Who knew that the House of Lords had a Committee on Climate Change? I didn’t until I heard about the report published on October 12 titled In Our Hands: behaviour change for climate and environmental goals. It’s worth an examination to see just what these unelected, self-important individuals on the Upper House’s Environment and Climate Change Committee would like to impose on us proles.
Right at the start we read in the summary that they consider there to be a twin crisis of climate change and nature loss which demands an immediate and sustained response. Analysis by the committee suggests that without behavioural change now the Net Zero target of 2050 is not achievable. Their lordships and ladyships have kindly identified for us that 32 per cent of emission reductions up to 2035 require decisions by individuals and households to adopt low-carbon technologies and choose low-carbon products and services as well as reduce carbon-intensive consumption.
They think that polling shows that we are clamouring for leadership on this and are eagerly waiting to be told how to modify our behaviour to help achieve the 2050 target. They write that behavioural science evidence and best practice show that a combination of policy levers, including regulation and fiscal incentives, must be used by government, alongside clear communication, as part of a joined-up approach to overcome the barriers to making low-carbon choices.
They go on: ‘Fairness is key to effective behaviour change and now more than ever must be at the heart of policy design. As the country faces a cost-of-living crisis, the Government must tailor behaviour change interventions to avoid placing a burden on those who can least afford it. The Government must also work with the many groups and organisations at different levels of society who have a critical role in securing behaviour change for climate change and the environment. Businesses are in a position to enable behaviour change through increasing the affordability and availability of greener products and services and engaging customers and employees, but need direction from government if they are to act against their immediate financial interests. Numerous civil society organisations and local authorities work tirelessly to deliver behaviour change projects on a local level, and their efforts should be both supported and celebrated better by central Government.
‘Lessons can be learned from both successful and unsuccessful behaviour change interventions in other policy areas. Most notably, the widespread behaviour change brought about by the Covid-19 pandemic. We recognise that the changes demanded by the pandemic were seen as a short-term response to a short-term emergency, nonetheless it will be a major missed opportunity if the Government does not seize the chance to evaluate behaviour change interventions implemented during the pandemic and apply lessons learned.’
Chapter 1 says they found that we cannot rely on large-scale and unproven technologies alone to achieve the transition to Net Zero. Behaviour change is also needed. This means the whole country needs to be engaged in this immense challenge – every government department, every layer of devolved and local government, every business, every charity, civil society group and faith community, and every household. Leadership and co-ordination from the Government are vital.
In Chapter 2, Behaviour Change: Why, What and Who, the report says that many witnesses said behaviour change is needed to achieve net zero emissions by 2050 and to comply with international obligations under the Paris Agreement. Of course they did. They quote witness Sir Patrick Vallance, the government Chief Scientific Adviser (for it is he): ‘The reality is that behaviour change is a part of reaching Net Zero. It is unarguable.’ It seems we’re not even to be allowed to debate it.
The Tony Blair Institute for Global Change stirs the pot too: Tim Lord, Associate Senior Fellow at the Institute, said: ‘There is not a counterfactual where we carry on as we are and everything is okay. A world of 2.5, 3 or 3.5 degrees of warming will also require significant behavioural changes in other respects.’
Chapter 3 details the public’s appetite for change. It starts by quoting the Tory MP and minister Greg Hands, who says: ‘We know that the public are keen to play their part. The BEIS Public Attitudes Tracker shows that 85 per cent of the public are concerned or, indeed, very concerned about climate change. That number has doubled since 2016.’ This is backed up by paragraphs detailing the wailing and gnashing of teeth, particularly among the young (just who was it who scared them?) They go on to claim that most of the UK public support some form of action by the Government and others to address climate change and environmental issues.
Subsequent chapters go on to discuss theories, drivers and levers of change, read-across from other policy areas, delivering behaviour change in partnership, challenges and opportunities, communications and the Government’s approach and role. You won’t be surprised to read that the infamous Behavioural Insights Team, or Nudge Unit, will be heavily involved.
The report runs to 140 pages including appendices. It’s worth having a read if only to click on the links of the committee members so you can see just who is behind this and what their outside interests are. Lord (Peter) Lilley stands out as the only one fighting any rearguard action. He lost the vote 1-11.
Not to be outdone, the ‘independent’ Climate Change Committee (not to be confused with the HoL Committee on CC) is getting in on the act of behavioural change too. Its report has been produced by Imperial College London (what could possibly go wrong?) It covers behavioural change in surface transport, aviation, domestic heating and shifting to ‘sustainable ‘diets (pass the mealworms).
An outlier but helping to pull this all together is the Human Behavioural Change Project, sponsored by the Wellcome Trust and UCL among others, which is developing AI systems to scan, organise and interpret human behaviour-change literature. A few clicks on the website leads you, under Grant Holders, to the director, our communist friend Professor Susan Michie. Well, who’d have thought it?
It’s probably a good idea to be up to date on this stuff, or at least have it downloaded and available, just so we know what’s coming down the track: this should enable adequate avoidance, non-compliance and/or resistance.
December 9, 2022
Posted by aletho |
Civil Liberties, Economics, Malthusian Ideology, Phony Scarcity, Supremacism, Social Darwinism, Timeless or most popular | Human rights, UK |
Leave a comment
The recent visit of Iran’s deputy foreign minister for political affairs, Ali Bagheri Kani, to New Delhi manifested a new chapter of relations between the traditional allies, India and Iran.
India, which used to be among the largest buyers of Iranian oil, stopped its crude imports from Iran in May 2019 after the US banned oil trade with Iran by lifting sanction waivers, a year after Washington unilaterally walked out of the landmark nuclear deal.
The imprudent move resulted in bilateral trade between the two countries nose-diving to $2 billion in the fiscal year 2021-22, compared to $16 billion in 2018-19.
Since the outbreak of war in Ukraine in late February, Russia has slowly edged past other oil-rich countries to become India’s largest crude supplier, with New Delhi refusing to join the Western charade of anti-Moscow sanctions and prioritizing its energy security.
That has opened a window of opportunity for Tehran and New Delhi to recalibrate their ties, and resume oil trade, in defiance of Western sanctions.
According to reports, New Delhi is strongly considering the resumption of oil imports from Tehran amid the simmering energy crisis in the country and no help from the Western countries.
India prioritizing energy security
Deepika Saraswat, an associate fellow at New Delhi-based Manohar Parrikar Institute for Defense Studies and Analyses, asserts that New Delhi prioritizes its energy security.
“New Delhi’s purchase of oil from Russia despite the Western sanctions on the country showed the importance of energy security given the context of high energy prices and supply constraints,” Saraswat told the Press TV Website.
“Therefore, India has been an important voice supporting the return of Iranian and Venezuelan oil to the market,” she hastened to add, hinting at the resumption of the Iran-India oil trade.
Bagheri, during his visit to New Delhi, reportedly delivered Tehran’s message to Indian Prime Minister Narendra Modi on the country’s willingness and preparedness to resume oil trade with New Delhi.
“Not a choice but a necessity,” Bagheri was quoted as saying on the importance of closer India-Iran ties.
“Both countries enjoy different types of cooperation in the economic sphere. They are partners and complete each other. Iran enjoys a huge energy resource, and thus it can provide energy supplies to India,” Bagheri told the Indian media.
Bagheri’s visit to New Delhi and discussion about oil trade came weeks after the Iranian ambassador to India, Iraj Elahi, stressed the importance of a close partnership between the two sides.
“There is no doubt that Iran and India were the best friends in dealing in oil. Iran was [meeting] the oil needs of India. But unfortunately, cooperation was affected by sanctions,” the envoy said.
“We always express our readiness to increase our economic ties with India. It’s up to India, we are ready to deliver oil.”
Oil trade and sanctions
In September, Tehran had called on New Delhi to resume oil purchases from the country, “ignoring unilateral” sanctions imposed by the US, similar to what New Delhi has done with Russian oil by skirting western sanctions.
Saurabh Kumar Shahi, a New Delhi-based journalist and commentator who mostly covers the Middle East region, is also of the opinion that New Delhi must go ahead with oil purchases from Iran.
“India should not be afraid of the illegal unilateral sanctions imposed on Iran by the US,” he told the Press TV Website in an interview.
Saraswat, referring to the new Iranian government’s ‘look eastward’ policy, said it means Tehran’s relations with regional countries will only improve.
“Since the new government came to power in Iran, its ‘Asian orientation’ in economic diplomacy means that relations with countries like China, Russia, and India have become a priority,” she stressed.
“Foreign Minister Abdollahian’s visit in June gave a much-needed boost to India-Iran ties, especially the commitment the two countries have shown in charting out a long-term roadmap for their relationship.”
Amid the changing geopolitical dynamics, New Delhi has begun to assert itself on the world stage, with top ministers defending the decision to continue importing oil from Russia.
India’s petroleum minister Hardeep Puri during his visit to Washington in October said New Delhi “will buy oil from wherever it has to”, pointing to the country’s new, vibrant foreign policy.
Saraswat said India has a “tradition” of independent foreign policy that is based on the country’s “own national interest calculus.”
What goes around comes around
Amid the raging Ukraine war and the end of the unipolar world order, the power center is gradually shifting towards Asia, according to observers, which means the death of the American hegemony.
The main protagonists of the new world order are Russia, China, Iran and India.
This political atmosphere could act as a perfect catalyst to resurrect different spheres of the relationship between New Delhi and Tehran, according to observers.
“The world is changing at a fast pace, and the Western order is slowly starting to collapse, under these circumstances India also wants to secure its interests in the region and beyond,” Shahi said.
“And in securing those interests, Russia and Iran are very, very important pillars as far as India is concerned,” he hastened to add.
With Iran set to join the Shanghai Cooperation Organization (SCO) and the BRICS grouping, of which Russia, China, and India are already core members, the future belongs to these countries.
However, not everything is hunky-dory as inimical forces are at play to prevent the partnership between New Delhi and Tehran from blossoming further.
New Delhi has a strategic alliance with the US and it is also part of groups such as I2U2 (India, Israel, US, and UAE), QUAD (United States, Australia, India, and Japan), which may act as obstructions.
“This relationship has not been performing as it should have, as India valued an alliance with the US, it dithered a lot about some of the responsibilities it had towards Iran,” Shahi explained.
Saraswat, however, believes that India has a “tradition of strategic autonomy”.
“It (India) does not believe in alliances against a third state, but partnerships based on mutual interests. In West Asia, India pursues a balanced policy of expanding relations with all key countries,” she said.
Where there’s a will, there’s a way
Amid the disruptions in international trade and transport routes caused by the Ukraine war and Western sanctions on Russia, Iran has emerged as a transit and transport hub connecting China and Central Asia to Europe, and also Russia with India along the International North–South Transport Corridor (INSTC).
Iran’s geological location in the region is such that it becomes the gateway for India to the INSTC that has sea, rail and road routes between India, Russia, Iran, Europe and Central Asia.
“The INSTC is an important route that links South Asia with Eurasia, it becomes important for India to be a part of it in a more proactive way,” said Shahi.
For India, the gateway to this route is the Chabahar Port in Iran’s southeastern Sistan and Baluchistan province. It not only provides key access to India to reach landlocked countries such as Afghanistan but also acts as the gateway for New Delhi and Tehran’s shared interests in the energy sector, in connecting resource-rich Central Asia to the Indian Ocean and their common security challenges in Afghanistan.
In New Delhi, Bagheri also stressed the importance of the development of the port, saying the project is not only important for Iran and India, but also for other countries in the region as it has a key role in the completion of the INSTC and connectivity in the region.
“In the last two decades, Iran has emerged as the pivot of India’s connectivity to Central Asia, wider Eurasia and also its development and humanitarian role in Afghanistan,” Saraswat said.
Shahi says India is now looking for its interests in the region, bypassing the threat of US sanctions.
In early November, during his address at the 21st Meeting of SCO Council of Heads of Government (CHG), Jaishankar underlined the potential of the Chabahar port in Iran for the economic future of the grouping, saying India will “unlock” the “economic potential” of this (SCO) region in which Chabahar port and the International North-South Transport Corridor could become “enablers.”
“The SCO provides a multilateral framework for India to further cooperation on key issues of counter-terrorism, connectivity with Central Asian countries and regional stability,” said Saraswat.
“With Iran soon becoming a full member of the grouping, the two countries will benefit from their shared positions on several issues of connectivity via Chabahar, on Afghanistan among other things.”
Saurabh said as the world moves towards multipolarity, India and Iran “will need each other’s help”.
Mehdi Moosvi is an Indian journalist, presently based in Tehran.
December 9, 2022
Posted by aletho |
Economics, Timeless or most popular | China, I2U2, India, INSTC, Iran, Russia |
Leave a comment
By Uriel Araujo | December 9, 2022
This week London announced it has ordered thousands of new anti-tank weapons to restock, after sending thousands of its units to Ukraine. Meanwhile, it has been reported that Washington is weighing Kiev’s requests to provide the country with cluster munition warheads. Both the UK and NATO have been almost running out of weapons for Ukraine. Recently, US President Joe Biden has been struggling to maintain his international coalition to support Kiev, but hardly succeeded due to domestic problems (both in the EU and in the United States). The conflict in Ukraine aggravates Europe’s energy crisis and this is one of the very reasons Washington has fueled this conflict.
University of Chicago political science professor John Mearsheimer has written extensively on how NATO’s enlargement policies over the years plus its strategy to move Ukraine out of Russia’s orbit by integrating it into the political West are the very root of the conflict which started in 2014 – and 8 years on, this is still the case.
For almost 8 years, the Donbass conflict was Europe’s forgotten war, even though in April 2021 Kiev escalated the violence there once more, with Washington’s full support. Since 2014, NATO has been aggressively provoking and encircling Russia (even in the Arctic), and its member states have been sending massive arms shipments to Ukraine.
Meanwhile, the Washington-led West, including media conglomerates, has white-washed Ukraine’s far-right problem and the blatantly neo-Nazi nature of its Azov Regiment, as well Kiev’s mass killings, its human rights infringements, genocidal policies, and chauvinistic nationalism aimed against ethnic Russians.
For example, on February 18, before the beginning of the current Russo-Ukrainian military conflict (February 24), Kiev started a nasty bombing campaign on Donbass, targetting civilian infrastructure and even a kindergarden in Lugansk. Ironically, the week before that, Moscow had withdrawn its troops from the area near the border, which should have de-escalated tensions – much to no avail.
Up to February 18, in a series of provocations, Ukraine’s military personnel often broke the cease-fire in Donbass and shelled the region so as to instigate the local militias into responding, thus providing a pretext for further Ukrainian aggression while NATO kept sending weapons and mercenaries to Kiev and further fueling tensions. All of that, one can argue, had been escalating to the point of potentially becoming casus belli for Russia. And here we are today. Whether one is critical of Moscow’s decision to launch its military campaign or not, all the above is part of the larger context that one should always keep in mind.
Why then has the US played such a destabilizing role and has supported all that? I’ve written on how the geopolitics of Washington’s strategies is intertwined with geoeconomics and energy interests. The United State’s persistent campaign against Nord Stream and against any Russian-European gas cooperation is part of that. Geoenergetic interests are one of the main issues and driving forces of the 21st century and Washington has been waging a largely unilateral economic war through sanctions and legislative measures.
Its goal has always been to have Europeans buying American LNG, which is more expensive, in fact, even though Russia is quite literally at the “doorstep” of the continent. The truth is that Europe’s energy crisis from the very beginning has served American interests well. In addition, the US-led “Green Agenda” which hampers African energy security quite ironically also hurts European’s own.
One could very well argue then that Washington’s economic war is being waged not only against Moscow, but in fact also against its own European allies. If this sounds far-fetched, one should consider the fact that Biden’s recent aggressive $369 billion subsidies package (which hurts Europe) has been described by French President Emmanuel Macron as an issue that could “divide the West”. EU diplomats have been quoted as saying that the American initiative “changes everything” to the point of making some of them ask “is Washington DC still our ally or not?”. EU industry chief Thierry Breton even stated Biden’s package poses an “existential challenge” to the European economy and industry.
The UK economy is also collapsing over the energy issue, while recession and even depression haunt Europe. Philip Pilkington, an Irish economist famous for his contributions on the empirical estimate of general equilibrium and other fields, has been writing on how post-Nord Stream Europe faces possible deindustrialization. If the high energy costs, related to the ongoing conflict in Ukraine, make European industry uncompetitive, Washington’s subsidy package is a nail in the coffin. In this scenario, Europe’s industry might be “wiped out by American rivals”, as Politico journalists Jakob Hanke and Barbara Moens put it. As the US stands ready to absorb European industrial potential, EU countries will face increasing unemployment, inflation and a decrease in living standards. That scenario of course promises social unrest.
In April, defeated French presidential candidate Marine Le Pen promised to pull France out of NATO. As temperatures decrease with the coming winter amid rising energy prices, one should expect European populism and the far-right to gain more and more political influence, as they have been successfully capitalizing on growing popular discontent with NATO and with the EU bloc itself. It is quite unfortunate that, in Europe, opposition to NATO and to suicidal policies has been largely marginalized to the point of almost becoming a monopoly of so-called extremist discourse.
It remains to be seen how European political elites will respond to the new developments, as the reality of an American economic war against their continent becomes increasingly impossible to deny.
December 9, 2022
Posted by aletho |
Deception, Economics | European Union, UK, United States |
Leave a comment
By Lucas Leiroz | December 8, 2022
As the security crisis and energy instability worsen in Europe, mainly in Germany, the unfeasibility of continuing the current European model of automatic alignment with American foreign policy becomes increasingly evident. American rivalry with Russia, passively embraced by European states, seriously violates EU’s interests and places the entire bloc under a serious threat.
Germany is the most economically important country for the EU and at the same time the most dependent on Russia. Without any energy sovereignty and dependent on the partnership with Moscow to supply its internal market, Berlin sought for decades to maintain pragmatic relations with Russia, capable of overcoming any political or ideological rivalries, aiming exclusively at the well-being of the German people and the local economy. But this stance has been completely abandoned.
During the early days of the Russian special military operation in Ukraine, Germany was the first country to try to somehow resist American pressure for sanctions, at least as far as energy is concerned. But the Scholz government was absolutely unable to resist pressure from Washington and quickly “surrendered”, favoring the American anti-Russian strategy and harming German interests.
Obviously, without the energy to power its industry, the negative effects have already started to be seen in Germany, but the situation will only get worse as winter gets more severe in Europe. With high energy prices and no prospect of improvement in the short term, as well as under a strong crisis of legitimacy with constant mass protests, the country is truly immersed in a severe crisis which consequences spread beyond national borders, since, with the largest European economy weakened, the whole EU is affected.
However, energy and economy are just some of the problems facing Berlin. The German adherence to American sanctions was not the only anti-strategic attitude taken by the government, which also strived to become one of the biggest arms suppliers for the neo-Nazi regime in Kiev, to the point of causing irreversible damage to domestic military reserves.
Before the Russian operation in Ukraine, military experts already frequently reported the obsolescence of the German military apparatus and its inability to defend the country, whose only hope in a possible conflict situation would be to rely exclusively on the “goodwill” of its NATO partners. Now, with Berlin sending its few weapons to Kiev and with an industry weakened by the energy crisis, unable to continue replenishing stocks, the situation is even more hopeless, placing Germany at a very serious level of subservience to the US.
In fact, on December 8, 2022, Olaf Scholz marks one year in the German government, and, as we can see, his administration so far has been a real disaster for the strategic interests of the German state and the entire EU. To sum it up, it is possible to say that his rise to power marked the decline of any German participation in the proposal of a “sovereign” Europe. Earlier, Angela Merkel was an active advocate of increasing the EU’s political autonomy, despite her close ties with the US. Merkel even became Emmanuel Macron’s main partner when the French president announced in his Sorbonne speech the project of achieving a “European sovereignty”.
As a politically stable and considered for years the “de facto” leader of the EU, Merkel tried to make Germany the economic pillar of a more independent Europe in relation to the US. Macron has emerged as an important ally, considering France’s military power – having even proposed the creation of a European army outside NATO. Thus, both countries together would have the conditions to lead a new shift in the bloc, making it a more “distant” ally of the US, defending its own interests without automatic alignment. But the fragility of the Scholz government prevented any process in this direction.
Scholz’s weakness and unpopularity caused his government to passively accept foreign impositions and escalate participation in the Ukrainian conflict, harming its own economy and people. More than that, Scholz passively accepted the humiliation imposed by the West in the attacks on the Nord Stream pipelines. Several intelligence reports point to the involvement of the US, UK and Poland in the sabotage, and even so Germany remains inert and submissive.
These events hindered any idea about “European sovereignty”. Macron’s project for the continent has lost force and today France acts more independently. Germany was unable to play a leading role in managing a new future for the European bloc and has consolidated itself over the last twelve months as an American satellite state, also reflecting its subservience to other European states, economically weaker, which did not have any posture other than increasing the irrational automatic alignment with the US.
As a result, Europe loses the opportunity to become an independent bloc amidst the rise of a multipolar world. At some point in the near future, European leaders will try to reverse the mistakes that are being committed now, but they will find it much more difficult. Weakened, the US-led NATO will become more reactive and aggressive in the future, seeking to retain all zones of influence it still has. And, as Washington has already made clear with the Nord Stream attacks, sabotage and aggression are possible options for forcing Europe to maintain its submissive posture.
Lucas Leiroz is a researcher in Social Sciences at the Rural Federal University of Rio de Janeiro; geopolitical consultant.
December 8, 2022
Posted by aletho |
Economics | European Union, Germany, United States |
Leave a comment
Samizdat – 08.12.2022
Up to 10 tankers carrying oil from Kazakhstan remain stranded in the Turkish straits of the Bosphorus and Dardanelles, the head of the KazMunayGas Kazakh oil and gas company, Magzum Mirzagaliev, said on Thursday.
“As of yesterday, there were 21 tankers there, including six tankers with oil from TCO [Kazakh oil producer]. In general, we estimate that about eight tankers related to Kazakhstan — from eight to 10 — are among those stranded,” Mirzagaliev told reporters.
Mirzagaliev cited the Kazakh Energy Ministry as saying on Wednesday that the delay in the passage of ships through the Turkish straits had already lasted six days at that point. He also recalled the 14-day bottleneck in the same waters last December.
On December 1, Turkey started requiring from oil shippers crossing the Bosphorus Strait and the Dardanelles a letter from an insurer confirming that the vessel is covered by the necessary Protection and Indemnity Insurance (P&I).
On Monday, as the European Union’s sanctions on Russian oil exports by sea went into effect, media reported that about 19 oil tankers were prevented from passing through the Turkish straits.
December 8, 2022
Posted by aletho |
Economics | European Union, Turkey |
Leave a comment
The conflict in Ukraine has fundamentally transformed Germany for the better, Berlin’s envoy to Washington has argued, while acknowledging her country has been far more affected by the economic backlash of anti-Russian sanctions than the US.
Emily Haber opened the op-ed, published by the Washington Post on Monday, with a description of “dimly lit” German airports and streets, cold homes and public buildings, rising gas prices and inflation running at 10%. The country also has to deal with over a million displaced Ukrainians, who are entitled to full health insurance, social benefits, housing and education at government expense.
“Increasingly, it is Europe (and not least Germany) that is bearing the brunt of the sanctions, not the United States,” writes Haber, before pivoting to argue that this doesn’t really matter.
German suffering is “almost nothing” compared to the hardships of the Ukrainian people, according to Haber, but more importantly, “our national psychology is undergoing a profound transformation.”
She calls the decades-long assumptions underlying Berlin’s policies, mainly that trade would promote “stability, transparency and, eventually, systemic change” an illusion that has been dispelled by the conflict.
“To be sure, there are dissenting voices, and there is discontent brewing in some parts of the country,” the ambassador notes in passing.
Germany has cut itself off from Russian energy imports, increased the export of weapons – mainly to Ukraine – and amended its constitution to create a 100 billion-euro fund for NATO-mandated “defense spending.”
Chancellor Olaf Scholz’s decision to increase military spending in February is the “most significant turning point in decades” for Germany, according to Haber. Even the reunification in 1990 “vindicated past strategic decisions and did not require a break with them,” unlike what’s happening now.
While admitting that all of this may seem irrelevant to Ukraine – whose priorities ought to matter more, she suggests – Haber is still proud of the “real and lasting” change Germany has achieved “in such a short time and at great psychological and material cost.”
“And we are happy to see that it is deepening our already close ties with our allies – first and foremost the United States,” she concludes.
December 7, 2022
Posted by aletho |
Economics, Militarism | Germany |
Leave a comment
Upon signing the protocol of the third session of the joint commission for economic cooperation between Iran and Hungary on 16 November, Hungarian Foreign Minister Péter Szijjártó expressed support for Iran’s right to the peaceful use of nuclear energy.
He also wrote on his Facebook page that the Hungarian government intends to integrate Iran into the international cooperation system and that Budapest plans to expand economic cooperation with sanctioned Iran with the aim of “normalizing the situation.”
After regaining power in 2010 and forming a government, Hungary’s ruling Fidesz Party defined its main priority as improving the nation’s economy, creating jobs, and attracting foreign direct investment (FDI). Budapest gradually moved to provide the necessary legal platforms through which foreign companies could make investments, especially in the industrial sector.
Arguably, Hungary’s foreign policy is therefore heavily focused on the development of economic relations with foreign partners to maintain and continue economic growth and attract more FDI.
Between 1989 and 2019, Hungary received approximately $97.8 billion in FDI, mainly in the banking, automotive, software development, and life sciences sectors. The EU accounts for 89 percent of all in-bound FDI.
Hungary’s “Eastern Opening” policy
However, the presence of eastern countries and the increase in the volume of trade and investment in Hungary is particularly noteworthy. This presence is due to Hungary’s “Eastern Opening” policy, which has become one of the principles of the country’s foreign policy and economy since 2012.
The global financial and economic crisis of 2007-2009 and its impact on the European economy was one of the catalysts for the Hungarian government in launching this initiative. As a result of this policy, China has become Hungary’s fifth most important trade partner with bilateral trade volume in 2020, having increased by more than 25 percent year-on-year.
Regardless of the debatable success of this policy, there are two points which make Hungary willing to continue this policy resolutely:
First, Hungary’s location as the gateway to Western Europe positions Budapest as an important access point to those markets, even potentially a logistics and transportation hub between the EU and Asia.
Second, is Budapest’s assumption that a genuine representation of Hungarian national interests is only possible once the country attains more global visibility and is able to parlay that into support from relevant international and regional players.
Iran and Hungary
Iran-Hungary relations cannot be separated from Budapest’s key “Look to the East” policy. Hungary has a special view of the east, including West Asia, and considers Iran to be an important strategic player in the region.
“The Hungarian government has always supported Iran’s balanced approach in international forums and the further development of bilateral ties,” Péter Szijjártó said in July.
The cooperation between Budapest and Tehran has been prioritized in several fields: energy, trade, migration, student exchanges, and support for Iran’s nuclear negotiations.
In the economic sector, Iran and Hungary have signed three economic cooperation protocols to date. Most of the cooperation is in the field of agriculture, animal husbandry, and healthcare. Moreover, the volume of economic trade between the 2nd and the 3rd Joint Economic Cooperation Commission has increased by 55 percent.
Following a recent meeting in Budapest, Iran’s Finance and Economic Affairs Minister Ehsan Khandouzi announced the two countries’ plans for boosting their annual bilateral trade to €100 million. In addition, Iran and Hungary signed a memorandum of understanding in late 2021 to expand economic cooperation in the fields of water treatment, seeds, power plants, animal feed and building materials, and joint investment opportunities.
“We would like Iran to return to the system of peaceful collaboration within the international community as soon as possible. We believe that economic cooperation may be the first step in this return,” Szijjártó said on his last visit to Iran.
In addition to economic cooperation, there are 2000 Iranian students in Hungary, and the government plans to grant scholarships to 100 Iranian students. Budapest also appreciated Iran’s role in preventing the flow of migrants to Hungary, especially Afghans, and politically supports Iran’s acquisition of peaceful nuclear technology.
Capitalizing on Budapest’s strained EU ties
From Iran’s point of view, Hungary can help it to bypass sanctions, enter global markets, and act as a mediator in easing belligerent European policies against Iran. Budapest’s tension with the EU in adopting policies that, in some cases, violate the EU’s own procedures and regulations, also incentivizes Iran to deepen its strategic partnership with Hungary to help further Tehran’s interests in Europe.
Hungary and the EU have been clashing for years on issues ranging from judicial independence to media freedoms and refugee rights. In September, several EU lawmakers declared that Hungary had become “a hybrid regime of electoral autocracy.”
In turn, Budapest has repeatedly accused Brussels of undermining its national interests and meddling in its internal politics. In 2018, Hungary passed a law in that criminalized helping illegal asylum seekers, which punishes violators with up to a year in prison. The EU strongly condemned the new legislation, but Hungary stood firm.
An eastward outlook
The opposition of the EU to Hungary and the adoption of its closer alignment with the east has prompted Budapest to take a positive, more proactive view toward countries like China, Russia, Iran, and to some extent, Turkey.
Currently, Hungary enjoys strong economic and energy relations with Russia. By opposing a visit by the special rapporteur on human rights to Russia, Budapest became the only European capital to take this stance.
While Hungary voted in favor of two 2014 resolutions against Russia over Ukraine, it has also opposed an €18 billion EU aid package to the embattled state.
Budapest is highly dependent on Moscow for energy supplies with 85 percent of the country’s gas and 65 percent of its oil supplied by Russia. Unlike the other energy dependent EU members, Hungarian authorities are strongly and openly opposed to sanctions against Russia, particularly in the energy sector.
In regard to 2022 energy shortages, Hungary’s foreign minister has even encouraged Europe to look to Tehran: “Iran’s stronger entry to the global energy market is in line with the interests of the world’s entire countries and nations.”
On the issue of Sweden and Finland joining NATO, Hungary – like Turkey – has declared its opposition to the plan, which is essentially opposition to the expansion of NATO in Europe or to the east.
Hungary’s common positions with Russia and the eastern bloc inevitably overlaps with some of Iran’s policies. By coordinating with both Europe and West Asia, deepening strategic relations between Budapest and Tehran can become a means to advance their mutual goals and interests.
At the same time, Hungary will be wary of potential western sanctions if it is viewed as growing too close to Iran.
December 7, 2022
Posted by aletho |
Economics | European Union, Hungary, Iran, Sanctions against Iran |
Leave a comment
The problem with most Western media’s political analyses is that they generally tend to be short-sighted and focused mostly on variables that are of direct interest to Western governments.
These types of analyses are now being applied to understanding official Arab attitudes towards Russia, China, global politics and conflicts.
As Chinese President Xi Jinping prepares to lead a large delegation to meet with Arab leaders in Saudi Arabia on 9 December, Western media conveys a sense of dread.
The Chinese leader’s visit “comes against the backdrop” of the Biden Administration’s “strained ties with both Beijing and Riyadh” over differences, supposedly concerning “human rights and Russia’s invasion of Ukraine,” Reuters reported.
The same line of reasoning was parroted, with little questioning, by many other major Western media sources, falsely suggesting that ‘human rights’, along with other righteous reasons, are the main priority of the US and Western foreign policy agenda.
And, since these analyses are often shaped by Western interests, they tend to be selective in reading the larger context. If one is to rely exclusively or heavily on the Western understanding of the massive geopolitical changes around the world, one is sure to be misled. Western media wants us to believe that the strong political stances taken by Arab countries – neutrality in the case of war, growing closeness to China and Russia, lowering oil output, etc – are done solely to ‘send a message‘ to Washington, or to punish the West for intervening in Arab affairs.
Seen through a wider lens, however, these assumptions are either half-truths or entirely fabricated. For example, the OPEC+ decision to lower oil output on 5 October was the only reasonable strategy to apply when the global market’s demand for energy is low. Additionally, Arab neutrality is an equally reasonable approach considering that Washington and its Western allies are not the only global forces that matter to the Arabs. It is equally untrue that the Middle East’s growing affinity with Asia is borne out of recent dramatic events, but a process that began nearly two decades ago, specifically a year following the US invasion of Iraq.
In 2004, China and the Arab League established the China-Arab States Cooperation Forum.
CASCF officially represented the Chinese government and all 22 members of the Arab League, eventually serving as the main coordination platform between China and the Arabs. This has given China the advantage of investing in a collective strategy to develop trade, economic and political ties with the entirety of the Arab world. On the other hand, Arabs, too, had the leverage of negotiating major economic deals with China that could potentially benefit multiple Arab states simultaneously.
An extremely important caveat is that CASCF was predicated in what is known as the “Five Principles of Peaceful Coexistence.” Based on the Westphalian norms of state sovereignty, the five principles seem to be founded on an entirely different paradigm of foreign relations, compared to the West’s approach to the Middle East and the Global South, in general, extending from the colonial periods to the neo-colonialism of post-World War II: mutual respect for “territorial integrity and sovereignty”, “non-aggression”, “non-interference”, and so on.
Chinese-Arab relations continue to follow this model to this day, with very little deviation. This validates the claim that collective Arab political attitudes towards China and Xi’s visit to the Middle East are hardly an outcome of any sudden shift of policies resulting from the Russia-Ukraine war of recent months.
This is not to suggest that Arab and Chinese relations with the US and the West had no impact on the nature of the speed of Chinese-Arab ties. Indeed, the Chinese model of ‘peaceful coexistence’ seems to challenge the henceforth modus operandi at work in the Middle East.
In 2021, China announced projects to build a thousand schools in Iraq, a piece of news that occupied substantial space in Arab media coverage. The same can be said about China’s growing economic – not just trade – influence in Arab countries.
China’s lucrative Belt and Road Initiative, announced in 2013, fits seamlessly into the political infrastructure of Arab-Chinese ties, which were built in previous years. According to the Asharq Al-Awsat newspaper, Riyadh was the largest recipient of Chinese investments within the BRI during the first half of 2022.
Starting in March, Saudi Arabia agreed in principle to sell its oil to China using the Chinese Yuan instead of the US dollar. When implemented, this decision will have irreversible repercussions on the global market but also on the future status of the dollar.
Assuming that such mammoth changes in global geopolitics were an outcome of the immediate need for the Arabs to ‘send a message’ will continue to impair the West’s ability to truly appreciate that the changes underway, not only in the Middle East but worldwide, are part of permanent shifts to the world’s political map. The sooner the West achieves this realisation, the better.
Considering all of this, it would be unfair – in fact, misguided – to suggest that large political entities like China and Arab countries combined are shaping their foreign policy agendas, thus staking their futures, on knee-jerk political reactions to the attitude of a single American President or administration.
December 7, 2022
Posted by aletho |
Economics | China, Iraq, Middle East, Saudi Arabia, United States |
Leave a comment
A letter provided by Russian insurer, Ingosstrakh, enabled the first oil tanker to sail through Turkish waters in recent days after tougher regulations were imposed by Turkish authorities, a document showed, Reuters reports.
This has led already at least 20 oil tankers backed up in the Turkish Straits as they do not have the right paperwork.
Turkish authorities introduced new requirements, which came into effect on 1 December, in which every ship must have insurance cover in place for all circumstances when sailing through Turkish waters or when calling at ports.
Ingosstrakh provided the requirements for the Liberia flagged “Vladimir Tikhonov” tanker, which included insurance for pollution risks throughout the period in Turkish waters, according to a letter issued to the authorities on 29 November by the insurer and seen by Reuters.
The world’s leading Western ship insurers say they are unable to provide cover for all circumstances, arguing they cannot be liable for payouts if, for instance, there are sanctions breaches with a ship’s cargo.
“Vladimir Tikhonov” completed sailing through the Bosphorus on 3 December, ship tracking data showed.
The EU and G7 price cap on Russian oil went into effect on Monday, but it’s already causing disruptions in global supply chains. The first manifestation comes from Turkey, where the Financial Times reports that a tanker traffic jam is stacking up in Turkish waters and blocking some 18 million barrels of oil from passage, as the country’s authorities demand proof that the vessels have insurance coverage:
“Around 19 crude oil tankers were waiting to cross Turkish waters on Monday, according to ship brokers, oil traders and satellite tracking services. The vessels had dropped anchor near the Bosphorus and Dardanelles, the two straits linking Russia’s Black Sea ports to international markets.”
In a striking demonstration of the price cap’s potential to disrupt markets, most of the oil in the delayed ships isn’t even subject to the sanction regime: It’s from Kazakhstan and has merely transited Russian ports after arriving there via pipeline.
One oil industry insider said Russian shippers have transited with relative ease — it’s shippers covered by western insurers that are anchored and now destined to deliver their cargo late. … Full article
December 6, 2022
Posted by aletho |
Economics, Environmentalism | European Union, Russia, Turkey |
Leave a comment
Something odd is afoot in Europe. Britain recently has been ‘regime washed’, with a strongly pro-EU Finance Minister (Hunt) paving the passage to an election-free premiership by ‘globalist’ Rishi Sunak. Why so? Well, to impose swingeing cuts to public services, to normalise immigration running at 500,000 per annum and to raise taxes to the highest levels since the 1940s. And to open channels about a new relationship deal with Brussels.
A British Tory Party is content to do that? Slash social support and hike taxes into an already existent worldwide recession? On the face of it, it doesn’t seem to make sense. Shades of Greece 2008? Greek austerity for Britain — are we missing something? Is this setting the scene for the Remainer Establishment to point to an economy in crisis (blamed on Brexit failure), and to say there is no alternative (TINA) but a return to the EU in some form, (British ‘cap in hand’, and with head bowed)?
Simply put, forces behind the scenes seem to want the UK to resume its former role as US plenipotentiary inside Brussels — pushing the US primacy agenda (as Europe sinks into self-doubt).
Likewise odd — and significant – was that on 15 September, former German Chancellor Schroeder entered unannounced into Scholtz’s office where only the Chancellor, and Vice-Chancellor, Robert Habeck, were present. Schroeder slapped down a long-term gas supply proposal by Gazprom on the desk, directly under Scholtz’s eyes.
The Chancellor and his predecessor held each other’s gaze for a minute – without a word passing. Then Schroeder reached out, took back the unread document, turned his back and exited the office. Nothing was said.
On 26 September (11 days later), the Nordstream pipeline was sabotaged. Surprise (yes, or no)?
Many unanswered questions. The upshot: No gas for Germany. One Nordstream train (2B) however, survived the sabotage and remains pressurised and functional. Yet still no gas arrives in Germany (other than high price liquified gas). There are presently no EU sanctions on gas from Russia. Landing the Nordstream gas requires only a Regulatory go-ahead.
So then: Europe is to have austerity, loss of competitiveness, price and tax hikes? Yes — yet Scholtz did not even glance at the gas offer.
The Green Party of Habeck and Baerbock (and the EU Commission) is in close alignment with those in the Biden team insisting to maintain US hegemony, at all costs. This Euro-coalition is explicitly and viscerally malefic towards Russia; and in contrast, is as viscerally indulgent towards Ukraine.
The big picture? German Foreign Minister Baerbock in a speech in New York on 2 August 2022 sketched out a vision of a world dominated by the US and Germany. In 1989, George Bush famously had offered Germany a “partnership in leadership”, Baerbock claimed. “Now the moment has come when we have to create it: A joint partnership in leadership”. A German bid for explicit EU primacy, snaring US support. (The Anglos will not like that!)
Ensuring no backsliding on Russia sanctions and continuing EU financial support for the Ukraine war is a clear ‘Red Line’ for precisely those in the Biden team likely to be attentive to Baerbock’s Atlanticist bid — and who understand that Ukraine is the spider at the centre of a web. The Greens explicitly are playing this.
Why? Because Ukraine is still the global ‘pivot’: Geopolitics; geo-economics; commodity and energy supply chains — all revolve around where this Ukraine pivot finally settles. A Russian success in Ukraine would bring a new political bloc and monetary system into being, through its allies in the BRICS+, the Shanghai Cooperation Organization and the Eurasian Economic Union.
Is this European austerity binge then just about the German Green Party nailing down EU Russophobia? Or are Washington and its Atlanticist allies now prepping for something more? Prepping for China to get the ‘Russia treatment’ from Europe?
Earlier this week at Mansion House, PM Sunak changed gear. He ‘hat-tipped’ to Washington with the promise to stand by Ukraine ‘as long as it takes’, yet his primary foreign policy focus was firmly on China. The old ‘golden’ era of Sino-British relations ‘is over’: “The authoritarian regime [of China] poses a systemic challenge to our values and interests”, he said — citing the suppression of anti-zero-COVID protests and the arrest and beating of a BBC journalist on Sunday.
Over in the EU — belatedly panicking over unfolding widespread de-industrialisation — President Macron has been signalling that the EU might take a more hard-line China stance, though only were the US were to back-down on the subsidies in the Inflation Reduction Act, which entice EU companies to up-anchor, and sail off to America.
Yet, Macron’s ‘play’ is likely to meet a dead end, or at best, a cosmetic gesture — for the Act has already been legislated in the US. And the Brussels political class unsurprisingly already is waving the white flag: Europe has lost Russian energy and now stands to lose China’s tech, finance and market. It’s a ‘triple whammy’ — when taken together with European de-industrialisation.
There you have it — austerity is always the first tool in the US toolbox for exerting political pressure on US proxies: Washington is prepping the EU ruling élites to sever from China as fundamentally Europe has already done from Russia. Europe’s largest economies already are taking a harder line on Beijing. Washington will squeeze the UK and EU ‘til the pips squeak to get full compliance on a China cut-off.
The protests in China over Covid regulations could not have arrived at a more serendipitous time from the US’ ‘China hawks’ perspective: Washington whipped the EU into full propaganda mode on Iranian ‘demonstrations’ — and now the China protests offer the opportunity for Washington to go full court on China demonisation:
The ‘line’ used against Russia (Putin makes mistake after mistake; the system bumbles; the Russian economy is precariously perched on a knife edge and popular disaffection is soaring) – will be ‘cut and pasted’ to Xi and China.
Only, the inevitable EU moral lecturing will antagonise China even further: Hopes to keep a trade foothold in China will vanish, and effectively it will be China ‘washing its hands’ of Europe, rather than vice versa. European leaders have this blind spot — quite some Chinese may deplore the Covid lockdown practice, yet still will remain deeply Chinese and nationalist in sentiment. They will hate EU lecturing: ‘European values speak only for themselves — we have our own’.
Obviously, Europe has dug itself into a deep hole. Its adversaries grow bitter at EU moralising. But what exactly is going on?
Well, firstly, the EU is hugely over-invested in its Ukraine narrative. It seems incapable of reading the direction of travel that events in the war zone are taking. Or, if it does read it correctly (of which there is little sign), it appears incapable of being able to affect a course correction.
Recall that the war at the outset was never seen by Washington as likely ‘being decisive’. The military aspect was viewed as an adjunct — a pressure multiplier — to the political crisis in Moscow that sanctions were expected to unleash. The early concept was that financial war represented the front line — and the military conflict, the secondary front of attack.
It was only with the unexpected shock of sanctions not achieving ‘shock and awe’ in Moscow that priority switched from the financial to the military arena. The reason the ‘military’ was not firstly seen as ‘front-line’ was because Russia clearly had the potential for escalatory dominance (a factor which is now so evident).
So, here we are: The West has been humiliated in the financial war, and unless something changes (ie. dramatic escalation by the US) – it will lose militarily too — with the distinct possibility that Ukraine at some point, simply implodes as a state.
The actual situation on the battlefield today is almost completely at odds with the narrative. Yet, so heavily has the EU invested in its Ukraine narrative that it just doubles-down, rather than draw back, to re-assess the true situation.
And so doing — by doubling-down narratively, (standing by Ukraine ‘for as long as it takes’) — the strategic content to the ‘Ukraine’ pivot rotates 180 degrees: Rump ‘Ukraine’ will not be ‘Russia’s Afghan quagmire’. Rather, its’ rump is morphing into Europe’s long-term financial and military ‘quagmire’.
‘As long as it takes’ gives the conflict an indeterminate horizon — yet leaves Russia in control of the timetable. And ‘as long as it takes’ implies ever more exposure to NATO blind spots. The rest-of-world intelligence services will have observed NATO’s air defence and military-industrial lacunae. The pivot will show who is the true ‘paper tiger’.
‘As long as it takes’ — has the EU thought this through?
If Brussels imagines too, that such dogged adherence to narrative will impress the rest-of-the-world and bind these other states closer to the EU ‘ideal’, they will be wrong. Already there is a wide hostility to the notion that Europe’s ‘values’ or squabbles have any wider pertinence, beyond Europe’s borders. ‘Others’ will see the inflexibility as some bizarre compulsion by Europe to self-suicide – at the very moment that the end of ‘everything bubble’ already threatens a major downturn.
Why would Europe double-down on its ‘Ukraine’ project, at the expense of losing its standing abroad?
Perhaps, because the EU political class fears even more losing its domestic narrative. It needs to distract from that — it is a tactic called ‘survival’.
The EU, as with NATO, was always a US political project for the subjugation of Europe. It still is that.
Yet, the meta-EU narrative — for internal EU purposes — posits something diametrically different: that Europe is a strategic player; a political power in its own right; a market colossus, a monopsony with the power to impose its will over whomsoever trades with it.
Simply put, the EU narrative is that it has meaningful political agency. But Washington has just demonstrated it has none. It has trashed that narrative. So, Europe is destined to become an economic backwater. It has ‘lost’ Russia — and soon China. And is finding it has lost its standing in the world, too.
Again, the actual situation on the geo-political ‘battlefield’ is almost completely at odds with the EU narrative of itself as a geo-strategic player.
Its ‘friend’, the Biden Administration, is gone — whilst powerful enemies elsewhere accumulate. The EU political class never had a good grasp of its limitations — it was ‘heresy’ even to suggest there were limitations to EU power. Consequently, the EU has hugely overinvested in this narrative of its agency too.
Hanging EU flags from every official building will not cast a fig leaf over the nakedness, nor hide the disconnect between the Brussels ‘bubble’ and its deprecated European proletariat. French politicians now openly ask what can save Europe from complete vassalage. Good question. What does one do when a hyper-inflated power narrative bursts, at the same time as a financialised one?
December 6, 2022
Posted by aletho |
Economics, Militarism | China, European Union, NATO, Russia, UK, United States |
Leave a comment
By Ahmed Adel | December 6, 2022
The price cap imposed by the West on oil from Russia will actually have negative consequences in the long term as it once again reaffirmed to the international community that Western-centric banking and shipping insurance schemes cannot be trusted as reliable partners.
Western oil sanctions went into effect on December 5, with the European Union stopping all shipments of Russian oil arriving by sea. In addition, the EU, as well as G7 countries and Australia, imposed a limit on the price of oil transported by sea at $60/barrel. The West expects that this will cripple the Russian economy and force Moscow to end its special military operation in Ukraine.
However, this will spectacularly fail.
Sanctions have not instigated an end to the military operation, and in fact they have forced financial mechanisms independent of western institutions to be established. Although the world economic system was already slowly heading towards de-Dollarisation, the anti-Russia sanctions have only sped up the process as important economic players like China, India and Egypt have found methods to bypass western sanctions.
It is recalled that Russia had previously introduced the Mir card system as an alternative to Western financial systems, despite there being a lot of scepticism about it. Now, Mir is being adopted all over the world, and the same can certainly be done in the shipping and shipping insurance industry.
The imposition of an oil price cap has made non-Western countries think about how to break free from Western payment systems and shipping channels. Many countries are already pre-emptively establishing these mechanisms to avoid the same teething problems that Russia has experienced since February 2022.
Washington warned the EU on December 1 that the $52 cited recently for Urals crude oil may not reflect the overall level at which Russian oil has been trading. An unnamed US official has said that Urals has been trading at a $17-$23 discount to crude, which would make it higher than the $52 cited by some media. It is for this reason that the EU set the oil price cap $8 above that cited figure.
For their part, Poland, Estonia, and Lithuania have all voiced their opinion that the price cap on Russian crude oil insured and shipped by Western companies should be set at Russia’s production cost – $20-$30 per barrel. Those levels were dismissed as having very little chance of being supported by other EU members.
The introduction of a price cap on Russian seaborne oil at $60 per barrel is already a risky strategy to begin with and has uncertain results. Therefore, the Polish-Baltic proposal was never going to be approved. Oil market participants were already fearing a $60 cap to begin with, forcing Biden administration officials trying to reassure that the newly agreed cap will not lead to supply disruptions and volatility in the price after it went into effect.
None-the-less, experts fear that “over-compliance” on the restrictions could affect pricing.
“One of the big potential issues is going to be over-compliance, intermediaries deciding that the risk is too great and not engaging,” said Adam M. Smith, a partner at Gibson, Dunn and Crutcher and a former adviser at Treasury’s Office of Foreign Assets Control, which oversees sanctions. “Banks have historically been very risk-averse — as they should be — in the sanctions space and I think over-compliance in that context can be expected.”
Due to the price cap, many countries may stop any action for a while so that they can analyse all the risks, including decisions which could lead to sanctions from Western countries.
“That’s a real risk,” said Hunter Kornfeind, an oil market analyst at Rapidan Energy Group. “There could be a multi-week lull when some buyers are reluctant to move barrels as they wait and see. It’s not going to be like the whole trade shuts down, but there could be some who take a step back.”
Russian Deputy Prime Minister Alexander Novak pointed out that Russia will not export oil to countries that set price caps. According to him, such restrictions mean that by interfering with the market, Moscow will only interact with buyers willing to work under normal market conditions.
For his part, Russian President Vladimir Putin has stated that Moscow will not deliver anything abroad if it is against its interests. He warned that the introduction of oil price caps could have “grave consequences for global energy markets.”
Although the full impact of what the price cap is not yet known, the attempts to further financially and economically isolate Russia are likely to be another spectacular failure.
Ahmed Adel is a Cairo-based geopolitics and political economy researcher.
December 6, 2022
Posted by aletho |
Economics, Russophobia | European Union, United States |
Leave a comment
By Uriel Araujo | December 5, 2022
While the United States’ European allies are now fighting aggressive American subsidies (a crisis that risks dividing the political West), Taiwan, another US ally, also faces Washington’s protectionism. This fits into the US pattern of hurting close allies in many different ways.
Biden and Apple’s CEO Tim Cook are visiting Arizona on December 6 to launch the $12 billion American plant of chip giant TSMC – it is the company’s first advanced chip in the US. The US $52 billion chip subsidy bill (passed in July) has been described as vital to the construction of the TSMC plant in Arizona. This will basically transfer Taiwan’s productivity and its most advanced technology to the US and such news has not been well received in Taiwan.
Journalist Zhang Zhouxiang has described this new development as TSMC draining itself. According to him, Taiwan is moving “high-end jobs” away, which hurts the Taiwanese economy.
Semiconductors play a key role in cybersecurity and military applications. Since the pandemic, there has been a shortage of chips (semiconductors) and earlier this year the US Commerce Secretary Gina Raimondo described this situation as a “national security” issue.
Regarding chips, national interests and national security concerns are thus often intertwined. The British government has basically imposed a semiconductor blockade on China, by having taken actions to retrospectively block the sale of Newport Wafer Fab (one of the country’s largest semiconductors plants) to Nexperia, a Dutch company owned by China’s Wingtech. Just days before, the German government had blocked the sale of Elmos Semiconductor’s factory to Silex, a Swedish subsidiary of China’s Sai Microelectronics. In both Germany and Britain concerns about security and economic as well as technological sovereignty have been voiced. There are also concerns about the possible outflow of technical know-how.
Likewise, as part of the ongoing New Cold War, the US government, in early October, banned Chinese companies from purchasing (without a license) both chip-making equipment and advanced chips. Singapore’s foreign minister Vivian Balakrishnan went so far as to describe the American ban as “all but a declaration of a technology war”. Former US Treasury secretary Lawrence Summers has also described the American chip restrictions as a “de facto declaration of economic war” (against China), and added that it is a “disproportionate response”.
Chipmaking has been a new front in American-Chinese tensions, and now, with the aforementioned German and British decision, tensions are also escalating in Europe. Such European decisions are also the result of Washington’s pressure, according to Xiaomeng Lu, director of geo‑technology at Eurasia Group.
In February, amid the escalation of tensions between Beijing and Washington over Taiwan, I wrote on how Taiwan stands between the two superpowers in their technological competition. Amid the ongoing chip race, many different countries have introduced incentives to foster the semiconductors’ industry. Taiwan is the planet’s largest chip manufacturer and is also the center of Chinese-US tensions today. This is the ironic context of TSMC’s Arizona move.
It is increasingly difficult today to insulate industries from geopolitical disputes. Beijing aspires to become a tech superpower, something which American political elites will not tolerate. Although the Chinese semiconductor industry has been growing quite quickly, it still remains behind the cutting edge in chips, largely due to American efforts to block Chinese endeavors to acquire the necessary equipment and know-how.
However, the American economic war on Beijing in fact endangers the global microchip industry itself and increases the risk of butterfly effects, China being a key part of the globalized world. Moreover, while the US never had an intensive economic relationship with its Soviet rival during the old Cold War, China today remains the United States’ third largest market for exports. In addition, as historian and foreign-policy analyst Max Boot has remarked, a single factory in China, Foxconn, is reported to produce about half the world’s iPhones, for example. This being so, according to Boot, while Washington does not want to see any Western technology being “transferred” to the Chinese military, it can’t, on the other hand, endanger supply chains for chips and other vital parts.
Moreover, the so-called American “chip war” and its export curbs can in fact bring record losses for Taiwanese, Japanese and South Korean makers (all of these nations being US allies).
Washington’s aggressive subsidies and protectionism have arguably stopped the country from rejoining the Trans-Pacific Partnership (a trade agreement among 12 Asia-Pacific nations). Its Inflation Reduction Act in turn has alienated important allies such as Germany and France – the very states Washington counts on in its plans to counter China.
Harvard professor William Overholt has stated that today the US “wants everybody to join economic alliances” with them, while not giving anything in return. Meanwhile, ironically, Communist-Party ruled China, according to him, has promoted freer trade and investment around the world.
With the Belt and Road Initiative, among others, geoeconomics has been the very core of Beijing’s geostrategic approaches. Washington, in turn, has been dangerously weaponizing its economic and financial policies to “counter” China and Russia, also hurting close allies in the process. The irony is that the more the US employs economic leverage to aggressively coerce other states, the greater the incentive to come up with alternatives against Washington.
To sum it up, currently, the US is overextended and overburdened, trying to simultaneously encircle and contain both Moscow and Beijing. Its aggressive protectionism in turn has been enraging and alienating important allies, such as the EU and Taiwan. All of this signals the decline of the American superpower and of the US-led global order.
December 5, 2022
Posted by aletho |
Economics, Militarism | China, European Union, United States |
Leave a comment
If you regard the United States as perhaps flawed but overall a force for good in the world . . .
Aletho News 