The Shock Doctrine

Disaster Capitalism in Action

Firms Ready to Profit off of $78 Billion Sichuan Earthquake Reconstruction

Alison Leung and Fang Yan, Reuters, June 12, 2008

"Asked how China's most destructive earthquake in three decades would affect his firm, Ma Chunji paused, then chose his words carefully. 'It's a sad thing,' said the head of Sinotruk, the country's top truck manufacturer. 'But it will stimulate demand. Beijing planned originally to re-adjust the speed of growth and compress the size of infrastructure projects and that would have affected us. Now we face a positive.'

"As China rebuilds quake-hit Sichuan province -- where nearly 90,000 are feared dead or missing and 5 million were left homeless -- investors and executives alike ask the awkward but natural question of who will join an estimated $78 billion reconstruction that has drawn comparisons to Katrina and Kobe....

"'In the short term, there're all kinds of catalysts,' said UBS strategist Hubert Tang. "But in the long run, if you look at a two- to three-year perspective, manufacturers have products exposed to the reconstruction theme. Just look at the pure amount of money to be spent.'....

"Apart from obvious beneficiaries in cement and infrastructure -- a boost for the likes of Anhui Conch and Maanshan Iron and Steel -- also touted are telecoms gear providers such as ZTE Corp and vehicle makers such as Sinotruk. China has sketched out a blueprint for rebuilding that spans hospitals and roads to power grids and telecoms. Deutsche Bank's chief economist for greater China, Jun Ma, estimates the effort will require 539 billion yuan ($78 billion) over three years, about 28 percent of that on new housing alone."

Monsanto Seeks Big Increase in Crop Yields

Andrew Pollack, New York Times, June 5, 2008

"Monsanto, the leader in agricultural biotechnology, pledged Wednesday to develop seeds that would double the yields of corn, soybeans and cotton by 2030 and would require 30 percent less water, land and energy to grow. The announcement, coming as world leaders are meeting in Rome to discuss rising food prices and growing food shortages, appears to be aimed at least in part at winning acceptance of genetically modified crops by showing that they can play a major role in feeding the world....

"While Mr. Grant said that skeptics might say Monsanto was exploiting the food crisis to win acceptance for its technology, other people 'will say it’s long overdue, and thank goodness the companies are stepping up.'

"Shares of Monsanto fell by $1.54, to close at $131.60 Wednesday. But the stock has more than doubled in the last year, in part because of soaring crop prices. Besides being a leader in genetic engineering, Monsanto is one of the largest suppliers of seeds in the world."

Israel is Privatizing Security at Checkpoints in the West Bank

Tobias Buckin, Financial Times, June 4, 2008

"Israel's ministry of defence started using private security companies at checkpoints more than two years ago but their presence has become visible only very recently. According to Mr. Dror, all 30 crossings through which Palestinians can enter Israel now use private security contractors, and at least one has been handed over completely to private companies. For the time being, the role of private security contractors will be confined to what Israel identifies as border posts with the West Bank.

"The government refuses to say how many private workers man the checkpoints, or how much it spends on their salaries. But Mr Dror says there are 'several hundred' private guards employed - a number that is certain to rise sharply. 'By the end of the year all the people will be civilians,' he says."

Firms Seek Patents on 'Climate Ready' Altered Crops

Rick Weiss, Washington Post, May 13, 2008

"A handful of the world's largest agricultural biotechnology companies are seeking hundreds of patents on gene-altered crops designed to withstand drought and other environmental stresses, part of a race for dominance in the potentially lucrative market for crops that can handle global warming, according to a report being released today.

"Three companies -- BASF of Germany, Syngenta of Switzerland and Monsanto of St. Louis -- have filed applications to control nearly two-thirds of the climate-related gene families submitted to patent offices worldwide, according to the report by the Ottawa-based ETC Group, an activist organization that advocates for subsistence farmers....

"The ETC report concludes that biotech giants are hoping to leverage climate change as a way to get into resistant markets, and it warns that the move could undermine public-sector plant-breeding institutions such as those coordinated by the United Nations and the World Bank, which have long made their improved varieties freely available. 'When a market is dominated by a handful of large multinational companies, the research agenda gets biased toward proprietary products,' said Hope Shand, ETC's research director. 'Monopoly control of plant genes is a bad idea under any circumstance. During a global food crisis, it is unacceptable and has to be challenged.'"

Private Investment Firms Are Buying Hundreds of New York's Rent-Controlled Apartment Buildings

Gretchen Morgenson, New York Times, May 9, 2008

"Private investment firms have been amassing what may seem like unusual stakes in New York real estate: they have bought hundreds of apartment buildings with thousands of rent-regulated units across the city that produce decidedly meager returns....

"New York provides an unusual opportunity because it is one of the few cities with a large inventory of apartments whose rental rates are regulated and kept below market levels. In the last four years, developers backed by private equity firms have acquired almost 75,000 rent-regulated apartments...."These companies often make clear that raising rents is crucial to their financial goals."

Luxury Hotels, Malls and Amusement Parks Planned for Green Zone

Michael Howard, Guardian, May 6, 2008

"A $5bn (£2.5bn) tourism and development scheme for the Green Zone being hatched by the Pentagon and an international investment consortium would give the heavily fortified area on the banks of the Tigris a 'dream' makeover that will become a magnet for Iraqis, tourists, business people and investors....

"Marriott International has already signed a deal to build a hotel in the Green Zone, according to Navy Captain Thomas Karnowski, the chief US liaison. Also in the pipeline is a possible $1bn investment from MBI International, a hotel and resorts specialist led by Saudi sheikh, Mohamed Bin Issa Al Jaber. One Los Angeles-based firm, C3, has said it wants to build an amusement park on the Green Zone's outskirts. As part of the first phase, a skateboard park is due to open this summer."

Multinationals Make Billions in Profit Out of Growing Global Food Crisis

Geoffrey Lean, Independent, May 4, 2008

"The World Bank says that 100 million more people are facing severe hunger. Yet some of the world's richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543m (£275m) to $1.12bn. Its profits increased from $1.44bn to $2.22bn.

"Cargill's net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. And Archer Daniels Midland, one of the world's largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21m to $341m.

"Similarly, the Mosaic Company, one of the world's largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m, on the back of a shortage of fertiliser. The prices of some kinds of fertiliser have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing countries have been hit hard."

Yes Magazine Highlights Ways to Resist Disaster Capitalism in the Context of the Food Crisis

Sarah van Gelder, Yes Magazine, April 28, 2008

"We need to take a page from Naomi Klein's new book, The Shock Doctrine. Her book shows that disasters--natural and human made--often provide openings for policies that people would never accept under ordinary circumstances. She calls this anti-democratic practice, disaster capitalism.

"Perhaps we need to do the inverse. Use disastrous times to create the bottom-up, deeply democratic alternatives that, during ordinary times, might seem more trouble than they're worth. These alternatives may be small scale at first, but they can function like seeds in a supersaturated solution. Without these particles, a solution can remain in a dissolved state. But add the "seeds" and crystals rapidly take shape and grow.

"On KUOW this morning, people talked of planting more gardens, going to the farmers market, hooking up with local farmers. Local food is not expected to get more expensive, one farmer said.

"Rather than follow the advice of World Bank president Robert Zoellick, who is calling for more of the same trade liberalization and instead of pushing GM crops on more farmers and consumers, we should turn to local production for local, human consumption. Biofuels should be made from waste crops and manure, not from food. The Farm Bill has provisions we should support and others we need to resist. We should be developing the local capacities to feed ourselves, turning lawns into "victory gardens," supporting local farmers, helping new farmers to get a start, creating farm incubators.

"Via Campesina, an international organization of farmers, has been pressing for these changes for years. Also Food First and the Institute for Agriculture and Trade Policy."

Cambodia: Country for Sale

Adrian Levy and Cathy Scott-Clark , Guardian, April 26, 2008

"The troubled kingdom of Cambodia, a precarious debtor-nation underpinned by more than £500m of hand-outs from the international community, had suddenly found itself a refuge for cash and speculators fleeing paralysed western financial markets. As London and New York, overcome by the US sub-prime crisis, began grinding to a halt last year, many in the City had moved on, transferring liquid assets to the east....

"Foreign fund managers had started pitching up in Phnom Penh wearing linen shirts and khaki drip-dry jungle wear, alerted by the country's unexpected boom in tourism that in 2006 had seen one-and-a-half million visitors overcome the west's collective memories of Cambodia's recent past to travel to the temples of Angkor Wat. Enticed also by indicators that suggested the feeble economy was turning a corner, super-rich, predominately British, French and Swiss speculators, fuelled by a high-risk machismo, came hunting for profits of 30% or more. Their interest was land speculation: buying up large sites in developing countries that they would then sit on in the hope that, with the influx of tourists, land values would soar.

"Hun Sen and his ruling Cambodian People's Party (CPP) have, in effect, put the country up for sale. Crucially, they permit investors to form 100% foreign-owned companies in Cambodia that can buy land and real estate outright - or at least on 99-year plus 99-year leases. No other country in the world countenances such a deal. Even in Thailand and Vietnam, where similar land speculation and profiteering are under way, foreigners can be only minority shareholders.

"There were other inducements. Many foreign funds - hedge funds, property funds, private equity funds - operating on the outer margins of the financial world thrive on complexity, risk and maximising profit. In Phnom Penh, they found an ideal partner in the prime minister, who has created a unique business environment. Since the mid-90s, Hun Sen and the CPP have declined to enforce money-laundering legislation and have concerned themselves little with the probity of investors. Foreign businessmen were offered nine-year tax holidays, and were allowed to hold their cash in US dollars in banks outside the country....

"The sale of the century continued with the mainland beaches. At the end of January, the Sokha Hotel Group, run by Sok Kong, a Cambodian oligarch and Hun Sen ally, was confirmed as the new owner of the lion's share of Occheuteal Beach, the largest and most popular public dune in the region, which was closed off to make way for a 1,000-room hotel and golf course. The deal was originally negotiated in June 2006 when, local fisherman told us, bulldozers and 10 trucks of armed men demolished 71 homes and 40 local restaurants....

"What will this mean for people such as Sang Run, who is now surviving in a makeshift home behind Independence Beach? Has the legacy of the Khmer Rouge been purged? Naly Pilorge, director of Licadho, a local human rights NGO, thinks not: 'Everyone claims Cambodia has come through the period of barbarism, but the sadism is still bubbling beneath the surface. Extreme violence, greed and disregard for the most basic human rights - of giving people a place to live - are still with us daily. The methods of the past are being used to dictate our future.'"

Biotech Firms See Opportunity in Food Crisis

Andrew Pollack, International Herald Tribune, April 21, 2008

"Soaring food prices and global grain shortages are bringing new pressures on governments, food companies and consumers to relax their longstanding resistance to genetically engineered crops. In Japan and South Korea, some manufacturers for the first time have begun buying genetically engineered corn for use in soft drinks, snacks and other foods. Until now, to avoid consumer backlash, the companies have paid extra to buy conventionally grown corn. But with prices having tripled in two years, it has become too expensive to be so finicky....

"Opponents of biotechnology say they see not so much an opportunity as opportunism by its proponents to exploit the food crisis. 'Where politicians and technocrats have always wanted to push GMO's, they are jumping on this bandwagon and using this as an excuse,' said Helen Holder, who coordinates the campaign against biotech foods for Friends of the Earth Europe."

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