Category: Regions

  • Shall we come to terms with the past?

    Shall we come to terms with the past?

    TÜRKKAYA ATAÖV
    Professor of International Relations
    Turkish Forum Advisory Board Member

     

    Why Not?

    Close to a hundred years have elapsed since the outbreak of the First World War. Armenian-Turkish relations during those four years are politicized that miscolour historical facts. Exclusively one-sided views, reflected in the sways of some third party parliaments, only convey rash pre-arrangements serving power politics instead of justice. In some Western mainstream media and legislative organs one perceives calls for “coming to terms with the past”. The presumption is that the Turks will have to do that.

    Why not? However, the occasional discourse over the hastily-suggested and irresponsibly repeated phrase is misleading in several ways[1]. Coming to terms with the past needs to be, above all, an exercise in good faith, free from domestic and international politics. Befitting endeavour entails the establishment of a correct historical record, including the scholarly duty to question the validity of the mainstream ideas. The challenge is not a legal requirement, but a probe into history, and as such one ought to expect the same scientific methodology to be utilized in its analysis. One has to be clear, then, as to the aim, procedure and techniques of such a venture. To determine what actually occurred in the past commands independence of the past and present decision-makers. At stake are the legitimacy of arguments and the identity of the peoples involved. No historical truth can be treated justly if all of its parts do not come out. There is an ingrained bond between non-discriminative truth and non-selective justice.

    If we agree that only unbiased scientific research can bring out all historical facts. We should also concur that attempts to explain past events via political organs may eventually usher Orwellian “truth ministries”. If, for instance, some reliable third party publications publicly state that the Armenians had “slaughtered…120.000 non-Armenians” in Eastern Anatolia while the Turks were only mobilizing for war, and if there is reference to such facts even in some mainstream sources,[2] historical truth is being sacrificed on the pedestal of powerful pressure groups and/or political interests.

    Do the parliamentarians always know who they are being lobbied by? Does the media display enough scrutiny of lobbying campaigns? Is the civil society provided with alternative explanations? The answer to these inquiries should be an emphatic “no!”. For instance, the register of lobbyists with full-time access pass even to the European Parliament only lists name and organizations, not who these people are lobbying for, or what issue and how much budget is involved.[3] Who can claim that this the way to write history?

    Irrefutably, then, coming to terms with the past demands all-inclusive, meticulous, and accurate research based on solid evidence beyond reasonable doubt. It urges for scholarly effort, not political propaganda designed to mislead especially third parties whose public knows little or nothing about the issue. In case the ultimate intent is limited to imposing a selected interpretation on foreign decision-makers, such a scheme has obviously reached alarming proportions. The name of the commitment is, then, academic work, not prejudice entangled with half-knowledge and naivetè.

    Initially, we must agree on dispassionate, non-partisan and open-minded treatment of the controversy. That guideline happens to be the indispensable criterion from which other imperatives follow. For instance, if one searches for “guilt history”, we should also agree

    that legal or moral modus operandi does not allow for a concept called “collective responsibility”. Assuming that there exists a guilt, the accused may only be a person or a group related to an executed policy. The blame cannot be put on the shoulders of a whole people, or people, or on the future generations. Correspondingly, one cannot reactivate the out-dated theologian concept of “original sin” and deduce from it the obsolete assertion that the new generation are born with guilt for all.

    Guilt is personal. It remains personal even in case of decisions made by a so-called central body, which is composed of individuals. However, no personal responsibility can be put, in ethical, rational or legal terms, on contemporary individuals for the behaviour of some of their predecessors. If present-day generations would be blamed for the misdeeds in the past, this would revive the so-called collective historical responsibility of a whole people, reintroducing the metaphysical and the irrational concept of perpetual guilt. A cumulative and everlasting accountability transceting ages would bring back the theoretical notion of guilt which some people may be unjustly accused to be born with. Doubtless it is absurd to entertain, even to tolerate such a primitive assumption.

    There are no “good” and “bad” nations, then. To insist on hearing and propagation one version of events is accepting the Manichaean co-existence of God and Satan, or a division of world based on a belief that disappeared centuries ago. Personal responsibility was one of the bases of the Nürnberg and the Tokyo trials in 1945-46. The classification of international crimes and the individual responsibility of the person who might have received from superiors are the two outstanding principles relevant even in our day. Accusations were levelled at some individuals because they were alive then. No individual may be dragged to a court if the culprits are no longer alive. Concomitantly, in terms of measures of redress, compensation is also out of the question if the culprits are no longer alive.

    Assuming that the accused are living, the instrument of justice should not be misused, however, as an opportunity for revenge. This is the case at the end of wars, when ruthlessness mixed with “getting even” is greater than ever with the cessation of armed hostilities. The defeated party that loses the war no longer enjoys sovereignty over public affairs[4]. Emotions prevent rational analysis. Only the privileged victors judge the behaviour of the defeated, moreover according to their own interests. Enjoying immunity from prosecution themselves setting up the tribunal, formulating the terms of criminal procedures, and drawing the list of indicted persons, the victors also become judge in their own cases, which has no place in justice. This privileged position may be appropriately labelled as “victor’s justice”. The Ottoman trials after the First World War, during which no Armenian appeared before the tribunal and only the Turks were punished, should be described as such.

    Had the International Criminal Court (ICC)[5] based on the Rome Statue (1998) and formed (2002) after ratification, existed after 1918 and had both the Armenians and the Turks applied to it with their own documentation and witnesses, such a tribunal, with some inherent weaknesses and later encroachments on its jurisdiction, but enjoying considerable transnational qualities, would have probably ruled out genocide on any side, noting in the process armed revolts, occupation, secession, war casualties, losses on account of contagious diseases, migration and the like.

    The ICC cannot prosecute crimes if they were committed before the entry into force of the Rome Statue ( 1 July 2002). Another question within the framework of time limits is the following: How far back may one look in order to come to terms with the past? If one stretches to far away periods in history, for instance to the founding days of some nations, one may meet myth that cover terrible barbarities. The experience of many powerful states. Including the days of old of the contemporary superpower, abound in monstrous atrocities. To bring all of them back will hardly serve the criterion of international understanding.

    But Not Only the Turks:

    Justice abhors double standards, and historical fact-finding demands balanced recording. Many safety measures are involved in thorough exploration. Probing into the past cannot be restricted only to a nation, region, date, or to an ethnic/religious group. No nation can demand from another to examine solely the past of the latter. No nation may be singled out by others and made a scapegoat. Moreover, no nation may be forced to serve the interests of another under the label of “coming to terms with its past”. If need be, the records of all countries, without any exception, and no veto privilege operating in favour of anyone of them, should be open for close scrutiny. Coming to terms with the past can only have a universal and comprehensive proportion, leaving no room for power politics.

    Especially, when the legislative bodies of countries that have often undermined human rights in the past, and moreover continue to do so, insist on others to examine their past, their position may well be described as hypocritical. Among them, those countries that have never or not fully come to terms with their own past, even their present, cannot designate themselves as impartial decision-makers in others’ cases.

    Can the histories of Asia, Africa, the Americas and Australia be fully written without appropriate references to what happened to the so-called “Red Indians”, Chinese, Filipinos, the Maghribi Arabs, the South Africans, the Australian Aborigines, and the like. None of our contemporaries in the Western world are now collectively or individually responsible for what some of their forefathers might have done in all the continents. But world-wide criminal acts, one more brutal than the other, are nevertheless in the annuals of history.

    The civilization peculiar to the soil were reduced to rabble with the coming of Cristobal Colon to the New World. The “American Indians”, who had previously scattered all over the land mass of the Western Hemisphere, were reduced by warfare and disease in the past, and are now very poor and discriminated against[6]. “Those pernicious creatures”, so described by the Puritan Cottton Mather, were hunted down mercilessly almost to the degree of total extermination. Colonel Chivington struck (1862) without warning a Cheyenne encampment that flew the Stars and Stripes, scalping even screaming women. Army fire (1890) on the Oglala Sioux dancers at Wounded Knee ended the armed conflict that had begun three centuries ago. If some in-group in the United States are still searching to commemorate a date for the inhuman treatment of fellow beings by other homo sapiens , one of these two occasions may well suit the land.

    Nor are the present-generation Americans accountable for the slaves imported from Africa. It was this American state that developed an explicit ideology that crowned racism as a dominant force.[7] Some brutal men from Western civilization tore African blacks from their lands, stacked them in the unhealthy holds of ships, threw some into the ocean, and hurled them into a new hostile environment. They tilled the soil for the 2Lords of the Land” and served the “Boses of the Buildings”. Although they raised enough cotton to clothe the whole nation, they had no matrasses to sleep on, and their bleeding bodies were, at times, dragged through the streets.

    Canada’s aboriginal peoples, who once owned that vast land, are discriminated against in the whole white society of English and French settlers, and now live in squalor amongst colossal wealth.[8] How this divergence came about is the topic of the historians. Moreover the image of the Amerindians in Canada’s textbooks risk instilling into young people prejudices against them.[9] Not only the native peoples and the Afro-Canadian, but the “Inuit” who are the Arctic dwellers of Canada, Alaska, Greenland and (Russian) Siberia, are placed at the very bottom of the social ladder. The Catholic French-speaking Canadians as well aspired for a society unlike the one created by the English Canadians.

    The “Indians” in parts of Central and South America were treated as sub-humans from the very outset. Various indigenous (comunidad native) , Afro-Latin Americans and some immigrants are discriminated against. Neither the Zapatista movement, nor the Nicaraguan Revolution should be surprising. In some Latin American countries, massacres (Matanzas) were carried out of even those who wore indigenous dress. The “Rastafarians”[10] were inspired by Marcus M. Garvey, who advocated a total exodus from the cruel white world. In South America, the native people were exterminated, expropriated and enslaved. Economically helpless, politically impotent and culturally isolated, the natives have been marginalized even in countries where they are more than half of the total population.

    The 197 forest-dwelling indigenous group in Brazil face extinction[11]. For the first time in 1972 in Colombian history, a group of white people was put on trial for the murder of natives. They were acquitted initially, on the grounds that they thought their victims were not humans; they were convicted only at the end of a retrial[12]. Argentina has been a pluri-ethnic country with numerically significant immigrants of European origin, against whom there has been manifestations of racism in different forms as ethnically, social class, occupational rank and religion. The Mapuche people in Chile, who now posses a little over 1% of the land they owned at the time of the initial European invasion, were repressed especially during the Augusto Pinochet regime. In Ecuador, indigenous peoples of the land, who had lived where Texaco dug its first oil well, have since then become extinguished. The French colonists threatened the life of the original inhabitants of the French Guiana. Human rights violations against Uruguay’s eighteen indigenous peoples have been shocking especially under general Alfredo Stroessner’s regime. Guerrilla group Sendero Luminoso (Shining Path), eager to maintain its violent control over the lucrative cocaine traffic, made life for the Ashaninka, who strive to exist in the Peruvian rain-forests, even more difficult. Venezuela’s indigenous groups have been historically neglected[13].

    Western Europe has three categories of minorities, some of whom have frequently been objects of discrimination. They are (a) the indigenous people such as the Sami[14]. (b) the so-called “historic minorities”[15], such as the Alsatians, and (c) “new” minorities such as the Magribi Arabs in France, or the Turks in Germany[16]. The Sami, who traditionally lived in the far North, are now outnumbered in those areas that were once inhabited only by them. The ten million or more Roma/Gypsies, originally from India and the first 2blacks” in Europe, are rejected almost in every part of that continent. Nazi Germany killed at least 300.000 of them.

    The Alsatians, Breton and Corsicans have historically fallen behind the average French citizens. Resettled French people, formerly from Algeria (pieds noirs) since then dominated Corsican economy. Occitan, spoken in parts of southern France, never enjoyed public or official status. The war-time Vichy government had introduced anti-Semitic legislation deporting 47,000 Jews to the Nazi death chambers. The French extreme right is likewise anti- Muslim when it comes to the move than 3,5 million “new” minorities, the citizenship of whom even born in France were withdrawn in 1993.

    In Belgium, an aggressive anti-immigrant Flemish Vlaams Blok (Our Own People First) grew in popularity. In the Netherlands, there is a rise in racist attacks against the new minorities from the Mediterranean and the former Dutch colonies. The grievances of the Basques and the Catalans in Spain go back to the pre-Civil War years, futher complicated by the Franco regime. The British had conflicts with the Irish Scots, Welsh, the coloured by the new minorities. The pan-Germanic voters increased their strength in Austria, where the historical Burgenland Croat minority is losing its identity, and the guest workers are under duress. The “neo-fascists” in Germany carry out attacks on foreign workers, more frequently on the Turks, and their children born there. They have set Turkish dwelling on fire, burning alive men, women and children. The so-called “skin-heads” acquired an identity mixed with the traditions of past totalitarianism or remnants of it in the present hate and enemy figures. The treatment of the Swiss of each other has been generally considered as the best handling of any minority anywhere. That country gives little or no protection, however, to fremdarbeiter (foreign workers).

    To paraphrase an oft-quoted famous statement “ a specter is haunting Europe”, the specter of racism, ethnic cleansing and expulsion, the last victims being unarmed Bosnians and the families of guestworkers, principally the Turks. Racism became more and more significant, not only on account of violent attacks on minorities and immigrants, but also by the power of extremist political parties which increased their influences on some mainstream parties that compete for the right-wing vote. Rising unemployment, coupled with waves of refugees from the former communist bloc, led large portions of the European electorate to search for scapegoats. While minorities and foreigners are denounced in various regions, the collapse of the regimes in Eastern Europe unleashed ethnocentric feeling in the whole continent.

    Recent history of Eastern Europe and the Balkans experienced wars, ethnic cleansing, exiles, population transfers and re-emergence of old feuds. One of the little-known facts of the histories of the Balkans. Crimea and the Caucasus is that the vast “Muslim land”, inhabited predominantly by the Turks among the Muslims, disappeared since the Greek revolt of 1821, leading (until 1922) to the loss of over five million Muslims and with the forced migration of 5,5 million more[17]. Only small pockets of Muslim (or Turkish) settlements were left in the new independent states founded on the suffering of the departed inhabitants. The Bosnian ethnic cleansing of much later date was only one of the last hoops of a long chain of events. The Bosnian case was “a slur on the face, not only of Europe, but the entire civilized world[18]. Pogrom were notorious in Russia and elsewhere.

    The Second World War eliminated much of the European Jewry and the Roma, Poland has no pressing minority problem mainly because close to 2,5 million Jews were exterminated during that war. In Lithuania, Russians and Poles recurrently charge that the authorities discriminate against them. The Gagauz, who officially did not exist for a long time and generally but falsely considered “Turkish-language Bulgarians”, are culturally and linguistically… a Turkic people”[19]. In the 1980s, authorities in a Balkan state had forced the Turks to change their names and to abandon their ethnic and religious customs as well their language.[20] This particular discrimination is no longer enforced. Greece also claimed to be a country exclusively inhabited of Greeks. On may assert, however, that just before the Balkan Wars (1912-13) even only in Aegean Macedonia and Western Thrace there were ( in addition to Greeks) Macedonians, Muslim Turks, Muslim Pomaks, Christian Turks (the Gagauz), Muslim Cherkez (Circassians), Muslim Albanians, Christian Albanians, Christians Vlachs, (Aromanis), Muslim Vlachs, Jews, Armenians, the Roma, and other. The Muslim Turks of Western Thrace are the most numerous minority in Greece[21].

    There is some struggle between the central authorities and the non-Russian territorial units in the Russian Federation. The Crimean Tatars, the Volga Germans, and the Meshkhetian (Ahiska) Turks have long stood out in a different category among the several nationalities forcibly resettled in Central Asia and Siberia during the Second World War[22]. Armenia and Azerbaijan brawled and fought over the Nagorno-Karebagh conflict, and the Armenian occupation of parts of Azeri territory, in addition to Nagorno-Karabagh, was criticized in strong terms by the U.N. Security Council[23].

    The Armenians as Well:

    Omission is the most virulent form of censorship. Many Armenian argument omit a mass of crucial facts. They cast aside the dimensions of their armed revolt, they count out the deaths that they have caused, they skip the frequent wars in which they participated, they overlook the memoirs oh their own commanders who admit Armenian carnage of non-Armenians, they ignore the destructive effect of contagious diseases especially in war conditions, and they withhold a series of facts that weaken their case. This ensemble of facts are indeed troubling for the Armenian version of events.

    Foreign Christian missionaries, who entered the vast Ottoman territory, convinced at least some Armenians that the latter were superior to the Muslim. The circumstances of the imperialist are added fire to the religious/ethnic conflict that the foreign preacher/propagandists had started in the alluring target of the Ottoman East. Foreign interventions in the form of ascendancy of alien clergy, enforced legal adjustments new trading conditions privileges for the outsiders, diplomatic threats, and outright military expedition turned the Ottoman society into an engine of ethnic conflagration.

    Imperialist mechanism favoured, not only different people or different classes, but also different ethnic groups[24]. The system rewarded some nations, hierarchies and ethnic/religious groups over other. The most privileged minority then was the Ottoman Armenians. The missionaries, the assessments then and some publications even today describe the Armenians as calm, weak, gentle, helpless, unprotected, unarmed, non-belligerent, good Christian, and totally vulnerable civilians, mostly old men, women and children, ostensibly upon whom well-armed regular Ottoman troops ascended with their full force, killing perhaps millions. This is a cock-and-bull story that many third party documents and certainly the Ottoman archives, even considerable Armenian confessions belie.

    While the teachings of some foreign missionaries, willing or unintentionally, provided the mental ingredient of armed Armenian action, great power appetite over Ottoman territories supplied the memory, logistics, arms, and equipment even down to uniforms. The following Chicago publication on the very even of 20th century by an American Protestant missionary and the president of the Armenian Patriotic Union in New York is a case in point. It reflect a deep-seated racist attitude, which nevertheless pulled wool over the eyes of the forefathers of some present-day decision-makers equipped with such inherited misinformation. The book says that the Turks are “not members of the best or the second best human race” and as such “incapable of assimilating complex ideas” and further that their “mental inferiority” is matched with a “religion of a very low order” which has made them “worse than savages”. While the soul of Christians, like the Armenians, “grows race and strength” the Turks, the authors conclude, “is a wild beast to be caged”. The missionary and his Armenian colleague “beg pardon of the hounds, hyenas and… other wild beasts for using their names in simile or metaphor to describe the…ferocity of Kurd or Turk.”[25]

    The weak affirmation of some Western writers, friendly to the Armenian cause to a degree inadmissible in academic research, that the Armenians “were not all angels”[26] should be rated as a shocking understatement. Published documents prove, beyond reasonable doubt, that they have committed armed terrorism, violent assaults, destruction, rape, assassinations, and wholesale murder of Muslim groups, all these misdeeds done for decades and especially at the beginning and the latter part of the First World War. They were outright participants in the armed conflicts, having formed battalions carrying heavy guns. Some Armenian writers, including their leading commanders, asserted that their use of weapons against the Turks had been the decisive factor in the winning of the war by the adversaries of the Ottoman state[27].

    Several Armenian authors, including academics like Louise Nalbandian[28], or concerned Armeno-American citizens like K. S. Papazian[29], admit that the Armenian militants of the late 19th and early 20th centuries were “terrorists”[30]. Notable Armenians such as the first Prime Minister of the independent Armenia (Hovhannes Katchaznouni), Britsh functionaries (Captain C. B. Norman) and men of letters (C. F. Dixon – Johnson, Bernard Lewis, Roderic Davison, Andrew Mango, Norman Stone), Russian officers (General Mayevski, Lieutenant- Colonel Tverdo- Khlebov, Captain Ivan Gokilevich Plat, Dr. Khoreshenov), contemporary American academics (Stanford J. Shaw, Justin McCarthy, Heath W. Lowry, Guenter Lewy), men from the legal professions (Samuel A. Weems), Armenians of first-hand knowledge (Edward Tashji) and others do not share the mainstream opinion about the innocence of the Armenians.

    Armenian-American reports and publications admitted having formed an army of “200.000 men”[31], even “over 200.000 Armenians”[32] fighting in the war against the Turks. Allied leaders (including the Russian Czar, the French Premier and the British commanding general in the Sinai Front) praised their contributions, mainly in the Caucasus (with the Russians) but also in the Suez area (with the British) and in the Adana region of Eastern Mediterranean (with the French).

    In all the armed conflicts, whether terrorist attacks, guerrilla warfare, underground fighting, regular battalions or civil war, the Armenians inflicted losses on their targets and suffered casualties in return. Neither such losses nor disappearance on account of voluntary migrations ought to be described as massacre or genocide. The Turks cannot be blamed for he deaths on the battlefields, for voluntary escape to Russia, Persia or other neighbouring areas, for the adverse war conditions and rampant epidemics that look many lives.

    The very much neglected truth is that, at the beginning of war, some Armenians were guilty of unspeakable brutality against the Muslim , many of whom were Turks. The Muslim victims initially reached a six-digit figure. In spite of abundant evidence in several state archives, this crucial fact is little circulated and wickedly overlooked. But occasionally this truth comes up, as started above in a 2003 British publication that quoted an initial Muslim loss of 120.000 and later 50.000 more. In between, of course, lies the Armenian occupation of the Ottoman Van province and the proclamation of an independent Armenian state there with Russian assistance.

    What is the Armenian role in concealing so much of the truth? It is obviously that scholarly search for the other side of the coin tremendously weakens Armenian arguments and moreover alters the framework of the controversy. In a few countries there also exist the threat of arrest and payment of fine for any expression of a Turkish view. There is also a psychological component in the Armenia attitude. Finally, there exists the hope as well of a political gain.

    At times, individuals, groups, and even nations have need for enemies as well as for allies as an investment, initially psychological, but eventually political, in the continuation of a conflict. The enemy image may prove to be beneficial, at least as an additional component in terms of inner control and identity. A community may pick out an event among other choices and rank it as the “chosen trauma”[33], to epitomize a mental condition of “victimization” which is elevated to be a part of an identity. The event is associated, not only with feeling, but modifications and even mythologizing as it is related by one generation to another. As the “event” is moved upwards to graduate into a shared mental representation, historical facts are outdistanced. To “stabilize its own tent”, the community removes the so-called “foreign” elements, mainly the losses of the “other side”. The totality of historical facts, however, may point to a different direction. This is the main shortcoming in the presentation of Armenian opinion.

    And the Turks:

    Let all nations, including the Armenians, Turks, and the rest , come to terms, with their past. If all agree, without exception, to do so, I venture to state that the Turks will be among those with the whitest records, as much as possible, of all times gone by. The Ottoman administration implemented the millet (semi-autonomous religious communities) system, fair and progressive in those days, within its vast domain. When the Christian churches condemned the Armenian Monophysite (single nature of Christ) belief as a heresy, it was none other than the Turkish Sultan who in 1461 recognized this community giving it the basic freedoms of worship, the use of the national language, and the right to live, work, trade, and (later) to hold public office[34]. Ottoman Kindness towards the Jews during the notorious Inquisition era many parts of Europe should be common knowledge by now. The Turks rescued the Jews from almost total extinction then and opened their frontiers once more during the Nazi era in Germany and saved many from the Holocaust[35]. These were not isolated phenomena. The Ottoman society frequently became a haven for individuals or peoples, including the Russian Old Believers, and the refugees fleeing after the failure of the Calvinists and when the Jews faced all-out annihilation.

    The Armenians as Ottoman citizens held high offices as cabinet members for such vital field as foreign and financial affairs), parliamentarians, provincial governors, ambassadors, consuls, teachers and other professionals[36]. The Ottoman Government appointed an Armenian (Gabriel Nouradungian) as the Minister of Foreign Affairs during the turbulent year of 1913 when the Turks faced the Balkan War. Could a Jew under any fascist regime come even close to any point comparable to such Ottoman fairplay?

    Regarding the radio of the Armenians living even in parts of Eastern Anatolia that some of their leaders preferred to call “Armenia”, a prominent blood relative of this minority wrote: “As it is evident from Turkish, Russian and all other world statistics… there is no territory within the Ottoman borders where the Armenians form a majority”[37]

    Armenians who lived near the borders in the east and south-east were relocated at a time when well-armed members of that community were active in the rear of the Ottoman forces and occupied the city of Van, severed it from the state and announced an independent state of their own there. As even the French commander M. Lancher noted, they had “openly made common cause with the Russians”[38]. These bloody events occurred when the Turks were experiencing serious military setbacks. Protestant and Catholic Armenians and those who lived in big cities like Istanbul, Izmir, Aleppo, or almost in the whole of Thrace were not moved. There was no government intent to kill them, or any portion of them , but to guide them, under strict orders of protection, to new cities in the southern Ottoman lands. One should concede the absence of Turkish documentary evidence to prove the responsibility of the government. The letters of biased missionaries and some foreign diplomats are no evidence that can substantiate a crime of genocide. It was a partially mismanaged war-time security measure, during which some corrupt escorts, civilians with vengeance, and some Kurdish tribesmen attacked those being displaced. The loss of life was not as huge as often asserted. But for the accuracy of historical record both Armenian and Turkish loss of life during the whole of the war period need to be known. There have been witnesses of assaults on both sides.

    Natural causes such as famine and epidemics afflicted again both Armenians and Turks. In addition, the Armenians participated in about a dozen wars and armed conflicts between 1914 and 1922, in which they killed and got killed in return. Foreign government archives substantiate that 395.000 Russian, 188.000 German, 179.000 French, 120.000 British, 85.000 Italian, and 60.800 American soldiers died of contagious diseases only. Even the top Turkish, German and British commanders could not be saved. Armenian leaders, aware of this epidemics reality, resisted drafting their men into the Ottoman army. Moreover, a substantial part of the exiles moved southwards unmolested, reached their destinations and survived.

    Apart from the general war conditions, epidemics and armed conflicts, some Armenians, Turks and other Muslims were lost their lives in the hands of guerrillas, escorts and tribesmen. However, only the Muslim were put on trial during and after the First World War. The Bulk of the Armenians minority that cooperated with the invading Russian forces were moved towards the southern portions of the Ottoman lands. For crimes committed during the dislocation, Ottoman courts had already passed, in 1915-16, verdicts, involving 654 individuals, 67 of whom had received capital punishment.

    The post-war conditions lack, however, the fundamental requirement of due process. The victors and those who are powerful in any case determine the mode and the proceedings, including the place of the trials, the selection of judges, the lists of suspects to be drawn, and in most cases the final verdicts themselves. This was the case immediately after 1918, and it applied to the way the victorious powers evaluated Armenian-Turkish relations. The armistice provided for unconditional Turkish surrender and gave the victors and their allies the opportunity to conduct trials in the way they wanted. Although Armenian ”slaughter” of Muslims was recorded even in British sources, not a single Armenian was brought to justice. This applied to wholesale murders, destruction, theft and rape, all of which had been perpetrated by some Armenians mercilessly, repeatedly and systematically. Even the very leaders of the armed Armenian battalions, which had committed so many sanguinary acts, roamed freely on the streets of Istanbul. Some Turkish functionaries, who had no connection with any illegality, were sent to the gallows. The Armenians became judges in their own cases. Neither the formation of tribunals, nor their verdicts warrant the evidence of genocide. The Ottoman authorities were moved by the need to pacify the victors, whose soldiers cracked the whip virtually on all occasion. The court hearing consisted of one-sided exaggerations, or outright lies by false witnesses.

    The end-product was not justice, but revenge on behalf of the Armenians, some of whom had started the assaults, destruction, pillage and bloodshed. But the victors later imposed their own version of justice and of history. They blamed their common enemies and exempted their partners from any accountability. Although the occupiers, desirous to achieve quick results, took 144 Ottoman high officials to the Crown Colony of Malta in 1919, the Turkish prisoners had to be released without charge or trial in 1921. Only a supranational court, equipped with independence of the prosecutors and judges, could have acted unreservedly and equitably towards the Turks.

    The Turks knew, all along, what actually occurred. The government of the republican regime never intended to hide anything. The Turks still possess the vast Ottoman archives material that differ from the more popular assertions beyond their borders. If one really wants to know what the official Ottoman policies had been then, the answer lies in the official records of that government. The Turkish government presented, in the late 1980s thousands of such documents to the leading libraries and the research centres of the world. Moreover, many of them are already transliterated, even translated and published in book form. But the founding fathers of Republic did not want to educate the young generations in vindictiveness. If they had opened up the “old chapters”, the top of the agenda would be the popular desire to review the tragic experience of close to eleven million Muslims, half murdered and half refugees, in addition to those slaughtered in Armenian hands. The Turks became part of the discussion only when militant Armenian groups unleashed a new period of terrorism and assassinations.

    By Way of Conclusion:

    Every word of the assertion that “the Armenians were loyal citizens, deprived of their right, but living in their homeland, where they constituted a majority that became a target of genocide” is no more than orchestrated misrepresentations. The complete truth cannot be such a distorted simplification that may be carbon-copied by one spokesperson after another. Scholarship is like a building that requires perpetual repair.

    Judgement should rest on unexpurgated collection of facts. Censoring of one side may only be described as a political game that serves the urge to revenge. Moreover, the question is not the agonies and grievances of some Armenian and some Turkish families in the past. There is no doubt that several families on both sides suffered. There are recollections of survivors on both sides. Eastern Anatolia is full of mass graves, recently unearthly, that covered the dead bodies of thousands of Muslims. There have certainly been some Muslim and American culprits. But to conclude that the loss of some Armenian lives is an incontestable fact of genocide on the part of the Turks is an outrageous contention. There exist absolutely no reliable documents that prove Ottoman Government complicity.

    If popular organs, such as some Western parliaments, suppress the voice of full facts, who can the public turn to? If responsible institutions help certain crucial facts to be held back, what can be the value of the conclusions of the political decision-makers? If preconceived notions overwhelm fairness, what will be the effect of false ruling on the discriminated party? How trustworthy may an examination of Armenian-Turkish relations be if even the mere expression of Turkish views are prohibited?

    Those who venture to ask a nation to investigate its past and moreover attempt to dictate to it the conclusions it should reach are demonstrating a monstrous partisanship. If need be, let no nation be exempt from scrutiny. Especially the imperialism of late 19th and the early 20th centuries was not a scheme of “crisis management” but the cause of that crisis and its escalation. Failure to recognize that role makes the issue only more complicated. The Turks also have their own case.

    The fancy that the Turks may only be victimizers is a deceptive delusion; it is an unjust partiality; it is wrong to the core; it is a denial of the accumulated gains of human struggle for equity; it is a careless brush-off of justice for all. The past cannot be changed to suit the present interests of a party to a dispute. To give a categorical stamp of approval to Armenian presentation is to change history. It is a prejudice that needs rereading, re-examination, revaluation and revision.


     


     

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    Faruk Logoglu

    Thank you very much. Since this is the right place and the right time I want to start a confession. I have two major regrets in my life: one is that I am not able to play the piano, even though it’s my favourite instrument. The other is that I cannot speak Italian, even tought I think it is one of the most beautiful languages in the world. You have a great country. You certainly have the most beautiful cities in the continent of Europe and you have a great language. I want to thank Quaderni Radicali and in particular Mr. Giuseppe Rippa for hosting this meeting as well as the Italia-Turkish Friendship association and I want to thank all the Italian citizens who are here to listen to this difficult subject.
    The purpose of my presence here, and I am sure that (Inc) and my other colleagues , is to see wheter we can open new windows of dialogue, new ways of reconciliation between the Turks and Armenian on this extremely sensitive, important and difficult issue. So I hope if this meeting as well as the one that was held before helps towards this purpose, we will all have accomplished our objective.
    Now, I’m going to be very brief. I’m not used to being very long. I want to answer to your three basic questions: what is the state of Turkish-Armenian relation? The second is: what’s happening today? Then, I’ll answer the questions why there is no diplomatic relations between Turkey and Armenia? And finally I’ll try to share with you some ideas about the future for Turkey and Armenia.
    In terms of the first topic, let me begin with the fact that Turkey was among the first countries to recognize Armenian independence. This was in december 1991 and I think we were among the very first countries to do so. We came close to establishing diplomatic relations but we have not been able to do so and I’ll explain why in a minute.
    Though we do not have diplomatic relations with Armenia, well, Armenia is represented in Turkey. How is that possible? Well, when Turkey initiated the economic organization initiative and after it became a sound organization, we invited Armenia to join that organization, in its headquarters in Istanbul there is an Armenian diplomat who lives in Turkey, working in Turkey, flying to Istanbul. In terms of other relations bewtween Turkey and Armenia, I would like to first emphasize the fact that the corridors between Turkey and Armenia are open, flights from other countries can fly the Turkish sky to Armenia and Armenian origin flights can cross Turkish airspace, in addition there are Turkish flights between Istanbul and the capital of Armenia, Yerevan, at least twice a week, during summer there are additional flights from Yerevan to the southern cities of Turkey. The land border crossing between Turkey and Armenia is closed and this has been the case since 1993. This was in response to the Armenian occupation of (inc), the disputed terrritory between the two states but also about 20% of Armenian territory (inc). As in response Turkey said: “enough is enough, so we are closing our land bord”. So, since 1993 the landcrossing between Turkey and Armenia has been closed.
    However, the road transports from Armenia and to Armenia is still open, there’s trucks that go and come thourgh Georgia or by Iran, can pass through Turkey though there is no direct trail between Armenia and Turkey. There is an interchange and in 2006, for example, the amount of trail with Armenia amounted to 160 million dollars, so if you go to Armenia today you can have shops, consumer goods of different (inc), and in Turkey there are more than 40000 citizens of Armenia who live in different parts of Turkey, some near the Armenian border, some in Istanbul. They could make a living in Turkey in different areas of life and why is it so? Well, Armenian economic conditions and Armenia itself are extremely poor. Even though we don’t have diplomatic relations, the two countries have very frequent and high level contacts. At the time of president Petroshn (?) there were regular meetings between the Turkish and Armenian presidents; after he lost power, there have been no meetings at the level of the president but Turkishh and Armenian high officials meet yearly along the margins of different international meetings.
    There are of course several society contacts between Turkey and Armenia. There is a countinous interchange between non governamental organizations in the two countries, particularly women, artists, journalists and academics. Sometimes Turks go to Armenia, other times Armenians come to Turkey. In 2004, for example, Armenian state orchestra gave a concert in Turkey and in 2005 the Armenian state ballet gave a performance in Turkey.
    Today Armenia is the poorest country in the region at war with one of its neighbors, Azerbaijan, at short hands with another neighbor, Turkey. Its population is, it has a rather unhealthy relationship and of extreme dependence from Russia, in contrast with Turkey which is one of th ebigger countries of the region, the 16th larger economy. And for a great deal there is a normalization of the relations between the two countries and to Armenia. Armenia unfortunately is excluding itself from almost every regional cohoperational scheme that has come to life after the collapse of the Soviet Union. I was ambassador in Azerbaijan and the (inc) , which is a major project, could have gone through Armenia with its structures, and the conditions at the moment and Armenia would have gained a great deal from this project.
    Why then, if this is the state of the art (?) in the two countries, which is a lot of relationships, a lot of interaction, why there are no diplomatic relations between the two countries? And that’s my second question.
    Now, in 1991 we came close to establishing diplomatic relations. There were intense negotiations  a lot of preogress was made at the time but at the last minute, bacause of certain obstacles that Armenian side exprience could not succeed in estabilishing full diplomatic relations between our countries. Problems where mostly related to territory, relating to the recognition of existing treaties and the genocide issue. I think that at the time a rare opportunity was missed because had it succeeded in establishing diplomatic relations at the time, we would have probably made a lot of progress both (inc) and regional cooperation efforts. Today, of course, the coinditions are different, are different from those that prevailed in 1991. What are the coinditions:
    first, territorial claims by Armenia. In both the declaration of independence of Armenia and in the constitution of Armenia there are references to parts of Turkey, for example, there is a reference to Western Armenia, which happens to be in Turkey, there is a reference to mount Ararat, which is in the territory of Turkey, which is symbolic and very important to Armenia. I understand that, the symbolic importance of mount Ararat for Armenians but it happens to be in Turkish territory. And you make a reference to it in the constitution, it makes it a lot of problematic.
    The second problem is the Armenian insistence on the recognition of genocide claims.
    This is a state policy binding all Armenian governments. Again, I don’t challenge the right on the Armenian side to make it a state policy. But if you make it a state policy, it makes normalisation of the relationships with Turkey difficult. That is the point.
    A third problem is the Armenian efforts to gain recognition of their genocide claims in third countries, in third country parliaments. And they have done a good job, obtaining such decisions and resolutions and in the case of France even a recognition of Armenian claims of genocide. A similar resolution was adopted even though in some muted (?) form in Italy, in 2000. Now, the problem here is : every time a country adopts a resolution that recognises Armenian claims, the relation between those countries and Turkey becomes problematic. When Turkey experiences problems with these countries, whether it is France, Switzerland, Germany, Slovakia , whatever, it also reflects on our relationship with Armenia. The Armenians are doing this and so it’s going to be even more difficult for us to normalise our relationship with Armenia.
    Of course, an important point to understand this, the idea behind those resolutions adopted by third party parliaments, is that there is a step on the Armenian side towards further claims. This idea: Turkey, especially compensation, property claims, and territorial claims.
    This is the strategy: they are trying to first create a political platform though the major missing link is a decision from the U.S. congress. They have not been able to do so.
    Another problem of course if the Armenian refuse to recognize existing treaties between Turkey and Armenia which date back from the 1920s. Treaties which are still valid and which regulate the relations and the borders between the two countries.
    Finally, what does the future hope for the two countries? Here the issue if very simple from the Turkey point of view: the future holds a great deal of promise, for the two countries, if they manage their relations, by mananging their relationship which means the normalisaion of the relationship and establishing of diplomatic relations between the two countries. Now this happens very easily, even as I explained, we have the (inc) (inc), we have the occupation of (inc) territory by Armenia, we have this other territory, genocide, non recognition of existing treaties, but I believe that we can overcome all of these problems only if we can start a genuine engagement on the issue of genocide claims.
    What is this, what created a good energy between these two very ancient people when they lived together and we want to see if we can go further in the normalisation of ancient  (inc).
    In this regards, the proposal by the Turkish Prime Minister in April 2005 is still valid. This is a call for uncovering the truth about a mutual issue: if it’s a genocide, it’ll be accepted, if it is not genocide, it won’t be accepted.
    My final remark will be from an article that appeared on the International (Herald?) Tribune on Monday 25th February, written by Timoty (inc) (INc) and is says:
    “Perhaps the time has come to take Turkey upon its author (?) and establish an international, independet historical coalition that can explore historical facts and (inc) the conditions in a neutral and sustained manner, and render an independet and informed opinion”. Thank you.


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    Intervento di Feroz Ahmed

    ‘The Committee of Union and Progress and the Armenian Question’

    (Draft of the talk, Rome, 27 February 2008)

    The Armenian awakening began perhaps fifty years before the founding of the Committee of Union and Progress (CUP) in 1889. The Armenian intelligentsia influenced by the forces of secularism following the French Revolution of 1789 began to recover the Armenian language from the clergy who used it only as the language of liturgy.

    The awakening, initially cultural acquired the political dimensions during the second half of the 19th century when the intelligentsia began to seek the support of the Great powers in order to reform its situation in the Ottoman Empire. Thus the Article 61 of the Treaty of Berlin of 1878 called for “improvement and reform in the provinces inhabited by the Armenians”.

    The Armenian intelligentsia continued to become more political and radical, possibly influenced by events in Russia during the late 19th century. That resulted in the founding of movements like the Hinchak (socialist) and the Dashnaksutiyun (the Armenian Revolutionary Federation/ARF). The latter, in particular, hoped that the Great Powers would intervene on behalf of the Armenian community as they had on behalf of the Serbs, Greeks, and Bulgarians, leading to reform and autonomy

    The ARF were convinced that if they could create disorder in the Empire, the Great Powers would be forced to intervene and coerce the Sultan to make concessions. But the massacres by Kurdish tribes (1895-6), the seizure of the Anglo-French Ottoman Bank in Istanbul by Armenian revolutionaries in August 1896 did not lead to the kind of GP intervention the ARF had hoped for. The GPs only forced the Sultan to permit the revolutionaries to leave Istanbul on a foreign ship.

    By the turn of the 20th century, the ARF understood that with the unification of Germany and Italy the balance of power in Europe had changed. It was no longer possible to get a European consensus on gunboat diplomacy vis-à-vis the Sultan. So they decided to collaborate with the CUP to forces the Sultan to proclaim the 1876 constitution and carry out reform in the Empire.

    That is precisely what happened in July 1908 when a military insurrection led by the CUP forced the Sultan to restore parliamentary government.

    A few words about the CUP are in order.

    Founded in Paris in 1889, other oppositional, secret groups were also set up throughout the Empire. Initially, it was a constitutional movement opposed to the Sultan’s autocracy, convinced that parliamentary government could save the Empire from the dissolution it seemed headed for.

    When the constitution was restored in 1908, there was no recognized leader who could speak for the movement and what emerged was a collective, collegial, leadership with its HQ in Salonika and not the capital, Istanbul. It has been aptly called ‘a party of leaders’.

    When Ahmed Riza, who had led the movement in Paris, returned to Istanbul, he was virtually marginalized and hardly played a significant role after 1908

    Until 1912, the CUP continued to be a secret body with a Central Committee elected by a General Assembly in secret congresses held in Salonika. Only in 1912, after the loss of Salonika to Greece during the Balkan War, did the movement’s HQ move to the capital.

    With the establishment of parliamentary government, the CUP emerged as a strongest party in the Assembly. Though it continued to rely on the old bureaucratic class to lead the government, it nevertheless tried to influence policy.

    The CUP also played an important role in establishing a working relationship with the non-Muslim communities – the Greek, the Armenian, and the Jewish. Thus for example, before general elections community leaders bargained with the CUP for representation in the coming Assembly.

    The Committee’s goal was to create a modern, constitutional Ottoman Empire without distinction of religion or race. That was welcomed by all the communities and that is why we read of joint, inter-communal celebrations throughout the Empire after the constitution was restored.

    The Unionists were able to establish a strong relationship with the ARF. I rely on the doctoral thesis by Dikran Mesrob Kaligian on ‘The Armenian Revolutionary Federation under Ottoman Constitutional Rule, 1908-1914’ for much of my information. The thesis was written at Boston College in 2003 and Kaligian was given access to the archives of the ARF which are housed in Watertown, Massachusetts.

    What we learn is that, despite their caution and suspicion, the ARF were able to reach a political understanding with the CUP. They agreed on parliamentary representation for the Armenian community, and later when the Law of Associations was passed forbidding associations that were based on religion or race, the government never enforced this law and communal association like ARF continued to thrive.

    In fact, both the CUP and the ARF had difficulties in dealing with the Armenian Patriarchate which represented the ‘amira class’ of Istanbul, the wealthy urban Armenians, the bankers, money changers, etc. The constitutional regime wanted to curb the privileges of the Patriarch while secular Armenian bodies like ARF wanted to share in the power within the community. The Patriarch told the British embassy’s dragoman that the future of the community “…lay in working in loyal union with the Turks on the line of prudence and moderation and eschewing all extremist ideas in the way of autonomy etc.. He was counseling his flock in this sense and had let it be discreetly understood that he would resign the Patriarchate rather than countenance any advanced tendencies on the part of the Henchaq, Droshaq, or other Armenian societies….” 1

    When elections were held in November, the British ambassador reported that the Armenian community was happy with the way the elections were conducted and showed their pleasure by sending a deputation to the Porte. 2

    The CUP-ARF relationship was not even damaged by the events in Adana in April 1909 that led to the killing of local Armenians. The ARF understood that the Adana incidents – along with the counter-revolution in Istanbul – were part of the conservative plan to destroy the CUP and undermine the constitutional regime. The Great Powers were expected to intervene in order to restore stability and support the conservatives.

    In the Assembly debated Nazaret Dagavaryan, the Armenian deputy for Sivas, noted that “These [massacres] did not happen on their own. Just as incidents began to take place here [in Istanbul] on 31 March [13 April], there too they began in the same way.[11]

    Who was responsible for the massacres?” asked Krikor Zohrab, another prominent Armenian. He blamed the governor of Adana, Cevat Bey. “What is the character of Governor Cevat Bey? This man is the product of the Palace. He is a man groomed by despotism….”[12[

    The conservative opposition continued to attack the CUP even after the failure of the counter-revolution and Bedros Halacyan, a Armenian minister provided an interesting defence of the Committee: “It is stated that the Committee has been trying to incite religious animosity between the Crescent and the Cross. I defy anybody to prove to me the accuracy or this statement. The fact is that the party ought to be judged by its enemies. Who are the enemies of the Committee? The reactionaries, the followers of Hamidian rule, [and] those Levantines who seek above all things the disintegration of the Ottoman Empire….”[13]

    In September 1909 the CUP and ARF concluded an agreement that that there should always be an Armenia in the cabinet. This agreement, commented The Times (23 September) “…may legitimately be regarded as a sign that the leaders of the new regime want to work in friendly cooperation with the Armenians”.

    Apart from the fact that the Unionists saw the Armenians as progressive allies against the conservatives, they also saw the Armenian – as well as other Christian communities – as models of progress. They were to be emulated by the Muslims of Anatolia if Muslims were to advance into the twentieth century. The Committee saw non-Muslim institutions, such as their schools, as a model that Muslims ought to copy and try to improve upon them

    The non-Muslims, and particularly the Armenians, were seen as agents of change even for urban, upper class, Muslims, the majority of whom were still steeped in tradition. The Unionists also regarded the Armenian business and professional intelligentsia as the group that could play an even more important role in helping to create an Ottoman bourgeoisie so vital for the revitalization of Ottoman economy and society. In fact, the Turks, lacking a developed technical intelligentsia, relied on Armenians to provide such skills in order to modernize Ottoman society. The Armenian community had been sending students to France and Italy to learn modern methods of farming, etc and the Unionists wanted to recruit such people in order to change the economy of Anatolia.

    During the years before the World War, CUP-ARF relations were viable because the Unionists recognized the grievances of the Armenian communities in Anatolia and tried to address them. Thus the land question as well as protections from Kurdish tribes that preyed on the settled population, both Muslim and non-Muslim.

    To resolve the land question the Assembly allotted money in the budgets to compensate Armenian peasants whose lands had been seized by tribes. But Istanbul found it impossible to establish state control, largely because of widespread brigandage and tribal anarchy throughout Anatolia. The insecurity in the east had become so grave and the government, unable to protect the Armenians, instructed them to buy arms in order to protect themselves against the Kurdish tribes. Thus Kiligian notes that the ARF took regular measures to arm Armenian peasants for their own protection.3

    In early 1912, there was a fear of a Kurdish uprising fomented by Russian agents at a time when a Russian army was on the border and was in a position to intervene. By 1911-12 The government’s position became so weak because of war with Italy, that in September 1912 it was forced to accept Albanian demands for autonomy.

    With the outbreak of the Balkan War in October and the rout of Ottoman armies, some Armenian revolutionaries saw the success of Balkan nationalities in achieving their goals as the right moment to fight for their own liberation. On 28 November 1912 Albania declared its independence. 4

    On 27 October, the ‘Self-Defense Body of the ARF wrote to the Troshag Editorial Board: “The ARF saw that the Ottomans were being soundly beaten and expected that there would soon be a peace conference at which the Europeans would divided the spoils of war. This would provide an opportunity to obtain the essential reforms needed to guarantee security and a livelihood to the Armenian population of Eastern Anatolia”. Earlier on 14 October Mikael Varantian, an ARF leader wrote to Simon Zavarian from Geneva noting that the ‘Armenians were dispersed on different sides’ in the war. ‘The young ARF members in the Balkans were enthusiastically forming battalions and going to fight against the Ottomans’. 5

    Thus Armenians of the Balkans led by Antranik Pasha fought on the Bulgarian side against the Ottomans. Armenians in Istanbul and Anatolia on the other hand supported the Ottoman war effort. The Porte differentiated between the two and emphasized the loyalty of the latter, the Armenians of Anatolia. The press reported that the Armenians of Istanbul were enlisting and making financial contributions to the war effort. Their patriotism was much appreciated by the Porte. According to the Patriarch there were 8,000 Armenians in the army and he had appointed 15 priests “to provide for the spiritual needs of the Armenian soldiers”. 6

    In order to prevent incidents in the east the Seyhulislam issued a proclamation to the provinces of Anatolia and Arabia calling for tolerance towards the non-Muslims and to treat them on terms of absolute equality, ‘as enjoined by the Sharia’, the holy law of Islam. They were also told the authors of the slightest incidents would be held responsible before God and would be punished by the government. 7

    Writing about the situation in the Balkans in 1912, Leon Trotsky noted that the Ottomans faced a nationalities question that could only be solved by establishing a state on the ‘federal basis’ on ‘the pattern of Switzerland or the U.S.A.’ But ‘the Young Turks had rejected that path’. 8

    Faced with colossal defeat, the Unionists abandoned their policy of ‘Union’ and opted for decentralization. They passed a new law for the provinces and modified the constitution of the Lebanon.

    The situation in the east grew worse with increasing tribal lawlessness affecting Unionist-Armenian relations. Because of the government’s failure to protect the Armenian communities, the ARF bought arms for the peasantry and break off relations with the Unionists [July 1913].

    In November 1913, ARF’s Western Bureau wrote to the U.S. Central Committee that because of the ‘upsurge in violence’ and the Porte inability to deal with it, the Dashnak decided to change their tactics and respond in kind ‘as was being done in the Van Vilayet. Kurdish Beys and aghas who oppressed Armenians would have to be intimidated and terrorized. Lands that had been seized by force would have to be taken by force. Thus it would be the Kurds who would have to protest to the government for assistance rather than the Armenians. Such revolutionary activities had been sanctioned by the prior world congress”. 9

    In January 1914, the British vice-consul wrote that “the Armenians are now better armed than the Kurds…The Dashnakist party made the most of this opportunity, their policy being to put the Armenians in the province in a position to hold their own against the Mahommedans should the necessity arise…” 10

    In their weakened position and under pressure from all sides, in February the Unionists signed the agreement to reform what Europe call the ‘Armenian provinces’ in Anatolia. These six provinces were to be divided into two zones, each to be ruled by a foreign governor. The Unionists had accepted foreign control, something they had promised never to do! That is where matters stood when war in Europe broke out. The two governors, Wesntennek and Hoff, were forced to return home.

    With the outbreak of war the entire situation changed. Istanbul had signed a secret alliance with Germany on 2 August 1912, and though neutral, she was expected to play an active role in German strategy.

    One of the principal weapons in the war was propaganda and both sides were determined to exploit it to the best of their ability. When the Russians expelled their Jewish population from the Pale, the Germans were quick to exploit that in the U.S. against Russia’s allies England and France, asking how parliamentary regimes could justify the alliance with a tyranny like Russia’s.

    Berlin brought Georgian and Ukrainian nationalist movements to Turkey so as to subvert those regions of the Russian empire. That was also one of the reasons for the alliance with Istanbul: the Sultan-Caliph would be able to appeal to Muslims living under the rule of England, France, and Russia and that is what the declaration of Jihad in November was intended to do.

    The Unionists (and the German) hoped that the Armenians would agree to play the same role. In mid-August the Unionists sent a delegation to Erzurum where the ARF had held its Eighth World Congress. The Unionists met the ARF leaders and had lengthy discussions. The Unionists “disclosed that the government had decided to take advantage of what they hoped would be the German defeat of France and Russia… should Russia be completely defeated, they would advance to the Caucasus to either conquer them or incite a revolution there. According to the Unionists, the Georgians and Tatars in the Caucasus were already preparing for a rebellion against Russian rule. They thought that the position of the Armenians would be vital to their success. This was because they were convinced that the ARF had the power and the ability to persuade the Russian Armenians to remain loyal to the Russian government until a critical juncture at which time they would shift their allegiance to the Turks. They assured their interlocutors that the Ottoman government had no interest in occupying the Caucasus, but merely wanted to pull it out of Russia’s orbit and then give it autonomy. And the extent of such autonomy would depend on the extent of the ‘dedication and service’ to the Ottoman Empire each of these peoples of the region displayed. Finally they stated that Germany was committed to helping the Ottomans execute the entire plan”. 11

    “The ARF representatives responded that they did not have the authority to make a commitment at that time particularly as the World congress had been adjourned prematurely. Only the responsible bodies for the Caucasus could make such a commitment. But in any case, Russian Armenians no longer had the enthusiasm for Ottoman constitutional rule as they had had from 1908-1910. The errors the government and the CUP had made in regards to Ottoman Armenians would give Russian Armenians no confidence that support for the Ottoman government would improve conditions for their compatriots across the border. The Russian government had been using that lack of confidence to win the support of its own Armenian population. The Ottoman government’s stance towards the Armenian reform issue also was not encouraging. Before promising autonomy to the Armenians in the Caucasus, the government should help Ottoman Armenians. They concluded that Turkey should hurry and implement policies that would win over the Armenians just as the Russians were doing toward the Poles. The Unionists insisted that they should be told what the ARF wants. The ARF representatives answered that they were fully aware of ARF demands and that those in power knew better what they could and could not give the Armenians, especially during wartime. The Unionist delegates promised to convey the ARF responses to Constantinople by telegram. In spite of their assurances to the contrary, Vramian believed the Turks considered them Russian sympathizers. This came from their misunderstanding of conditions and what the real issues were as well as their political savvy”. 12

    At this date, Istanbul was neutral and still did not intend to become a belligerent until the right moment. Let’s remember that the war was expected to be short, ending in a negotiated peace under German hegemony.

    Even when Istanbul entered the war in November 1914, the war was expected to end by the spring of 1915. The Ottoman disaster at Sarikamis in the Caucasus and the beginning of the Gallipoli campaign changed that. For Istanbul, war had become a matter of its very survival.

    The Entente fleet failed to break through the Straits in March 1915 and began to land troops in order to open the road to Istanbul. The Germans and the Ottoman decided that if Istanbul fell to the enemy, they could continue the war on two fronts: The Germans from Edirne, the Turks from Anatolia.

    I believe the decision to relocate Armenians (and Greeks) was taken in order to make sure that the retreat into Anatolia could not be hindered by a fifth column. Remember that the Armenian communities of Istanbul and Izmir were not relocated because they were not judged a threat.

    The day before that Entente landing at Gallipoli, only ARF leaders in Istanbul were arrested on 24 April 1915 and their organization closed down. 13

    Armenian rebellion in Van began in 13 April 1915; local Armenians led by the Dashnak said to be collaborating with the Russian army. News was received in Tiflis on 6 or 7 May that Van “had been occupied by Russian troops under General Oganesov (really Ohanesian, an Armenian general in command of the Russian Caucasian Army). He was assisted by six Armenian volunteer regiments commanded by Andranig, the well-known Armenian revolutionary, who had already fought against the Turks during the first Balkan War, and had been given the rank and decoration of a general by Tsar Ferdinand of Bulgaria”. 14

    At this point, the ARF made no secret of their collaboration with the Russian army. why should they? They believed that they were fighting to liberat their homeland. The Ottomans may have considered they as rebels and traitors but future historians of the war should not.

    Under these circumstances the Tehcir/Relocation Law was passed in late April 1915. Its implementation was haphazard because the Government did not control the administration of Anatolia and therefore was not strong enough to enforce it. The Unionists were themselves divided.

    In an Armenian memoir we are told that the governor of Kutahya, Faik Ali, refused to deport local Armenians despite pressure from the Unionists of Kutahya. They complained to Minister Talat Bey but Ali Faik refused to budge and offered to resign if Talat persisted in pressing to have the order fulfilled. Talat backed down and the Armenians of Kutahya were not relocated. 15

    This event suggests a number of possibilities. Firstly, that the regime in Istanbul was not strong enough to have its orders carried out even if it wanted to. After all, Kutahya was not so far from Istanbul and its governor was in communication with the government. The government should have been able to force Faik Ali to carry out its orders or accepted his resignation.

    Secondly, the CUP was divided on this issue and many in the Committee were opposed to the Relocation order. After all Faik Ali, though the brother of Suleyman Nazif, was not such a prominent Unionist as to stand up to Talat. But Talat lacked support in the movement.

    The threat from Gallipoli ended in January 1916 when the Entente withdrew its forces. The relocation policy was also wound down and we hear of Armenians returning to their former homes or moving to the security of Istanbul.

    Even the Russian advance into Anatolia in 1916 did not lead to a change of policy. In 1916, Russian armies had occupied a swathe of Ottoman territory from Trabzon on the Black Sea down through Erzincan to Van and then back to the Caucasus. This region was to be annexed and attached to Russian Armenia if Russia won the war.

    While this was an important front for the Unionists, they did not see the Russian occupation as threatening the very existence of the Empire. They were depending on the final German victory that would be won on the Western front. This was especially true after the Bolshevik Revolution and the retreat of Russian armies from Anatolia. Right until the failure of the last German offensive in the West in July 1918, The Unionist war aims show that they were hoping to have an enlarged Empire that would include not only territories conquered by the British in Iraq and Syria, but the restoration of Egypt, occupied by the British in 1882, and even Cyprus, leased to London in 1878. At Brest-Litovsk, the Unionists had already regained territories annexed by Russia in 1878.

    The Unionists were Imperialists not nationalists. They wanted to retain a multi-ethnic, multi-religious empire that included not only Turks, but Arabs, Armenians, Greeks, and Jews.

    Armenian nationalists had calculated on an Entente victory and such a victory was achieved even after the Bolsheviks made peace.

    After the Ottoman defeat, Armenian nationalists hoped that they would have the support of the victorious Great Powers – England, France, Italy, and the US – to achieve an even greater Armenia with borders from the Black Sea to the Mediterranean. They claimed to have the demographic strength – i.e. over a million people – to populate such a state if only they wee given this territory under a U.S. mandate. They said that there were hundreds of thousands of Armenian refugees who had fled with the Russian armies, who were waiting to be repatriated in Anatolia. This suggests that the war had not take the toll on life that wartime and later propaganda claimed.

    But the historical conjuncture had changed and the Great Powers were in no mood to consider Armenian territorial claims. Armenian nationalists, who the Powers admitted had made a considerable contribution to their war effort as beligerents, were not given any compensation they believed they deserved. Thus their bitterness then and today. 16

    Feroz Ahmad

    Yeditepe University

    Istanbul

     


     

    [1] Hans Köchler. “Coming to Terms with the Past as a Problem of Justice: Philosophical Reflections”. Paper submitted to Bilgi University, Instanbul, 2007.

    [2] For instance: Stephen Pope and Elizabeth-Anne Wheal, Dictionary of the First World War, S. Yorkshire, UK, Pen & Sword Military Classics (first published by Macmillan Reference Books, 1995). 2003, pp.34-35.

    [3] Olliver Hoedeman. “Corporate Power”, Argumenta Against G8 eds. Gill Hubbard and David Miller, London and Ann Arbor, MI, Pluto Press, 2005, p.88.

    [4] This was the case in the Ottoman trials(after1918), post-war Germany and Japan (1945-46), Yugoslavia(1990-2000), and Iraq( 2003).

    [5] For the ICC as a supranatutional entity, the independence of the judge and of the Prosecutor, and assertion of authority; Hans Köchler, Global Justice or Global Revenge? International Global Justice at the Crossroads. Wien-New York. Spinger, 2003. pp.4,12-14, 24-26, 28-30, 45-49, 185-204, 208-229, 237, 245, 249, 250, 260-266.

    [6] Angie Debo, A History of the Indians of the United States, Norman, Okla. University of Oklahoma Press, 1970.

    [7] A classic: Gunner Mydal, An American Dilemma, New York, Harper Collins, 1962.

    [8] From the pen of an activist: Charles C. Roach, Canada’s Aboriginals: The Struggle for Their Homelands, London EAFORD, 1983.

    [9] Condesed version of the authors’ prize-winning study: Sylvie Vincent and Bernard Arcand. The Image of the Amerindians in Quebec Textbooks, London, EAFORD 1983.

    [10] E.E. Cashmore, The Rastafarians London MRG, 1984; L. Barrett, The Rastafarians, London, Heinemann.

    [11] Condensed English version of prize-winning study: Rosque de Barros Laraia, New Trends in Brazilian Indian Affairs, London EAFORD, 1985.

    [12] Hugh O’Shaughnessy and Stephen Corry, What Future for the Amerindians of South America, London EAFORD, 1977, p.9.

    [13] M.M. Colchester with F. Watson, Venezuelan Violation of Indigenous Rights, London, Survival International and World Rainforest Movement, 1975.

    [14] H. Beach, “The Sami of Lapland”, Polar peaples and Self-Determination and Development, London MRG, 1994.

    [15] C. Palley et al..Minorities and Autonomy in Western Europe, London MGR, 1991

    [15][16] S. Collinson Europe and International Migration, London Royal Institute of International Affairs, 1974; D. Jolly with C. Nettleton and L. Kelly, Refugees in Europe, London MGR 1997. For the life of the Suryanis in Sweden: Ulf Björklund, North to Another Country, Stockholm University of Stockholm, 1981.

    [17] Justin McCathy, Death and Exile: the ethnic cleansing of Ottoman Muslims, 1821-1822, Princeton, The Darwin Press, 1995.

    [18] Salahi Ramadan Sonyel, The Muslims of Bosnia: Genocide of a People, liecester, The Islamic Foundation, 1995, p.5

    [19] Olga Radova, “The Problem of Gagauz Ethno-DEmographic Development in the 19th Century. “Südost Forsehungen, Munchen, 54 (1995) pp. 263-270: O.K. Radova, “Gagauzy Bessarabii: Rasseleniye I Chislennost bXIX v” Etnograficheskoye Oboreniye (Yanvar- Fevral1997) str.121-128.

    [20] Türkkaya Ataöv The Inquisition of the Late 1980s: the Turks of Bulgaria, Washington D.C., EAFORD , 1990

    [21] Hugh Poulton, The Balkans: Minorities and State in Conflict, London, MGR, 1992, pp.182-188.

    [22] Ann Sheehy and Bohden Nahaylo, The Crimean Tatars, Volga Germans and Meskhetians, London MGR, 1980.

    [23] U.N. Security Council , Resolution 822 (1993), Resolution 853 (1993), Resolution 884 (1993).

    [24] On the tensions resulting from “market dominant minorities” and the power behind them: Amy Chua, World on Fire: How Exporting Free Market Democracy Breeds Etnic Hatred and Global Instability, London, William Heinemann, 2004.

    [25] A.W. Williams and M.S. Gabriel, Bleeding Armenia: Its History and Horrors under the Curse of Islam, Chicago, publishers’ Union, 1896, pp.423-440, 470-471, 490-491. For extensive quotation of these statements, see: Türkkaya Ataöv The British Blue Books:Vehicles of War Propaganda, 1914-18, New York, Okey Enterprises, 2006, pp.32-33.

    [26] For istance: David Marshall Lang, The Armenians: A people in Exile, London, George Allen and Unwin, 1981, p. 7.

    [27] G. Pasdermadjian, Armenia: A leading Factor in the Winning of the War, tr. A. Toroossian, New York. American Committee for Armenia, 1919. For the chapter on Armenian armed revolt in 1915 and other Armenian sources on their belligerency, see: Türkkaya Ataöv, What Happened to the Ottoman Armenians? New York, Okey Enterprises, 2006, pp. 27-35 and fn 62.

    [28] Louise Nalbandian, The Armenian Revolutionary Movement: The Development of Armenian Political Parties through the Nineteenth Century, Berkeley, Los Angeles, University of California Press, 1975.

    [29] K. S. Papazian, Patriotism Perverted: Armenian Revolutionary Federation, Boston, Baikar Press, 1934.

    [30] So were those Armenians who wantonly murdered Turkish Diplomats and some other nationals between 1975 and the 1980s.

    [31] American Commitee opposed to the Lausanne Treaty, The Lausanne Treaty and Kemalist Turkey, New York, 1924, p.19

    [32] American Committee Opposed to the Lausanne Treaty, The Lausanne Treaty, Turkey, and Armenia, New York, 1926, p.143

    [33] Nmuk D. Volkan, The Need to Have Enemies and Allies: From Clinical Practise to International Relationships, Northvale, New Jersey and London, Jason Aronson, Inc.1994

    [34] Stanford J. Shaw. History of the Ottoman Empire and Modern Turkey, Vol.1, Cambridge, University Press, 1976, pp.58-59, 133-135, 315-316.

    [35] Stanford J.Shaw, Turkey and the Holocaust: Turkey’s Role in Rescuing Turkish and European Jewry from Nazi Persesution, 1939-1945, New-York, Palgrave Macmillan, 1993

    [36] For an Armenian view: Mesrob K. Krikorian, Armenians in the Service of the ottoman Empire:1860-1908, London Henley and Boston, Routledge and Kegan Paul, 1977.

    [37] Papazian op.cit. pp.74-75.

    [38] M.Lacher, La Guerre turque dans la guerre mondiale, Paris Etienne Chiron, 1926, pp. 395-396.

  • Istanbul unveils European Capital of Culture 2010 plans

    Istanbul unveils European Capital of Culture 2010 plans

    (ISTANBUL) – Istanbul on Thursday unveiled its plans for celebrating its nomination as European Capital of Culture 2010.

    The projects, ranging from street art to music festivals, are dedicated to the ancient philosophy of Aristotle who said everything is made up of the four elements: earth, air, fire, and water.

    “This is how we interpret Istanbul. We believe that the culture that has permeated Istanbul for many centuries, allowing a Greek man to work with an Armenian artisan, a Turkish businessman and a Jewish trader, is a good example for the world today,” said Nuri Colakoglu, president of the Istanbul-2010 committee.

    International architects Renzo Piano and Norman Foster are involved in a project to transform the working-class district of Yenikapi.

    Around it lies a new archeological park, which showcases items uncovered from the ancient Byzantine harbour of Eleutherios, including the body of a third-century emperor and about 30 ships.

    A number of modern art exhibitions comprising plastic objects will also be displayed, and organisers have invited prominent artists to work alongside their younger counterparts in the run up to 2010.

    Istanbul was awarded European Capital of Culture status for 2010 in 2006 by the European Union, along with the German town of Essen and the Hungarian city of Pecs.

    Source: www.eubusiness.com, 27 November 2008

  • Foreign nationals given ID cards

    Foreign nationals given ID cards

    Biometric cards are being issued to some foreign nationals from Tuesday

    The Home Office is to start issuing identity cards to people from outside the European Economic Area.

    The first cards will go to students and the husbands, wives and partners of permanent residents who apply for permission to extend their stay.

    Ministers want 90% of foreigners in the UK to have cards with fingerprints and personal details on, by April 2015.

    The Conservatives called the cards an expensive gimmick. The Lib Dems called it a “dark day in British history”.

    They will contain the fingerprints, name, date of birth, nationality and the person’s right to be in the UK.

    ‘Employers benefit’

    Ministers predict that between 50,000 and 60,000 cards will be issued by the end of March.

    Home Secretary Jacqui Smith said: “In time, identity cards for foreign nationals will replace paper documents and give employers a safe and secure way of checking a migrant’s right to work and study in the UK.”

    But shadow home secretary Dominic Grieve said: “This is a gimmick but it’s a gimmick with a price.

    “While these ‘ID cards’ won’t stop illegal immigration or terrorism, they will land the taxpayer with a multi-billion pound bill.

    “At a time of economic hardship this is the last thing the taxpayer needs.”

    Liberal Democrat home affairs spokesman Chris Huhne said: Forcing ID cards onto guests in our country marks a dark day indeed in British history. This hugely expensive scheme will have no impact on crime, terrorism, illegal immigration or illegal working as foreign nationals already have passports with visas. This intrusion on British liberty is completely unnecessary.

    “Foreign nationals, who cannot vote, are perfect guinea pigs for a government wanting to test a deeply unpopular and unworkable policy. When the rest of us are forced to carry ID cards, this scheme will prove to be a laminated Poll Tax.”

    Source: news.bbc.co.uk, 25 November 2008

  • US intelligence predicts EU ‘hobbled giant’ by 2025

    US intelligence predicts EU ‘hobbled giant’ by 2025

    And other world news from the future

    By Austin Modine

    Posted in Public Sector, 22nd November 2008 03:58 GMT

    Webcast: Building Applications for the 21st Century

    United States government intelligence hasn’t exactly been on a winning streak for predicting future events, but recently it’s been painting a somewhat bleak future for Western society.

    A report released Thursday by the National Intelligence Council (NIC) predicts global trends in the year 2025 to better inform US policy makers.

    NIC’s report concludes the European Union will maintain its economic clout in 2025, but internal bickering and competing national agendas will leave the EU a “hobbled giant” unable to translate its position into global influencel

    It forecasts that Europe’s shrinking working-age population will become a major test of its social welfare model. “Progress on economic liberalization is likely to continue only in gradual steps until aging populations or prolonged economic stagnation force more changes – a crisis point that may not hit before some time in the next decade and might be pushed off even further.” The agency said there will be no easy solutions for the problem, save cutbacks in health and retirement benefits, “which most states have not begun to implement or even to contemplate.”

    Disagreements in threat perceptions and a likelihood that defense spending will remain uncoordinated suggests the EU won’t be a major military power in 2025, the report states. “The national interests of the bigger powers will continue to complicate EU foreign and security policy and European support for NATO could erode.”

    In 2025, the intelligence agency said that the US will remain the single most powerful country in the world, but that it will be less dominant. The shift in wealth and economic weight will continue to shift from the West to East.

    “Even in the military realm, where the US will continue to possess considerable advantages in 2025, advances by others in science and technology, expanded adoption of irregular warfare tactics by both state and nonstate actors, proliferation of long-range precision weapons, and growing use of cyber warfare attacks increasingly will constrict US freedom of action.”

    On the economic front, rather than emulating Western models for development, more countries may be attracted to China’s alternative development model.

    In fact, the report states China is poised to have more impact on the world over the next 20 years than any other country. If current trends continue through 2025, China will become the world’s second largest economy and a leading military power.

    India will also continue to enjoy its rapid economic growth. The two countries must soon decide the extent of the role which they are able and willing to play on the global stage, the report states.

    Russia has the potential to be “richer, more powerful, and more self-assured” in 2025 if it diversifies its economy and integrates with global markets.

    “On the other hand, multiple constraints could limit Russia’s ability to achieve its full economic potential.” Those problems include decaying education and health, an undeveloped banking sector, and corruption, according to the NIC. “Shared perceptions regarding threats from terrorism and Islamic radicalism could align Russian and Western security policies more tightly, notwithstanding disagreements on the other issues and a persisting ‘values gap.’”

    Japan will be forced to restructure its political, social, and economic systems to address its continually shrinking work force. Due to increasing electoral competition, Japan’s one-party system “probably will fully disintegrate” by 2025. The NIC predicts the country’s Liberal Democratic Party will split into a number of contending parties, leading to “policy paralysis.”

    By 2025, Brazil will exercise greater regional leadership, but won’t be able to extend its influence beyond the continent, the report predicts.

    “The country’s maturing commitment to democracy is on a secure footing with fair and open electoral processes and smooth transitions having become routine.”

    The Brazilian economy may get a dramatic spike based on preliminary finds of new, possibly large offshore oil deposits. “The oil discoveries in the Santos Basin – potentially holding tens of billions of barrels of reserves – could make Brazil after 2020 a major oil exporter when these fields are fully exploited.”

    Other countries on the NIC’s shortlist of up-and-coming powers are Indonesia, Turkey, and Iran. The full report can be downloaded here (). (8.3MB PDF warning)

    Original URL:

  • Arzu Arda’s documentary on Hagia Sophia

    Arzu Arda’s documentary on Hagia Sophia

    Los Angeles, CA-Los Angeles Art Association is pleased to announce the opening of its annual Open Show. This year’s show was curated by David Pagel, art critic for the Los Angeles Times.

    Show runs: Dec. 13, 2008 – Jan. 16, 2009. Opening reception: Sat. Dec. 13, 6-9 p.m.
    Where: Gallery 825, 825 N. La Cienega Blvd., Los Angeles, CA 90069.

    Video Screening: Jan 8th, 7:30pm.
    Where: Japanese American National Museum’s National Center for the Preservation of Democracy, 111 N. Central Ave., Los Angeles, CA 90012.

    Video pieces will also be screened at the Open Show at Gallery 825.

    For more information, please contact Dan Goldman, Gallery/Program Manager, LAAA/Gallery 825 either by email at dwg@laaa.org, or by telephone at 310.652.8272.

    About LAAA: Los Angeles Art Association (LAAA)/Gallery 825 is a 501(c)(3) nonprofit organization whose mission is to provide opportunities, resources, services and exhibition venues for emerging Southern California artists. Founded in 1925, LAAA has helped launched the art careers of many celebrated artists, such as Marcel Duchamp, Man Ray, Wayne Thiebaud and June Wayne. LAAA has played a pivotal role in the formation of Los Angeles’s arts community and is committed to providing emerging artists with the experience, education and exposure needed to create and sustain careers in the arts. LAAA’s unique status as a non-profit organization provides it the flexibility for risk-taking beyond what is possible in the commercial gallery system, positioning the organization as a driver of innovative content in Los Angeles.

    Los Angeles Art Association/Gallery 825 is located in the heart of La Cienega’s Restaurant Row at 825 North La Cienega Boulevard, Los Angeles, CA 90069. Gallery Hours are 10am – 5pm, Tuesday – Saturday or by appointment. Please call 310.652.8272 or visit www.laaa.org.

  • THE SERIOUS PAIN STARTS IN 2009

    THE SERIOUS PAIN STARTS IN 2009

    wellington letter

    November 24, 2008 Volume 31: No. 25
    THE SERIOUS PAIN STARTS IN 2009
    MORE CRISES, MORE BAILOUTS

    Late News:
    Senator Chuck Schumer (D-NY) said on Sunday that the Congress will be working with the President-Elect to add another $700 billion to the original $700 billion to “stimulate” the economy. Of course, it’s not so much the size but how it will be spent that’s important.
    At the same time, Nancy Pelosi said that Congress may give the automakers $75 billion, instead of the $25 billion they asked for. Yes, the politicians have blinked. They don’t have the courage to get the pain behind us. They will do everything they can over the next 10-15 years, prolonging the economic pain just as in the 1930’s. As politicians, they really have no choice. To do otherwise means they would take the blame and not be re-elected. And that means the end of their cushy job, private planes, limousines, etc. That’s unacceptable.
    So, the taxpayers, who will struggle to get by, will get the bill. And because of their ignorance of basic economics, the taxpayers will thank the politicians for their “bold” actions.
    Russian bombers arrive in Venezuela. Furthermore, Russia and Venezuela will carry out naval exercises very close to the U.S. This is in response to the U.S. installing missile bases in Eastern Europe, surrounding Russia. Washington says these missiles are to protect central Europe from attacks from Iran. Russian isn’t buying the story. Russia’s President Dmitry Medvedev spoke
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    Bert Dohmen’s
    Wellington LetterTM

    with President Bush at last week’s APEC meeting in Peru, and repeated Russia’s demand that the missile bases be closed. That’s what we really need now, another “Cold War.”
    The stock of Citigroup has been trading just like Bear Stearns, Lehman, Fannie Mae, Washington Mutual, Wachovia and others just before they either went bankrupt or were taken over. Last week the CEO of Citi said that, “The company is financially sound.” This is the same statement each of the CEO’s of the other companies made just a week before their demise. It’s a bright red warning signal.
    Therefore, Citi needed a bailout this weekend. And they got it. Another weekend, another bailout. Citigroup will get a $306 billion governmental guarantee for 90% of the losses of for its underwater derivative portfolio. It will also get $20 billion from the taxpayers, etc. etc. If you have their credit cards, will you get a break on the interest rate? I doubt it. This is a huge guarantee for one firm. It’s now obvious that Bernanke is everything but the kitchen sink at the threatening deflationary collapse. And we can’t blame him. The situation is extremely precarious. To do nothing would be dumb.
    The credit card firms have a great window on consumers sales. Master card today reports a huge drop in sales, one of the biggest ever seen. Women and men clothing down 20%. Big ticket electronics down 22%. Large price cuts everywhere. Drops of this size were last seen in the Great Depression.
    THE STOCK MARKET
    Another bounce, but no bottom
    From Election Day to Nov. 19, 11 trading days, the DJI fell 16.9%, the S&P 500 19.8% and the NASDAQ Composite 22.8%. The optimists think that every little bounce in the stock market is the end of the bear market. They are fooling themselves. It’s a matter of hope over experience.
    One of the most widely heard phrases this year in the markets is, “stock market bottom.” If you Google “stock market bottom in 2008” you get 2,910,000 results. Yes, all the pundits have been telling investors since the beginning of the year that it was a stock market bottom. Yet, the world’s stock markets have lost over $16 TRILLION this year. So much for “free” advice.
    After last Friday’s 498-point rally we are hearing the phrase again. And many investors will fall for that fairy tale. Hope is eternal.
    The rally on Friday was predictable. In our SMARTE TRADER service of the prior day, we advised closing out short and bearish positions the next morning as the DJI would drop to

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    “approach the 7200-7400 area.” We didn’t think it would hit that area, only “approach” it. That’s usually what happens on the first approach. Then you get a rally. Often that is followed by another decline that breaks the prior low. We had big profits and wanted to cash them in because SMARTE TRADER is a trading service.
    But will this be a long-term bottom as so many alleged analysts tell you in the media? Think about it. The S&P 500 already broke through the bear market low of 2000-2002, which was a horrific bear market. That in itself is extremely bearish. That suggests that conditions will get worse than at the bottom in 2002, the depth of a deep technology crash. All the stock that was bought between the low of 2002 and now, that’s 6 years of buying, is now being held at a loss. And much of that stock becomes supply to be potentially sold on any rally in the stock.
    Take a premier company, Intel. The company is an industry leader, has billions of dollars of cash, and is unlikely to go out of business. But the stock just broke its bear market low of 2002.
    The bulls look at the “cheap” valuations in the stock market, the high dividend yields on some stocks, etc. But those numbers are all history. Look at the Citigroup: the dividend has plunged more than 95% the last two months. The best way to see if the financial situation is worsening or improving is to watch credit spreads, T-bill yields, the spread between the yields on junk bonds and T-bonds, etc. The manipulated Dow Jones Indices won’t tell you.
    The yields on Treasury securities, especially short-term T-bills, tell you about stress. When yields are pushed to record lows, as they are now, then you know that money from around the world is fleeing to the safest haven, namely U.S. Treasuries. The yield on 30-year T-bills is now near zero. The two-year T-note yield is below 1%. It’s just like the 17-year deflationary experience in Japan. The flood of money going into Treasuries is pushing the dollar upward. There is another place to look when you think stress is being relieved.
    The yield on junk bonds also tells a lot about stress. Currently the yield has soared over 20% on the speculative-grade corporate bonds, surpassing the 20% mark for the first time in at least two decades, according to the Merrill Lynch & Co.’s U.S. High Yield Master II index.
    Junk bonds have lost more than $187 billion in market value since August. That’s just three months ago. I remember seeing a number of analysts in the media recommending them because of the high yields. I shuddered each time I heard it. Now the losses are soaring.
    One of the foremost junk bond experts is Martin Fridson, CEO of money management firm Fridson Investment Advisors. I had the pleasure of meeting him two years ago. He was quoted by Bloomberg: “Prices are in a virtual freefall.” That’s stress!
    Because of stress in the credit markets, we are in a “liquidation bear market” for stocks,

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    something seen only rarely. That means that stocks are being sold regardless of value. The only motivation is to raise cash. For short sellers, that’s the best environment. While 99% of investors are using “hope” as their excuse for holding onto stocks, the smart traders, as subscribers to our trading services, are literally making fortunes selling short and buying the bear ETFs.
    But short selling goes against human nature. What is the question you hear posed to guests on financial TV about 50 times every day? “What stocks would you buy now?” Do you ever hear someone say, “What stocks would you sell short now?” Of course not. They don’t want to take the chance of losing any advertisers. So how many bears do you see interviewed on financial TV? Very few. Once in a while they invite a “token” bear, but they are usually the ones who were bearish during the entire bull market of the preceding five years and, therefore, have no credibility. Where is the warning label on the screen that says, “This advice may be ruinous to your investment portfolio”?
    Since Sept. 15, only 10 stocks on the S&P 500 index are higher. That means 490 stocks of the index are down. Remember this summer when the financial TV analysts were still debating whether or not it was a bear market? Yet almost every guest gave advice on what to buy. Imagine trying to catch the 10 out of 500 stocks that will go up! No one has the guts to say “sell.”
    We are in a global financial crisis, but very few believe that it will last long. However, look at the evidence. Billionaires around the world are getting huge margin calls. That’s when financial institutions holding the stock for collateral against loans ask for more money as collateral. In Germany, VEM Vermoegensverwaltung GmbH, the investment unit of the billionaire Merckle family, said it has two weeks to secure bank financing after wrong-way bets on Volkswagen AG shares and the plunging value of HeidelbergCement AG led to a “liquidity shortage”?
    In the U.S., Sheldon Adelson of Las Vegas Sands was worth $32 billion a year ago, and soon may be very poor. Kirk Kirkorian of MGM has lost billions, and even Warren Buffett may be down more than $25 billion. Imagine, a $375 subscription to our WELLINGTON LETTER could have saved these gentlemen from those misfortunes. You, our valued subscribers, have done much better than these people with all their overpaid advisors.
    Such wealth destruction doesn’t happen because it’s just “a little bear market.” This is a crisis of monumental proportions. Big bank stocks have lost $125 BILLION of market value in the last two weeks, according to Charlie Gasparino of CNBC. Imagine, Bank of America (BAC) losing 22% on one day last week. I believe that BAC and Citi will have to be bailed out by the government buying at least $50 billion of preferred stock in each. They have hundreds of billions in mortgages that can’t be sold, and which are defaulting at an accelerating rate.
    I believe that soon we will see bankruptcies in the brokerage business. The first one may be E-trade. Years ago, they threatened to sue us for patent infringement because the name of one of

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    our services was “Smart Etrader.” We thought that was a far reach, but the CEO was inflexible. So we changed the name by just moving the “e.” Their former CEO was a jerk, whose pals on the board had given him over $60 million in compensation in one year. That’s $5 million per month, or $30,000 per hour. Then he was ousted.
    We are seeing major companies, many of which survived every financial panic of the last 100 years, including a 10-year Great Depression, like Bear Stearns, Lehman Brothers, GM, etc. going out of business. And we are just in the first year of this episode. Even the survivability of the world’s formerly premier companies, such as Citigroup, GE, Ford, JP Morgan and Goldman Sachs, is being questioned.
    Until now, we have only seen about one year of financial crisis, and it’s already the worst one the world has ever seen. But this is the easy part. It really hasn’t much affected the average person. In fact, many of my friends, who are smart, educated, business leaders, etc., are still in denial in spite of all the weekly crises in the financial system. The attitude is “they will fix it,” “Wall Street is smart and will get out of this,” etc. I just have to shake my head. Wall Street basically doesn’t exist anymore, except for the asphalt, and they assume everything will turn out fine.
    THE NEXT PHASE: Economic Crisis
    Now comes the tough part, economic crisis. This is where the real pain starts. In January, there will be an avalanche of corporate bankruptcies. Retailers will still try to capture the Christmas season although they don’t have the credit lines to stock up for Christmas. Therefore, they will deplete inventories. After that, they will have no cash or credit to restock and to pay the bills.
    The unemployment rate will skyrocket. Businesses will close, and office buildings will empty out. Positive cash flow will quickly turn negative. Owners of the large office buildings, who financed the purchases with short-term loans over the past several years, will not be able to refinance, and the buildings will go into foreclosure.
    Shopping centers will see vacancies soar, and the signs “Closed for Remodeling” will go up in the shopping centers. The REITs specializing in commercial real estate will plunge even further. Banks will have even less incentive to lend as their bad loan portfolios will get much thicker and their write-downs will accelerate. That means all the infusions of capital from the Fed and the Treasury will be used to meet capital reserve requirements, not to make loans.
    World trade is already coming to a halt, for two reasons. First, there’s the LOC (Letter of Credit) problem, which we wrote about several months ago. Manufacturers won’t accept them because they don’t have faith in the companies issuing them. Thus the importers have to send cash overseas, say to China, and trust the seller that the goods will be shipped. If they are not, the only
    Bert Dohmen’s
    Wellington LetterTM
    remedy is to sue in a Chinese court. Good luck! And thus trade stops. Second, consumers have hit the wall. As they start losing jobs, consumer spending will plummet.
    Factories in less-developed countries will close by the thousands, and these countries will see a huge outflow of foreign investment money. The term FDI (foreign direct investment) will change to FIO (foreign investment outflows). Their currencies will crash, they will boost interest rates to double-digits in ill-fated efforts to support the currencies and recessions will turn into depression.
    When the U.S. unemployment rate hits 10%, the new President will invoke “executive orders” to fix the economy. The natural target will be to tax the “wealthy.” That will be defined as anyone with over $75,000 of income. Labor unions will become very powerful again, which will destroy all opportunity for large firms to fix themselves. Thousands of new taxes and regulations will discourage new formations and entrepreneurs will find retirement more attractive.
    Just six months ago, they were talking about the cost of the financial crisis eventually being $280 billion. We said it would be $1-2 TRILLION. Then they kept increasing it. About two months ago, we wrote that it would be $5 TRILLION and eventually perhaps $10 TRILLION. Those projections seemed insane. But the bailout cost is already over $2 TRILLION, and with the new proposal, will soon be at $3 TRILLION. And we are still only in the first year of the crisis.
    The foregoing is the unembellished forecast. I wanted to give it to you early, instead of making it the typical year-end forecast. This gives you more time to prepare. And please don’t make the mistake of thinking that this is “too extreme.” In fact, I believe it’s on the optimistic side, as the credit implosion means that any company dependent on getting loans or credit will face extreme stress.
    The biotech area is a good example. One expert said: “For the first time in the history of the biotech industry, you’re going to see unprecedented levels of bankruptcies and dissolutions.” The problem is the unavailability of financing. And the merger route, via larger pharma firms, is also closed, as these firms can’t get credit for acquisitions either.
    THE CHARTIST’S VIEW
    Charts tell the story much better than a thousand words. Going through the charts of several hundred indices, of markets and sectors, the only charts where Friday’s close (after the big rally) was higher than the prior day’s high was the gold related sector. That makes the rally for everything else pretty insignificant, technically speaking. And furthermore, we didn’t see any “weekly” reversals, where the close on Friday was above the close of the prior Friday. Without a

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    weekly reversal, you can’t have a meaningful bottom. Therefore, this looks like a relief rally. The holiday week is perfect for that.
    Let’s look at the charts. The NASDAQ COMPOSITE (monthly) long-term chart clearly shows
    that the index did not even retrace 50% of the 2000-2002 decline during the bull market that
    followed. That’s a poor rally. It never got close to the high of 2000 again. This is important. It was my view during the recent bull market that it was merely a cyclical bull market inside of a much longer-term secular bear market. In other words, it was only a rally and the important top was made in 2000. Our work shows that such bear markets last at least 17 years. So if we count 2000 as the beginning, the earliest we can expect a solid bottom is 2017. Of course, there will be rallies in between, even profitable ones for bulls, but they will not lead to new, long-term highs.
    NASDAQ COMPOSITE (monthly)
    The long-term chart of the DOW JONES TRANSPORTS (monthly) shows the beautiful 1-2-3-point top (next page). As longtime subscribers know, we sell at point three. This is where the indicator below has made the second lower low while the index has made a new high. A good downside target is the 2003 low. That should come early next year.

    DOW JONES TRANSPORTS (monthly)
    The DJ US UTILITIES (weekly) shows a classic “head and should top” that’s always bearish. We identified that in August. Look at the plunge after the pattern was completed. But Wall Street touts say technical analysis doesn’t work. Let them continue to believe that. The 2002 low was reached, and is major support for now. That suggests that a temporary bottoming phase is ahead.
    DJ US UTILITIES (weekly)

    The DJ US HEALTHCARE (daily) is one of the sectors recommended by just about every analyst in the media as a “defensive” sector. Well, a 33% decline in 10 weeks is not “defensive.” It’s vastly over-owned. Amazingly, the indicator below is once again negative.
    DJ US HEALTHCARE (daily)
    The DJ US OIL & GAS (daily) is now back at the October low. This chart still looks bearish. The probability is high that there will be another break to the downside.
    DJ US OIL & GAS (daily)

    The chart of GOLD (weekly) shows more than a shorter-term chart. Gold is very erratic. Short- term moves often have no follow-through. Our view has been that the deleveraging and dumping of any assets for which there was a market had also been putting pressure on gold. Therefore, an easing of the pressure will be seen in the credit market first. Then you will see it in the dollar, which will decline. And that will confirm a new up move in gold. The rally on Friday was a breakout above a three-week congestion area. This is positive, but it’s only one day. On any pullback, the breakout level must hold. We will watch signals closely. A very good buying opportunity for gold may have emerged.
    GOLD (weekly)
    The chart of the DJ US GOLD MINING STOCKS (daily) shows a double bottom and a bullish divergence with the indicator below (next page). Now it just has to break out and close above the early November high to
    DJ US GOLD MINING STOCKS (daily)
    And finally, we have the DOLLAR INDEX (daily), which is a composite of about 13 currencies against the dollar (next page). Note the beautiful rise. But also note that the chart now forms a “rising wedge.” As longtime subscribers know, a rising wedge usually ends in the chart breaking sharply to the downside as the
    DOLLAR INDEX (daily)
    CONCLUSION
    Our downside target for the Dow Jones Industrials Index (DJI) was the 7200-7400 area. In our SMARTE TRADER service last Thursday we advised closing out all short and bearish positions on a decline the next morning as the DJI “approached” the 7400 area. Well, the low was 7449. That’s close enough. However, often the rally starts just shy of such a target. Then the chart declines again and the prior low is penetrated. That often forms a better bottom. In other words, we could be close to a temporary bottom and a bear market rally.
    Last time we wrote about gold: A decisive close above $767 would negate the potentially negative formation. On the downside, a move below $714 would be bearish.
    Well, we now got the close above $767, which negates the negative formation.
    We also wrote: The stock market is now giving us new strong sell signals. We need one-two days to confirm that. But it looks like the major indices will drop back to the October lows, and that implies those lows will eventually be broken and the market will go to new lows.
    If that occurs we would have the next downside target of the 7200-7400 area on the DJI.

    As we know now, that’s exactly what has happened. Of course, the low was just 49 points shy of our target area. In fact, our area may still be reached. We know that there are people who think we should have known the exact price of the, but we really don’t have a crystal ball.
    We also wrote: The only markets rising in that eventuality are the Japanese yen, the U.S. dollar and U.S. Treasury bonds.
    As you know, U.S. T-bonds had an astonishing rally, as did the yen.
    WHAT TO DO
    Last time we recommend that “if the DJI closes below 8130, we would buy some of the ETF’s that are designed to rise in price as the index declines. Here are some to choose from:
    PROSHARES SHORT QQQ (PSQ)
    PROSHARES SHORT MIDCAP-400 (MYY)
    PROSHARES SHORT MSCI EMERGING MARKETS (EUM)
    We made phenomenal profits in these bearish ETF’s on Friday when the DJI got top 7449, close to our downside target area of 7200-7400. Anyone who didn’t close these out will probably get another chance to do so. And that’s what we recommend if Friday’s low is approached again. (You have to decide what “approach” means to you.)
    WORLD TRADE AT A STANDSTILL
    Several months ago we addressed the topic of trade. We had learned from our sources that goods for the holidays were not being shipped by the manufacturers because of the credit squeeze and lack of confidence in the banks. When a retail chain in the U.S. buys goods from China or other places, it gets an “irrevocable letter of credit (LOC). The LOC is issued by a bank, guaranteeing the manufacturer payment for the goods when they are shipped.
    The problem now is that the manufacturers don’t trust the banks that issue the LOC. Therefore, they are not shipping. Around the world, ships are standing idle at the ports with nothing to load. As we wrote this summer, at Christmas time the shelves will be empty. But it won’t matter very much, because there won’t be many customers anyway.
    A photo of the port of Hong Kong shows a long, long line of freighters. They can’t load cargo because shippers have problems with LOC’s, and other reasons for not shipping. The Baltic Freight index has now collapsed by over 90% since the peak in May. Remember when we showed the chart at that time? It had just made a new, all-time high. We said that would be a

    “false upside breakout,” leading to a collapse of 80%. Well, even that outrageously pessimistic forecast was too optimistic. The index crashed from over 11,000 to 800.
    BALTIC FREIGHT INDEX
    If goods are not being shipped, it’s obvious that there will be terrific shortages on the store shelves next year. Stocking up on necessary staples will be a good idea, especially if they are imported.
    Deflation is growing like an out-of-control cancer. The consumer price index dropped 1.0% on a seasonally adjusted basis compared to the previous month, the largest drop since February 1947. That’s 61 years ago!
    The LEI (index of leading U.S. economic indicators) fell in October for the third time in four months as stocks and consumer confidence plunged, signaling a deepening recession.
    A survey of purchasing managers (ISM) showed today that the manufacturing and service sectors contracted in November at the fastest pace since data were first compiled a decade ago.
    Large department stores, such as Saks Fifth Avenue, are having 70%-off sales on everything. The word is that they must raise cash quickly. Obviously, with such discounts they lose money on every item sold. I predict that January will go down in history as a record month for corporate bankruptcy filings.

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    But some companies are too big to fail. GM, Citigroup and Bank of America are three of those. Here are the next big sources of troubles in the financial markets:
    COLLATERAL LOAN OBLIGATIONS (CLO’S): These are participations in pools of loans backed by credit card receivables, car loans, installment bank loans, etc.
    And then we have the CMBS (commercial mortgage backed securities) where commercial buildings are the collateral. The spread between AAA-rated CMBS’s and Treasuries have doubled in the past weeks, indicating growing concerns about the state of the commercial real estate market.
    THE CAUSE OF U.S. DOLLAR STRENGTH
    What ever happened to all the predictions of the dollar plunging into the abyss, that no one would want it, that it was a great short sale? Well, for new subscribers, and we have a lot, let me point out that our view since this summer has been that it would be one of the strongest currencies, only to be outperformed by the Japanese yen.
    Well, last week a well-known economist said that now the U.S. dollar is once again a desirable currency, and is undoubtedly “the reserve currency of the world.” Well, that’s news, but unfortunately it is too late to help all the short sellers who have lost fortunes. They listened to their economists.
    One of the greatest economic fictions is that high interest rates cause a strong currency. Apparently economics majors at universities are brainwashed to believe it, because they all say it. Actually, the reverse is closer to reality. The strength of the yen once again confirms what I have preached for the last 30 years, namely that raising interest rates to support a currency is the ultimate folly. For example, the interest rate on the yen is near zero and it’s the strongest currency. The overnight interest rate on the Icelandic krona is 20% and the currency has plunged by 50%. And in the U.S., the Fed funds rate is 1%, the 90-day T-bill is at 0.03% and the dollar is soaring. Moral of the story: Beware of what everyone accepts as the truth, especially when it comes from economists.
    So what’s ahead for the dollar? An easing in the credit market crisis will cause a sharp decline in the dollar.
    THE SPREADING GLOBAL RECESSION
    One huge problem worldwide now is that banks are not lending. They can’t. It’s that simple.

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    Of course, if banks don’t make loans, they can’t get more income. But they can’t make new loans because they are close to their capital reserve requirements and have to leave some room for future write-offs of bad assets. In other words, they are in a death spiral. This is why Citigroup is firing another 52,000 people. That’s 88,000 in one year. The only way for them to stay alive is by cutting expenses. It’s like a wolf caught in a trap that bites off its leg to get free. It hurts.
    The never-ending cycle of asset write-downs and mounting loan defaults is preventing all the Fed’s monetary injections from spurring new lending. One banking expert believes that U.S. banks will require $350 billion. That can’t be raised in the private markets, so the government will have to step in.
    During the Great Depression the value of outstanding bank loans fell by almost half between 1928 and 1935. I expect nothing less this time around.
    The Consumer Price Index in the U.S. plunged last month by a hefty 1% compared to the previous month. It was the largest drop in 61 years.
    Yes, global DEFLATION, not INFLATION, is the problem. And that’s much worse than inflation. Just a few months ago the Fed was still worried about inflation. Here is another reason why we should not have 12 economists at the Fed trying to “steer” the economy. At critical times they never know where the economy is or where it is going.
    Europe is now officially in recession. The 15-nation Euro zone has now entered into the first recession since it adopted a single currency about a decade ago. In the 3rd quarter, GDP declined 0.2% compared to the previous quarter. This followed an equal decline in the second quarter.
    My contacts in China and other emerging countries report similar plunges in economic activity. The “virtuous” cycle during the boom, where growth in one area produced growth in another area, is now working in reverse. Contract availability has collapsed worldwide. My Theory of Liquidity, which I first proposed in 1977, says that when availability of money (credit) expands, the economies have to expand, and when it contracts, the economies must contract. There is just no way around that connection. And if the credit contraction is severe, the economic contraction is just as severe. Well, we are having the greatest credit crisis since 1931. Even the largest and best firms, such as GE, can’t get money from the regular channels.
    While this is happening, the guests on financial TV continue to advise you to go bargain hunting in stocks, as they will be much higher in five years. Amazing! They never saw this crisis coming, but now they are experts in “knowing” where stocks will be in five years? Well, in five years, these guys will be driving taxis. Do you think they’ll give you your money back?
    Apparently there is an endless supply of “analysts” who are ready and willing to make fools of themselves in the media. You don’t see many bears. They are not allowed, with a few exceptions.

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    THE EMERGING MARKETS: A GROWING MESS
    We have discussed the Iceland financial crisis in the past. Well, instead of being resolved, it’s intensifying. The IMF agreed to lend Iceland $2 billion about three weeks ago. But that came with conditions that haven’t been fulfilled. The IMF wants Iceland to first get twice that amount from other sources. There is no way it can get that.
    The central bank of Sweden would give around $620 million after the IMF approves the amount discussed. Other countries such as Holland and Britain are not willing to help until the deposits of its own citizens in one of Iceland’s nationalized banks are returned. In fact, the IMF will not go ahead on the loan until that issue is resolved.
    In the meantime, Iceland is teetering on the edge of a hyper-inflationary depression. Goods can’t be imported because the credit mechanism no longer exists. The banking system is gone. You need Letters of Credit in which the seller has confidence to buy goods from abroad. Icelanders are moving out of the country in droves.
    This is only one country. Now imagine the other countries that are in trouble having to jump through the same IMF hoops. It’s a long-term mess, which historically has preceded a depression.
    THE GLOBAL ECONOMIC CONTRACTION
    The U.S. auto industry is not the only one to be in trouble. In Europe the large carmakers are also asking their governments for help. In Germany and Britain alone there are 1.6 million jobs connected to the auto sector. In the U.S. they say it may be as many as 2 million.
    Governments can’t risk throwing that many people out of work. They can’t make the reasonable argument that in due time these people will lose their jobs anyway, and they can’t let it happen because the government refused to help.
    Car sales in Europe plunged 15% in October. You can bet that “October” will go down into the annals of history as the month that the global recessions got very serious.
    According to the Wall Street Journal, Renault and Peugeot-Citroen are slashing production by 25% and 30%, respectively, in the fourth quarter, equivalent to about 370,000 vehicles. Even before this, “excess capacity” was estimated to be around 2.2 million cars in Europe.
    Only massive job cuts can restore the sector even to the modest levels of profit many of the region’s manufacturers enjoyed in 2007. European carmakers and auto suppliers would have to shed 26% of their work force, Goldman Sachs estimates. That’s politically unpalatable for politicians in Germany, France and the U.K.

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    The European Central Bank President Jean-Claude Trichet has finally seen the light. He said the bank may cut interest rates again in December amid signs Europe’s recession is deepening.
    Just 6-8 weeks ago, Trichet wanted to raise interest rates. This is another piece of evidence proving that central bankers should have no authority to set interest rates. They are always far behind market forces and therefore create even greater damage.
    THE STATES HAVE HIT A FINANCIAL BRICK WALL
    Another big bailout requirement over the next two years will be individual states and cities. They just can’t raise money through the traditional channels. Therefore, how can they meet the payrolls, take care of normal services such as street cleaning, garbage pickup, road repairs, police, etc.?
    The federal government will be the only possible source of funds. But it also means that the muni-bond market will be decimated. I have had that conversation with friends over the past year, but they all think they are getting a great deal with the tax-free income. My warnings have fallen on deaf ears for the most part. It’s total denial. They all quote the low default rates over the past 20 years, not recognizing that the current environment is not that of the last 20 years, but that of the years 1930-31.
    And as these local governments run out of money, they will increase every tax in sight. Just follow the examples of California over the next 5 years. That will be your road map. Current proposals are for a 5% surcharge on the income tax (currently 9%), and a 1.5% hike in the sales tax.
    A good way to invest on that trend is the stock of U-Haul. There will be a long line of people leaving the state.
    California employers already have to battle with 72,385 regulations according to CNBC, and the number is growing every day. That’s not a great incentive for companies to stay there.
    FEEDING AT THE TROUGH: Everyone wants a piece of the TARP. This was supposed to be a bailout for the banks. Now everyone is standing in line. The Hispanic Chamber of Commerce is promoting Spanish-speaking asset managers for a piece of TARP. The boat dealers are also asking. Who are the winners? As always, the lobbyists. These guys should sell shares in their companies. It would cause a stock market boom.
    Chinese sovereign wealth funds are also in line for the TARP. Can you believe it?

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    Rewarding failure creates more failures. Rewarding success creates more success.
    THE MIDDLE EAST FINANCIAL IMPLOSION
    There is an old saying, “What goes up, must come down.” Yes, that’s certainly true in the global stock markets, real estate and the economy. But analysts in the media are still bullish on the oil-rich Middle East. They have no idea what they are talking about.
    Last year, we predicted that Dubai would become the greatest real estate disaster in the history of mankind. Now we have the evidence that the implosion of the Middle East bubble is well underway. And as we have been writing for 18 months, once a bubble bursts, it cannot be re-inflated.
    In the seven days ending Nov. 15, the Dubai stock index had the biggest decline ever, plunging 32% in basically one week. Qatar’s dropped 25%. The borrowing needs of Dubai real estate developers are now skyrocketing. It’s expensive to build the world’s tallest building, more than half a mile high. Hubris is always expensive.
    But the international credit markets have finally realized what we warned over 12 months ago, namely that Dubai is destined to become a fiasco. Now Dubai is trying to borrow from its neighbors, such as Abu Dhabi. But Abu Dhabi has similar uneconomic real estate ventures under construction. If you listen closely, you can almost hear these economies coming to a screeching halt as oil drops below $50.
    So far this year, the Dubai stock index is down a hefty 67%, Qatar’s is down 42%, and Oman’s 35%. The Dubai stock index is now trading at 4.7 times earning. I wouldn’t touch it with a 10-foot pole.
    The perennial “bargain hunters” on Wall Street will find great bargains over there. Imagine how cheap the empty 40-story office buildings will be. Of course, it will cost a fortune to run the air conditioning during the 125-degree daytime heat, but you’ll have “pride of ownership.”
    Dubai Islamic mortgage lender Amlak told Reuters it had suspended new mortgage loans as Dubai’s real estate sector shows further signs of stress. Dubai-based Elysian Real Estate sent out a text message this week to some 40,000 mobile phones, advertising distressed property sales.
    This is only the beginning. The Tower of Babel (Burj Babil) was the last huge monument to hubris in the Middle East. Now, over 2600 years later, Dubai will be the monument to hubris gone wild. Currently, they are building the world’s largest building, the Burj Dubai. How appropriate!
    Bert Dohmen’s
    Wellington LetterTM
    Interestingly, there are many other “hubris” projects underway in the world, all trying to be the tallest building in the world. Most are in Asia. One is in Saudi Arabia. And they all will meet the same fate as Dubai.
    In an article in the UAE-based Gulfnews, the head of the giant Dubai real estate firm denied that it was having difficulties. He also said the company is not for sale. I don’t think he has to worry about anyone wanting to buy that white elephant.
    With regard to DP World’s debts, Bin Sulayem said they were not government debts, but bank loans. “At Dubai World, we have no problem paying off our loans and have refinanced to improve previous loan conditions,” he added. The foreign investments of DP World have not been affected by the current global financial crisis, Bin Sulayem said.
    That’s an amazing statement. What planet are they investing on? Apparently they don’t have regulations about disseminating misleading information.
    Bin Sulayem said he expected the crisis to recede and the credit market to improve in early 2009. His optimism is misplaced. Dubai World is one of 29 companies listed on the Dubai Stock exchange. The exchange index has plunged over 67% this year, and 32% in a recent week.
    More Middle East Problems: Kuwait’s Gulf Bank announced a 375-million-dinar ($1.4 billion) emergency rights issue and a boardroom sweep following the revelation it had lost a similar amount through losing currency trades. They were probably shorting the U.S. dollar.
    The hike is the biggest emergency recapitalization move to date in the Gulf. The resignation of the company’s entire board is very unusual.
    POTPOURRI
    THE NEW ADMINISTRATION Normally, we don’t involve ourselves much with politics. But it’s really important for investors to watch closely where the new administration is heading. The new rulers of our once great nation are now being revealed.
    Some commentators have suggested that the President-Elect is a “centrist.” I have a different view. So, we must watch the appointees.

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    He’s back! Yes, we were happy when we he was gone. But Tom Daschle, former Senator from South Dakota, will become Health and Human Services secretary. He will head up the effort to revamp the U.S. health-care system. I sure wouldn’t touch a company related to the health care industry with a 10-foot pole now. Philosophically Daschle appears to be to the left of Karl Marx.
    Also, for Attorney General we have Eric Holder from the Clinton administration. Same signals!
    In fact, there are lots of retreads from the Clinton administration. Is this “the change we can believe in”? The most stunning appointment may be the new Secretary of State, Hillary Clinton. If it happens, it would be a sorry state of affairs. Political strategist Dick Morris writes:
    Apart from the breathtaking cynicism of the appointment lies the total lack of foreign-policy experience in the new partnership. Neither Clinton nor Obama has spent five minutes conducting any aspect of foreign policy in the past. Neither has ever negotiated anything or dealt with diplomatic issues. It is the blonde leading the blind.
    For me, that’s enough. We now know where the country is heading for the next eight years.
    AT LAST: SOME ACTION ON BEHALF OF TAXPAYERS
    AIG is a fiasco. They sold over $560 billion of risky derivatives, called CDS (credit default swaps), which guaranteed bonds of many corporations against default. This “insurance” was not just sold to those holding such bonds, but also became a huge vehicle for speculators. Finally, as bond prices plummet because of risk of defaults, the swaps soared in value, which caused AIG to get “margin calls,” i.e., they had to put up more collateral. When the speculators wanted to take profits, AIG had trouble coming up with the cash. So now the taxpayer is paying the speculators.
    Remember, just two months ago, the government bailed AIG out with an $85 billion infusion in return for just less than 79% of the common stock. We wrote at the time that this amount would get much bigger. Well, currently it has quietly risen to around $160 billion. Eventually it will hit $250 billion, in our view.
    But amazingly, after the bailout the company was still planning to hold its extravagant “retreats” and affairs at five-star resorts, with $20,000 health club bills, etc. And the executives that caused this mess are either retired and celebrating on their yachts, or employed and still expecting their huge severance checks.
    Well, it seems that the Attorney General of NY put a stop to that on Oct. 22. Here is what www.investmentnews.com wrote:

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    The missive is the latest dispatch from the attorney general, who last week sent a letter to AIG’s board demanding that the company cease covering “extravagant” expenditures and recover unreasonable payments, or face legal action.
    Mr. Sullivan’s (CEO) contract calls for some $19 million in payments, plus other benefits, according to the letter.
    The company has also agreed that no money will be distributed from the $600 million deferred-compensation and bonus pools in its financial-products subsidiary, the unit that Mr. Cuomo said was “largely responsible for AIG’s collapse.”
    He also said that he thinks that Joseph Cassano, the former head of the financial products unit, has a share of $69 million of the funds in that subsidiary. Five other top executives have a combined share of the funds totaling $93 million.
    “It is my position that until the taxpayers are repaid with interest the more than $120 billion that has been used in the rescue financing of AIG, no funds should be paid out of these pools to any executives,” Mr. Cuomo wrote in his letter.
    Good for Cuomo. It’s nice to see that at least one person considers the interests of the taxpayers.
    WHO’S THE SUCKER?
    With trillions of dollars being dispensed, who are the suckers who will pay for all this? Of course, you and I. And small business owners who work 6-7 days per week will be hit even harder with tax increases if the President-elect carries out his promises.
    In Washington they are talking about appointing an “auto czar” to be in charge of the bailing out the Big Three automakers. Incredible! Earlier this year, Washington was talking about an Energy Czar. This summer, they wanted a “Bailout Czar.” You see, the guys in Washington love Russia, at least those impressive Russian titles.
    The CEO’s of the major automakers went to Washington begging for another $25 billion, although just last month they already got another $25 billion. Seeing those three, you could understand why their firms are going under. Heads of the major automakers were in front of the House committee urging the government to give them another handout of $25 billion, without any plan how the money will be used.
    Obviously, that’s the same way they have been mismanaging their firms. What a tap dance they did! They implied that profitability is in sight. The fact is that they have incredible legacy costs.

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    The average Detroit worker gets about 60% more than his counterpart working in the southern states for the Japanese.
    As Congressman Gary Ackerman from NY pointed out, these CEO’s flew into Washington on private jets, with tin cup in hand. Couldn’t they have at least “jet-pooled”?
    I have a great friend who is one of the most successful businessmen in Canada, and a member of the Forbes 400 list of billionaires. I remember in the 1980 recession, he sold his jet, and was traveling coach, just to set an example to the presidents of his many companies.
    Everyone knows the reasons for the legacy problems of these firms, so we won’t repeat them.
    Bankruptcy is a wonderful solution. Going bankrupt doesn’t mean they have to close up. People will still go to work there. And maybe a change in management can find permanent solutions without a handout. Bottom line: Do a pre-packed bankruptcy and don’t burden the taxpayer even more.
    My impression of these CEO’s was that they don’t have a clue as to what to do. If these were their own companies, and their own livelihood were at risk, they’d be sweating. But the alternative for them is beautiful, golden parachutes with multi-million-dollar payouts. A business owner gets his best ideas when his back is to the wall. These people don’t have the benefit of that. Their escape routes go through five-star hotels, vacation homes in Aspen, yachts and private planes, hopefully not at the expense of the taxpayer.
    Senator Bob Corker (R, TN) asked some very penetrating questions about the labor contracts with the union. And the head of the union said he didn’t know. Bull! Workers who are laid off get 95% of their prior pay. And that’s what you and I will pay for. He also asked the CEO’s, “If we give you the $25 billion, do you promise you will not come back asking for more?” Waggoner of GM answered, “If you guarantee that the economy won’t get worse.” Now they are asking the taxpayers for guarantees on the economy. What arrogance!
    They explained the “hardship” of retirees whose health benefits were already cut by 50% through an agreement with the union. But that won’t go into effect till 2010. They let slip out that 40% of the retirees are under the age of 65. I am sure many of our subscribers are older, are still working, and now they may have to pay the retirement and health benefits of 50-year-olds.
    Bottom line: The carmakers should go into a prepackaged bankruptcy. They can keep operating just as all the bankrupt airlines have done for years. They couldn’t make profits during the greatest boom in history. They will just keep coming back for more every month if they get this handout.

    I am sure that some of our subscribers are asking, “Where is my bailout loan?” Well, you are on the other side of the fence: You’re going to get the bill instead of a loan. And if you don’t pay that in form of taxes, they’ll put you in prison.
    Taxpayers are getting very angry. And they don’t even know all the facts that would intensify their anger. Next year there will be more bailouts to get angry about. But how many people actually write their representatives? Very few.
    Greetings,
    Bert Dohmen
    Bert Dohmen’s Wellington Letter, P.O. Box 49-2433, Los Angeles, CA 90049
    Phone: (310) 476-6933 Fax (310) 440-2919 Website: www.dohmencapital.com E-mail: client@dohmencapital.com
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