2ndlook

Immigrants – A Solution to West’s Labour Shortage?

Posted in America, Business, China, Current Affairs, Desert Bloc, India by Anuraag Sanghi on November 20, 2011

What happens when West is no longer favored by immi-grunts from the Indian sub-continent, and Philippines.

The Chinese State was an enthusiastic supporter of the Western policy prescription of Population control - a decsion that they are already regretting.   |   A Chinese poster promoting single child family. Image source and courtesy - geographylwc.org.uk.   |   Click for larger source image.

The Chinese State was an enthusiastic supporter of the Western policy prescription of Population control - a decsion that they are already regretting. | A Chinese poster promoting single child family. Image source and courtesy - geographylwc.org.uk. | Click for larger source image.

Immigration and Population

Two inter-connected issues, have been a matter of much Western propaganda. The West would not like to admit how much they depend on immi-grunt labour – at the top of the pyramid and at the bottom.

Indian immigrants into the US – more than 20 lakhs (2 million) of them, occupy key positions in corporate, academic, and administrative sectors. This is fully 10% of key positions.

No wonder they have climbed the totem-pole of economic success in the US.

Cleft stick

This is more or less the situation in most of the Developed World. With record levels of unemployment on one side – and labour shortages on the other, the West is caught in a cleft stick. More immi-grunts will mean more unemployment – and fewer immi-grunts will mean labour shortages.

An aging population adds a few more wrinkles of complications to an already difficult scenario.|   Cartoon by Adam Zyglis; published July 22, 2007 : Titled - shrinking; source and courtesy  - adamzyglis.com   |  Click for larger image.

An aging population adds a few more wrinkles of complications to an already difficult scenario.| Cartoon by Adam Zyglis; published July 22, 2007 : Titled - shrinking; source and courtesy - adamzyglis.com | Click for larger image.

One curious aspect of this entire exercize is statistical projections.

By 2050 … kind of scenarios.

It reminds me of child-brides from Hyderabad – that Arab ‘sheikhs’ would ‘marry’ and take to the Middle East for use, usually as domestic help.

This entire ‘market’ has collapsed in the last 15 years. Increasingly, Muslims in cities like Hyderabad, depend less on the Middle East to improve their economic position.

What Statistics hides and reveals – is like a bikini

To extrapolating these trends, add five factors.

English is unlikely to remain as a significant language. Going by past cycles in the decline of Persian, Urdu, Arabic, Spanish, French – 2ndlook estimate is that English will be in decline between 2020-2050 period. The decline of English may be postponed, if large numbers of Indians embrace English – which seems like an unlikely prospect.

The current economic difference between the West, India, China, Philippines, Pakistan, Bangladesh and Sri Lanka may shrink to insignificance. In which case, West may not be able to source immi-grunts from Asia – at all. But intra-EU and intra-West immi-grunt movement may increase. We may see the return to islands of prosperity in the West.

Cannot forget an aging population. With most societies in the West, either shrinking-and-aging or stagnant-and-aging, adds a new wrinkle to the mass of complications.

Western economies dominated by bureaucracies and a huge edifice of Welfare State. While the West had colonies – or neo-colonial structures like Bretton Woods, IMF and World Bank, these gold-plated benefits could be funded.

What after 15-20 years?

Recent talk of ‘reverse’ migration, from the West – back to India, is still a trickle. As action under the USCAP moves from China, it appears that Bangladesh and Sri Lanka may be the beneficiaries of USCAP. This will mean that India, Bangladesh and Sri Lanka may attract a ‘reverse’ brain drain. The return of the Native. What happens to countries like the USA then.

Or to Germany.

Immigration is a highly sensitive and politically charged issue in Germany, which with more than 10 million immigrants has quietly become home to the world’s third largest immigrant population after the United States and Russia.

Both East and West Germany took in millions of low-skilled “guest workers” in the 1960s and 1970s, and in the three-million-strong Turkish community — the second largest group of immigrants after ethnic Germans from Eastern Europe and former Soviet states — many have struggled to integrate.

German sentiments on immigration were exposed last year after the publication of a book by former central banker and local Berlin political leader Thilo Sarrazin that asserted that families of Turkish and Arab origin sponge off the state and threaten Germany’s indigenous culture.

Right-wing politicians and the Confederation of German Trade Unions (DGV) want the government to train unemployed Germans to fill labor shortages and oppose changes to the immigration laws.

The unemployment rate, at 7 percent, is the lowest since figures for a unified Germany were first published two decades ago.

“I do not believe that — in a labor market encompassing the entire EU and in which there are after all 20 million people without jobs — we need to seek workers from outside the EU,” Georg Nuesslein, a member of parliament from the conservative Christian Social Union, told Reuters.

But immigration experts say people are wrong to conflate the issue of low-skilled immigration and the easing of entry rules for high-skilled workers.

“We always talk about the immigration problems of the past but the challenge for the future is that we need immigrants,” said Reiner Klingholz, director of the Berlin Institute for Population and Development.

“When people hear this they think, ‘this is more of the old problem.’ But we need those people. We depend on them.”

GOVERNMENT MOVES INADEQUATE, CRITICS SAY

The government is aware of the issue but so far has been unable to find a solution.

Chancellor Angela Merkel has backed changes allowing firms to hire engineers and doctors, where the shortages are especially dire, from non-EU states without having to prove they could not find EU candidates.

She also wants to cut the minimum annual salary that German employers have to pay non-EU workers to 40,000 euros.

Experts say those measures are helpful but are not enough.

Experts like Herbert Bruecker, an economist and immigration specialist with the Federal Labour Office, advocate a points system using such criteria as education, work experience and language skills, as exists in Canada.

“These measures for doctors and engineers will not lead to mass immigration,” he said. “We would be doing well if we could attract even 1,000 workers like this each year.”

A Berlin Institute study projects Germany’s population of 81.8 million will shrink by 12 million by 2050. That’s equivalent to emptying Germany’s 12 largest cities. The German workforce is forecast to fall by over 30 percent by 2050. (via Germany looks to migrants to fight labour shortage | Reuters).

The inn-keeper of Babylon

Posted in European History, History, India by Anuraag Sanghi on May 12, 2011
5th century Indian innkeeper in Kish, Babylon (from The shape of ancient thought: comparative studies in Greek and Indian ...  By Thomas McEvilley; page 11).

5th century Indian innkeeper in Kish, Babylon (from The shape of ancient thought: comparative studies in Greek and Indian ... By Thomas McEvilley; page 11). Click to go to books.google.com

This figurine is a small (18 cm tall) bronze rein-ring, constructed as a decoration for a four-wheeled chariot. Collected in 1928 on a joint Field Museum of Natural History/Oxford University expedition, it dates to the late Early Dynastic I period - c. 2800-2750 BC. (Data Source - Darren Naish; Picture courtesy - scienceblogs.com). Click for larger picture.

This figurine is a small (18 cm tall) bronze rein-ring, constructed as a decoration for a four-wheeled chariot. Collected in 1928 on a joint Field Museum of Natural History/Oxford University expedition, it dates to the late Early Dynastic I period - c. 2800-2750 BC. (Data Source - Darren Naish; Picture courtesy - scienceblogs.com). Click for larger picture.

Indian confetti over the world

A 5th century cuneiform clay tablet, dating probably from the reign of Darius the Great) was found at Kish (near modern town of Al-Hillah, Babil province of modern Iraq). Kish, about 100km south of Baghdad, was one of the important cities in the Babylonian cluster – along with Babylon, Sippar, Seleucia and Borsippa.

Unlike the popular image, of ‘static’ Indians, we have some free-ranging Indians roaming the world. With elephants, expert horsemen – and a probable case of a Siwalik giraffid.

Siwalik giraffid

Kish was the site of another intriguing find. A bronze chariot rein ring, which probably seems related to the African giraffe or a species of deer from Iran. Called Sivathere of Kish, it has been object of many studies  – an unknown hoofed mammal of the Middle East. Initially thought to be related to the Sivatherium – a large, short-necked giraffid, originally described for S. giganteus from the Siwalik Hills of India.

So, apart from the deep links in astronomy, there are other intriguing such confetti sprayed around Babylon – which the Americans have pounded with tons of explosions.

Meshing and gnashing – The Clash of civilizations

Posted in Current Affairs, European History, History, India, Islamic Demonization, Media, politics, Religion by Anuraag Sanghi on February 16, 2011
Huntington's book gave pseudo-intellectual justification started the Western campaign of Islamic demonization. (Image source - http://www.bayesianinvestor.com/books; artist attribution not available at image source)

Huntington

Mercenary logic

Samuel P . Huntington’s 1993 book, Clash of Civilizations, has a historical ring to it – a hint of something grand. An influential book, it ostensibly examined ‘conflicts between Western and non-Western cultures’ – and brought the phrase, Clash of Civilizations into limelight.

In the post-Soviet World, the book marked the launch of a new Western campaign – Islamic demonization. This book, released some four years after Rushdie-fatwa, provided pseudo-intellectual justification for West’s anti-Islamic campaign.

The America+NATO sponsored ‘ethnic cleansing’ campaign in Bosnia was underway, since 1992. Saturation media coverage of Monica Lewinsky and cigars effectively drowned President Clinton’s role in the initiation of the anti-Islamic campaign – and the news coming out of the Balkans. Deliberate diversionary tactics?

India’s co-option too, into this campaign was planned in significant detail – and successfully executed. 9/11 (September 11, 2001) was still 8 years in the future. The verbal trickery behind Huntington’s Clash of civilizations ‘package-deal’ has gone by without challenge or de-construction in India. This post will cover some Trojan concepts Huntington  smuggled into the mainstream.

A Basic Stance

For one, the definition of civilizations has to be beyond race, ruins and region. Instead, a definition  around differentiated structures – political, social, economic and ethical structures makes comparative analysis possible.

Civilizations tend to repeat political, social, economic and ethical structures. In the last five thousand years, only three civilizational models can be identified and substantially differentiated.

Desert Bloc

The world’s dominant model today, it has been able to nearly erase competing systems from the collective minds of the ruling elites in the world.

Signs of the Desert Bloc’s birth were first evidenced in the Assyrian Empire – its first laws codified by Hammurabi. Dating is contested, and best estimates are that the Assyrian Empire collapsed around c.600 BC. Seven of history’s largest empires used the Assyrian Empire, as a springboard.

The Desert Bloc extends from west of India, across Middle East, West Asia, extending to Central Asia and Eastern Europe – with its core in a region of 1000 miles radius of Palestine. Inventors of religion, world’s three important religions, (Judaism, Christianity, Islam) were born within 1000 miles radius of Palestine, in the deserts of Middle East. Each of these religions were, so to say, ‘backward compatible’. Islam recognizes Christianity, which uses Judeo-Mosaic texts for its foundations.

Anti-feminist, none of the three religions have female goddesses – unlike the two other civilizations specified below. Western Christian world gave women the right to vote, mostly between 1920-1950. Low levels of marital success are institutionalized – and instead prostitution levels are high.

The Desert Bloc depends on extreme competitiveness between its own factions to gain leadership – extending the analogy of survival of the fittest. Some of its defining struggles in the last 1000 years were Islam vs Christianity; Spain vs Portugal; England vs France; USA vs USSR.

Such factions spring up around deified leaders based on a sharp identity – race, tribe, language, region, religion. Significant leadership struggles have broken out between even intra-religious sects – like Catholics and Protestants, Shias vs Sunnis.

A significant marker of the Desert Bloc is concentration of wealth, power and land in the hands of these deified leaders and their inner circle. Unlike the two other civilizational groups, as we will see. This allows Desert Bloc factions to indulge in extremism. Over 90% of the world’s bloodiest wars, genocides, massacres, annihilations, are to the Desert Bloc account.

The Desert Bloc is differentiated by extensive use of slavery, rule by elites, conspicuous consumption (show piece buildings, spectacular technology) et al.

Driven by ‘at-any-cost’ approach, in the Desert Bloc, everything and everyone is expendable to attain leadership position. Driven more by accelerated creation and destruction, Desert Bloc sub-groups have short life spans (Achaemenid Iran, Greece, Rome, Mongol Empire). Greece, Rome, the Ummayyads, Abbasids, Mongolian Empire, Colonial Spain and Britain best represent the Desert Bloc.

Can different factions of the Desert Bloc, like the Christian West and Islam collaborate? The Islāmic Ottoman Empire and the Christian European powers could not get around to colluding with each other. Even the collusion between the Christian European colonizers was  difficult.  Unless it was over carving the spoils, dividing areas for exploitation – like Papal Bulls (between Spain and Portugal) or the Berlin Conference which triggered the ‘scramble for Africa.’

The  Afro Group

Apart from the Indic System, the only other civilization, the Afro Group could resist the Desert Bloc onslaught in the last 1000 years. The Afro Group successfully kept its identity, at a great cost, unlike Native Americans or Australian aborigines.

An iconic photograph of the Soweto uprising. (Image courtesy - le-regent.net; photographer attribution absent at source).

An iconic photograph of the Soweto uprising. (Image courtesy - le-regent.net; photographer attribution absent at source).

They successfully engaged with the Desert Bloc in Haiti, at Battle of Isandlwana (22 January 1879), by the Mau Mau in Kenya.

Monica Schulyer, an assistant professor of history at Wanye State University, (thinks) the name Mau Mau was itself a British invention and means nothing in Kenyan. Members of the independence movement called them selves the Land and Freedom Army.

In modern South Africa, on July 16, 1976, the ‘day began with a march by 10,000 students carrying banners and slogans, saying “Down with Afrikaans” and “Viva Azania” (the name given to South Africa by black nationalists)’. Soon the number swelled to ‘fifteen thousand school children involved in the protests (Tuttle 1)’, rose against imposition of Afrikaans language by White Apartheid rule. Known to the world as Soweto Uprisings, it is without parallel in the annals of history. In the very heart of the modern Desert Bloc – the USA, after centuries of slavery and discrimination, the Afro Group was able to roll back excesses.

Their robust ‘native’ intelligence best describes how Desert Bloc works. In Jomo Kenyatta words,

“When the Missionaries arrived, the Africans had the Land and the Missionaries had the Bible. They taught how to pray with our eyes closed. When we opened them, they had the land and we had the Bible.”

Another unit from the Afro Group, Cuba, far from its base in Africa, after breaking from slavery,  successfully resisted coming under political bondage of the Desert Bloc, for the last 100 years. In the ancient world, Carthage checked the spread of Desert Bloc, represented by Greece. Carthage allied with Rome to destroy Greece.

Before that, Nubians brought the Egyptian Empire to heel. The 25th dynasty from Nubia or Kush, south of Egypt (modern Sudan), ruled over Egypt for at least 75 years. Piye, earlier”Piankhy”the Nubian king invaded Egypt (ca. 746 BC) – and started the 25th Dynasty, that probably continued till 650 BC. He was succeeded by Shabaqo (ca. 716-702 BC) and his successors Shebitqo (ca. 702-690 BC) and Taharqa (690-664 BC).

Traditional African structures had diffused land and wealth ownership – unlike the Desert Bloc. There is little proof of concentration of wealth in African structures.

Both, the Afro Group and the Indic System have a much superior record of minimal environmental degradation. The Big 5 in animals – elephant, tiger /leopard, lion, wild bull, rhino exist only in the these two core geographies. Big Game hunters in Africa (from the Desert Bloc, where else) described 5 animals as the Big 5 – elephants, lion, buffalo, leopard and the rhino as the Big Five. These were animals that were difficult to hunt and kill (for pleasure, if you thought otherwise).

This ‘pleasure’ was the operating principle. As a result of this ‘pleasure’, there are only two parts of the world where such Big Five exist. India and Africa. China, the Middle East and of course Europe and America, have wiped entire continents of all these animals.

Modern history, under a Hegelian spell has ignored Afro Group history. Bereft of spectacular structures, visible ‘leaders’ or the recent decline in fortunes, the study of African history has been decided as unimportant.

Indic systems

Based on भारत-तंत्र Bharattantra platform. Indic systems focus on four freedoms – काम kaam (desire, including sexual) अर्थ arth (wealth), मोक्ष moksh(liberty)and धर्मं dharma (justice), and stipulates unrestricted access to ज़र zar (gold), जन jan (people) and ज़मीन jameen (land).

Originating in India, based on platform of anti-slavery, distribution of power and diversity, this was the dominant ideology in the world till about 8th century. In Tibet, Songtsen Gampa, the 33rd king, became the first dharma-raja in 7th century – a follower of भारत-तंत्र Bharattantra . The Indic system has been in sharp retreat for the last 500 years – especially after Mughal rule in India. Inspite of sharp reversals in the last 500 years, half the world is still significantly influenced by Indic systems.

Militarily impregnable till about 17th century, Mughal rule established the first beachhead for the Desert Bloc in India.

Strong population growth based on widespread marital occurrence, strong and extensive family structures, are features that have sustained Indic systems in the society, even though some rulers defected to the Desert Bloc.

Indians worship every item of God's creation - not just cows. (Image source - Sri U.Ve. Prasanna Venkatachariar Chaturvedi Swamin)

Indians worship every item of God's creation - not just cows. (Image source - Sri U.Ve. Prasanna Venkatachariar Chaturvedi Swamin)

With diverse liturgical, beatification, sacramental practices, graded pantheism (local deities, semi-divine gods and goddesses with a top layer of the Holy Trinity), faith and belief do not occupy the space or importance that religion has in the Desert Bloc. These are within the realm of individual choice with scattered efforts at proselytization

The Indic system still has significant following in China and most of ASEAN region – notably Indonesia, Tibet, Cambodia, Thailand, Sri Lanka. The modern proof of this was the India Independence League (IIL) headed by Subhash Chandra Bose.

In recent times

Each of these megaliths have traditional spheres of influence.

Post-WWII world has been been seriously influenced by the Desert Bloc. The Desert Bloc split into two factions. The liberal-progressive, democratic, Judeo-Christian faction led by America. Significant parts of the world has moved to the Desert Bloc orbit, and adopted the religion of Westernization.

An interesting study is the post-WWII behaviour of the Euro-American faction. After WWII, as British, French and Dutch colonialists were being thrown out of Asia, in country after country, the West was in real danger of losing markets and raw material sources.

To make war palatable, Desert Bloc invented religion. (Image source - loonpond.com; artist attribution not available at image source)

To make war palatable, Desert Bloc invented religion. (Image source - loonpond.com; artist attribution not available at image source)

A new power, fueled by a growing migrant population, USA, took the place of tired, old powers – Britain, France and the Dutch. Instead of the openly-exploitative system of European powers directly running colonial governments in these Asian countries, the US installed an opaque system – which is equally exploitative. To impose its writ on the newly independent Asian countries, the US simply destroyed their  economies by war. The USA, then instituted the innovative USCAP Program and ‘helped’ these countries. These countries (Taiwan, Singapore, Japan, South Korea, Indonesia, Malaysia, et al) were now ruled by overtly independent regimes – but covertly, client states of the USA.

US multinationals and home-grown oligarchs (keiretsus, chaebols, etc.) took over the economy – and sidelined British, French and Dutch companies. To impose this economic model, US armies, using nearly 1 million troops, killed 50 lakh Asians. The takeover of European colonial possessions by the USA was handled over 3 regimes of Eisenhower-Kennedy-Johnson seamlessly.

Islamic units

The second faction is the Islamic faction. After the breakup of the Ottoman Empire, by the West, after WWI, new renegade groups supported by the West, sprang up. These renegade groups are using extremist  Islam to meld the Islamic faction into a more powerful factor in the global power equation.

Some of these Islamic regimes installed and supported by Western powers have been slowly drifting away from the West – like Turkey, Syria, Jordan, Iran, etc. Some other regimes are longer able to call the shots – like the Saud family, or the Iraqi regime.

The other aspect of the Islamic faction is the geographical spread. The primary Islamic region is the Arab region, centred around Middle East /West Asia region. The secondary Islamic region is the Central Asia – earlier a part of the Mongol Empire. Walled in by China and Japan on the East, by Russia on the West and diverse countries in the South, it is a shadow of its former self.

The region with the largest Islamic population is South and South East Asia – concentrated across India, Indonesia, Pakistan, Bangladesh and Malaysia. The South and South East Asia Islamic region has a moderate and non-imperial history.

Hence these three regions (Middle-East region, Central Asian region and South /SE Asian) have evolved differently and have little in common. Hence, the image of the Islamic ‘world’ as a monolithic unit is misleading.

Big trouble in Little China

The other puzzle is classifying China. China under Confucian State model was solidly in the Desert Bloc. After the advent of Buddhism, as the Chinese people became landholders, as they obtained rights to own silver and gold, they moved to Indic system. Marriage and family systems became the norm – instead of exception.

After and under Mongols, for instance the Kublai Khan restricted silver and gold rights – and issued fiat currency. The Chinese State has mostly been Desert Bloc in its tendency. But the Chinese people have great faith in their Buddhist teachers. Will China become a staunch Desert Bloc member like Iran in the past, is still possibly an open question.

Even stevens!

The Assyrian thread

With Niniveh, (also called Asshur) as its capital, the Assyrian Empire, ended in 600 BC. The Assyrian Empire passed through many hands – recreating and renewing itself in the same mould. The name, Assyrian Empire was a Roman modification of Asuristan - the area of current Iraq.

The  Achaemenid Empire (c. 550–330 BC) were the first successor power to preside over the Assyrian Empire, from their capital in Perspolis. Many wealthy Jews were envied for their vast slave holdings. Alexander ousted the Achaemenids to rule over the Assyrian Empire – effectively after the Battle at Gaugemela (331 BC). Daidochi Wars after Alexander’s death and attacks by Rome-Carthage alliance  led to the disintegration of Macedonian rule. Romans, added Western Europe, and ruled over the Assyrian Empire for the next 350 years (60 BC-285 AD), with its capital in Rome.

Rome formally lost the Assyrian Empire when Diocletian was forced to split Roman Empire in 285 AD. Eastern Roman Empire, well-known for its premier city, Byzantium (a cognate of Indian Vyjayanti) mostly had its capital in Constantinople (modern Istanbul) continued to gain power and wealth over the next 400 years.

Various Islamic dynasties (c.700-1300) ruled over large parts of the Assyrian Empire, with capitals mostly in Damascus, Baghdad, till they were deposed by Genghis Khan’s Mongols. After adding China, Mongol factions ruled over the Assyrian Empire for varying periods, between 1300-1600 AD over different parts of the Assyrian Empire.

It was the Mongols who helped in the rise of the West. First, was the trade in millions of slaves from Eastern Europe (the Slavs, hence slaves) by Venetian and Florentine traders, which funelled vast monies into European economies from Egyptian and Byzantine slave-buyers. This wealth from slave trade was the stuff of which tales are told. Shakespeare wrote of Merchant of Venice, Comedy of Errors, Gentlemen of Verona. Leonardo da Vinci,  architect Bramante, sculptor Donatello, Michelangelo, Titian and other famous artists found patrons with the earlier Visconti, powerful Medicis, notorious Borgias, lesser known Sforza (Milan), Pazzi and the Albizzi families. It was this slave-trade that fuelled Renaissance art and culture. Florence, Venice, Milan became major banking centres. Double-entry book keeping became standard, under which any kind of financial picture can be created. Quite unlike the Indian single-entry system.

Mongols brought to the West two major technologies. One, was the Indian decimal system and Indian saltpetre for gunpowder, was the other. Indian mathematics (initially outlawed by European rulers) is the foundation of Western science and technology. Indian gunpowder was their ticket to military power. Wealth from trade in African slaves, conquest, loot, annihilation of Native Americans, using gunpowder, fuelled a 500 year technology boom in the West.

The last significant dynasties that ruled over the ancient Assyrian Empire were Islamic Ottomans and the Christian Austro-Hungarian Empire. These two empires were dismantled after WW1 (1920) by Western allies.

Slavery rarely finds mention in Indian media. Much less is any discussion or understanding about the role of slavery in the rise of the West. A rare Indian columnist with awareness of the slavery factor. Even this discussion about clash of civilizations does not work.

Turning points in 20th century history

Posted in Business, Current Affairs, European History, Gold Reserves, History, India, politics by Anuraag Sanghi on November 19, 2010
A poster advertising life of the "Abonos Nitrato de Chile" (Fertilizer Nitrate of Chile), 1930.

A poster advertising life of the "Abonos Nitrato de Chile" (Fertilizer Nitrate of Chile), 1930.

Gunpowder monopoly ends

Towards the end of 19th century, newly discovered nitrate deposits (sodium nitrate) in the Atacama desert of Chile came onto world markets. Chile’s nitrates were a crucial intermediate for gunpowder.

Chile’s nitrates broke the British monopoly over the trade in Indian saltpetre for the first time in modern history. French domestic production of saltpetre, barely enough for their own needs, could not challenge Indian saltpetre output that the British monopolized.

Indian saltpetre (potassium nitrate) could be simply refined and used directly in gunpowder – unlike Chilean nitrates. Also Chilean nitrates were limited natural deposits, whereas Indian saltpetre was produced on an industrial scale, accounting for some 70% of global production.

Germans quickly secured supplies of Chilean nitrates. A few years into the WWI, Germans brought the Haber-Bosch process from the laboratory stage to industrial production. The Haber-Bosch process for production of ammonia, gave Germans industrial capacity to produce gunpowder.

Causes for WW1

With this industrial capacity for gunpowder in place, Germany and Turkey, both non-colonial, industrialized powers challenged colonial powers, Britain and France, for access to world markets.

Diagram showing the world nitrogen quantities ...

Image via Wikipedia

The breakup of the Islamic Turkish Ottoman Empire was long seen (1890-1920) as an outcome essential for continued Anglo-French hegemony.

Funding WWI

Against Britain and France, the then dominant world powers, with extensive colonies, were Germany, the Austro-Hungarian Empire and the Ottoman Empire out of Turkey. Once WWI started, US funded both Britain and France. The US plied the Anglo-French alliance with extensive supplies and credit.

Emergence of USA

While millions died in European trenches, the USA bided its time. With mud, blood and disease taking a heavy toll, Britain, France, Germany, Turkey and Russia were soon exhausted and prostrate into a stalemate by the end of 1916. As the fate of WWI hung in balance, USA finally joined the Anglo-French side to gain a share of spoils.

 A soldier evacuated from the battlefront on a stretcher during WW1 - Image courtesy - bbc.co.uk. Click for larger image.

A soldier evacuated from the battlefront on a stretcher during WW1 - Image courtesy - bbc.co.uk. Click for larger image.

Financially unaffected, industrially strong, militarily effective, the US emerged on the world stage.

Post-WW1

Soon after WWI, as Anglo-French colonies and markets started opening up, US products gained new customers. Indians started buying Chevrolets, Buicks, Packards in small numbers. Victrolas started playing music in India – and on India. Michelin’s radial tyres from France became a byword in India for long-life. Indian natural rubber started going to Italy’s Pirelli and France’s Michelin.

Impoverishment of India

But Britain, a victorious nation was deep in debt – to USA and Colonial India. US emerged as the largest creditor nation. To settle these wartime debts, debtor Britain and creditor USA worked out a debt-repayment ‘mechanism’. Nothing but financial jugglery, this mechanism slashed the amount due to Colonial India and actually transferred the debt-burden of WW1 onto the backs of Indian peasant.

To settle this debt, Britain took recourse to gold from India. To give impetus to this transaction US supplied Britain with silver – then in abundant supply, in the form of US silver currency coins. This silver was ‘sold’ to Britain at double the market price – under the guise of the Pittman Act. Britain paid its wartime debt to India with this silver – at this inflated Pittman Act price. Abundant silver coins were stuck by the Colonial Raj, which are still available across India in large quantities.

To settle loans taken from USA to fight WW1, Britain extracted scarce gold from India. While payments for Indian exports were made in overpriced silver, the Indian peasant was forced to pay for imports and taxes in under-priced gold.

Starving Indian woman with swollen ankles & feet because she suffers from dropsy as young daughter stands by with swollen belly from hunger during famine crisis. (Photographer - Margaret Bourke-White; Date taken-1946; picture courtesy - life.com). Click for larger image.

Starving Indian woman with swollen ankles & feet because she suffers from dropsy as young daughter stands by with swollen belly from hunger during famine crisis. (Photographer - Margaret Bourke-White; Date taken-1946; picture courtesy - life.com). Click for larger image.

Due to this overpriced silver-under-priced gold combination, a surge in gold outflows started from India. Soon the US banking system was flush with liquidity.

Great Depression

Expecting the closed markets of Anglo-French colonies to open up, US economy expanded trade relations and industrial capacity. This expansion in trade and production of industrial goods was funded partly on the back of inflows of gold from India through Britain.

Finally though, protective barriers did not come down substantially enough – creating industrial over-capacity and excess liquidity in USA. Seeing ‘irresponsible’ bankers, waste ‘hard-earned’ gold on ill-planned trade expansion and production capacities, the US Federal Reserve clamped down on liquidity.

Great Depression followed. To ‘save’ gold-reserves, Roosevelt went further and nationalized gold.

Crime in the 20th century

In turn, Roosevelt’s gold nationalization, sparked a global crime tsunami. Only after the easing of restrictions on gold ownership by 1990, did the crime tsunami subside. The axis of this tsunami of crime was gold smuggling into India and narcotics trans-shipment through India.

A tsunami that engulfed all major economies of the world.

WW2

Unresolved issues of WW1 triggered WW2. Germany hemmed in from all sides by British client-states, unable to find markets for its industrial production,  reacted.

Germany, allied with Japan and Italy, proposed creation of larger ‘home’ markets. This was to be done by ‘expanding’ their own borders – to include neighboring countries. As first steps, on 3 October 1935 Italy invaded Abyssinia, now Ethiopia, Germany on 11-12 March, 1938, swallowed Austria; and Japan occupied Manchuria.

The basic assumptions of all the European powers, Japan and the USA were the same. The Confucian-Platonic ideal of superior, wise rulers who ruled over ‘inferior’ peoples.

These militant powers shared the same disregard for human life. Britain wreaked havoc by creating The Great Bengal Famine. Some 40-50 lakh (4-5 millions) Indians died. Hitler rained the Holocaust on the Jews. Some 50-60 lakh (5-6 million) Jews died.

Same difference.

Three faces of stagnation

Production capacity of non-OECD world was destroyed by years of colonialism, WW1 and WW2. Economic conditions after WW2 improved due to relative peace and as countries of the world started rebuilding their economies in the last 60 years (1950-2010).

The last 60 years has seen significant increase in industrial capacity of non-OECD nations. US extended supplier’s credit – using the US dollar, the favored currency of the Bretton Woods system.

A significant portion of economic expansion of OECD economies during 1950-1980 happened as production capacity of the world was rebuilt. The same capacities that were destroyed by colonialism, WW1 and WW2 – especially during 1850-1950 period.

WW3?

This creation of production capacity in non-OECD countries means economic stagnation and loss of political power for a few decades across OECD. With greater production capacity in the hands of non-OECD producers,  production capacity in OECD-USA must shrink.

Or a WW3 will be ‘needed’ to destroy the production systems of the poorest countries – to ‘save’ the West-OECD.

Creating false agenda's has become a full time job in the West with specialist think-tanks, media organisations and PR firms. (cartoon courtesy - http://polyp.org.uk). Click for larger image.

Creating false agenda's has become a full time job in the West with specialist think-tanks, media organisations and PR firms. (cartoon courtesy - http://polyp.org.uk). Click for larger image.

Red herrings

To get around this ‘problem’ of stagnation, the West has created artificial ‘crisis’ situations.

  1. Population Explosion
  2. Global Warming and climate change
  3. Civil Wars in Africa
  4. Islamic Demonization
  5. Terrorism
  6. Financial meltdowns

Complicating the current situation is the US currency mechanism, called USCAP (by 2ndlook) which favors selected US allies with advantageous exchange rates. China, Asian Tigers, Japan and NATO-Europe have gained significantly from the USCAP program.

The most notable loss due to trade distortion has been Africa’s.

Power Corrupts

During the 20th century, the world had to contend with an intolerable situation. The Anglo-Saxon Bloc (America, Australia, Britain and Canada) accounted for 80% of gold production (between 1200-1800 tons per annum) and controlled 80% of global gold reserves (around 100,000 tons circa  1920) also. Not even Chengez Khan had that kind of control over global economy.

Dawn of a new century

Things change.

At the beginning of 21st century, gold reserves in the hands of all the nation-States, are at a historic low. All the Governments in the world own less than 20%, i.e. 30,000 tons from global gold reserves of 150,000 tonnes.

Another 5 years of aggressive gold buying by global consumers will see this down to possibly 15%-17%. This will severely limit the ability of any State to wage a prolonged war.

A collapse of the currency systems in the world is imminent – in the next 5-15 years. Gold may give super-normal returns in the face of such an event.

Desert Twins - Westernization and Jihad. Problems both!

Desert Twins - Westernization and Jihad. Problems both!

Desert Bloc – beginning of the end?

The 20th century possibly saw the Desert Bloc reach its high-point. The world fully understands the bankruptcy of the Desert Bloc – and it may take some time for the effects of Desert Bloc propaganda to wear off.

Celebrations may, however, be premature. The alternate to Desert Bloc politics – भारत-तंत्र Bharat-tantra is yet to regain traction.

India – The Perfect Storm Ahead

Posted in Business, Current Affairs, India, Indo Pak Relations, Pax Americana, politics by Anuraag Sanghi on October 29, 2010

Till such time that India cannot fight 10-year-war, India will remain a soft state. India – The Perfect Storm Ahead.

Increasing gap. Back to bad ole' days. Image credits & sources embedded

Increasing gap. Back to bad ole’ days. Image credits & sources embedded

Stormy weather

India’s has three strategic problems. All three are known problems. This post looks at how the three could mesh and create a ‘perfect’ storm.

Oil’s not well

One is clearly oil. India imports 70%-80% of its oil consumption. Too much of our exports are used for oil imports. This makes India prone to economic pressures.

We would do well to remember Bombay High (1973). Only after Bombay High could India detonate the atom bomb (1974), throw out IBM and Coke (1977). Bombay High also saw India’s break away from our colonial ‘heritage’ of hunger, poverty, shortages, disease, social ossification.

Where India gets its oil from?

Where India gets its oil from?

After recent discoveries at Krishna-Godavari basin, by Cairn oil, GSPC production, will possibly account for 30% of Indian demand. The 70% imports-dependence mark won’t be broken. But import-dependence is unlikely to come down much.

The answer to reliable oil imports are countries with low domestic-demand, low exploration-profile and low current-production. That means Africa, coastal  and island nations in Pacific, Atlantic and Indian oceans, countries in Central Asia. With populations of 20-50 million these countries, fit the profile. ONGC’s global expansion remains hostage to short-term actions.

For want of a nail

The second major issue remains defense prepared-ness. With aircraft, aircraft-carriers, howitzers – all imported, many from Western sources (including Israel). India will be seen seeking spares parts within 15 days of any conflict. India is not prepared for a ‘peak’ fighting situation beyond 15 days.

Increasing amount of Indian exports going towards oil imports. Image and data sources & credit embedded.

Increasing amount of Indian exports going towards oil imports. Image and data sources & credit embedded.

India’s defence purchases of US$50 billion in the last 10 years gets us toothless, stuffed tigers – which can at best intimidate a small warlord.

It’s the economy, stupid

The third issue is closely related to the first – oil. India’s current account deficit (imports-exports=current acount deficit) is currently gap-filled by FDI+FII+expat inflows. Combine the current account deficit with above two factors, and we find India in a poker-game with a bad hand of cards. Though the less-than-US$40-billion current account deficit is small beer for now, things could change. Especially in case of a prolonged war.

These structural issues became apparent within 10-12 years after Bombay High – by 1985. These three issues have remained unaddressed, by India, now for the last 25 years.

War stories

Energy concerns: An ONGC offshore platform. India is seeking to reduce dependence on imports as production from domestic fields declines. Bloomberg

Energy concerns: An ONGC offshore platform. India is seeking to reduce dependence on imports as production from domestic fields declines. Bloomberg

India’s position in the 1971 Bangladesh War was superior, as our defence and oil supplies, were in the hands of a reliable ally – Soviet Russia. This time we have no such comfort.

In WW2, Hitler could not make the final assault on Moscow, as his armies were split to capture Romanian oil fields, which finally did not happen. Stranded in the Russian winter, without oil, at the gates of Moscow, the oil shortages defeated the Germans. In Africa, Rommel’s tanks were sitting ducks without oil.

Instead of fighting the Americans in the Pacific, the Japanese Imperial Navy was busy escorting oil in sea-lanes across Pacific and Indian oceans.

The Allies, on the other hand, had Middle East oil – in addition to the huge American domestic production.

Dassault Rafale

Dassault Rafale

This time it is war

Any conflict will see an immediate withdrawal of FII, triggering  GOI caps and restrictions, leading to stoppage of FDI/FII inflows. Rupee devaluation of 40%, meaning Rs.70 to US$ is the probable outcome. Export production will be affected due to oil shortages, further widening current account deficit.

Blowing in the wind

Till such time that India cannot fight a war for 10 years, India will remain a ‘soft state’.

Even a simple increase in indigenous oil production may be of very little help. A few missile attacks on Bombay High and Jamnagar will see India in the Stone Age – our meaningless treaties notwithstanding.

This also is a powerful argument against the Ultra-Mega-Power-Project (UMPP) strategy of the GOI. Instead of  the UMPPs, what India needs is small, micro oil-wells, refineries and power plants – combined with indigenous oil production from small, distributed oil wells, refineries and power plants. Thousands of them. A smart indigenization program of defence industry will do the rest.

Sabsa bada rupaiya

This will attract the usual argument of cost.

Having made no efforts in this direction, also means that we will have no cost-estimates, solutions or technology. Having opted and continued with the practice of importing ‘mega’ technologies from the West, a la Middle-East oil potentates, cannot be the answer. Not after 60 years of the Indian Republic. For proof, witness the pride behind Jamnagar complex. Concerted actions on these three parameters will mean some real security.

For the aam aadmi !


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