By now, it’s no secret that the Bush administration’s plans for its new satrapy in Iraq are as much economic as military. The most visible signs of the future it has mapped out for the Middle East’s second biggest oil storehouse are the huge contracts the White House has awarded its corporate cronies. Halliburton’s Kellogg Brown & Root subsidiary received… return to article
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Reader Comments (11)Page 1 of 1 pagesMr. Laursen’s statement--"Salaried Kazakh workers’ retirement savings have shrunk severely. The dream of a funded pension system that nurtures the local economy and grows alongside it has turned out to be just that."--is blatantly incorrect. Since the inception of the accumulation pension system in 1998, salaried Kazakh workers’ retirement savings have grown steadily every year and in the aggregate currently stand at approximately USD 2.0 bln--which, for Mr. Laursen’s information, is slightly more than total household deposits in Kazakhstan’s commercial banks, which have grown to USD 1.8 bln currently from about USD 300 mln in 1998.
Kazakhstan’s pension system has funded solid growth in the country’s corporate bond market where cumulative issuance is currently at USD 730 mln, including USD 4.5 mln of mortgage-backed securities--the first in the former Soviet Union.Mr. Laursen’s egregious inaccuracy speaks poorly for the editorial integrity of this magazine--non-profit and progressive or not. A more accurate, if more expensive, review of Kazakhstan’s financial sector appears in the May 29 edition of The Economist.
Posted by Steve Moody on Jun 2, 2003 at 10:40 PM Everybody is talking about Halliburton and Bechtel. How does hiring companies and paying them with US taxdollars to rebuild and build in Iraq hurt Iraq? I would certainly welcome halliburton in my house if they want to rebuild there - in fact, if they want to run my economy, they can have and good luck to them.
Posted by Nus on Jun 3, 2003 at 1:55 PM Why am I not hearing and seeing the word “impeachment” on electronic TV, radio and in the newspapers? Where are the media? Where are those who have the most to gain...the democrats?
Posted by Bob Mendes on Jun 3, 2003 at 2:54 PM My question(s) with the article outlining economic reform (privatization) in Iraq is that of what industries other than oil are available to privatize? Are there any functional industries left in that country to employ iraqi’s many citizens? Who would want to invest money in a newly created stock market when the country hasn’t shown that all the different religous groups can work side by side to ensure the greater good of Iraq? How can a people with little to no income support industry? You can privatize hospitals, airports etc. but how many people can they employ? Without a government with a revenue stream (oil), how will it address the many needs going forward to build a sustainable economy? Maybe they just need a tax cut!
Posted by cynical sam on Jun 4, 2003 at 9:54 AM Sleep tight Nus, they do run your economy.
Careful what you wish for.
Posted by Faf on Jun 6, 2003 at 4:25 PM Let’ work on the US economy, moving it from recovery to sustainable growth.
Posted by Craig Struthers on Jun 8, 2003 at 11:22 PM Ask a question: “How does hiring companies and paying them with US taxdollars to rebuild and build in Iraq hurt Iraq”
Get a nonsensical response: Halliburton and Bechtel “do run your economy. Careful what you wish for”
faf, if you believe what you said is not stupid and nonsensical, please explain.
Posted by Nus on Jun 12, 2003 at 2:24 PM I was referring to the takeover of the Presidency by the oil industry in 2000
Posted by Faf on Jun 16, 2003 at 3:26 AM Responding to Mr. Moody’s comments on my article, it’s not surprising that “salaried Kazakh workers’ retirement savings have grown steadily every year,” as he says. Kazakhstan’s retirement system started from scratch, and the country’s wage-earning workforce is young and, for the most part, years away from pulling out its money to retire. So naturally their savings are growing. The real question, which Mr. Moody avoids, is whether the rate of growth is fast enough to provide sufficient funds decades from now to support their retirement (if my own language brushed over this point, I apologize). The fact that more money is now deposited in these accounts than in Kazakhstan’s commercial banks speaks poorly for the success of the country’s commercial banking system, which is still too small to play a proper role in industrial development, and in any case does not prove that its privatized pension system has been a “success.”
The first measure of success for Kazakhstan’s privatized retirement system remains whether it can relieve the state of a heavy burden of funding retirees’ needs in later years. On this point, I would reiterate, the system has not succeeded thus far, since it is still invested primarily in government bonds. There is nothing wrong with state funding of retirement in my view - but those who supported the Kazakh pension privatization scheme think there is, and so by their own yardstick, the system has not fulfilled its goals so far.
The retirement system’s ability to spark capitalist economic expansion in Kazakhstan is also - as I wrote - still in question, given that, for example, the country’s entire corporate bond market is only about 40% the size of its pension deposits.
Mr. Moody’s egregious failure to address the substantive points about the Kazakh experiment in pension privatization speaks poorly of his qualifications to critique my article or to comment on In These Times’ “editorial integrity.”
Posted by Eric Laursen on Jun 16, 2003 at 4:27 PM Another note on Moody’s critique of my article: Whether or not “salaried Kazakh workers’ retirement savings have grown steadily every year” does not address the fact that the country’s stock market has suffered reverses and that workers’ accounts have suffered lossesm, as I pointed out. A steady flow of mandatory contributions can mask this, but nevertheless slows down the rate of growth and damages workers’ prospects once they retire.
Mr. Moody glides over this point. It’s typical of defenders of pension privatization in the past three years to brush aside market reverses and appeal to “the long run” in touting the advantages of their approach. Of course, this is just another way of saying that their approach is a roll of the dice, the sucess of which we conveniently won’t be able to assess fully for some decades. Meanwhile, the Kazakh worker is very much at the mercy of a casino-like system with no guarantee of a comfortable retirement - unless, of course, that worker’s name is Nazarbayev.
Posted by Eric Laursen on Jun 16, 2003 at 4:40 PM Page 1 of 1 pages -
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Also by Eric Laursen
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FBI probe of eco-terrorists targets Long Island anarchists - Registering the Peaceniks
Democrats and Greens meet in Washington to “Take Back America” - Privatizing Iraq
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