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Context of 'February 27, 2009: Central and Eastern Europe Banks to Receive $31 Billion Rescue'

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Haitian Prime Minister Smarck Michel announces that Haiti will continue with plans to privatize nine state-owned companies, though he acknowledges that most Haitians are “against the idea of privatization” and that for many, “the word is a demon.” In an effort to sell the plan to the public the government has been euphemistically describing it as the “democratization of assets.” The privatization scheme—to include Haiti’s flour mill, a cement factory, its air and seaports, telephone exchanges, and electricity—must be implemented in order for Haiti to receive $170 million in structural adjustment loans from the World Bank, the IMF, the Inter-American Development Bank (IDB) and the European Union. The loans are part of a five-year, $1.2-billion aid program (see (October 18, 1996)) which Aristide had tacitly agreed to in August 1994 (see August 1994). [Inter Press Service, 9/8/1995]

Entity Tags: Smarck Michel, Inter-American Development Bank (IDB), International Monetary Fund

Timeline Tags: Haiti Coup

The first oil pumped from Baku, by the Caspian Sea in Azerbaijan, arrives in Ceyhan, on Turkey’s Mediterranean coast, and is loaded onto a ship. The 1,770 km pipeline, which passes through the Georgian capital of Tbilisi, bypasses Russia and Iran for geopolitical reasons. The main shareholder is British Petroleum, and other significant shareholders include the State Oil Company of Azerbaijan (SOCAR), Statoil of Norway, and the US company Unocal, which has an 8.9% interest and became interested in the project no later than 1998. Unocal begins losing interest in a pipeline across Afghanistan around the same time (see December 5, 1998). Substantial amounts to finance the $3-4 billion Baku-Tbilisi-Ceyhan (BTC) pipeline were arranged by the World Bank’s International Finance Corporation and the European Bank for Reconstruction and Development. The consortium members put up the remaining 30%. [US Congress, 2/12/1998; Alexander's Gas and Oil Connections, 7/12/2002; Guardian, 12/1/2003; Guardian, 5/26/2005; Eurasia Daily Monitor, 5/31/2005; Turkish Weekly, 5/29/2006] Journalist Pepe Escobar comments: “In terms of no-holds-barred power politics and oil geopolitics, BTC is the real deal—a key component in the US’s overall strategy of wrestling the Caucasus and Central Asia away from Russia—and bypassing Iranian oil and gas routes… BTC makes little sense in economic terms. Oil experts know that the most cost-effective routes from the Caspian would be south through Iran or north through Russia. But BTC is a designer masterpiece of power politics—from the point of view of Washington and its corporate allies. US Vice President Dick Cheney, already in his previous incarnation as Halliburton chief, has always been a huge cheerleader for the ‘strategically significant’ BTC.” Escobar also mentions that the amount of Caspian oil was overestimated (see November 1, 2002), “the Caspian may hold only 32 billion barrels of oil—not much more than the reserves of Qatar, a small Gulf producer.” [Asia Times, 5/26/2005] However, the Caspian area is still believed to hold considerable amounts of natural gas. The construction of this pipeline does not halt plans for the construction of a natural gas pipeline from Turkmenistan across Afghanistan to the Indian Ocean (see January 18, 2005).

Entity Tags: Pepe Escobar, Richard (“Dick”) Cheney, British Petroleum, Statoil, State Oil Company of Azerbaijan, Unocal

Timeline Tags: Complete 911 Timeline

Talks between Lehman Brothers and the Korea Development Bank end. The Koreans had been thinking about investing in the bank, enabling it to raise needed capital. However, they decide not to go through with the investment. [Bloomberg, 9/16/2008] Lehman Brothers files for liquidation five days later (see September 14, 2008).

Entity Tags: Lehman Brothers, Korea Development Bank

Timeline Tags: Global Economic Crises

The European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), and the World Bank pledge to invest €24.5 billion in countries such as Latvia and Hungary that have been hit by the global economic slump. In a joint statement, the three groups announce that the two-year joint initiative will include equity and debt financing, and access to credit and risk insurance aimed at encouraging lending, on top of the countries’ national government responses. The bailout is designed to “deploy rapid, large-scale and coordinated financial assistance… to support lending to the real economy through private banking groups, in particular to small-and medium-sized enterprises.… The response takes into account the different macroeconomic circumstances in, and financial pressures on countries in Eastern Europe, acknowledging the diversity of challenges stemming from the global financial retrenchment,” the groups add. The EBRD was founded in 1991 to assist the transition of former communist nations to market economies—investing across 30 countries including Ukraine, Moldova, and Russia. “The institutions are working together to find practical, efficient and timely solutions to the crisis in eastern Europe,” says EBRD President Thomas Mirow. [BBC, 2/27/2009]

Entity Tags: European Bank for Reconstruction and Development, Thomas Mirow, World Bank, European Investment Bank

Timeline Tags: Global Economic Crises

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