Friday, May 4, 2012

Back in the States, Catching up on the news

Just got back to the U.S., but a 9 hour layover at LAX means i get to enjoy the dulcet commercialism of Santa Monica--relaxing after 13 hours in economy over the Pacific.  Slowly trying to piece together the news I missed while away, and reflecting on how to incorporate reflections from my travels into the blog.

To start off with, I would like to highlight two recent pieces by some Jedi's of geopolitics, F. William Engdahl and Pepe Escobar.  Engdahl's, who's masterful work Century of War: Anglo-American oil politics and the New World Order I just reread, just finished writing about the new possibilities for a Eurasian economic sphere, connecting China all the way to Western Europe.  He focuses on the new rail links being developed in Turkey, and the recent visit by Turkish PM Erdogan to China, the first such trip for a Turkish leader since 1985.
The Turkish-China railway discussion is but one part of a vast Chinese strategy to weave a network of inland rail connections across the Eurasian Continent. The aim is to literally create the world’s greatest new economic space and in turn a huge new market for not just China but all Eurasian countries, the Middle East and Western Europe. Direct rail service is faster and cheaper than either ships or trucks, and much cheaper than airplanes. For manufactured Chinese or other Eurasian products the rail land bridge links are creating vast new economic trading activity all along the rail line.
More After the Jump

The new Turkish rail links would be the second "Eurasian Land Bridge," following last year's creation of Chinese freight train networks that run all the way from Rotterdam to China's port of Lianyungang.  Starting in November 2011, BMW began daily shipments along this route, transporting auto parts from Liepzieg all the way to the BMW Shenyang plant, cutting the necessary transport time in half compared to the maritime journey.  As Engdahl writes, these corridors also unlock the possibility of Central Asian markets:
The Second Eurasian Land Bridge runs 10,900 kilometers in length, with some 4100 kilometers of that in China. Within China the line runs parallel to one of the ancient routes of the Silk Road. The rail line continues across China into Druzhba where it links with the broader gauge rail lines of Kazakhstan. Kazakhstan is the largest inland country in the world. As Chinese rail and highways have expanded west, trade between Kazakhstan and China has been booming. From January to October 2008, goods passing through the Khorgos port between the two nations reached 880,000 tons - over 250% growth compared with the same period a year before. Trade between China and Kazakhstan is expected to grow 3 to 5 fold by 2013. As of 2008, only about 1% of the goods shipped from Asia to Europe were delivered by overland routes, meaning the room for expansion is considerable.
From Kazakhstan the lines go on via Russia and Belarus over Poland to the markets of the European Union.
Another line goes to Tashkent in Uzbekistan, Central Asia’s largest city of some two millions. Another line goes west to Turkmenistan’s capital Asgabat and to the border of Iran.8 With some additional investment, these links, now tied to the vast expanse and markets of China could open new economic possibilities in much-neglected regions of Central Asia. The Shanghai Cooperation Organization (SCO) could provide a well-suited vehicle for coordination of a broad Eurasian rail infrastructure coordination to maximize these initial rail links. The members of the SCO, formed in 2001, include China, Kazakhstan, Russia, Kyrgyzstan, Tajikstan, Uzbekistan with Iran, India, Mongolia and Pakistan as Observer Status countries.
Of course, in opposition to all of this are the Washington strategists who are desperately clinging to the Post World War Two "American Century" paradigm, based on the primacy of the U.S. Dollar and unquestionable military might.   Militarily, this has been most recently expressed in the desire for a new "Global NATO" that reaches into Central Asia and the Persian Gulf, and the U.S. "pivot" into Asia, what Hillary Clinton calls America's new "Pacific Century."  Of Course, this belligerency is making up for the economic shortfalls, as the U.S. dollar is rapidly losing its importance.  As Escobar writes,
China, for instance, continues to informally advance the yuan as a globalizing, if not global, currency. It's already trading in yuan with Russia and Australia, not to mention across Latin America and in the Middle East. Increasingly, the BRICS are betting on the yuan as their monetary alternative to a devalued US dollar. 
Japan is using both yen and yuan in its bilateral trade with its huge Asian neighbor. The fact is that there's already an unacknowledged Asian free-trade zone in the making, with China, Japan, and South Korea on board.   
 What is building is an economic vs. military strategy standoff between the U.S. and China.  As the U.S. continues to expand it's military ties, China is expanding its economic ties, both in competition for control of Eurasia, an area the early 20th century British geographer Halfred Mackinder called "The World Island."

Afghanistan, at the heart of Eurasia and the transway of the ancient Silk Road, exemplifies this difference in economic vs. military strategy.  As the U.S. wages an unsucessful and wildly expensive counter-insurgency war, requiring upwards of 100,000 NATO troops, the Chinese have been busy tapping into the Afghan mineral wealth, including a $3.5 billion investment into the Anyak copper mine in Logar province, one of the worlds largest copper deposits (and the largest foreign investment in Afghan history), as well as a $700 million oil deal signed in December 2011.  As a report in Foreign Policy put it:
China is the odds-on favorite for development of any new Afghan mineral resources. Chinese firms will control the flow of new funds, and the way those funds are distributed between the central and local governments. It's all well and good that Barack Obama's administration has recommitted to building civil projects in rural Afghanistan, but consider the relative scale of building a school to establishing a multimillion-dollar mine (not to mention the transport networks and infrastructure required to get the extracted minerals out) and it's easy to see what kind of influence the Chinese will bring to the table.
By developing the transportation infrastructure discussed above by Engdahl, including the new forays into cross continental railroads, China is able to forge ahead on their strategy for economic influence.  The U.S., on the other hand, has seemingly resorted to only one diplomatic tool--military aid.  The question then becomes which strategy will win out in countries like Kazakhstan and Uzbekistan.  Will these autocratic leaders sign on to the NATO consensus, or will they cast their lot with Chinese style development?  Or can both occur simultaneously?  It is questions like these that will define geopolitics in the coming decade.


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