September 3, 2015
A History of the World, BRIC by BRIC
Posted on Apr 26, 2012
By Pepe Escobar, TomDispatch
However, BRICS cohesion, to the extent it exists, centers mostly around shared frustration with the Masters of the Universe-style financial speculation that nearly sent the global economy off a cliff in 2008. True, the BRICS crew also has a notable convergence of policy and opinion when it comes to embattled Iran, an Arab Sprung Middle East, and Northern Africa. Still, for the moment the key problem they face is this: they don’t have an ideological or institutional alternative to neo-liberalism and the lordship of global finance.
As Vijay Prashad has noted, the Global North has done everything to prevent any serious discussion of how to reform the global financial casino. No wonder the head of the G-77 group of developing nations (now G-132, in fact), Thai ambassador Pisnau Chanvitan, has warned of “behavior that seems to indicate a desire for the dawn of a new neocolonialism.”
Meanwhile, things happen anyway, helter-skelter. China, for instance, continues to informally advance the yuan as a globalizing, if not global, currency. It’s already trading in yuan with Russia and Australia, not to mention across Latin America and in the Middle East. Increasingly, the BRICS are betting on the yuan as their monetary alternative to a devalued U.S. dollar.
Japan is using both yen and yuan in its bilateral trade with its huge Asian neighbor. The fact is that there’s already an unacknowledged Asian free-trade zone in the making, with China, Japan, and South Korea on board.
Square, Site wide
What’s ahead, even if it includes a BRICS-bright future, will undoubtedly be very messy. Just about anything is possible (verging on likely), from another Great Recession in the U.S. to European stagnation or even the collapse of the eurozone, to a BRICS-wide slowdown, a tempest in the currency markets, the collapse of financial institutions, and a global crash.
And talk about messy, who could forget what Dick Cheney said, while still Halliburton’s CEO, at the Institute of Petroleum in London in 1999: “The Middle East, with two-thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.” No wonder when, as vice president, he came to power in 2001, his first order of business was to “liberate” Iraq’s oil. Of course, who doesn’t remember how that ended?
Now (different administration but same line of work), it’s an oil-embargo-cum-economic-war on Iran. The leadership in Beijing sees Washington’s whole Iran psychodrama as a regime-change plot, pure and simple, having nothing to do with nuclear weapons. Then again, the winner so far in the Iran imbroglio is China. With Iran’s banking system in crisis, and the U.S. embargo playing havoc with that country’s economy, Beijing can essentially dictate its terms for buying Iranian oil.
The Chinese are expanding Iran’s fleet of oil tankers, a deal worth more than $1 billion, and that other BRICS giant, India, is now purchasing even more Iranian oil than China. Yet Washington won’t apply its sanctions to BRICS members because these days, economically speaking, the U.S. needs them more than they need the U.S.
The World Through Chinese Eyes
Which brings us to the dragon in the room: China.
What’s the ultimate Chinese obsession? Stability, stability, stability.
The usual self-description of the system there as “socialism with Chinese characteristics” is, of course, as mythical as a gorgon. In reality, think hardcore neoliberalism with Chinese characteristics led by men who have every intention of saving global capitalism.
At the moment, China is smack in the middle of a tectonic, structural shift from an export/investment model to a services/consumer-led model. In terms of its explosive economic growth, the last decades have been almost unimaginable to most Chinese (and the rest of the world), but according to the Financial Times, they have also left the country’s richest 1% controlling 40%-60% of total household wealth. How to find a way to overcome such staggering collateral damage? How to make a system with tremendous inbuilt problems function for 1.3 billion people?
Enter “stability-mania.” Back in 2007, Prime Minister Wen Jiabao was warning that the Chinese economy could become “unstable, unbalanced, uncoordinated, and unsustainable.” These were the famous “Four Uns.”
Today, the collective leadership, including the next Prime Minister, Li Leqiang, has gone a nervous step further, purging “unstable” from the Party’s lexicon. For all practical purposes, the next phase in the country’s development is already upon us.
It will be quite something to watch in the years to come.
How will the nominally “communist” princelings—the sons and daughters of top revolutionary Party leaders, all immensely wealthy, thanks, in part, to their cozy arrangements with Western corporations, plus the bribes, the alliances with gangsters, all those “concessions” to the highest bidder, and the whole Western-linked crony-capitalist oligarchy—lead China beyond the “Four Modernizations”? Especially with all that fabulous wealth to loot.
The Obama administration, expressing its own anxiety, has responded to the clear emergence of China as a power to be reckoned with via a “strategic pivot”—from its disastrous wars in the Greater Middle East to Asia. The Pentagon likes to call this “rebalancing” (though things are anything but rebalanced or over for the U.S. in the Middle East).
New and Improved Comments