[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] A [/yt_dropcap] new distribution of the strategic, geoeconomic, military and political potentials is currently taking place in the world. Hence we must orient these new mechanisms towards a peaceful, homogeneous and stable development of the world market and the world system. Otherwise – and once again there are signs of a possible war – our global system will collapse without producing practicable alternative options.
The fault lines of this new world order – much different from the one set by the United States after the end of the Soviet hegemony over the Third World – are mostly shaped by the large regional alliances.
Currently war is waged to conquer fault lines, border areas, the Rimland.
Suffice to think of the Asia Pacific Economic Forum (APEC), set up in 1989 and now joining 21 countries, including China and the United States, in addition to Japan, which is the gateway for the economic integration of the Asian-Pacific region – an area with a very high economic and strategic potential at world level.
Or we can mention the Association of South East Asian Nations (ASEAN), founded in 1967 and now counting eleven members, which is the main bridge between Asia and Europe and partly overlaps with APEC in terms of membership.
Nor can we forget the Council of Arab Economic Unity (CAEU), created in 1964 by eighteen African and Arab countries to foster regional economic integration.
We must also mention the Caribbean Community (CARICOM), established in 1973 and based on the European Single Market model, which may even be turned into a political union, according to the plan already adopted by the Member States, which will be implemented between 2018 and 2020. Nor should we forget the Economic Community of West African States (ECOWAS), founded in 1975 and currently turned from an economic integration instrument into a mechanism of institutional and political reform – in this connection, suffice to think of the role played by ECOWAS in the recent coup in Ghana.
We should also mention NATO, but this topic will be analyzed later. Finally it is worth recalling the Southern African Development Community (SADC), founded in 1992 as regional common market for its eleven Member States, but currently also turned into an instrument for the political transformation of the region.
These are economic alliances established to take advantage of globalization by offering cheap labour and a series of infrastructure and, at the same time, resist globalization by blocking the inevitable attempts of each State to resort to the “beggar thy neighbour” rule.
They are all regional alliances established in previously dishomogeneous areas in terms of geopolitical loyalty, type of development, economic potential, as well as relations with the European countries or the United States.
This means that all the abovementioned alliances are alliances of the Rimland, of the peripheral areas surrounding the real geopolitical masses: the Sino-Russian Heartland, with the Indian and Iranian appendices towards the Greater Middle East, and the Eurasian appendix towards the European peninsula; Africa, and the Pacific peripheral areas, not surprisingly with many crossed economic alliances; finally, the United States and Canada with the Latin American appendix.
China wants to achieve hegemony over the Pacific, but it has difficulties in having access to that ocean. The Russian Federation records economic and strategic differences among its wide regions. Europe is deciding to fall apart, by favouring both the United States and Russia at the same time. India is planning a geopolitical future as hegemonic power over the Himalayan region and as global power broker on all Asian seas, in connection with the Mediterranean.
The Mare Nostrum, the future global hub, is in the hands of the most radical destabilizers, torn between jihad and counter-jihad, between increasingly weak nation-States and mass Islamic militants of “the sword jihad”.
Finally, a new sequence of trade and economic wars is shaping within this classic geopolitical system.
In the recent Davos Forum, Xi Jinping rightly said that “no one has to gain from trade wars.”
China exports to the United States more than the latter exports to China.
Hence none of the two has to gain from a trade war, but it is likely that the United States would lose more.
And China mainly controls the global chains of components, which are currently worth 80% of the whole global flow of goods.
Suffice to consider the fine electronics sector.
In fact, it was the quick fall in transport prices which enabled the large global companies to split the supply chains among various countries, many of which belonging to networks and associations of which we have already spoken.
Therefore the Rimland is no longer such and it is creating relations with the countries which define their primary productions: the South East Asian network reaches up to China and partly to India; the Middle East is joining the Sino-Russian axis (Iran) or the North-African one; Latin America will find itself divided between the United States, the European Union and China, which wants to unite the two Pacific shores.
A trade war between China and the United States, with the creation of symmetric trade barriers, would generate strong inflationary pressure in the United States, followed by a Federal Reserve’s policy which shall gradually raise interest rates more than the US economy needs.
The solution could be a new bilateral commercial treaty between the United States and China, which would enable the US companies to gain access to the huge Chinese market and would also enable China to increase its direct investment in the US market.
It is worth noting that America has large trade deficits with most of its trading partners in Asia – the Vietnamese surplus with the United States alone accounts for 15% of the Vietnamese GDP.
Probably, in the near future, President Trump will decide to revise trade relations also with India, Indonesia and Malaysia, but certainly a country that currently runs so large trade deficits, such as the United States, is highly vulnerable to any kind of economic warfare attack.
The Euro and the European Union have suffered – and are still suffering – from monetary and trade wars which are easy to predict: Greece’s persisting crisis, which will lead the European Union to lose its strategic Southern flank, to the benefit of Russia, China, Saudi Arabia and Turkey; “the spread war” between France and Germany – not to mention Italy’s decline and the new Spanish autonomy, halfway between Latin American temptations and North African plans.
Even in the Balkans, Croatia is imposing non-tariff restrictions on Macedonia, while there is a clear trade war going on between the United States and Germany.
While the Americans rightly think that the Euro is an undervalued German Mark, enabling Germany to take advantage both of the EU countries and the United States.
Therefore, in America, the Europeans attack some technology platforms, such as Apple or Google and, in response, the United States attack European and especially German car-making companies on the issue of emissions.
Today’s trade wars are waged with indirect strategies and are soft wars, although they are often heavily defamatory.
On the financial side, many multinationals buy the huge public debt of some smaller and weaker States (and this holds true also for Italy) and securitize it by hiding its origin and source; finally they sell it thanks to the shelter of their tax havens.
This, too, is a trade war – a new type, but even fiercer than the traditional one – possibly with the “Black Ships” of Commodore Perry for the opening of Japan to US trade, as happened in 1853.
Not to mention tax dumping which attracts major investors to a country, but leaves the others without a penny, compelled by their public debt or the bad valuation of their public debt securities to keep corporate taxes high.
Furthermore austerity policies make taxation regressive: those who earn less pay slightly more.
Hence markets shrink, with obvious knock-on effects on taxation and development rates.
Furthermore, the purely geopolitical and military crisis points are well-known, but basically they are all attempts to acquire peripheral territories to achieve the goal of controlling commercial networks, the comparatively more efficient production areas, the extraction of raw materials and public debt.
Ukraine, for example, could be invaded by the Russian Federation and force NATO to a counteroffensive.
It is also worth recalling the issue of the Senkaku-Diaoyo islands, a point of tension between Japan and China for controlling the Pacific – islands which are a very rich fishing area and a possible oil field.
The fact must not be neglected that the military treaties signed in the aftermath of the Second World War oblige the United States to support, with its Armed Forces, Japan and the other countries which would be certainly threatened by the Chinese operations in the Senkaku-Diaoyo archipelago.
Finally we must analyze the future tension between China and Russia on their Eastern border, which could increasingly mount due to China’s demographic characteristics and Russia’s weakness in this regard.
Iran does not yet know whether it wants to challenge the Saudi Sunni power with weapons and the “indirect strategy” of the Shiite Islam’s unification or to expand into the Shiite region of Central Asia, up to Afghanistan and well beyond.
He cannot wish both but, whatever Iran decides, it will have military relevance.
North Korea wants the stability of its regime and the security of its borders, as well as foreign investment to stabilize its economy.
Here again there will be a point of tension that China has no intention of supporting in the long run – and this is a further factor of instability in the region.
What can be done? We must immediately stabilize monetary balances, with a currency defined – in set percentages – by the US Dollar, the Chinese Yuan, the Euro, the Rouble, the Indian Rupee and the Japanese Yen.
This will automatically redesign the world trade trends and routes, thus avoiding the trade wars which persist in peripheral areas to conquer them.
Later we shall think of a sort of “Register of financial securities” at global level.
As the Land Register and the accurate measurements of plots led to the creation of modern taxation in nation-States, the integration of the various databases for the transactions of all kinds of financial securities will enable to have such a new taxation system as to avoid many of the current failed States.
Iran has an integral role to play in Russian-South Asian connectivity
Iran is geostrategically positioned to play an integral role in Russian-South Asian connectivity. President Putin told the Valdai Club during its annual meeting in October 2019 that “there is one more prospective route, the Arctic – Siberia – Asia.
The idea is to connect ports along the Northern Sea Route with ports of the Pacific and Indian oceans via roads in East Siberia and central Eurasia.” This vision, which forms a crucial part of his country’s “Greater Eurasian Partnership”, can be achieved through the official North-South Transport Corridor (NSTC) and tentative W-CPEC+ projects that transit through the Islamic Republic of Iran.
The first one refers to the creation of a new trade route from Russia to India through Azerbaijan and Iran, while the second concerns the likely expansion of the China-Pakistan Economic Corridor (CPEC, the flagship project of China’s Belt & Road Initiative [BRI]) westward through Iran and largely parallel to the NSTC. W-CPEC+ can also continue towards Turkey and onward to the EU, but that branch is beyond the scope of the present analysis. The NSTC’s terminal port is the Indian-backed Chabahar, but delays in fully developing its infrastructure might lead to Bandar Abbas being used as a backup in the interim.
CPEC’s Chinese-backed terminal port of Gwadar is in close proximity to Chabahar, thus presenting the opportunity of eventually pairing the two as sister cities, especially in the event that rumored negotiations between China and Iran result in upwards of several hundred billion dollars worth of investments like some have previously reported. The combination of Russian, Indian, and Chinese infrastructure investments in Iran would greatly improve the country’s regional economic competitiveness and enable it to fulfill its geostrategic destiny of facilitating connectivity between Russia and South Asia.
What’s most intriguing about this ambitious vision is that Iran is proving to the rest of the world that it isn’t “isolated” like the U.S. and its closest allies thought that it would be as a result of their policy of so-called “maximum pressure” against it in recent years. While it’s true that India has somewhat stepped away from its previously strategic cooperation with Iran out of fear that it’ll be punished by “secondary sanctions” if it continued its pragmatic partnership with the Islamic Republic, it’s worthwhile mentioning that Chabahar curiously secured a U.S. sanctions waiver.
While the American intent behind that decision is unclear, it might have been predicated on the belief that the Iranian-facilitated expansion of Indian influence into Central Asia via Chabahar might help to “balance” Chinese influence in the region. It could also have simply been a small but symbolic “concession” to India in order not to scare it away from supporting the U.S. anti-Chinese containment strategy. It’s difficult to tell what the real motive was since American-Indian relations are currently complicated by Washington’s latest sanctions threats against New Delhi in response to its decision to purchase Russia’s S-400 air defense systems.
Nevertheless, even in the worst-case scenario that Indian investment and infrastructural support for Iran can’t be taken for granted in the coming future, that still doesn’t offset the country’s geostrategic plans. Russia could still use the NSTC to connect with W-CPEC and ultimately the over 200+ million Pakistani marketplaces. In theory, Russian companies in Pakistan could also re-export their home country’s NSTC-imported goods to neighboring India, thereby representing a pragmatic workaround to New Delhi’s potential self-interested distancing from that project which could also provide additional much-needed tax revenue for Islamabad.
Iran must therefore do its utmost to ensure Russia’s continued interest in the NSTC regardless of India’s approach to the project. Reconceptualizing the NSTC from its original Russian-Indian connectivity purpose to the much broader one of Russian-South Asian connectivity could help guarantee Moscow’s support. In parallel with that, Tehran would do well to court Beijing’s investments along W-CPEC+’s two branch corridors to Azerbaijan/Russia and Turkey/EU. Any success on any of these fronts, let alone three of them, would advance Iran’s regional interests by solidifying its integral geo-economic role in 21st-century Eurasia.
From our partner Tehran Times
The phenomenon of land grabbing by multinationals
Since 2012 the United Nations has adopted voluntary guidelines for land and forest management to combat land grabbing. But only a few people know about the guidelines, which aim to protect small farmers particularly in Third World countries.
When multinational investors buy up fields for their huge plantations, the residents lose their livelihood and means of support and will soon only be sleeping in their villages. If they are lucky, they might find work with relatives in another village. Many also try their luck in the city, but poverty and unemployment are high. What remains are depopulated villages and the huge palm oil plantations that have devoured farmland. People can no longer go there to hunt and grow plants or get firewood. The land no longer belongs to them!
Land grabbingis the process whereby mostly foreign investors deprive local farmers or fishermen of their fields, lakes and rivers. Although it has been widely used throughout history, land grabbing – as used in the 21st century – mainly refers to large-scale land acquisitions following the global food price crisis of 2007-2008.
From 2000 until 2019 one hundred million hectares of land have been sold or leased to foreign investors and the list of the most affected countries can be found here below:
Such investment may also make sense for the development of a country, but it must not deprive people of their rights: local people are starving while food is being produced and turned into biofuels for export right before their eyes.
In 2012, after three years of discussion, the UN created an instrument to prevent such land grabbing: the VGGTs (Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security:
Detailed minimum standards for investment are established, e.g. the participation of affected people or how to safeguard the rights of indigenous peoples and prevent corruption. Formally, the document provides a significant contribution to all people fighting for their rights.
The document, however, is quite cryptic. The guidelines should be simplified and explained. Only in this way can activists, but also farmers and fishermen, become aware of their rights.
Others doubt that much can be achieved through these guidelines because they are voluntary. After all, the UN has little or no say in the matter and can do no more than that. If governments implemented them, they would apply them as they will.
In Bolivia, for example, there are already laws that are supposed to prevent land grabbing. In the Amazon, however, Brazilian and Argentinian companies are buying up forests to grow soya and sugar cane, often with the approval and agreement of corrupt government officials. Further guidelines would probably be of little use.
At most, activists already use the guidelines to lobby their governments. Together with other environmental and human rights activists, they set up networks: through local radio stations and village meetings, they inform people of the fact that they right to their land.
Nevertheless, in many countries in Africa and elsewhere, there is a lack of documentation proving land ownership. Originally, tribal leaders vocally distributed rights of use. But today’s leaders are manipulated to pressure villagers to sell their land.
The biggest investors are Indians and Europeans: they are buying up the land to grow sugar cane and palm oil plantations. This phenomenon has been going on since 2008: at that time – as noted above – the world food crisis drove up food prices and foreign investors, but also governments, started to invest in food and biofuels.
Investment inland, which has been regarded as safe since the well-known financial crisis, must also be taken into account. Recently Chinese companies have also been buying up thousands of hectares of land.
In some parts of Africa, only about 6% of land is cultivated for food purposes, while on the remaining areas there are palm oil plantations. Once the plantations grow two or three metres high, they have a devastating effect on monocultures that rely on biodiversity, because of the huge areas they occupy. There is also environmental pollution due to fertilisers: in a village, near a plantation run by a Luxembourg company, many people have suffered from diarrhoea and some elderly villagers even died.
Consequently, the implementation of the VGGTs must be made binding as soon as possible. But with an organisation like the United Nations, how could this happen?
It is not only the indigenous peoples or the local groups of small farmers that are being deprived of everything. The common land used is also being lost, as well as many ecosystems that are still intact: wetlands are being drained, forests cleared and savannas turned into agricultural deserts. New landowners fence off their areas and deny access to the original owners. In practice, this is the 21st century equivalent of the containment of monastery land in Europe that began in the Middle Ages.
The vast majority of contracts are concentrated in poorer countries with weak institutions and land rights, where many people are starving. There, investors compete with local farmers. The argument to which the advocates of land grabbing hold -i.e. that it is mainly uncultivated land that needs to be reclaimed – is refuted. On the contrary, investors prefer well-developed and cultivated areas that promise high returns. However, they do not improve the supply of local population.
Foreign agricultural enterprises prefer to develop the so-called flexible crops, i.e. plants such as the aforementioned oil palm, soya and sugar cane, which, depending on the market situation, can be sold as biofuel or food.
But there is more! If company X of State Y buys food/fuel producing areas, it is the company that sells to its State Y and not the host State Z that, instead, assigns its future profits derived from international State-to-State trade to the aforementioned multinational or state-owned company of State Y.
Furthermore, there is almost no evidence of land investment creating jobs, as most projects were export-oriented. The British aid organisation Oxfam confirms that many land acquisitions took place in areas where food was being grown for the local population. Since local smallholders are generally weak and poorly educated, they can hardly defend themselves against the grabbing of the land they use. Government officials sell or lease it, often without even paying compensation.
Land grabbing is also present in ‘passive’ Europe. Russia, Ukraine, Romania, Lithuania and Bulgaria are affected, but also the territories of Eastern Germany. Funds and agricultural enterprises from “active” and democratic Europe, i.e. the West, and the Arab Gulf States are the main investors.
We might think that the governments of the affected countries would have the duty to protect their own people from such expropriations. Quite the reverse. They often support land grabbing. Obviously, corruption is often involved. In many countries, however, the agricultural sector has been criminally neglected in the past and multinationals are taking advantage of this under the pretext of remedying this situation.
No let-up in Indian farmers’ protest due to subconscious fear of “crony capitalism”
The writer has analysed why the farmers `now or never’ protest has persisted despite heavy odds. He is of the view that the farmers have the subconscious fear that the “crony capitalism” would eliminate traditional markets, abolish market support price and grab their landholdings. Already the farmers have been committing suicides owing to debt burden, poor monthly income (Rs. 1666 a month) and so on.”Crony capitalism” implies nexus between government and businesses that thrives on sweetheart deals, licences and permits eked through tweaking rules and regulations.
Stalemate between the government and the farmers’ unions is unchanged despite 11 rounds of talks. The farmers view the new farm laws as a ploy to dispossess them of their land holdings and give a free hand to tycoons to grab farmers’ holdings, though small.
Protesters allege the new laws were framed in secret understanding with tycoons. The farmers have a reason to abhor the rich businesses. According to an a January 2020 Oxfam India’s richest one per cent hold over four times the wealth of 953 million people who make up the poorest 70 per cent of the country’s population. India’s top nine billionaires’ Inc one is equivalent to wealth of the bottom 50 per cent of the population. The opposition has accused the government of “crony capitalism’.
Government has tried every tactic in its tool- kit to becloud the movement (sponsored y separatist Sikhs, desecrated Republic Day by hoisting religious flags at the Red ford, and so on). The government even shrugged off the protest by calling it miniscule and unrepresentative of 16.6 million farmers and 131,000 traders registered until May 2020. The government claims that it has planned to build 22,000 additional mandis (markets) 2021-22 in addition to already-available over 1,000 mandis.
Unruffled by government’s arguments, the opposition continues to accuse the government of being “suit-boot ki sarkar” and an ardent supporter of “crony capitalism” (Ambani and Adani). Modi did many favours to the duo. For instance they were facilitated to join hands with foreign companies to set up defence-equipment projects in India. BJP-ruled state governments facilitated the operation of mines in collaboration with the Ambani group just years after the Supreme Court had cancelled the allotment of 214 coal blocks for captive mining (MS Nileema, `Coalgate 2.0’, The Caravan March 1, 2018). Modi used Adani’s aircraft in March, April and May 2014 for election campaigning across the country.
“Crony capitalism” is well defined in the English oxford Living Dictionaries, Cambridge and Merriam –Webster. Merriam-Webster defines “crony capitalism” as “an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants, and other forms of government assistance) in ways seen as suppressing open competition in a free market
If there’s one”.
Cambridge dictionary defines the term as “ an economic system in which family members and friends of government officials and business leaders are given unfair advantages in the form of jobs, loans, etc.:government-owned firms engaged in crony capitalism”.
A common point in all the definitions is undue favours (sweetheart contracts, licences, etc) to select businesses. It is worse than nepotism as the nepotism has a limited scope and life cycle. But, “crony capitalism” becomes institutionalized.
Modi earned the title “suit-boot ki sarkar” when a non-resident Indian, Rameshkumar Bhikabhai virani gifted him a Rs. 10 lac suit. To save his face, Modi later auctioned the suit on February 20, 2015. The suit fetched price of Rs, 4, 31, 31311 or nearly four hundred times the original price. Modi donated the proceeds of auction to a fund meant for cleaning the River Ganges. `It was subsequently alleged that the Surat-based trader Laljibhai Patel who bought the suit had been favoured by being allotted government land for building a private sports club (BJP returns ‘favour’, Modi suit buyer to get back land, Tribune June21, 2015).
Miffed by opposition’s vitriolic opposition, Ambani’s $174 billion conglomerate Reliance Industries Ltd. Categorically denied collusion with Modi’s government earlier this month. Reliance clarified that it had never done any contract farming or acquired farm land, and harboured no plans to do so in future. It also vowed to ensure its suppliers will pay government-mandated minimum prices to farmers. The Adani Group also had clarified last month that it did not buy food grains from farmers or influence their prices.
Like Modi, both Adani and Ambani hail from the western Indian state of Gujarat, just, who served as the state’s chief for over a decade. Both the tycoons are reputed to be Modi’s henchmen. Their industry quickly aligns its business strategies to Modi’s nation-building initiatives. For instance, Adani created a rival regional industry lobby and helped kick off a biannual global investment summit in Gujarat in 2003 that boosted Modi’s pro-business credentials. During 2020, Ambani raised record US$27 billion in equity investments for his technology and retail businesses from investors including Google and Face book Inc. He wants to convert these units into a powerful local e-commerce rival to Amazon.com Inc. and Wal-Mart Inc. The Adani group, which humbly started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator.
Parallel with the USA
Ambani and Adani are like America’s Rockefellers and Vanderbilt’s in the USA’s Gilded Age in the second half of the 19th century (James Crabtree, The Billionaire Raj: a Journey through India’s New Gilded Age).
Modi government’s tutelage of Ambanis and Adanis is an open secret. Kerala challenged Adani’s bid for an airport lease is. A state minister said last year that Adani winning the bid was “an act of brazen cronyism.”
Threat of elimination of traditional markets
Farmers who could earlier sell grains and other products only at neighbouring government-regulated wholesale markets can now sell them across the country, including the big food processing companies and retailers such as WalMart.
The farmers fear the government will eventually abolish the wholesale markets, where growers were assured of a minimum support price for staples like wheat and rice, leaving small farmers at the mercy of corporate agri-businesses.
Is farmers’ fear genuine?
The farmers have a logical point. Agriculture yield less profit than industry. As such, even the USA heavily subsidies its agriculture. US farmers got more than $22 billion in government payments in 2019, the highest level of farm subsidies in the last 14 years, and the corporate sector paid for it. The Indian government is reluctant to give a permanent legal guarantee for the MSP. In contrast, the US and Western Europe buy directly from the farmers and build their butter and cheese mountains. Even the prices of farm products at the retail and wholesale levels are controlled by the capitalist government. In short, not the principles of capitalization but well-worked-out welfare measures are adopted to sustain the farm sector in the advanced West.
Threat of monopsonic exploitation
The farmers would suffer double exploitation under a monopsony (more sellers less buyers) at the hands of corporate sharks. They would pay less than the minimum support price to the producers. Likewise, consumers will have to pay more because the public distribution system is likely to be undermined as mandi (regulated wholesale market) procurement is would eventually cease to exist.
Plight of the Indian farmer
The heavily indebted Indian farmer has average income of only about Rs. 20000 a year (about Rs. 1666 a month). Thousands of farmers commit suicide by eating pesticides to get rid of their financial difficulties.
A study by India’s National Bank for Agriculture and Rural Development found that more than half of farmers in India are in debt. More than 20,000 people involved in the farming sector died by suicide from 2018-2019, with several studies suggesting that being in debt was a key factor.
More than 86 per cent of India’s cultivated farmland is owned by small farmers who own less than two hectares of land each (about two sports fields). These farmers lack acumen to bargain with bigger companies. Farmers fear the Market Support Price will disappear as corporations start buying their produce.
Modi sarkar is unwilling to yield to the farmers’ demand for fear of losing his strongman image and Domino Effect’. If he yields on say, the matter of the farm laws, he may have to give in on the Citizenship Amendment Act also. Fund collection in some foreign countries has started to sustain the movement. As such, the movement may not end anytime soon. Unless Modi yields early, he would suffer voter backlash in coming elections. The farm sector contributes only about 15 per cent of India’s $2.9 trillion economy. But, it employs around half its 1.3 billion people.
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