Me as Jeremy Clarkson. Not.
Thursday, March 26, 2009
Saturday, March 14, 2009
The Dollar Imbalance
Wen Jiaobao is an old-school communist leader with a surprising popular touch. He's a master propagandist and a deft politician - remember him at the train stations exhorting people to weather the snow and ice a year ago? Never had a Chinese leader appeared in front of crowds feeling their pain. He weighs words carefully and his tone carries conviction.
So his expression today of worry over America's attempt to spend its way out of recession should prick the world's ears up.
There's one thing Chinese leaders know better than almost anyone else it's the history of the imperialism. They have a keen appreciation for Britain's fall and decline. It went hand in hand, the history commissars will tell you, with sterling's collapse.
Under the British Empire, the colonies -that is India, Malaysia, Africa etc - all ran a current account
surplus with Britain. They had to because they were meant to be self-sufficient. These surpluses
were sent back to London where they purchased government bonds or Consols. British banks then lent to British companies to go off and invest in the empire.
Overstretch first militarily and then financially saw Britain end up in hock to the United States and voila the Sterling world became Dollarized. The colonies suffered as local industry was stifled and holdings lost their value.
Today prime minister Wen is warning the US not to overspend - fearing that dollar devaluation would affect China's own reserves. China holds a trillion dollars in US treasury bonds so a sliding US currency would hit them hard. Of course crisis offers opportunity; America weakened offers a chance for China to exert itself. But this all comes too soon for Beijing.
It is not that Beijing does not have the ambition to be top dog, it is that China is not ready to assume the mantle of global economic leadership. Hence to maintain stability - and important ensure global demand takes off without crashing down to earth - Wen Jiabao calls for fiscal restraint. By questioning the sums thrown about by team Obama the Chinese politbureaucrats are also signalling that they no longer sees the US treasuries as the safest haven. Beijing aims to put its money elsewhere. It will end its export-driven model of growth. It will end its dependency on Washington. Domestic demand will be prioritized.
Unless Obama perhaps caves in on some vital Chinese interest, Beijing will accelerate its attempts to secure a new, more independent role in global affairs. We are about to live in interesting times, indeed.
So his expression today of worry over America's attempt to spend its way out of recession should prick the world's ears up.
There's one thing Chinese leaders know better than almost anyone else it's the history of the imperialism. They have a keen appreciation for Britain's fall and decline. It went hand in hand, the history commissars will tell you, with sterling's collapse.
Under the British Empire, the colonies -that is India, Malaysia, Africa etc - all ran a current account
surplus with Britain. They had to because they were meant to be self-sufficient. These surpluses
were sent back to London where they purchased government bonds or Consols. British banks then lent to British companies to go off and invest in the empire.
Overstretch first militarily and then financially saw Britain end up in hock to the United States and voila the Sterling world became Dollarized. The colonies suffered as local industry was stifled and holdings lost their value.
Today prime minister Wen is warning the US not to overspend - fearing that dollar devaluation would affect China's own reserves. China holds a trillion dollars in US treasury bonds so a sliding US currency would hit them hard. Of course crisis offers opportunity; America weakened offers a chance for China to exert itself. But this all comes too soon for Beijing.
It is not that Beijing does not have the ambition to be top dog, it is that China is not ready to assume the mantle of global economic leadership. Hence to maintain stability - and important ensure global demand takes off without crashing down to earth - Wen Jiabao calls for fiscal restraint. By questioning the sums thrown about by team Obama the Chinese politbureaucrats are also signalling that they no longer sees the US treasuries as the safest haven. Beijing aims to put its money elsewhere. It will end its export-driven model of growth. It will end its dependency on Washington. Domestic demand will be prioritized.
Unless Obama perhaps caves in on some vital Chinese interest, Beijing will accelerate its attempts to secure a new, more independent role in global affairs. We are about to live in interesting times, indeed.
Wednesday, March 11, 2009
The Return of the Mamluk empire
President Obama’s olive branch of talks with a moderate Taliban has furrowed brows in New Delhi. For India there is no good or bad Taliban only extremists bent on creating an Islamic state stretching across the subcontinent. India sees talk of talks with the Taliban as worse than appeasement. Already the media has picked up on the French foreign minister's innocuous comments on having to accept a possible Taliban's victory - if it came through the ballot.
True Obama has promised to raise troop levels in Afghanistan a la the Iraqi surge, but analysts worry in Delhi that this is simply a prelude to a phased withdrawal under the gaze of a US-installed regime.
For New Delhi this opens the way for the worst possible option: a soft Taliban in Kabul backed by Islamabad – which according to defence analyst Ajai Shukla would allow “the Pakistani army to run Afghanistan on its behalf”.
But Shukla undermines this thesis with a pertinent point.
Pakistan no longer has no single telephone number to call in the badlands along the Durand line. It could create one by boosting a single Islamic group with arms and cash so that it could wipe out its rivals.
But controlling - let alone unifying - the Taliban, who have an expansive ideological agenda distinctive from the Pakistani state, will be no easy task.
The cutting off of Nato supply lines in NWFP, the bombing of Shia mosques in Punjab and the razing to the ground of a police station point to a much bigger problem. One where imperial masters are toppled by former slaves. If this were ever to happen it would be a reprisal of the Mamluk age – when tribal vassals took over empires in South Asia and the Arab world.
The point is that Islamists do not want to be controlled. They want to control. They are authoritarians who will privilege a small percentage of Muslims to rule over all others. From where this Islamic vanguard springs will determine the distinctive vision of society imagined by Islamists in territory they acquire. Given the historical and geographical roots of the resurgent Taliban, India, Afghanistan and Pakistan have much to worry about.
True Obama has promised to raise troop levels in Afghanistan a la the Iraqi surge, but analysts worry in Delhi that this is simply a prelude to a phased withdrawal under the gaze of a US-installed regime.
For New Delhi this opens the way for the worst possible option: a soft Taliban in Kabul backed by Islamabad – which according to defence analyst Ajai Shukla would allow “the Pakistani army to run Afghanistan on its behalf”.
But Shukla undermines this thesis with a pertinent point.
“The unpredictability within Pakistan is multiplied, say Indian officials, by the fragmentation within Pakistan’s radical fringe. During the anti-Soviet jehad in the 1980s and 1990s, Pakistan dealt with just one jehadi leader, Gulbuddin Hekmatyar. In 2005, when negotiating a ceasefire in Waziristan, Pakistan had 17 tribal Shoora (council) chiefs sitting at the table. Now there are dozens of shooras, often with competing demands.”
Pakistan no longer has no single telephone number to call in the badlands along the Durand line. It could create one by boosting a single Islamic group with arms and cash so that it could wipe out its rivals.
But controlling - let alone unifying - the Taliban, who have an expansive ideological agenda distinctive from the Pakistani state, will be no easy task.
The cutting off of Nato supply lines in NWFP, the bombing of Shia mosques in Punjab and the razing to the ground of a police station point to a much bigger problem. One where imperial masters are toppled by former slaves. If this were ever to happen it would be a reprisal of the Mamluk age – when tribal vassals took over empires in South Asia and the Arab world.
The point is that Islamists do not want to be controlled. They want to control. They are authoritarians who will privilege a small percentage of Muslims to rule over all others. From where this Islamic vanguard springs will determine the distinctive vision of society imagined by Islamists in territory they acquire. Given the historical and geographical roots of the resurgent Taliban, India, Afghanistan and Pakistan have much to worry about.
Tuesday, March 3, 2009
Mercenaries of God
Machiavelli got it right: mercenaries bring nothing but loss. The cricket killings in Lahore are part of an unfolding tragedy for Pakistan. The terror groups cultivated first to fight Soviet troops in Afghanistan and then to wage war against India in Kashmir have turned upon the civilian government. Loyal only to their version of religious truth and thirsty for power, these groups have morphed with parts of Pakistani elite - finding shelter and succour in high places. The result is bloody blowback.
The growing tribalism and lawlessness of even the country's great cities underlines how much the state has withdrawn in the past few years. Into the vacuum have sprung up huge charities, running schools and hospitals, funded by zakat contributions. The mullah, the military, the bureaucracy have been unwilling to counter hardline propaganda, seeing it as an essential service to a nation born to save Islam.
This saviour complex haunts the country in which many are simply in a state of denial about the men with guns. These mercenaries fight no holy war on poverty, illiteracy and discrimination. They see divinity in the wreck and ruin of human life. The powers that be in Pakistan need to understand that these are not armies of Allah. These are dangerous, disloyal and undisciplined condottiere. Sure they will trade bullets with the infidel armies of America and India. But at what cost? The price for Pakistan is being paid on the streets of Lahore.
The growing tribalism and lawlessness of even the country's great cities underlines how much the state has withdrawn in the past few years. Into the vacuum have sprung up huge charities, running schools and hospitals, funded by zakat contributions. The mullah, the military, the bureaucracy have been unwilling to counter hardline propaganda, seeing it as an essential service to a nation born to save Islam.
This saviour complex haunts the country in which many are simply in a state of denial about the men with guns. These mercenaries fight no holy war on poverty, illiteracy and discrimination. They see divinity in the wreck and ruin of human life. The powers that be in Pakistan need to understand that these are not armies of Allah. These are dangerous, disloyal and undisciplined condottiere. Sure they will trade bullets with the infidel armies of America and India. But at what cost? The price for Pakistan is being paid on the streets of Lahore.
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