Financial Intervention

The politics of outside support for struggles against dictatorship

By Ken Simons

In 1997, when Science for Peace hosted its conference on "the Lessons of Yugoslavia," I heard more than one speaker say that Western countries, if they were sincere about wanting change in the region, should be giving cash to the democratic opposition.

I also heard other people at the same event denounce members of democratic opposition movements for being too cosy with the West. Indeed, these two apparently contradictory arguments often came from the same corners of the peace movement.

I was reminded of this controversy when the documentary "Bringing Down a Dictator" showed recently on US public television (see John Bacher's review, elsewhere this issue). The student opposition movement Otpor had little in common with small (but long-haul) civil society organizations like the Belgrade Anti-War Centre, Women in Black, and the Humanitarian Law Fund, but was a key player in Milosevic's downfall in October 2000. The ability to organize right across the country was something no previous opposition movement had really enjoyed. And Otpor built this knack for organizing on two foundations: youthful energy and outside money. One was apparently useless without the other.

But did the source of the money (the National Endowment for Democracy, the National Republican Institute, and the National Democratic Institute) affect the political goals or perspectives of the idealistic Serbian students?

Some people would say yes, hastily - that the US political establishment owns everything it finances. Others would say no, but claim the students' victory was nonetheless sullied by accepting American money.

The Otpor students were themselves ambivalent. Very few of them were pro-American, many were nationalist, some were hawkish on Kosovo, but all were clear on the need to remove Milosevic from power, peacefully and democratically. Even many supporters of Milosevic's own party wanted Serbia to become a normal state again.

Without much reflection, Otpor gambled that they could accept foreign help without becoming owned by the Americans. By contrast, Radio B92 - active against Milosevic over a much longer period - frequently confronted the problem of justifying the financial resources it needed to survive.

Radio B92: The Arm's Length Formula

Radio B92, the independent youth radio station which consistently opposed the Milosevic regime, urgently needed outside technical support in the winter of 1995. It had lost transmitter facilities in Belgrade, not for the first time, and gambled that it could temporarily rebroadcast on the US-run Radio Free Europe (now a largely independent agency). It did this for as short a time as possible, and suffered only minimal political fallout after the opposition protests died out and the regime retrenched in early 1996. It survived the Croatian and Bosnian wars with no outside sources of funding, but was the subject of wild accusations even then. Listeners tended to believe what they heard - a scrappy, chaotic mix of alternative music and late-night rambling, punctuated by brief but very pointed and uncensored news reports from Vukovar or Sarajevo or Prishtina.

Radio B92 was later to get significant funding from agencies like the Council of Europe and George Soros's Open Society Institute. As a Belgrade analyst observed, "either you get money from [foreign] foundations to do them, or you get no money and do nothing at all."

B92 wanted to improve the reach of its own broadcasting and establish a network and news service throughout the Federal Republic of Yugoslavia. It maintained a 20 percent ceiling on funding from any one source "as an internal safeguard against influence on editorial policy."

The radio station laughed off the accusation that it was a tool of the West. Before the NATO air war over Kosovo, it was (like all but a few Serbian opposition voices) consistently anti-NATO; during the war, its studios occupied by agents of the regime and its journalists in fear for their lives, it continued to condemn the NATO bombings on its website FreeB92 - hosted by xs4all.nl, a Dutch anarchist provider and funded in part by the Open Society Institute.

With the fall of Milosevic, B92 is a respected, anti-authoritarian, scrappy voice in the Serbian media scene. It now functions as a sort of on-air truth commission, a place where the Serbian people can reflect honestly on the mistakes of the past decade.

The Diaspora And The NGOs

Every significant movement confronting an authoritarian regime - armed or unarmed, extremist or moderate, religious or secular - has to rely on some funding from outside its country or region. Little controversy is attached to funding by exile communities, though this normally implies direct and often covert funding of specific political parties, armed movements, or both. There can also be elements of coercion in fundraising - as in the Tamil diaspora in Canada. In general, however, states tend not to seize on exile-community fundraising, even for paramilitary activities, as evidence of foreign interference.

Next up on the scale of "financial intervention" are nongovernmental agencies and foundations - sometimes linked to governments, more often not, but usually vilified as imperialist by dictators left and right. Such accusations have also been used against human rights observers and other low-impact NGOs - the Sipaz observers in Mexico's Chiapas state in the late 1990s and the international solidarity activists in the West Bank in 2002 have met these accusations, as have Médecins sans Frontires doctors in the Caucasian republics.

Finally, the most problematic area of all, direct governmental assistance to opposition groups. But even at this level, the objective is not necessarily one of control - the range of governments which gave aid to anti-apartheid forces in South Africa is impressive.

Neither NGO nor governmental support for opposition social movements normally fund political parties directly. Such aid is illegal in both the donor and recipient countries. Instead, voter education, administered through independent agencies; electoral monitoring; and alternative media outlets tend to receive support. It can be argued that funding of this sort tends to support a particular model of democracy (liberal-democratic, election-oriented, pluralistic) but in most countries in transition, this is about as radical as one can get.

However, the European Union's "Initiative for Democracy and Human Rights" (formerly known as the Democracy Fund) currently gives grants to human rights groups in 77 different countries, with an additional 26 projects specifically for the rehabilitation of victims of torture. This shows an interpretation of democracy which extends far beyond multi-party elections, as valid and global in reach as the Universal Declaration of Human Rights.

This article assumes that opposition movements must either be defensive of their sources of funding, or display high candor to avoid either negative propaganda or repressive action. This defensiveness also affects how they are seen by the international media and by civil society movements - a particular problem for progressive groups confronting a state which is adept at anti-imperialist rhetoric.

Pro-regime groups, on the other hand, are rarely so cautious. They tend to be funded directly by the state, and in many cases are part of the state's own apparatus. Thus in East Timor, Indonesia supplied the anti-independence militias directly from armed forces stores; in South Africa, the Inkatha Freedom Movement was created and maintained by agencies of the apartheid regime; and in effective dictatorships everywhere the government party can conscript civil servants and schoolkids for pro-government rallies.

Similar things happen in functional democracies as well, but tend to be more covert and less likely to wash with a politicized public.

Venezuela 2002: Money Can't Buy You Power

The failed coup against Venezuelan president Hugo Chávez illustrates some of the limitations of money as an extension of foreign policy. The National Endowment for Democracy had been funding pro-business groups in Venezuela, including the Confederation of Venezuelan Workers (CTV) - linked to Acción Democratica and with strong roots in the oil industry.

Chávez was thought, even by many leftists, to have less than complete respect for democratic processes - he attempted a military coup in 1992, later retiring from the armed forces and entering electoral politics. He was elected president in 1998 at the head of a peaceful social process - the "Bolivarian Revolution"- which sought an end to social inequality and domination by the traditional political and economic élites. His first four years in power were marked by intense social polarization, divisions between the radicals and moderates within his own movement, and by considerable unease over restrictions on press freedom.

In this atmosphere of suspicion and uncertainty, organized groups, largely associated with Acción Democrática and the other dominant opposition party, COPEI, began in late 2001 to hold daily protest rallies in Caracas and other cities. Outside observers could be easily deluded into believing that Chávez had little popular support and that all the opposition required was a little friendly assistance from abroad.

And the protests continued. Finally, in April 2002, when Chávez moved to curb the power of opposition supporters in the state-owned oil monopoly by appointing a new board, CTV and the opposition parties picked the tempo, unaware that they were soon to be double-crossed by the front-line coup plotters. On 11 April, army units quickly invaded the presidential palace, arrested President Chávez, and named an ultra-conservative interim government which excluded the trade union and moderate political leaders. Street protests by Chávez supporters, combined by open dissension within the military and confusion among the moderate opposition, ensured the rapid collapse of the coup. By 14 April, as 100,000 people rallied in front of the presidential palace, most rebel army units had returned to support the elected government. Chávez returned to triumph on 15 April, promising either a new era of conciliation or a retrenching of the "Bolivarian Revolution." The failed coup against Chávez was more damaging to the opposition that Chávez's 1992 attempt to overthrow Carlos Andres Perez was to his own political future. Certainly what was most damaging to the opposition was the impression that they were serving not Venuzuelan interests but those of the USgovernment.

Moreover, the money trail from the National Endowment for Democracy to various Venezuelan groups was murky enough and damaging enough for the State Department to begin an investigation; the credibility of the foundation would be badly shaken if clear links were established between its funds and the activities of the coup plotters.

The US government's mistake in Venuezuela may well have been that they assumed the people they were supporting were the government-and that a brazen and unsubtle approach to crushing the "opposition" (in this case, the elected president and his supporters) would work. Use of NED money to promote free enterprise (one of the foundation's core aims in Latin America) was blatantly destabilizing in the Venezuelan context; and a particularly poor advertisement for democracy.

The moderate right wing in Venezuela gambled with this money, and lost. Their failure came not just from the lack of a plan but the lack of control over their own activities.

Ken Simons is office manager of Peace and is engaged in on-going research into the politics of international solidarity.

Peace Magazine Jul-Sep 2002

Peace Magazine Jul-Sep 2002, page 26. Some rights reserved.

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