Archive for ‘Europe’

February 3, 2015

The shifting world system

Here is a very interesting piece by World Systems Theory guru Immanuel Wallerstein on Putin’s politics in a multi-polar world.

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April 24, 2014

Some links on Ukraine

 

Ukraine oil pipelines

China/Russia pipelines: Reuters on the fossil fuel geopolitics behind the Ukraine conflict

MOSCOW/BEIJING, April 23 (Reuters) – Europe’s plans to reduce its dependence on Russian energy as the Ukraine crisis threatens supplies are spurring efforts by Russia’s top producer, Gazprom, to sign a deal next month to pump gas to China, industry sources say.

The elusive deal, slated to be signed next month when Russian President Vladimir Putin is expected to visit China and seen as vital if Russia is to be a big player in Asian gas markets, would wrap up a decade of talks in which price has been the main obstacle.

“Judging by the speed of work which is under way in Gazprom, I would say that the possibility that the deal would be signed is 98 percent,” a Gazprom source said, adding agreement on what China would pay for the gas was close. [READ THE REST.]

Cutting off Ukraine: The FT on Russia’s risk of killing its golden goose

Arseniy Yatseniuk, Ukraine’s beleaguered premier, claims his country is facing not just military aggression from neighbouring Russia, but “another kind of aggression – aggression through its gas supplies”.

Russia’s military intervention in Ukraine is all too real. President Vladimir Putin admitted last week that gunmen who helped Moscow annex Ukraine’s Black Sea peninsula of Crimea last month were Russian. Few western leaders doubt that pro-Russian separatists in eastern Ukraine also include Russian soldiers.

Yet while it is difficult to disentangle the gas dispute from the geopolitical crisis, the accusation of “energy aggression” by Russia and its natural gas monopoly, Gazprom, is less clear cut.

By cutting off gas to Ukraine in 2006 and 2009 amid pricing disputes, Gazprom has hardly endeared itself to Kiev, or to European customers further west – which experienced disruptions to Russian supplies through the massive transit pipelines that run across Ukraine.

Now, paradoxically, Russia seems to be putting maximum pressure on its neighbour’s struggling government, while doing its best to avoid cutting off supplies. [READ THE REST]

Send a message to Putin: WSJ on why a trans-Atlantic energy partnership makes geostrategic sense

Energy has always been central to creating a trade and investment bloc through the Transatlantic Trade and Investment Partnership. If a TTIP agreement can reduce wide differences in energy prices between Europe and the U.S., Europeans will pay less for energy, while American energy producers will finally be able to profit from the recent energy boom by selling at competitive market prices. Trying to artificially hold down prices has heavy costs for domestic producers, encourages consumption, and dampens energy production over…  [READ THE REST]

May 23, 2011

Corporate China’s political shadows

Isabel Hilton in the Guardian says British business should be wary of the opaque Communist party role in China’s corporate culture

It was reported this week that China’s sovereign wealth fund is about to receive new capital from the government, adding billions of dollars annually to its already impressive wallet. As China’s economic power continues to grow and countries around the world compete for Chinese investment, the question facing developed countries is not so much what happens when China rules the world, as what will be the impact when China owns the world?

The China Investment Corporation was set up in 2007 to invest some of the $3tn in foreign exchange reserves that have accumulated through trade surpluses – fuelled in part, critics would say, by an artificially depressed exchange rate. It is currently the world’s fourth largest sovereign wealth fund but is growing fast as the Chinese government pursues its twin goals of securing raw materials and energy, and reducing its holdings of US treasury bonds – no longer seen by Beijing as future-proof.

Until 2000 China’s investments outside Asia were small and largely aimed at energy and natural resources in Latin America and Africa. But now China is on a spending spree, buying into mining interests from Australia to Canada and looking for acquisitions that might give them technology, major brands or market access. [READ THE REST]

Other China news: Economy

Just after the State Council acknowledged that the massive Three Gorges Dam has had a negative social and environment impact, the corporation running the damn announced that they came up short in a recent audit. // China has surpassed India as the biggest market for investment-grade gold, based on newly released statistics for the first quarter of 2011. (Although India is still the world’s largest overall consumer of  products.) … The sudden jump in Chinese demand for gold is thought to be driven by fears of inflation. Analysts expect that demand for gold in China will increase in the future. // More tragedy for  workers, as an explosion at a Chengdu plant killed two workers and injured at least ten. // The New York Times reports on a new fad among China’s super rich: illegal helicopters. // In recent weeks, Internet users in China have complained of increasing difficulty accessing overseas websites, in what many see as part of the ongoing crackdown on free expression. In the Global Times, Fang Binxing, the so-called Father of the Great Firewall, attributes the problem to cost-cutting measures by ISPs.

Other China news: Chinese soft imperialism

South Korean media has reported that North Korea’s heir apparent Kim Jong Eun is traveling in China on his first trip overseas since being chosen to take over power from his father, Kim Jong Il.  // China Confirms Visit by Kim Jong II – Wall Street Journal.

Related articles

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April 14, 2011

Socialism or your money back

A few items from the above-named blog:

China’s ghost cities and the biggest property bubble of all time

A couple of months ago, a lot of people were passing around the news about China’s plan to create a megacity that would be home to 42 million people, the so-called “Turn the Pearl Delta Into One” idea. The reporting was generally favorable, painting a picture of economic growth and opportunity — the narrative of a prosperous China, with a growing middle class, that has become commonplace in recent years.

Unfortunately, the view of China’s urban planning strategies from the ground is less shiny. A riveting report from Dateline, an Australian TV show, reveals a disturbing pattern of development for development’s sake — the construction of gigantic infrastructure projects with no regard for human needs. (Hat tip to WalkableDFW.)

Take the New South China Mall, in Dongguan. The Dateline crew took a tour of the place, which has been 99 percent vacant since it opened in 2005, and the result is one of the most depressing things I have ever watched. Six years after its creation, what is touted as the largest mall in the world sits almost empty. One of the very few stores that’s in business is a toy shop, where the wistful owner spends his days dusting children’s bikes that no child will ever ride. He is lucky if he makes one sale a day. [READ THE REST]

Doom and gloomier

British families are on average £910 worse off than they were two years ago. Rising food, clothing and energy prices mean the average British family will have £910 less to spend this year than they did in 2009.The squeeze – which is considered the worst in peacetime for 90 years – is set to continue with a two per cent fall in household disposable income this year. The fall in disposable income is comparable with the savage post-World War One recession which lasted between 1919 and 1921, as a result of a collapse in manufacturing and international trade.The findings also show the fall in household disposable income is sharper than in the 1930s depression.

The Centre for Economics and Business Research forecasts inflation will average 3.9pc in 2011. At the same time, salaries will rise just 1.9pc as unemployment remains high and the public sector makes cut-backs.

Employment lawyers have predicted that older workers and pregnant women will be hit by a fresh wave of job cuts. Paul Griffin, head of employment at DBS Law, said: “The growth of discrimination claims from older workers and pregnant women suggests that employers are now targeting their more expensive staff, despite them being in protected groups. Obviously mistakes are being made in companies as accounts departments win out against human resources.”

Robert H. Frank, an economics professor at the Johnson Graduate School of Management at Cornell University, invented the toil index, a measure of how many hours the median American must work to pay for an average family home in a school district of average quality.
“During the immediate postwar decades the toil burden for meeting the rent of that median-price home actually declined slightly, from 42.5 hours a month in 1950 to 41.5 in 1970, according to my calculations.… By 2000, the median worker had to work 67.4 hours a month to put his or her family into the median home. “

The Libyan weapons shop-window

To take out Moammar Gadhafi’s air defenses, Western powers such as France and Italy are using the very aircraft and weapons that only months ago they were showing off to the Libyan leader. Times change, allegiances shift, but weapons companies will always find takers for their goods. The Libyan no-fly zone has become a prime showcase for potential weapons customers, underlining the power of western combat jets and smart bombs, or reminding potential buyers of the defensive systems needed to repel them.

Almost every modern conflict from the Spanish Civil War to Kosovo has served as a test of air power. But the Libyan operation coincides with a new arms race — a surge of demand in the $60 billion a year global fighter market and the arrival of a new generation of equipment in the air and at sea. For the countries and companies behind those planes and weapons, there’s no better sales tool than real combat. For air forces facing cuts, it is a strike for the value of air power itself.

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April 12, 2011

Sheffield families vs the super rich: who flies more often?

Belle leaves a chauffeur driven Rolls-Royce an...

From David Osler:

MILLIONAIRE Tory Oliver Letwin has come out against building new airports because he doesn’t want ‘morepeople from Sheffield flying away on cheap holidays’. However, I suspect that he has missed the primary sources of additional demand for aviation services.

One of the many interesting findings of the 2011 Wealth Report, produced by property consultant Knight Frank in conjunction with Citi Private Bank, is that all Russians worth $100m or more have increased spending on private jets and yachts over the last five years. The same can be said of 93% of super rich Indians, and 70% of high net worth individuals in the Middle East.

Indeed, the private jet market probably has further to rise, according to Tara Loader Wilkinson in Financial News, who quotes the opinions of a leading jet broker:

[T]he Russian & CIS private jet fleet is forecast to triple by 2019, with 650 deliveries scheduled from 2010 – 2019. Similar high demand is also identified in China where deliveries are expected to grow six fold, from 110 to 700 by 2019.

Nor are these people willing to fly on crap aeroplanes, it seems:

But the newly-monied do not want just any old private jets and yachts. Private bankers say the wave of emerging markets consumers have a competitive streak and when it comes to executive transport, big is beautiful.

“The (emerging markets buyers) are buying the newer, bigger, better jets. These, of course, have a higher ticket price.” said Mary Schwartz, head of Aircraft Finance at Citi Private Bank.

April 8, 2011

War in the Middle East: follow the money

From Der Spiegel:

Weapons Sales to the Arab World under Scrutiny

By Benjamin Bidder and Clemens Höges

Bernhard Zand/ DER SPIEGEL

In recent years, Western countries have made a bundle selling arms to Arab despots. But, as with Libyan leader Moammar Gadhafi, some of yesterday’s buyers have become today’s enemies. Now major weapons exporters must seek a new balance between arms profits and human rights.

The revolutions in the Arab world caught British Prime Minister David Cameron off guard. For some time, diplomats had been planning a trip for Cameron that would take him to several countries in the Middle East. In fact, it was meant to be more of a trade mission, with Cameron’s delegation consisting largely of high-level executives from Great Britain’s weapons industry.

But then came the revolutions in Arab countries and the fighting in Libya. Ignoring them was impossible, and Cameron added a six hour stopover in Cairo to his already tight schedule. It was almost exactly a month ago that he visited Tahrir Square in the center of the city, the focal point of mass demonstration which ultimately forced Egypt’s aging leader, Hosni Mubarak, out of office.

“Meeting the young people and the representatives of the groups in Tahrir Square was genuinely inspiring,” Cameron said. “These are people who have risked a huge amount for what they believe in.”

From Egypt, Cameron flew on to Kuwait, where he got down to the real purpose of his trip: selling weapons to Arab autocrats. When members of parliament back home attacked him for this lack of tact, the prime minister insisted there was nothing wrong with such business transactions and that, in any case, his government made weapons buyers pledge to not use them to violate human rights under any circumstances. Great Britain, he said, has “nothing to be ashamed of.”

Britain, though, has exported over €100 million ($142 million) in weapons to Libyan dictator Moammar Gadhafi in the last two years alone. Included in those shipments are sniper rifles that may currently be in use against the Libyan opposition. Furthermore, Gadhafi’s terror police are British-trained. Indeed, British officials were forced to hastily revoke 50 arms export licenses to Libya and Bahrain.

Friends of Convenience

Cameron now finds himself in a tight spot shared by many Western politicians. Policies that seemed fine prior to the revolutions are now questionable. Regional paradigms are shifting and, at a time when populations are throwing off the yoke of oppression, Realpolitik is a poor guide to Western policy.

Until recently, the West had been arming despots in the Arab world with a series of ever-larger, billion-dollar deals that served to stabilize their regimes. Some are close allies when it comes to Iran and al-Qaida, making questions about human rights and democracy secondary.

In addition, many of the region’s potentates were convenient partners for the West: They had their people more or less under control, and some provided oil. Even Gadhafi proved useful by keeping poor African refugees out of Europe. Likewise, many of the rulers bought whatever the West’s defense industry put up for sale.

The Ascent of German Arms

This was certainly also the case with Germany’s defense industry. According to the Stockholm International Peace Research Institute (SIPRI), though it still lags far behind the United States and Russia, Germany has become the world’s third-largest weapons exporter in recent years.

Indeed, SIPRI statistics show that, over the last decade, the German defense industry’s share of the global arms market has doubled to 11 percent. In 2008, the total value of these arms sales amounted to just under €6 billion. Germany primarily supplies high-tech items, such as submarines and military electronics. German defense corporations — such as EADS, Rheinmetall and Heckler & Koch — together employ roughly 80,000 people.

German military wares are so good that even Russia has become a reliable customer. Although Russia’s own products are perfectly suited for guerilla warfare in Africa, Russian Defense Minister Anatoly Serdyukov admits that they no longer meet “modern requirements.”

For this reason, Russia plans to order military hardware worth nearly €500 billion by 2020, including many items from the West. The Russian army would like to replace its T-90 tanks for the German Leopard 2, and Rheinmetall is to provide armored plating for other Russian vehicles. Even Russia’s mobile military camps will soon be “made in Germany.” Kärcher Futuretech, a company based in Winnenden, near Stuttgart, manufactures the finest in field kitchens and water purification systems.[…]

From Le Monde Diplo:

by Samir Aita
[…] Monarchies in the Arab world have been absolute, and life-long presidents (with hereditary office) ruled the republics, because they created a supreme power above both state and post-independence institutions (1). They set up and controlled their own security services to ensure that their powers would endure; the services escaped parliamentary or government supervision, and their members could reprimand a minister and impose decisions. It costs money to run such services, and the clientelist networks of one-party states. The funds derive not from public budgets, as do those for the police and the army, but from different sources of revenue. (The New York Times recently reported that Muammar Gaddafi had demanded in 2009 that oil firms operating in Libya should contribute to the $1.5bn he had promised to pay in compensation for the Lockerbie terrorist murders – or lose their licences. Many paid. And Gaddafi’s immediate cash holdings of billions of dollars are thought to be funding his mercenaries and supporters to defend him.)

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April 5, 2011

Libya and the British state

Important analysis of what the Libyan intervention tells us about the British state.

March 24, 2011

Who sold Libya its supermissiles?

From Wired.com:

The U.S. government calls it the “one of the most lethal” weapons of its kind — an advanced, portable missile, designed to knock planes out of the sky. A variant of it just showed up in Moammar Gadhafi’s army and nobody seems to know how exactly it got there. But diplomatic cables, unearthed by WikiLeaks, suggest one potential culprit: the Chavez regime in Venezuela.

Aviation Week’s eagle-eyed reporter David Fulghum spotted a Russian SA-24 Grinchsurface-to-air missile mounted on a Libyan army truck in recent cable news footage. And that’s a cause for concern: The SA-24 is more accurate, longer-flying, and more lethal than than earlier models of surface-to-air missiles. It also has a dual-band infrared seeker and is more difficult to jam than older systems.

The missiles “reportedly have counter-countermeasures that may be difficult for planes with just flares to counter,” Matthew Schroeder, director of the Federation of American Scientists’ Arms Sales Monitoring Project, tells Danger Room. ”Overall it’s just a much more capable system.”[…]

So how did the missile get there and where did it come from? Thanks to a shaky system of international arms-sale monitoring, its hard to say.

Russia has shown a willingness to sell Libya other sophisticated air defense systems in the recent past. In 2010, Moscow announced a deal to sell Tripoli a $1.8 billion package of arms that included two batteries of its big, bleeding-edge S-300 air defense missiles, in addition to Sukhoi fighter jets and T-90 tanks. But the deal was never finalized.

Schroeder says he can’t find any other Russian missile sales in the last seven years. But countries aren’t always keen to be candid about their arms deals.

[…]Russia has sold Venezuela a shoulder-fired version of the SA-24, which is a bit different from the truck-mounted model found by Aviation Week. In classified cables released by WikiLeaksAmerican diplomats expressed alarm at Russia’s deal with Venezuela, writing that the missile, “considered one of the most lethal portable air defense systems ever made,” was at risk of falling into other hands.[…] Gadhafi is reportedly close to Venezuela’s Hugo Chavez, who has blasted the coalition attacks on Libya.[…]

So, did Chavez sell Gadafi the SA-24?

Notes:

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March 18, 2011

Chart of the week: Britain’s export gap with the BRICS

Will Straw writes:

Sky News and the Financial Times report that Peter Mandelson will later today outline a £27 billion export gap with the BRIC countries (Brazil, Russia, India and China). The finding comes from a piece of research that my colleagues Sarah Mulley, Amna Silim, and I have done for ippr on the future of globalisation and Britain’s place in the global economy.

The chart below – part of a presentation to be made later today by ippr Director, Nick Pearce, prior to Peter Mandelson’s keynote speech on globalisation – shows the actual volume of Britain’s exports to the four BRIC countries compared to the potential volume if export performance matched Britain’s global share of trade.

[READ THE REST]

Below the fold, recent(ish) trade news from The Gabber:

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March 17, 2011

The UK: oilier than ever

Daniel Elton writes:

The Cameron administration has a firm aspiration to be the ‘greenest government ever‘, but the reality is turning out to be quite different. Alongside having a transport secretary who advocates gas-guzzling changes to public policy, and continuing to encourage road-building in a time of austerity, it turns out that the person almost certain to head up the coalition’s environment and energy policy is a former BP policy advisor.

Deep-sea-oil-drilling

Ben Moxham is currently working at the Riverstone private equity group which focuses on energy investment. In line with civil service practice, he has been put forward on a short list of one by civil servants for approval by the prime minister and Nick Clegg.

Moxham was previously director of policy of BP’s alternative energy department and part of the team pledged to move BP  ‘Beyond Petroleum’. However, the initiative concerned environmental campaigners as ineffective. [READ THE REST]