World on Fire - Brownstein, Michael [132]
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The list goes on. A startling percentage of the world’s developing countries have at some point confiscated the assets or businesses of market-dominant foreign investors. Invariably, these nationalizations were majority-supported—usually with wild popular enthusiasm.
With the fall of the Soviet Union in 1989, many imagined that the pressures for nationalization in the developing world would evaporate. But as discussed earlier, this prediction was based on the erroneous assumption that nationalization in the developing world was motivated principally by socialist or Communist ideals. In reality, with a few exceptions (China, Cuba, Vietnam), nationalization in developing countries was never so much an expression of socialism as it was of intense nationalism and ethnonationalism, directed at both Western and internal market-dominant minorities.
The events of 1989, while perhaps discrediting socialism, did nothing to diminish nationalist and ethnonationalist pressures. Indeed, as chapter 5 discussed, ethnonationalist confiscations targeting market-dominant minorities have occurred frequently since 1989, for example, in Ethiopia, Indonesia, and most recently Zimbabwe. At the same time, nationalist resentment against Western “economic aggression” and IMF free market “austerity” measures has intensified. In recent years, with the rising dominance of the United States and the growing visibility of American multinationals, such nationalist resentment increasingly vents itself in concentrated anti-American hatred.
But unlike in the 1930s or even 1970s, anti-American backlash these days rarely takes the form of confiscation or nationalization of American holdings. This is not because nationalism or anti-Americanism has lessened. (When President Bill Clinton visited India in 2000, furious protests broke out, and well-known poet Kaifi Azmi wrote a poem for Clinton, saying: “Your bill is counterfeit. O shark of the markets / We know you truly well. O benevolent / intruder from the distant land.”)
35 Rather, anti-American nationalizations are rare because of America’s tremendous global clout—economic, political, and military. Any country daring to expropriate American property today risks serious consequences, whether in the form of capital flight, crippling lawsuits, economic sanctions, or worse. The poor countries of the world, governments and citizens alike, fear America. That’s partly why they hate us.
Indeed, the few episodes of near-confiscation in recent years have typically involved unusual circumstances and some degree of American botch-up. In 1999, for example, the Wall Street firm Kohlberg Kravis Roberts (KKR) engineered the hostile takeover of Russia’s Lomonosov Porcelain Factory by American shareholders. But KKR underestimated the importance of the factory as a symbol of Russian cultural identity. Established by Peter the Great’s daughter in 1744, the Lomonosov Factory produced tea sets, gilded figurines, and even porcelain paintings for generations of tsars. After the Communists took over in 1917, the factory’s product line “became more politically correct: plates bearing Lenin’s visage and chess sets with manacled proletarians as pawns.” Apparently, Jane Fonda once ordered Lomonosov china, painted environmental green with the rust-colored slogan “Earth to the Workers.”
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For many Russians the idea of foreigners, especially Americans, owning the factory was anathema, or, as one factory spokeswoman put it, akin to “selling part of the Hermitage art collection.” Nor did it help matters that KKR had employed a shady local intermediary to carry out the actual transaction. In any event, self-interested