Saturday, February 9, 2008

US AND RUSSIA: ALTERING EQUATIONS

http://news.bbc.co.uk/2/hi/europe/6726839.stm
http://www.usiofindia.org/frame.htm

Background
With the collapse of the Soviet Union in 1991, the United States stood tall—militarily invincible, economically unrivalled, diplomatically uncontestable, and the dominating force on information channels worldwide. The next century was to be the true “American century,” with the rest of the world moulding itself in the image of the sole .

Surprisingly, a new and increasingly potent multipolar world has surfaced within a decade, in which new powers are challenging different aspects of American supremacy — Russia and China in the forefront, with regional powers Venezuela and Iran forming the second rank primed to erode American hegemony.

Military Misadventures
The phenomenon behind the world evolving in this way so soon is intriguing. The Bush administration’s misadventure in Iraq is clearly a major factor in this transformation, a classic example of an imperialist power over-extending itself. The Iraq fiasco has demonstrated the striking limitations of power of the globe’s highest tech-savvy and most destructive combat machine. In Iraq, Brent Scowcroft, National Security Adviser to two U.S. Presidents, concedes in a recent op-ed, “We are being wrestled to a draw by opponents who are not even an organised state adversary.”

The invasion and occupation of Iraq and the mismanaged military campaign in Afghanistan have crippled the credibility of the United States. The scandals at Abu Ghraib prison in Iraq and Guantanamo Bay in Cuba, along with the widely publicized murders of Iraqi civilians in Haditha, have badly tarnished America’s image. In the latest opinion poll, even in a secular state and member of NATO like Turkey, only 9% of Turks have a “favorable view” of the U.S (down from 52% just five years ago).

Other Factors
Other explanations include the tightening market in oil and natural gas, which has enhanced the power of hydrocarbon-rich nations as never before; the rapid economic expansion of the mega-nations China and India; the transformation of China into a global manufacturing hub; and the end of the Anglo-American duopoly in international television news.

During the 1991 Gulf War, only CNN and the BBC covered Operation Desert Storm. The international TV audience saw the conflict through their lenses. When the Bush administration invaded Iraq, Al Jazeera Arabic, funded by the hydrocarbon-rich emirate of Qatar, broke this duopoly. It relayed images that contradicted the Pentagon’s versions. Soon France 24 came on the air, broadcasting in English and French from a French viewpoint, followed in mid-2007 by the English-language Press TV, which aimed to provide an Iranian perspective. Russia was next in line for 24-hour TV news in English for the global audience. Funding for these TV news ventures came from soaring national hydrocarbon incomes — a factor draining American hegemony not just in imagery but in reality.

Resurgent Russia
Under President Vladimir Putin, Russia has more than recovered from the economic chaos that followed the collapse of the Soviet Union in 1991. After effectively renationalising the energy industry through state-controlled corporations, he began deploying its economic clout to further Russia’s foreign policy interests. In 2005, Russia overtook the United States, becoming the second largest oil producer in the world. Its oil income now amounts to $679 million a day. European countries dependent on imported Russian oil now include Hungary, Poland, Germany, and even Britain.

Russia is also the largest producer of natural gas on the planet, with three-fifths of its gas exports going to the 27-member European Union. Bulgaria, Estonia, Finland, and Slovakia get 100% of their natural gas from Russia; Turkey, 66%; Poland, 58%; Germany 41%; and France 25%. In 2006, the Kremlin’s foreign exchange reserves stood at $315 billion, up from a paltry $12 billion in 1999. In July 2006, on the eve of the G8 summit in St Petersburg, Putin rejected an energy charter proposed by the Western leaders.

The changing relationship between Moscow and Washington too has not gone unnoticed by policy-makers in the hydrocarbon-rich Persian Gulf region. Russia and Gulf Arab countries, once rivals from opposite ideological camps, had found a common agenda of oil, anti-terrorism, and arms sales. The Gulf countries are keen to keep all geopolitical options open, reviewing the utility of the United States as the sole security guarantor, and contemplating a collective security mechanism that involves a host of international players. A strong, more self-confident Russia has become an integral part of changes in the world.

The Hugo Chavez Challenge
Hugo Chavez, While visiting Moscow in June 2007, urged Russians to return to the ideas of Vladimir Lenin. He declared that the Americans don’t want Russia to keep rising and that Russia had risen again as a centre of power and the world needs Russia to become stronger. Chavez finalised a $1 billion deal to purchase five diesel submarines to defend Venezuela’s oil-rich undersea shelf and thwart any possible future economic embargo imposed by Washington. By then, Venezuela had become the second largest buyer of Russian weaponry. By 2006, Venezuela was giving more foreign aid to needy Latin American states than the US.

Chavez vigorously pursued the concept of forming an anti-imperialist alliance in Latin America as well as globally. He strengthened Venezuela’s ties not only with such Latin countries as Bolivia, Cuba, Ecuador, Nicaragua, and debt-ridden Argentina, but also with Iran and Belarus.

Stuck in the quagmire of Iraq and lashed by rocketing oil prices, the Bush administration’s area of manoeuvre has shrunk considerably, when dealing with a rising hydrocarbon power. The reason is the crippling dependence of the United States on imported petroleum which accounts for 60% of its total consumed. Venezuela is the fourth largest source of U.S. imported oil after Canada, Mexico, and Saudi Arabia; and some refineries in the U.S. are designed specifically to refine heavy Venezuelan oil.

China has played an important role in Chavez’s scheme to undermine the USA. During an August 2006 visit to Beijing, he announced that Venezuela would triple its oil exports to China to 500,000 barrels per day in three years, a jump that suited both sides. Chavez wants to diversify Venezuela’s buyer base to reduce its reliance on exports to the US. China’s leaders are keen to diversify their hydrocarbon imports away from the Middle East, where American influence remains strong. Along with a joint refinery project, China agreed to build thirteen oil drilling platforms, supply eighteen oil tankers, and collaborate with the state-owned company, Petroleos de Venezuela S.A, in exploring a new oilfield in the Orinoco Basin in Venezuela.

Rise of the Dragon
In 2007, the dramatic growth of the state-run company Petro China made it second only to Exxon Mobil in its market value among energy corporations. In fact, three Chinese companies made it onto the list of the world’s ten most highly valued corporations. Only the U.S. had more with five. China’s foreign reserves of over $1 trillion have now surpassed Japan’s. With its gross domestic product soaring past Germany’s, China ranks number three in the world economy.China broke new diplomatic ground in 1996 by sponsoring the Shanghai Cooperation Organisation (SCO), consisting of four adjoining countries: Russia and the three former Soviet Socialist republics of Kazakhstan, Kyrgyzstan, and Tajikistan. The SCO started as a cooperative organisation with a focus on countering drug-smuggling and terrorism. Later, the SCO invited Uzbekistan to join, even though it does not abut China. In 2003, the SCO broadened its scope by including regional economic cooperation in its charter. That, in turn, granted observer status to Pakistan, India, and Mongolia — all adjoining China, and Iran which does not. When the U.S. applied for observer status, it was rejected, a setback for Washington, which enjoyed such status at the Association of South-East Asian Nations (ASEAN).

In late 2006, as the host of a China-Africa Forum in Beijing attended by leaders of 48 of 53 African nations, China left the U.S. woefully behind in the diplomatic race for that continent (and its hydrocarbon and other resources). In return for Africa’s oil, iron ore, copper, and cotton, China sold low-priced goods to Africans, and assisted African countries in building or improving roads, railways, ports, hydro-electric dams, telecommunications systems, and schools.

To reduce the cost of transporting petroleum from Africa and the Middle East, China began constructing a trans-Burma oil pipeline from the Bay of Bengal to its southern province of Yunan, thereby shortening the delivery distance now travelled by tankers. This undermined Washington’s campaign to isolate Myanmar. Earlier, Sudan, boycotted by Washington, had emerged as a leading supplier of African oil to China. In addition, Chinese oil companies were competing fiercely with their Western counterparts in getting access to hydrocarbon reserves in Kazakhstan and Uzbekistan.China’s oil diplomacy is putting the country on a collision course with the U.S. and Western Europe, which have imposed sanctions on some of the countries where China is doing business. China and the US are clearly headed into conflict over energy.

China’s rapid industrialisation and modernisation of its military, the test-firing of the country’s first anti-satellite missile, which successfully destroyed a defunct Chinese weather satellite in January 2007, dramatically demonstrated its growing technological prowess. An alarmed Washington had already noted an 18% increase in China’s 2007 defence budget. China’s declared budget of $45 billion was a tiny fraction of the Pentagon’s $459 billion one. Yet, in May 2007, a Pentagon report noted China’s “rapid rise as a regional and economic power with global aspirations” and claimed that it was planning to project military influence farther afield from the Taiwan Straits into the Asia-Pacific region in preparation for possible conflicts over territory or resources.

The American Options
This disparate challenge to American global primacy stems mainly from sharpening conflicts over the planet’s depleting natural resources, particularly oil and natural gas. The growing military commitments too have seen American national resources deployed in avoidable and wasteful adventures. The US will need to rework its global priorities, review afresh its international equations and marshal its tremendous economic potential to retain its position as a super power.

2 comments:

Saurabh J. Madan said...

The article is fascinating; however, I am reminded of the title of a book written by Democratic presidential hopeful Obama. He calls it the 'audacity of hope'. I do believe America has the stuff to bounce back. If only vested interest groups would step back and look towards the interest of the nation, America will bounce right back. I also feel that in this new world, it has a formidable natural ally in India. I remember Mahatma Gandhi’s biography in which he was not allowed to stay in any decent hotel in South Africa because he was a colored man. Finally, one hotel owner gave him a room – and that man was American. Here is wishing the nation all the best.

Anonymous said...

This is a nice overview of the current state of geopolitical affairs.Thank you.