Let A Thousand Poles Bloom

Shanghai Cooperation Organization

“Let A Thousand Poles Bloom”

Dispatches From The Edge

Sept. 29, 2014

 

At the very moment that the Americans and their allies are trying to squeeze Russia and Iran with a combination of economic sanctions and political isolation, alternative poles of power are emerging that soon may present a serious challenge to the U.S. dominated world that emerged from the end of the Cold War.

 

This past summer, the BRICS countries—Brazil, Russia, India, China and South Africa—created an alternative to the largely U.S. controlled World Bank and International Monetary Fund (IMF), and the Shanghai Cooperation Organization (SCO) added 1.6 billion people to its rolls.

 

The BRICS construction of a Contingent Reserve Arrangement will give its member’s emergency access to foreign currency, which might eventually dethrone the dollar as the world’s reserve currency. The creation of a development bank will make it possible to by-pass the IMF for loans, thus avoiding the organization’s onerous austerity requirements.

 

Less than a month after the BRICS’ declaration of independence from the current strictures of world finance, the SCO—China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan—approved India, Pakistan, Iran and Mongolia for membership in the organization. It was the single largest expansion of the economic cooperation and security-minded group in its history, and it could end up diluting the impact of sanctions currently plaguing Moscow over the Ukraine crisis and Teheran over its nuclear program.

 

The Shanghai Cooperation Organization began as the Shanghai Five in 1996, and five years later became the SCO. Even before the recent additions, SCO represented three-fifths of Eurasia and 25 percent of the world’s population.

 

A major focus of the SCO is security, although the countries involved have different agendas about what that exactly means.

 

Russia and China are determined to reduce U.S. and North Atlantic Treaty Organization (NATO) presence in Central Asia to what it was before the 2001 invasion of Afghanistan. The SCO has consistently rebuffed U.S. requests for observer status, and has pressured countries in the region to end U.S. basing rights. The U.S. was forced out of Karshi-Khanabad in Uzbekistan in 2006, and from Manas in Kyrgyzstan in 2014.

 

“At present, the SCO has started to counterbalance NATO’s role in Asia,” says Alexei Maslov, chair of the Department of Oriental Studies of the Higher School of Economics in Moscow, and the new members, he says, want in to safeguard their interests.

 

Given the current confrontation between NATO and Russia over the Ukraine, and tensions in the East China Sea between the U.S., Japan, and China, Moscow and Beijing may not agree on a number of issues—in 1969 they came to blows over a border dispute—but they are on the same page when it comes to limiting Washington’s influence in their respective backyards.

 

Chinese Defense Minister Gen. Chang Wanquan said last year “China is ready to work with Russia to…expand the scope of bilateral defense cooperation.” Last month Russia’s Chief of Staff Gen. Valery Gerasimov declared that, “Russia is ready to make joint efforts with China to lift the relationship to a new high.” China has been supportive of Russia in the Ukraine crisis.

 

For Iran, SCO membership may serve as a way to bypass sanctions currently pounding the Iranian economy. Russia and Iran signed a memorandum in August to exchange Russian energy technology and food for Iranian oil, a move that would violate U.S. sanctions. But Moscow—already weathering sanctions that have weakened its economy—may be figuring that there is little more the U.S. can do and still keep its European allies on board. Russian counter sanctions on the European Union (EU) have shoved a number of European countries back into recession, and the EU is worried that Russia will turn east and Europe will lose much of its Russian market share.

 

To a certain extent, that is already happening. When the 2,500-mile “Power of Siberia” pipeline is completed in 2018, it will supply China with about 15 percent of its natural gas, Russia’s Rosneft and China’s National Petroleum Corporation are jointly exploring oil and gas reserves in the arctic, and the Russians have also offered China a stake in the huge Vankor oil field in East Siberia. Since January 2014, some 30 percent of Russian oil exports have gone to Asia.

 

Teheran is reaching out to Beijing as well. Iran and China have negotiated a deal to trade Iran’s oil for China’s manufactured goods. Beijing is currently Iran’s number one customer for oil. In late September, two Chinese warships paid a first ever visit to Iran, and the two countries navies carried out joint anti-piracy and rescue maneuvers.

 

For India and Pakistan, energy is a major concern, and membership in the oil and gas rich SCO is a major plus. Whether that will lead to a reduction of tensions between New Delhi and Islamabad over Kashmir is less certain, but at least the two traditional enemies will be sitting down to talk about economic cooperation and regional security on a regular basis.

 

There are similar tensions between SCO members Uzbekistan and Kyrgyzstan over borders, and both countries, plus Tajikistan, have squabbled over water rights.

 

Most SCO members are concerned about security, particularly given the imminent departure of the U.S. and NATO from Afghanistan. That country might well descend into civil war, one that could have a destabilizing effect on its neighbors. Added to that is the U.S.-NATO-Gulf monarchy jihad against the Assad regime in Syria, a conflict that is raising yet another generation of mujahedeen that will some day reappear in their home countries—some of them SCO members—trained and primed for war.

 

From Aug. 24 -29, SCO members China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan took part in “Peace Mission 2014,” an anti-terrorist exercise to “subdue” a hypothetical Central Asia city that had become a center for terrorist activity. The drill involved aircraft, 7.000 troops, armored vehicles, and drones, and according to China’s Chief of Staff, Fang Fenghui, was aimed at the “three evil forces of terrorism, separatism, and extremism.”

 

The problem with General Fang’s definition of “terrorism” is that it can easily be applied to minorities or local groups with legitimate complaints about their treatment by SCO member governments.

 

China has come down hard on Turkic speaking Uyghurs in Xinjiang Province, who have been resisting marginalization by China’s dominant ethnic group, the Han. Uyghur scholar IIham Tohti was recently sentenced to life imprisonment for “separatist activity.”

 

Beijing has also suppressed demands for independence or more autonomy by Tibetans—who it also labels “separatists” –even though China has no more a claim over Tibet than Britain did to India or Ireland. All of them were swept up by empires at the point of a sword.

 

The BRICS and the SCO are the two largest independent international organizations to develop over the past decade, but there are others as well. In Latin America, Mercusur—Argentina, Brazil, Paraguay, Uruguay, and Venezuela—is the third largest trade grouping in the world. Associate members include Chile, Colombia, Bolivia, Ecuador, and Peru. Mexico and New Zealand have observer status. The newly minted Union of South American Nations (USAN) includes every country in South America, including Cuba, and has largely replaced the Cold War relic, the Organization of American States (OAS) that excluded Havana. While the U.S. and Canada are part of the OAS, they were not invited to join USAN.

 

What role these new organizations will play internationally is not clear. Certainly sanction regimens will be harder to maintain because the SCO and the BRICS create alternatives. South Africa, for instance, announced that it would begin buying Iran oil in the next few months, an important breach in the sanctions against Iran. But being in the same organization does not automatically translate into having the same politics on international questions.

 

The BRICS and the recent Israeli invasion of Gaza are a case in point. China called for negotiations. Russia was generally neutral (but friendly toward the Netanyahu government, in part because there are lots of Russians in Israel). India was silent—Israel is New Delhi’s number one source of arms. South Africa was critical of Israel, and Brazil withdrew its ambassador

 

In comparison, NATO was generally supportive of the Israeli actions, Turkey being the odd man out. There is more political uniformity among NATO countries than there is among SCO and BRICS nations, although there is growing opposition in the ranks of the European Union (EU) over Washington’s hard line approach on the Ukraine. The U.S. does $26 billion in trade with Russia, the EU $370 billion. Russia also supplies Europe with 30 percent of its natural gas, although that reaches 100 percent for countries like Finland. Most EU countries—the Baltic nations and Poland being the exceptions—see little percentage in a long, drawn out confrontation with Russia.

 

These independent poles are only starting to develop and it is hardly clear what their ultimate impact on international politics will be. But the days when the IMF, World Bank, and U.S. Treasury could essentially dictate international finances and intimidate or crush opponents with an avalanche of sanctions are drawing to a close.

 

The BRICS and the Shanghai Cooperation Organization are two nails in that coffin.

 

 

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Free Speech Movement: The Musical

FSM: The Musical
Daily Planet
Conn Hallinan
Oct. 3, 2014

FSM: A Play With Music About A Moment That Changed America”
Book by Joan Holden
Music & Lyrics by Bruce Barthol & Daniel Savio
Directed by Erin Merritt
Musical Direction Daniel Savio

History plays present their own particular challenges. On one hand, the story is driven by the sequence of events in the real world. On the other, the drama has to engage an audience. The twain rarely meet. But Joan Holden’s FSM, under the able direction of Erin Merritt, with music and lyrics by Bruce Barthol and Daniel Savio, pulls off the still more daunting job of creating an evening of theater that entertains both those for whom the events include their own life stories and those for whom it is ancient history.

Subtitled “A play with music that changed America,” FSM covers a four month period in the fall of 1964 when students took on the University of California at Berkeley over the right to speak and organize on campus. There is a little bit of tongue-in-cheek in the title, and Holden wisely does not try to turn the “Battle of Berkeley” into the Second Coming. But, at the same time, she understands that something unique happened in those fall days when virtually the entire student body came together to confront the powerful and wealthy Board of Regents, and win. That victory has echoed down the years, helping to propel the anti-war movement, the women’s movement, and battles around racism, South Africa, and Gay liberation. .

Commissioned by Stagebridge, an Oakland-based theater company of older adults, the play was written with the 50th anniversary of the FSM in mind. It was performed before packed audiences during a weeklong celebration on the Berkeley campus. Many in those audiences had taken part in the events the play portrayed, which made them both enthusiasts and critics. And, Lord, those FSMers can quibble and debate, just like they did a half-century ago.

The arc of the story runs from the initial arrest of Jack Weinberg in Sproul Plaza, and the subsequent sit-in around the police car in which he was being held, to the key vote in the Academic Senate that finally broke the back of the University administration. Those four months were enormously complex, in part because the FSM itself was such a heterogeneous collection of ideas, tactics and political beliefs, ranging from Communists to conservative Republicans. Nor is it taken out of context. Its antecedents in the civil rights movement are abundantly clear, and the depiction of the sexual politics among the activists presages the arrival of Woman’s Liberation groups a few years later. The complexity of the differences within the various groups—students, faculty, and administration—and their varying certainties and ambivalence, all come into play as Holden refuses to reduce her characters (with very few exceptions: J.Edgar Hoover, for example) to one dimensional mouthpieces for an Idea. The play does an admirable job of reflecting that mosaic without losing sight of the dramatic narrative. As someone who took part in those events 50 years ago, I was continually surprised at how accurately the play managed to reflect the highs and lows of the struggle.

But FSM is hardly a didactic documentary. Holden, a long-time playwright for the San Francisco Mime Troupe, brings lots of energy, humor, and action to the stage, and Barthol’s and Savio’s music is engaging, even moving. When the students are packed into Sproul Hall awaiting arrest, they sing “Carry Us Away,” a song that mirrors both their determination not to give in and their fear at what is to come. It was one of the play’s most powerful moments.

FSM moves back and forth between the events of 1964 and current interviews with veterans. Older actors sit and talk about what their characters did after 1964, while the young actors who portray their younger selves stand silently behind them. The cast of 19 plays multiple roles—43, to be exact—and there always seems to be a crowd of protestors (fraternity hecklers, angry citizens, etc.) on stage.

Director Erin Merritt choreographs a visually arresting montage that keeps the action clear as actors segue from character to character. Stagebridge actors (Abe Bernstein, Patricia Long Davis, Charmaine Hitchcox, Lynne Hollander, Bill Liebman, Merle Nadlin and Miyoko Sakatani) capably portrayed many of the older characters, with Bay Area notables Dan Hiatt (as the grown-up “small town boy” and a clearly conflicted Clark Kerr) and the SF Mime Troupe’s Ed Holmes filling out the senior tier of the intergenerational cast. Brady Morales-Woolery’s portrayal of one of the FSM’s major leaders—or spokesman, as the FSMers repeatedly insist—Mario Savio, sometimes borders on the eerie. Morales-Woolery gets Savio’s body language and speaking cadence down almost perfectly (yes, yes, quibble, quibble). Heather Gordon is particularly effective as the sorority girl turned activist, and the cohort of younger actors, all professionals (Lucas Hattan, Andrew Humann, Danielle Gray, Jeremy Kahn, Damion Matthews, Brandon Mears, Adrienne Walters and the SF Mime Troupe’s Lisa Hori-Garcia), ably embodied the passion of the characters “workin’ in the movement.”

So, is it history or theater? Both. The question is: can it play Peoria? Probably not, but FSM is bigger, more entertaining, instructive and engaging, than just a play whipped up for a 50th anniversary. On its own, the production is dramatic and fun, the music catchy, and Karla Hargrave’s simple but engaging sets make it the kind of low-cost production that would do well in university towns.

FSM is not just nostalgia or, in the end, a play about a specific historical event. It is about how people come to commit themselves to something, despite the pressures of everyday life. It is not about activists, but how people become activists. The song “Workin’ in the Movement” picks up the excitement of that commitment, but also the strain it puts on people’s personal lives. But the decision to come together and resist is a formula for how to build a better world. That particular message is bound by neither time nor geography.

As the director notes in her introduction to the play, “The promise of 1964 remains to be fulfilled 50 years later.” Indeed, it does. Free speech is still under attack. Racism, inequality, sexism, homophobia, and war plague the nation. But FSM presents a hopeful solution: convince people to commit themselves, pack the plazas, and take the bastards on.

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Foreign Policy, Lord Palmerston & Appendectomies

Foreign Policy, Lord Palmerston & Appendectomies
Dispatches From The Edge
Sept. 15, 2014

Thinking about U.S. foreign policy these days brings to mind a line from songwriter/comedian Tom Lehrer: if you are feeling like a Christian Scientist with appendicitis you have good reason.

1) The North Atlantic Treaty Organization (NATO) is creating a Rapid Reaction Force to challenge Russian “aggression” in Ukraine, and the U.S., the European Union, and Russia are lobbing sanctions at each other that have thrown Europe back into a recession. Russian planes are buzzing U.S. and Canadian warships in the Black Sea.
2) The U.S. is bombing Iraq and Syria in an effort to halt the Islamic State of Iraq and the Levant (ISIL), while at the same time supporting insurgents trying to overthrow the Assad regime in Damascus, the pool from which ISIL was created.
3) After 13 years of war, Afghanistan is the verge of a civil war over the last presidential election, while the Taliban have stepped up their attacks on the Afghan military and civil authorities.
4) Libya has essentially dissolved as a country, but not without supplying insurgents in central Africa and Nigeria with greatly enhanced firepower.
5) The U.S. encouraged the Japanese government to bypass Article 9 of Japan’s peace constitution that restricted deploying its military outside of Japan. Washington also committed the U.S. to support Tokyo in the event of a clash with China over the ownership of a handful of islands in the East China Sea. American, Japanese and Chinese warships and military aircraft have been playing chicken with one another in the East and South China seas.

What is going on? Did some Greek open a box she shouldn’t have? Is the Obama administration—take your choice—incompetent? Trying to wind down two of America’s longest wars? Giving liberal cover to a neo-conservative strategy to re-institute a new cold war? Following an agenda?

How about all of them?

There certainly has been incompetence. The 2009 surge into Afghanistan did nothing but kill a lot of people, and the Libya intervention substituted Chaos Theory for diplomacy.

It is also true that old wars are winding down. In 2008 there were 110,000 U.S. troops in Afghanistan and 182,000 in Iraq. By the end of 2014 there will be no U.S. troops in Afghanistan, and—at this time—only a handful in Iraq.

Cover for the neo-cons? The Obama administration did help engineer the coup in Ukraine, and Assistant Secretary of State Victoria Nuland—who oversaw the action and handpicked the interim coup president—was Dick Cheney’s principle foreign policy advisor.

And the U.S. certainly has an agenda, which may best be summed up by 19th century British Prime Minister and Foreign Secretary Henry Lord Palmerston—England’s hammer of empire, who oversaw the Opium Wars with China and the Crimean War with Russia: “We have no eternal allies and we have no eternal enemies. Our interests are eternal and perpetual, and these interests it is our duty to follow.”

What are our “interests” in Ukraine?

Certainly not spreading democracy. We supported a coup against a corrupt, but legally elected oligarch, and replaced him with another oligarch in an election that excluded half the country.

There are, in fact, multiple currents at play. During the Cold War disagreements about foreign policy among the ruling elites were suppressed by the overarching need to defeat what was perceived as a real threat to capitalism, the socialist world. “Politics stops at the water’s edge” was the watchword back then. But once that threat evaporated with the collapse of the Soviet Union in 1991, those disagreements were free to come pouring out. Democrats and Republicans now openly sabotage one another’s policies in Asia, Latin America, and the Middle East, and different wings of both parties battle over using the American military.

Which doesn’t mean there isn’t common ground.

One shared interest is pushing NATO east, something the U.S. been doing since the U.S. double-crossed Soviet Prime Minister Mikhail Gorbachev in 1990. Gorbachev agreed to pull 380,000 Soviet troops out of East Germany provided NATO did not fill the vacuum. “Not one inch east,” U.S. Secretary of State James Baker promised. Now, virtually every Warsaw Pact country is a member of NATO.

There is also general agreement—underlined at the recent Alliance meetings in Wales—to expand NATO into a worldwide military alliance, although that creates a certain dilemma for Washington. Currently the U.S. foots 75 percent of NATO’s bill, but is finding that increasingly hard to do, given the enormous costs of the Afghan and Iraq wars, the pivot to Asia, and the expanding war in Iraq and Syria.

The Ukraine crisis has served as the perfect excuse to dragoon other members of NATO into increasing their contributions, though that won’t be a slam-dunk. Most of Europe is in recession, and while the NATO ministers are all for becoming global policemen, their constituents are less enthusiastic. European publics turned sharply against the Afghan War, and most polls show strong opposition to any more “out of area” deployments or increased military spending at the expense of social services.

One strong current at work these days are the neo-conservatives, whose goals are not to just break Ukraine away from Russia, but go for regime change in Moscow. They also lobby for overthrowing the Assad regime in Syria, and for war with Iran. They are overwhelmingly Republicans, but include Democrats.

Allied to the neo-cons in policy—if not politics—are the liberal interventionists, most of whom are Democrats. The interventionists led the charge on Libya and also lobbied for bombing Assad. Former U.S. Secretary of State Hillary Clinton and UN Ambassador Samantha Powers may not have the same politics on all issues as the neo-conservatives, but in places like the Ukraine they share common ground.

A leading “interest” in Ukraine is challenging Russia’s designation as the world’s top energy exporter and throttling its oil and gas industry. With Siberian fields almost tapped out, Russia is developing offshore and arctic sources, and the sanctions are aimed at blocking Moscow from getting the technology it needs to do that. The sanctions are also aimed at the South Stream pipeline, which, when completed, will run from the Caspian basin, across the Black Sea, to Europe. South Stream will eventually supply Europe with 15 percent of its gas and generate $20 billion in yearly revenue for Moscow. The U.S. and Turkey have been trying to derail South Stream for over a decade.

There are minor currents and back eddies as well.

Eastern Ukraine has large shale deposits that Chevron has been sniffing around, and—if you like conspiracies—one of U.S. Vice-president Joe Biden’s kids, Hunter, is on the board of Burisma Holdings, the Ukraine group exploring the country’s energy potentials. Joe Biden has been particularly hawkish on the Ukraine, comparing it to the Munich appeasement with Nazi Germany in 1938.

But the overriding “interest” of American foreign policy—regardless of the different currents—is to marginalize competition. Russia’s economy is no competition for Washington’s, but Moscow is a major supplier of energy to China. The two countries recently inked a $400 billion pipeline deal.

China’s economy is on the verge of passing the U.S. as the world’s largest, and it has already replaced the U.S. as the leading trade partner for most of the world. It is also the globe’s number one consumer of oil and gas.

This latter fact is a sensitive one, particularly given growing tensions between the U.S. and China. Some 80 percent of Beijing’s energy arrives by seas currently controlled by the U.S. Sixth and Seventh fleets.

Russian supplies, however, travel mostly by train and pipelines, and are, thus, out of the U.S. Navy’s reach. China is also negotiating with Iran over energy, and once again, those energy supplies would mostly move through pipelines.

To understand U.S. interests in the Ukraine involves tracking all of these currents, some of which may run at cross purposes. Obama’s push to damage the Russian energy industry is not popular with the American oil company ExxonMobil. He wants to push NATO east, but there is no indication he is seeking regime change in Moscow, and he has even tried to reduce some of the sturm und drang around the crisis. The neo-conservatives, on the other hand, want to arm Ukraine and put Putin’s head on a stake.

Of course the “interests” the Obama administration is pursuing in Ukraine are not the “interests” of the majority of Americans—or Ukrainians, for that matter. They are the “interests” of the neo-cons, energy companies, arms manufacturers, and international financial organizations like the International Monetary Fund and the European Bank. In short, the interests of the 1 percent over the 99 percent.

Up until ISIL started cutting American journalists heads off, U.S. polls reflected overwhelming exhaustion with foreign wars. The Center for Public Integrity found 65 percent of Americans would choose to cut military spending. But Americans are also easily stampeded by bombast: The “Russians are coming” (while it was the West that marched east). “Chinese cyber warriors are going to crash our national power grid” (except we don’t have a national power grid and the only countries that have engaged in cyber war are the U.S. and Israel). “And the turbans are going to get you in your bed” (even if U.S. intelligence agencies say the ISIL has not threatened the U.S.).

Since the September 11, 2001 attacks on the World Trade Center and Pentagon, the U.S. has spent almost $70 million an hour on security and around $62 million on domestic needs. Since 9/11 some 23 Americans have died as result of “Muslim terror plots” in the U.S., while the number of those killed by right-wing extremists is 34.

The reality is the U.S. cannot do much about climate change, growing economic inequality, infrastructure deterioration, and the slow motion collapse of our education system without confronting the $1 trillion it spends annually on military and defense related items, or the $4 to $6 trillion that the wars in Afghanistan and Iraq will eventually cost us.
With the U.S. about to begin an open-ended air war in Iraq and Syria (to join those in progress in Pakistan, Yemen and Somalia) the cost of fighting an almost non-existent “terrorist” threat to the U.S. is about to sharply escalate. In whose interest is that?

Increasingly, what is in the interest of the few is incompatible with the interest of the many.

Conn Hallinan can be read at disptchesfromtheedgeblog.wordpress.com or middleempireseries.wordpress.com

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Sanctions and the U.S. Dollar

Sanctions & the Dollar: A Fall From Grace?
Dispatches From The Edge
Aug. 26, 2014

The recent round of sanctions aimed at Moscow over the crisis in the Ukraine could backfire on Washington by accelerating a move away from the dollar as the world’s reserve currency. While in the short run American actions against Russia’s oil and gas industry will inflict economic pain on Moscow, in the long run the U.S. may lose some of its control over international finance.

Proposals to move away from using the dollar as the international currency reserve are by no means new. Back in 2009, the Shanghai Cooperation Organization (SCO) proposed doing exactly that. SCO members are Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. Afghanistan Iran, India, Pakistan and Mongolia have SCO observer status, and the organization has close ties with Turkey and the Association of Southeast Asian Nations.

Ever since the 1944 Britton Wood Agreement, the world’s finances have been dominated by the U.S. dollar, the International Monetary Fund (IMF), and the World Bank. But, according to economist Jeffrey Sachs, that world is vanishing and the dollar cannot continue to hold the high ground, because “the role of the United States in the global economy is diminishing.”

While it may be diminishing, the U.S. and its European allies still control the levers of international finance. For example, the U.S.’ slice of the global GDP is 19.2 percent, and its share of IMF voting rights is 16.8 percent. In contrast, China, with 16.1 percent of the global GDP, has only 3.8 percent voting rights in the IMF. The presidency of the organization is reserved for a European.

In 2010, the World Bank “reformed” its voting rights to increase low and middle-income countries from 34.67 percent to 38.38 percent, although even this modest adjustment has been sidelined because the U.S. Senate refuses to accept it. The wealthier countries still control more than 60 percent of the vote. The presidency of the Bank normally goes to an American.

In early August of this year, the BRICS countries—Brazil, China, India, Russia and South Africa—launched a series of initiatives aimed at altering the current structure of international finance. Besides pushing to dethrone the dollar as the world’s reserve currency, the organization created a development bank and a Contingent Reserve Arrangement (CRA). The former would allow countries to by-pass the IMF and the World Bank, with their tightfisted austerity fixation, and the latter would give countries emergency access to foreign currency.

The development bank will start off with $50 billion in the kitty, but that will soon double. The BRICS will also be able to draw on $100 billion from the CRA. While by international standards those are modest sums—the IMF has close to $800 billion in its coffers—the BRICS bank and CRA has just five members, while the IMF serves hundreds of countries. Eventually the BRICS observer members may be able to tap into those funds.

Last month’s sanctions went straight for Russia’s jugular vein: the development of its massive oil and gas reserves and Moscow’s construction of the South Stream pipeline. When completed, South Stream will supply Europe with 15 percent of its natural gas and generate over $20 billion in annual profits. Indeed, there is suspicion among some Europeans that the real goal of the sanctions is to derail South Stream and replace it with U.S. shale-based American oil and gas.

Sanctions can do enormous damage.

The United Nations estimates that the sanctions against Iraq were responsible for the deaths of some 500,000 Iraqi children from 1991 to 1998.

The sanctions aimed at Iran’s oil and gas industry have cut deeply into government revenues—80 percent of the country’s foreign reserves are generated by hydrocarbons—resulting in widespread inflation, unemployment and a serious national health crisis. While humanitarian goods are not embargoed, their cost has put medical care beyond the reach of many Iranians.

Associated Press reporter Nasser Karimi wrote last year that some medicine and medical equipment costs have risen 200 percent: “radiology film up 240 percent; helium for MRIs up 667 percent; filters for kidney dialysis up 325 percent.” The cost of chemotherapy has almost tripled.

Iran’s exclusion from the Society for World Wide Banking (SWIFT) makes it impossible to transfer funds electronically. That, in turn, makes buying the raw materials to manufacture generic medicines expensive and difficult.

The recent crash of an Iranian passenger plane that killed 39 people was, in part, the result of sanctions. Because Iran cannot purchase spare parts for its Boeing and Airbus planes, it is forced to use alternatives, like the trouble-prone Ukrainian-made A-140 aircraft that went down Aug. 10. Another A-140 crashed in 2002, killing 46 passengers.

In short, opposing the U.S. and its allies can be dangerous to one’s health.

There is growing opposition to the widespread use of sanctions, as well as to the ability to isolate countries from international finance by excluding them from things like SWIFT. Coupled with this is a suspicion that the U.S. uses its currency to support its economy at the expense of others.

After the 2007-08 economic meltdown, the U.S. lowered its interest rates and increased its money supply, thus making its exports cheaper and other countries imports more expensive. Developing countries have blamed these policies for artificially driving up the value of their currencies and, thus, damaging other countries economies. Brazilian Finance Minister Guido Mantega calls it waging “currency war.”

With the U.S. now pushing higher interest rates and throttling back on buying foreign bonds, many developing countries fear that international capital will flow back to the U.S., leaving countries like Brazil high and dry.

But as long as the world’s reserve currency isin dollars, the U.S. will be able to manipulate global finance and block countries like Iran from any transactions using dollars. But that may be coming to an end. With China set to replace the U.S. as the world’s largest economy, it is only a matter of time before the renminbi—or some agreed upon international method of exchange—replaces the dollar.

China is already moving toward bypassing New York as the world’s financial center, instead routing finances through Hong Kong and London. “There can be little doubt from these actions that China is preparing for the demise of the dollar, at least as the world’s reserve currency,” says Alastair Macleod of GoldMoney, a leading dealer in precious metals.

A number of countries are already dealing in other currencies. Australian mining companies have recently shifted to using China’s reniminbi. How dumping the dollar will affect the U.S. is not clear, and predictions range from minor to catastrophic. What will almost certainly happen is that the U.S. will lose some of its clout in international finance, making it easier for developing countries to move away from the American economic model: wide-open markets, fiscal austerity, and hostility to any government role in the economy.

Diminishing the role of the dollar may make it harder to apply sanctions as well, particularly in those areas where Washington’s policies are increasingly alienated from much of the world, as in Iran, Cuba, and Russia. The European Union (EU) has sanctioned Russia over Ukraine, but not to the extent that the U.S. has. The EU’s trade with Russia is a major part of the Europe’s economy, while Russian trade with the U.S. is minor. And the BRICS—who represent almost a quarter of the world’s GNP and 40 percent of its population—did not join those sanctions.

Addressing the BRICS delegates in Fortaleza, Brazil, Russian President Vladimir Putin said that “together we should think about a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decision made the by the U.S. and their allies.”

In the long run, the EU may come to regret that it went along with Washington. German industry has taken a big hit—trade with Russia fell 20 percent from January through May—and Russia’s ban on EU agricultural products has badly hurt Poland, Lithuania, Germany, Denmark, Latvia, Finland and the Netherlands. Indeed, European Bank President, Mario Draghi, warned that the current EU recovery is extremely fragile and that sanctions could push it back into recession.

The Germans are especially worried that Russia will turn to Asia, permanently cutting Berlin out of Moscow’s economic sphere.

There are enormous changes ahead as a result of climate change and population growth. While there has been a reduction in the number of people living in extreme poverty—making less than $1.25 a day—almost all that reduction was in China. Things have actually gotten worse in parts of Asia and Africa. By 2050 the world’s population will grow to nine billion, and 85 percent of that growth will be in developing nations, the very countries that most need help to confront the consequences of that future.

Unless the institutions of international finance are wrested from the control of a few wealthy nations, and unless there are checks on the ability of the U.S. and its allies to devastate a country’s economy over a disagreement on foreign policy, those figures bode for some serious trouble ahead.

Conn Hallinan can be read at dispatchesfromtheedgeblog.wordpress.com and middleempireseries.wordpress.com

—30—

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Parsing the East Asian Powder Keg

China & The U.S.: The Past’s Dead Hand

Dispatches From The Edge

July 22, 2014

 

 

A major cause of current tensions in the East and South China seas are two documents that most Americans have either forgotten about or don’t know exist. But both are fueling a potential confrontation among the world’s three most powerful economies that is far more unstable and dangerous than most people assume.

 

Consider what has happened over the past six months:

 

  • In February, U.S. Secretary of State John Kerry assured Japan that the Americans would defend Japan in case of a military confrontation between Tokyo and Beijing. That same month, U.S. Chief of Naval Operations Admiral Jonathan Greenert said the Philippines could count on American support if there were a clash with China in the South China Sea.
  • In early May, the Japanese Self-Defense Forces practiced “retaking” islands of the Amami Group near Okinawa in a not-so-subtle challenge to China over the ownership of the Diaoyu/Senkaku Islands in the East China Sea. That same week, U.S. and Philippine forces held joint war games, while President Barack Obama promised “ironclad” support against “aggressive” neighbors seeking to alter “changing the status quo” in Asia.
  • In mid-May, China challenged Japanese ownership of Okinawa, stating it did “not belong to Japan,” challenging Tokyo, and indirectly calling in to question the presence of huge U.S. bases on the island.
  • At the end of May, Japanese Prime Minister Shinzo Abe pledged Tokyo would support the Philippines, Vietnam, and other members of the Association of Southeast Asian Nations (ASEAN) in their disputes with Beijing over islands and shoals in the South China Seas.
  • On July 1, the Abe government “re-interpreted” Article 9 of its peace constitution to allow Japan to use military force in support of its allies. U.S. allies in the region supported the move. The Philippines agreed to allow the U.S. military use of the former American base at Subic Bay.

 

American naval vessels have accused the Chinese Navy of playing chicken off China’s coast. Chinese ships are blockading Philippine ships near a number of disputed shoals and reefs. Vietnam claims China rammed some of its ships. Japan scrambled a record number of fighter planes to intercept supposed incursions by Chinese and Russian aircraft. U.S. Senator John McCain called China “a rising threat,” and the Pentagon’s Frank Kandell told the House Armed Forces Committee that U.S. military superiority in the Pacific was “not assured.”

 

In short, “tense” doesn’t quite describe the situation in Asia these days, more like “scary.”

 

A major source of that friction are two documents, the 1951 “San Francisco Treaty” that ended World War II in Asia, and a little known doctrine called the AirSea Battle plan.

 

According to research by Kimie Hara, the Director of East Asian Studies at Renison University College and the author of numerous books on the Cold War in Asia, today’s tensions were purposely built into the 1951 Treaty. “Close examination of the Allies’ documents, particularly those of the United States (which was primarily responsible for drafting the peace treaty), reveals that some, if not all, of these problems were intentionally created or left unresolved to protect U.S. strategic interests.”

 

Hara say the U.S. wanted to create “strategic ambiguity” and “manageable instability” that would allow the U.S. to continue a major military presence in the region. She specifically points to disagreements over the Kurile/Northern Territories Islands, the Dokdo/Takeshima islands, the Senkaku/Diaoyu islands, the Spratley/Nansha and Paracel/Xisha islands, the divided Korea, and the Taiwan Straits. All of these—plus a few others—have led to tensions or confrontations among Japan, China, Russia, the Philippines, Vietnam, South and North Korea, Malaysia and Brunei.

 

Neither China nor Korea was invited to the Treaty talks, and while the USSR was present, it was not a signatory.

 

Sometimes the U.S. directly sabotaged efforts to resolve issues among Asian nations. In 1954, Japan and the Soviet Union restored diplomatic relations and were on the verge of cutting a deal over the Kurlies/Northern Territory islands, essentially splitting the difference: Japan would take two islands, the USSR another two.

 

However, Washington was worried that a peace treaty between Tokyo and Moscow would eventually lead to diplomatic ties between Japan and communist China, and that would have exerted, says Hara, “considerable pressure on the United States to vacate Okinawa, whose importance had significantly increased as a result of the Americas’ Cold War strategy in Asia.” Okinawa was a major base for the U.S. during the Korean War.

 

So Washington torpedoed the deal, telling Tokyo that if it did not demand all four islands, the U.S. would not return Okinawa to Japan. The U.S. knew the Soviets would reject the Japanese demand, which would scuttle efforts to reduce tensions between the two nations. There is still no peace treaty between Russia and Japan.

 

AirSea Battle (ASB) has been official U.S. military doctrine in Asia since 2010, and what it calls for is chilling: the military defeat—WW II style—of China. Not even during the height of the Cold War did the U.S. and it allies envision defeating the Soviet Union, seeking to rather “contain” it.

 

In the 1990s, China began building a military that could defend its coastal waters. Called “denial of access,” it includes a variety of anti-ship and ballistic missiles, stealth submarines, cyber warfare and space surveillance. China’s turn from its traditional reliance on land forces to “denial of access” was given a major push in 1996 when the Clinton administration deployed two aircraft carrier battle groups in the Taiwan Straits during a period of tension between China and Taiwan. Beijing could do nothing about it, and the Chinese military was deeply embarrassed.

 

ASB is designed to neutralize “denial of access” by “blinding” Chinese radar and surveillance capabilities, destroying missile sites and command centers, and, according to Amitai Etzioni of Washington University—author of books on U.S. foreign policy and a former Senior Advisor to the White House under Jimmy Carter—allowing U.S. military forces to “enter contested zones and conclude the conflict by bringing to bear the full force of their material military advantage.”

 

A land invasion of China?

 

The potential dangers involved in such an undertaking are sobering. Since ASB includes strikes deep into Chinese territory, Beijing might assume such attacks were directed at China’s nuclear weapons arsenal. The general rule with nukes is “use them or lose them.” According to Etzioni, the Center for Strategic and International Studies concludes that, “China is likely to respond to what is effectively a major attack on its mainland with all the military means at its disposal—including its stockpile of nuclear arms.”

 

While Pentagon officials claim that ASB is not aimed at any particular country, China is the only power in Asia capable of “access denial” to the U.S. military. Etzioni quotes one “senior Naval official” as saying “AirSea Battle is all about convincing the Chinese that we will win this competition.”

 

The Chinese are fully aware of ASB, which does much to explain their recent assertiveness in the East China Sea. The Diaoyu/Senkakus are part of the “first island chain” through which Chinese submarines and surface craft must pass in order to exit Chinese coastal waters. If Japan controls those islands it can detect—and with anti-ship missiles destroy—anyone going from China to the Pacific.

 

The South China Sea disputes also find their roots in the San Francisco Treaty. China has a good case that Japan’s claim to the Diaoyu/Senkakus violates the 1945 Potsdam Agreement. Potsdam was supposed to dismantle Japan’s empire, including territories that it had seized during its years of expansion. The Diaoyu/Senkakus were absorbed by Japan following the1894-5 Sino-Japanese War, so China has a solid ownership argument.

 

However, it can make no such case for the Spratleys, Parcels or reefs and shoals of the South China Sea. It may be that defense considerations are driving some of those disputes—most of China’s energy supplies transit the region—but oil, gas and fishing rights would seem to loom larger. In any case, China appears to be in violation of the 1982 UN Convention on the Law of the Sea that guarantees countries a 200 nautical mile “exclusive economic zone.” China, using a 19th century “nine dash line” map claims “indisputable sovereignty” over 3.5 million sq. kilometers of the South China Sea, a sea that borders six nations and through which one third of the world’s shipping passes.

 

While China’s forceful behavior in the East China Sea is somewhat understandable, throwing its weight around in the South China Sea has given the U.S. an opportunity to exploit the situation. Because of tensions between China the Philippines, the U.S. military was invited back into the islands. And China’s unilateral actions in the Paracels has some Vietnamese talking about a military relationship with Washington.

 

All sides need to take a step back.

 

China should adhere to a 2002 ASEAN code of conduct to consult and negotiate its disputes with Vietnam and the Philippines, and to bring the issue of the Diaoyu/Senkaku before the International Court.

 

The U.S. should back off its blank check support for the rightwing Abe government. Tokyo started this fight in 2010 by first arresting a Chinese fisherman—thus violating an agreement not to apply domestic trespassing laws to fishing violations—and then unilaterally declaring sovereignty over the Diaoyu/Senkakus in 2012, a violation of a 1972 agreement with China to leave that issue up to negotiations.

 

Washington sould also reverse its expensive expansion of military forces in Asia—the so-called “Asia pivot”—and reconsider the folly of the AirSea Battle doctrine. According to Raoul Heinrich of Australian University, ASB “will greatly increase the range of circumstances for maritime brinkmanship and dangerous naval incidents.” Establishing military “hot lines” between the major powers in the region would also be helpful.

 

The current tensions are exactly what the San Francisco Treaty was designed to do: divide and conquer. But with the potential dangers of escalation embedded in the doctrine of AirSea Battle, local tensions are threatening international order.

 

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Day of the Vulture in Argentina

Day of the Vulture in Argentina

Truthdig

July 24, 2014

By Conn Hallinan

It is no surprise that right-wing Republican and hedge fund billionaire Paul Singer should be trying to wring hundreds of millions of dollars out of Argentina for a debt that Buenos Aires doesn’t really owe him. He screwed tens of millions of dollars out of poverty-stricken Peru and the Republic of Congo using the same financial sleight of hand. What may surprise people, however, is that key leaders in the administration of former President Bill Clinton are helping him do it.

 

To read the full article go to: http://www.truthdig.com/report/item/day_of_the_vulture_over_argentina_20140724

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Iraq: War and Remembrance

Iraq: War & Remembrance

Dispatches From The Edge

June 28, 2014

 

“So far as Syria is concerned, it is France and not Turkey that is the enemy”

T. E. Lawrence, February 1915

 

It was a curious comment by the oddball, but unarguably brilliant, British agent and scholar, Thomas Edward Lawrence. The time was World War I, and England and France were locked in a death match with the Triple Alliance, of which Turkey was a prominent member. But it was none-the-less true, and no less now than then. In the Middle East, to paraphrase William Faulkner, history is not the past, it’s the present.

 

In his 1915 letter, Lawrence was describing French machinations over Syria, but he could just as well have been commenting on England’s designs in the region, what allied leaders in World War I came to call “The Great Loot”—the imperial vivisection of the Middle East.

 

As Iraq tumbles into a yet another civil war, it is important to remember how all this came about, and why adding yet more warfare to the current crisis will perpetuate exactly what the “Great Loot” set out to do: divide and conquer an entire region of the world.

 

There is a scorecard here, filled with names, but they are not just George W. Bush, Dick Cheney, Donald Rumsfeld and Condoleezza Rice—though the latter helped mightily to fuel the latest explosion—but names most people have never heard of, like Sir Tatton Benvenuto Mark Sykes, 6th Baronet of Sledmore and Francois Georges-Picot. In 1915, these two mid-level diplomats created a secret plan to divvy up the Middle East. Almost a century later that imperial map not only defines the region and most of the players, but continues to spin out tragedy after tragedy, like some grotesque, historical Groundhog Day.

 

In 1915, the imperial powers’ major goal in the Middle East was to smother any expression of Arab nationalism and prevent any unified resistance to the designs of Paris and London. France wanted Greater Syria, Britain control of the land bridges to India. The competition was so intense, that while hundreds of thousands of French and British troops were dying on the Western Front, both countries secret services were blackguarding one another from Samara to Medina, maneuvering for position for when the Ottoman Empire finally collapsed.

 

The Sykes-Picot Agreement was the compromise aimed at ending the internecine warfare. France would get Greater Syria (which it would divide to create Lebanon), plus zones of influence in northern Iraq. Britain would get the rest of Iraq, Jordan and establish the Palestine Mandate. All of this, however, had to be kept secret from the locals lest they find out that they were replacing Turkish overlords with French and British colonialism.

 

The Arabs thought they were fighting for independence, but London and Paris had other designs. Instead of the lands between the Tigris and Euphrates rivers and access to the Mediterranean the Arabs had been promised, they would get the sun-blasted deserts of Arabia, and the rule of monarchs, who were easy to buy or bully.

 

However, to run such a vast enterprise through the use of direct force was beyond the power of even London and Paris. So both empires transplanted their strategies of using religion, sect, tribe and ethnicity, which had worked so well in Indochina, India, Ireland and Africa, to divide and conquer, adding to it a dash of chaos.

 

There are new players in the Middle East since Sykes and Picot drew up their agreement. Washington and Israel were latecomers, but eventually replaced both imperial powers as the major military forces in the region.

 

The enemy of the “Great Loot” was secular nationalism, and the U.S., France, and Britain have been trying to overthrow or isolate secular regimes in Iraq, Syria, Egypt and Libya since they first appeared. The rationale for the hostility is that secular regimes were run by dictators—many were—but questionably no worse than the Wahabi fanatics in Saudi Arabia, or the monsters the Gulf monarchies have nurtured in Syria and northern Iraq.

 

Why is Syria a dictatorship and Saudi Arabia is not? This past February, the Kingdom passed a law equating dissent, the exposure of corruption, or demands for reform with “terrorism” including “offending the nation’s reputation or its position.”

 

The list of names on the ledger of those who nurture terrorism in the Middle East is long. Yes, it certainly includes the Bush administration, which smashed up one of the most developed countries in the region, dismantled the Iraqi state, and stoked the division between Sunni and Shiites. But also the Clinton administration, whose brutal sanctions impoverished Iraq. And further back, during the First Gulf war, George H. Bush pounded southern Iraq with toxic depleted uranium, inflicting a massive cancer epidemic on places like Basra. It was Jimmy Carter and the CIA who backed Saddam Hussein’s rise to power, because the Ba’athist dictator was particularly efficient at torturing and killing trade unionists and members of the Iraqi left.

 

Not to mention members of the Gulf Cooperation Council—Kuwait, Saudi Arabia, Oman, the United Arab Emirates, Qatar, Bahrain, Morocco and Jordan— who fund the Islamic insurgency in Syria. Some of those countries may decry the excesses of the Islamic State of Syria and the Levant (ISIL), but it was they who nursed the pinion that impelled the steel.

 

Turkish Prime Minister Recep Tayyip Erdogan is also on that list. It is through Turkey’s borders that most fighters and supplies pass into Syria. So is the Obama administration, which farmed the insurgency out to Qatar and Saudi Arabia and is now horrified by the creatures that Wahabist feudal monarchies produced.

 

And don’t forget T.E. Lawrence’s French.

 

Paris has never forgiven the Syrians for tossing them out in 1961, nor for Damascus’s role in the 1975-91 Lebanese civil war that dethroned the French-favored Christian minority who had dominated the country since its formation in 1941.

 

The French have been enthusiastic supporters of the insurgency in the Syrian civil war and, along with the British, successfully lobbied the European Union to drop its ban on supplying the rebels with military hardware. Paris has also earned favor from Saudi Arabia by trying to derail efforts to find a solution to the conflict over Iran’s nuclear program. France is a member of the P5+1—France, the U.S., Russia, Britain, China and Germany—involved in talks with Teheran.

 

The Gulf Council praised France’s attempted sabotage, and Paris promptly landed a $6 billion contract to upgrade Saudi Arabia’s air defense system. It is negotiating to sell $8 billion in fighter-bombers to the Emirates and almost $10 billion worth to Qatar.

 

Saudi Arabia recently donated $3 billion in aid to the Lebanese Army on the condition that it is used to buy French weapons and ammunition. It is a somewhat ironic gift, since the major foe of the Lebanese Army has been Saudi-supported Wahabists in the country’s northern city of Tripoli.

 

Apparently French President Francois Hollande met with the foreign ministers of Jordan and Emirates last September to discuss a plan for Pakistan to train a 50,000-man Sunni army to overthrow the Syrian government and defeat al-Qaida-affiliated jihadist groups.

 

Members of that army may already be on their way to Europe, much as the mujahedeen from Afghanistan did a generation ago. According to western intelligence services, more than 3,000 European Union citizens have gone to fight in Syria, ten times the number who went to fight the Soviets in Afghanistan. The gunman who killed four people May 24 at the Jewish Museum in Brussels was a veteran jihadist from the Syrian civil war.

 

For now, the Gulf monarchies see themselves as pulling the strings, but they have virtually no control over what they have wrought. Those Wahabi fanatics in Syria and northern Iraq may do what Osama bin-Laden did and target the corruption of the monarchies next.

 

The Gulf countries are rich but fragile. Youth unemployment in Saudi Arabia is between 30 and 40 percent, and half the country’s 28 million are under 25 years of age. In other Gulf nations a tiny strata of superrich rule over a huge and exploited foreign work force. When the monarchies begin to unravel, the current chaos will look like the Pax Romana.

 

But chaos has always been an ally of imperialism. If things fall apart and mayhem rules, governments and bankers in Paris, Zurich or New York have not been overly bothered. “The agenda has always been about imposing division and chaos on the Arab world,” wrote long-time peace activist Tom Hayden. “In 1992, Bernard Lewis, a major Middle East expert, write that if the central power is sufficiently weakened, there is no real civil society to hold the polity together, no real sense of common identity…the state then disintegrates into a chaos of squabbling, feuding, fighting sects, tribes, regions and parties.”

 

Military intervention by the U.S. and its allies will accelerate the divisions in the Middle East. If the White House is serious about stemming the chaos, it should stop fueling the Syrian civil war, lean on the Gulf Monarchies to end their sectarian jihad against Shiites, pressure the Israelis to settle with the Palestinians, and end the campaign to isolate Iran.

 

And tell the French to butt out.

 

 

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