Archive for the ‘CHN’ Category

Rising world oil prices threaten to raise cost of consumer electronics

February 22, 2011 Comments off

The following article is reprinted with permission from PanARMENIAN Net.

Rising world oil prices threaten to raise cost of consumer electronics
February 22, 2011  12:41 AMT

(PanARMENIAN.Net) – Rising world oil prices threaten to raise the cost of consumer electronics and slow development by forcing Asian manufacturers to spend more on transportation and raw materials, regional economists say.

Oil prices have been pushed up by unrest in the Middle East and the cost of crude for April delivery moved close to US$100 a barrel on Feb 21. This threatens to jack up transportation expenses, which account for roughly 20 percent of the cost of products made in East Asia, according to analysts.

The cost of raw materials such as plastics for computer casing or chemicals for mobile phone printed circuit boards will also go up if petrochemical factories end up paying more for crude supplies.

Oil refiners or naptha crackers would pass on about 80 percent of their higher costs to electronics firms who buy from them, said Wai Ho Leong, regional economist with Barclays Capital in Singapore.

“I assume the oil price hikes would be passed through to end users,” Tim Condon, chief economist with ING in Singapore. “Activity would slow because consumers wouldn’t be parting with their money. Demand would go down, you’d see unwanted inventory accumulating, and you’d see product cutbacks and employment effects.”

So far oil prices that have tested their highest since mid-2008 haven’t cramped Asia’s momentum in PCs seen during the Western year-end holidays and China’s Lunar New Year, analysts say.

But if the prices stay above $100 per barrel – and fresh violence in Libya could push them into that groove – for six to 12 months, manufacturers will be pinched.

“There is already some moderation kicking in,” said Joanna Tan, economist with Forecast Ltd in Singapore. “With the oil prices up, we could see more moderation. It really depends on how long it drags on.”

A dent in general world consumer confidence driven by higher oil prices could reduce demand for electronics, prompting manufacturers to pull back on capital expenditures for development of new technology, said Tony Phoo, economist with Standard Chartered in Taipei.

Oil prices that topped $140 per barrel in 2008 contributed to a slowdown in the growth of India’s PC market and compounded the woes of manufacturers elsewhere as the world economy struggled against fallout from the U.S. sub-prime mortgage crisis.

Electronics firms are not assuming business as usual this year but keeping a wary eye on the second quarter of 2011 for any signs that oil prices will stay high, IDG New Service reports.


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RUSSIAN MEDIA: USA’s 2011 National Military Strategy: We’ve got the power!

February 10, 2011 Comments off

The following commentary is reprinted with permission from Pravda, Moscow.

USA’s 2011 National Military Strategy:  We’ve got the power!
By Sergei Balmasov
February 10, 2011

The USA has unveiled the 2011 National Military Strategy for the first time in seven years. The strategy, as usual, serves for the preservation of the U.S. predominance in the world. The appearance of the document is based on recent major changes on the planet. The authors of the strategy pointed out a number of challenges for the United States in particular and for the Western civilization in general.

U.S. strategists claimed that the shortage of resources in the world may trigger territorial disputes, which poses a direct threat to American interests. They are also concerned about the fact that the national debt of the United States “poses a significant national security risk.”

All of that is aggravated with a whole list of unsolved problems, which have become even more serious during the recent years. First and foremost, “the world’s preeminent power” has not been able to defeat terrorism and extremism. The war in Afghanistan continues, and the fire of Afghan unrest is spreading into neighboring Pakistan. The strategists of the U.S. national security wrote that terrorists had nested on the Arabian Peninsula, in the countries of north-western Africa and in Somalia.

Nevertheless, the authors of the document said: “We will be prepared to find, capture, or kill violent extremists wherever they reside when they threaten interests and citizens of America and our allies.” Therefore, it is not ruled out that the world will soon witness the USA launching another military adventure in the above-mentioned territories.

Secondly, the USA is concerned about the rising powers, India and China, as well as other regional powerful countries. The Americans are especially worried about China and its defense preparations in the Taiwan Strait.

In this connection, the Pentagon is not going to reduce its attention to South Asia and the Far East. However, the USA does not exclude increasing its military presence in potentially dangerous directions. “With partner nation support, we will preserve forward presence and access to the commons, bases, ports, and airfields commensurate with safeguarding our economic and security interests worldwide,” the strategy runs. Here, it goes about such old allies as Japan and South Korea.

Thirdly, the nuclear proliferation issue remains unsolved as well. North Korea has proved the possession of nuclear weapons to the whole world. Iran is just about to do the same. “The prospect of multiple nuclear armed regimes in the Middle East with nascent security and command and control mechanisms amplifies the threat of conflict, and significantly increases the probability of miscalculation or the loss of control of a nuclear weapon to non-state actors,” the document says.

To solve the problem, Washington intends to support regional allies, like Iraq, to develop the missile defense system, which Russia vehemently objects to, and to take defense measures against those violating the nuclear non-proliferation regime. The USA must be prepared to eliminate sources of weapons of mass destruction, the document runs.

Fourthly, by 2025, Washington predicts serious destabilization in a number of developing states because of the ongoing demographic explosion. The population of those countries will grow by 1.2 billion people, which will lead to serious food and water problems. “Conversely, in Europe and parts of Asia, populations are projected to decline and age with long term impacts to the global share of their economic output. Population growth and urbanization in the Middle East, Africa, and South Central Asia will contribute to increased water scarcity and may present governance challenges,” the report says.

In other words, the American supremacy is facing many challenges on different continents. One shall pay attention to the following telling phrase: “In this multi-nodal world, the military’s contribution to American leadership must be about more than power – it must be about our approach to exercising power.”

Thus, the U.S. National Military Strategy must be flexible to take account of all serious changes in the world. That is why the USA must be prepared to dealing with modern-day challenges without allies’ help.

“Let us not forget, the Nation remains at war abroad to defend against and defeat threats to our homeland. Our foremost priority is the security of the American people, our territory, and our way of life.” “We will pursue deliberate acquisition process improvements and selective force modernization with the cost effective introduction of new equipment and technology,” the report says.

U.S. strategists point out the necessity to maintain high prestige of the U.S. Armed Forces. According to the document, the state must continue to pay increased attention to improving the well-being of its defenders. “Just as our Service members commit to the Nation when they volunteer to serve, we incur an equally binding pledge to return them to society as better citizens. We must safeguard Service members’ pay and benefits, provide family support, and care for our wounded warriors,” the report runs.

Needless to say that the Americans could not leave Russia out of their attention. On the one hand, the document declares the intention to develop military partnership, continue the reduction of arms and build security in Central Asia in cooperation with Russia. As for the Asian security, the Americans, most likely, are planning to get Russia involved in the Afghan war.

The new strategy also mentions more important things about Russia. For instance, the USA is going to continue its cooperation with Canada regarding the issues of regional security, such as the development of the Arctic region. It is an open secret that Russia claims its right on the Arctic shelf, which infuriates Canada in the first place.

Here is another, rather expressive statement: “NATO members act as a stabilizing force on its perimeter, which ranges from the Middle East and the Levant, Northern Africa, the Balkans, and the Caucasus.” One shall assume that the Americans will continue to interfere in Russia’s internal affairs.

The authors of the new National Military Strategy are certain that the USA will preserve its economic and defense power in the foreseeable future. The USA still places its stake on brutal military force, which, as the authors of the report say, will contribute to America’s security and prosperity in the 21st century.


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Long-Range Question Mark

January 20, 2011 Comments off

The following commentary is reprinted with permission from International Relations & Security Network (ISN), Center for Security Studies, Zurich.

Long-Range Question Mark
©  Peter A Buxbaum
Source:  ISN Insights
January 20, 2011

The U.S. Air Force is pushing for enhanced long-range strike capabilities. The upcoming U.S. government budget will reveal whether the Obama administration will be going along.

The Obama administration will be submitting a proposed defense budget for fiscal year 2012 to the U.S. Congress in February. What is, or is not, included in that budget will provide clues as to the direction Obama intends to take the U.S. military.

A case in point: Will the administration request new funding for long-range strike capabilities? These are essentially strategic bombers that can penetrate enemy defenses from distances of thousands of kilometers.

The U.S. has reduced its long-range strategic bombing capability since the end of the Cold War, even shuttering the Strategic Air Command. Secretary of Defense Robert Gates also scrapped a new long-range strike program in 2009.

A new strategic direction?

New funding for long-range strike in an era of budgetary constraints – “The gusher has been turned off,” Gates told his Department of Defense (DoD) underlings in a 2010 speech – would indicate a new strategic direction for the U.S. military. That’s because the so-called “long war” on terror, as it has been pursued in Afghanistan and Iraq, is up close and personal, with plenty of boots on the ground and air support coming from nearby bases and aircraft carriers operating in a permissive environment. The prevalent military posture led Thomas Donnelly, an analyst at the neoconservative American Enterprise Institute, at the height of the Iraq war in 2006, to decry the Bush-era Pentagon for its long-range strike ambitions.

But if the Obama administration intends to pursue these ambitions, it means it is looking beyond the current conflicts and toward the mitigation of future threats coming from potential adversaries such as China and Iran. The U.S. Air Force has renewed its push for long-range strike capabilities, a move with supporters in Washington.

“A stealthy, long-range strike aircraft is essentially a platform geared to conventional and semi-conventional national security strategies,” noted a report from the Center for American Progress, a liberal Washington-based advocacy group. Forgoing a new long-range bomber “would be suitable for a national security strategy that bets all-in on an irregular strategy.”

The Air Force’s current bomber force lacks the capabilities to penetrate contested airspace and strike targets in future air campaigns, according to Mark Gunzinger, a senior fellow at the Center for Strategic and Budgetary Assessments, a Washington-based bipartisan think tank. “Pentagon planners viewed long-range strike as a first day capability that would be needed to help rapidly halt invading enemy forces,” he told ISN Insights. “After that, short-range tactical aircraft flying from nearby bases in relatively permissive operating environments could carry out the majority of strike missions.”

Those assumptions led to 20 years of defense budgets that favored investments in short-range fighters at the expense of major new long-range strike programs. The B-2 program, the last bomber the Pentagon acquired, was stopped short at 20 aircraft, of the 132 originally contemplated, in the early 1990s.

U.S. and NATO operations in the Balkans, Afghanistan and Iraq reinforced DoD’s planning assumptions, Gunzinger noted. But “on reevaluation, the Defense Department’s 1990s planning assumptions provide an unsuitable framework for assessing strike capabilities that may be needed for future operations,” he added. “Our adversaries went to school on us.”

China’s People’s Liberation Army, for example, is building up anti-access and area-denial capabilities (A2AD) with the apparent goal of extending its power to the western half of the Pacific Ocean and denying the U.S. access to that area. Chinese military and political doctrine holds that China should rule the waves out to the second island chain of the Western Pacific, which extends as far as Guam and New Guinea, essentially dividing the Pacific between the U.S. and China and ending U.S. hegemony on that ocean.

Among the A2AD capabilities being fielded by China are anti-satellite weapons; spaced-based reconnaissance, surveillance and target acquisition; electromagnetic weapons; advanced fighter aircraft; unmanned aerial vehicles; advanced radar systems; and ballistic and cruise missiles.

China and Iran have also hobbled U.S. power projection, Gunzinger noted, by moving potential targets inland, hardening or deeply burying potential targets, and increasing the mobility of key military systems, such as surface-to-air missiles and missile launchers.

Beating the drum of long-range strike

Gunzinger authored a detailed plan for beefing up U.S. long-range strike capabilities in a report entitled Sustaining America’s Strategic Advantage in Long-Range Strike, which was released by CSBA in September. Among other things, the report recommends that the U.S. develop and buy 100 penetrating stealth bombers with an unrefueled range of over 9,000 kilometers as well as a new cruise missile that could be launched from both long and short range.

CSBA is not alone in beating the drum of long-range strike. The liberal Center for American Progress has also advocated the procurement of a new long-range bomber, although one with more modest capabilities and lower cost than the B-2.

“Development of a new long-range bomber should focus on meeting the ambitious goal of fielding a new bomber by 2018 through the use of existing technology,” said a CAP publication. “The Air Force should not seek to acquire a ‘gold-plated bomber’ that can offer everything. Rather, the new bomber [should] incorporate existing technology, including low-observability, but not necessarily at the level of the B-2.”

CAP also pointed out in another report that extending the long-range projection of force by the U.S. military could save DoD $80 billion over 10 years by eliminating 50,000 current U.S. personnel now stationed in Europe and Asia.

The Air Force appears to be moving in the direction of requesting a scaled-down bomber program as recommended by CAP. In a recent speech, Secretary of the Air Force Michael Donley termed long-range strike a “priority.”

“We are confident that a modern long-range strike platform not only has been, but should remain, a critical tool in the nation’s arsenal,” he added. “But we are also cautious. Cautious not to repeat the painful experience of previous Air Force bomber programs: narrowly focused capabilities, high risk technologies, and high costs contributing to affordability problems, leading to program cancellations, or low inventories.”

Whether the Air Force gets what it wants will become apparent when the next U.S. federal government budget is unveiled in February.


Peter A Buxbaum a Washington, DC-based independent journalist, has been writing about defense, security, business and technology for 15 years. His work has appeared in publications such as Fortune, Forbes, Chief Executive, Information Week, Defense Technology International, Homeland Security and Computerworld. He holds a Juris doctorate from Temple University and a Bachelor’s in political science and economics from Columbia University. His website is

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Categories: CHN, IRN, USA

The Balkanization of Sudan: The Redrawing of the Middle East and North Africa

January 16, 2011 Comments off

The following commentary is reprinted with permission from Global Research.

The Balkanization of Sudan:  The Redrawing of the Middle East and North Africa
©  Mahdi Darius Nazemroaya
Source:  Global Research
January 16, 2011

Sudan is a diverse nation and a country that represents the plurality of Africa through various tribes, clans, ethnicities, and religious groups. Yet the unity of Sudan is in question, while there is talk of unifying nations and of one day creating a United States of Africa through the African Union.

The limelight is on the January 2011 referendum in South Sudan. The Obama Administration has formally announced that it supports the separation of South Sudan from the rest of Sudan.

The balkanization of Sudan is what is really at stake. For years the leaders and officials of South Sudan have been supported by America and the European Union.

The Politically-Motivated Demonization of Sudan

A major demonization campaign has been underway against Sudan and its government. True, the Sudanese government in Khartoum has had a bad track record in regards to human rights and state corruption, and nothing could justify this.

In regards to Sudan, selective or targeted condemnation has been at work. One should, nonetheless, ask why the Sudanese leadership has been targeted by the U.S. and E.U., while the human rights records of several U.S. sponsored client states including Saudi Arabia, Egypt, the U.A.E., and Ethiopia are casually ignored.

Khartoum has been vilified as a autocratic oligarchy guilty of targeted genocide in both Darfour and South Sudan. This deliberate focus on the bloodshed and instability in Darfour and South Sudan is political and motivated by Khartoum’s ties to Chinese oil interests.

Sudan supplies China with a substantial amount of oil. The geo-political rivalry between China and the U.S. for control of African and global energy supplies is the real reason for the chastisement of Sudan and the strong support shown by the U.S., the E.U., and Israeli officials for the seccession of South Sudan.

It is in this context that Chinese interests have been attacked. This includes the October 2006 attack on the Greater Nile Petroleum Company in Defra, Kordofan by the Justice and Equality Movement (JEM) militia.

Distorting the Violence in Sudan

While there is a humanitarian crisis in Darfour and a surge in regional nationalism in South Sudan, the underlying causes of the conflict have been manipulated and distorted.

The underlying causes for the humanitarian crisis in Darfour and the regionalism in South Sudan are intimately related to economic and strategic interests. If anything, lawlessness and economic woes are the real issues, which have been fuelled by outside forces.

Either directly or through proxies in Africa, the U.S., the E.U., and Israel are the main architects behind the fighting and instability in both Darfour and South Sudan. These outside powers have assisted in the training, financing, and arming of the militias and forces opposed to the Sudanese government within Sudan. They lay the blame squarely on Khartoum’s shoulders for any violence while they themselves fuel conflict in order to move in and control the energy resources of Sudan. The division of Sudan into several states is part of this objective. Support of the JEM, the South Sudan Liberation Army (SSLA), and other militias opposed to the Sudanese government by the U.S., the E.U., and Israel has been geared towards achieving the objective of dividing Sudan.

It is also no coincidence that for years the U.S., Britain, France, and the entire E.U. under the pretext of humanitarianism have been pushing for the deployment of foreign troops in Sudan. They have actively pushed for the deployment of NATO troops in Sudan under the cover of a U.N. peacekeeping mandate.

This is a re-enactment of the same procedures used by the U.S. and E.U. in other regions where countries have either formally or informally been divided and their economies restructured by foreign-installed proxy governments under the presence of foreign troops. This is what happened in the former Yugoslavia (through the creation of several new republics) and in Anglo-American occupied Iraq (through soft balkanization via a calculated form of federalism aimed at establishing a weak and de-centralized state). Foreign troops and a foreign presence have provided the cloud for state dismantlement and the foreign takeover of state infrastructure, resources, and economies.

The Question of Identity in Sudan

While the Sudanese state has been portrayed as being oppressive towards the people in South Sudan, it should be noted that both the referendum and the power sharing structure of the Sudanese government portray something else. The power sharing agreement in Khartoum between Omar Al-Basher, the president of Sudan, includes the SPLM. The leader of the SPLM, Salva Kiir Mayardit, is the First Vice-President of Sudan and the President of South Sudan.

The issue of ethnicity has also been brought to the forefront of the regional or ethno-regional nationalism that has been cultivated in South Sudan. The cleavage in Sudan between so-called Arab Sudanese and so-called African Sudanese has been presented to the outside world as the major force for the regional nationalism motivating calls for statehood in South Sudan. Over the years this self-differentiation has been diffused and socialized into the collective psyche of the people of South Sudan.

Yet, the difference between so-called Arab Sudanese and so-called African Sudanese are not that great. The Arab identity of so-called Sudanese Arabs is based primarily on their use of the Arabic language. Let us even assume that both Sudanese ethnic identities are totally separate. It is still widely known in Sudan that both groups are very mixed. The other difference between South Sudan and the rest of Sudan is that Islam predominates in the rest of Sudan and not in South Sudan. Both groups are still deeply tied to one another, except for a sense of self-identification, which they are well in their rights to have. Yet, it is these different identities that have been played upon by local leaders and outside powers.

Neglect of the local population of different regions by the elites of Sudan is what the root cause of anxiety or animosity between people in South Sudan and the Khartoum government are really based on and not differences between so-called Arab and so-called African Sudanese.

Regional favouritism has been at work in South Sudan.

The issue is also compounded by social class. The people of South Sudan believe that their economic status and standards of living will improve if they form a new republic. The government in Khartoum and non-Southerner Sudanese have been used as the scapegoats for the economic miseries of the people of South Sudan and their perceptions of relative poverty by the local leadership of South Sudan. In reality, the local officials of South Sudan will not improve the living standards of the people of South Sudan, but maintain a klepocratic status quo. [1]

The Long-Standing Project to Balkanize Sudan and its links to the Arab World

In reality, the balkanization project in Sudan has been going on since the end of British colonial rule in Anglo-Egyptian Sudan. Sudan and Egypt were one country during many different periods. Both Egypt and Sudan were also one country in practice until 1956.

Up until the independence of Sudan, there was a strong movement to keep Egypt and Sudan united as a single Arab state, which was struggling against British interests. London, however, fuelled Sudanese regionalism against Egypt in the same manner that regionalism has been at work in South Sudan against the rest of Sudan. The Egyptian government was depicted in the same way as present-day Khartoum. Egyptians were portrayed as exploiting the Sudanese just as how the non-Southern Sudanese have been portrayed as exploiting the South Sudanese.

After the British invasion of Egypt and Sudan, the British also managed to keep their troops stationed in Sudan. Even while working to divide Sudan from Egypt, the British worked to create internal differentations between South Sudan and the rest of Sudan. This was done through the Anglo-Egyptian Condominium, from 1899 to 1956, which forced Egypt to share Sudan with Britain after the Mahdist Revolts. Eventually the Egyptian government would come to refuse to recognize the Anglo-Egyptian Condominium as legal. Cairo would continously ask the British to end their illegal military occupation of Sudan and to stop preventing the re-integration of Egypt and Sudan, but the British would refuse.

It would be under the presence of British troops that Sudan would declare itself independent. This is what lead to the emergence of Sudan as a separate Arab and African state from Egypt. Thus, the balkanization process started with the division of Sudan from Egypt.

The Yinon Plan at work in Sudan and the Middle East

The balkanization of Sudan is also tied to the Yinon Plan, which is a continuation of British stratagem. The strategic objective of the Yinon Plan is to ensure Israeli superority through the balkanization of the Middle Eastern and Arab states into smaller and weaker states. It is in this context that Israel has been deeply involved in Sudan.

Israeli strategists viewed Iraq as their biggest strategic challenge from an Arab state. This is why Iraq was outlined as the centre piece to the balkanization of the Middle East and the Arab World. The Atlantic in this context published an article in 2008 by Jeffrey Goldberg called “After Iraq: What Will the Middle East Look Like?” [2] In the Goldberg article a map of the Middle East was presented that closely followed the outline of the Yinon Plan and the map of a future Middle East presented by Lieutentant-Colonel (retired) Ralph Peters in the U.S military’s Armed Forces Journal in 2006.

It is also no coincidence that aside from a divided Iraq a divided Sudan was shown on the map. Lebanon, Iran, Turkey, Syria, Egypt, Somalia, Pakistan, and Afghanistan were also presented as divided nations too. Of importance to East Africa in the map, illustrated by Holly Lindem for Goldberg’s article, Eriteria is occupied by Ethiopia, which is a U.S. and Israeli ally, and Somalia is divided into Somaliland, Puntland, and a smaller Somalia.

In Iraq, on the basis of the concepts of the Yinon Plan, Israeli strategists have called for the division of Iraq into a Kurdish state and two Arab states, one for Shiite Muslims and the other for Sunni Muslims. This has been achieved through the soft balkanization of federalism in Iraq, which has allowed the Kurdistan Regional Government to negotiate with foreign oil corporations on its own. The first step towards establishing this was a war between Iraq and Iran, which is discussed in the Yinon Plan.

In Lebanon, Israel has been working to exasparate sectarian tensions between the various Christian and Muslim factions as well as the Druze. The division of Lebanon into several states is also seen as a means of balkanizing Syria into several smaller sectarian Arab states. The objectives of the Yinon Plan is to divide Lebanon and Syria into several states on the basis of religious and sectarian identities for Sunni Muslims, Shiite Muslims, Christians, and the Druze.

In this regard, the Hariri Assasination and the Special Tribunal for Lebanon (STL) have been playing out to the favour of Israel in creating internal divisions within Lebanon and fuelling politically-motivated sectarianism. This is why Tel Aviv has been very vocal about the STL and very supportive of it. In a clear sign of the politized nature of the STL and its ties to geo-politics, the U.S. and Britain have also given the STL millions of dollars.

The Links between the Attacks on the Egyptian Copts and the South Sudan Referendum

From Iraq to Egypt, Christians in the Middle East have been under attack, while tensions between Shiite Muslims and Sunni Muslims are being fuelled. The attack on a Coptic Church in Alexandria on January 1, 2011 or the subsequent Coptic protests and riots should not be looked at in isolation. [3] Nor should the subsequent fury of Coptic Christians expressed towards Muslims and the Egyptian government. These attacks on Christians are tied to the broader geo-political goals of the U.S., Britain, Israel, and NATO in the Middle East and Arab World.

The Yinon Plan stipulates that if Egypt were divided that Sudan and Libya would also be balkanized and weakened. In this context, there is a link between Sudan and Egypt. According to the Yinon Plan, the Copts or Christians of Egypt, which are a large minority in Egypt, are the key to the balkanization of the Arab states in North Africa. Thus, the Yinon Plan states that the creation of a Coptic state in Upper Egypt (South Egypt) and Christian-Muslim tensions within Egyptian are vital steps to balkanizing Sudan and North Africa.

The attacks on Christians in the Middle East are part of intelligence operations intended to divide the Middle East and North Africa. The timing of the mounting attacks on Coptic Christians in Egypt and the build-up to the referendum in South Sudan are no coincidence. The events in Sudan and Egypt are linked to one another and are part of the project to balkanize the Arab World and the Middle East. They must also be studied in conjunction with the Yinon Plan and with the events in Lebanon and Iraq, as well as in relation to the efforts to create a Shiite-Sunni divide.

The Outside Connections of the SPLM, SSLA, and Militias in Darfour

As in the case of Sudan, outside interference or intervention has been used to justify the oppression of domestic opposition. Despite its corruption, Khartoum has been under siege for refusing to merely be a proxy.

Sudan is justified in suspecting foreign troops and accusing the U.S., Britain, and Israel of eroding the national solidarity of Sudan. For example, Israel has sent arms to the opposition groups and separatist movements in Sudan. This was done through Ethiopia for years until Eritrea became independent from Ethiopia, which made Ethiopia lose its Red Sea coast, and bad relations developed between the Ethiopians and Eritreans. Afterwards Israeli weapons entered South Sudan from Kenya. From South Sudan, the Sudan People’s Liberation Movement (SPLM), which is the political arm of the SSLA, would transfer weapons to the militias in Darfur. The governments of Ethiopia and Kenya, as well as the the Uganda People’s Defence Force (UPDF), have also been working closely with the U.S., Britain, and Israel in East Africa.

The extent of Israeli influence with Sudanese opposition and separatist groups is significant. The SPLM has strong ties with Israel and its members and supporters regularly visit Israel. It is due to this that Khartoum capitulated and removed the Sudanese passport restriction on visiting Israel in late-2009 to satisfy the SPLM. [4] Salva Kiir Mayardit has also said that South Sudan will recognize Israel when it separates from Sudan.

The Sudan Tribune reported on March 5, 2008 that separatist groups in Darfur and Southern Sudan had offices in Israel:

[Sudan People’s Liberation Movement] supporters in Israel announced establishment of the Sudan People’s Liberation Movement office in Israel, a press release said today.

“After consultation with the leadership of SPLM in Juba, the supporters of SPLM in Israel have decided to establish the office of SPLM in Israel.” Said [sic.] a statement received by email from Tel Aviv signed by the SLMP secretariat in Israel.

The statement said that SPLM office would promote the policies and the vision of the SPLM in the region. It further added that in accordance with the Comprehensive Peace Agreement the SPLM has the right to open in any country including Israel. It also indicated that there are around 400 SPLM supporters in Israel. Darfur rebel leader Abdel Wahid al-Nur said last week he opened an office in Tel Aviv. [5]

The Hijacking of the 2011 Referendum in South Sudan

What happened to the dreams of a united Africa or a united Arab World? Pan-Arabism, a movement to unit all Arabic-speaking peoples, has taken heavy losses as has African unity. The Arab World and Africa have consistenly been balkanized.

Secession and balkanization in East Africa and the Arab World are on the U.S., Israeli, and NATO drawing board.

The SSLA insurgency has been covertly supported by the U.S., Britain, and Israel since the 1980s. The formation of a new state in the Sudan is not intended to serve the interests of the people of South Sudan. It has been part of a broader geo-strategic agenda aimed at controlling North Africa and the Middle East.

The resulting process of “democratization” leading up to the January 2011 referendum serves the interests of the Anglo-American oil companies and the rivalry against China. This comes at the cost of the detriment of true national sovereignty in South Sudan.


[1]  A kleptocracy is a government or/and state that works to protect, extend, deepen, continue, and entrench the wealth of the ruling class.
[2]  Jeffrey Goldberg, “After Iraq: What Will The Middle East Look Like?” The Atlantic, January/February 2008.
[3]  William Maclean, “Copts on global Christmas alert after Egypt bombing”, Reuters, January 5, 2011.
[4]  “Sudan removes Israel travel ban from new passport”, Sudan Tribune, October 3, 2009:
[5]  “Sudan’s SPLM reportedly opens an office in Israel – statement”, Sudan Tribune, March 5, 2008:


Mahdi Darius Nazemroaya is a Research Associate of the Centre for Research on Globalization (CRG).

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Critical Minerals: Growing Demands, Rising Tensions

January 3, 2011 Comments off

The following commentary is reprinted with permission from International Relations & Security Network (ISN), Center for Security Studies, Zurich.

Critical Minerals:  Growing Demands, Rising Tensions
©  Christine Pathemore
Source:  ISN
January 3 2011

Looking back at the major headlines of 2010, one story stands out as truly unexpected: The sudden concern with a little-known class of minerals – rare earth elements – that had previously served a key but quiet role in the global economy. These minerals serve as a foundation for modern technologies – from television screens to missile guidance systems – making this newfound interest warranted.

It seems an historical abberation that concern over mineral supplies critical to weapons systems and energy production did not deeply permeate industrial policies, trade and geopolitical planning in the past two decades.

Throughout history, battles have been fought over control of natural resources. During World War II, the U.S., its European allies, Germany and Japan all relied on imported supplies of many raw materials critical to their war efforts, including steel and petroleum and the minerals used to process those materials. Both sides also developed extensive operations to cut off their opponents’ supply lines.

After World War II and during the Cold War, the Soviet Union’s expanding sphere of influence included many of the world’s most important minerals suppliers. Economists and defense planners in all industrial countries sounded alarms that import dependence on minerals from Southern Africa and Eastern Europe created intolerable strategic vulnerabilities. This concern extended to common imports such as steel and petroleum, but also to lesser-known minerals, such as cobalt and minerals of tailored use in strategic weapons, such as uranium required for stockpiling nuclear weapons. As the Cold War drew to a close, however, worries about minerals supplies waned.

The modern challenges of minerals

Today, the resurgence in concern over minerals is no longer characterized by great power competition, but by globalized markets and booming economic growth in the world’s most populous developing countries. Demand for many minerals is growing at a scale that few would have predicted a decade ago.

Though India, Brazil and other countries are rapidly becoming modern industrial powers and driving a surge in demand for minerals, China is at the heart of these concerns. China has a distinct strategy for its economic development that makes certain minerals central to its growth, including rare earth elements such as neodymium and europium. In addition to its ongoing space exploration and extensive military expansion, economic growth plans include “advanced manufacturing, new energy, new material and new-energy automobiles” – all areas of technological development that depend heavily on rare earth elements. Moreover, China’s economic, diplomatic, and military tactics to create a robust international supply system that meets its rapidly growing mineral demands is seen as a potential strategic concern by many analysts.

The renewed wave of interest in minerals has been several years in the making. An early incident, a disruption in supplies of rhenium, a mineral used to produce specialty alloys for the aerospace industry, caused prices to spike from $1,000 to $6,000 per kilogram. In 2007, China threatened to withhold exports of certain rare earth minerals used as catalysts in petroleum refining for long enough that American refiners warned of gasoline shortages; the U.S. State Department had to step in to help settle the tensions.

Most recently, rare earths have grabbed headlines and the U.S. Congress and Obama administration’s attention, in large part due to China’s regularly-changing export quotas for these minerals and its recent cessation of exports to Japan. Following a scuffle in the East China Sea in September, Chinese exporters halted shipments of rare earths to Japan for weeks, eventually resuming in late November. Although China’s leaders denied that they had imposed an official, government-sanctioned embargo, the move made clear China’s ability to leverage its current corner on the rare earths export market.

While this does not appear to have directly affected American companies, it served as a warning about the possible effects of over-reliance on China by the U.S. and other developed countries. For the U.S., more than 90 percent of its rare earth minerals imports could be at risk of supply disruptions of this kind. Beyond the direct economic costs of China changing rare earths export policies, its control of the vast majority of current world supplies allows it significant political power in relation to countries that have important military and civilian needs for these minerals.

What to do?

The U.S. must overcome several key challenges in order to better manage these minerals issues – which may in the future extend beyond rare earths, given the country’s complete reliance on imports for at least 19 different minerals.

First, the government and private sector should increase information sharing regarding mineral supply chains. The Japanese government, for example, has more open information sharing between the government and private sector, helping to mitigate potential problems. Second, governments of all industrialized countries should work to catalogue their dependencies on the most contentious minerals, such as rare earth elements and indium, for defense equipment needs and clean energy manufacturing goals. The U.S. government is in the early stages of taking on this task, but unfortunately it will take years to get even a general sense of the country’s true vulnerabilities. Finally, the government must improve its understanding of the kinds of economic and geopolitical risks that mineral import dependence could create when things go wrong. This will entail educating high-level policymakers and especially diplomats of the connections between the global minerals trade, defense industrial needs and international relations.

In the long term, experts project that supplies of rare earths (and most minerals on which the global economy relies today) will be sufficient to meet demand for decades – centuries in some cases. Unfortunately, this does not preclude the negative effects of short-term supply shortages, market share consolidation by only a few suppliers, and exporting countries flexing their geopolitical muscles by leveraging their control of important minerals. The growing recognition that assured access to minerals and raw materials is important for ensuring a reliable defense industrial base, developing a clean energy economy and managing geopolitical tensions is therefore a positive development.

Understanding these issues and mitigating potential problems will become vitally important in the future, as demand grows and tensions surrounding supply chains rise. The stakes are high. In the past three years, these issues have led to trade disputes, detracted attention from important diplomatic gains in the Asia-Pacific and renewed clashes over territory from the Arctic to the South China Sea. We should expect to see minerals make even more headlines in 2011 and beyond.


Christine Pathemore is a Fellow at the Center for a New American Security (CNAS), a non-profit, bipartisan national security think tank in Washington, D.C. She directs CNAS’s program that analyzes national security challenges related to natural resources.

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India-China contention benefits Kashmiris, Tibetans

December 17, 2010 Comments off

The following article is reprinted with permission from TamilNet.

India-China contention benefits Kashmiris, Tibetans
©  TamilNet
December 17, 2010

Since China has started issuing special visas to Kashmiris, India retaliated by not declaring Tibet as a part of China in the joint statement of the prime ministers of both the countries after their meet in New Delhi, Wednesday and Thursday. For the last 30 years as a prerequisite for dialogue with China, at every meeting of both the countries India was reiterating its official position that Tibet was part of China. The long oppressed and suffocating Himalayan states, hemmed between the two powers, could see new light if the states and the concerned peoples concertedly come forward to intelligently negotiate the unfolding equation between the two powers, political analysts on South Asia said.

The status of the kingdom of Kashmir was undecided when Britain granted independence to India and Pakistan. But both the new countries militarily occupied it in 1947 and to this date refuse to conduct the plebiscite they promised to the U.N. Instead, long oppressing the people of that nation, they have made the occupied territories as ‘integral’ parts of their countries.

The Lamaist states of Tibet and Ladak were militarily occupied and brutally subjugated by China in the late 1950s and early 1960s. India managed an anschluss of the kingdom of Sikkim in the 70s. Nepal and especially Bhutan are long under the shadow of India.

The boundary issue is a historical problem and that would take time to resolve, said the Chinese Primier, Wen Jiabao, addressing the Indian Council of World Affairs.

From India, Mr Wen will be going to Pakistan on Friday on a three-day visit.

China has recently increased its investments in Pakistan-occupied Kashmir, says the Indian side.

While China maintains that the stapled visas it issues to people of Indian-occupied Kashmir is an “administrative” matter and it is a basis for India and China to “continue without constraints,” India says, the main constrain is the stapled visa, as it challenges India’s sovereignty and territoriality.

For many years now, India is discriminating Eezham Tamils in the issue of visa, even after they becoming citizens of countries in the West.

For instance, people of Eezham Tamil origin in a western country, even after becoming citizens of that country, were issued with visas that were valid to land only in Chennai. ‘Special’ time is always needed to process the visas of the people of Eezham Tamil origin. Any foreigner married to an Indian is eligible to get the PIO (People of Indian Origin) status. But by some special administrative protocols that are never revealed openly, Eezham Tamil spouses of Indians are never considered for the grant of this status.

Even though negative, such administrative ways may perhaps mean India’s indirect recognition of the separate national identity of Eezham Tamils in the island of Sri Lanka. But for the genocidal Sri Lankan state these are not matters challenging its ‘sovereignty and territoriality’.


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Russia unable to win possible war with either NATO or China

December 15, 2010 Comments off

The following column is reprinted with permission from Pravda, Moscow.

Russia unable to win possible war with either NATO or China
By Sergey Balmasov
December 15, 2010

Gen. Nikolai Makarov, the chief of the Russian General Staff, stated on December 14 that after two years of reforms the Russian army was fully prepared for showing appropriate reactions to any threats. It became possible owing to the creation of the absolutely new defense structure and the introduction of the new training system for the troops, the official said.

High-readiness forces have been thoroughly provided with weaponry and ammo, whereas the army was supposedly degenerating before, the official added.

Makarov also said that the majority of military schools were training officers on the basis of outdated programs and techniques. Many of those programs, the official said, were based on combat experiences of the Great Patriotic War.

Judging upon the statements of the high-ranking defense officials, the previous problems of the Russian army have been solved. Is it really so? Will the Russian army be ready to stand up against a potential enemy? Will the results of the army reforms give Russia an opportunity to show appropriate reactions to possible aggression from NATO members or China?

Pravda.Ru asked expert opinion from military experts.

Konstantin Sivkov, the first vice president of the Academy for Geopolitical Problems:

“Statements claiming that Russian Armed Forces are ready to repulse any attack after the so-called reforms are nothing but nonsense. They are capable of settling a small conflict, in which not more than 100,000 men would need to participate. If there’s a larger, local conflict, which requires the participation of up to 500,000 people, then the Russian Armed Forces would not be able to deal with it, not to mention a large-scale war with NATO or China.

“In other words, without the use of nuclear arms, Russia is incapable of reacting to challenges from potential enemies. Those, who believe that the Russian army should be cut, say that we do not need such a large army at all because we have our nuclear weapons. The forces of nuclear containment need to be protected in the air and on the surface. If someone attacks Russia without the use of nuclear arms, Russia will not respond with a nuclear attack either. No country participating in WWII used chemical weapons during the war in spite of the fact that everyone had more than enough of those weapons. No one did that, not even the dying Nazi Germany.

“The same will happen to nuclear weapons. Everyone is very well aware of the fact that using nuclear weapons is similar to committing suicide. Both NATO and China know that Russia will not use its nukes if a non-nuclear war occurs.

“As for the so-called reforms, the combat effectiveness of the Russian army has considerably reduced during the years of those reforms. Many officers resigned not because of the outdated training – they were simply sacked. They tell us today that Stalin ‘beheaded the Red Army’ when he repressed 30,000 out of 800,000 officers. But what is the right word to describe the sacking of 200,000 out of 300,000 officers within two years? Not one of them received any apartments, by the way.

“The reforms are over, and what do we see? Officers still do not have the motivation to serve, because they do not have a place to live. The technological base of the army was cut considerably during these two years. Let’s take the support system, for example. This system has been handed over to entrepreneurs. This system can function normally only during time of peace. Will businessmen and their subordinates risk their lives to deliver all necessary goods to the battlefield?

“So what does Russia have? China and NATO can oppose Russia with huge armies – 2.5 million men each. Russia has only 85 instant readiness brigades, or 180,000 people deployed on such a vast territory as our country.

“Here is another important aspect – Russian reformers want to purchase foreign arms. One would only have to press a button to deactivate those arms in case an armed conflict with NATO occurs,” the expert said.

“For the time being, Russia is capable of showing resistance to such countries as Georgia. Russia will not be able to win a war with China or NATO,” Alexander Khramchikhin, deputy director of the Institute of Political and Military Analysis told Pravda.Ru. “As for nuclear weapons, NATO is much stronger than Russia, and China’s nuclear arsenal will soon be just as powerful as that of Russia. It will not be possible for Russia to conduct offensive operations against NATO members, because the strength of the Russian army has declined considerably.

“As for military hardware, which was supposedly fully provided to high-readiness forces, I have to say that all that hardware is of the Soviet origin. New weapons exist in meager quantities. There are only two divisions of S-400 anti-missile systems, for example, and they do not have long-range missiles, which would make them different from S-300 systems. Where are those highly acclaimed Su-35 fighters, which Russia exports?

“There is another important aspect here. It is an open secret that all recent wars started with massive air strikes against enemies. Russia’s air defense is absolutely not ready to face such a threat. It can only protect large centers in the country and that’s it. There is not even one single air defense regiment on a huge territory from Irkutsk to Khabarovsk, which is 2,500 kilometers,” Khramchikhin said.


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Categories: CHN, NATO, RUS, USA

India’s Military Might: Hype over Substance

December 14, 2010 Comments off

The following commentary is reprinted with permission from International Relations & Security Network (ISN), Center for Security Studies, Zurich.

India’s Military Might:  Hype over Substance
©  Harsh V Pant
Source:  ISN
December 14, 2010

Serious concerns about the trajectory of Indian defense policy stand in sharp contrast to hyperbolic talk of India’s military rise.

When it comes to military defense aspirations, all eyes are on – and wallets open to – India, as big defense players vie for the multi-billion dollar prize of providing multirole combat aircraft to the Indian Air Force (IAF). Just last week French President Nicolas Sarkozy visited India pushing jet fighter aircraft Dassault’s Rafale, which is back as a contender after it was initially knocked out of the race for technical reasons last year. British Defense Secretary Liam Fox was in New Delhi two weeks ago promoting the Eurofighter Typhoon, as India looks to buy 126 new combat aircraft. The Obama administration is also eyeing the lucrative multi-billion dollar tender. Russian President Dmitri Medvedev will also be in Delhi later this month in order to firm up an already tight defense partnership. Russia was and still is a huge seller of defense equipment to India, although the government’s outreach to the U.S. and Europe has allowed for a diversification of the defense market.

India has been the world’s second-largest arms buyer over the past five years, importing seven percent of the world’s arms exports. With the world’s fourth largest military and one of its biggest defense budgets, India has been in the midst of a huge defense modernization program for more than a decade now; one that has seen billions of dollars spent on the latest high-tech military technology. According to a recent report by KPMG, India will be spending around $100 billion on defense purchases over the next decade. This liberal spending on military equipment has attracted the interest of western industry and governments alike and is changing the scope of the global defense market.

From hyperbole to reality

And yet, just a few weeks ago, India’s Air Chief Marshal P V Naik bluntly informed the country that half of the equipment used by the IAF is either obsolete or obsolescent. Though he assured the nation that the IAF was quite “capable” of carrying out its defensive role, he was unequivocal in his suggestion that most of the hardware used by the IAF was not in the best operational condition. At a time when Indian political brass blithely talk of India’s rise as a military power, such a statement from the top military leadership raises serious concerns about the trajectory of Indian defense policy. That this is happening at a time when the regional security environment in Asia is witnessing an unprecedented military transformation should make redressing the situation the government’s top priority.

India’s security environment is deteriorating rapidly with the prospect of the Taliban’s return to power in Afghanistan, the military taking control in Pakistan, China asserting its territorial interests more aggressively than ever before, deepening Sino-Pakistan military cooperation, internal turmoil in Kashmir and the growing Maoist threat.

As a percentage of GDP, annual defense spending has declined to one of its lowest levels since 1962. More damaging, the defense ministry has not been able to spend its budgetary allocation for the last several years. The defense acquisition process remains mired in corruption and bureaucracy. A series of defense procurement scandals since the late 1980s have also made the bureaucracy risk averse, thereby delaying the acquisition process India’s indigenous defense production industry has time and again made apparent its inability to meet the demands of the armed forces. While the armed forces keep waiting for arms and equipment, the finance ministry is left with unspent budget funds year after year. Most large procurement programs get delayed, resulting in cost escalation and technological or strategic obsolescence of the budgeted items.

Coming up short… and frustrated

Not surprisingly, while the Indian army asserts that it is 50 percent short of attaining full capability and will need around 20 years to gain full defense preparedness, naval analysts are pointing out that India’s naval power is actually declining. During the 1999 Kargil conflict, operations were hampered by a lack of adequate equipment. The then Indian army chief famously commented that the forces would fight with whatever they had, underlining the army’s frustrating inability to procure the arms it needs. Only because the conflict remained largely confined to the 150 kilometer front in Kargil sector did India manage to gain an upper hand, ejecting Pakistani forces from its side of the Line-of-Control.

India also lacked the ability to impose significant military costs during Operation Parakram in 2001-2002 because of the unavailability of suitable weaponry and night-vision equipment needed to carry out swift surgical strikes. Similarly, the public outcry after the terror attacks on Mumbai in November 2008 was strong enough for the Indian government to consider using the military option vis-à-vis Pakistan. But it soon turned out that India no longer had the capability of imposing quick and effective retribution on Pakistan and that it did not enjoy the kind of conventional superiority over its regional adversary that it had for the past five decades.

The organizational set-up of India’s higher defense continues to exhibit serious weaknesses, with its strategic ability to prosecute contemporary wars in serious doubt. The current institutional structures are not effective enough to provide single-point military advice to the government or to facilitate the definition of defense objectives. Coordinated and synergized joint operations need integrated theater commands, yet India has not yet found it necessary to appoint even a defense chief-of-staff.

The Indian government is yet to demonstrate the political will to tackle the defense policy paralysis that seems to be rendering all claims of India’s rise as a military power increasingly hollow. There has been no long-term strategic review of India’s security environment, and no overall defense strategy has been articulated. The challenge for the Indian government is to delineate clearly what products they need and how to build up their own industry by significantly reforming their domestic defense manufacturing sector. In the absence of a comprehensive, long-term appraisal of the country’s defense requirements, there will be little clarity about India’s real needs in defense acquisitions. And India’s rise as a major global player will remain merely a matter of potential.


Dr Harsh V Pant teaches at King’s College London in the Department of Defense Studies and is an Associate with the King’s Center of Science and Security Studies. His research is focused on Asia-Pacific security issues. His recent books include ‘Contemporary Debates in Indian Foreign and Security Policy’ (Palgrave Macmillan, 2008) and ‘Indian Foreign Policy in a Unipolar World’ (Routledge, 2009).

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Categories: AFG, CHN, IND, PAK

U.S. diplomatic offensive tightens strategic encirclement of China

November 13, 2010 Comments off

The following perspective is reprinted with permission from World Socialist Web Site.

U.S. diplomatic offensive tightens strategic encirclement of China
©  World Socialist Web Site
By John Chan
November 13, 2010

Washington’s aggressive diplomatic campaign in Asia over the past two weeks has amounted, in the words of U.S. Secretary of State Hillary Clinton, to “a full court press” against China, with the western Pacific and the Indian Ocean emerging as potential future theatres of war.

President Barack Obama’s visits to India, Indonesia, South Korea and Japan, and Clinton’s trips to Vietnam, Cambodia, Malaysia, Papua New Guinea, New Zealand and Australia, sought to either strengthen existing alliances or create new partnerships for a U.S.-led strategic encirclement of China.

Obama fervently courted India, China’s regional nuclear-armed rival. He urged New Delhi to become a “world power” and backed its bid to become a U.N. Security Council permanent member. Clinton twice reiterated that Washington could invoke the U.S.-Japan Security Treaty to militarily support Japan against China in the conflict over the Diaoyu/Senkaku islands in the East China Sea. Vietnam announced it was ready to hire out its strategic Cam Ranh Bay port in the South China Sea “to naval ships from all countries” – with Washington the most likely client. Canberra agreed to provide greater U.S. access to its military facilities, especially those in northern Australia.

The American offensive aims to prevent China from controlling the South China Sea, the Indian Ocean and key connecting waterways, such as the Strait of Malacca and the Sunda/Lombok straits of Indonesia. Since China depends on ships to transport one third of its oil consumption and 70 percent of its foreign trade, these sea lanes have become its “lifelines”. Some 60 percent of the ships passing through the Strait of Malacca every day are Chinese.

Since World War II, retaining the ability to cut off vital oil supply shipments to rival powers by controlling such “choke points” has been a key U.S. naval strategy. This task looms ever larger for Washington today, with the accelerating decline of American economic power and the rapid rise of China, particularly in the aftermath of the 2008 global financial crisis. Since the China-Association of South East Asian Nations (ASEAN) free-trade zone came into effect last January, Sino-ASEAN trade has increased by nearly 50 percent, whereas rising protectionism in the U.S. is stalling any free trade agreement with Asian states.

Far from accepting a diminishing role, the U.S. is determined to retain its dominant position in Asia through its residual military might. In an interview with The Australian newspaper on Monday, Clinton recalled that when Chinese officials first told Washington, earlier this year, that Beijing viewed the South China Sea as a core Chinese interest, “I immediately responded and said, ‘We don’t agree with that’.” What followed was Clinton’s aggressive announcement at the ASEAN meeting in July that Washington would intervene into disputes between China and ASEAN members, such as Vietnam and Philippines, over the Spratly and Paracel Islands in the South China Sea. China angrily responded by warning that “outsiders,” i.e., the U.S., should keep out of South China Sea affairs.

Clinton’s subsequent statement that the U.S. had a “national interest” in “freedom of navigation” in the South China Sea was even more provocative. More than 40,000 ships freely pass through the sea each year. The “freedom of navigation” that Washington demands is the freedom of American surveillance vessels and warships to sail the waters near the Chinese coast, and to collect intelligence on Chinese military operations, including the deployment of submarines, in the region. If China likewise were to send spy ships to international waters just off the coast of Hawaii or San Diego to monitor the U.S. naval bases there, the American media and political establishment would respond with outrage over what would, legitimately, be interpreted as acts of provocation.

By establishing or strengthening military ties with Vietnam, India, Australia and Indonesia, the U.S. is seeking to counter China’s “string of pearls” strategy. The aim of this strategy is to build port facilities in Burma, Bangladesh, Pakistan and Sri Lanka for the deployment of Chinese warships into the Indian Ocean in order to protect the shipping lanes that carry oil and raw materials from the Middle East and Africa to China.

Herein lies the importance of Indonesia, which was the second stop on Obama’s trip. The U.S. think tank Stratfor noted: “It [Indonesia] straddles the Strait of Malacca, a global shipping choke point, as well as the Sunda and Lombok straits, making it critical for sea-lanes between the Indian Ocean, the South China Sea and the Pacific, and Australia and China. These sea lanes supply China with critical raw materials; any power controlling this area accordingly has enormous leverage over Beijing.”

These considerations also apply to East Timor, Papua New Guinea and Solomon Islands, which sit astride other vital sea lanes. There is concern in Washington that over the past decade, China has established economic and even military ties with Pacific island states, and the Obama administration is determined to reassert U.S. “leadership” in the region.

Thus Clinton visited Papua New Guinea and discussed the Asia-Pacific region in her meetings with key officials in Australia and New Zealand.

The centrality of the South China Sea in Washington’s thinking was expressed by Robert Kaplan, who wrote recently in the Washington Post: “The geographical heart of America’s hard-power competition with China will be the South China Sea, through which passes a third of all commercial maritime traffic worldwide and half of the hydrocarbons destined for Japan, the Korean Peninsula and northeastern China. That sea grants Beijing access to the Indian Ocean via the Strait of Malacca, and thus to the entire arc of Islam, from East Africa to Southeast Asia.”

Kaplan is among those within U.S. ruling circles who have criticised the occupations of Afghanistan and Iraq for diverting the focus of the former Bush administration, and allowing China to expand its geopolitical influence throughout Asia. Kaplan’s basic ideas can be seen in the Obama administration’s “back in Asia” policy.

The anti-China coalition being assembled by the U.S. directly conflicts with China’s quest to build a blue-water navy to protect its sea lanes and oil supplies. A bestseller published in China last year, China Sea Power by Zhang Wenmu, summed up Beijing’s view of the present great-power struggle for global hegemony. Zhang wrote: “All players are focusing at one aim, the control of the Indian Ocean.”

Beijing will not allow Washington to undermine the gains it has made in Asia. Just days after Clinton told Cambodia not to become “too dependent” on a single country – i.e., China – the Chinese government gave Cambodia $1.6 billion for infrastructure projects and announced a $590 million loan for the development of mobile phone services. Less than a day after Obama arrived in Jakarta, a Chinese delegation came with $6.6 billion in infrastructure projects. In the words of the New York Times, Beijing “laid down a not-so-subtle challenge to Mr. Obama: Show your Indonesian hosts the money”.

Driven by the deepening global economic crisis, the escalating rivalry between the U.S. and China is yet another sign that the world capitalist system is hurtling towards a major catastrophe. Unless the international working class intervenes to overthrow the profit system and the outmoded system of rival nation-states, these great-power tensions must inevitably lead to a new world war.


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PAUL CRAIG ROBERTS: American Job Loss Is Permanent

October 28, 2010 Comments off

The following column is reprinted with permission from Paul Craig Roberts.

American Job Loss Is Permanent
©  Paul Craig Roberts
October 27, 2010

Now that a few Democrats and the remnants of the AFL-CIO are waking up to the destructive impact of jobs offshoring on the U.S. economy and millions of American lives, globalism’s advocates have resurrected Dartmouth economist Matthew Slaughter’s discredited finding of several years ago that jobs offshoring by U.S. corporations increases employment and wages in the U.S.

At the time I exposed Slaughter’s mistakes, but economists dependent on corporate largess understood that it was more profitable to drink Slaughter’s Kool-Aid than to tell the truth. Recently the U.S. Chamber of Commerce rolled out Slaughter’s false argument as a weapon against House Democrats Sandy Levin and Tim Ryan, and the Wall Street Journal had Bill Clinton’s Defense Secretary, William S. Cohen, regurgitate Slaughter’s claim on its op-ed page on October 12.

I sent a letter to the Wall Street Journal, but the editors were not interested in what a former associate editor and columnist for the paper and President Reagan’s Assistant Secretary of the Treasury for Economic Policy had to say. The facade of lies has to be maintained at all costs. There can be no questioning that globalism is good for us.

Cohen told the Journal’s readers that “the fact is that for every job outsourced to Bangalore, nearly two jobs are created in Buffalo and other American cities.” I bet Buffalo “and other American cities” would like to know where these jobs are. Maybe Slaughter, Cohen, and the Chamber of Commerce can tell them.

Last May I was in St. Louis and was struck by block after block of deserted and boarded up homes, deserted factories and office buildings, even vacant downtown storefronts.

Detroit is trying to shrink itself by 40 square miles. On October 25, 60 Minutes had a program on unemployment in Silicon Valley, where formerly high-earning professionals have been out of work for two years and today cannot even find part-time $9 an hour jobs at Target.

The claim that jobs offshoring by U.S. corporations increases domestic employment in the U.S. is one of the greatest hoaxes ever perpetrated. As I demonstrated in my syndicated column at the time and again in my book, How The Economy Was Lost (2010), Slaughter reached his erroneous conclusion by counting the growth in multinational jobs in the U.S. without adjusting the data to reflect the acquisition of existing firms by multinationals and for existing firms turning themselves into multinationals by establishing foreign operations for the first time. There was no new multinational employment in the U.S. Existing employment simply moved into the multinational category from a change in the status of firms to multinational.

If Slaughter (or Cohen) had consulted the Bureau of Labor Statistics nonfarm payroll jobs data, he would have been unable to locate the 5.5 million jobs that were allegedly created. In my columns I have reported for about a decade the details of new jobs creation in the U.S. as revealed by the BLS data, as has Washington economist Charles McMillion. Over the last decade, the net new jobs created in the U.S. have nothing to do with multinational corporations. The jobs consist of waitresses and bartenders, health care and social services (largely ambulatory health care), retail clerks, and while the bubble lasted, construction.

These are not the high-tech, high-paying jobs that the “New Economy” promised, and they are not jobs that can be associated with global corporations. Moreover, these domestic service jobs are themselves scarce.

But facts have nothing to do with it. Did Slaughter, Cohen, the Chamber, and the Wall Street Journal ever wonder how it was possible to have simultaneously millions of new good-paying middle class jobs and virtually the worst income inequality in the developed world with all income gains accruing to the mega-rich?

In mid-October Treasury Secretary and Goldman Sachs puppet Tim Geithner gave a speech in California in the backyard, or former backyard, of 60 Minutes’ Silicon Valley dispossessed upper middle class interviewees in which Geithner said that the solution is to “educate more engineers.”

We already have more engineers than we have jobs for them. In a recent poll a Philadelphia marketing and research firm, Twentysomething, found that 85% of recent college graduates planned to move back home with parents. Even if members of the “boomeranger generation” find jobs, the jobs don’t pay enough to support an independent existence.

The financial media is useless. Reporters repeat the lie that the unemployment rate is 9.6%. This is a specially concocted unemployment rate that does not count most of the unemployed. The government’s own more inclusive rate stands at 17%. Statistician John Williams, who counts unemployment the way it is supposed to be counted, finds the unemployment rate to be 22%.

The financial press turns bad news into good news. Recently a monthly gain of 64,000 new private sector jobs was hyped, jobs that were more than offset by the loss in government jobs. Moreover, it takes around 150,000 new jobs each month to keep pace with labor force growth. In other words, 100,000 new jobs each month would be a 50,000 jobs deficit.

The idiocy of the financial press is demonstrated by the following two headlines which appeared on October 19 on the same Bloomberg page:

·  “Dollar Index Appreciates as Geithner Supports Currency Strength”

·  “Geithner Weak Dollar Seen as U.S. Recovery Route”

To keep eyes off of the loss of jobs to offshoring, policymakers and their minions in the financial press blame U.S. unemployment on alleged currency manipulation by China and on the financial crisis. The financial crisis itself is blamed by Republicans on low income Americans who took out mortgages that they could not afford.

In other words, the problem is China and the greedy American poor who tried to live above their means. With this being the American mindset, you can see why nothing can be done to save the economy.

No government will admit its mistakes, especially when it can blame foreigners. China is being made the scapegoat for American failure. An entire industry has grown up that points its finger at China and away from 20 years of corporate offshoring of U.S. jobs and 9 years of expensive and pointless U.S. wars.

“Currency manipulation” is the charge. However, the purpose of the Chinese peg to the U.S. dollar is not currency manipulation. When the Chinese government decided to take its broken communist economy into a market economy, the government understood that it needed foreign confidence in its currency. It achieved that by pegging its currency to the dollar, signaling that China’s money was as sound as the U.S. dollar. At that time, China, of course, could not credibly give its currency a higher dollar value.

As time has passed, the irresponsible and foolish policies of the U.S. have eroded the dollar’s value, and as the Chinese currency is pegged to the dollar, its value has moved down with the dollar. The Chinese have not manipulated the peg in order to make their currency less valuable.

To the contrary, when I was in China in 2006, the exchange rate was a little more than 8 yuan to the dollar. Today it is 6.6 yuan to the dollar – 17.5% revaluation of the yuan.

The U.S. government blames the U.S. trade deficit with China on an undervalued Chinese currency. However, the Chinese currency has risen 17.5% against the dollar since 2006, but the U.S. trade deficit with China has not declined.

The major cause of the U.S. trade deficit with China is “globalism” or the practice, enforced by Wall Street and Wal-Mart, of U.S. corporations offshoring their production for U.S. markets to China in order to improve the bottom line by lowering labor costs. Most of the tariffs that the congressional idiots want to put on “Chinese” imports would, therefore, fall on the offshored production of U.S. corporations. When these American brand goods, such as Apple computers, are brought to U.S. markets, they enter the U.S. as imports. Thus, the tariffs will be applied to U.S. corporate offshored output as well as to the exports of Chinese companies to the U.S.

The correct conclusion is that the U.S. trade deficit with China is the result of “globalism” or jobs offshoring, not Chinese currency manipulation.

An important point always overlooked is that the U.S. is dependent on China for many manufactured products including high technology products that are no longer produced in the U.S. Revaluation of the Chinese currency would raise the dollar price of these products in the U.S. The greater the revaluation, the greater the price rise. The impact on already declining U.S. living standards would be dramatic.

When U.S. policymakers argue that the solution to America’s problems is a stronger Chinese currency, they are yet again putting the burden of adjustment on the out-of-work, indebted, and foreclosed American population.


Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term.

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Categories: CHN, Paul Craig Roberts, USA