Puppets Turning Against Puppet Masters

November 18, 2010 at 10:35 am | Posted in International Relations, Political Economy, World Politics | Leave a comment
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If the failure of President Obama to wrest any meaningful concessions from the major economies at the G-20 summit in Seoul underlined the incoherence of US economic policy–with many economists admitting that a weaker US dollar would not increase employment–Afghan President Hamid Karzai’s sharp criticism of US military policies underline the incoherence of its occupation of Afghanistan.


As the almost decade-long occupation has failed to pacify the insurgency which is, in fact gathering such steam that NATO forces are transporting Taliban leaders to Kabul to meet with the Karzai regime to negotiate a cease-fire, the US commander in Afghanistan escalated night-time raids to about 200 a month–more than 6 times the level 18 months ago. Whereas US Special Operations forces were carrying out an average of 5 raids a night as recently as last July, in the three months before November 11, they were conducting an average of 17 raids a night leading to the death or capture of 368 ‘insurgent leaders’ and the death of 968 ‘other insurgents’ and the capture of an additional 2,477 according to NATO sources. ”Many Afghans see the raids as a flagrant, even humiliating symbol of American power,” some New York Times correspondents reported, “especially when women and children are rousted in the middle of the night.”


Finally, last Saturday, in an interview with the Washington Post, President Karzai sharply criticized the massive increase in night-time raids and said that US and NATO failure to respect the sanctity of Afghan homes was fuelling the insurgency. Karzai turning against his US patrons is ironic since he was parachuted into the Afghan presidency precisely because he was seen as a complaint figure. And indeed, in his first appearance as the Afghan Interim President before the US Senate Foreign Relations Committee, we sat like a minor provincial satrap while the Senators sat on an elevated platform and quizzed him as one would an errant schoolboy


But as the occupation continues, for his own survival he recognizes that he has to assert some autonomy from the incoherent military policies of the Occupation forces. Though he holds office only at the pleasure of the United States–his recent “electoral” win was questionable and in any case the Afghan armed forces are no match for the insurgents–he knows that the US cannot forsake him as they have no other ‘leader’ in the wings to take over. Thus, last April when he was pressured by the US to reform his administration, he even brazenly threatened to “join” the Taliban!

What is perhaps more surprising, given Karzai’s earlier protests against US policies, is that General Petreus could only respond by registering his “astonishment and disappointment” at Karzai’s pointed criticism. What is astonishing about noting that the killing of civilians, the rousing of women and children in the dead of the night, the violation of the sanctity of private homes is a humiliating reminder of the powerlessness of the Afghans, and that continued humiliations fuels the insurgency?

Appearing before the British parliament’s foreign affairs committee, Sir Sherard Cowper-Coles who served two terms as ambassador to Afghanistan, said that army commanders who told their superiors that the military strategy was not working were told to make their reports more optimistic and that the Afghan government was much less popular in the country’s south than the Taliban who were seen as ”a fairer, more predictable alternative than a corrupt and predatory government.”

Afghanistan is not merely a military quagmire from which a face-saving exit is now almost impossible, but it is also turning to be a bottomless money pit. One recent audit found that between 2007 and 2009, the Pentagon, the US Agency for International Development, and the US State department gave $18 billion to some 7000 contractors and that they cannot account for much of this money or to whom it was given! Other reports show that police stations, hospitals, schools and other buildings that were to have been constructed were so badly built that they are unusable. Louis Berger, a New Jersey construction firm, was assessed a fine of $69.3 million in fines for overbilling the government for things like a music system in its Washington DC offices for money that were to have been for reconstruction in Afghanistan!

Circle of Democracy?

November 3, 2010 at 9:03 pm | Posted in democracy, international relations, Political Economy, world politics | Leave a comment
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President Obama’s 10-day trip to Asia this month comes at a time of increased tensions between China and its neighbors in East Asia over off-shore territories and increased military spending by the Chinese government. This has provided the US government with a wedge to ‘re-engage’ with Asia and promote a ”circle of democracy” between India, Indonesia, Japan, South Korea, and the United States. ‘Democracy’ is a warm fuzzy word that is hard to oppose but a closer examination of the nascent alliance is disconcerting

Territorial disputes in the South China were cast in sharp relief in early September when a Chinese fishing trawler fishing along the coasts of Senkaku Islands (called Diaoyu in Chinese and claimed by Japa, Taiwan, and China) collided with Japanese Coast Guard vessels. The hawkish Japanese Minister of Land, Infrastructure, Transport, and Tourism. Maehara Seiji ordered the Coast Guard to arrest the captain of the Chinese trawler, Zhan Qixiong. Maehara’s actions may have propelled him to the Foreign Ministry within a fortnight of this incident, but his hawkishness prompted a vigorous Chinese response. They cancelled, as Peter Lee notes, scheduled bilateral talks on undersea oil and gas exploration and airline flights. Travel agents were instructed not to accept reservations by Japanese tourists and embargoed exports of rare earth oxides to Japan as well as detaining four employees of a Japanese firm on charges of espionage. Eventually, the Japanese Prime Minister had to step in and order the release of Captain Zhan. However, humiliating this incident may have been to Japan, it provided a windfall to the United States as China’s neighbors were increasingly alarmed by Beijing’s willingness to use its military and economic clout to advance its interests.


This disquiet among the small East and Southeast Asian states was aggravated by rising Chinese military expenditures–though these are still far smaller than US outlays on the military. Nevertheless, the expansion of the Chinese navy and the fact that China now has an aircraft carrier under construction has raised concerns amongst its neighbors and Vietnam is now seeking closer relationships with its old adversary–the United States. Vietnam is also concerned by Chinese dam constructions that could limit the flow of water downstream to the Mekong River–and the US has exploited the opportunity by creating a Lower Mekong Initiative.


Meanwhile, after having initially made some overtures to China, the Obama White House change tack and adopted an increasingly antagonistic posture to China: even though the United States refused to commit to greenhouse gas emission limits, it demanded that China give up the favorable terms it had secured in the Kyoto Protocol. It demanded that China sacrifice its energy security and enlist in a Western crusade against Iran. And it is being pressured to appreciate its currency to resolve US current account deficits.


This set the stage for the United States to forge an alliance in Asia with India, Indonesia, Japan, and South Korea–and despite protestations to the contrary, all alliances are against another power–and in this case, China. Dubbed the ‘circle of democracy,’ it is attractive to Japan and South Korea–two American client states without a strong military presence–and cautious of China flexing its muscles; to Indonesia which has a large Chinese minority that has been persecuted, most notably in 1950, in 1965-67, and again in 1997-98; and to India seeking a global role. Rhetorically, it is billed as an alliance of democracies ringing an ‘authoritarian’ state.

Democracy is a warm, fuzzy word and one can no more be against democracy than against a teddy bear! And yet, democracy masks a variety of practices–mere electoral democracy does not translate into substantive rule of the people. In the United States, elections have become so expensive that politicians are deep in the hock to moneybags and hence there is little difference between the two parties. In India, it has not translated into power to the people, and more recently even the freedom of the press has come under attack, especially in Maharashtra by the Shiv Sena where they pressured the Vice Chancellor of Bombay University to withdraw Rohinton Mistry’s book, Such a Long Journey, from the prescribed list of books even though neither the protesting Sainiks nor the Vice Chancellor had read it!

For the US, President Obama’s visit to India has a clear objective: to sell advanced fighter planes and other arms to India–along with India’s indigenously developed aerial reconnaissance capabilities (AWACS), it will allow India to project its power regionally in support of US objectives–but not to seriously obstruct the United States. The US economy, despite projected Indian purchases of planes and weaponry remains weak and unable to sustain its imperial role. Its unparalleled nuclear capabilities have been shown to be useless in the wars in actually has to fight–in Iraq and Afghanistan. The Indian Ocean is a crucial trade route–some 70 percent of the world’s oil passes through it and a large and growing part of world trade. And it is a arena where the Chinese are increasingly active–building naval base in Gwadar in Pakistan near the Straits of Hormuz and building alliances with Sri Lanka, Bangladesh, and Mauritius, Here, the US seeks to court India as a subordinate ally–and last year US forces trained more with the Indian military than with the militaries of any other state–to perform ‘low end activities’ for the US: search and rescue, humanitarian assistance, disaster relief. high-value cargo escort–so that the US can concentrate on the ‘high-end’ activities.

Obama’s India Visit

November 1, 2010 at 8:05 am | Posted in Political Economy | Leave a comment
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Projections that the Republicans will make substantial gains in the midterm elections add significance to President Barack Obama’s visit to India during the Diwali weekend. The visit was to focus on two issues: the economy and geopolitics.


To underline the importance of economics and to tap into India’s growing market, President Obama–unlike the four other US presidents who have visited India–will begin his visit in Mumbai, the country’s business capital and will spend more time there than in New Delhi. He is also bringing with him a bevy of some 250 CEOs of US corporations as the US seeks increased access to Indian markets not only for the large transnational corporations but also for small- and medium-scale enterprises. Reflecting domestic US concerns about outsourcing jobs to India, unlike his immediate two predecessors, President Obama will not travel to the information technology centers of Hyderabad and Bangalore. And, because so many in the US continue to believe that their president is a Muslim, despite all evidence to the contrary, President Obama has also eschewed a visit to the holiest of Sikh gurdwaras–the Golden Temple in Amritsar–as he would have to cover his head and this may be construed by the rabid right-wing in the United States as him being Muslim!


While Indian capitalists bristle at allegations that they use unfair trade practices to take jobs away from Americans and resent restrictions placed on the employees they can send to the US, they are also more closely linked to the United States than ever before. For one thing–partly to ensure access to high-level contacts–they have been making substantial donations to US universities. Ratan Tata donated $50 million to Cornell University in 2008 and followed it up with a $50 million donation to the Harvard Business School last month–the largest international private donation in the institution’s 102-year history. Several other Indian industrialists–Nandan Nilekani, Anand Mahindra. N. R. Narayana Murthy, among others–have made substantial donations to US universities–and strikingly none to more cash-strapped Indian institutions of higher learning.

Apart from seeking access to US policy makers, these donations reflect close family relationships with US universities–many of the industrialists and their children have studied in the universities that are now the recipients of their largesse. Indeed, most Indian middle- and upper-class families have relatives now living in the US, most of them working in the software, financial, and engineering sectors and fully supportive of US policies. Perhaps the most indicative sign of the growing influence of US “soft” power was the recruitment of Washington Redskins cheerleaders to provide a model for Indian cheer leaders in that most un-American game: cricket (though cricket was once the preferred bat-and-ball game among colonists in what is now the US!). And shamefully, India was only one of three countries–the others being Israel and the United States–where there was popular support for the US-led invasion of Iraq in 2003.

This congruence of strategic interests gains added significance in the light of likely Republican gains in the US midterm elections. Many Republicans have expressed their opposition to ‘nation-building’ exercises in Afghanistan and yet a resolution to the ongoing problems in Afghanistan continues to be elusive. Just last week, a joint raid on opium producing facilities by NATO, the Russians, and the Afghan Interior Ministry’s Counter-Narcotics Police Sensitive Investigative Unit and National Interdictive Unit was denounced by President Hamid Karzai as “a blatant violation of Afghanistan’s sovereignty.”

Leaving aside, Karzai’s chutzpah, India is an obvious partner to the US in Afghanistan: it is already the largest regional donor to Afghanistan and is eager to increase its role there to gain “strategic depth” against Pakistan and to emerge as a regional power. Republican opposition to foreign aid also provides an opportunity for India to step up its aid to Africa and show that it is more than a regional power–that its tentacles spread beyond the South Asian region. Of course, it is deeply ironic that the Indian government is stepping in to provide aid to Africa when not only do many Indian states fall below many African states in the Global Hunger Index but many Indian companies are now buying land or leasing land in Africa to export crops back to India. Surely, for sheer immorality, exporting food from an chronically food-deficient continent cannot be beaten. But such ironies are lost on the policy-making establishments!

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For the Indian government, partnership with the United States is essential for India’s emergence as a global power–though what that says about the nature of its ‘global power’ if such status depends on another (the US) is never discussed! For the United States, given its enduring difficulties in Afghanistan and Iraq, and a continued economic downturn at home, India provides a counterweight to China. President Obama had come to office seeking a strategic partnership with China and last year, in his first visit to Asia after assuming office, his speech on Asian Security in Tokyo did not even mention India–a factor which probably led to him having Prime Minister Manmohan Singh as guest for his first state dinner at the White House.

Since then, increasing difficulties with China, and China’s assertive stance towards its neighbors and a brief stoppage in the export of rare earths to Japan, the US, and increasing Chinese incursions into the Indian Ocean have shifted US foreign policy perceptions. Hence, it is now willing to sell advanced weaponry to India to cement ties between the two countries and of course to boost the US domestic economy.While the Indian political leadership welcomes these initiatives, what they would most like to see is unambiguous and strong US support for a seat as a permanent member of the UN Security Council. This is unlikely, though President Obama may sponsor India’s membership in the Nuclear Supplier’s Group (NSG) formed by an angry US administration in 1974 after India’s first ‘peaceful’ nuclear explosion to deny India dual-use nuclear technology.


Shifting Geopolitical Sands

October 22, 2010 at 8:43 pm | Posted in Political Economy | Leave a comment
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Two events this week–Chinese overtures to a Turkey that had angrily reacted to Beijing’s suppression of Uyghur protests in Xinjiang last year and NATO’s invitation to Iran to attend security briefings on Afghanistan–are indicative of major ongoing geopolitical shifts. After the Second World War, as the United States rose to a position of world hegemony and European colonial empires were dissolved, new geopolitical regions were created–Middle East, South Asia, Southeast Asia, East Asia, etc–while older geopolitical regions–Central Asia, Central Europe, etc–were erased by the fissures of the Cold War. The new post-Second World War regionalizations often violated long historical connections–as between South Asia and the Middle East on the one hand, and between South Asia and Southeast Asia on the other. Again, the Middle East was cordoned off from Central Asia (then under Soviet rule) while China was walled off from US client states in East Asia and from Southeast Asia. In East and Southeast Asia, by the early 21st century, these Cold war divides have been replaced by greater regional integration that more closely resemble the pre-capitalist Sino-centered tributary trade system as Mark Selden has recently argued.

On the Western frontiers of Asia, the increasing prominence of Turkey, India, and Iran suggest a similar realignment of forces that resemble earlier alliances between the Ottomans and the Mughals, though in a vastly changed geopolitical ecology.

Since it came to power in the elections of 2002, the Justice and Development Party (or AKP–its acronym in Turkish) has broken partly with the Kemalist republic’s orientation to the West to leverage its multiple regional identities–as a Balkan, Black Sea, Caspian, Central Asian, European, and Mediterranean state–to become a regional and global power. Rather than brusquely disavow its pro-Western stance, Ahmet Davutoglu, the party’s chief foreign policy expert and now the Foreign Affairs Minister, advocated a “zero problems with neighbors” policy.


Defly exploiting the street cred it acquired by refusing US troops permission to pass through its territory for the invasion of Iraq, Ankara began to mediate between Syria and Israel till the brutal Israeli assault on Gaza in Operation Cast Lead caused Turkey to break off the talks. Turkey’s steadfast support to the Palestinians has won it the support of Arabs, especially since President Hosni Mubarak of Egypt is 82 and less active and the veteran Saudi foreign minister Saud al Feusal allegedly has Parkinson’s disease. Relations with its neighboring states has also been strengthened since the financial crisis beginning in 2008 which led to falls in Turkish exports to the EU and to a rise in its exports to its eastern neighbors.

Prime Minister Recep Tayyip Erdogan and Davutoglu engaged in shuttle diplomacy between Tiblisi and Moscow as Russian troops intervened on behalf of South Ossetia and Abkhazia in 2008 during a brief war. Ankara has also promoted a series of meetings between Serbia, Croatia, and Bosnia.


More crucially, along with President Lula of Brazil, Erdogan has intervened in the dispute between the US and its allies and Iran over the latter’s nuclear energy program. Equally importantly, in November 2008, Davutoglu became in November 2009, the first high-level Turkish official to visit to the Kurdish Regjonal Government in northern Iraq which is akin to an Indian foreign minister visiting Pakistan-occupied Kashmir.

Meanwhile, India has emerged as the largest regional donor of reconstruction aid to Afghanistan, Relations between India and Afghanistan had been close till the Taliban captured power in 1996. Now, the US occupation forces and India share a common goal in eliminating Islamic extremists and it is telling that Pakistan was not invited to the high-level NATO security briefing that was attended by Iran. In large part, this is the result of the US promoting India as a regional counter-weight to China but also in part due to the relationship between the Pakistani military and intelligence services with the Taliban and al-Qaeda. The US is also courting India to provide a counter-weight to Iran.

Despite Iranian President Mahmoud Ahmedinejad’s vocal opposition to Israel’s brutal oppression of the Palestinians and to US policies more generally, Iran’s growing influence in Iraq and Afghanistan where US forces are bogged down in a war they cannot win implies that the US can only extricate their forces with Iranian cooperation or an entire region with much of the world’s proven oil reserves will endure decades of political instability.

When much attention has been focussed on regional integration in east and southeast Asia, the developments sketched here suggest that there is a parallel re-emergence of regional linkages between west and south Asia. This suggests that the geopolitical regions of the world are being reshaped with much of East and Southeast Asia being reoriented towards China, while Turkey, India, and Iran are emerging as important regional powers in a re-contoured ‘geographical pivot of history,’



Outsourcing and Currency Wars

October 10, 2010 at 4:59 pm | Posted in Political Economy | Leave a comment
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The US Department of Commerce reports that in the last two years, the number of employees of foreign affiliates and subsidiaries of US firms grew by 729,000 while these firms cut some 500,000 jobs domestically over the same period.


Candidates of both major parties lay the blame for this on the Chinese government intervening in currency markets to keep the value of the renminbi artificially low and thereby gain an unfair advantage against US workers as companies ship manufacturing operations off-shore to take advantage of wage differentials.

But the emphasis in this argument is misplaced. In the first instance, manufacturing jobs have been disappearing from the United States for several decades. The Bureau of Labor Statistics reports that in September 2010 alone, more private sector jobs were created in the United States than in the entire 8 years of the George W. Bush Administration.


More significantly, a look at China’s trade statistics reveals that its huge current account surpluses with the US and the European Union is counterbalanced by substantial deficits with its East and Southeast Asian neighbors. Indeed, components and intermediate goods dominate intra-Asian trade and China has emerged as a assembly point for parts manufactured elsewhere. This implies that any appreciation of Chinese currency could mean that China could import more intermediate goods and thereby offset any gains that might accrue to US producers from the higher value of Chinese wages. There is also no guarantee that manufacturers wont shift jobs to other low wage countries like Laos, Cambodia, or Vietnam if Chinese wages increase

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