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The Arctic’s strategic value for Russia

November 3, 2010 2 comments
In this Aug. 24, 2009 picture provided by the U.S. Coast Guard, the U.S. Coast Guard Cutter Healy breaks ice ahead of the Canadian Coast Guard Ship Louis S. St-Laurent in the Arctic Ocean. The two ships are taking part in a multi-year, multi-agency Arctic survey that will help define the Arctic continental shelf. Photo: AP; Courtesy-thehindu.com.

In this Aug. 24, 2009 picture provided by the U.S. Coast Guard, the U.S. Coast Guard Cutter Healy breaks ice ahead of the Canadian Coast Guard Ship Louis S. St-Laurent in the Arctic Ocean. The two ships are taking part in a multi-year, multi-agency Arctic survey that will help define the Arctic continental shelf. Photo: AP; Courtesy-thehindu.com.

NATO, for the first time, officially claimed a role in the Arctic, when Secretary-General Jaap de Hoop Scheffer told member-states to sort out their differences within the alliance so that it could move on to set up “military activity in the region.”

“Clearly, the High North is a region that is of strategic interest to the Alliance,” he said at a NATO seminar in Reykjavik, Iceland, in January 2009.

Can the West see beyond oil in the next 50 years. Not unless, they are led by their nose. (Cartoonist-Matt Wuerker; Date-25-6-2008; Courtesy-cartonistgroup.com; Copyright-Matt Wuerker).

Can the West see beyond oil in the next 50 years. Not unless, they are led by their nose. (Cartoonist-Matt Wuerker; Date-25-6-2008; Courtesy-cartonistgroup.com; Copyright-Matt Wuerker). Click for larger image.

Since then, NATO has held several major war games focussing on the Arctic region. In March this year, 14,000 NATO troops took part in the “Cold Response 2010” military exercise held in Norway under a patently provocative legend: the alliance came to the defence of a fictitious small democratic state, Midland, whose oilfield is claimed by a big undemocratic state, Nordland. In August, Canada hosted its largest yet drill in the Arctic, Operation Nanook 2010, in which the U.S. and Denmark took part for the first time.

Russia registered its firm opposition to the NATO foray, with President Dmitry Medvedev saying the region would be best without NATO. “Russia is keeping a close eye on this activity,” he said in September. “The Arctic can manage fine without NATO.” The western media portrayed the NATO build-up in the region as a reaction to Russia’s “aggressive” assertiveness, citing the resumption of Arctic Ocean patrols by Russian warships and long-range bombers and the planting of a Russian flag in the North Pole seabed three years ago.

It is conveniently forgotten that the U.S. Navy and Air Force have not stopped Arctic patrolling for a single day since the end of the Cold War. Russia, on the other hand, drastically scaled back its presence in the region after the break-up of the Soviet Union. It cut most of its Northern Fleet warships, dismantled air defences along its Arctic coast and saw its other military infrastructure in the region fall into decay.

(Cartoonist-Chip Bok; Date-23-6-2008; Courtesy-cartonistgroup.com; Image subject to copyright). Click for larger image.

(Cartoonist-Chip Bok; Date-23-6-2008; Courtesy-cartonistgroup.com; Image subject to copyright). Click for larger image.

The Arctic has enormous strategic value for Russia. Its nuclear submarine fleet is based in the Kola Peninsula. Russia’s land territory beyond the Arctic Circle is almost the size of India — 3.1 million sq km. It accounts for 80 per cent of the country’s natural gas production, 60 per cent of oil, and the bulk of rare and precious metals. By 2030, Russia’s Arctic shelf, which measures 4 million sq km, is expected to yield 30 million tonnes of oil and 130 billion cubic metres of gas. If Russia’s claim for a 350-mile EEZ is granted, it will add another 1.2 million sq km to its possessions.

A strategy paper Mr. Medvedev signed in 2008 said the polar region would become Russia’s “main strategic resource base” by 2020. Russia has devised a multivector strategy to achieve this goal. First, it works to restore its military capability in the region to ward off potential threats. Russia is building a new class of nuclear submarines, Borei (Northern Wind) that will be armed with a new long-range missile, Bulava. Navy Chief Admiral Vladimir Vysotsky said recently he had also drawn up a plan to deploy warships in Russia’s Arctic ports to protect polar sea routes. (via The Arctic’s strategic value for Russia By Vladimir Radyuhin.)

Thin ice …

Some sixteen months ago, 2ndlook speculated that West’s redemption may come from oil – from the Arctic. With receding Arctic ice-caps, the West may find itself sitting on large oil reserves. Production from these discoveries may take 10-25 years – climate permitting.

West on the drip - needs Arctic oil. (Cartoon title- Arctic Oil; Cartoon By - Monte Wolverton, Copyright-Monte Wolverton; Date - 3/20/2005 12.00.00 AM). Click for larger image.

West on the drip - needs Arctic oil. (Cartoon title- Arctic Oil; Cartoon By - Monte Wolverton, Copyright-Monte Wolverton; Date - 3/20/2005 12.00.00 AM). Click for larger image.

A big if.

Climate change, I don’t believe in. How long will these weather patterns persist? The West is skating on thin ice – but then what can they do. Slavery is not an option – not for another 50-100 years at least. Dig mother earth, is the second and only option they have believed in.

For the last 3000 years at least.

Global warming’s got me thinking …

August 14, 2009 2 comments
Carbon credits ... anyone!

Carbon credits ... anyone!

a call has been given by Al Gore that there should be an immediate moratorium on coal fired power plants. Look at how this will impact India. More than half of the 8,00,000 mega watts of power India plans to produce by 2030 are to come from coal fired plants. Simply because India has abundant coal resources.

What most western analysts don’t realise is nearly 600 million Indians do not have regular and formal access to any source of electricity. If comparison is to be drawn, it is a bit like the entire US population and half of the European Union going without any electricity.

Can you estimate the enormity of this problem? This is what Prime Minister Manmohan Singh told George Bush at the G-8 summit in Japan last year when America tried to force India to commit carbon emission cuts. India merely said it will keep its per capita emmissions at below the world average. (via Carbon emmisions and Democracy!:Wisdom by Hindsight:MK Venu’s blog-The Times Of India).

How oil is sapping the world
How oil is sapping the world

What if

The entire global warming debate is just a facade to keep up demand for oil from India and China. The opposition to coal fired power plants is to stop India and China from reducing the growth in oil consumption.

After all practically all of British GDP today is declining North Sea oil and British Petroleum. Apart from Chinese money, the other source of liquidity which keeps the US afloat is petro dollars.And the US future is so closely linked to Arctic oil.

If India and China were to reduce their reliance on oil, leading to a price collapse, the biggest losers will be the Anglo Saxon bloc.

Makes one think!

QED –

On 19th December, 2009, after the Copenhagen meet, alternet.org reported Bill McKibben of 350.org, saying how US President Barack Obama has

formed a league of super-polluters, and would-be super-polluters. China, the U.S., and India don’t want anyone controlling their use of coal in any meaningful way.

voiced his disapproval. Writing for Grist

Mercantilism reconsidered by Dani Rodrik

July 28, 2009 1 comment

Healthcare is killing

Healthcare is killing

the mercantilist mindset provides policymakers with some important advantages: better feedback about the constraints and opportunities that private economic activity faces, and the ability to create a sense of national purpose around economic goals. There is much that liberals can learn from it.

Indeed, the inability to see the advantages of close state-business relations is the blind spot of modern economic liberalism. Just look at how the search for the causes of the financial crisis has played out in the US. Current conventional wisdom places the blame squarely on the close ties that developed between policymakers and the financial industry in recent decades. For textbook liberals, the state should have kept its distance, acting purely as Platonic guardians of consumer sovereignty. (via Dani Rodrik: Mercantilism reconsidered).

Public sector or oblivion?

During the Great Depression, more than 19 auto companies (similar to the number of banks today) were folded into the Big 3. The Big 3 lived to fight for another 70 years. In their death throes, the US Big Auto is likely to go the way European auto sector has gone – public sector or oblivion.

What is on the table

Hobsons choice?

Hobson's choice?

2 out of the G-7 countries are bankrupt – US and Britain. Their industrial base was supported by raw materials and captive markets – acquired by genocide, and the loot of centuries.

France, Germany, Canada, Italy  and Australia (not in G7) are tethering on the brink – under the weight of their social security system, and most of their business is in the public sector. A geriatric Japan is dependent almost entirely on exports to these declining seven. Japan’s investment in India and China has been negligible.

Real low … real truth (seen an oxymoron like that?)

The real question – who will pay for this financial crisis?

Not the Americans! No siree. Definitely not. Neither the American super-rich or the American welfare-poor! Not the American tax payers or the American tax evaders? Not the American Whites or the American Blacks?

It is the Chinese, the Russians, Indians, Brazilians, and above all, the Africans, who will pay for these bailouts! They (BRICS+Africa) have done, what bankers call non-recourse lending! The Chinese, Russians, Indians, Brazilians and the Africans, have no recourse. Who will the Chinese go to, for redeeming their US$2 trillion? The bankrupt US of A?

Welcome to the real world.

US economic outlook

How the West can become competitive?

How can the West become competitive?

US auto is down – but not yet out. It will limp along for few more decades. The US is still the prime force in the computing industry – though not on the manufacturing side. US oil industry no longer dominates international markets the way they did in mid-20th century. The US nuclear industry faces increasing competition from a public sector French and Russian industry. The seemingly strong position of the US in agriculture is based on two aspects. Massive direct subsidies – of more than 8 billion dollars. And indirect subsidies of possibly another US$ 8 billion. Most of which goes to the 46000 farmers who account for 50% of the US agricultural production. The communication sector has again seen the erosion of US competitiveness – with the domination of GSM technology seemingly solid for another 10-15 years. The global financial markets were dominated by the US organizations in the past – but with the global financial crisis and the end to dollar dominance may see reduced clout for US firms.

Big Government ... Big oil ...

Big Government ... Big oil ...

With such an economic outlook over the next 10-25 years, what the US leadership may focus on, is Arctic oil. Oil will remain a strategic asset only with high prices (slower production increase and faster demand growth) and if no other energy source appears. Oil finds in the Atlantic and Pacific republics may spoil the party – for instance, Cuban oil.

Much like the respite of the North Sea oil to Britain, Arctic oil may provide a temporary halt to the slide in US economic dominance. If the US can lay its hands on a significant part of it!

The other option is to nationalize the US economy. Like France, Germany and Italy. The economies of France, Germany and Italy are practically run by public sector monopolies – or subsidized behemoths, who make survival of competitors difficult by their ability to sustain losses – based on Government largesse.

The lure of ‘capitalism’ …

The Franco-German-Italian public sector model may be the only answer

The Franco-German-Italian public sector model may be the only answer

Why is the West so keen on calling these publc sector, subsidy driven regimes as Capitalism? Capitalism depended on looted capital and slave labour to prosper – resulting in the famous ‘laissez faire’ quip. Capitalists wanted and got ‘laissez faire’ capitalism – which was a ‘coda’ for unlimited slavery. The restrictions on laissez faire were actually restrictions on slaves.

Now under socialism, they get unlimited protection from ‘destructive’ competition. Which is being papered over by names like crony capitalism, free market capitalism. etc.,  etc.

After the multi-trillion dollar bailout, which has just begun, and with more than US$4 trillion with China, Japan, Russia and India, neither is the outcome certain nor is the outlook bright.

Last but not the least, we must remember the power wielded by the Chartered Companies of Europe – another word for public sector.  East India Company was a public sector company!

The Rest of the World needs to be careful of these public sector monsters!

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