Dr Neelam Singh is on the front line of India's battle to save its girls.

Modern medical technology - specifically ultrasounds for determining the baby's sex - coupled with ancient cultural values which give preference to boys, mean that hundreds of thousands of girls are never being born.

There were only 914 girls for every 1,000 boys under the age of six in India, according to the 2011 census, compared with 927 for every 1,000 boys in the 2001 census. Today's ratio is the highest imbalance since the country won independence in 1947.

"I feel the demand [for abortions] every day," Singh told Al Jazeera. "Parents say it's important to have a son in the family. They want to keep their family name. I see this as the most heinous kind of discrimination towards a girl child."

A gynecologist in Uttar Pradesh, India's most populous state, Singh has witnessed population growth at a rate of 20 per cent. Out of a population of almost 200 million, men outnumber women by nearly 10 million.

The world's population will hit seven billion later in October, according to the UN, and the problem of imbalanced gender ratios is getting worse in several regions.

Widespread patriarchy

"In India, there is a confluence of factors leading to passive infanticide, active infanticide or sex selective abortion," Valerie Hudson, a professor of political science at Brigham Young University who studies birth rates, told Al Jazeera.

"Probably the most important is the tradition of dowry [payment to a prospective husband]. Having to marry a girl off may be the equivalent of several years of income for a family. A daughter is often seen as a thief who will rob necessary resources."

Restrictive property rules, where inheritance is passed from father to son rather than to daughters, male dominated funeral rights and parental hopes that male breadwinners will support them through old age also play a part in skewing demographics, Hudson said.

The world's largest democracy still fares better than China, where the ratio is 121 men per 100 women. Globally, 163 million girls have gone "missing" from the world's population due to sex selective abortions in the last thirty years, according to the calculations of Mara Hvistendahl, author of Unnatural Selection.

By 2020, an estimated 15 to 20 per cent of men in some regions of northwest India will lack female counterparts. "In Punjab, there are entire villages with no girls under [age] five," said Rohini Prabha Pande, an independent demographer who works on gender issues in India. "There are some districts with 700 girls per 1,000 boys," she told Al Jazeera.

Social disorder

These massive social imbalances could spark a host of social problems.

"When 15 per cent of young adult males in your population will never become head of household or heirs you will alienate these men in ways that cannot be fixed," Hudson said. Poor men will be the biggest losers in this equation.

"The historical record shows there can be distinct negative impacts on levels of violent crime, riots and rebellion against the state," when large groups of single young men are alienated and lack family commitments, according to Hudson.

The lack of women is being felt by bachelors, policy makers and women's rights activists across Asia. By 2020, China could be home to 40 million bachelors who won't be able to find mates.

"North Korea's largest export is women across their northern border with China," Hudson said, noting that the ruling communist party is particularly worried about prospects for unrest from angry, unmarried men.

Governments will likely funnel bachelors into the military, she said.

While prospects for conflict are unclear, other problems including human trafficking, prostitution and polyandry – men (usually relatives) sharing a wife - are certain to get worse.

Governments are, however, trying to address the problem.

Legislative response

After India's 1991 census, a prolonged campaign by women's rights activists over the skewed child sex ratio led to the enactment of the Pre-Natal Diagnostic Techniques Act in 1994.

"Technology allowing families to detect the sex of a foetus at an early stage and plan for an abortion has been banned," said Mohammed Asif, director of programme implementation with Plan India, an NGO which lobbies to save baby girls.

"The government's law is stringent, but people have been trying to work around it, going to far away clinics and giving fake addresses. Loopholes have been exploited and a key strategy would be to take action against illegal ultra sound clinics," Asif told Al Jazeera.

Other researchers don't think legal changes are the best way to improve the situation. If cultural values discourage against having girls, families can find other ways of getting rid of them without advanced screening techniques.

"Ultra sound technology is just the latest wave to select a son preference," Pande said. "In rural Uttar Pradesh and Bihar, you see a fairly balanced sex ratio at birth. But when you look at what is happening between birth and age six, they resort to traditional means of neglecting girl children. They are less likely to be immunised, less likely to be taken to a health centre and more likely to be chronically malnourished."

No cure in education

Contrary to popular belief, education, status and upward mobility can actually make the problem worse.

"You have a much greater chance of survival as a girl baby if born to a poor family, rather than a rich family," Hudson said. "Richer families have more assets which could be put in jeopardy by girls due to dowry payments," she said, adding that wealthy groups worry about having their family name tarnished if their daughter marries from a lower class.

While national trends are cause for concern, the situation is improving in some areas. "Tamil Nadu is one of the few states where we have seen an improvement," said Sharada Srinivasan, a professor of gender studies at York University in Canada.

In addition to counselling, and the creation of self-help groups for women, the southern state is using the carrot and the stick approach. "The government has created a massive cash transfer programme" to entice parents to keep baby girls, Srinivasan told Al Jazeera. Parents who commit infanticide are increasingly being prosecuted for homicide, she said.

Tamil Nadu also hosts some of India's new outsourcing and information technology and these post-industrial jobs could improve women's rights. "Before, women's work was either at home or on the farm," Plan India's Asif said. "With globalisation, girls are now picking up jobs in banking, manufacturing and hi-tech. This is creating a lot of buzz in the family to start considering girls."

While cash incentives, laws against gender selective ultrasounds, harsh punishments and economic changes all play a role, changing deeply ingrained social values is arguably the most important issue, and the most difficult.

Some communities in Punjab and elsewhere are taking collective pledges not to kill or abort girls, considering the practice a source of shame and an example of backwardness. This is where government policy ends and grassroots action begins.

"There is no way you can tax patriarchy," Srinivasan said. "Public action has a role to play in changing social norms. History is full of examples of this."

The world’s richest nations are approaching a baby bust. It’s a bear market for newborns and the effects could spell economic and social dislocation in the next 20 years, according to some analysts.

As demographers debate the dangers and benefits of the earth’s population reaching seven billion on October 31, advanced economies in Europe, East Asia and even the US are facing declining birth rates.

With senior citizens making up a larger proportion of the population, countries are worried that there will be too many retirees receiving healthcare and social security payments and too few workers to support them.

“The costs of supporting the elderly are generally met through taxes,” Madeleine Sumption, an analyst with the Migration Policy Institute in Washington, told Al Jazeera. “Without any reforms to current working and spending patterns, the costs are expected to grow to unsustainable levels in many wealthy countries, particularly in very rapidly ageing countries such as Japan and Italy.”

For a population to stay at a steady state, the fertility rate needs to be about 2.1 children per woman. Japan’s rate, one of the lowest in the world, is 1.21, according to the CIA, far below basic replacement levels. The UK is at 1.91, Belgium’s is 1.65, Canada is at 1.58, South Korea has a rate of 1.23 and Italy has a rate of 1.39.

More than 30 countries have what is considered a very low fertility of less than 1.3 births per woman.

Demographic dangers

“With a lower fertility rate, the ageing of the population is inevitable,” said Roderic Beaujot, a demographer at the University of Western Ontario in Canada. “You have less people at the bottom of the [age] pyramid and with people living longer you have more people at the top of the pyramid.”

In the UK, for example, the number of people over 70 will increase by more than 50 per cent - from 6.2 million today to 9.6 million in 2030 - according to government forecasts.

“Ageing has become a huge industry,” Peggy Taillon, director of the Canadian Council on Social Development, a research organisation, told Al Jazeera. “People are looking for options because of the costs associated with care.”

Rising healthcare expenditures are just one of the challenges ageing, developed countries are beginning to face as children of the so-called baby boom - the period of high economic growth following World War II - begin to retire.

“In order to maintain their standard of living, based on the economic level they have been at for the past 50 years, [developed countries] are going to have to replace their population after the baby boom,” said Thomas Janoski, a professor of sociology at the University of Kentucky. “Demography is the one thing in the social sciences you can predict pretty strongly.”

There are two main solutions to the baby bust: increasing fertility rates or encouraging immigration. Both seem fairly simple, but can be difficult to achieve.

Facing a steep demographic decline, Russia initiated a policy known as “mother capital” where women are paid about $10,000 to have more than one child. It seems to have had a small effect, but the general trend remains dismal for the world’s largest country by territory.

The other option, immigration, is not popular in East Asia and is becoming less appetising for some Europeans. Japan has one of the lowest naturalisation rates in the world, Janoski said. “Japan and Korea will be the odd cases, but with China sitting on their border, they will have an incentive to keep their economies strong, as they don’t want to become vassal states of China,” he told Al Jazeera.

Class and religion

In Europe, a common fear among the far-right is that immigration from Muslim majority nations will create “Eurabia”. But demographics don’t seem to back up that view.

“Perhaps the biggest surprise, given received notions about the Arab/Muslim expanse, is the recent spread of sub- replacement fertility to parts of the Arab and the Muslim world,” wrote Nicholas Eberstadt, a political economist at the conservative American Enterprise Institute. “Algeria, Tunisia, and Lebanon are now sub-replacement countries, as is Turkey.”

Traditionally a sender of emigrants to the US, Canada, Australia and other regions, widespread immigration into Europe began after World War II, as large numbers of mostly low-skilled labourers from Turkey, North Africa and the UK’s former colonies in South Asia were encouraged to come in search of work.

The children of those immigrants, in some cases, are accused of not assimilating to European culture. This divide, however, could be based more on class than religion.

In contrast to Europe, Muslims in the US are among the most highly educated demographics. Forty-three per cent of Muslim American women hold college degrees, compared with 29 per cent of American women overall, making them the second-best educated religious group following American Jews, according to a 2009 Gallup poll.

Debates in the US about Latino immigration share similar rhetorical overtones with European discourse about Muslim immigrants.

Successful models

From the perspective of national interest, Canada’s immigration policies - which prioritise skilled workers and investors - may offer the best model.

“In proportion to its population, Canada naturalises the most people in the world by far,” Janoski said. “Canadian immigration policy is really focused on economic growth,” where immigrant investors or skilled workers are given preference over family reunification which drives the model in the US and other countries, he said.

“That is why they came up with the policy for Chinese entrepreneurs. When Hong Kong [formerly a British colony] went back to the Chinese, they [Canada] gave relatively quick citizenship to businessmen.”

Recently, Filipinos have become one of Canada’s largest immigrant groups, with many first arriving as domestic helpers or temporary healthcare workers before gaining citizenship.

These professions are fundamentally linked with demographics, as most wealthy countries will be hiring more healthcare professionals in the coming years.

“People are looking for options because of the costs associated with care,” said Taillon. “A lot of people are going the way of international nannies because they see it is a better option.”

The employment rate for foreign-born citizens of Canada is actually higher than for native-born Canadians, the Globe and Mail newspaper reported. By 2031, one in three workers in Canada is projected to be foreign-born, according to government statistics. This trend should cushion the country from the baby bust.

For Europe and Japan in particular, the choice seems stark. “Countries that do not wish to open their doors to immigration will be forced to rely more on other policies to shoulder the burden of population ageing,” Sumption, from the Migration Policy Institute, said. “For example, retirement ages may have to rise faster and tax burdens may have to increase.

“Like immigration, these other policies are also politically controversial and painful to implement.”

Mexico's security forces are hailing the capture of "El Chabelo", a high-ranking Zetas cartel boss, as a victory in the battle against drug violence. But The Zetas - one of Mexico's most violent gangs - are also facing fire from a self-described vigilante group calling themselves the "mata Zetas", or Zetas killers.

Alleged vigilantes with apparent links to cartels have been implicated in at least 67 murders in the past several weeks, in which mutilated bodies were strewn across a highway underpass and stuffed in shuttered houses around Veracruz state. Some analysts worry that Mexico's drug violence is transcending levels normally associated with gang turf wars.

"If you look at the tactics cartels are using, they resemble paramilitaries or insurgent groups rather than just criminal gangs," said Ted Carpenter, Mexico analyst for the right-wing Cato Institute in Washington DC. The line between a criminal conspiracy and a direct challenge to the authority of the Mexican state has become blurry, he said.

The upstart "mata Zetas" laid out their apparent aims in a YouTube video posted in late September, promising to fight the ultra-violent Zetas cartel, who control much of Veracruz. Calling themselves the "paramilitary arm of the people", the mata Zetas say their "only objective" is to destroy the Zetas cartel. Police arrested Alredo Carmona, or "El Capi", a suspected mata Zetas leader on October 6.

They don't want to fight state security forces, they said, but called on "the functionaries and authorities who support the Zetas to stop doing so", in a digital communique read by men wearing balaclavas and toting machine guns. "We are anonymous warriors, faceless, but proudly Mexican."

Colombia to Mexico

The trend of well-armed men posing for macabre propaganda videos and making pseudo-political statements echoes the dark days of Colombia's narco-conflicts in the 1980s and 1990s.

"As a phenomenon, I am actually surprised that paramilitaries are not rising up faster," said Walter Mackay, a former Canadian police officer who has trained Mexican security forces and now studies drug violence. "Communities simply cannot rely on the government to protect them."

Violence has claimed more than 40,000 lives since 2006, when Mexican President Felipe Calderon declared all-out war on cartels.

Former members of the Colombian army's special forces have been training the Zetas, Colombia's El Tiempo newspaper reported Sunday.

"The public's understanding of a paramilitary, it seems, is from the war in Guatemala or Colombia [where paramilitary forces] were backed and supported by powerful local interests," including ranchers and industrialists, Mackay told Al Jazeera. "The question is still murky in Mexico," he said - noting that accurate information on the Mata Zetas is impossible to attain.

Other analysts think paramilitarisation in Veracruz might just be a ruse. "It is too early to tell what is happening with mata Zetas," Carpenter told Al Jazeera. They could be vigilantes, or they could be muscle for an opposing cartel trying to roust the Zetas from their stronghold, he said.

Beginning in September, the mata Zetas, also known as the New Generation Jalisco Cartel, formed a partnership with the Gulf cartel, La Resistencia and the Sinaloa cartel to take on the Zetas, Proceso magazine reported.

"As far as I know, the mata Zetas are hired guns fighting for the highest bidder," George Grayson, a drug war expert at the College of William and Mary, told Al Jazeera. "It seems like El Chapo [Joaquin Guzman, the billionaire leader of the Sinaloa cartel], is the highest bidder."

With the killing of Osama bin Laden, Guzman - who has a $5m bounty on his head from the US government - is now the world's most wanted fugitive, according to Forbes magazine.

Broader cartel objectives

The acquisition of money, of course, is the basic rationale for drug dealing and the violence that comes with it. But intense turf wars, headless bodies on the streets and public anger usually aren't great for business. Carpenter thinks there is something more sinister developing than just the hustle for illicit wealth.

"There are early indications of cartels trying to seek territorial control for broader purposes, not just maximising profits," Carpenter said. "The Sinaloa cartel is building community centres - in terms of raw profit seeking, it is an interesting activity. The Zetas , whose leaders received US Special Forces training in Fort Bragg, look to me like they have a shadow military agenda."

Genaro Garcia Luna, Mexico's public safety secretary, has compared media appearances and public violence from cartels and vigilantes to methods used by al-Qaeda.

But most drug analysts see greater parallels with Colombia, during the heady, cocaine-fuelled crime wave inspired by Pablo Escobar - rather than the Middle East.

Colombian authorities, with backing from right-wing paramilitary groups funded by landowners and business elites, eventually smashed Escobar's Medellin cartel and its rival Cali cartel in the 1990s, fragmenting Colombia's drug trade and allowing Mexican gangs to become the dominant suppliers to the US.

"The change didn’t occur in Colombia until the cartels started using terrorism," Grayson said. "Once they began bombing shopping centres and movie theatres, the elite began to realise they had a stake in fighting organised crime. That may have occurred in Monterrey or Matamoros, but it really hasn’t occurred in [much of elite] Mexico."

Monterrey, Mexico's commercial capital and wealthiest city, has seen a rash of recent violence, including an attack by gunmen at a casino which killed more than 50 people in August.

Unlike other parts of Mexico, traditional paramilitaries funded by the elite have been operating in Monterrey. Mauricio Fernandez Gomez, mayor of a wealthy Monterrey suburb, who is "as rich as he is eccentric" according to Grayson, reportedly had his own private hit squad, to keep the peace in his area.

"After a tape recording of him [Gomez] talking to the Beltran-Levy cartel came out, he won the election anyway, because people want tough leaders," Grayson said.

Political gangsters

The emergence of the mata Zetas and similar organisations has not been confined to Monterrey. "Two cartels [have] already displayed something in terms of a vague ideological agenda," Carpenter said. Before its fragmentation, La Familia in Michoacán espoused a "quasi-religious element ... and a strident populism against the Catholic establishment and oligarchs in Mexico City", he said.

That cartel claimed to protect average people from other gangsters, but began fracturing in 2006 and even offered to disband in 2009 and 2010 if the Mexican government offered them protection.

In June, police arrested the alleged leader of La Familia, Jose de Jesus Mendez Vargas - also known as "El Chango" or "The Monkey". The Knights Templar, former Famila members, are still at large and have formed a separate, politically minded gang.

"To the society of Michoacán we inform you that from today we will be working here on the altruistic activities that were previously performed by the Familia," the Knights Templar announced via banner advertisements in March.

"Our commitment to society will be: to safeguard order; avoid robberies, kidnappings, extortion; and to shield the state from possible rival intrusions," the banners said. The irony, of course, is that these actions present a direct challenge to public order.

To defend themselves, some elites are - in isolated cases - following Gomez’s example and making deals with cartels. This, however, seems to be rare. Most corporate or political honchos simply hire private security. "Any corporation of any size is going to have its own security force," Grayson said. "I don't see them taking the offensive."

But this too could change. As the military spawned the Zetas, it is possible that private security companies could morph into formalised paramilitaries, working for the same wealthy individuals who hired them in uniform, but with the ability to kill as they see fit. There is, however, no serious evidence of this happening so far. Like everything involving drug violence, the situation is murky.

Corruption blurs lines between security forces and cartels. Personal vendettas and business deals muddy links between paramilitaries and gangs. Politicians and narco-bosses often live in the same neighbourhoods and, in some cases, share the same security.

The drug war and debates on the rise of paramilitaries "is like the question of Republic versus Empire in US foreign policy," Carpenter said. "When do you cross that line? It isn't clear."

Follow Chris Arsenault On Twitter: @AJEchris

If past visits to the region are anything to go by, Iranian President Mahmoud Ahmadinejad’s five-day tour of Latin America will probably be full of bombastic rhetoric, but short on concrete, new policy developments.

As tensions heat-up over Iran’s nuclear programme, and sanctions choke economic growth, Ahmadinejad is visiting Venezuela, Cuba, Ecuador and Nicaragua, countries that – in his words – “resist the oppression of the United States”.

The Latin America tour, which began on Sunday, comes against a backdrop of diplomatic sparring between the US and the Islamic Republic over new Western sanctions and threats from Tehran about stopping oil traffic through the strategically crucial Strait of Hormuz.

“They [the US] accuse us of being warmongers,” Venezuela’s President Hugo Chavez said on Monday, after a prolonged embrace with his Iranian counterpart.

Ahmadinejad, heaping praise on his host, said: “Despite those arrogant people who do not wish us to be together, we will unite forever.”

The US State Department described Iran’s mission to Latin America as a “desperate” search for friends.

Populist diplomacy

Symbolism, rather than concrete agreements, will be the thrust of Ahmadinejad’s diplomacy, said Philip Giraldi, a former CIA counter-terrorism specialist who currently leads the Council for the National Interest, a Washington-based lobby group.

“It is a bid to create a basis of political support among nations in Latin America who are believed to be estranged from the US,” Giraldi told Al Jazeera. “I think the tour is aimed at the domestic market in Iran. The sanctions are becoming quite crippling; [legislative] elections are coming up [in March] and this is a push-back to show Iran does indeed have friends.”

On the surface, the two leaders do not have much in common: One leads the Islamic Republic of Iran and the other calls himself a “Christian socialist”. But Chavez and Ahmadinejad clearly have personal chemistry.

“I think there is a real affinity between the two leaders, which doesn’t have so much to do with underlying ideologies,” said Alexander Main, Latin America specialist at the Centre for Economic and Policy Research. “Both have a strong populist streak, a rejection of elites and a belief in connecting to the poor.”

Whether populist politics translate into actual policies –particularly in Iran – is debatable, Main said.

Despite his recent bout of cancer, Chavez is politically stronger than his Iranian counterpart, who is beholden to a powerful clerical establishment and the country’s Supreme Leader, Main told Al Jazeera.

Ahmadinejad, who has visited Latin America more frequently than US President Barack Obama, is on his fifth trip to Venezuela.

Since taking office in 2005, the Iranian leader has opened six new embassies in the region and some US officials have raised concerns about the Islamic Republic’s growing diplomatic footprint.

US fears

WikiLeaks cables from 2009 warned of Iranian plans to mine uranium for its nuclear programme in Venezuela. Manhattan’s former attorney general, Robert Morgenthau, fretted about “Iranian nuclear and long-range missile threats, and creeping Iranian influence in the Western Hemisphere”.

Venezuelan banks have also been used to circumvent sanctions on Iran, and some US officials allege that Hezbollah fighters – backed by Iran - have been setting up operations in Venezuela.

“I know the intelligence community looked seriously at allegations that Iran was using Venezuelan banks to launder money for terrorist activities and to buy uranium,” said Giraldi, the CIA veteran. “It came up with little or no evidence.”

While there is not much evidence of nefarious dealings, Ahmadinejad and Chavez certainly do enjoy criticising Uncle Sam with rhetorical flourishes.

“Venezuela and Iran want to be able to show they have a broader alliance to balance against the US,” Greg Weeks, professor of political science at the University of North Carolina, told Al Jazeera. “If Iran starts really getting punished by sanctions, Venezuela won’t be able to save it. When push comes to shove, the value for each country is relatively small.”

Just days before Ahmadinejad’s visit, the US expelled Venezuela’s consul-general to Miami, after a Spanish TV network broadcast a documentary that alleged Iranian, Venezuelan and Cuban diplomats had discussed cyber-attacks against the US.

Economic promises

“Iran’s track record has been bad,” said Gary Sick, a scholar at Columbia University’s Middle East Institute who served on the US National Security Council in the 1970s and 1980s. “He [Ahmadinejad] arrives, makes newspaper headlines, says ‘We are going to build a port there and an industrial plant here', and never follows through."

More than 100 development projects have been announced during previous visits, but many of them have not gotten off the ground. Brazil, South America’s biggest economy, is notably absent from Ahmadinejad’s trip.

"Most of the countries that have signed agreements with Iran have very little to show for it,” Sick told Al Jazeera.

Pledges in 2007 and 2008 to build a $350m port in Nicaragua and an oil refinery in Ecuador, for example, have yet to materialise.

Yet, some development projects have actually been built due to the "south- south" cooperation extolled by populist leaders.

“Iranian-designed tractors are all over the Venezuelan countryside and have been used as part of international cooperation efforts, in Haiti for example,” Main said. The two countries have also been cooperating to build low-income housing.

An Iranian-made oil tanker with the capacity to carry 113,00 tonnes, the first of its kind to be built in the Middle East, will be delivered to Venezuela in September, Iran’s ISNA news agency reported recently.

Iran may not be famous for its manufacturing prowess, but Iran and Venezuela have co-operated for decades through OPEC, the Organisation for Petroleum Exporting Countries. Both are seen as hawks favouring high prices – and this relationship goes back two decades, before Ahmadinejad or Chavez arrived onto the political scene.

Oil markets

Iran is the world’s fifth-biggest oil producer, pumping 4.2m barrels per day. Venezuela is number 13 with 2.4m barrels per day, according to CIA figures.

“Venezuela and Iran can call for higher prices [within OPEC], but they can’t get the Saudis to play along,” Mark Katz, a professor of government at George Mason University who studies the Middle East and Latin America, told Al Jazeera.

During one of Ahmadinejad’s previous visits to South America, Etemaad-e Melli, a reform-minded newspaper in Iran, called the Venezuelan, Ecuadorean and Nicaraguan presidents, “left-wing friends, good for coffee-shop discussions but not for setting our security, political and economic priorities”.

From a security perspective, the stakes have only increased. “Iran sees these sanctions being imposed by the US congress as the equivalent to a military blockage,” Sick said.

Oil sales account for about 80 per cent of Iranian export revenue and 50 per cent of the government's budget. Sanctions targeting the industry amount to an “existential threat” for Tehran, Sick said.

Military confrontation in the Strait of Hormuz would invariably rattle energy markets, sending prices rising rapidly. Ironically, this instability could benefit Venezuela by increasing oil revenue.

“The potential of oil production being disrupted has more of an effect on oil prices than anything Iran is doing at OPEC,” Professor Weeks said. “Iran right now can get a boost by ratcheting up tensions with the US."

In this regard, co-operation between Venezuela and Iran might mean something more substantial than shaky commercial agreements, stern-looking presidential honour guards or bear hugs between self-proclaimed anti-imperialists.

Follow Chris Arsenault On Twitter: @AJEchris

Hugo Chavez must be smiling.

In the latest showdown between western oil companies and Venezuela’s populist president, Exxon Mobil is widely seen as the loser, after the Paris-based International Chamber of Commerce (ICC) ruled that the world’s biggest oil company would not be entitled to most of the damages it demanded after its fields were nationalised.

"The ICC only awarded Exxon ten per cent of what they wanted," Chavez said recently. "You can make your own conclusions."

Petroleos de Venezuela (PDVSA), the state oil company, said on January 2 it would pay Exxon Mobile $255m, after accounting for money frozen in a New York bank account and outstanding debts.

"Exxon has been granted the value of its [initial] investment, but not the value of the project today," Chris Nelder, an independent energy analyst, told Al Jazeera. The company had demanded as much as $12bn, citing potential lost future profits and other concerns, after the nationalisation of its Venezuelan heavy oil assets in the Orinoco belt in 2007.

"This is a victory against a corporation that tried to abuse Venezuelan law," said Eva Golinger, a lawyer and author of The Chavez Code: Cracking US Intervention in Venezuela. "The Venezuelan government had originally offered $1bn for the nationalisation and now they end up only having to pay $255m."

After four years of arbitration at the ICC, Exxon still has another case pending against Venezuela at the World Bank-affiliated International Centre for Settlement and Investment Disputes.

"The Orinoco is incredible - it is the largest volumne of oil on the planet. "

- Steve Levine, Georgetown University

'Sending a signal'

"Traditionally, Exxon is very litigious," Steve LeVine, professor of energy security at Georgetown University, told Al Jazeera. "This whole exercise is about Exxon sending a signal around the world to anyone who would attempt to mess with their contracts."

After refusing to obey Venezuela’s new petroleum laws in 2007, under which foreign companies would have to become minority partners with PDVSA, Exxon and ConocoPhillips, another US firm, pulled out of the country entirely.

Exxon spokesman Patrick McGinn told the Associated Press that the arbitration award "represents recovery on a limited, contractual liability of PDVSA".

Talk of foreign companies cancelling Venezuelan oil projects abounds in some business circles. But aside from Exxon and ConocoPhillips, western multinationals have stayed, perhaps because the stakes of leaving are so high.

"ChevronTexaco is still there. European oil companies are there from Italy and France; the Russians, Chinese, Indians and Brazilians are there," Golinger told Al Jazeera. "Foreign companies shouldn’t try to use their political and economic power to undermine local laws."

Biggest deposits 'ever assessed'

Venezuela’s Orinoco belt, containing an estimated 513bn barrels of technically recoverable heavy oil, is "the largest accumulation ever assessed" by the US Geological Survey. Until recently, the oil was not counted in reserve figures, because it was too expensive to extract. New technologies, rising oil prices and dwindling conventional reserves have changed the game.

"The Orinoco is incredible - it is the largest volume of oil on the planet," Professor Levine said. "The cost of producing it is huge, but the volume is bigger than Saudi Arabia's."

Venezuela celebrates 200 years of independence

Unlike Saudi’s proven reserves of 260bn barrels of light sweet crude, heavy oil in the Orinoco is expensive, difficult to refine and environmentally harmful to extract. This type of oil is either mined, or separated from earth by injecting steam deep into the ground in a process called insitu. Most experts believe that Venezuela does not have the technology to profitably extract and refine this heavy crude alone. Extracting heavy oil from tar sands deposits causes up to three times more greenhouse gas emmissions than conventional crude, while polluting huge amounts of water. Environmentalists believe these despoits should be left in the ground, as fears of global warming intensify.

Despite this recent victory, PDVSA is facing some trouble. Under Chavez, the energy giant has undertaken ambitious social spending, running subsidised food distribution programmes and international aid projects as if it were a state unto itself.

Critics say oil companies should not be delivering government services. And the money used for "Bolivarian" projects means the corporation has less to invest in developing new reserves; production has dropped from about 3.3m barrels per day in 1998 to about 2.25m in 2011, The Economist reported.

After subsidised gasoline for locals and cheap oil sent to Venezuelan allies - such as Cuba - is figured into the mix, the firm only exports about 1.25m barrels per day at regular market prices.

"Chavez did bring in social programmes to reduce inequality," Amy Jaffe, director of energy research at Rice University’s Baker Institute, told Al Jazeera. "But he did so in a way that damaged the future of the oil industry in Venezuela. Is it really in people’s interest to have production cut in half or worse?

"Is it better to have 60 per cent of a lot or 100 per cent of a little? Sometimes people get so hell-bent on the ideology of getting 100 per cent that they lose the baby with the bathwater."

Under Chavez, PDVSA may not be a perfect model for corporate governance. Chavez’s vocal critics, however, tend to compare current problems at PDVSA with a barometer such as Norway’s Statoil, rather than PDVSA in the pre-Chavez era.

"Prior to the Chavez administration, there were governments in place getting kick-backs from these [international oil] agreements; they didn't care if companies obeyed the law," Golinger, a vocal supporter of Chavez, said. Corruption, and the selective enforcing of local laws, has also been a major problem for Chavez's government, according to critics and former government officials.

Poverty reduction

Like many of its South American neighbours, Venezuela has drastically reduced poverty in the past decade; the Bolivarian Republic’s poverty rate fell from 48.6 per cent in 2002 to 27.8 per cent in 2010, according to the UN Commission for Latin America's 2011 report. Inequality also declined sharply. This progress is linked to tough negotiations with foreign oil companies, so the state can have more resources to invest in local communities, Chavez’s supporters contend.

"If we [the world] really were running out of oil, people might have to kiss the ring in Venezuela. That is not the reality we are facing."

- Amy Jaffe, Rice University

Away from the medical clinics funded by oil wealth in poor Venezuelan neighbourhoods, or the stores selling subsidised food, the Exxon case symbolises something larger happening on international energy markets.

"The big picture is that the vast majority of the world’s remaining [conventional] oil resources are not accessible to the western oil majors," Nelder, the independent analyst, said. "The easy to access oil, the stuff in the western hemisphere, has been declining. Those with the resources try to drive the hardest bargain possible."

Other analysts aren't so sure. Concerns over peak oil - the idea that demand will rapidly outstrip supply in the near future - may seem to have been exaggerated, they contend, especially as new, unconventional sources come onto the market.

"Instead of staying in Venezuela, Exxon invested in shale gas in the US and the Canadian oil sands," Jaffe said. "People are now making a fortune drilling in the US. There will be one million barrels a day coming from North Dakota, Ohio is going to have oil. If we [the world] really were running out of oil, people might have to kiss the ring in Venezuela. That is not the reality we are facing."

But with prices rising from around $12 a barrel in 1998 to $100 today, markets view oil scarcity as a growing reality, which helps Venezuelan exporters demand more from companies, even with new supplies coming online.

"Oil is sort of like cocaine," Levine said. "Supply creates demand." If the professor is correct, then international consumers are going to be demanding crude from massive Orinoco reserves for generations to come. In this context, driving a hard bargain doesn't sound like such a bad idea.

Follow Chris Arsenault on Twitter: @AJEchris

Rio De Janeiro, Brazil - More than a month after "pacifying police units" seized control of Rio's biggest slum or favela with the help of tanks and helicopters, life seems to be improving for residents of Rocinha. On a sunny afternoon in December, children dart through narrow hillside alleys, butchers hawk chicken meat from side-walk stalls and graffiti artists paint murals around the densely populated urban ghetto.

The crackdown in Rocinha, which saw 3,000 heavily armed police storm into the neighbourhood in November, is part of an ongoing campaign in Brazil to assert state authority in largely lawless favelas as the country prepares to host the World Cup in 2014 and the Olympics two years later.

"Sometimes the bad rap our community gets is fair, it has been violent," says Rogerio Roque, a former drug dealer who has become a youth worker and anti-violence activist. "Before the crackdown, lots of gunfire could be heard but it is getting better."

Antonio Bonfim Lopes, the alleged drug lord known locally as "Nem", who controlled organised crime in the favela, was arrested by police on November 10, as the crackdown's opening salvo.

Security forces have occupied more than a dozen shanty towns in the last three years, but the operation in Rocinha - often described as the biggest slum in Latin America - is seen as a litmus test for the government's ability to control the ghettos.

Most of the estimated 100,000 residents of the favela do not have formal title to their homes. Brazilians from the country's poor northeast first established Rocinha as a squatter community in the 1940s. It is the largest of Rio's 500 favelas; neighbourhoods where about 20 per cent of the city's population resides.

Criminal culture

Known as bastions of violence and lawlessness, where heavily armed drug dealers patrol the streets, Brazil's favelas inspired the internationally acclaimed gangster film City of God, the video game Call of Duty: Modern Warfare 2, and a series of popular Brazilian movies, including Jose Padiha's Elite Squad 2.

Outside of a public housing complex - one of the few areas in Rocinha where residents have formal deeds to their small homes - children scamper around, pretending to blast each other with pieces of scrap wood carried like machine guns.

"Do you know any English words?" my Brazilian friend asks one of them.

"Give me money," the kid replies in perfect English.

Since the crackdown, the official narrative of violence and vice has started to change, with Brazilian and international media visiting Rocinha to do "positive" stories about honest people making a living in rough circumstances. Many residents commute into other parts of Rio, working in restaurants, retail or the service sector.

"I think life will get better here [now that the government is asserting authority]," Roque says, standing beside a new swimming pool and youth centre built by the state. "Now companies are coming here to open stores and the Bank of Brazil just opened a branch in the neighbourhood."

As someone who left the drug life after doing time in jail, Roque's transformation could be an example of what government policymakers hope will happen to the community itself: Once people have options aside from the criminal lifestyle, they will embrace them.

The Brazilian flag is now hoisted-up in the middle of the favela, for the first time, and it's seen as a sign of state control in the previously lawless area.

Rough 'justice'

Not everyone is happy with the state's new presence. "About half the population supports the crackdown," says Leandro Lima, a young reporter, born and raised in the neighbourhood, who writes for the local news website FavelaDaRocinha.com. "In some ways, Nem was a good administrator, and before [the crackdown] people didn't have to pay for their electricity" as they siphoned it off from the grid.

Criminals used the lawless area as a base to sell cocaine and marijuana to rich kids from surrounding areas, residents say.

Nem, and various gangsters who preceded him, attempted - often ineffectively - to keep peace in the favela, so authorities wouldn’t come inside. "If you get robbed here, you would never call the cops," Lima says.

"A few years ago, my friend had his watch stolen," he says. "They [gangsters] found the guy who did it and brought him to my friend. They asked 'Do you want us to cut off one of his fingers?" The friend declined, but harsh criminal 'justice' has been a feature of life in the area.

Nem banned the highly addictive drug crack cocaine from Rocinha, Lima says.

In 2008, the government started a new policing programme called "pacifying police units" (UPPs), with the declared aim of reducing shootouts in the slums, releasing communities from the control of gangs.

Military police, carrying automatic weapons and hanging-out in the back of a pick-up truck emblazoned with a skull stabbed with a sword, refused interview requests.

Iraq to Rocinha

WikiLeaks documents from the US consulate in Rio marked "confidential" in December 2009 conclude that the Favela Pacification Programme "shares some characteristics with US counter-insurgency doctrine and strategy in Afghanistan and Iraq".

"The programme's success will ultimately depend not only on effective and sustained coordination between the police and state/municipal governments, but also favela residents' perception of the legitimacy of the state."

Residents seem to welcome the new swimming pool, bank and other infrastructure projects, but some still do not trust local government officials.

The president of the favela association in Rocinha, Leonardo Rodrigues Lima (no relation to Leandro Lima the journalist), refused Al Jazeera's interview request. Sporting a yellow golf shirt and constantly yelling into a cellphone, Lima did explain that it was too early to tell if the crackdown was working.

While the government has hoisted the national flag, they have been less effective in cleaning massive piles of garbage stinking-up street corners in the densely packed area.

Without formal title to their homes, it is difficult for residents to get loans to start business, so they often have a hard time participating in the formal economy.

"One of the principal challenges in this project is to convince favela population that the benefits of submitting to state authority (security, legitimate land ownership, access to education) outweigh the costs (taxes, utility fees, civil obedience)," WikiLeaks cables note. "As with American counter-insurgency doctrine, we should not expect results overnight."

Information gathering is arguably the key ingredient for a successful counter-insurgency campaign; and favela residents say security forces have used some unique strategies in Rocinha.

"One day, about six months ago, these two hot, hot blonde women moved into a house in the favela," Lima says. "They would go and buy groceries, walk around and talk to people. All the guys were checking them out."

After the operation which netted Nem, residents learned the "hotties" were undercover police officers, Lima, the young journalist, says.

'Hearts and minds'

Some residents, who do not fully trust the authorities, worry the police crackdown was linked to broader economic interests, rather than their well-being.

"Things have become more expensive," says Flavio Carvalho, 25, a student living in the area. "You see in the newspaper that the economy is growing, but I haven't seen it for real. Most of the money goes to companies."

Foreign tourists have descended upon Rocinha, drinking beer at canteens, taking pictures with high-end digital SLR cameras and, according to Lima, viewing poor communities like an exotic "urban safari". Some even rent apartments in the favela, and housing costs have soared since the crackdown, residents say. Some worry they will be priced out of their own neighbourhood.

A December 12 report from the People's World Cup Committees, a coalition of human rights groups, alleges that 150,000 people have had their housing rights violated around Brazil in order to "clear the ground to make way for big money-making real estate projects" related to sporting events.

"Everything about sports is important," says a graffiti artist calling himself D Wark, as he paints a mural near Rocinha's entrance. "But the money they used for the Olympics could be used for more important things such as sanitation, culture and job development."

While Wark spray paints, two younger guys watch intently. He mentors disenfranchised kids, teaching them graffiti so they can get jobs painting signs for businesses.

According to the United Nations study, State of the World's Cities 2010/2011, Brazil has reduced its favela shantytown population by 16 per cent in the last decade, implying "an improvement in the living standards of 10.5 million Brazilians between the years 2000 and 2010". According to that UN study, the poor living in favelas dropped from 31.5 to 26.4 per cent of the population.

When discussing an earlier pacification action, US consular officials noted that the programme had "little chance of success" if it is just crafted around the Olympics. "If, however the programme wins over "hearts and minds" in the favelas... [it] could remake the social and economic fabric of Rio de Janeiro."

Follow Chris Arsenault on Twitter: @AJEchris

It has been a good year for unelected technocrats and a bad one for democracy in Europe. The vision of a generous welfare state mixed with competitive capitalism all but fell apart under its weight in 2011; as debt-laden states sacrificed sovereignty at the international bond market's financial altar.

Scenes of burning tyres, tear gas and striking workers became common place across the continent as Europeans - ineffectively - opposed the market's dictates.

Italy's finance minister was reduced to tears in December when announcing harsh cuts. The technocratic government, led by prime minister Mario Monti passed a $39bn austerity package, including tax hikes and a higher retirement age. Spain's recently elected Conservative prime minister, Mariano Rajoy, has promised spending cuts of $21.6bn to trim a dangerous deficit. And Ireland unveiled a new series of budget cuts, worth more than $3bn in December.

"We are going through a painful process of adjustment. Public anger is acute because the public was not responsible for putting us in the position we are in," Brendan Howlin, Ireland's public expenditure minister said at the time, echoing the view of many across the continent.

Economically, cuts to social spending will mean less growth, as workers facing pay cuts will not be spending money. Normal Keynesian solutions of government saving in good times and spending to stimulate growth in bad times, however, have run their course. States simply cannot borrow anymore, making Keynesian solutions impossible, even if austerity is unpractical, if the desired result is growth.

Last year, we featured the rise of the right in Europe as one of our top 10 stories. The mix of xenophobia and economic malaise can have deadly consequences, as history has shown.

One thing is certain: The bond market and its technocratic enablers have achieved what elected politicians like Margaret Thatcher never could; the end of the modern welfare state and a complete victory for neoliberalism.

The choices for Europe will be difficult in 2012, as the entire project could easily collapse. Alternatively, leaders could opt to continue the "muddle on" strategy, where central banks try to buy time by purchasing debt and attempting to defend the project of integration. The "peripheral" countries in southern Europe - particularly debt-laden Greece - could leave the eurozone, allowing a core led by Germany and France to go-it-alone. Harder still, perhaps, is that the philosopher Slavoj Zizek seems to have gotten it right when noting that Europe's crisis shows the "marriage between capitalism and democracy is over". In 2012, be careful what you wish for; as bad as things are now, it could always get worse.

The small restaurants and shops selling plastic sandals, tacky umbrellas, kitchen wares and paper lanterns in Buenos Aires' Chinatown do not give the impression of impending economic dominance.

Away from this small urban area, however, China has been not-so-quietly buying up agricultural products, companies and minerals around South America.

Some analysts consider this aggressive drive for resources as a new form of imperialism, in which a big power wrangles raw materials from weaker states. Others believe China's push gives South Americans an alternative to the US, which critics say has attempted to control Latin economies through debt and support for dictators. Regardless of how it is seen, China's economic footprint in the region is growing dramatically.

"Across Latin America we are seeing that China is having an increasing importance in trade and investment," Ricardo Delgado, director of Analytica Consulting in Buenos Aires, told Al Jazeera.

"Brazil and Argentina produce and export many raw materials: soy, sugar, meat and corn… China is a very important driver of demand for these commodities."

Since 2005, China's development bank and other institutions have spent an estimated $75bn on financial investments in South America, said Boston University professor Kevin Gallagher. This is, he points out, "more [investment] than the World Bank, US Export Bank and the Inter-American Development Bank combined".

Chinese private investment, often coming from large state-supported firms that set-up operations in the region or buy local companies, has been about $60bn, Gallagher said.

In the past five years, Bilateral trade between China and South America jumped more than 160 per cent, rising from $68bn in 2006 to $178bn in 2010. In Peru, Chinese mining giant Chinalco spent $3bn buying "copper mountain" - an entire rock formation containing two billion tonnes of the precious metal. The firm expects a 2,000 per cent profit on its investment.

The Chinese state lent Petrobras, Brazil's national oil company, $10bn in 2009. And a plan from China's Beidahuang food company to lease more than 300,000 hectares of land to grow genetically modified soya, corn and other crops in Argentina's Patagonia region has locals furious about potential environmental damage.

Food and fuel

As director of Mercampo, an agricultural consulting firm based in Rosario, Argentina, Gabriel Perez has seen the increase first hand. More trade delegations are coming from China, and tycoons from the world's second largest economy are eager to invest in agriculture and commodities.

"China has the strategic vision to ensure food security and energy in their country [as they worry] that long-term problems will be the supply of raw materials," Perez told Al Jazeera. "This is undoubtedly the primary reason for China's investments in South America."

Chinese firms often buy local assets or lock-in long term supply agreements, sometimes making deals in Chinese currency, rather than the US dollar which typically underpins international trade.

China's expanding relationship with South America has global repercussions far from Argentinian soy farms or Brazilian beaches. Unlike most Americans, regular working-class Chinese people save money. Instead, China maintains a large surplus in its foreign trade.

These factors allowed the Chinese government to amass more than $3tn worth of foreign exchange reserves by the end of March 2011, according to China's national statistics bureau.

Most of that money, nearly $2tn, has been invested in US treasury bonds. For years, they provided a low-risk, low- reward, but stable place to put surplus capital. Now China has a conundrum: The US is living beyond its means and has, according to Standard and Poor's, lost its AAA credit rating.

Yet, if China starts selling its US bond holdings, the debt will lose value. China, the largest holder of the debt, will be shooting itself in the foot. The country, therefore, is trying to quietly move its reserves into assets in emerging economies such as those in South America.

South America became the "primary focus" of Chinese non-bond investments in 2009, according to the Heritage Foundation, a conservative US think-tank that has tracked the communist giant's overseas purchases.

China is now Brazil's largest trading partner. Beijing owns $18.3bn worth of assets in South America's largest country, according to the Heritage Foundation.

"The most important contribution of China’s growth has been trade," Eliana Cardoso, a World Bank economist and former MIT economics professor based in Sao Paulo, told Al Jazeera. "It has contributed to the increase of commodity prices."

Debt and dependency

Throughout South America's history, economists and politicians have worried about dependency created by countries exporting raw materials and then depending on industrialised nations for high-end manufactured goods and technology.

"An economy organised around the export of resources often dampens economic diversification and the development of value-added industries, so there is a way in which China could be as much of a problem as the US," said Greg Grandin, professor of history at New York University and author of Empire's Workshop: Latin America, the United States and the rise the new imperialism.

China has, however, given Latin American countries a "more diversified set of options to negotiate prices and interest rates" than what the US would offer, Grandin told Al Jazeera.

Raul Prebish, an Argentinian economist and former director of the UN’s Economic Commission for Latin America (ECLAC), argued that nations on the "periphery" of world trade were doomed to be primary commodity exporters unless they developed by building a domestic manufacturing base and closing trade links.

"In Brazil, China is an important competitor in low labour cost industries. Chinese prices are low and problems of dumping and subsidised exports are common," Delgado said. "Our industries are not prepared very well for this competition." China is frequently accused of keeping its currency artificially low to boost exports.

Brazil's real and other South American currencies have risen drastically due to the commodities boom in recent years. Brazil’s former finance minister went so far as to warn of a "currency war" as countries around the world tried to lower their currencies to boost exports.

"You hear lots of complaints from the industrial sector that competition has become very hard, because the exchange rate is misplaced," Cardoso said, adding that she thinks such concerns are minor compared to the country's growth.

Plenty of economists who do not have strong positions in debates about dependency think it's wrong to worry about Chinese investment because the terms of trade are squarely in South America's favour, as countries maintain large trade surpluses with China.

The values of basic products have changed dramatically since the 1960s when "dependency" became a fashionable topic of discussion.

High prices

"In the last decade, the price of commodities that Latin America exports have doubled and tripled, while the industrial goods it imports from China have become cheaper," Aldo Pignanelli, Argentina’s former Central Bank president, told Al Jazeera's Lucia Newman. "This has allowed Latin America to have a positive trade balance, a strong accumulation of reserves in its central banks and a growth rate that will surpass six per cent this year."

More importantly, Chinese loans, representing the bulk of investment, do not come with the same strings as aid from the International Monetary Fund (IMF) or Inter- American development Bank, which are seen as Washington's fiscal agents.

Through the IMF and World Bank, US policy makers demanded privitisation and low inflation rates, often at the expense of growth, on Latin America through the 1970s and 80s.

Governments in the region have discarded that advice in recent years, looking instead to a mixed economy, in which the state is actively involved in setting monetary policy and managing natural resources. Brazil's government-backed oil giant Petrobras is the clearest example of South America's new form of hybrid capitalism.

Critics charge that the IMF offered one set of prescriptions for developing countries: cut social spending, lower inflation at the cost of job creation and raise interest rates. During crisis at home, the fund's US backers did the opposite, relying on government stimulus programmes and low interest rates to boost growth.

"Unlike the Americans, the Chinese do not have all sorts of draconian policy conditions on their finance," Gallagher said. Other experts have echoed this sentiment - China is more concerned with getting the goods, rather than changing the structure of economies with which it trades.

After defaulting on its massive debt in 2002, following street protests and a bitter economic crisis, Argentina settled its debts with the IMF in 2006 and has ignored its advice ever since.

Back in Buenos Aires' Chinatown, a young Cantonese waitress carried trays of fresh orange juice and sparkling water, chatting in imperfect Spanish to eager Portenos (residents of Buenos Aires) who sit outside in the summer air. While it does not glisten, Chinatown is increasingly becoming fashionable, with young Argentines. Some local libraries even offer free Mandarin language classes, financed with Chinese money, as part of the country's quiet "soft power" in the region.

In recent weeks, Chinese officials have expressed concerns about an economic slow-down, linked to the crisis in European export markets. That could spell trouble for growth in South America.

"Seventy-two per cent of Argentina's soy goes to China," Gallagher said. "If China's demand slows by a few percentage points, you could have an unwinding." He worries commodity exporters have put "too many eggs in the China basket".

Even so, the restaurants in Buenos Aires' Chinatown and beyond are filled with well-dressed people chowing down on BBQed meat, noodles and warm bread. The economy has been strong, despite inflation.

China's growth has played an important role in reducing poverty across Latin America, which has fallen to its lowest level in 20 years, according to the UN figures released in December.

While Brazilian manufacturers worry about dependency and increased competition, the country's economy has, according to Cardoso, seen an "increase in productivity, an increase in real wages, and a decrease in inequality".

"People are feeling better off," she said. At least part of this feeling can be linked to China and the commodities boom.

Nicaragua’s recently re-elected third term President Daniel Ortega has morphed from socialist revolutionary to an anti-abortion zealot and promoter of tax free "special economic zones" in just a few years.

After winning Sunday’s election with more than 60 per cent of the vote amid allegations of fraud and intimidation, Ortega and his Sandinista party are set to expand their grip on power in the Western Hemisphere’s second poorest country.

With their landslide victory, the Sandinista National Liberation Front (FSLN) now controls all four branches of government: the executive, judiciary, electoral authority and national assembly. Nicaragua’s constitution is supposed to prohibit consecutive presidential terms, but Ortega and his supporters in the Supreme Court were able to lift the ban in 2009, paving the way for his most recent election. Critics say he is creating the conditions for one man rule and enriching himself at the expenss of the nation.

"Ortega is almost impossible to classify. But for the purpose of sound bites, he is more opportunist than ideologue," Tim Rogers, editor of Nicaragua Dispatch, told Al Jazeera. “He is a masterful political operator - a pragmatist who believes in power."

Known for fiery speeches denouncing US imperialism and his fight against military dictatorship in the 1970s, Ortega beat out his two main conservative opponents, former president Arnoldo Aleman and radio personality Fabio Gadea, by large margins.

Economy and inequality

Nicaragua’s economy grew 4.5 per cent in 2010 and is expected to continue being one of the best performers in Central America through 2011.

"People were pretty pleased with his management of the economy for the last several years," said John Booth, a professor of political science at the University of North Texas. "His evolution into being a capitalist who runs programmes for the poor seems to be the magic formula for Nicaraguan elections."

With about 57 per cent of the population living in poverty and wealthier citizens split between two competing conservative parties, Ortega has capitalised on his legacy as a champion of the dispossessed, even though he has allegedly amassed considerable wealth exploiting Nicaragua’s position as a low-wage manufacturing hub.

The number of companies operating in controversial special economic zones has grown from five in 1993 to 99 in 2006, according to a 2008 report from the London School of Economics. These factories and related industries, normally loathed by leftists as centres of foreign exploitation, now employ 240,000 people - or 15 per cent of Nicaragua’s labour force - the report said.

"There are strong rumours that Daniel Ortega owns a lot of the free trade infrastructure in Nicaragua," said Dennis Rodgers, Senior Research Fellow at the Brooks World Poverty Institute and a professor at the University of Manchester. "He certainly owns some key hotels."

Election monitors from the European Union complained of "sometimes inexplicable obstacles" to accessing polling stations, concerns which were echoed by observers from the Organisation of American States. Compared with other elections in Central America, incidents of irregularities do not seem to have been considered particularly egregious.

Ortega almost certainly would have won the presidency without alleged fraud, according to polls. But the race for the national assembly, part of a separate vote on the same ballot, could have proved more difficult, said Karen Kampwirth, a professor at Knox College specialising in Nicaragua.

"Some people might have voted for FSLN for the presidency, but they might vote for another party for the [national] assembly," Kampwirth told Al Jazeera. "They [the FSLN] got away with [electoral fraud] in 2008. It’s hard to resist the temptation next time. You get used to having power."

Historical hero

It wasn't always this way, analysts say. In the 1960s and 1970s, when socialism, Che Guevara and anti-imperialism were all the rage across Latin America, Ortega and the Sandinista National Liberation Front (FSLN) battled the corrupt, US-backed Somoza dictatorship, calling for democracy and a more equitable distribution of wealth through guerilla war.

The Sandinistas and their allies toppled Somoza in 1979. Back then, Ortega was still a socialist idealist, rather than a political opportunist, Kampwirth said. "If you are an opportunist, are you really going to join a tiny little guerrilla group when the most likely outcome is not power and wealth, but that you will be thrown in prison and tortured and killed?" Kampwirth said.

The Sandinistas set about trying to reform the country, challenging the entrenched oligarchy and conducting a mass literacy campaign. They did not, however, outlaw private enterprise - and foreign corporations continued doing business in the country.

But the US was worried. In 1981, the CIA began selling arms to Iran, violating US rules, and using the profits to finance the Contras, an anti-Sandinista paramilitary group. The scandal became known as the Iran-Contra affair.

In justifying opposition to the leftists, US president Ronald Regan warned that the Sandinista army was "a dagger pointed at the heart of Texas", as it was only two days marching time from the border. The conflict between Sandinistas and the Contras left about 30,000 Nicaraguans dead. Despite the fact that Ortega and the FSLN won democratic elections in 1984, the Contras continued fighting until 1989.

The FSLN lost elections in 1990. Before leaving power, officials transferred hundreds of millions of dollars worth of expropriated assets, including homes, business and agricultural land, amongst themselves in a massive corruption scandal known as the Piñata.

"This became the nucleous for a Sandinista business group," Rodgers told Al Jazeera. "For a while, Daniel Ortega’s brother was the biggest landowner in the country."

Many of the movement’s early supporters abandoned Ortega and the FSLN political party after the scandal, while remaining loyal to the Sandinistas' original ideals.

Ortega regained power in 2006, after losing elections in 1989, 1995 and 2001.

Oil diplomacy

Much of Nicaragua’s - and the FSLN’s - recent success can be linked to Venezuela's Hugo Chavez. As part of the Bolivarian Alliance for the Alliance for the Americas, a bloc of leftist leaders designed to counter US hegemony - Venezuela has been funding the FSLN with up to $500m every year since 2007.

"There are subsidised food programmes in cities, with rice, beans and sugar sold from small neighbourhood stores," Kampwirth said of Venezuelan assistance. "There are small loans for families to start businesses, given in the woman’s name. In the countryside, there are programmes where people get some seeds and chickens." In 2010, Venezuela's contribution of $511m in oil discounts and direct aid accounted for 7.6 per cent of Nicaraguan GDP, according to an article in Foreign Affairs.

Public opinion polls, cited by WikiLeaks cables, say that Nicaraguans consider Venezuela to be the country which is most supportive of their nation.

Critics say Venezuelan petro-dollars are used by the FSLN as a slush fund to buy political support from poor communities, rather than given to the state in a transparent fashion.

With Chavez suffering from cancer, some analysts wonder how long Nicaragua's mini economic miracle will continue, given current policies of low taxes, primary commodity exports and basic, low-wage manufacturing. "Ortega has kept taxes on big business low," Kampwirth said. "Without any real taxes, those social programmes will collapse if Nicaragua loses Chavez."

The elite, however, are quite happy with the present tax structure. The government collects 80 per cent of its tax revenue through indirect taxation, such as value added tax (VAT), according to a London School of Economics report. This form of revenue generation disproportionately affects the poor, as they pay a greater percentage of their income for basic goods. Inequality has also risen during Ortega’s tenure, the report said.

Like his dealings with the traditional elite, Ortega has formed decent relations with the US, despite appearances to the contrary, Rodgers said.

While both sides rail against each other with hyperbolic rhetoric - the US being called hegemonic imperialists and Ortega accused of being undemocratic - Washington and Managua generally maintain cordial relations. "They are like two dogs barking at each other through a fence," Professor Booth told Al Jazeera.

'No choice'

As part of his campaign to appease sections of the elite, Ortega has courted the Catholic Church by outlawing all abortions, even when a woman's life is in danger. The women's movement, once an important backer of the FSLN, has been completely alienated from Ortega, Kampwirth said.

Persistent rape allegations against Ortega from his step-daughter Zoilamerica certainly have not helped the president in the eyes of many women.

Like human rights groups and media activists, Nicaraguan feminists would favour a leftist party more similar to Brazil's popular Workers' Party, but such an option does not exist.

"Ortega has carefully eliminated everyone on the left," Rodgers said.

In left-leaning families, the older generations often vote for Ortega, Kampwirth said, but youth have a harder time stomaching his transgressions. Young people, who support Sandinista ideals of social justice but not Ortega’s brand of crony capitalism, "feel really lost," she said, "like they do not have any electoral options at all".

Back in 1798, clergyman and author Thomas Malthus fretted that the "power of population is indefinitely greater than the power in earth to produce subsistence for man".

When Malthus was writing in 1810, the world's population was about one billion. It will hit seven billion on October 31, according to the UN, and debates about how many people the planet can sustain only seem to be intensifying. The global population is expected to hit nine billion by 2050.

"We don't really know how to adequately feed seven billion people - we still have one billion who are not getting enough to eat - so how are we going to feed nine or ten billion?" asks John Weeks, director of the International Population Centre at San Diego State University.

"My own belief is that we don't have enough resources to sustain seven billion - much less nine or more at the standard of living that we have in the West," he told Al Jazeera.

"Malthus was obviously wrong about a lot of things." He certainly overestimated prospective population growth rates and underestimated the ability of technology to revolutionise agriculture. "But the question about how many resources we can generate sustainably remains unanswered," Weeks said.

Other early scholars came to different conclusions from Malthus, who used his dire predictions to preach chastity and religious moralism.

In the 1670s, Antoni van Leeuwenhoek, the Dutchman who invented microscopes, estimated that the world could sustain 13.385 billion people.

Population is not necessarily the problem, rather over consumption and inequality drive the worst environmental degradation, some of Malthus' critics argue.

"The consumption of the rich causes far more environmental problems per person than the modes of consumption from the vast majority of people - who have fewer claims to resources and incomes," Richard E Bilsborrow, faculty fellow at the Carolina Population Centre, told Al Jazeera. "High consumption [in the rich world] is linked to degradation in the poorer countries. Still, the latter people are degrading the environment."

More people, more geniuses?

Mao Zedong, the architect of communist China, didn't worry about over population because "every stomach is born with a pair of hands". In his view, the need to consume was balanced by the ability to produce.

Chairman Mao was not the only powerful cornucopian - someone who believes that population growth is a blessing, not a curse.

Standing on the other side of the political spectrum and sharing a similar world view, was Julian Simon, a business professor and fellow at the free-market CATO institute, who passed away in 1998.

To oversimplify his arguments, Simon contended that resources are not becoming any more scarce and population growth should be celebrated; more people means more geniuses who can solve the world's problems through technology and innovative policies.

Today, it looks like Mao and Simon are out of style. China's population grew from fewer than 600 million in the 1950s to nearly one billion in 1978, when reform-minded leaders imposed the one child policy, worrying there were too many idle hands and empty stomachs.

Part of Simon's fame stems from a bet he made with the ecologist Paul Ehrlich. Simon thought that prices for basic metals - a measure of scarcity - would fall through the 1980s, while Ehrlich wagered they would rise. Simon won, but prices for food, fuels and commodities have increased dramatically since then - and many hedge funds and speculators see a rising arch over the long-term for prices of basic goods - indicating that supplies are becoming scarcer.

"We don't have any more land on which to grow food," Weeks said. "All the resources we are exploiting need to be exploited more efficiently."

Inequality vs population

In early 2011, the International Monetary Fund released a paper entitled Inequality, Leverage and Crisis, warning that spiraling inequality could have "disastrous consequences" if not addressed.

And they are not alone in sounding the alarm. "The global wealth pyramid has a very wide base and a sharp point," The Economist reported in January 2011. "The richest one per cent of adults control 43 per cent of the world's assets; the wealthiest ten per cent have 83 per cent. The bottom 50 per cent have only two per cent."

This massive amount of money is often spent on private jets, multiple estates and market speculation. If the gap between the haves, have-nots and have-yachts is reduced drastically, critics say, the world has enough wealth and natural resources to provide a decent standard of living to a large population.

"There is a rough tradeoff between population and consumption ... a country's environmental resources can be stressed by either of them," said Geoffrey McNicoll, a senior associate at the Population Council, an international non-profit organisation. "More consumption is usually a better route in generating human well-being - though with diminishing returns at high levels," he told Al Jazeera.

Between 2000 and 2010, the number of adults worldwide rose from 3.6 billion to 4.4 billion, while average wealth (total wealth divided by population) rose from $30,700 to $43,800, The Economist reported. There could be plenty to go around.

"Simply redistributing wealth would greatly improve the current situation but it is not politically feasible," Bilsborrow said.

Environmental debts

But these calculations on redistribution do not take environmental costs into account. Some critics say that humans are already taking too much from nature and increased population - especially a globe full of people who want to live like citizens of the developed world - will only make the planet more unsustainable.

The ecological footprint of humankind - the amount of natural wealth we currently take out of the world in the form of food, energy, materials and water - is 35 per cent greater than what the planet can sustain, according to the calculations of environmentalist Mathis Wackernagell, co-developer of the ecological footprint concept.

Some people consume far more than their fair share, others far less. The current model is unsustainable, Wackernagell argues, as we are taking resources out of the planet faster than they can be regenerated. You can probably guess the worst offenders.

Residents of Canada, the US and a few northern European countries are only surpassed by the consumers in Arab Gulf States - the UAE, Qatar and Bahrain - where petroleum extraction, constant air conditioning and fleets of massive SUVs contribute to the world's highest environmental impact per person, according to the Global Footprint Network, a research organisation.

"Obviously, we could sustain a larger number of people at a lower standard of living," said Weeks. "But that would mean higher death rates and more misery."

Growth slowing

While the population continues expanding, demographers are encouraged because its growth rate has slowed down in most regions. "The world's population growth reached its peak at 1.9 per cent in the 1960s and has dropped to about 1.2 per cent," said Bilsborrow. "The fall is really extraordinary."

A rise in living standards, access to family planning and more rights for women have all played a role in slowing the rise, analysts said.

There is, however, one significant exception. "The single major world region still experiencing rapid population growth is sub-Saharan Africa," McNicoll said. "There is some population-related conflict (for instance, between farmers and herders), but most of the region's conflicts seem to have other causes - religion, ethnicity, minerals, etc."

Improving agriculture in the region is certainly possible, experts agree, as many rural farmers still lack access to basic technologies. This will help feed a growing population in the short-term, but reducing long-term population growth is trickier in a region disproportionately afflicted by conflict. "The most productive aid we [in the West] can give is education," Weeks said. "But selling weapons is what the rich countries do most easily."

Follow Chris Arsenault on Twitter: @AJEchris

As military jets pound protesters in the Libyan capital, oil analysts around the world are watching apprehensively from comfortable offices.

"The price for crude oil is up by five dollars per barrel, and most of the press is relating this rise to the tensions that are escalating as we speak," said Stephen Jones, the vice president of market services with Purvin & Gertz, an energy consultancy based in Houston, Texas.

“Unrest in the greater Middle East market-place is becoming a greater concern to global oil markets," Jones told Al Jazeera in a phone interview.

The price of Brent crude hit $105 per barrel on Monday, and pushed as high as $108 in after-hours trading, levels not seen since September 2008.

Libya, Africa's third largest oil producer, pumps out around 1.6 million barrels of oil per day, meeting almost two per cent of global demand.

Fuelling revolt

Wealth from light sweet crude has allowed Muammar Gaddafi, an autocrat described as a "mercurial and eccentric figure who suffers from severe phobias” by US diplomats in WikiLeaks documents, to hold power for more than 40 years.

While oil production has only dropped by 50,000 barrels per day, according to International Energy Agency reports, Gaddafi's luck seems to be running dry.

"When you are using military force against protests in your capital, it shows how far it has gone," said Peter Zeihan, vice president of analysis with Stratfor, a global intelligence company.

At least 61 people died in unrest on Monday, adding to several hundred who have been killed in recent protests. Two Libyan air force jets landed on the island of Malta on Monday night; their pilots claimed they defected after refusing to bomb anti-government protesters. Several Libyan diplomats have also defected, protesting attacks on demonstrators.

"Libya is a genuine revolution. The military is split," Zeihan told Al Jazeera in a phone interview. A recent uprising in Egypt did not qualify as a revolution, he said, because the military remained united and firmly in control.

Libyans may be excited about the prospects of change. But energy markets beg to differ. "In general, oil markets prefer stability and stability often comes with [various] modes of governance," said Jones, hinting that markets are not perturbed by dictatorships, so long as the pipelines keep gushing.

"The best case scenario, from the oil market’s stand point, would be for unrest to calm," Jones added. "That might be at odds with the populace." The analyst would not comment on what would happen to energy markets if unrest spread to Saudi Arabia, the world’s biggest oil producer.

Paul Horsnell, head of oil research at Barclays Capital, told the UK Telegraph newspaper that Libya's uprising is "potentially worse for oil than the Iran crisis in 1979".

For global energy markets, that assessment might be an exaggeration. Libya's main oil infrastructure is located in the desert, far from population centres facing violence, said Stratfor's Zeihan. While drilling platforms and other expensive extraction equipment seem safe, refineries and loading platforms could be damaged.

"Nothing explodes like an oil refinery and rioters tend to like to burn things," Zeihan said. “The country is self-sufficient in its refined goods, if its refineries remain intact.”

An Italian job

While Libya produces enough petroleum for domestic consumption, its former colonial master Italy is not so fortunate.
"The Italians have the most to lose," Zeihan said. "They get about one third of their oil and 10-15 per cent of their natural gas from Libya." Italy has enough oil reserves for 90 days and gas for 30 days, a government source told Reuters on Tuesday.

Eni, Italy’s biggest oil company which is partially owned by the government, has pledged to invest up to $25bn in Libya. Eni’s share price fell 5.1 per cent on Monday, the biggest drop since July 2009.

"If I was Eni, I would be terrified right now," Zeihan said. "The Italians don’t have an energy policy; they have even less of an energy policy than the Americans."

Italy is Libya's biggest trading partner. About $17bn worth of goods and services were exchanged between the two countries in 2009.

The Libyan Investment Authority, a sovereign wealth fund which invests Libya’s oil money overseas, owns about two per cent of Finmeccanica SpA, Italy’s biggest defense company.

If Gaddafi’s regime falls, it is unclear how a new government would approach relations with Italy, while it is unlikely any government would stop oil exports to Europe, Zeihan said.

"Whoever takes power, has an interest in producing oil and natural gas,” he said. If I was the Europeans, I would put together a nice little aid package, to see that the contracts move regardless of who comes to power. It is an opportunity for everyone who isn’t Italy."

International energy companies, including Eni, Shell, BP and Norway’s Statoil have repatriated some personnel from Libya, according to reports.

While analysts say that it is unlikely any new government would nationalise the energy industry, the behavior of specific tribes in Libya is harder to predict.

On Monday, the head of the Al Suwayya tribe in eastern Libya threatened to cut oil exports to western countries within 24 hours unless the authorities put an end to the "oppression of protesters".

While Libya doesn’t produce as much oil as other countries in the region “it is still a major producer," said the Texas-based analyst Stephen Jones. "The question is: How much of their production could be put at risk?"

When police arrested Anthony Graber for speeding on his motorbike, the 25-year-old probably did not see himself as an advocate for police accountability in the age of new media.

But Graber, a sergeant with the Maryland Air National Guard, is now facing 16 years in prison, not for dangerous driving, but for a Youtube video he posted after receiving a speeding ticket.

The video, filmed with a camera mounted on Graber's motorcycle helmet designed to record biking stunts rather than police abuse, shows a plain clothes officer jumping out of an unmarked car and pointing a pistol at the motorcyclist.

It does not portray the policeman in a positive light.

After he posted the video on Youtube, police raided Graber's home, seized computers and put him in jail.

"The case is critical to the protection of democracy because I don't think you can have a free country in which public officials are able to criminally prosecute people who film what they are doing," David Rocah, a lawyer with the American Civil Liberties Union in Maryland who is representing Graber, said.

Wiretapping

Even though he had never been arrested before, Graber is being charged with illegal wiretapping and could face 16 years in jail.

"This is about shielding the policeman, a public servant, from journalistic scrutiny," Steve Rendall, a media analyst with Freedom and Accuracy in Reporting (FAIR), told Al Jazeera.

The arrest happened in April and the trial is expected to begin later this year.

Rocah said his client "was charged under the wiretapping statute which prohibits taping oral communications without consent".

The statute, which does not mention video recording, is not supposed to apply to "conversations in a colloquial context, but in a private context" Rocah told Al Jazeera.

The encounter happened on a public street and, according to Rocah, police officers - public officials tasked with protecting the public interest - should not be able to hide behind such rules to avoid scrutiny.

"The value of documenting what is happening cannot be over-stated," he said.

Threat to privacy?

Supporters of the crack-down on filming police argue that citizen journalists pose a threat to privacy.

That is the logic Joseph Cassily, the prosecutor handling Graber's case, is likely to make at the trial.

In media interviews, Cassily presented a scenario where police stopped someone on suspicion of drinking and driving, asking for a breath test, and a random passerby filmed the encounter, putting it on the internet without consent from the driver or the officer.

"Is there some interest in protecting private individuals who may be having a conversation with the police? Yes," Rendall said.

"But in the end, I think that is out-weighed by the public's right to know."

"[Furthermore] you can't walk through Washington Square [a public space in New York] without being in the view of dozens of video cameras run by the police."

Recording ban

The wiretapping statute which bans "secret" recording of private conversations is legislated by the state of Maryland, not the US federal government.

Other US states, including Florida, Illinois and Massachusetts, have used similar laws against citizen journalists.

In 2007, police in Florida arrested Carlos Miller, after the journalist photographed the arrest of a woman.

"They [police] told me to leave the area, saying it was a 'private matter' and I said 'this is a public road'. They escorted me across the street and told me to keep moving. I had the right to be there and kept taking photos. They arrested me," Miller said.

He was charged with a series of misdemeanors and like many Americans arrested for filming police, Miller was eventually acquitted in court.

The arrest prompted the reporter to start the blog Photography is Not a Crimewhere he has documented more than eight similar incidents.

But the idea of winning court battles against journalists may not be the reason security forces prosecute journalists with wiretapping laws and other methods.

Intimidating journalists

"The whole reason for these laws is to intimidate people from filming," Rendall said.

And attempts to intimidate journalists into putting down their cameras reach far beyond the US.

In February the UK's Guardian newspaper ran the headline "Photographer films his own 'anti-terror' arrest" for a story and video about a man who was held by police for eight hours after taking pictures of Christmas celebrations in the small town of Accrington.

Rocah points to the example of the post-election protests in Iran. "The regime completely shut down the traditional media," he said.

"It was citizens' video posted on the web that allowed the world to see what was happening."

Barack Obama, the US president, went so far as to ask Twitter to hold-off on a maintenance operation because the social networking site was playing an important role in the protests.

Police assault

The most prominent US example of a citizen journalist filming police was arguably the case of Rodney King, a black man in Los Angeles who was assaulted by several police officers. His beating was filmed by a citizen standing at a nearby gas station.

Without video evidence, King, a convicted felon, may have stood little chance testifying against police officers in court.

But the video of King's beating flashed across news screens and helped spark the 1992 Los Angeles riots, which left more than 50 people dead and caused about $1bn in property damage.

The dynamics of video-tapping have fundamentally changed since then.

"I think that technology is making the issue [of arrests] arise with increasing frequency because the ability to record is more widely distributed than it ever has been," Rocah said.

The civil liberties lawyer, who believes the wiretapping law is unconstitutional and will eventually be struck down, says he is confident his client will be found not guilty.

Broader trends

But even if he is, this case is indicative of broader trends in media, and consequently, the exercise of power.

As technology outpaces the abilities of states to control the flow of information, governments in the US and beyond are cracking down on independent journalists.

"In the past, freedom of the press only really belonged to those who owned newspapers, TV stations or other major outlets," Miller said.

Now information is more diffuse; history easier to record and technology easier to afford.

Direct evidence, including video of police abuses, is the easiest way to hold the powerful to account. And that may be exactly why security forces do not want to be caught on tape.

Sanjay Verma was only five months old when a cloud of poison gas killed his parents and five siblings in Bhopal, India, as they slept in their beds.

His parents and siblings were among some 3,500 people who died immediately after the December 1984 gas leak while more than 15,000 others perished from the lingering effects of the world's worst industrial disaster.

On Monday, a court in Bhopal found seven ex-employees of the Indian unit of Union Carbide, the US company that owned the chemical plant, guilty of "causing death by negligence".

They were sentenced to two years in jail, a penalty similar to those handed out for deadly traffic accidents, and ordered to pay fines of $2,100 each.

But for Verma, the victory provides little comfort, as Warren Anderson, Union Carbide's former CEO, did not show up for court.

"In a sense I was lucky," Verma said. "I was too young to see the bodies in the streets. I was lucky I didn't know my parents."

Monday's ruling was the result of a court battle that dragged on for 23 years and came after Mohan P Tiwari, the chief judicial magistrate, reviewed testimony from 178 prosecution witnesses and the contents of 3,008 documents.

The convicted parties will likely appeal the verdict in India's supreme court.

But the case against company officials is just one of several ongoing court battles surrounding the Bhopal disaster, which according to Indian government records, affected 578,000 people.

More than 25 years later, many are still grappling with its effects.

"About 30,000 people are still drinking contaminated water," Karuna Nundy, a human rights lawyer in New Delhi who is representing victims on a pro-bono basis, said.

Nundy is arguing a separate case before India's supreme court, trying to get better medical care for Bhopal's victims.

"These are poor people who have no option but to drink the toxic water, even though they know how dangerous it is.

"There are children who have been born with chromosomal defects, who have terrible health care."

When the 25 tonnes of toxic methylisocyanate gas leaked from a storage tank, drifting into the streets of Bhopal and the homes of its 1.5 million residents, Nundy said "all six of the most important safety measures failed".

"The siren that should have gone off to warn the surrounding populations did not go off."

Union Carbide built the plant, which Nundy said had been leaking toxins into the local water supply and soil since 1977, in a densely populated urban area, despite the advice of its own experts.

On December 7, 1984, days after the disaster, Indian officials arrested Warren Anderson, but he was released on bail and allowed to return to the US.

Victims like Verma are enraged by the decision to allow Anderson to leave the country, but Nundy speculates that the Indian government may have feared that keeping him imprisoned would have discouraged foreign investment in the country.

In 1989, Union Carbide paid a $470mn settlement to the Indian government. But because the number of victims was so high, rights activists say each one received just about $1,000.

Union Carbide divested its stake in its Indian division in 1994 and a message on the company's website says that it, and former chairman Anderson, "worked diligently to provide aid to the victims and set up a process to resolve their claims".

It also attributes the gas leak to an act of sabotage.

But rights activists and lawyers say the claim is absurd and that it has been disproven in various courts.

Dow Chemical paid $12bn to acquire Union Carbide in 2001 and denies that it holds responsibility for the Bhopal disaster. Dow Chemical's India division did not respond to Al Jazeera's request for an interview.

Bhopal survivors launched a class action lawsuit against Union Carbide in the US in 1999.

During court hearings in New York in 2002, internal Union Carbide documents were disclosed, showing the company was using "unproven technology" at its Bhopal plant.

But, the company did not use this "unproven technology" in its US operations.

In separate US litigation in 2002, Dow Chemical set aside $2.2bn to compensate American workers who were exposed to asbestos at Union Carbide operations, leading rights activists to accuse the company of attaching greater value to the lives of Americans than those of Indians.

In June 2009, Bhopal survivors secured the signatures of 27 members of the US congress, who wrote a letter to Dow Chemical asking the company to clean up toxic waste from the site.

"We request that Dow ensures that a representative appears in the ongoing legal cases in India regarding Bhopal, that Dow meets the demands of the survivors for medical and economic rehabilitation, and cleans up the soil and groundwater contamination in and around the factory site," the politicians wrote in the letter to Dow Chemical's CEO.

However, the company did not comply with these requests and survivors continue to fight court battles in India over rehabilitation and clean up.

"The toxic waste case is now before the high court of Madhya Pradesh [the state where Bhopal is located]," Nundy said.

"I am also arguing a case in which the supreme court is directing better medical care for the victims of the gas leak."

After a series of delays and procedural issues, US litigation around the Bhopal disaster continues in a New York court.

Despite Monday's guilty verdict, litigation surrounding the disaster will continue in other Indian courts.

Rights activists, however, worry that the Indian government and foreign multinationals will go on with business as usual.

As India's economy grows quickly, the country has announced plans for a series of new nuclear power plants.

In May 2010, Bhopal survivors filed a right-to-information request with the Indian government, asking how it would deal with a nuclear accident.

According to an editorial in the Wall Street Journal, the Indian government plans to cap corporate liability at $100m with the next $400m to deal with potential nuclear disasters coming from Indian taxpayers.

Nundy said the government continues to send the wrong message - "we'll set a cap for you and we'll have the taxpayer pay for it" - to foreign companies doing business in India.

As Bhopal victims like Verma wait for the next round of litigation in the wake of this verdict, some Indian lawyers are pushing for structural changes in how the country does business with multinational corporations.

"If you have a lax regulatory system, as you do in many third world countries, then there is a race to the bottom because adherence to health and safety standards is not enforced," Nundy said.

"There is less of a deterrent effect on companies to take safety seriously, to protect Indian lives. We need the same rule of law for everybody."

The 19th century French philosopher Pierre-Joseph Proudhon once referred to laws as spider webs for the rich and chains for the poor. For many of the victims, those words prevail.

http://english.aljazeera.net/focus/2010/2010/07/201072302826665260.html

When Hillary Clinton, the US secretary of state, visited Vietnam on Thursday she extolled the country's "unlimited potential" and strong trade relations with the US. But the words must have rung hollow for Ngyuen Ngoc Phuong, who has seen his potential destroyed by American chemical poisoning.

Phuong, 19, was born long after the US cut and run from the Vietnam war, evacuating its last remaining personnel by helicopter from the roof of its Saigon embassy in 1975.

But the results of that war, which officially ended 35 years ago, affect every aspect of Phuong's life.

The young man has severe physical deformities, and like an estimated three million Vietnamese, he suffers from exposure to Agent Orange, a toxic chemical US forces sprayed during the war to defoliate the dense jungles Viet Cong rebels used for cover.

In its manufacture, the chemical was contaminated with TCDD, or dioxin, "the most toxic substance known to humans", according to an investigation in the journal Science.

Dangers known

In his book Agent Orange on Trial published by Harvard University Press, Peter Schuck reported that companies who manufactured the defoliant knew "as early as 1952" that deadly dioxin had contaminated the chemical.

Between 1962 and 1971, the US military sprayed an estimated 80 million litres of Agent Orange and other herbicides on Vietnam, the journal Nature reported in 2003.

"I met one family of victims with four blinded children, no eyes - period," Dr Nguyen Thi Ngoc Phuong, a Vietnamese researcher, said in a 2007 interview.

In a now declassified report for the US department of veterans affairs, Admiral ER Zumwalt Jr wrote that Dow Chemical and other manufacturers knew Agent Orange exposure could cause "general organ toxicity" and "other systematic problems" as early as 1964.

These and other studies show that the American military, and the chemical companies who serviced it, were well aware of the dangers posed by the chemicals on the general population.

On this front, Agent Orange elucidates an alarming trend in modern warfare, particularly counter-insurgency fighting: civilians and the environment tend to be main casualties.

Brutality clearly defined World War I and II and previous conflicts between standing armies, but soldiers usually made up the majority of the dead.

Poisoning civilians

From the jungles of Vietnam to the plains of Sudan, Iraq's cities to the Afghan mountains, civilians now bear the highest cost for wars not of their making.

"In Vietnam it was chemical [weapons] ... Agent Orange and napalm," Len Aldis, secretary of the Britain-Vietnam friendship society,told Al Jazeera.

"In Iraq, Kosovo, [and] Afghanistan the US, UK and Nato have used depleted uranium, cluster weapons ... and drones that are controlled from military bases in the US."

These conflicts tend to continue even after the wars officially end.

"We did a number of soil samples and followed [dioxin contamination from Agent Orange spraying] though the food chain into ponds, to fish, into ducks and then into humans. We found it in children who had been born long after the war ended," Dr Wayne Dwernychuck, who led the first team of western scientists to study the long-term affects of sprayingin Vietnam, said in an interview.

"We concluded the only way they could be contaminated is through food and nursing," he said, referencing his 1994 study.

Former US military bases including Bien Hoa, Phu Cat and the infamous Danang are the worst sites of present day contamination.

"We have been working with Vietnam for about nine years to try to remedy the effects of Agent Orange," Clinton said at a press conference in Hanoi.

Since 2007, the US congress has appropriated $9m to help Vietnam clean up contaminated areas and for related health activities, or an amount roughly equal to the cost of 12 Tomahawk cruise missiles.

'Wounds still remain'

In June, a joint panel of US and Vietnamese policymakers, citizens and scientists estimated the cost of a proper clean-up and rehabilitation for the sick at $300m.
Despite public pressure, Vietnamese victims were unable to win justice in US courts [AFP]

"The war is over but the wounds from the war still remain in many areas of Vietnam," Nguyen Van Son, a member of Vietnam's National Assembly, said during the report's launch in Hanoi.

Vietnamese civilians are not the only ones suffering from exposure. Veterans in the US, Canada and beyond also have historieswith the chemicals.

In 1984, US veterans reached an out-of-court settlement for $180m with companies who produced the chemicals, including Monsanto and Dow Chemical.

Remarkably, Dow maintains that there is no evidence to link Agent Orange to illnesses from US veterans and Vietnamese civilians.

The Institute of Medicine (IOM),the pre-eminent scientific authority in the US when it comes to setting government policy, links exposure to a raft of conditions including cancers, diabetes and spina bifida.

Like their American counterparts, Vietnamese victims have tried to gain justice in US courts, but after a series of cases, the US supreme court refused to hear their case in 2009.

However, American conservatives were some of the first to recognise the moral quagmire around giving pensions and other benefits to US veterans and not Vietnamese civilians, even though both groups were poisoned by the American government and the companies who provided it with chemicals.

'Difficult to rationalise'

It is "difficult to rationalise why [American] Vietnam vets are compensated for Agent Orange exposure but Vietnamese civilians shouldn't be," Steve Milloy, a scholar at the Cato institute, wrote in a commentary for Fox News.

During her visit, Clinton criticised Vietnam for jailing rights activists and censoring the internet and urged the single party, nominally communist state to "strengthen its commitment to human rights".

However, in the broader schema of rights, Vietnam's transgressions against courageous lawyers and journalists seem positively minor compared to three million destroyed lives: children born missing eyes, grossly elongated heads or misshapen legs where their arms ought to be.

As world leaders gather in Canada for the G8 and G20 meetings, they are divided on what is to be done about the global economy, with debates over banking reform and stimulus spending taking centre stage.

On stimulus spending, initially everyone wanted to borrow to make sure the great recession did not become another great depression.

Today, Europe wants to cut, while America and China want to spend.

Jan Randolph, head of Sovereign Risk Country Intelligence at Global Insight, said the US worries that leading economies will "collectively withdraw these supports too soon there could be an economic relapse, just like what happened in the 1930s that extended the great depression."

When to spend and how much? These are not new debates.

Politicians in the great depression of the 1930s and the stag-flation period in the 1970s fought elections on these very questions.

Academics and economists have been arguing about this stuff, without pause, since the depression.

But today’s G8 show-down reverses a general trend in economic history.
Obama wants governments to stimulate economic growth [AFP]

Typically, the US preached rugged individualism and power for private business over government spending.

Europe is known for embracing the welfare state.

But this new recession is a game changer.

At its core, the transatlantic divide on stimulus spending looks like a battle between Milton Friedman and John Maynard Keynes, with the US and Europe reversing their traditional roles.

Friedman, an American economist based at the University of Chicago, believed that governments should not interfere in financial markets.

His views have come to define the policies advocated by much of the American right, although massive public spending on the military does not seem contradictory to this crowd.

Keynes, an Englishman based at Cambridge University, argued that governments should borrow money to finance growth in times of economic contraction.

In the great depression, Keynes' views became policy, with governments, particularly Roosevelt's America and Hitler's Germany, making massive investments in infrastructure, and later in war, to kick start their economies.

Keynes may have won the first battle. But in debates over stimulus spending this time around, he may lose the final war in favour of Friedman's public austerity and market orientated shock-therapy.

That is because governments today seem more likely to respond to bond traders than the people who elect them.

Voters generally support social services and state spending for job creation, while the markets favour austerity.

And, there is a spectre haunting Europe: the spectre of an angry bond market forcing a Greek style meltdown in sovereign debt.

The US is not so fearful of incurring wrath from the electronic hoard of bond traders because the US dollar still acts as the world's reserve currency.

If a country wants to buy oil or other commodities, they usually make the transactions in US dollars.

This, in part, allows the US government to borrow at low interest rates.

Policy makers in London, Paris and Berlin fear that international bond traders will not be so kind to Europe.

That is why Germany, the continent's biggest economy, has committed to budget cuts of $98bn over the next four years, and the French government also wants to pursue conservative fiscal measures to reduce existing debts.

The UK announced significant spending reductions this week, including a planned $16bn reduction in the national welfare bill and a rise in goods tax by 2.5 per cent

The transatlantic divide continues when it comes to bank taxes.

But on this issue, the roles are reversed, with Europe taking a position associated with state intervention and the US opposing it.

Germany and France have expressed support for some kind of a banking tax, although the exact details are unclear.

The US, despite its touted financial reform package negotiated on Friday, does not want serious new taxes on the financial sector

Stamp out Poverty, a coalition of trade unions and development organisations in the UK, is pushing for a global transaction tax or what they call a "Robin Hood tax".

"Since the Pittsburgh [G20] summit, the whole thing has been opened up from 'shall we tax the banking sector' to 'how should we tax the banking sector'", David Hillman, the group's coordinator, told Al Jazeera.

"The Robin Hood tax campaign favours a transaction tax and it is extremely difficult to avoid because it is automated, for selling bonds, derivatives or foreign exchange. Once you try to tax profits, bankers can move to tax havens," Hillman said.

European leaders have said that a global transaction tax needs to be investigated.

The US and Canada oppose such a policy.

"The banks caused the crises, there should be some pay-back. We need to make sure that there aren't as many jobs lost and [that] are we going to meet our climate change [obligations]," the campaigner said.

Despite all this tax talk, two of the largest US based hedge funds, the Citadel Investment Group and the Blackstone Group, people who have the most to lose from a transaction tax, refused interview requests.

It seems these organisations, whose destabilising, speculative activities are almost universally loathed, want the whole transaction debate to just go away.

That seems unlikely. But a global deal on a new financial tax at the G8 or G20 is even more doubtful.

Regardless of what the G8 leaders decide, thousands will gather to protest.

The poorly named "anti-globalisation movement" had its coming out party in Seattle against the World Trade Organisation (WTO) in 1999.

The world has changed a lot since then.

Like the International Monetary Fund and World Bank, the WTO was seen as an instrument of western economic imperialism, preaching a 'do as we say, not as we do' logic to the global south.

And, while some protesters take credit for undermining the WTO's hegemony, the real threat to the organisation came from changing dynamics in global power.

The WTO's push for increased influence and scope collapsed after negotiations in Doha, Qatar and Cancun, Mexico, but not because of protests.

Rather, divides between the weakening north and a more confident south meant that the status quo was untenable.

The US and Europe preached open markets and an end to protectionism while massively subsidising agricultural products, steel and other politically connected industries.

Delegates from the south, particularly emerging giants India and Brazil, said "no deal".

Despite the growing political clout of emerging economies, much of the anti-globalisation movement sees international affairs in a unipolar framework: arguing that the US and Europe exploit the economies of poorer nations for their own benefit in a neo-colonial fashion.

This exploitation remains true, in some sectors at some times.

But the west's general influence is slipping and new alliances are being built.

In 1999, protesters chanted "another world is possible".

Today, after the relative failure of the WTO, the invasions of Iraq and Afghanistan and China's sustained rise, it seems like another world is here, compared to the one that existed in 1999.

This new world, however, may not be the one that demonstrators wanted to see.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.