Fat and lazy
Between 1875-1935, Britain was dependent on India for gunpowder, on USA and Iran for oil, on Malaya and India for rubber. British economy had grown fat and uncompetitive – unlike Italian, German and Japanese economies.
Even though Britain won WWII, their economy was a lost cause. Though Germany, Italy and Japan were losers, with their economy in shambles, they could make a brilliant recovery and vastly out-compete Britain.
The story of Middle East oil is similar for USA and West. The Welfare State, built on a diet of cheap oil, easy dollars, is now too expensive for the West to sustain. The above book extract gives an excellent snapshot of the oil industry in the 20th century.
And the shadow of oil on the 21st century.
- Onward, American Soldiers! Another million await death. (quicktake.wordpress.com)
- Out with the old? (bbc.co.uk)
- UK economy trailing (thesun.co.uk)
- Skidding Oil Prices: A Blip or a Trend? (green.blogs.nytimes.com)
Things go bump in the night
In the early hours of 2nd May, 2011, an obscure twitter-user started tweeting about the US raid on Osama Bin Laden’s safe-house – 35 km from Islamabad, 200 miles south of the Afghanistan border, in Abbottabad. In a city, which houses Pakistan’s equivalent of Indian Military Academy.
But Pakistan’s police, para-military, military forces claimed ignorance, showed surprise, feigned outrage. Par for the course. Was it abject failure or a cover-up in Pakistan , by the powers-that-be?
Afraid of the mullah-madrasa-mujahid combine, predictably, Pakistan started denying any role in the killing of Osama Bin Laden. Truly Pakistan ‘doth protest too much, methinks’. Secret deal or not, in the past or post-facto, a deal around killing Osama could have been easily hammered out between Pakistan and USA.
It suited both the leaderships.
It is election time in USA
Pakistan was not alone in using Osama. Osama alive was source of US funds for Pakistan. Osama dead is an election ticket and a feel-good factor for the a USA being battered by the Great Recession. As Rajiv Dogra points out, on the opposite side of the world,
The timing suited Obama well. It had long been speculated that Osama would be killed around the time Obama’s re-election campaign kicked off.
Predictably, the US made a song-and-dance about the annual aid of US$3 billion that they dole out to Pakistan. Compared to the US$3 trillion that the US Department of Defence is unable to account for, this talk of US$3 billion makes for poor form.
On a lighter – and logical side
Famous for the song केम छे ‘kem che, kem che’ from the film जिस देश में गंगा रहता है Jis Desh Mein Ganga Rahta Hain, a Bollywood songwriter confidently predicted, soon after 9/11, that Bin Laden would be found near the White House or Islamabad!
Coming to India
Memories dimmed, history forgotten, India draws wrong conclusions from these Western adventures in our neighbourhood.
After WWII, as British, French and Dutch colonialists were being thrown out of Asia, in country after country, the West was in real danger of losing markets and raw material sources.
A new power, fueled by a growing migrant population, USA, took the place of tired, old powers – Britain, France and the Dutch. Instead of the openly exploitative system of European powers directly running colonial governments in these Asian countries, the US installed an opaque system – which is equally exploitative. To impose its writ on the newly independent Asian countries, the US simply destroyed their economies by war. The USA, then instituted the innovative USCAP Program and ‘helped’ these countries. These countries (Taiwan, Singapore, Japan, South Korea, Indonesia, Malaysia, et al) were now ruled by overtly independent regimes – but covertly, client states of the USA.
US multinationals and home-grown oligarchs (keiretsus, chaebols, etc.) took over the economy – and sidelined British, French and Dutch companies. To impose this economic model, US armies, using nearly 1 million troops, killed 50 lakh Asians. The takeover of European colonial possessions by the USA was handled over 3 regimes of Eisenhower-Kennedy-Johnson seamlessly.
Between a rampant USA, behind biggest terror spots of the world, and a nuclear-armed, imploding Pakistan, India’s choices are difficult – and reactive policies inadequate.
Once more, Osama’s death and Obama’s antics bring out India’s policy inadequacy in sharp relief.
- Cable: Pakistan military learn anti-Americanism (cbsnews.com)
- Bin Laden’s Pakistan villa: Tourist destination? (cbsnews.com)
- Osama bin Laden dead: Pakistan returns helicopter wreckage (telegraph.co.uk)
- You: Drones hurting national integrity (nation.com.pk)
The official spokesman at the US State Department, PJ Crowley, resigned. His
resignation followed Crowley’s remarks to an MIT seminar last week about Manning’s treatment in military prison.
Crowley had said: “What is being done to Bradley Manning is ridiculous and counterproductive and stupid on the part of the department of defence.”
Glenn Greenwald, a Salon reporter who has been outspoken about Manning’s detention, tweeted that “detainee abuse is allowed, speaking out against it isn’t”.
Last week, Manning gave his own account of how he is being held, saying that it was harsh treatment designed to punish him even before he was put on trial. He said he was stripped naked every night after he made a sarcastic comment to guards about the absurdity of the regime he was under.
Manning has been charged with multiple counts relating to the leaking of thousands of secret US embassy cables, as well as videos and warlogs from Afghanistan and Iraq.(via PJ Crowley Resigns After Remarks Bashing Bradley Manning’s Detention, Ed Pilkington, The Guardian, March 13, 2011).
What is the real story …
Crowley was not a critic – or even dissenting. He was an establishment man – concerned that Manning’s treatment may ‘impact on global standing and leadership’ of Pax Americana. Was this display of power more important than the display of ‘freedom’?
- Onward, American Soldiers! Another million await death. (quicktake.wordpress.com)
- The shadow of oil (quicktake.wordpress.com)
- The madness of Bradley Manning? – video (guardian.co.uk)
- PJ Crowley Resigns After Remarks Bashing Bradley Manning’s Detention (alternet.org)
- The British government has a duty to Bradley Manning and his family | Ann Clwyd (guardian.co.uk)
- You: WikiLeaks accused Bradley Manning ‘should never have been sent to Iraq’ (guardian.co.uk)
The dollar and euro need to be devalued by 25%-50% which means yuan must appreciate another 20%-35% from it record high (update on 26th August, 2011)
Can Europe be far behind
Doing business with bankrupt customers
- Empty building blocks combined with inflated real-estate prices
- Bloated banks loan ledgers with ballooning bad debts
- Low entrepreneurial levels with foreign ownership of Chinese businesses
- Aging population with a dominant public sector
- Increasing foreign exchange reserves of depreciating currencies
As for the Rest of the world
- ‘Black Death’ of eurozone crisis will hit exports – China (telegraph.co.uk)
- Any euro zone solution requires pain: Stiglitz (theglobeandmail.com)
- German Leaders Reiterate Opposition to Euro Bonds (nytimes.com)
There are three separate reasons for this … The reasons refer to the broad determinants of economic growth — capital, labour and productivity.
On the first, India is investing at the same rate as China (approximately 40 per cent of GDP), on the second, India’s labour force growth is about 1.8 per cent per year faster than China, and on the third, China has outpaced India by about 2 per cent per annum (for the last five years).
Most of this outpacing has had to do with the deep and deeper currency undervaluation practised by the Chinese authorities which led to two unsatisfactory outcomes: the great financial crisis of 2008, and now the largest and fastest growing polluter of the world.
For how long will the international community stand idly by? Not very, and this is the first big forecast for the ensuing decade: China’s exchange rate will appreciate significantly starting 2010. How significantly? A first year appreciation to about 6 yuan per dollar from the present 6.8 level. (via Surjit S Bhalla: India’s Shining Decade).
Plausible! Probable … Possible?
Surjit Bhalla outlines a plausible scenario – with China needing to adjusting their exchange rate upwards – much like other US client-states had to! Europe had to in the 70s, Japan in the 90s, Asian Tigers in last 10 years. As examined earlier in some detail by 2ndlook. One question is settled. There will be economic mayhem.
However, Bhalla assumes that the Dollar-Yuan revaluation will happen smoothly – without any significant disruption. And that is one, big, huge assumption – which is based on really, really slippery slope.
Bhalla would do well to remember that last time when China had a problem, it resulted in the India China War of 1962. Just after the disastrous Great Leap Forward and before the equally disastrous Cultural Revolution.
The Great Leap Forward began in 1957-58, saw famine and hunger across China. After the Communist takeover of China, land seized from land owners, was given to peasants in 1949. Ten years later, in 1959, the Chinese State took away the same land from the same peasant. Food shortages, starvation followed. Western (questionable) estimates are that 30 million people died during this period. War with India followed in 1962 – a diversion from the domestic Chinese catastrophe.
What will it be this time?
The approaching mayhem
The next few years will be tumultuous for China.
Much like, when Europe was weaned off the low exchange rate crutch in 1967-1974 period. Stagflation, oil shock, the Nixon Chop followed. How Japan had to live with endaka, the Plaza accord, with S&L crisis in the US. Or the Asian Tigers had to reset to a higher exchange rate and higher foreign reserves, that accompanied the 1997 (Asian Crisis) to 2000 (The Tech meltdown).
What will follow the Chinese moment in the sun? What will set off economic mayhem in China?
Will the Chinese Government be able to ride this storm? Without a war with India? Which side of the fence will China fall? Answers to these questions will be worth waiting for! And prepared with!
Signs of coming troubles?
When the Soviet Union imploded, one of the unexpected fall out was the Russian mafia. Recent troubles in China, with the underworld creates a spectre of yet another mafia creating global disturbances. One more element in global trouble spots. To understand this better, turn to Chinese cinema.
Most films that have any Chinese element in it, (actors, directors, characters, locations) end up having the Chinese underworld as an important part of the storyline. Is it that the Chinese are morbidly fascinated by criminals and the underworld – much like Europe was with English pirates and murdering Spanish Conquistadors.
Ranging from Jet Li in Kiss of the Dragon, (Jet Li takes on the French mafia) or Chow Yun-Fat in The Corrupter (exposing police-underworld nexus and corruption in the USA), or Jackie Chan in Rush Hour series or the Chinese Ric Young in The Transporter, Jet Li in Lethal Weapon 4.
All have two elements in common.One is the pervasive Chinese underworld. Across Europe, in the USA. In drugs, fake currency, in smuggling boat people, the Chinese are there – everywhere. Many of these movies have Chinese stars, directed by Chinese directors or even partly funded by Chinese studios .
The second is the absence of the Buddhist monk.
India – the loose cannon!
Now, India is one box which defies description. By any global and historical standards, the country should not even exist – much less prosper, or be a significant global player. Too many languages, too much poverty, too much freedom, too many political parties, too many languages, too many religions, too many racial types are the common factors going against India (so goes the Desert Bloc narrative).
In such a situation, even in India, for the Westernized types or the remnants of the Desert Bloc admirers, India remains a failure waiting to happen.
Unfortunately, for these doubting Cassandra’s, India has proven them wrong for more than 5000 years now!
As President-elect Barack Obama prepares to take office this month, he has avoided the fawning praise of India that has become fashionable in some Washington circles. But experts on the region say that India-US ties now have a momentum of their own. Industries in each country now have a vested interest in deepening ties with their counterparts.
“In 20 years, I expect the Indo-US relationship to resemble the Israel-US relationship, and for many of the same reasons,” said Shashi Tharoor, an Indian writer and former undersecretary general of the United Nations. (via Will the love-fest stoked by Singh, Bush bear fruit? – Economy and Politics – livemint.com).
Why is the Israeli model a bad idea
The first disqualification against accepting the Israeli State model is the fact it is heavily dependent on America, for fiscal and military aid – which “since 1974 totals roughly $80 billion”.
Do I sense envy when an article from Daily Times Of Pakistan says “The United States has poured $140 billion into Israel since its formation”. That is about a US$56,000 for every Israeli family.
Is this what you learnt at the UN Tharoor Saar …
First, did it ever occur to Tharoor Saar to check where is the guarantee that the US will be in a any position to underwrite India’s long term requirements?
After satisfying himself, did Tharoor Saar ever ask, “Why would the US underwrite India?” In case of Israel, the US had good reasons. After all, (as NYT says)
America has vital long-term strategic interests in the Middle East. The gulf has well over 60 percent of the world’s proven conventional oil reserves and nearly 40 percent of its natural gas.
To some it may look like a boon, but is surely the kiss of death.
American policymakers began regarding Israeli strength as an American asset in the Cold War, they supported significant aid as a matter of strategy, not charity. … American aid continues to flow to Israel. … critics on the opposite end of the political spectrum argue that while aid to Israel may be tied to the best of intentions, it does more harm than good to the Jewish State by propping up a big and inefficient government and making Israel dependent upon the U.S.
For how long can any country, society, individual survive on foreign largesse? Note how during the 1973, Arab Israeli War, the tide of battle finally turned when the massive US airlift of weapons, tanks, spares happened! Which itself, is self-serving – “American assistance, emerging as a disjointed policy that urges a peaceful resolution to the conflict while boosting military aid to Israel.”
Another client state of US, Pakistan enviously records, that
“Israel is the only country that receives all of its U.S. aid in a single package, while others only receive it in quarterly installments.” It continues, “Most recipients of military aid are obliged to spend it in the US but Israel is permitted to spend 25 percent of what it receives to subsidize its own defence industry,”…
Doubtful motives, suspect intentions
Three aspects of the Israeli behaviour makes Israeli intentions doubtful.
One – Israel surely knows that US support cannot continue ad infinitum. What will be the Israeli response after they stop getting US support?
Two – After consistent and constant efforts to make enemies, over the last 50 years, how does Israel plan to continue living in a hostile neighbourhood – without American aid?
Three – With a population of little over 50 lakhs (5 million) in Israel and a world Jewish population of less than 1.3 crores (13 million), how does the Jewish population stop itself from going extinct?
Is there a pattern …
Tharoor Saar’s statement needs to be read in light of two other incidents. For starters, read Manmohan Singh’s speech at Oxford, praising the Raj, while receiving his honorary doctrate. Continue with Chidambaram’s decision to end “abject poverty” in India that he seems to “have known for 5,000 years.” And now add Tharoor Saar’s stated objective to make India into a US-client state in another 20 years. Are these three incidents stray and unrelated? Do they form a pattern?
Any which, Tharoor Saar’s thinking is a cause for concern.