Counterpoint: Russia's gas diplomacy

Russia's habit of using gas supplies to blackmail the west may backfire soon. 

EurActiv blog reports that Russian editors and experts recently scoffed at the EU's decision to build up gas reserves while gas prices were cheap, in case Russia became belligerent during the winter. 

But in that same article, the writer notes this: 

"Konstantin Simonov, head of the Russian fund for national energy security, warned that Russia’s EU gas market share was not as large as many think. “It used to be 25% in the previous year, and in the first quarter of this year it felt to 16%,” he stated, confirming the bad forecasts for Russian sales". 

Seems like further attempts at gas diplomacy will only push the Europeans to look elsewhere. Central Asia's been making some interesting noises in the past few years. 

Counter-point: Iran's nuclear weapons

John Robb's excellent 'Brave New War' is a highly reccomended read. Don't miss it. 

He writes (and I paraphrase) that one of the reasons the US basically got away with attacking Iraq is because no one really cared beyond winning political brownie points.

Iran is different because a war against Iran is also a shock to the world's economy (oil). And so, no one (least of all, Israel) will ever attack Iran, no matter what Biden said yesterday to an Australian news channel. Too much is at stake.

So here's my counterpoint comes. Yes, an Iran with nuclear weapons is inherently dangerous. But that is precisely why an Iran with nuclear weapons may be a 'good' thing. It means no country can take the decision to attack Iran lightly.  

When the world recovers from the present economic crisis, the prospect of an oil price shock won't seem so severe. That's when Iran will need a bigger guarantee for its safety. The economic crisis has bought Iran perhaps 2-3 years to build its capabilities.

We know it is already collaborating with North Korea on this. Nuclear weapons - even a really small stockpile - give it that guarantee. In the grander scheme of things. A nuclear-armed Iran (caveat: with a sensible leader) will be a good thing for the world. 

(This is a thought experiment. Not a firm opinion.)

Iran and the world

When Israel went to war against the Hezbollah in Lebanon in 2006, there were calls to include Iran in the fighting. I argued then that Iran was absolutely central to long-term stability in the middle east; not least because it had the region's strongest military and the largest economy. 

Now, two pieces of news make me believe the Obama administration feels Iran needs more 'attention'... mindspace... whatever you'd like to call it. 

Dennis Ross, the point-person on Obama's team for Iran has been moved to head the National Security Council's Strategic Planning Cell. What this tells me is that Obama indeed needs someone with serious knowledge on Iran to plan scenarios for the US. 

The second, far more worrying bit of news is that Iran and North Korea are reportedly working together on missile technology. With North Korea's nukes and Iran's fairly advanced missiles, Southern Europe and parts of Alaska and Hawaii could now potentially come under nuclear attack. The world has just got A LOT scarier. 

Externalities

On World Environment Day, Ashok Khosla, founder of Development Alternatives and President of the International Union for Conservation of Nature, made an interesting speech. 

He said that the economic value of services' provided by nature to India is estimated at $1.5 trillion - 50% greater than the value of India's GDP. In other words, phenomenon such as the filtration of air by trees, rain, etc are worth more than India's GDP. 

This alone should prompt some serious protection measures. If we do not preserve our natural resources, we will need to artificially replicate the services nature provides us.

This will cost us. Heavily! Think about it - our economy currently generates around $1 trillion in goods and services each year. Can Indians afford another $1.5 trillion tacked on to the money we already spend?

Malthus... Google... and imperfect information

My latest thought experiment started out simply enough. Malthus hasn't yet been proved right on a planet-wide scale. In great part, this is thanks to globalisation - where countries are now pulling in resources from everywhere.

So what if Malthus is wrong in perpetuity. What does that do to economics? Will inflation keep going up? What does that mean for the true value of what we make? What does that do to capitalism, which in large part depends on hiding the true value of a product or service in order to create profit?

So I went one step beyond that. Is capitalism its own worst enemy? If Malthus is wrong and resources won't ever get so scarce, then can capitalism continue a charade in perpetuity? I still think it's highly efficient. But that efficiency depends entirely on imperfect information finding its way into the market. One person knows more, and another is deliberately told less.

Takes me to another strand of thought. Google's ulitmate objective of organising all the world's information, may in fact be capitalism's greatest threat. By bringing all the world's information under one roof, chances are, you are finally going to create a source of 'perfect' information; or at the very least, a place where people can get answers to most questions. "How much do potatoes really cost to make?"; "How much does a neurosurgeon make in Dallas?"; "How much does diesel cost in Noida; is it cheaper than Delhi?".... and so on. Answers to basic economic questions, brought to you by Google... answers that can ultimately destroy the monopoly on information that is so vital to the success of capitalism.

Winning in South Asia - Part 2

I'm going to take the liberty of writing at length. I feel the ideas would flow better, and I can test them against my own thinking as it progresses.

Here's a quick recap of an earlier post, where i put some of my own analysis on the problem:

1) Our neighbours are all unstable

2) China's aggressively courting each of them

3) Our diplomatic corps is understaffed to mount a proper diplomatic counter

Further, our focus should be on two areas:

1) Reduce south asian instability and simultaneously Nullify chinese advances

2) Expand India's diplomatic corp

With that done, here's some expanded thinking...

1) Reducing instability means two things:

a) Improving the conditions and institutions that allow democratically elected governments to flourish in the region - i.e. internal security, judicial processes, parliamentary systems.

These build the government's capacity to address social and economic issues and keep the citizens happy. (I know that's kinda glib, but you get the picture). A happy citizen then learns to value that which provides him that stability, making him or her more resistant to that which causes instability.

b) Improving economic ties with our neighbours. This will make our neighbours more susceptible to violence or instability that affects trade ties. As we know, India's trade with South Asia makes for around 5% of its total trade. However, each of our neighbours' trade with us is around 15% of their exports. Being more liberal with them will not hurt us. Being less liberal will hurt them. So the logic here is: Why keep an enemy when you can win a friend?

c) These moves will effectively make people in our neighbourhood 1) more dependent on us and 2) Less likely to want their governments to go to war with us.  More importantly, it will give us valuable leverage in our neighbourhood against the Chinese advance. A minor advantage, but an important one.

Finally - expanding our diplomatic corps on a war-footing. There is no two ways about this. Ministry of External Affairs officials themselves tell you that we're woefully understaffed. Several embassies in Africa and South America run with just one officer - often a junior officer... often not a trained diplomat. With securing natural resources becoming an important aspect of India's diplomacy, we certainly need more trained diplomats staffing these places. Soft power.. soft power. When it comes to soft power ammunition, we've got a very wide choice - movies, music, dance, food, drink, art, theatre... The problem is, we don't seem to have enough soldiers who can use that ammunition in the field. 

Dear Leader! (Jr)

"The 26-year-old Kim Jong-un, who is Swiss-educated, fluent in three languages (English, German and Swiss-German) beside Korean and has no known "revolutionary" qualifications, is favored to take over whenever his father departs this world. The signs appear incontrovertible. Schoolchildren are singing a new song dedicated to Kim Jong-un. Officials, including diplomats overseas, are pledging fealty to him, and people are referring to him as "commander" - a title that may reflect the post of "inspector" of the armed forces to which he was appointed in early April. Nobody knows when to expect the announcement, but it could come at this autumn's convention of the ruling Workers' Party, of which Kim Jong-il is general secretary. The party, however, is not exactly the center of power, and Kim Jong-un will need to prove himself before the generals under the wing of the defense commission if he is to rule effectively." (Asia Times Online)

The signs have been around for a while. Here's a chat I had with someone via a blog about two weeks ago.

Pierre said...

Here's my theory...
He's dying.
And he's testing missiles and nukes to distract everyone from that fact...

PREDICTION: His son, Kim Jong Un, will take over within 2 years... And the missile and nuclear tests will make him look more formidable than the 26 year old really is.

1:58 PM

Dody G. said...

awww..daddy loves you so much he detonate a nuclear weapon for you!

2:02 PM

Pierre said...

If Daddy can hit 11 holes in one in his first game and kidnap South Korea's leading film stars to start a North Korean film industry... Daddy is crazy enough to do anything!!

My worry is, how crazy his son is! He's been put in charge of an army of 1 million active soldiers, 7 million reserves and they now have nukes!!!

Dody's right.. Daddy is a genius. :)

2:35 PM

Dody G. said...

I think people tend to underestimate him because he looks goofy and just look fucking crazy, but he completely controls a country and get to play the balance of China, South Korea, Japan and the USA. Not many countries can claim that.
He knows that no one is going to invade North Korea because he can destroy Seoul in 30 minutes with a million soldiers across the border and gazillion of artillery. No one will risk a war, he doesn't give a shit about sanctions as long as China keep supplying the country with fuel. He manages to be extreme and sometimes not insane at the same time.

7:33 PM