Category: Geopolitics

Forget Greece: Europe’s real problem is Germany

Germans look at the current crisis and blame their spendthrift Mediterranean neighbors for using the cover of the euro to rack up public and private debts that they now cannot support. They blame hedge funds and other speculators for making a bad situation worse and profiting from other people’s misery. And they are furious that they are being told by their leaders that they have no choice but to bail everyone out.

What Germans won’t accept is that they wouldn’t have been able to sell all those beautifully designed cars and well-engineered machine tools if Greeks and Spaniards and Americans hadn’t been willing to buy those goods and German banks hadn’t been so willing to lend them the money to do so. Nor will they accept that German industry was able to thrive over the past decade because of a common currency and a common monetary policy that, over time, rendered industry in some neighboring countries uncompetitive while generating huge real estate bubbles in others.The danger of Germans misunderstanding the causes of the current crisis is that it leads them, and the rest of Europe, to the wrong solutions.

via Steven Pearlstein – Forget Greece: Europe’s real problem is Germany.

Natural Gas Replacing Oil Has Big Geopoltical Implications

The coal industry will not surrender the power sector without a fight. The gasification of transport, if it happens, could also take a less direct form, with cars fuelled by electricity generated from gas.

A gasified American economy would have profound effects on both international politics and the battle against climate change. Displacement of oil by natural gas would strengthen a trend away from crude in rich countries, where the IEA believes demand has already peaked as a result of the recent spike in oil prices. Another consequence of the energy market’s bull run, the unearthing of vast new supplies of gas, could bring further upheaval. If the past decade was characterised by the energy-security concerns of consumers, the coming years could give even the world’s powerful oil producers reason to worry, as a subterranean revolution shifts the geopolitics of global energy supply again.

via Natural gas: An unconventional glut | The Economist.

A Food Fight for Hugo Chavez

El Presidente’s efforts to transform his country into a Cuban-style socialist state are sputtering. With its vast oil wealth, Venezuela shouldn’t suffer from shortages, yet inefficient farms, government takeovers of supermarkets, and a 50% currency devaluation in January have thrown the food supply into disarray. Chávez’s approval rating among Venezuelans has dropped to about 45% from 70% three years ago.

Supplying low-cost food to the poor has been a centerpiece of Chávez’s presidency. He has expropriated food processors, stores, and more than 6 million acres of farms and ranches, convinced that the government can feed Venezuela better than the private sector does. Under state ownership, though, production has suffered. From 1999 to 2008, per capita, sugar cane was off by 8%, fruit declined by 25%, and beef production dropped by 38%, according to Carlos Machado, an expert in agriculture at the Institute of Higher Administrative Studies, a business school in Caracas. “The cooperatives have failed and our cattle ranching has been decimated,” Machado says.

In a poll by researcher DATOS 86% don’t think Cuba is an appropriate model for Venezuela. Chávez “is moving in the opposite direction from what people say they want for their country,” says DATOS director Joseph Saade. “People look at everything the government has taken over and they’re seeing that the companies have become dysfunctional.”

via A Food Fight for Hugo Chavez – BusinessWeek.

Wiil China Develop Like US or Japan Did?

Is China like the US in 1890? Or is it more like Japan in 1980? If the parallel with America is right, China is likely to be the dominant power of the next century. If the Japanese comparison is more accurate, then the Chinese challenge to American hegemony could prove ephemeral.

The current mood in the US certainly feels like an exaggerated version of the “declinism” that set in towards the end of the 1980s, when the US was transfixed by the rise of Japan. A recent Pew opinion survey showed that a majority of Americans now believe that the Chinese economy is larger than that of the US. This is plain wrong. At the time the poll was taken, the Chinese economy was around half the size of America’s.

It was this kind of scare that took hold in the late 1980s. Japanese investors provoked angst by buying the Rockefeller Centre in New York – and it was Japan that was the world’s largest creditor nation. Continue reading “Wiil China Develop Like US or Japan Did?”

Moderate Muslim Leaders Beat Extremists

In 2005 a man of wisdom and moderation, King Abdullah, formally ascended to the throne and inaugurated a large-scale political and intellectual effort aimed at discrediting the ideology of jihadism. Mullahs were ordered to denounce suicide bombings, and violence more generally. Education was pried out of the hands of the clerics. Terrorists and terror suspects were “rehabilitated” through extensive programs of education, job training, and counseling. Central Command chief Gen. David Petraeus said to me, “The Saudi role in taking on Al Qaeda, both by force but also using political, social, religious, and educational tools, is one of the most important, least reported positive developments in the war on terror.”

Perhaps the most successful country to combat jihadism has been the world’s most populous Muslim nation, Indonesia. In 2002 that country seemed destined for a long and painful struggle with the forces of radical Islam. The nation was rocked by terror attacks, and a local Qaeda affiliate, Jemaah Islamiah, appeared to be gaining strength. But eight years later, JI has been marginalized and main-stream political parties have gained ground, all while a young democracy has flowered after the collapse of the Suharto dictatorship.

Moderate Muslim Leaders Beat Extremists – Newsweek.com.

There’s a new Red Scare. But is China really so scary?

This new Red Scare says a lot about America’s collective psyche at this moment. A nation with a per capita income of $6,546 — ensconced above Ukraine and below Namibia, according to the International Monetary Fund — is putting the fear of God, or Mao, into our hearts.

Recent reports about how China is threatening to take the lead in scientific research seem to ignore the serious problems it is facing with plagiarism and faked results. Projections of China’s economic growth seem to shortchange the country’s looming demographic crisis: It is going to be the first nation in the world to grow old before it gets rich. By the middle of this century the percentage of its population above age 60 will be higher than in the United States, and more than 100 million Chinese will be older than 80. China also faces serious water shortages that could hurt enterprises from wheat farms to power plants to microchip manufacturers.

And about all those engineers? In 2006, the New York Times reported that China graduates 600,000 a year compared with 70,000 in the United States. The Times report was quoted on the House floor. Just one problem: China’s statisticians count car mechanics and refrigerator repairmen as “engineers.”

via There’s a new Red Scare. But is China really so scary? – washingtonpost.com.

Globilization’s Religious Revival

Here’s the indisputable reality: All of the world’s major religions were formed during the Malthusian era of human economics, before the Industrial Revolution shifted Western societies from a subsistence paradigm to questions of how to deal with abundance.

Survival economies demand a strict code, but abundance offers a choice: Do I adapt the ancient rules to this economic liberation or do I reject it as a socially driven moral evil?

Once the “go forth and multiply” logic is disrupted, then long-held strictures regarding marriage, family, sex, homosexuality, and other social institutions are suddenly put in jeopardy. This is where globalization’s economic connectivity generates revolutionary social change, unleashing personal freedom that by historical standards is stunning — even perverse.

The upside, of course, is the commensurate unleashing of personal creativity and innovation, something we’ll need in superabundance for the many resource-utilization challenges that lie ahead.

Globalization divides societies into short-term economic winners and losers, for the simple fact that some people adapt faster than others. The temptation for those who come out on the losing end is an end-times ideology that promises deliverance from these unacceptable circumstances. Such fundamentalism pursued peacefully presents no problem. The faithful simply live apart from the “evil world.”

This is how religion’s fundamentalist variants came to replace communism as the worldwide organizing principle for violent resistance to capitalism’s continued evolution and expansion around the planet.

via WPR Article | The New Rules: West Must Bridge Globalization’s ‘God Gap’.

Goodbye America, Hello China? Think again!

About a quarter of the world's economic output is produced by the United States, whose population is less than a fourth of China's 1.3 billion. So there's a very long way to catch up for a country beset by a variety of Third World problems, from lack of paved roads in many rural areas to water pollution so severe that 700 million people have to drink contaminated water every day, according to the World Bank.

via Goodbye America, Hello China? Think again!- International Business-News-The Economic Times.

For many in Haiti, there’s nowhere to call home

With the looming rainy season and housing proposals coming to disaster-prone Haiti, both government officials and relief workers are in a race against nature to relocate hundreds of thousands of quake victims living in squalid camps prone to flooding. But in their fervent pursuit of rain-resistant shelter, they are finding an old problem quickly becoming a new one: lack of suitable land.

Even before Haiti’s biggest disaster leveled more than 200,000 homes and buildings, land was already a problem in this densely populated nation where the Champs de Mars camp now boasts one person per 53 square feet, instead of the international norm of one person per 484 square feet.

Illegal squatters living on private and government land, often in substandard conditions with nothing more than dirt for a floor, are as much a norm as people spending their life savings in corruption-ridden legal battles over land title.

via For many in Haiti, there’s nowhere to call home – Haiti – MiamiHerald.com.

How America Can Rise Again

Is America going to hell? After a year of economic calamity that many fear has sent us into irreversible decline, the author finds reassurance in the peculiarly American cycle of crisis and renewal, and in the continuing strength of the forces that have made the country great: our university system, our receptiveness to immigration, our culture of innovation. In most significant ways, the U.S. remains the envy of the world. But here’s the alarming problem: our governing system is old and broken and dysfunctional. Fixing it—without resorting to a constitutional convention or a coup—is the key to securing the nation’s future.

via How America Can Rise Again – The Atlantic (January/February 2010).