Political economy of recent Zionist colonisation and war

The news from Israel, with introductory comment
By Shunpiking Online Editorial Team


HALIFAX (22 August 2004) - THE 34-day duration of the recent round of full-scale Israeli military aggression in Lebanon, followed by its rather abrupt cutoff on 14 August, followed (on the weekend of 19-20 August) by Israel gearing up a resumption of aggressive activity utilising covert special forces pre-positioned for such an eventuality (the Ba`albak raid), suggests and smells like some financial dickering was going on in the background all along.

It's as though the chief creditor/paymaster issued the borrower a promissory 30-day note, gratefully extended by the other creditors in the UN Security Council to a 34-day note, when the borrower demanded an additional 60 hours from 12 to 14 August. Viewed from this vantage point, and now with the news of the loan guarantees extension to Israel by Washington, the outline of the rest [in this case: the missing preface] of this sordid story now emerges, as follows:

* In 2002-2003, following the severe economic recession in the "Jewish State" that attended the conclusion of Operation Defensive Shield, Israel wanted the Bush Administration to increase aid to the Israeli economy.

* This became a "bi-lateral" problem due to other urgent matters-of-state within The Empire at that time. The U.S. was embroiled in trying to persuade governments and the masses of the Americas of the benefits of a so-called Free Trade Area of the Americas (FTAA) throughout the Caribbean and South America, and of a Central American Free Trade Area (CAFTA) throughout Central America. They told us that through the FTAA everyone could realize the "American Dream": toe the line and you'll strike it rich - otherwise, you'll fall.

Behind this brutal dictate, the biggest issue raised by the financial oligarchs of the U.S. and other big powers was how so-called "rules-based" trade and finance would finally eliminate "corruption", the "lack of efficient management" of the economy, failure to have "human rights", etc. They ascribed the devastation of Africa, Asia including West Asia, and Latin America - not to neo-liberal globalization - but "bad government" and "failed states". From this position, the obvious facts of how "free" trade exacerbates a chronic crisis could also be made to disappear. Imperialism had already devastated the oppressed nations, but the free trade nostrum was prescribed in its wake [1] as the cure for super-exploitation of the workers of these countries. In the conditions of late 20th / early 21st century, the American Empire was replicating the British Empire's approach of outfitting the "lesser breeds without the law" for "responsible" and "self-government", only on the basis of new arrangements introduced by governments-of-the-day for assisting, directly, industries friendly to the regime, or indirectly by rigging government-backed programs to finance business expansion. Thus, "corruption" would be eliminated. The underlying and motivating idea was that, just as trade, commerce and manufacturing would become privatised, all corporate financing activity would become the province at last of the private banking and financial sector, as well. So, in the case of US-Israeli economic aid: direct US aid to Israeli business, sectoral interests, or the Israeli government was out.

* The alternative compromise was to replace direct economic foreign aid with loan guarantees, enabling Israel to lower its borrowing costs by using the US guarantee to obtain a favourable rate of interest in the finance capital markets. For example, the Trans-Israel Highway [2] is a multinational consortium of consortia: in Canada - Derech Eretz Highways (1997) Ltd. comprises Canadian Highways International Corporation (CHIC), builder of the toll turnpikes in Ontario and Nova Scotia, control of which was acquired by the U.S. financial conglomerate CIT Group in 1999; in Israel - Africa Israel Investment Ltd. of Tel Aviv and 36 other firms; in France - Société Générale d'Entreprises of Paris; and in the United States - Hughes Transportation Management Systems and Raytheon Corp., the weapons manufacturer which supplied the billion-dollar, dysfunctional Patriot missile system to Israel. The para-military highway project itself was constructed from a US$3-billion contract, with 80 per cent of any potential losses guaranteed ...by the Israeli government. In a word: the mutual fleecing of each lesser predator by a bigger predator-partner goes 'round and around and it comes out here... in these long-term loan guarantees floated on international financial markets. For their part, business interests based in Israel acquire access to capital by means of free-trade agreements and most-favoured-nation status annexing their market to the financial houses of Wall Street [United States], London and Frankfurt [the European Union] and Bay Street [Canada]. The US-backed loan guarantees to Israel were set up to run 2003-2008 [Jan 1].

* It was the availability of this loan-guarantee facility that provided the basis for Israel announcing its schemes to add 30,000 houses in Ma'ale Adumim and annex the entire settlement block in Palestinian East Jerusalem to the State of Israel. Directing such use of the loan guarantees was intended to circumvent the restrictions of UN Security Resolutions 242 and 338 on Israel's long-standing objective of annexing all the land it had colonised in the West Bank since the June 1967 war through Zionist "settlements." Since 1967, Israel had already by this time confiscated more than 750,000 acres of land from the 1.5 million acres comprising the West Bank and Gaza. No "new settlement" orders would have to be issued. Thus, Washington could then declare that its own request that Israel "freeze" further settlements had been met, and the illusions about its "honest broker" status and the "peace track" could continue. Sharon extracted a written promise from Bush (the letter of 14 April 2004) affirming US acceptance of Israeli jurisdiction over "Jewish settlements" in the West Bank. This was followed by Sharon's unwritten commitment to Bush to remove Israeli settlers from Gaza, which the Israeli side fulfilled in the 15 August 2005 drama, guaranteeing prosperity to all.

* The first cries of pain in the business press of Israel after Hamas' election to office in the Palestine Legislative Council elections of 25 January 2006 were over the need to get the US to extend the loan guarantees ... even though only about half the facility had been used up [the data in the Ynet article below discloses that US$4.9 of US$9.0 billion has been used]. The electoral verdict created great anxiety in Tel Aviv among those sections of Israeli business and industry living off the avails of the loan guarantees. Hamas, the Islamic Resistance Movement, which won the majority and the democratic right to form the government, was not (and still is not) committed to recognising the Zionist colonies of the West Bank as Israeli territory. This non-recognition gravely jeopardises the entire house-of-cards just elaborated.

* From Ynet News' disclosure below, it now appears that some not-inconsiderable part of the economic content of the Israeli aggression was to secure the extension of the loan guarantee from Washington.

Summarising the financial guts of the-story-so-far:

a. Israel borrows in the money market at a highly preferred rate.

b. The Zionist magnates of the construction and real estate industry - a sector through which the Sharon family enriched itself, and intimately linked with the Jewish National Fund which holds virtually 100 per cent of the land "in trust" (and its parent, the World Zionist Council, composed of Anglo-American finance capitalists) - then borrow from the Israeli government at a slightly higher rate, but still below the mortgage market rate within Israel.

c. Finally, the numerous settlers borrow from the tiny handful of banks and-or fat-cat settlement developers at the prevailing mortgage market rate.

Thus does finance capital skin the ox once, twice, three times with the Zionist mantra and dreams, mere illusions to fool the gullible, the impoverished many, with "Jewish right." "Jewish right" is elevated to monopoly right, subordinated to finance capital. The artifice of the so-called "Jewish nation" for such elements is merely real estate, in which the destruction of the productive forces through war both within the "state of Israel" and its neighbouring countries is the most profitable business of all.

* * *

US extends credit line to Israel

Bush administration agrees to extend by three-year loan guarantees for Israel given to Israel in 2003; Israel has used USD 4.9 billion of a total USD 9 billion

Ynet News; published 20 August '06

The Bush administration has agreed to an Israel demand that a loan guarantee deal be extended by an additional three years, until 2011.

The Congress needs to approve the move.

Finance Minister Abraham Hirchson said the administration's conceding to Israel's request underscores Washington's faith in Israeli economy.

In 2003, the United States approved a USD 9 billion aid package to Israel in the form of loan guarantees which allow Israel to borrow money on the international market for low interest rates.

Israel has used less than half of the fund leaving USD 4.6 billion in available cash.

Finance Minister Director General Yossi Bachar discussed the extension of the loan period with US Deputy Treasury Secretary Robert M. Kimmit.

Hirchson praised the Administration for expressing faith in Israel's economy.

Bachar will leave for New York on Wednesday where he will present to officials and investors the Israeli government's fiscal plans after the war in the north.


[1] Sandra L Smith, "To get the FTAA accepted as something it is not - the federal Liberals' impossible dream", TML Daily, 16 February 2001)

[2] Tny seed, Profits from the Promised Land, Dossier on Palestine (shunpiking), 2003

      Home |  Archives  |  Write On! |  Dossiers |  Search |  Boutique | Donate

Comments to : shunpike@shunpiking.org Copyright New Media Services Inc. © 2006. The views expressed herein are the writers' own and do not necessarily reflect those of shunpiking magazine or New Media Publications. You may not alter or remove any trademark, copyright or other notice from copies of the content. Copyright of written and photographic and art work remains with the creators.