is strange to note that people seem to suddenly and completely forget that excessive debt is the very thing that brought forth the crisis in the first place.
Stimulus packages are simply a postponement of the greater debt burden to a future date, to be paid by future generations. It is, in a sense, an ultimate act of irresponsibility and selfishness.
What is needed in these trying times is to challenge our fundamental assumptions about how the economy, industry and commerce are and should be run.
A paradigmatic shift of our mindset is perhaps required if we were to get out of this endless cycle of booms and crises with its ever increasing toll of economic and human pain and suffering.
Could the wisdom of the ancients, repeated by the world’s great religions, about the evil of usury not be a sound ingredient for the foundation of human happiness?
·Mohd Nazari is a professor attached to the Faculty of Business and Accounting at University of Malaya. Readers’ feedback is welcome to this article. Please write to starbiz@thestar.com.my
The lending-for-profit factor
By Dr MOHD NAZARI ISMAIL
As long as there is such an industry, there will always be financial crises
THE present financial crisis which started in the US is now fast spreading to the rest of the world. Some people are puzzled as to why experts in academia and experienced policy makers are unable to prevent it from happening in the first place.
Their puzzlement actually stems from a failure to realise that financial crises at their core are problems of over-leveraging, over-lending and over-borrowing.
Unfortunately history has shown that regardless of efforts to prevent the occurrence of financial crises, as long as the lending-for-profit industry exists, problems of over-leveraging, over-lending and over-borrowing will always be with us.
Take the Asian currency crisis of the late 1990s. The cause of that crisis was over-investment in the Thai real estate sector which was financed by massive foreign borrowings.
The resulting current account deficits put pressure on the baht. The Thai authorities were unable to support the baht which later depreciated.
This led to a ballooning of the country’s foreign-denominated debts. The crisis spread to other South-East Asian countries with some having to resort to International Monetary Fund’s assistance.
Another example is the Argentinean financial crisis of 2001. It was caused mainly by fiscal indiscipline by successive governments using foreign debt. In 1983, Argentina’s foreign debt was US$46bil. By 1999, it was US$130bil.
This dependence on foreign borrowings, combined with severe unemployment, rampant corruption and political instability led to massive capital flight by companies and individuals.
By 2001, the government of the day was forced to take drastic measures including freezing all bank accounts, leading to violent riots.
The Japanese market crash of the late 1980s stemmed from a speculative stock and property markets bubble. These were financed by loans from Japanese banks. When the bubble burst, trillions of yen were wiped out in those markets.
Ever-cautious Japanese consumers withheld spending because of the poor economic conditions and this slowed down the economy even more. The Japanese economy has never recovered fully from this crisis till today.
It is widely agreed that the current global financial crisis is a case of a market crash followed by a banking crisis followed by economic slowdown, which is spreading worldwide from the US. The problem originated from the low interest rates in the late 1990s.
This encouraged over-borrowing, especially in the housing market. When interest rates rose from 1% to more than 5% between 2004 and 2006, the less-than-sound borrowers, i.e. the subprime sector, defaulted.
Many lending institutions which specialised in subprime mortgage went belly-up. This has a knock-on effect, which is ongoing, throughout the financial markets of the US and beyond.
In all the above cases, the fundamental common features are problems of over-lending, over-borrowing and over-leveraging.
It may surprise some people but these problems never existed before lending-for-profit became an industry.
This was because “usury”, as lending-for-profit is also called, was condemned by all major religions and philosophers such as Aristotle and Cato.
The practice of usury was looked down upon in ancient Greece and Rome and by Hindu and Buddhist teachings.
Judaism prohibited usury against fellow Jews while the medieval Christian Church forbade it completely. Islam forbids it to this day.
What changed in 16th century Europe was the emergence of Christian scholars such as John Eck and John Calvin who argued that Christianity permits the charging of interest on loans and that the term “usury” refers only to “excessive interest”.
With the advent of the Industrial Revolution, interest-charging gained further respectability with the arguments put forward by the champions of capitalism such as Jeremy Bentham and Adam Smith.
It is to be noted from that period onwards the phenomena of financial crises came into existence.
It is my contention that the active existence of the lending-for-profit industry will inevitably and unavoidably lead to excessive lending, excessive borrowing and leveraging.
As long as there is a lending-for-profit industry, there will always be financial crises of varying magnitudes.
What is particularly worrisome is that some of the solutions offered, especially the fiscal stimulus policy, in my opinion may worsen the situation in the long run.
It is true that fiscal stimulus may boost the economy in the short run. However, this will inevitably result in the government taking up ever greater debt burden.
It is strange to note that people seem to suddenly and completely forget that excessive debt is the very thing that brought forth the crisis in the first place.
Stimulus packages are simply a postponement of the greater debt burden to a future date, to be paid by future generations. It is, in a sense, an ultimate act of irresponsibility and selfishness.
What is needed in these trying times is to challenge our fundamental assumptions about how the economy, industry and commerce are and should be run.
A paradigmatic shift of our mindset is perhaps required if we were to get out of this endless cycle of booms and crises with its ever increasing toll of economic and human pain and suffering.
Could the wisdom of the ancients, repeated by the world’s great religions, about the evil of usury not be a sound ingredient for the foundation of human happiness?
·Mohd Nazari is a professor attached to the Faculty of Business and Accounting at University of Malaya. Readers’ feedback is welcome to this article. Please write to starbiz@thestar.com.my
Saturday, April 25, 2009
Malaysia in a good position to advise Hamas
This is my letter to Malaysiakini sent on 19 Jan 2009 in response to a letter written by one Fernando Pastor. Mr. Pastor's letter is appended below.
Date: Mon, 19 Jan 2009 11:11:39 +0800
From: mdnaz...@um.edu.my
Reply-To: mdnaz...@um.edu.my
Subject: Letter:
To: edi...@malaysiakini.com
Dear Sir,
I refer to a letter dated 16 January 2009 by Fernando Pastor to Malaysiakini entitled `Malaysia in a good position to advice Hamas' and would like to express my complete disagreement with him. Mr. Pastor said he studied Islam. However I think he did not study enough of the religion because if he had, he would have found out that Islam is a religion that do not tolerate injustice. Mr. Pastor, despite his visit to the West Bank also obviously did not study the history of the Palestine-Israeli conflict too because if he had he would have found out that Israel is actually an ilegitimate or illegal state. This is because its establishment in 1948 involved the killing of tens of thousands of innocent Palestinians, the theft of their land and the expulsion of hundreds of thousands of Palestinians out of their country. To recognise the state of Israel is to legitimise all the atrocities mentioned above. Only people who are ignorant of history or devoid of any sense of justice will do such a thing. Fortunately the majority of Malaysians are not like that and I hope Mr. Pastor can take efforts to enlighten himself and join the majority of Malaysians.Furthermore Mr. Pastor also seems ignorant of the background of the recent Israeli massacres of the innocent Palestinians in Gaza. If he had bothered to do some investigation, he would have found out that Hamas won the Palestinian legislative election in 2006 but despite that was not treated as a legitimate organization by the US and Israel. Also for the last 18 months Gaza was under blockade by Israel causing deaths and sufferings for the 1.5 million people there due to lack of food and medications. The blockade was tightened further during the so-called 6-month truce period when Hamas did not shoot any rocket towards Israel. Moreover Israel killed 40 Palestinians during the truce period whilst no Israeli was killed during that time. As a result of these gross injustices as well as their sufferings, most people in Gaza were pressuring Hamas to fight against Israel with whatever weapons they have and that was the main reason the rockets were launched. In other words, the rockets were not launched by terrorists but by a group of desperate people who have been victims of atrocities committed against them for more than 60 years.Mr. Pastor, if he had done some readings beside walking the streets of the West Bank would have found out that the Israelis have been illegally occupying Palestinians lands and are still murdering the innocents, steal their lands and at the same time trying to starve Gazans to death. By the way Mr. Pastor may want to know that Israel, unlike Malaysia, is a racist state because Israel will not allow any Palestinian refugee to go back to their lands but will allow any Jew from any part of the world to emigrate to Israel.Lastly we should encourage Malaysians to educate themselves more bout the history of the conflict so that we can act justly towards the parties involved.
Thank you.
Dr. Mohd Nazari Ismail
_____
Malaysia in good position to advise Hamas
Fernando Pastor
Jan 16, 09 2:31pm
I should preface this letter by noting that I am far from being an Israel aficionado, a Zionist or whatever else you may wish to call me. I have no religious persuasion, yet have spent time in the Middle East, studied Arabic and Islam and had the pleasure of visiting the West Bank where I still have friends. I was in Ramallah during the funeral of Yasser Arafat. Whilst I was in Israel, at the height of the intifada, I was stripped to my boxer shorts and had guns put to my head by the Israeli Defence Forces. Malaysian responses to the current Israeli pummeling of the Gaza Strip have been interesting. Malaysians tend to view the crisis as a clear-cut attack on the ummah as a whole, a ‘clash of civilisations’ as some might call it. Given the timely death this week of Samuel P Huntington the eminent scholar (he was 91) famous for coining the notion of there being a post-Cold War stand off between the West and the Islamic world, it is important to recognise that the wider Muslim world must intervene to stop Hamas' feckless government from bringing more misery upon their own people who have already suffered enough. This conflict is not quite as black and white as the Malaysian (and Indonesian, for that matter) press have made it to be. Like many, I find the Israeli action in Gaza totally abhorrent. Nevertheless, some may argue that the actions of Israel (as disproportionate as it is - akin to the brief war with Hezbollah in the summer of 2006) were merited as a strong response from a sovereign state responding to terrorist attacks on their territory by a neighbouring territory.However, at the crux of this intractable conflict is not Israel. It is Hamas. When we repeatedly see Hamas firing rockets into Israel and in the process shunning the Egyptian-brokered cease fire, one has to question the motives of Hamas, who are, of course, the democratically-elected Palestinian Authority. With democracy comes responsibility. Hamas' whole cause de guerre is far too radical and has arguably won them few friends in a region where they need as much help as they can get. The Palestinian people deserve a homeland, rightly so as many Malaysian friends have told me over the last week or so. I couldn't agree more. Hamas (in Arabic 'Islamist Resistance Movement'), who project themselves as this, are not the party to make that peace happen. Let's just remind ourselves - Hamas' didn't even have an election manifesto when they swept to power in 2005 and four years on it appears as though they do not have a plan to get themselves (and their people) out of this terrible mess. Under their watch, we have seen infighting with Fatah, rampant corruption, not to mention the odd hijacking of a BBC journalist or scores of Katyusha rockets being fired towards Israel. This offers us the same salient message- Hamas do not want peace. A few years ago whilst in the West Bank myself, I witnessed young Palestinian men no older than myself (I am 23) firing machine-gun rounds in the air around the Muqatta, formerly Yasser Arafat's compound in downtown Ramallah. I asked the men, surely this wasn't the message they wanted the world to see? Kalashnikov fire aimed skywards that would only rain back down? That would never happen here in Malaysia, because the people know it's not the right thing to do. Successful moderate Muslim states like Malaysia can be doing a lot more to help the plight of the people they seem to care about so much. Perhaps when the dust has settled in a few days time, the wider Muslim world can start to stand up for the Palestinian people. Who has told Hamas that rupturing a cease-fire is not how to play ball with a neighbor with a penchant for excessive retaliation? It appears as though that while the quartet led by former British prime minister Tony Blair is unable to reach Hamas, maybe other Muslim states - like Malaysia - will be able to do so. The recent unofficial 'boycott' of US products like Coca-Cola and McDonald’s (who both, incidentally, employ a vast Muslim Malay workforce) does not send a good message to those suffering in Gaza. These boycotts largely damage the local economy, putting predominantly Malay Muslims at risk. Coca-Cola Malaysia employs 1,700 Malaysians - 60 percent of whom are Malay. What would be far more pro-active would be for moderate Muslim states like Malaysia, who have a good standing in the Arab world, to engage more directly with Hamas and other Arab governments in the region. But of course, for that to happen, they'd have to, at least, open a diplomatic representation there and recognise Israel as a sovereign state.
Date: Mon, 19 Jan 2009 11:11:39 +0800
From: mdnaz...@um.edu.my
Reply-To: mdnaz...@um.edu.my
Subject: Letter:
To: edi...@malaysiakini.com
Dear Sir,
I refer to a letter dated 16 January 2009 by Fernando Pastor to Malaysiakini entitled `Malaysia in a good position to advice Hamas' and would like to express my complete disagreement with him. Mr. Pastor said he studied Islam. However I think he did not study enough of the religion because if he had, he would have found out that Islam is a religion that do not tolerate injustice. Mr. Pastor, despite his visit to the West Bank also obviously did not study the history of the Palestine-Israeli conflict too because if he had he would have found out that Israel is actually an ilegitimate or illegal state. This is because its establishment in 1948 involved the killing of tens of thousands of innocent Palestinians, the theft of their land and the expulsion of hundreds of thousands of Palestinians out of their country. To recognise the state of Israel is to legitimise all the atrocities mentioned above. Only people who are ignorant of history or devoid of any sense of justice will do such a thing. Fortunately the majority of Malaysians are not like that and I hope Mr. Pastor can take efforts to enlighten himself and join the majority of Malaysians.Furthermore Mr. Pastor also seems ignorant of the background of the recent Israeli massacres of the innocent Palestinians in Gaza. If he had bothered to do some investigation, he would have found out that Hamas won the Palestinian legislative election in 2006 but despite that was not treated as a legitimate organization by the US and Israel. Also for the last 18 months Gaza was under blockade by Israel causing deaths and sufferings for the 1.5 million people there due to lack of food and medications. The blockade was tightened further during the so-called 6-month truce period when Hamas did not shoot any rocket towards Israel. Moreover Israel killed 40 Palestinians during the truce period whilst no Israeli was killed during that time. As a result of these gross injustices as well as their sufferings, most people in Gaza were pressuring Hamas to fight against Israel with whatever weapons they have and that was the main reason the rockets were launched. In other words, the rockets were not launched by terrorists but by a group of desperate people who have been victims of atrocities committed against them for more than 60 years.Mr. Pastor, if he had done some readings beside walking the streets of the West Bank would have found out that the Israelis have been illegally occupying Palestinians lands and are still murdering the innocents, steal their lands and at the same time trying to starve Gazans to death. By the way Mr. Pastor may want to know that Israel, unlike Malaysia, is a racist state because Israel will not allow any Palestinian refugee to go back to their lands but will allow any Jew from any part of the world to emigrate to Israel.Lastly we should encourage Malaysians to educate themselves more bout the history of the conflict so that we can act justly towards the parties involved.
Thank you.
Dr. Mohd Nazari Ismail
_____
Malaysia in good position to advise Hamas
Fernando Pastor
Jan 16, 09 2:31pm
I should preface this letter by noting that I am far from being an Israel aficionado, a Zionist or whatever else you may wish to call me. I have no religious persuasion, yet have spent time in the Middle East, studied Arabic and Islam and had the pleasure of visiting the West Bank where I still have friends. I was in Ramallah during the funeral of Yasser Arafat. Whilst I was in Israel, at the height of the intifada, I was stripped to my boxer shorts and had guns put to my head by the Israeli Defence Forces. Malaysian responses to the current Israeli pummeling of the Gaza Strip have been interesting. Malaysians tend to view the crisis as a clear-cut attack on the ummah as a whole, a ‘clash of civilisations’ as some might call it. Given the timely death this week of Samuel P Huntington the eminent scholar (he was 91) famous for coining the notion of there being a post-Cold War stand off between the West and the Islamic world, it is important to recognise that the wider Muslim world must intervene to stop Hamas' feckless government from bringing more misery upon their own people who have already suffered enough. This conflict is not quite as black and white as the Malaysian (and Indonesian, for that matter) press have made it to be. Like many, I find the Israeli action in Gaza totally abhorrent. Nevertheless, some may argue that the actions of Israel (as disproportionate as it is - akin to the brief war with Hezbollah in the summer of 2006) were merited as a strong response from a sovereign state responding to terrorist attacks on their territory by a neighbouring territory.However, at the crux of this intractable conflict is not Israel. It is Hamas. When we repeatedly see Hamas firing rockets into Israel and in the process shunning the Egyptian-brokered cease fire, one has to question the motives of Hamas, who are, of course, the democratically-elected Palestinian Authority. With democracy comes responsibility. Hamas' whole cause de guerre is far too radical and has arguably won them few friends in a region where they need as much help as they can get. The Palestinian people deserve a homeland, rightly so as many Malaysian friends have told me over the last week or so. I couldn't agree more. Hamas (in Arabic 'Islamist Resistance Movement'), who project themselves as this, are not the party to make that peace happen. Let's just remind ourselves - Hamas' didn't even have an election manifesto when they swept to power in 2005 and four years on it appears as though they do not have a plan to get themselves (and their people) out of this terrible mess. Under their watch, we have seen infighting with Fatah, rampant corruption, not to mention the odd hijacking of a BBC journalist or scores of Katyusha rockets being fired towards Israel. This offers us the same salient message- Hamas do not want peace. A few years ago whilst in the West Bank myself, I witnessed young Palestinian men no older than myself (I am 23) firing machine-gun rounds in the air around the Muqatta, formerly Yasser Arafat's compound in downtown Ramallah. I asked the men, surely this wasn't the message they wanted the world to see? Kalashnikov fire aimed skywards that would only rain back down? That would never happen here in Malaysia, because the people know it's not the right thing to do. Successful moderate Muslim states like Malaysia can be doing a lot more to help the plight of the people they seem to care about so much. Perhaps when the dust has settled in a few days time, the wider Muslim world can start to stand up for the Palestinian people. Who has told Hamas that rupturing a cease-fire is not how to play ball with a neighbor with a penchant for excessive retaliation? It appears as though that while the quartet led by former British prime minister Tony Blair is unable to reach Hamas, maybe other Muslim states - like Malaysia - will be able to do so. The recent unofficial 'boycott' of US products like Coca-Cola and McDonald’s (who both, incidentally, employ a vast Muslim Malay workforce) does not send a good message to those suffering in Gaza. These boycotts largely damage the local economy, putting predominantly Malay Muslims at risk. Coca-Cola Malaysia employs 1,700 Malaysians - 60 percent of whom are Malay. What would be far more pro-active would be for moderate Muslim states like Malaysia, who have a good standing in the Arab world, to engage more directly with Hamas and other Arab governments in the region. But of course, for that to happen, they'd have to, at least, open a diplomatic representation there and recognise Israel as a sovereign state.
We Must adjust our distorted image of Hamas
This article is not mine. It was written by William Sieghart, Chairman of an Organization called Forward Thinking and appeared on Times Online on Dec 31, 2008. Here is the link to the web-site: http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5420584.eceI thought it is such an excellent article that i decided to just append it below to make it easier for people to read it. Read on...
We must adjust our distorted image of Hamas
by William Sieghart, Chairman Of Forward Thinking.
Last week I was in Gaza. While I was there I met a group of 20 or so police officers who were undergoing a course in conflict management. They were eager to know whether foreigners felt safer since Hamas had taken over the Government? Indeed we did, we told them. Without doubt the past 18 months had seen a comparative calm on the streets of Gaza; no gunmen on the streets, no more kidnappings. They smiled with great pride and waved us goodbye.Less than a week later all of these men were dead, killed by an Israeli rocket at a graduation ceremony. Were they "dangerous Hamas militant gunmen"? No, they were unarmed police officers, public servants killed not in a "militant training camp" but in the same police station in the middle of Gaza City that had been used by the British, the Israelis and Fatah during their periods of rule there. This distinction is crucial because while the horrific scenes in Gaza and Israel play themselves out on our television screens, a war of words is being fought that is clouding our understanding of the realities on the ground.Who or what is Hamas, the movement that Ehud Barak, the Israeli Defence Minister, would like to wipe out as though it were a virus? Why did it win the Palestinian elections and why does it allow rockets to be fired into Israel? The story of Hamas over the past three years reveals how the Israeli, US and UK governments' misunderstanding of this Islamist movement has led us to the brutal and desperate situation that we are in now.The story begins nearly three years ago when Change and Reform - Hamas's political party - unexpectedly won the first free and fair elections in the Arab world, on a platform of ending endemic corruption and improving the almost non-existent public services in Gaza and the West Bank. Against a divided opposition this ostensibly religious party impressed the predominantly secular community to win with 42 per cent of the vote. Palestinians did not vote for Hamas because it was dedicated to the destruction of the state of Israel or because it had been responsible for waves of suicide bombings that had killed Israeli citizens. They voted for Hamas because they thought that Fatah, the party of the rejected Government, had failed them. Despite renouncing violence and recognising the state of Israel Fatah had not achieved a Palestinian state. It is crucial to know this to understand the supposed rejectionist position of Hamas. It won't recognise Israel or renounce the right to resist until it is sure of the world's commitment to a just solution to the Palestinian issue.In the five years that I have been visiting Gaza and the West Bank, I have met hundreds of Hamas politicians and supporters. None of them has professed the goal of Islamising Palestinian society, Taleban-style. Hamas relies on secular voters too much to do that. People still listen to pop music, watch television and women still choose whether to wear the veil or not. The political leadership of Hamas is probably the most highly qualified in the world. Boasting more than 500 PhDs in its ranks, the majority are middle-class professionals - doctors, dentists, scientists and engineers. Most of its leadership have been educated in our universities and harbour no ideological hatred towards the West. It is a grievance-based movement, dedicated to addressing the injustice done to its people. It has consistently offered a ten-year ceasefire to give breathing space to resolve a conflict that has continued for more than 60 years.The Bush-Blair response to the Hamas victory in 2006 is the key to today's horror. Instead of accepting the democratically elected Government, they funded an attempt to remove it by force; training and arming groups of Fatah fighters to unseat Hamas militarily and impose a new, unelected government on the Palestinians. Further, 45 Hamas MPs are still being held in Israeli jails. Six months ago the Israeli Government agreed to an Egyptian- brokered ceasefire with Hamas. In return for a ceasefire, Israel agreed to open the crossing points and allow a free flow of essential supplies in and out of Gaza. The rocket barrages ended but the crossings never fully opened, and the people of Gaza began to starve. This crippling embargo was no reward for peace.When Westerners ask what is in the mind of Hamas leaders when they order or allow rockets to be fired at Israel they fail to understand the Palestinian position. Two months ago the Israeli Defence Forces broke the ceasefire by entering Gaza and beginning the cycle of killing again. In the Palestinian narrative each round of rocket attacks is a response to Israeli attacks. In the Israeli narrative it is the other way round. But what does it mean when Mr Barak talks of destroying Hamas? Does it mean killing the 42 per cent of Palestinians who voted for it? Does it mean reoccupying the Gaza strip that Israel withdrew from so painfully three years ago? Or does it mean permanently separating the Palestinians of Gaza and the West Bank, politically and geographically? And for those whose mantra is Israeli security, what sort of threat do the three quarters of a million young people growing up in Gaza with an implacable hatred of those who starve and bomb them pose?It is said that this conflict is impossible to solve. In fact, it is very simple. The top 1,000 people who run Israel - the politicians, generals and security staff - and the top Palestinian Islamists have never met. Genuine peace will require that these two groups sit down together without preconditions. But the events of the past few days seem to have made this more unlikely than ever. That is the challenge for the new administration in Washington and for its European allies.
We must adjust our distorted image of Hamas
by William Sieghart, Chairman Of Forward Thinking.
Last week I was in Gaza. While I was there I met a group of 20 or so police officers who were undergoing a course in conflict management. They were eager to know whether foreigners felt safer since Hamas had taken over the Government? Indeed we did, we told them. Without doubt the past 18 months had seen a comparative calm on the streets of Gaza; no gunmen on the streets, no more kidnappings. They smiled with great pride and waved us goodbye.Less than a week later all of these men were dead, killed by an Israeli rocket at a graduation ceremony. Were they "dangerous Hamas militant gunmen"? No, they were unarmed police officers, public servants killed not in a "militant training camp" but in the same police station in the middle of Gaza City that had been used by the British, the Israelis and Fatah during their periods of rule there. This distinction is crucial because while the horrific scenes in Gaza and Israel play themselves out on our television screens, a war of words is being fought that is clouding our understanding of the realities on the ground.Who or what is Hamas, the movement that Ehud Barak, the Israeli Defence Minister, would like to wipe out as though it were a virus? Why did it win the Palestinian elections and why does it allow rockets to be fired into Israel? The story of Hamas over the past three years reveals how the Israeli, US and UK governments' misunderstanding of this Islamist movement has led us to the brutal and desperate situation that we are in now.The story begins nearly three years ago when Change and Reform - Hamas's political party - unexpectedly won the first free and fair elections in the Arab world, on a platform of ending endemic corruption and improving the almost non-existent public services in Gaza and the West Bank. Against a divided opposition this ostensibly religious party impressed the predominantly secular community to win with 42 per cent of the vote. Palestinians did not vote for Hamas because it was dedicated to the destruction of the state of Israel or because it had been responsible for waves of suicide bombings that had killed Israeli citizens. They voted for Hamas because they thought that Fatah, the party of the rejected Government, had failed them. Despite renouncing violence and recognising the state of Israel Fatah had not achieved a Palestinian state. It is crucial to know this to understand the supposed rejectionist position of Hamas. It won't recognise Israel or renounce the right to resist until it is sure of the world's commitment to a just solution to the Palestinian issue.In the five years that I have been visiting Gaza and the West Bank, I have met hundreds of Hamas politicians and supporters. None of them has professed the goal of Islamising Palestinian society, Taleban-style. Hamas relies on secular voters too much to do that. People still listen to pop music, watch television and women still choose whether to wear the veil or not. The political leadership of Hamas is probably the most highly qualified in the world. Boasting more than 500 PhDs in its ranks, the majority are middle-class professionals - doctors, dentists, scientists and engineers. Most of its leadership have been educated in our universities and harbour no ideological hatred towards the West. It is a grievance-based movement, dedicated to addressing the injustice done to its people. It has consistently offered a ten-year ceasefire to give breathing space to resolve a conflict that has continued for more than 60 years.The Bush-Blair response to the Hamas victory in 2006 is the key to today's horror. Instead of accepting the democratically elected Government, they funded an attempt to remove it by force; training and arming groups of Fatah fighters to unseat Hamas militarily and impose a new, unelected government on the Palestinians. Further, 45 Hamas MPs are still being held in Israeli jails. Six months ago the Israeli Government agreed to an Egyptian- brokered ceasefire with Hamas. In return for a ceasefire, Israel agreed to open the crossing points and allow a free flow of essential supplies in and out of Gaza. The rocket barrages ended but the crossings never fully opened, and the people of Gaza began to starve. This crippling embargo was no reward for peace.When Westerners ask what is in the mind of Hamas leaders when they order or allow rockets to be fired at Israel they fail to understand the Palestinian position. Two months ago the Israeli Defence Forces broke the ceasefire by entering Gaza and beginning the cycle of killing again. In the Palestinian narrative each round of rocket attacks is a response to Israeli attacks. In the Israeli narrative it is the other way round. But what does it mean when Mr Barak talks of destroying Hamas? Does it mean killing the 42 per cent of Palestinians who voted for it? Does it mean reoccupying the Gaza strip that Israel withdrew from so painfully three years ago? Or does it mean permanently separating the Palestinians of Gaza and the West Bank, politically and geographically? And for those whose mantra is Israeli security, what sort of threat do the three quarters of a million young people growing up in Gaza with an implacable hatred of those who starve and bomb them pose?It is said that this conflict is impossible to solve. In fact, it is very simple. The top 1,000 people who run Israel - the politicians, generals and security staff - and the top Palestinian Islamists have never met. Genuine peace will require that these two groups sit down together without preconditions. But the events of the past few days seem to have made this more unlikely than ever. That is the challenge for the new administration in Washington and for its European allies.
Friday, April 24, 2009
The Folly of the Blame Game at Davos
This year, the meeting at Davos was reported to be somewhat subdued. One of the most interesting news that came out of the meeting was the criticisms leveled by some participants towards others regarding their respective roles in bringing about the current global economic crisis. These participants seem surprisingly unaware of the fact that in reality the fault lies in the global financial system itself. Therefore, it is a mistake to put the blame on one or only a few parties when in fact everybody who is involved in the system is responsible for the crisis, albeit in different degrees.
The group receiving the most amount of criticism is people from the banking industry. Realizing that harsh criticisms will be directed towards them during the Davos meeting, many of them failed to turn up. The main criticism regarding the banks is that their reckless behaviour in providing loans, especially to sub-prime borrowers, was the main cause of the crisis. It is argued that as a result, the banks themselves got into trouble with many of them becoming insolvent. This had the effect of drying up the credit market thereby starving firms in the real economy of much needed funds for their operations.
However, in reality that argument is overly simplistic. In the first place the crisis is the outcome of a situation of over-indebtedness in the global economy and especially in the US and the UK. The sub-prime mortgage crisis merely represents a `tipping-point’ or the proverbial `straw that broke the camel’s back’. The proof of this is the current problems faced by firms in almost all sectors including the car and airline industries. The reason why General Motors, Chrysler and Ford are in trouble is that they are highly indebted companies whose operations rely on borrowed funds.
Moreover, blaming the banks alone for the troubles that are being faced is grossly unfair. As the English saying goes, “It takes two to tango”. Lenders cannot lend recklessly without the existence of borrowers who borrow recklessly. That is why whenever we read of stories about borrowers getting into trouble with loan sharks or Ah Longs, we cannot help but also apportion some blame on the borrowers too. The fact is, the problem of over-indebtedness in the financial system is not possible without the active participation of willing and reckless borrowers.
However, it will also be a mistake to pin the blame totally on `reckless borrowers’. Notwithstanding the reports on the US carmakers ownership of corporate jets, in reality the firms in the car industry are not in a state of high indebtedness through choice. GM, Chrysler and Ford borrow money because they need it to compete against their competitors from Japan and Southeast Asia who are themselves huge borrowers of money. In other words, competition from firms who borrow huge sums of money forces firms to also borrow in huge sums. Otherwise they will be left far behind.
Moreover, banks also compete against one another and therefore banks that are reluctant to engage in risky leveraging activities will be less profitable compared to banks that are not so risk-averse. Managers of the latter group will not be able to hang on to their jobs for long if their competitors were showing stellar profits. Competition in the banking industry also forces banks to engage in risky lending. The reason why some banks in the US lend money to sub-prime borrowers is largely due to the fact that their competitors are also doing it. As such not engaging in it would have meant lower profits compared to competitors.
One irony that needs to be highlighted is that now some people are still blaming bankers for the credit freeze saying that the reason the economy is not moving is because bankers are reluctant to lend. Logic will tell you that if banks realize that the reason they got into trouble was because they were not cautious enough when lending money, now that the economy is in a downward tailspin the banks must be extra-cautious when lending.
To be sure, the blame game at Davos also involved parties other than banks. The Chinese premier, for example channeled his criticism towards the American authorities for their failure to control the consumption binge of their consumers. However, this is also ironic because all this while the Chinese have been very proud of their booming economy, which would have impossible if the US had not been swallowing up Chinese exports over the past decade or more.
The American authorities on the other hand blame the Chinese for their manipulation of the exchange rates. According to the Americans, Chinese intervention to prevent the Yuan from appreciating was the reason Chinese exports remain cheap and why the US continually records a trade deficit with China. However, the US forgot that the core of the problem is over-indebtedness which is due to the willingness of American consumers to live beyond their means. Their overconsumption was largely due to the ease with which they can obtain credit rather than the cheapness of Chinese goods.
The blame game at Davos was therefore a pointless and fruitless activity. It is very much analogous to motorists blaming each other when getting stuck in a traffic jam. A more useful activity is to identify the root cause of the problem and to figure out a way to remove it.
But obviously this has not happened as evidenced by the willingness of many governments to stimulate their economies by using borrowed funds and to encourage banks to be more liberal in lending. As pointed earlier, the root cause of the problem is excessive indebtedness. Even a primary school kid can tell you that promoting further indebtedness in order to solve an economic crisis caused by over-indebtedness simply does not make sense.
The Seemingly Unacceptable but Only Way Out of This Financial Mess.
On Tuesday, 10 February 2009, the Obama administration, Federal Reserve and Senate announced the seriousness of their attempt to solve the deepening economic crisis in the US, an attempt which entails public and private money to the tune of more than $3 trillion. In response the Dow Jones industrials dropped 382 points. This disappointing response to the above initiatives points to a number of possible implications.
First implication is that the USD 3 trillion was judged by the market to be inadequate to solve the crisis. The problem is that nobody is able to figure out exactly how much is needed. It could very well be an additional USD10 trillion. Nobody really knows. But if the eventual amount is thought by the market to be too huge, then this can trigger a perception that the debt burden of the US taxpayer is beyond redemption. This could very well lead to a loss in confidence in the US economy thereby leading to a worsening of the situation.
Second, that the plan of action by Obama lacks the necessary details on how the huge sum of money is eventually going to solve the financial and economic crisis. But to expect Obama and Geithner to be able to come up with a crystal clear and convincing plan is simply illogical. After all if it is indeed possible to create a clear `road-map’ on how to get out of this crisis, then that will imply it was possible in the first place to create a plan that would have prevented the crisis.
Third, that the market players realize that whole world is in a deep financial quagmire, the solution of which requires a totally new and radical way of thinking and that the current solutions being offered are considered by them to be neither new nor radical enough. Well, actually that is what a lot of people are saying including our own governor of Bank Negara who, during the recent Bank Negara High Level Conference, reiterated the need for renewed thinking to reform the global financial system. Unfortunately, the reality is that these calls for reforms in the global financial system or `architecture’ are not new. More than a decade ago, during the Asian financial crisis, we heard similar choruses of calls for reforms to the global financial architecture. According to most people, there has not been any significant reform and that is one possible reason we were unable to prevent the occurrence of the present much bigger and wider crisis.
In reality what is needed is an acceptance by all that the current system is fundamentally flawed and must be abandoned. At their core, financial crises are problems of over-borrowing, over-lending and over-leveraging. Financial crises are also the outcomes of a relatively recent innovation which is the legalizing of the activity of lending for profit which led to the growth of the lending-for- profit industry. Prior to the 15th century, lending in almost all societies and communities in the world were motivated by altruistic reasons. Lending was thus engaged in for the sake of helping people in need. As a result the scale of this type of activity was small. Only the most desperate people were in debt and, significantly, there was no interest charged on the debt. However, since usury was legalized, lending is now an industry and a massively huge one too. In fact it is the most important industry and the driver behind all other economic activities.
Lending and debt is now so embedded in people’s life that to be debt-free is an exception and to be in debt is the norm. From individuals to corporations to football clubs to countries, everybody is now indebted. Major corporations in the US are so highly indebted or leveraged that they cannot function without being able to borrow money. The moment credit lines slow they are in trouble. If the credit lines freeze, they become zombies. And since interest payments are due on outstanding debts, a highly indebted individual or company that is in trouble can easily become strangled by the debt. And if there is nobody willing to help, the strangle-hold becomes tighter and tighter by the day. For individuals, personal bankruptcy and all its worst implications stare in the face. For those who are not willing to face them, a bullet in the head or a rope around the neck seems the only option.
Help may come in the form of more loans to tide out the problem. However due to the interest that will be charged on those additional loans on top of existing unpaid and accumulating interest payments, those actions are simply equivalent to giving a person more rope to hang himself.
If we really want to help a person who is strangled in debt and unable to engage in meaningful economic activities, the best way is to freeze all interest charges. Better still is to forgive the interest charges and only ask for the principal back. If the debtor is unable to pay back the principal owed, the lender must give him time until his situation improves. This is how we unravel the knots around the neck of borrowers.
However, for this to take place the paradigm must change. Our actions described above must be motivated solely by a desire to help borrowers who are in trouble rather than to profit from their troubles. Lending must be seen as an opportunity to be benevolent rather than as an opportunity to enrich oneself. If we are unable to make that paradigmatic change in how we see the purpose of extending loans, then the solution I am offering will make no sense and will appear to be completely unacceptable and bizarre. But be cognizant of the fact that there is no other solution that can solve the situation and at the same time prevent future financial crises from happening again.
This article was published by Star on May 5, 2009 with the heading "Crisis Shows Financial System Must be Abandoned" ( http://biz.thestar.com.my/news/story.asp?file=/2009/5/5/business/3799207&sec=business )
Thursday, January 8, 2009
Is Hamas the Main Obstacle to Peace?
Is Hamas the Main Obstacle of Peace in the Middle East?
As of today, almost 700 Palestinians have been killed and almost 3,000 injured as a result of the Gaza offensive by Israel. The world expresses its outrage at the inhumane carnage. Israel’s response is that the blame must be put squarely at the feet of Hamas which it describes as an organization that is the chief obstacle to peace in the region. Israel’s officials go to great pains to explain that Hamas leaders are the ones responsible for the death of the civilians and that what they are trying to do now in Gaza is to simply remove these bad guys so that the good guys can be in charge for the benefit of the Palestinians. And they also made it very clear who they think are the Palestinian good guys… none other than members of Fatah which is led by Mahmoud Abbas. This message is repeated again and again by Israel and her faithful partner in crime, The US. Amazingly however, the majority of the ordinary Palestinians, especially those in Gaza who the direct victims of the current onslaught appears to be unwavering in their support for Hamas. Moreover they are increasingly loathful of Fatah and Mahmoud Abbas. In this short article I will explain why this is so. I will also explain why it will be grave mistake to put the blame on Hamas and why we must resist all efforts by Israel and America to isolate Hamas.
To be sure the root of the problems in the Middle East goes back a couple of hundred years ago in Europe. Christian Europeans were very racist and the main victims of their centuries of persecutions include Gypsies and Jews. Attempts by Jews to overcome this problem by assimilating into European society met with no success. A group of Jews led by Theodore Herzl therefore decided to set up a Zionist movement in 1897 whose main aims include setting up a homeland for Jews where they can live on peace and prosperity i.e. a wholly Jewish state. Later these Zionists set about their plan to completely dispossess the indigenous Arab population of Palestine of their lands, with clear approval and active support of the British. The persecution of Jews by the Nazis during the World War Two only served to spur this process further. The Zionists even engaged in rape and murder in order to force the Palestinians to leave their lands (as related by Professor Benny Morris of Ben-Gurion University, Israel). This left the Palestinians no choice but to engage in armed resistance if they do not wish to see the complete dispossession of their nation. In the period up until the 1980s, the most important Palestinian organization which was engaged in these activities was the PLO led by the late Yaser Arafat. However, the PLO lost steam and beginning in the 90s until today the leader of this resistance movement is Hamas.
Hamas, which is a translation of the Arabic acronym for `Islamic Resistance Movement’, is noted for its steadfast refusal to recognise the state of Israel. For Hamas, such an act tantamounts to recognizing the legitimacy of the killings and rapes and dispossession of their lands by foreign invaders. Moreover it has also insisted that all Palestinian refugees which were forced by Israel to leave their country during the formation of Israel have the right to return to their homes. Lastly, it reserves the right to engage in armed resistance in order to prvent injustices committed against the Palestinians. As a result these stances, Israel, the US and EU have refused to recognise Hamas as a legitimate organization in representing the Palestinian people. Instead they have labelled it a terrorist organization and have engaged in numerous attempts to eliminate it. When the strategy to demonise Hamas failed, Hamas founder Sheikh Ahmad Yassin who was a quadriplegic was assasinated on 22 March 2004. A missile was fired from an Apache helicopter towards him which blew him to pieces as he was being pushed in his wheel-chair on the way home after morning prayers in a nearby mosque. He was replaced by Dr. Abdul Aziz Rantisi, a peaditrician. But a few weeks later on 17 April 2004 he too was blown up by Israeli missiles.
Nevertheless the killings of these top two founder members of Hamas failed to eliminate the organization. Instead it became stronger. The US government under the administration of George W. Bush decided to use a different strategy which was through the use of the democratic process. In the minds of the Americans, Hamas was an extremist and radical group and surely the group will be rejected by the majority of the Palestinians. A presidential election resulted in victory for Mahmoud Abbas. But Hamas did not contest that election. Instead it decided to focus on the general election which was held in January 2006. America and Israel was confident that Fatah would win that election to as the US thought that Fatah was a `moderate’ organization. Moreover Fatah which was once led by Yaser Arafat had a much longer history and is secular in character as opposed to Hamas which stated aim was to establish an Islamic state in historic Palestine. Many observers described the election to be free and fair, in fact the first truly genuine democratic election process in the Middle East. But to the surprise and dismay of the US, Hamas won the election by a landslide. The reason for the rejection of Fatah and the popularity of Hamas was obvious to all except for the Americans. Hamas is an organization that operates on the basis of Islam and their leaders were squeaky clean and selfless. Fatah on the other hand operates on the basis of Palestinian nationalism and their leaders were perceived to be highly corrupt and self-serving. Moreover Fatah was willing to cut a deal with Israel which includes recognition of the state of Israel, cessation of armed resistance and complete abandoment of the principle of `right-of-return' of the millions of Palestinian refugees many of whom are currently languishing in refugee camps in Lebanon and Jordan. These stances were completely unacceptable to the majority of the Palestinians.
However, the US and Israel were not willing to accept the outcome of the democratic process which would have forced them to deal with an organization which they themselves designated as `terrorist’ organization. They then immediately conspired with Fatah to remove Hamas. In Gaza this was to be achieved by force. Fatah fighters there were led by the very-corrupt Mohammad Dahlan. He was supplied with tons of weapons including a number of armored personned carriers. Fatah operatives also began to assasinate Hamas’s leaders in Gaza. But before the plan was able to be carried out fully, Hamas became aware of it. They found out that the mysterious killings of some of their leaders were connected to elements linked to Dahlan’s military force. Hamas then decided that if they did not act fast they would be completely annhilated. Hamas’s military wing, the Izadeen Al-Qassam brigade then carried out a pre-emptive military coup which resulted in them successfully taking complete control of Gaza and routing Dahlan's force in the process. Since that time, Hamas’s control and influence in Gaza has been getting stronger by the day. The majority of Palestinians in Gaza were impressed with Hamas’s government which stresses law and order and is corruption-free. Hamas also runs a network of social services including free medical care and education. On the other hand, Fatah which is in control of the West Bank is getting weaker by the day. This is partly due to the fact that they are perceived to be corrupt. Moreover they have been unable to improve the living conditions of the ordinary Palestinians there too. Fatah’s grip on power in the West Bank is only possible due to the strategy of curtailing the activities of other opposition groups including the arrest and jailing of hundreds of Hamas leaders and the closing down of organizations associated with Hamas.
Meanwhile America and Israel have not given up their plan to weaken Hama’s grip on power in Gaza. The strategy pursued there by the US and Israel was by an imposition of a harsh blockade of the area. Gaza, in the words of many observers was `the largest open-air prison in the world’, cut off completely from the outside world. It was obvious to all that America and Israel were hoping that the blockade will weaken the resolve of the Palestinians and also weaken their support for Hamas. Even though the 1.5 million Gazans were undergoing severe hardships as a result of the blockade, the governments of Arab coutries in the Middle East such as Egypt and Jordan had little motivation to come to their rescue. This was mainly due to the fear that a successful, prosperous and democratic Gaza may serve to inspire their own restless populace who have been clamoring for more democratic rights and less corrupt governments.
The blockade did weaken the Gazans physically because of the lack of food, medication and other basic necessities. There were reports of people dying due to lack of medications and of widespread cases of hunger and malnutrition. But amazingly, the blockade failed to significantly weaken their political support for Hamas. In the meantime Hamas agreed to a 6-months `period of calm’ with Israel where they agreed to end rocket strikes towards Israel. Hamas was hoping that Israel would be tempted to relax the blockade in return for the security for the inhabitants of Israeli towns in the south such as Sderot and Ashkelon. Unfortunately that did not happen. Israel continued with its policy of imposing a harsh blockade of Gaza. In addition in the final weeks of the `calm period’ Israel embarked on a number of incursions into Gaza and killing more than 5 Hamas fighters in the process. Hamas decided that Hamas decided that they, as responsible leaders of the Gazans, had to fight against the efforts by Israel to slowly starve them to death. Clearly the truce that they agreed to with Israel over the previous 6 months was not helping to improve the living conditions in Gaza. In December of 2008, Hamas declared that the truce was over and duly launched a couple of rockets across the border towards Israel.
It is obvious now that this was what Israel’s leaders wanted to happen. The Israeli general election is planned for late February and the opposition leader Bibi Netanyahu has been leading in the polls due to his hawkish stance towards the Palestinians. Moreover Israel had long decided that the corrupt and unpopular Fatah will never be able to gain influence among the Palestinians without more active help from them. So now they have decided that the best way to do that is to remove Hamas by force from Gaza and to teach the ordinary Gazans that as long as they support Hamas they will pay a price in the form of increased sufferings. Israel and America also wants to give a clear message to the Palestinians that the bombs from their F-16s fighter planes will continue to fall on their head and kill them, their women, children and old people if they continue with their refusal to be led by Mahmud Abbas-led Fatah.
We are now therefore witnessing another round of atrocities committed by Israel towards the Palestinians. In the past Fatah was in the forefront in the fight against Israeli atrocities. But Fatah has clearly long decided to abdicate this role in favor of a strategy of peaceful negotiations with Israel. Even though the strategy is not yielding benefits for the Palestinian people as a whole, it was yielding personal material and monetary benefits for the leaders of Fatah. This therefore mean that the only major Palestinian group left that is willing to fight against injustices committed against the Palestinian people is Hamas. Hamas is the last and only hope for the Palestinians. Its fight is in reality not only for the rights of the Palestinians but also for the upholding of the principle of justice in this world. Therefore, an unequivocal expression support of Hamas’s struggle from us is an obligation, both from an Islamic as well as moral viewpoint
.
As of today, almost 700 Palestinians have been killed and almost 3,000 injured as a result of the Gaza offensive by Israel. The world expresses its outrage at the inhumane carnage. Israel’s response is that the blame must be put squarely at the feet of Hamas which it describes as an organization that is the chief obstacle to peace in the region. Israel’s officials go to great pains to explain that Hamas leaders are the ones responsible for the death of the civilians and that what they are trying to do now in Gaza is to simply remove these bad guys so that the good guys can be in charge for the benefit of the Palestinians. And they also made it very clear who they think are the Palestinian good guys… none other than members of Fatah which is led by Mahmoud Abbas. This message is repeated again and again by Israel and her faithful partner in crime, The US. Amazingly however, the majority of the ordinary Palestinians, especially those in Gaza who the direct victims of the current onslaught appears to be unwavering in their support for Hamas. Moreover they are increasingly loathful of Fatah and Mahmoud Abbas. In this short article I will explain why this is so. I will also explain why it will be grave mistake to put the blame on Hamas and why we must resist all efforts by Israel and America to isolate Hamas.
To be sure the root of the problems in the Middle East goes back a couple of hundred years ago in Europe. Christian Europeans were very racist and the main victims of their centuries of persecutions include Gypsies and Jews. Attempts by Jews to overcome this problem by assimilating into European society met with no success. A group of Jews led by Theodore Herzl therefore decided to set up a Zionist movement in 1897 whose main aims include setting up a homeland for Jews where they can live on peace and prosperity i.e. a wholly Jewish state. Later these Zionists set about their plan to completely dispossess the indigenous Arab population of Palestine of their lands, with clear approval and active support of the British. The persecution of Jews by the Nazis during the World War Two only served to spur this process further. The Zionists even engaged in rape and murder in order to force the Palestinians to leave their lands (as related by Professor Benny Morris of Ben-Gurion University, Israel). This left the Palestinians no choice but to engage in armed resistance if they do not wish to see the complete dispossession of their nation. In the period up until the 1980s, the most important Palestinian organization which was engaged in these activities was the PLO led by the late Yaser Arafat. However, the PLO lost steam and beginning in the 90s until today the leader of this resistance movement is Hamas.
Hamas, which is a translation of the Arabic acronym for `Islamic Resistance Movement’, is noted for its steadfast refusal to recognise the state of Israel. For Hamas, such an act tantamounts to recognizing the legitimacy of the killings and rapes and dispossession of their lands by foreign invaders. Moreover it has also insisted that all Palestinian refugees which were forced by Israel to leave their country during the formation of Israel have the right to return to their homes. Lastly, it reserves the right to engage in armed resistance in order to prvent injustices committed against the Palestinians. As a result these stances, Israel, the US and EU have refused to recognise Hamas as a legitimate organization in representing the Palestinian people. Instead they have labelled it a terrorist organization and have engaged in numerous attempts to eliminate it. When the strategy to demonise Hamas failed, Hamas founder Sheikh Ahmad Yassin who was a quadriplegic was assasinated on 22 March 2004. A missile was fired from an Apache helicopter towards him which blew him to pieces as he was being pushed in his wheel-chair on the way home after morning prayers in a nearby mosque. He was replaced by Dr. Abdul Aziz Rantisi, a peaditrician. But a few weeks later on 17 April 2004 he too was blown up by Israeli missiles.
Nevertheless the killings of these top two founder members of Hamas failed to eliminate the organization. Instead it became stronger. The US government under the administration of George W. Bush decided to use a different strategy which was through the use of the democratic process. In the minds of the Americans, Hamas was an extremist and radical group and surely the group will be rejected by the majority of the Palestinians. A presidential election resulted in victory for Mahmoud Abbas. But Hamas did not contest that election. Instead it decided to focus on the general election which was held in January 2006. America and Israel was confident that Fatah would win that election to as the US thought that Fatah was a `moderate’ organization. Moreover Fatah which was once led by Yaser Arafat had a much longer history and is secular in character as opposed to Hamas which stated aim was to establish an Islamic state in historic Palestine. Many observers described the election to be free and fair, in fact the first truly genuine democratic election process in the Middle East. But to the surprise and dismay of the US, Hamas won the election by a landslide. The reason for the rejection of Fatah and the popularity of Hamas was obvious to all except for the Americans. Hamas is an organization that operates on the basis of Islam and their leaders were squeaky clean and selfless. Fatah on the other hand operates on the basis of Palestinian nationalism and their leaders were perceived to be highly corrupt and self-serving. Moreover Fatah was willing to cut a deal with Israel which includes recognition of the state of Israel, cessation of armed resistance and complete abandoment of the principle of `right-of-return' of the millions of Palestinian refugees many of whom are currently languishing in refugee camps in Lebanon and Jordan. These stances were completely unacceptable to the majority of the Palestinians.
However, the US and Israel were not willing to accept the outcome of the democratic process which would have forced them to deal with an organization which they themselves designated as `terrorist’ organization. They then immediately conspired with Fatah to remove Hamas. In Gaza this was to be achieved by force. Fatah fighters there were led by the very-corrupt Mohammad Dahlan. He was supplied with tons of weapons including a number of armored personned carriers. Fatah operatives also began to assasinate Hamas’s leaders in Gaza. But before the plan was able to be carried out fully, Hamas became aware of it. They found out that the mysterious killings of some of their leaders were connected to elements linked to Dahlan’s military force. Hamas then decided that if they did not act fast they would be completely annhilated. Hamas’s military wing, the Izadeen Al-Qassam brigade then carried out a pre-emptive military coup which resulted in them successfully taking complete control of Gaza and routing Dahlan's force in the process. Since that time, Hamas’s control and influence in Gaza has been getting stronger by the day. The majority of Palestinians in Gaza were impressed with Hamas’s government which stresses law and order and is corruption-free. Hamas also runs a network of social services including free medical care and education. On the other hand, Fatah which is in control of the West Bank is getting weaker by the day. This is partly due to the fact that they are perceived to be corrupt. Moreover they have been unable to improve the living conditions of the ordinary Palestinians there too. Fatah’s grip on power in the West Bank is only possible due to the strategy of curtailing the activities of other opposition groups including the arrest and jailing of hundreds of Hamas leaders and the closing down of organizations associated with Hamas.
Meanwhile America and Israel have not given up their plan to weaken Hama’s grip on power in Gaza. The strategy pursued there by the US and Israel was by an imposition of a harsh blockade of the area. Gaza, in the words of many observers was `the largest open-air prison in the world’, cut off completely from the outside world. It was obvious to all that America and Israel were hoping that the blockade will weaken the resolve of the Palestinians and also weaken their support for Hamas. Even though the 1.5 million Gazans were undergoing severe hardships as a result of the blockade, the governments of Arab coutries in the Middle East such as Egypt and Jordan had little motivation to come to their rescue. This was mainly due to the fear that a successful, prosperous and democratic Gaza may serve to inspire their own restless populace who have been clamoring for more democratic rights and less corrupt governments.
The blockade did weaken the Gazans physically because of the lack of food, medication and other basic necessities. There were reports of people dying due to lack of medications and of widespread cases of hunger and malnutrition. But amazingly, the blockade failed to significantly weaken their political support for Hamas. In the meantime Hamas agreed to a 6-months `period of calm’ with Israel where they agreed to end rocket strikes towards Israel. Hamas was hoping that Israel would be tempted to relax the blockade in return for the security for the inhabitants of Israeli towns in the south such as Sderot and Ashkelon. Unfortunately that did not happen. Israel continued with its policy of imposing a harsh blockade of Gaza. In addition in the final weeks of the `calm period’ Israel embarked on a number of incursions into Gaza and killing more than 5 Hamas fighters in the process. Hamas decided that Hamas decided that they, as responsible leaders of the Gazans, had to fight against the efforts by Israel to slowly starve them to death. Clearly the truce that they agreed to with Israel over the previous 6 months was not helping to improve the living conditions in Gaza. In December of 2008, Hamas declared that the truce was over and duly launched a couple of rockets across the border towards Israel.
It is obvious now that this was what Israel’s leaders wanted to happen. The Israeli general election is planned for late February and the opposition leader Bibi Netanyahu has been leading in the polls due to his hawkish stance towards the Palestinians. Moreover Israel had long decided that the corrupt and unpopular Fatah will never be able to gain influence among the Palestinians without more active help from them. So now they have decided that the best way to do that is to remove Hamas by force from Gaza and to teach the ordinary Gazans that as long as they support Hamas they will pay a price in the form of increased sufferings. Israel and America also wants to give a clear message to the Palestinians that the bombs from their F-16s fighter planes will continue to fall on their head and kill them, their women, children and old people if they continue with their refusal to be led by Mahmud Abbas-led Fatah.
We are now therefore witnessing another round of atrocities committed by Israel towards the Palestinians. In the past Fatah was in the forefront in the fight against Israeli atrocities. But Fatah has clearly long decided to abdicate this role in favor of a strategy of peaceful negotiations with Israel. Even though the strategy is not yielding benefits for the Palestinian people as a whole, it was yielding personal material and monetary benefits for the leaders of Fatah. This therefore mean that the only major Palestinian group left that is willing to fight against injustices committed against the Palestinian people is Hamas. Hamas is the last and only hope for the Palestinians. Its fight is in reality not only for the rights of the Palestinians but also for the upholding of the principle of justice in this world. Therefore, an unequivocal expression support of Hamas’s struggle from us is an obligation, both from an Islamic as well as moral viewpoint
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