Connect with us

Features

America’s New Cold-War: The Balance Sheet

Published

on

In the long-run, the US cannot contain the rise of China

by Kumar David

A new cold-war has been declared. Mike Pompeo launched the first fusillade on July 23 and formally asked the world to “distrust” China and called for a grouping of nations in an anti-China alliance. He demanded the overthrow of the Chinese state: “The world cannot be safe until China changes . . . the world must change the Chinese Communist Party, or China will change us as is happening in Taiwan, Hong Kong and Xinjiang . . . Xi Jinping is not destined to tyrannize inside and outside China forever, unless we allow it . . . it is time for a new grouping of like-minded nations, a new alliance of democracies”. If ever there was a declaration of cold-war this is it! Phrases used by Pompeo include: “Frankenstein China”, “communist cover-up of the virus”, “distrust and verify” and “securing our freedoms from the Chinese Communist Party is the mission of our time”. The world is engaged in a new strategic ball-game and Sri Lanka will be entangled

The US perspective is consolidation of a ring of military steel round China. In the mind of Trump-Pompeo the technique used to achieve the fall of the USSR can be repeated. The Soviet economy was technologically and managerially backward, the Eastern European regimes were hated, neoliberalism had weakened Soviet power especially defeat in Afghanistan, and the Sino-Soviet split had debilitated communism. The rigid and grossly inept centrally directed economic system was not delivering nor was it up to the challenges of global competition. It was a half rotten low-lying fruit ready to fall. Regan’s star-wars challenge was too pricey to compete against. Gorbachev’s bungling created fissures through which popular uprisings overthrew the regime. But the big difference is that the USSR’s was a sick and hobbled economy, China’s is strong and robust. The pocket book talks louder than the diplomatic megaphone. China’s rise as an economic force is relentless and Asians have adjusted; even those with no affection for Beijing.

Whether Biden-Harris or Trump-Perry win it will make little difference to international policy. (There will be domestic policy differences but don’t hold your breath). There will be no difference in Middle East, trade and China policy. There is bipartisan determination to roll back China. Both Dems and GOP are fearful of its rise to economic supremacy and its climb up the military ladder. Pompeo may be a worst-case cold-war freak but there is bipartisan support for the overthrow the PRC state and using Hong Kong as a Trojan Horse. See video https://youtu.be/2JN2kXxuo58 and article

https://www.chinadailyhk.com/article/139477#National-Security-Law-a-valid-response-to-radicals-who-wished-HKSAR-harm

 

The QUAD strategy

The US and UK are working in collaboration. India is in the game for its own purposes which dovetails into the cold-war QUAD strategy (India, US, Japan and Australia). America is also coordinating a six-nation alliance – QUAD plus Australia and Canada. West Berlin, physically deep in East German territory, was a dagger in the heart of the wounded animal – propaganda, espionage, escape routes. The US-UK approach is to use Hong Kong in the same way. Money is in abundance while propaganda and training flow in through its open borders. But it won’t work because China’s economy is strong, American finance capital in decline. The Communists are moderately popular for material achievements, like pulling 600 million out of poverty. To destroy this state is impossible, but it is possible to make life uncomfortable for Beijing in global hard and soft power stakes.

It is colossally stupid of China to be drawn into skirmishes with India on remote Himalayan glaciers, whoever is right or wrong. After the 1962 fiasco China has no option but to avoid skirmishes even if it has to concede territory. China’s other ailment is again territorial greed; it throws its weight around the South China Sea bullying Vietnam, the Philippines, Malaysia, Indonesia, Japan and tiny Brunei. Geopolitically it is seen in poor light because of aggressive rampaging. Chinese zealots feel they can do no wrong, maybe “If Adam and Eve had been Chinese, we would all still be living in paradise”. If China gets its nose bloodied in these regional encounters I will be pleased. The new security laws to eliminate rioting and treason in Hong Kong was necessary, but repression of Uighur Muslims in Xinjiang is inexcusable. Nevertheless, this cannot be generalised into support for the US cold-war agenda.

For what ungodly reason did China initiate a border war with India in 1962? A dispute over the sovereignty of remote border regions. Even if Mao believed this territory was legitimately Chinese, military action was unforgivable. Initiated by China the war was a huge foreign policy faux pas that bedevils relations to this day. India would not be sucked into the US laid quagmire now but for border conflicts. Indians feel that they cannot shy away from China containment. To add burlesque, India has banned 120 Chinese Apps, even children’s videos, for “strategic” reasons!

The depth of China hate among Indian scholars is on display in this quote: “The People’s Republic of China ruled by the communist party is an evil, inhuman and corrupt political entity, committed only to the expansion of the power and wealth of its leadership” and the writer adds “the leadership is on a mission to become the sole superpower with the rest of the world as vassals the Chinese empire” – Gurvinder Singh (http://www.southasiaanalysis.org/node/2644).

 

Is China cornered?

China’s economic power, aid and development reach outdo America’s; its economic clout is too big and its diplomatic footprint too large for America to contain. It accounts for one-third of global growth; its trade with Asian nations exceeds its trade with any other bloc; its intra-Asian trade is greater than Asian trade with the rest of the world. The West’s share of the global economy is shrinking and will continue to do so. The longer-term disparity is starker. The IMF projects that, by 2024 China’s contribution to global growth would exceed 28%, while that of the US would fall from 13.8 to 9.2%. Huawei stunned America with its stellar leap into the 5G stratosphere. The US produces half-a-million STEM graduates a year, China 4.5 million. The US is pressuring the world to roll back top Chinese technology but is it doable? Can one make water flow upstream?

 

China however is isolated compared to the large compact of states that the US has cobbled together; it needs allies, not only economic ones. Is the dispute with India irreversible, can it draw Vietnam, Indonesia and those on the Belt closer and can it loosen the US grip on Japan and S Korea? Former prime minister Kevin Rudd observed that an official Australian delegation poured “buckets of cold water on participation on contingency planning”. Asia recognises that the poise of the global order has changed and that China’s rise – backed by economic and military capability – must be accommodated. The Philippines and Vietnam have shifted strategy, markedly. China has already achieved parity with the US in several military modernisation areas and is likely to double its nuclear warhead stockpile over the next decade according to a 2020 Pentagon report. Beijing is thinking long-term, as Chinese are wont to do; America’s obsession with quick fixes won’t do. The Chinese will not rule the world one day in the future, but a far more multi-polar order is a certainty within less than a generation.

 

[Next week I will have a follow up on the implication of this new cold war for Sri Lanka and explain why in my view we are overestimating our strategic importance for all players except India]



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Features

Whither the rules-based order?

Published

on

by Andrew Sheng
for Asia News Network

Every day, we are told we must defend the rules-based order. But whose order? What rules? Why should we defend an order if we did not have a say in shaping?

All this is in the realm of politics and geo-politics. The biggest thinker who shaped the current neoliberal order was Austrian philosopher Friedrich Hayek (1899-1992), whose ideas of classical liberalism of freedom, democracy and self-order of markets dominated global relations. Neoliberalism was put into practice in the 1980s, when US President Ronald Reagan and British Prime Minister Margaret Thatcher pushed through the free market philosophy that swept away Keynesian state intervention of the 1950-1970s.

The deeper thinker on the whole question of constitutional law, politics and international order was German jurist Carl Schmitt (1888-1985), whose influence on conservative political circles in almost all the Big Powers has been growing. I only became aware of Schmitt’s work when Noema magazine wrote an editorial on Schmitt’s Nomos of the Earth (1950). Schmitt is controversial, because he essentially wrote the legal basis for Nazism in the 1920s, which accounts for his ostracization (in today’s language “cancelled”) from academic circles for decades.

Schmitt was a brutally realist thinker who explored the legal foundations of European political theory. Schmitt argues that no order can function without a sovereign authority. A state is legally constituted when the politics distinguishes between friend and enemy and when the citizens are willing to fight and die for its identity. The state alone is given the power of violence (and enforcement) by the citizens to enforce the law.

Schmitt is considered an authoritarian supporter, because he saw sovereign power resting ultimately in the Executive (rather than the Legislature or Judiciary) because the sovereign (i.e. the President) decides on the exceptional situation, where he/she must suspend the law because of war or assume emergency powers in order to restore order. Decisions by the Executive are either bound by law or bounded by his or her moral bearings.

The world is today watching on TV whether former President Trump is morally culpable for causing the January 6, 2021 riots, or legally culpable. The Ukraine war is being supported by NATO on a matter of moral principle for a non-member, but if the war escalates to nuclear global destruction that kills all, how do we trade off the individual rights with the collective right of everyone else to survive?

Schmitt dissected the European constitutional laws and international order, dividing them into three phases: pre-1500, 1648 to 1919 (World War I) and thereafter. Before the discovery of America, European powers fought each other under a religious cloak, since the Pope decided on disputes of rights on moral grounds. Indeed, it was the Papal Bulls of 1455 and 1493 that authorized the Portuguese and Spaniards to conquer all lands and seize and enslave Saracens and non-Christians in the Americas, Africa and Asia. The religious rationales comprised the Domination Code whereby Christians can rule over non-Christians and possess their property, as well as the Discovery Code, whereby lands owned by non-believers are treated as terra nullius (empty land), meaning non-Christian indigenous peoples do not have rights.

But when the Dutch and English started fighting with the Portuguese and Spaniards over overseas territories, what was the legal justification? Dutch jurist Grotius (1583-1645) provided the secular rationalisation that discovery alone is not enough, but since there was freedom in the seas, occupation by a sovereign state confirms rights seized through war. Schmitt argued that Jus Publicum Europaeum (European Public Law) emerged after the 1648 Treaty of Westphalia to allow sovereign countries to have the right to go to war based on their own judgement of justice and necessity without interference in each other’s domestic affairs. This changed after the end of the First World War, when the 1919 Treaty of Versailles treated the losing side as criminals, with their rights cancelled or confiscated.

Whilst the Europeans were busily fighting each other, the United States rose in global power and imposed her 1823 Monroe Doctrine that asserted that she has her own sphere of influence, with the right to intervene in Central and South American states. That sphere of influence would spatially cover cultural, economic, military, political and today technology exclusivity beyond legal sovereign borders.

Schmitt was prescient in seeing that where war is fought on the basis of “good versus evil”, in which all rights of the other side are “cancelled” (like the foreign exchange assets of Afghanistan and Russia are frozen or seized), the situation may be an unstable equilibrium. The unstable European security architecture was settled decisively by the United States in two World Wars because of her overwhelming military, economic and industrial power. But in today’s multipolar situation, who decides on the rules of the international order? If both sides accuse the other side as evil and illegitimate, who decides other than the use of arms?

To cut a complex story short, the NATO military alliance, comprising nearly one billion people and 47.3 percent of world GDP (2020), assumes its status quo role as the final arbiter of the “rules-based order”. The problem is that BRICS countries, plus Indonesia have 3.5 billion population with one quarter of world GDP in market terms (25.6%). However, on GDP PPP terms, they are near parity with NATO and therefore may have their own views on the international order. What if the larger non-Western countries want their own version of the Monroe Doctrine?

The moral principle that all of us should live peacefully on one planet should override sovereign nations fighting over power and ego from turf to space, when humanity could be burned by climate warming or nuclear war. For Nomos (or order) of the Planet, rather than the Earth, we should all rationally cooperate. If we truly believe in democracy, can the eight billion people in the world vote on the rules-based order, or do we still leave it to G-7?

No order is stable without true legitimacy. How to achieve that order remains an open question.

Continue Reading

Features

Scarcity, prices, hoarding and queuing

Published

on

By Usvatte-aratchi

We live in a scarcity economy and will do so well into 2024, past the next Presidential elections if it comes then; it may not. (The new minister may open bets.) All economies are scarcity economies; otherwise, there would be no prices. We also live in plentiful economies; look at the streets of Tokyo, Shanghai, Singapore, Paris or San Francisco during day or night. Scarcity is a relative term, as most terms are. A scarcity economy is one where prices rise relentlessly, where cigarettes are more expensive in the evening than they were the same morning. Scarcity economies will have two or more sets of prices: one official, others in markets in varying shades of grey until black. Scarcity economies are where everyone (producers, traders, households) hoards commodities, hoards everything that can be hoarded, at reasonable cost. Scarcity economy is one where productivity is lower than it was earlier, where both labour and capital idle. Scarcity itself may push down productivity. Observe thousands of people standing in queues to buy all kinds of things whilst producing nothing. That is labour idling. Others hang on to dear life in crowded trains arriving in office late to leave early, to get to ill lit homes where to cook each evening they repeat what their ancestors did millions of years ago to light a fire. Money is one commodity that can be hoarded at little cost, if there was no inflation. The million rupees you had in your savings account in 2019 is now worth a mere 500,000, because prices have risen. That is how a government taxes you outside the law: debase the currency. In an inflation afflicted economy, hoarding money is a fool’s game.

The smart game to play is to borrow to the limit, a kind of dishoarding (- negative hoarding) money. You borrow ten million now and five years later you pay 500 million because the value of money has fallen. US dollars are scarce in this economy. It is hoarded where it can wait until its price in Sri Lanka rises. Some politicians who seem to have been schooled in corruption to perfection have them stored elsewhere, as we have learnt from revelations in the international press. Electricity is not hoarded in large quantities because it is expensive to hoard. Petrol is not hoarded very much in households because it evaporates fast and is highly flammable. That does not prevent vehicle owners from keeping their tanks full in contrast to the earlier practice when they had kept tanks half empty (full). Consequently, drivers now hoard twice as much fuel in their tanks as earlier. Until drivers feel relaxed as to when they get the next fill, there will be queues. That should also answer the conundrum of the minister for energy who daily sent out more bowser loads out than earlier, but queues did not shorten.

As an aside, it is necessary to note that the scarcity economy, which has been brought about by stupid policies 2019-2022, and massive thieving from 2005 is partly a consequence of the fall in total output (GDP) in the economy. Workers in queues do not produce. The capital they normally use in production (e.g. motor cars, machines that they would otherwise would have worked at) lie idle. Both capital and labour idle and deny their usual contribution to GDP. Agriculture, industries, wholesale and retail trade, public administration, manufacturing and construction all of which have been adversely affected in various ways contribute more than 75% of total GDP. Maha (winter crop) 2021-22, Yala (spring crop) 2022 and Maha 2022-23 and fishing are all likely to have yielded (and yield) poor harvests. Manufacturing including construction are victims of severe shortages in energy and imported inputs. Wholesale and retail trade which depend directly on imports of commodities have been hit by the sharp drop in imports. Tourism, which is more significant in providing employment and foreign exchange, collapsed dreadfully since late 2019 and has not recovered yet. About 16 percent of our labour force work in the public sector. They have failed to contribute to GDP because they did not engage in productive work due to variegated reasons. Teachers were on strike for two months in 2021. In 2022, so far government employees have worked off and on. Wages of government employees are counted as contributions to GDP, by those that make GDP estimates. However, here is an instance where labour was paid but there was no output equal to the value of those wages. Such payments are rightly counted as transfers and do not count to GDP. For these reasons estimates of GDP for 2021 must be well below the 2020 level. The 3.6 growth in official estimates is unlikely. The likely drop in 2022 will be roughly of the same magnitude as in 2021. These declines are not dissonant with misery one sees in towns and the countryside: empty supermarket shelves, scant supplies of produce in country fares, scarce fish supplies, buses idling in parks and roads empty of traffic. There have been warnings from our paediatricians as well as from international organisations of wasting and probable higher rates of child mortality. It is this sort of sharp fall in wellbeing that engenders the desperation driving young and ambitious people to obtain passports to seek a living overseas. You can see those from mezzo-America amassed on the southern border of US. Will our young men and women end up beyond the wall of China?

Of this lowered supply of goods and services, this society is expected to pay a massive accumulated foreign debt. (Remember the reparation payments in the Versailles Treaty). In real terms it will mean that we forego a part of our lower incomes. Do not miss this reality behind veils of jargon woven by financial analysts. It is not something that we have a choice about. That is where international help may kick in. Gotabaya Rajapaksa government after much senseless dilly dallying has started negotiations with the IMF. There is nobody compelling our government to seek support from IMF. They are free go elsewhere as some who recently were in their government still urge. Examine alternatives and hit upon an arrangement not because it permits the family grows richer but because it will make life for the average person a little less unbearable.

If prices are expected to rise people will seek resources to hoard: money to buy commodities, space and facilities to hoard, security services to protect the property and much more. Rice producers cannot hoard their product because animals large as elephants and small as rodents eat them up. Because of the unequal distribution of resources to hoard, the poor cannot hoard. In a scarcity economy, the poor cannot hoard and famines usually victimise the poor, first and most. If prices are expected to fall, stocks are dishoarded to the market and prices fall faster and deeper. In either direction, the rate at which prices change and the height/depth of the rise/fall depends on the speed at which expectations of change in prices take place. A largescale rice miller claims he can control the price of rice at a level that the government cannot. His success/failure will tell us the extent of his monopoly power.

When commodities are scarce, in the absence of a sensible system of coupons to regulate the distribution, consumers will form queues. A queue is rarely a straight here, nor a dog’s tail (queue, in French, is a dog’s tail which most often crooked). Assembled consumers stagnate, make puddles and sometimes spread out like the Ganges, with Meghna, disgorges itself to the Bay of Bengal. They sometimes swirl and make whirlpools and then there is trouble, occasionally serious. There is order in a queue that people make automatically. To break that order is somehow iniquitous in the human mind. That is why breaking the order in a queue is enraging. For a queue to be disobeyed by anyone is infuriating, and for a politician to do so now in this country is dangerously injurious to his physical wellbeing.

The first cause of rising prices, hoarding and queues is the scarcity of goods and services in relation to the income and savings in the hands of the people.

Continue Reading

Features

Terror figuring increasingly in Russian invasion of Ukraine

Published

on

In yet another mind-numbing manifestation of the sheer savagery marking the Russian invasion of Ukraine, a shopping mall in Ukraine’s eastern city of Kremenchuk was razed to the ground recently in a Russian missile strike. Reportedly more than a hundred civilian lives were lost in the chilling attack.

If the unconscionable killing of civilians is a definition of terrorism, then the above attack is unalloyed terrorism and should be forthrightly condemned by all sections that consider themselves civilized. Will these sections condemn this most recent instance of blood-curdling barbarism by the Putin regime in the Ukrainian theatre and thereby provide proof that the collective moral conscience of the world continues to tick? Could progressive opinion be reassured on this score without further delay or prevarication?

These issues need to be addressed with the utmost urgency by the world community. May be, the UN General Assembly could meet in emergency session for the purpose and speak out loud and clear in one voice against such wanton brutality by the Putin regime which seems to be spilling the blood of Ukrainian civilians as a matter of habit. The majority of UNGA members did well to condemn the Russian invasion of Ukraine close on the heels of it occurring a few months back but the Putin regime seems to be continuing the civilian bloodletting in Ukraine with a degree of impunity that signals to the international community that the latter could no longer remain passive in the face of the aggravating tragedy in Ukraine.

The deafening silence, on this question, on the part of those sections the world over that very rightly condemn terror, from whichever quarter it may emanate, is itself most intriguing. There cannot be double standards on this problem. If the claiming of the lives of civilians by militant organizations fighting governments is terror, so are the Putin regime’s targeted actions in Ukraine which result in the wanton spilling of civilian blood. The international community needs to break free of its inner paralysis.

While most Western democracies are bound to decry the Russian-inspired atrocities in Ukraine, more or less unambiguously, the same does not go for the remaining democracies of the South. Increasing economic pressures, stemming from high energy and oil prices in particular, are likely to render them tongue-tied.

Such is the case with Sri Lanka, today reduced to absolute beggary. These states could be expected ‘to look the other way’, lest they be penalized on the economic front by Russia. One wonders what those quarters in Sri Lanka that have been projecting themselves as ‘progressives’ over the years have to say to the increasing atrocities against civilians in Ukraine. Aren’t these excesses instances of state terror that call for condemnation?

However, ignoring the Putin regime’s terror acts is tantamount to condoning them. Among other things, the failure on the part of the world community to condemn the Putin government’s commissioning of war crimes sends out the message that the international community is gladly accommodative of these violations of International Law. An eventual result from such international complacency could be the further aggravation of world disorder and lawlessness.

The Putin regime’s latest civilian atrocities in Ukraine are being seen by the Western media in particular as the Russian strongman’s answer to the further closing of ranks among the G7 states to the Russian invasion of Ukraine and the issues growing out of it. There is a considerable amount of truth in this position but the brazen unleashing of civilian atrocities by the Russian state also points to mounting impatience on the part of the latter for more positive results from its invasion.

Right now, the invasion could be described as having reached a stalemate for Russia. Having been beaten back by the robust and spirited Ukrainian resistance in Kyiv, the Russian forces are directing their fire power at present on Eastern Ukraine. Their intentions have narrowed down to carving out the Donbas region from the rest of Ukraine; the aim being to establish the region as a Russian sphere of influence and buffer state against perceived NATO encirclement.

On the other hand, having failed to the break the back thus far of the Ukraine resistance the Putin regime seems to be intent on demoralizing the resistance by targeting Ukraine civilians and their cities. Right now, most of Eastern Ukraine has been reduced to rubble. The regime’s broad strategy seems to be to capture the region by bombing it out. This strategy was tried out by Western imperialist powers, such as the US and France, in South East Asia some decades back, quite unsuccessfully.

However, by targeting civilians the Putin regime seems to be also banking on the US and its allies committing what could come to be seen as indiscretions, such as, getting more fully militarily and physically involved in the conflict.

To be sure, Russia’s rulers know quite well that it cannot afford to get into a full-blown armed conflict with the West and it also knows that the West would doing its uttermost to avoid an international armed confrontation of this kind that could lead to a Third World War. Both sides could be banked on to be cautious about creating concrete conditions that could lead to another Europe-wide armed conflict, considering its wide-ranging dire consequences.

However, by grossly violating the norms and laws of war in Ukraine Russia could tempt the West into putting more and more of its financial and material resources into strengthening the military capability of the Ukraine resistance and thereby weaken its economies through excessive military expenditure.

That is, the Western military-industrial complex would be further bolstered at the expense of the relevant civilian publics, who would be deprived of much needed welfare expenditure. This is a prospect no Western government could afford to countenance at the present juncture when the West too is beginning to weaken in economic terms. Discontented publics, growing out of shrinking welfare budgets, could only aggravate the worries of Western governments.

Accordingly, Putin’s game plan could very well be to subject the West to a ‘slow death’ through his merciless onslaught on the Ukraine. At the time of writing US President Joe Biden is emphatic about the need for united and firm ‘Transatlantic’ security in the face of the Russian invasion but it is open to question whether Western military muscle could be consistently bolstered amid rising, wide-ranging economic pressures.

Continue Reading

Trending