Adonis Diaries

Posts Tagged ‘South-East Asia.

The International Monetary Fund (IMF) failed in its mission; (Mar. 27, 2010)

After 30 years of successive wrong decisions, decisions based on ideology and not on economics, that

1. weakened the developing States and reduced them to further poverty and famine;

2. decisions that destabilized world economy and lead to the global financial crash…

This International Monetary Fund (IMF) is still refusing to evaluate its ideological economic policies and account for modern economics theories that have

1. demonstrated the total inadequacy of market mechanisms and

2.  financial forces working independently of State interventions and benefiting the upper classes

3.  failing to come to the rescue of the poorer classes and reducing chronic employment.

The IMF has failed in its objectives.

Its mission was supposed to tackle two global economic problems: first, engaging world economic stability and second, aiding developing countries to healthier transition into economic globalization.

The IMF thought that it was doing the right thing for over 30 years:  It stuck staunchly to an archaic economic theory of market forces taking care of fluctuations and inefficient decisions.

The IMF went further to feeling comfortable in the position that poverty and joblessness are not within its mission: they were the World Bank (WB) mission of carrying these functions toward the less fortunate classes!

In fact, the IMF adopted this slogan: “What is good for the financial community in diagnosing healthy world economy is necessarily an excellent stability factor for globalization.”

This incomprehensible laziness of the IMF economists to studying, evaluating, and analyzing economic structural singularities of developing countries, led to strengthening the notion that world market forces is the best solution for hazardous economic investments.

John Keynes theorized that when market mechanisms are not challenged by States and that market forces work unperturbed, it is inevitable that chronic collective joblessness follow.  Keynes stated that, even singular developed nation economic decisions, affect global economic stability: what one State import in product and services many other States are exporting them.

Keynes reflected that in financial crashes many needy economies will be unable to borrow liquidity to stimulating their solvable economies to either finance spending deficits or compensating for tax income reduction.

Indeed, many solvable States went down for lack of international lending policies.

Thus, Keynes was the economics guru who demanded the establishment of an international monetary fund with mission to extending liquidity to maintain a certain level of full employment that will sustain global economic stability.

The IMF policy makers functioned contrary to Keynes’ economic theory and mission, and the IMF relied on the archaic market dynamics and refused to have any faith on the interventions of States institutions.   This ideology is a blatant irony since the IMF is supposed to be a public institution, but it is acting and behaving as if transparency in decision, management, and administration, is none of its concern or demanded to be submitted to restrictions.

For three decades, the IMF has been pressuring developing states to adopting stringent restrictive economic policies that never suited world economic stability. The successive failures never incited the IMF into revising its economic ideology and make sense of all those incoherent concepts that led to humongous errors and deeper poverty.

For example, during the last three decades, world finance considered exchange rates as one of other commodities, such as product and services.  Thus, exchange rates were to be flexible to accommodate market forces. That was a great wise idea; what the IMF did?

The IMF considered that exchange rate is one commodity that should be maintained at any cost by pumping billions of dollars in pure expenses for no benefit to real economy. Contrary to its market ideology, the IMF excluded exchange rate from market mechanism tool to stabilizing a failing economy.

Usually, it is excessive pessimism after a euphoric phase that drives speculative capitals to be withdrawn in economically solvable States.  Speculative investment is the disease to be treated and an overvalued exchange rate is just one of the symptoms.

The ideology of the IMF did its best to greatly facilitating speculative influx of capitals, and when difficulties arise, to pumping more liquidity in order to maintain the previous exchange rate to the benefit of the multinational financial speculators.

Consequently, the disease is aggravated by this unilateral vision of who should be the prime beneficiary; it has never been the developing States.

For three decades, the developing States have been paying interest on IMF loans simply to enrich multinational speculators by maintaining high exchange rates.  Otherwise, speculators would have desisted if developing States were not pressured to maintaining their exchange rates.

When a private company fails to pay interests on wrong investment decisions, it just declares bankruptcy.  The IMF refuses the developing States to declaring bankruptcy because the multinational financial speculators have to benefit from their faulty loaning decisions.

For example, Russia slapped the IMF in 1998 and defaulted on its external debts; two years later, the multinationals were back investing in Russia.  Thus, liquidity pumped by the IMF at high interest rates into bankrupt States ends up in the pocket of the speculators at the detriment of stringent social conditions of the needy classes.

The gain amassed by speculators, as a group, basically amount to a State financial and economic loss as a government and society at large.  The IMF has in fact been encouraging financial speculators for over 30 years!

Consequently, the other incoherence in the IMF mission is the lack of viable diagnostic tools.  The economists hired by the IMF get worried with balance of payment deficits but barely care how the money was used and where it ended.

The IMF has been extending funds to developing countries in order to salvage companies of the developed States, which made very bad investment decisions.  Multinationals had not to worry about examining closely their faulty policies or had any incentives to reform since the IMF is established principally to come to their rescue.

When States enjoy surplus export balances it is at the expense of excess import balances in other States.  If imports are of the luxury-kind items then desisting extending financial loans on luxury items should take care of the imbalance.

The IMF ideology states: “Once a State reaches a pessimistic speculative mood, the neighboring States will inevitably suffer by disease contamination.”  The coherent economic theory of Keynes reflected as follow: “A State will reduce imports which will hurt neighboring economies.

How did the IMF interpret that relationship? 

The IMF responds by forcing neighboring States to drastic austerity policies in order to avoid “contagion!”  Thus, an entire region such as South East Asia, had to crumble after Thailand. Oil demands and other basic products were cut down which generated reduction in brute oil demands and prices; the waves of panic spread thousands of miles away.  Russia was affected by reduced oil prices and not by any mysterious links related to investors’ confidence.

So far, after the latest financial crash, the IMF was forced to re-examine its economic ideology and to reform its governance.  The IMF is encouraging developing States to control and manage the flux of speculative investments and discourage any investment that does not benefit real economy.

What is needed is that the IMF funds institutions, particularly in developing countries, can identify, control, and manage external investments and offer developing countries the availability of instant information and intelligence on economic and financial activities to be able to compete with the elite multinationals.

The long-term “Revenge of Geography”; (Oct. 30, 2009)

In ancient times, oceans, seas, high mountain chains, vast deserts, large rivers, and lakes formed natural barriers that separated settled tribes from nomadic ones.  Eventually, rivers were no longer major barriers for demographic explosions and warrior-like tribes; deserts were sort of conquered with caravans of camels by 2,000 BC that originated in Yemen; mountain chains could be overcome when the other side did not offer any worthy hardships for the wealth and bounty of fertile lands.  The Mediterranean Sea was the playground for commerce and trade of the Greeks, Phoenician City-States of Sidon, Tyr, and Byblos; later Carthage, the Roman Empire, and the Byzantium Empire conquered this sea.  Major oceans were criss-crossed by the gigantic Chinese fleet as early as 1000 AC that reached the Arabic Peninsula and the Horn of Africa.  By the 15th century, Portugal and then Spain conquered the Pacific and then the Atlantic and started the colonial period that lasted five centuries and is still going on under different labels and forms.

“It is man who has the power to create; it is nature that commands to a large extent” said Harold Mackinder in 1904.  To Mackinder, the “Heartland zone” of earth is that vast land forming Russia, Central Asia, and parts of Central Europe.  All imperial military and economic strategies such as the British and the USA were based on encircling this “heartland” with military and trade zones. 

Russia was plagued by invasions from Mongolia and Central Asia and thus, to create durable buffer zones Russia countered by expanding into that “heartland” toward Siberia in the East, Central Asia toward Turkey and Iran, and then toward Central Europe in the West.  China also suffered from relentless invasions from Mongolia and the south east civilizations and endeavored to expand westward into Tibet and Central Asia and southward into South-East Asia.  Europe turned overseas since the 15th century to open up and conquer trade implants and then colonize the bordering regions around the “pivotal heartland”.  The 13 federated states in America expanded to the Pacific Ocean and toward Mexico.

Along the borders of the “Heartland pivot land” there are natural blocks of lands such as the South-East (from Vietnam to Burma or Maynamar with their jungles); the Indian sub-continent with the Himalaya and the Indo-Kouch mountain chains which include all of current Pakistan, then you have Iran that includes all of Afghanistan, then you have Turkey and the Caucasus. That is how the 21st century is looking like when all is settled.

The main power will reside on who control the sources of the major rivers.  China has conquered Tibet because three main rivers take their sources from the Himalaya mountain chains; mainly the Mekong (that flow into the South East), the Indus (that flow in Pakistan), and the Brahmapoutre that flow in India and join the Gange River.  China has already built 86,000 dams along the Blue and Yellow Rivers that take sources on the western plateaus; China has not consulted with the South East countries and has already built four mega dams on the Mekong, including two huge lakes that will take about 10 years to fill in order to generate hydraulic power.

Turkey controls two huge rivers the Euphrates and the Tiger that flow in Syria and Iraq.  Turkey has been building dams on these rivers without consulting with the southern neighboring States.  Ethiopia is in control of the Nile if it wishes to.  The US has been building dams along rivers that flow into Mexico.

The USA would like you to believe that there are no natural borders for its military might. That is not a half truth; it is a lie and a psychological propaganda.  Planes, missiles, tanks, and navy do not conquer lands: it is the walking soldier that does this job in order to retain any conquered land. If there is the will to resist in a rough geographic landscape then there can be no conquest. The US used all kinds of defoliate gas (Orange gas) in the jungles of Vietnam but it had to declare defeat and retreat in total chaos; it is already preparing plans to retreat from Afghanistan; it gave up rapidly after the first major skirmish in Somalia.  If the US managed to enter Baghdad it is because there was no will to resist by the people: they wanted to get rid of despot Saddam Hussein; the US is packing up and leaving next year after pressuring the Iraqis to sign an agreement.

Yes, we are witnessing the era of “Anthropocene” which means man is doing more damages to the environment than nature can stabilize but the main reality is there to account for: sources of water.  China, Turkey, Russia, USA, and Brazil control sources of major rivers.  The main struggle in the medium-term is who will control the Nile, the Congo, and Niger Rivers in Africa. Water desalination of Oceans and the towing of icebergs will do for a while but cannot resolve a long-term problem in water shortages.  Actually, huge displacement of people from megapolis to near water sources will have to be undertaken because of the huge investment of supplying water to big urban cities and in order to recover sub-terrain naps and natural ecosystems.

Is the United Nation Indispensable? (October 29, 2009)

 

We have UN “peace keeping forces” on our border with Israel since the July 2006 war that lasted 33 days; this savage pre-emptive war ended with a major debacle of the Israeli troops and a definite political defeat of Israel’s expansionist strategies and pre-emptive war policies. This peace keeping force is not really meant to keep peace and could not do this job if a resumption of war sets in.  The major benefit of UN peace keeping forces is to interact with citizens and aid in small social and economic undertakings within the needed communities and providing seasonal jobs.  The fact that citizens are exposed to different nationalities and daily interactions is more important than any kinds of power exhibition and posturing.  One drawback is that many kids tend to like playing soldiers wearing blue beret or blue helmets; in a way start dreaming of emulating the UN military forces.

Many regions have witnessed exposures to UN peace keeping contingents with communication advantages that dwarf the petty enmities based on ethnic or religious conflicts that are the wreckages of lasting historic ignorance and confinements.  Just providing multinational troops for separating armies is good enough a job to preserving and consolidating the UN institutions. 

Currently, the UN departments are focusing on environmental changes (the Copenhagen forum is awaited with great expectation this December), eliminating arms of mass destructions, reducing the nuclear arsenals, slowing down the proliferation of sub-munitions, biological and chemical arms, and prohibiting the usage of land mines, cluster shells, phosphoric bombs. 

After the fiasco of the pre-emptive war in Iraq and the hopeless case of resolving the Afghan conflict by shear military intervention it is becoming obvious that the UN will erect a solid wall against such unilateral pre-emptive endeavors.  Major wars are practically at an end.  The main difficulty is to diplomatically pre-empt conflicts that may result in low level wars or civil wars that are more difficult to resolve when they starts than open wars; this is where the UN can dynamically extend helping hands as an honest third party broker to encouraging the main parties to meeting directly.

A not largely publicized endeavor is the efforts to re-integrate kid-soldiers into civilian societies; many families and communities refuse to accept their kid-soldiers within their mist for fear or disrupting the traditional way of life. Many African States have recruited over 300,000 kids to play soldiers during the many civil wars and those kids would not relinquish the man status they acquired during these horrible wars and the easy ways to rob and stead just by showing off with a Kalashnikov.

The UN divulged that military expenses have reached 1.5 trillion dollars this year; an amount that would have made every inhabitant of planet earth richer by 200 dollars.  The US alone accounts for 48% of that total in military budget.  Most armies have reduced the number of their standing armies in order to invest the savings on more performing weapons in load power, reduced size, and accuracy to kill and maim.  The US and Russia are negotiating the reduction on the number of war heads and ballistic missiles for the purpose of investing the savings on more performing and newer generations of war heads and missiles.  The US and Russia needed the UN as a world forum to misinform the world community on their intentions for greater peace and stability.

Civilian group actions are taking the lead over State governments in disseminating awareness on global problems and exercising beneficial pressures on the 199 State governments represented in the UN.  Former hegemonies of superpowers are making rooms to emerging economic and financial powers.  The group of G20 is meeting frequently and neighboring States are conglomerating into trade zones in South America and South-East Asia.

Slow changes in the re-organization of the UN and power distribution are taking place.  Rotations of non-veto power States (I think around 9 in addition to the 5 veto members) are asked to represent the UN body in executive sessions; for example Lebanon was voted in for two years after 53 years of absence.  This sharing in responsibilities is a great exposure for non-veto States to learn and get training on the UN administrative labyrinths.

The rights of the former five “superpowers” of US, Russia, China, France, and Britain to veto on major decrees related to wars or pre-emptive wars did not function well: superpowers did what they wanted to do anyway regardless of the votes in the General Assembly. Worse, the superpowers vetoed on petty matters that would have discouraged crimes against humanity and blatant apartheid policies.  The US caste the most number of vetoes in the history of the UN just to take Israel off the hook on the thousands of Israel’s behaviors and activities that went counter to the UN charter of safeguarding human dignities and rights. 

Veto rights to absolving crimes against humanity are not to be acceptable any more.  After the world financial crash, the successive failures of direct wars to solving problems, and the exorbitant costs to waging wars and paying for wars’ aftermath in caring for refugees, displaced people, and reconstruction a new political era is evolving; the superpowers are now willing to permit the UN playing greater roles in resolving world problems.

The Essence of Wars and the Spice Wars (October 1, 2008)

 

If you cannot acquire cheaply what you badly want then, borrow money at high interest rates to set up a stealing operation.  Since time immemorial, wars were the most expensive alternatives in order to get what States wanted for refusing to purchase at fair market values.  This article will describe the Spice Wars which Stephen Swig introduced in his “Magellan, the vanquisher of the seas”. As it is known, Magellan is the first mariner to circumnavigate earth’s seas and oceans. 

Medieval Europe got hooked and addicted on all the varieties of spices and perfumes arriving through the Arab Moslem World; the aristocratic classes even added spices to their drinks and the values of spices were more expensive than silver and gold; people even sold lands in exchange of spices and perfumes because they were common currencies.

            Prices of spices and perfumes were extremely high because the sources of their production were found on remote lands in South-East Asia and by the time every port taxed the shipments and then traveling the deserts of Iraq and Syria and with the loss of one ship for every five in the seas due to the danger of sea faring and pirates then the prices skyrocketed through multi-levels of middlemen. 

The Arabic kingdoms knew well the sources of production in Malaysia but they didn’t reach the main islands that were rich in spices beyond the Malacca Straight.  Malacca Straight is still now the most strategic location for maritime commerce where all the ships coming from China, Japan, Viet Nam, Thailand, Burma and the south-east Asian countries and islands have to cross that straight westward and the reverse for the Nations doing commerce eastward. 

All the spices and perfumes had to cross the Arab kingdoms, one way or another, and most middlemen, before the shipments of spices reached Europe were Arabs. The European States decided to conquer the Near East under the pretense of a Holy War to re-conquer Jerusalem. 

 The main target of the crusading campaigns was Egypt as the shortest route to shipments arriving by the Red Sea.  Unfortunately for the European coalitions three targeted Crusading invasions of Egypt failed miserably and the whole business failed for lack of incentives to finance further campaigns. 

In the meantime, Venice vanquished Byzantium naval power and became the exclusive wholesaler of spices.  The English, Holland and German middlemen auctioned out the spices on the Rialto Square in Venice and then sold them throughout the main European markets.

            It happened that in 1415, one of the sons of the King of Portugal, Prince Henrick, started to doubt the theory and affirmations of Ptolemy which stated that there are no exits in the Atlantic Ocean when you sail west or south and that past the equator in Africa nobody can return alive because of the heat, fire and Evil emanations.  Ptolemy even said that past the equator Africa is not inhabited and is a desolate land. Henrick resumed his research and investigations and trained mariners and built ships to verify his new theories.  Henrick died before he experienced the successes of his endurance and far sightedness.

            Within a century, Portugal, the tiniest and poorest State in Europe, became the strongest and richest nation.  Portugal ships colonized the whole of Africa, India, and Malaysia and even reached China and Japan. King Juan II of Portugal had a meeting with Christopher Columbus but didn’t see any value of discovering another route to India going west the Atlantic since the southern route was completely discovered and known and the Pope had allotted Africa and India to the kingdom of Portugal.  The King of Spain invested in Columbus and the Pope had to divide the Atlantic Ocean into two zones; thus, lands discovered were distributed between these two kingdoms; Brazil was within the dividing line of Portugal.

            Magellan decided to tour around the world by seas going westward as Columbus: his closest mariner friend Francisco Srao convinced him that the route westward is far shorter in order to visit him in the spice islands of Ternate, Mulouk, Panda and Ambo Ana.  Francisco had been living the good life for nine years among the aborigines’ four islands; it seems that the Arabs had not reached yet these islands.

            The 15th century was most active in maritime discovery and the cruelest; the Spanish and Portuguese conquistadors slaughtered the aborigines and brought in to the conquered lands all kinds of diseases that the natives were not immune at.  It was the century that started the wholesale colonial wars among the powerful European States for cheap produces and large markets. 


adonis49

adonis49

adonis49

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