Posts tagged ‘United States’

July 20, 2011

Opinions: the shifting tectonic plates of geopolitics

Two items from the very cool Al Arabiya website:

Market Moves / Hello, Venezuela, possessor of biggest oil reserves. Welcome to the oil games

By EMAN EL-SHENAWI

Over the past year, many will have thought of Saudi Arabia, the oil goliath, as being home to the largest proven crude oil reserves in the world and that the country will maintain this title for many years to come. After all, the kingdom is the largest oil exporter in the world. But creeping up behind Saudi throughout 2010 was the South American oil bigwig, Venezuela. […]

Hillary Clinton should be fed noodle soup in New Delhi

By RAVI SHANKAR

Empires do not have friends. They only have allies.

America is the only empire left after the Soviet Union collapsed. China is a perennial empire in waiting: perhaps it heeds history’s tutorials that it is better to be an imperial work in progress, the promise of menace and power a deterrent not only to the rest of the world but also to itself. Revolution may devour its children, but empires get devoured by theirs.[…]

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April 8, 2011

The oil lobby and dirty energy

Modernity writes:

There is often talk about “the Lobby”, and those words have a certain resonance and conjure up an unpleasant mental picture for most of us, however, I am going to argue that the real lobby in the world is hardly ever discussed, in any meaningful way.

That is the extent of its power.

Clearly, we hear bits about it, in a broad sense, yet it is rarely analysed for its component parts, wider geopolitical influence and negative effect on human rights.

It spans the globe.

Nevertheless, much of the discussion relating to it comes across in a rather crude materialistic fashion, lacking subtlety and depth

There is seldom any piercing critique of the countries involved, the powerful players, the governments, the vested interests, the paid lobbyists, the various parliamentarians on the payroll, etc and above all, the oil companies.

Yes, that is the Lobby I am talking about, the oil lobby.

Dan Froomkin at HuffPost has a good article, which touches upon some of the issues.

The Froomkin piece, “How The Oil Lobby Greases Washington’s Wheels“, is quite hard-hitting.

Clout in Washington isn’t about winning legislative battles — it’s about making sure that they never happen at all. The oil and gas industry has that kind of clout.

Despite astronomical profits during what have been lean years for most everyone else, the oil and gas industry continues to benefit from massive, multi-billion dollar taxpayer subsidies. Opinion polling shows the American public overwhelmingly wants those subsidies eliminated. Meanwhile, both parties are hunting feverishly for ways to reduce the deficit.

But when President Obama called on Congress to eliminate about $4 billion a year in tax breaks for Big Oil earlier this year, the response on the Hill was little more than a knowing chuckle. Even Obama’s closest congressional allies don’t think the president’s proposal has a shot.

At an angle to this, read Ellen Cantarow on dirty energy. TomDispatch sets the context:

If BP’s Gulf of Mexico disaster was the elephant in the room, Japan’s Fukushima Daiichi Nuclear Power Station was a blue whale.  “Now, in light of the ongoing events in Japan, I want to just take a minute to talk about nuclear power,” the president began, before extolling its supposed virtues as a clean energy source.  “So those of us who are concerned about climate change, we’ve got to recognize that nuclear power, if it’s safe, can make a significant contribution to the climate change question.”  By the end, he left no room for debate about the future of atomic power in the United States, telling the audience: “[W]e can’t simply take it off the table.”

Ongoing events.  It was a curious and entirely disingenuous way to describe the ever-worsening disaster at Fukushima when, just the day before, Japan’s prime minister, Naoto Kan, told his Parliament, “The earthquake, tsunami and the ensuing nuclear accident may be Japan’s largest-ever crisis.”  He said this, it’s worth reminding ourselves, about a country that, within living memory, saw more than 60 of its cities reduced to ashes through systematic firebombing and two metropolises obliterated by atomic bombs, losing hundreds of thousands of its citizens in one of the most devastating wars of a conflict-filled century.  In fact, the very morning that Obama gave his speech, the New York Times quoted Tetsuo Iguchi, a professor in the department of quantum engineering at Nagoya University, about a subject that only a few outside observers had dared to previously broach: the prospect of a swath of Japan becoming an irradiated dead zone.  “The worst-case scenario is that a meltdown makes the plant’s site a permanent grave,” Iguchi said.

Between his soft-peddling of ecological and humanitarian catastrophes resulting from dirty energy and his advocacy of a variety of dubious strategies for freeing America from the chains of foreign petroleum, the president admitted that the U.S. would continue to import oil for the foreseeable future. “It will remain an important part of our energy portfolio for quite some time until we’ve gotten alternative energy strategies fully in force,” Obama told the crowd.  “And when it comes to the oil we import from other nations, obviously we’ve got to look at neighbors like Canada and Mexico that are stable and steady and reliable sources.”

Unlike offshore drilling and nuclear power, reliance on neighboring countries for a particularly dirty form of energy didn’t prompt any excuses or handwringing from the president, as if petroleum from Mexico (a place his secretary of state likened to insurgent-embattled Colombia of the 1990s) and Canada posed no problems.  If you believe that, then I’ve got an electric power company in Japan to sell you.

And here’s an extract from Ellen:

read more »

March 4, 2011

Who owns the US?

Federal_Debt-VS-Taxes

Image via Wikipedia

By Greg Bocquet, here:

Regardless of how much closer Obama’s budget brings our economy into a balance of payments not seen since 2001, we will continue to run deficits for the next decade, and the national debt will keep growing every year that happens.

While most of the country’s $14 trillion debt is held by private banks in the U.S., the Treasury Department and the Federal Reserve Board estimate that, as of December, about $4.4 trillion of it was held by foreign governments that purchase our treasury securities much as an investor buys shares in a company and comes to own his or her little chunk of the organization.

Looking at the list of our top international creditors, a few overall characteristics show some interesting trends: Three of the top 10 spots are held by China and its constituent parts, and while two of our biggest creditors are fellow English-speaking democracies, a considerable share of our debt is held by oil exporters that tend to be decidedly less friendly in other areas of international relations.

Here we break down the top 10 foreign holders of U.S. debt, comparing each creditor’s holdings with the equivalent chunk of the United States they “own,” represented by the latest (2009) state gross domestic product data released by the U.S. Bureau of Economic Analysis. Obviously, these creditors won’t actually take states from us as payment on our debts, but it’s fun to imagine what states and national monuments they could assert a claim to.

foreigndebt-flags.jpg
©Radar Communication

1. Mainland China

Amount of U.S. debt: $891.6 billion

Share of total foreign debt: 20.4%

Building on the holdings of its associated territories, China is the undisputed largest holder of U.S. foreign debt in the world. Accounting for 20.4% of the total, mainland China’s $891.6 billion in U.S. treasury securities is almost equal to the combined 2009 GDP of Illinois ($630.4 billion) and Indiana ($262.6 billion) in 2009, a shade higher at a combined $893 billion. As President Obama — who is from Chicago — wrangles over his proposed budget with Congress he may be wise to remember that his home city may be at stake in the deal.

[…]

4. Oil Exporters

Amount of U.S. debt: $218 billion

Share of total foreign debt: 5%

Another grouped entry, the oil exporters form another international bloc with money to burn. The group includes 15 countries as diverse as the regions they represent: Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria. As a group they hold 5% of all American foreign debt, with a combined $218 billion of U.S. treasury securities in their own treasuries. That’s roughly equivalent to the combined 2009 GDP of Nebraska ($86.4 billion) and Kansas ($124.9 billion), which seems to be an equal trade: The two states produce a bunch of grain for export, which many of the arid oil producers tend to trade for oil.

[…]

6. Caribbean Banking Centers

Amount of U.S. debt: $155.6 billion

Share of total foreign debt: 3.6%

You have to have cash on hand to buy up U.S. government debt, and offshore banking has given six countries the combined capital needed to make the Caribbean Banking Centers our sixth-largest foreign creditor. The Treasury Department counts the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles, Panama and the British Virgin Islands in this designation, which as a group holds $155.6 billion in U.S. treasury securities. That’s equivalent to the GDP of landlocked Kentucky ($156.6 billion), whose residents may not actually mind if they were ever to become an extension of some Caribbean island paradise.

7. Hong Kong

Amount of U.S. debt: $138.2 billion

Share of total foreign debt: 3.2%

At No. 7 on the list of our foreign creditors is Hong Kong, a formerly British part of China that maintains a separate government and economic ties than the communist mainland. With $138.2 billion in U.S. treasury securities, the capitalist enclave could lay claim to Yellowstone Park and our nation’s capital: The combined GDP of Wyoming ($37.5 billion) and Washington D.C. ($99.1 billion) totaled $136.6 billion in 2009.

[…]

10. Russia

Amount of U.S. debt: $106.2 billion

Share of total foreign debt: 2.4%

Starting off the list of our major foreign creditors is Russia, which holds about 2.4% of the U.S. debt pie that sits on the international dinner table. Its $106.2 billion in treasury securities is equivalent to the 2009 GDP of our sparsely populated North: The combined output of North Dakota ($31.9 billion), South Dakota ($38.3 billion) and Montana ($36 billion) matches up nicely with the Russian holdings, at $106.2 billion.

Let’s hope Russian president Dmitry Medvedev doesn’t come to collect.

June 20, 2010

The last superpower

In Europe, the economy continues to implode. In the UK, analysis by the FT shows, unsurprisingly, that it is the lowest paid who, as ever, will bear the brunt of the economic downturn – while companies like Ernst and Young, which aided and abetted Lehman Brothers in its misdemeanours, go on and on.

Although the big business lobby likes to blame public sector profligacy for the so-called PIGS crisis (and therefore prescribe public sector austerity as the cure), the private sector bears the main responsibility – most clearly in Spain, where the national debt stock stands at about 53 per cent of GDP – among the lowest in the eurozone – while private sector debt stands at a staggering 178 per cent.

Meanwhile, in the USA, as the oil spreads through the Gulf, so do conspiracy theories. The finance sector, however, continues on, despite wave after wave of shameful incidents, the latest culprit being Litton Loans, the sub-prime arm of Goldman Sachs, “America’s foreclosure king”, specialising in loans to (and repossessions from) the US’s poorest home-owners. And America’s global power is declining; it has already lost its hegemony in the Middle East.

The disaster in the Gulf and the crisis in Europe are good indicators of a totally transforming geography of power in the world today. The centre of gravity is no longer the old Atlantic.

As Stephen Walt writes,

Asia’s share of world GDP already exceeds that of the United States or Europe, and arecent IMF study suggests it will be greater than the United States and Europe combined by 2030. Europe has already become a rather hollow military power, and the current economic crisis is going to force European states-and especially the United Kingdom — to cut those capabilities even more. Needless to say, hopes that the euro might one day supplant the dollar look rather hollow today. Politics within many European countries is likely to get nasty as austerity kicks in, and there will inevitably be less money and less support for Europe’s various philanthropic projects in Africa, Central Asia, or the Middle East. Such activities won’t disappear entirely, but it’s hard to see how they can continue at anywhere near their current levels.

China in particular continues to rise. This article analyses China’s strategic interests in Latin America, in the US’s back yard. This article describes its strategy in Africa. China is also on the move in crisis-torn Europe, with the Vice Premier Zhang in Greece this week to grease the rusting wheels of Greek capitalism.

To be sure, China is a new form of global superpower, but that does not mean it is fundamentally different from the old imperialist powers.

While China’s public pronouncements may at times appear mercurial, they are more likely part of a well-conceived strategy. On one hand, China seeks to leverage benefits consistent with being a developing country, plays upon the west’s historical guilt over colonialism, and exploits the west’s continued belief that economic development will inexorably lead to pluralism. On the other hand, it does not hesitate to attempt to parlay its growing power into influence whenever and wherever it can. This Janus-like strategy gives China leeway and flexibility in crafting its international political and economic policy.

And despite occasional posturing from American liberals and conservatives, China and the US remain tied together in an intimate web of shared interests.

However, in China itself, the workforce is getting restive. In a highly unusual move, the prime minister has acknowledged worker grievances.Following the Honda strikes in Guangdong, a Toyota parts manufacturer in Tianjin is now out.  This excellent article shows how the wildcat strike at Honda sheds new light on the suicides at Foxconn, suggesting Chinese labor is reaching a tipping point.

And, along with the China, the new global geometry of power continues to tip towards the oil producing states, especially in the Persian Gulf region, as the BP disaster seems to be doing little to encourage us to break our dependency on petroleum. Global spare capacity is around 6 million barrels per day, nearly all of which is in OPEC countries (around 4.2 million barrels per day of this is in Saudi Arabia) – and these countries are reaping the benefits of a weak Euro caused by the PIGS crisis. Jadwa, one of Dubai’s biggest companies, has just bought one of the largest new office complexes on the Southern edge of London’s financial district, at a serious bargain price.

In turn, the Arab oil states and China are increasingly drawing together:

As Washington’s influence in the world and the Middle East wanes, Gulf countries are weaning themselves from their traditional orientation toward and dependence on the United States. America’s post-war political and economic supremacy in the region is now threatened as a result of its own foreign policy, but equally so by the rise in importance of the emerging powers. No country has capitalized on the shifting landscape more thanChina, which has, consistent with its actions globally, moved assertively to strengthen its ties with the Gulf region generally and in particular with its most important economic and political power, Saudi Arabia.

However, critical voices are in denial about the new geometry of power, and continue to act as if America and its close allies, including insignificant Israel, remain the geopolitical driving forces. Time to wake up.