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A possible Pax Americana end game

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Part 2

It is disturbing to see the opinion of the gold subculture or "gold bugs" merge with mainstream economists, i.e., those that accept an economy denominated in something other than gold, and that does not leave me sanguine. I find merit in one gold bug's opinion that "the health of the dollar reflected in the price of gold, and the health of the dollar is now in foreign hands" lays out a progression that "foreign banks will diversify out of dollars [then] cease buying dollars [and] then they will sell them." I put even more merit in this gold trader when he adds that "Anyone cheering for a high price of gold should get on Prozac" as a healthy dollar will retain its position as a global reserve currency while gold demonetizes and remains at a commodity level but that a "mismanaged dollar" drives gold to rise in value, remonetizing in the process.

I should note that these opinions are unmoved by 9 June testimony by Federal Reserve Chairman Alan Greenspan that:

"Despite some of the risks that I have highlighted, the U.S. economy seems to be on a reasonably firm footing, and underlying inflation remains contained."

One can work wonders in a forecast by adjusting the range and underlying assumptions in what is a charged political atmosphere. Observers said that the testimony "heralded a continuation in the Fed's rate-rise campaign." T-bills prices eased and dollar weakened accordingly.

The gold subculture voices the same underlying concerns as traditional economists: consumer debt, federal deficit, and current account deficit that have driven the US into a debtor state of such magnitude that international concerns over the dollar are striking. Saddam Hussein was one of the first to promote the use of the Euro as an oil denominated currency in lieu of the dollar, albeit as a form of economic warfare. Russia has now warmed to the same idea as had Iran and China. (All this occurred before the Euro began to drop against the dollar in the aftermath of the French and Dutch 'no' votes on the European constitution, so it remains to be seen how much further this shift will proceed in the near-term. The point that I would make is that the dollar has weakened and other states are increasingly open to alternative currencies.)

The cessation in buying dollars is in evidence in the purchase of US treasury bonds by Asian central banks, notably Korea. (China keeps buying but I put that to Beijing's willingness to accept a depreciating dollar in return for rising economic growth and social peace at home.) An increase in cessation is not pretty:

A low-level panic about the debt crisis, and its possible effect on the American economy, is gathering strength. [Morgan Stanley's chief economist says that] "Our little post-bubble workout is not over, not by any stretch of the imagination" and believes that an adjustment is necessary and inevitable, and that when it comes, it will be very, very painful.

[Former Federal Reserve chairman, Paul Volker, added] that "there are disturbing trends" undergirding the U.S. economy, including "huge imbalances, disequilibria, risks [that demand] a strong sense of monetary and fiscal discipline [which is not in evidence by either US nationals or the US government such that] the circumstances seem to me as dangerous and intractable as any I can remember."

And if that does not get one's attention, the US Comptroller General, David Walker, summarized the long-term US debt crisis, assuming no mitigation, as "Argentina."

Part 4 Trends and timing

Believing (and Believing and Believing) in Bullion
By STEPHEN METCALF
New York Times
June 5, 2005

Military Obsession
Oscar Lurie, Associate Research Analyst
Center for Defense Information
Weekly Defense Monitor, Volume 3, Issue #05, February 4, 1999
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Pax Americana increasingly closer to outcome of Pax España

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Part 1

Readers will gather from part 1 that I am uncomfortable with what I see as an unsustainable force projection based upon our economic capacity to support same as well as directions and the magnitude of some of those expenditures. While Lurie's Military Obsession is emotional in spots this 1999 note points out that at that time:

The U.S. by itself spends $281 billion on its military, more than the total spent by 25 of its closest allies and friends. Countries of most concern to the U.S. -- Russia, China, India and Pakistan [and] the seven "rogue states" -- together spend less than half the U.S. total on their military forces. Yet over the next six years, President Clinton wants to increase America's military spending by more than $110 billion -- and Congress thinks even this insufficient!

The part of this note that has kept it dear to me is Lurie's comment on the directions of achieving and maintaining overwhelming superiority:

While the Pentagon spends millions of dollars on "force protection" for the military, the commission chaired by retired Admiral William Crowe found the provisions made for the security of U.S. embassies and diplomats almost universally inadequate. The commission cited a "collective failure of the U.S. government over the past decade" to provide adequate protection for U.S. personnel abroad. Among the other reasons for this failure is the cost of constructing redesigned facilities.

Although the Crowe commission was too polite to say so, diverting a few billion from the defense budget to the basic security of our non-military overseas representatives might have dissuaded those who attacked our Nairobi and Dar Es Salaam embassies. Instead, America responded to the havoc wreaked on these two African embassies by pounding Afghanistan and Sudan with missiles that cost more than what should have been devoted to protecting these embassies.

In the post 11 September GWOT, this retains its luster nicely. Readers of this weblog know that I take issue with aspects of the current effort in Iraq which have:

  • Diverted significant sums even as we have seen our ability to fight a multifront war diminish sharply
  • Badly eroded our ability to raise a willing coalition beyond name only to deal with, say, an escalating problem on the Korean peninsula or an implosion in Pakistan
  • Seen 52% of the American public say that the Iraq war "has not contributed to the long-term security" of the US and worse:
    • Nearly three-quarters of Americans say the number of casualties in Iraq is unacceptable, while two-thirds say the U.S. military there is bogged down and nearly six in 10 say the war was not worth fighting -- in all three cases matching or exceeding the highest levels of pessimism yet recorded. More than four in 10 believe the U.S. presence in Iraq is becoming analogous to the experience in Vietnam.
  • Failed accordingly to achieve our enlistment quotas four months running and even parents are weighing in to disuade their children from enlisting

It is painful enough to witness the nation not to see value in the manner in which its military capabilities are used, but it extremely worrisome that Iraq contributes significantly to our continuing to live beyond our economic means of delivering the global force projection that we desire.

Part 3

Military Obsession
Oscar Lurie, Associate Research Analyst
Center for Defense Information
Weekly Defense Monitor, Volume 3, Issue #05, February 4, 1999
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Pax Romana, Pax España, Pax Britannica and Pax Americana

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What do these remarkable dominions have in common? For one thing, the first three occurred at their relatively unchallenged imperial zenith after which they went into decline at various rates of descent. There are increasing signals, many not recent, that the US, without intervention, is following a similar trajectory.

In a January 2000 private distribution on D'Souza's The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence, I noted:

Yes, Planet America for a while longer but do not be overly smug. The US is tracking significant bits of what claimed imperial Spain - an ever-expanding world policeman whose force projection underpinning the Pax Espana could not be supported by a plateauing, and ultimately declining, economic base. Strong force projection demands an equally strong or stronger economic engine. (I accept the school of thought that says that they should match, else you run the risk of becoming a Saudi Arabia or Kuwait, a economic morsel that can't resist being gobbled up.)

A month later, responding to a distribution of William Satletan's summary of the Kosovo war that was a "pro" document:

If [the sender agreed with Saletan's article], then my comments will perhaps jolt…

We have become the 16th century Spain of our day, a single unrivaled superpower whose simultaneous combination of technological, military, and financial power is of concern to friend and foe alike. Spain also chose a posture of force projection, a world policeman if you will in attempting to extend its Pax Espana, that ultimately bankrupted the nation that could no longer afford to pay for it.

What did we get from this affair? A lamentable example of a distracted administration sliding into yet another world event without thinking of the secondary impacts of its decisions, moving from one incremental tactical event to another without a view to a coherent strategic vision. A reawakened Russia whose warring political factions could only unite around one thing, resistance to the US, in which every fear of an expanded NATO on the border of the Russian Republic was seen by them to come true. A China whose leadership - even before the bombing of the Chinese embassy - believed that the US entered into Kosovo in order to test its latest weaponry systems, a rerun of 1930s Spain and the Condor Legions, and has gone on a buying spree of the latest Soviet weapon systems that tops that which occurred after the US sent a carrier battle group through the Taiwan Straights. A Russia and China appalled that the US had initiated a new justification for international force projection - humanitarian justification for intervention into a non-belligerent sovereign nation - that could just as easily be applied to, say, Chetnya or Tibet. An extremely sensitive depleting of US smart weapons stocks in the face of the extending Kosovo action that would have left us open to, say, a DPRK incursion southward into Korea, now that the US no longer has the forces, logistics, and stocks on hand to fight what is called a two-front war. A NATO political leadership almost broken by the affair. And this is just the first order effects.

No, I did not, and do not, feel that this [Kosovo] action was justified even in the face of the suffering abundantly on offer, and that we shall pay an exceeding high price for its ramifications in the years to come.

Part 2

Believing (and Believing and Believing) in Bullion
By STEPHEN METCALF
New York Times
June 5, 2005

Why ‘The Rise and Fall of the Great Powers’ was wrong
HENRY R. NAU
Review of International Studies (2001), 27, 579
592

Philip III and the Pax Hispanica 15981621: The Failure of Grand Strategy
by Paul Allen
Yale University Press, 2000
Review http://www.airpower.maxwell.af.mil/airchronicles/bookrev/allen2.html

The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence
by Dinesh D'Souza
The Free Press
January 2000
Cache of the introduction and first chapter

WAR-RELATED DEFLECTIONS OF ECONOMIC TRENDS
From War-related deflections of economic trends in Eastern and Western Civilizations
Krus, D.J., Nelsen, E.A. & Webb, J.M.
Psychological Reports, 84, 1021-1024, 1999

The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000
Paul Kennedy
Random House, 1987

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Understanding the treaties leading to the European Union Constitution

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Part 2

I draw readers attention to The European Union Constitution site hosted by the University of Zaragoza containing documentation regarding European Union treaties negotiated and ratified since the 1950's, leading to the current Constitutional Treaty debate. Usefully dividing its items into 'preparation' (proposals and documents forming basis for negotiation), 'negotiation' (Intergovernmental Conference (IGC) process of amendments and changes), and 'ratification' (each member's unique ratification, referendum and constitutional modification), it is a good jump point for the history of postwar European integration:

  • Treaty of Paris (1951) - European Steel and Coal Community (ESCC)
  • Treaties of Rome (1957) - European Economic Community (EEC) and the European Atomic Energy Community (EAEC)
  • Single European Act (1986) - additional harmonization measures
  • Maastricht Treaty (1992) - EU citizenship and the European Monetary Union (EMU)
  • Amsterdam Treaty (1997) - measures to strengthen political union and prepare for eastward enlargement
  • Nice Treaty (2001) - institutional changes required for enlargement
  • Treaty Establishing a Constitution for Europe - the especially Herculean task in a down market and fearful polities "to simplify and synthesize previous treaties within a single, clear, foundational document for the European Union"

NOTE: I find this site more immediately useful than the multimedia European NAvigator (ENA) knowledge base produced by the Centre Virtuel de la Connaissance sur l'Europe (Virtual Resource Centre for Knowledge about Europe) documenting the "historical and institutional development of a united Europe from 1945 to the present day." One value for the researcher is that the ENA site has its documents in both their original language as well as French and English translations.

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How Germany could leave the EU

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Part 1

How could Germany or any other EU state reasonably depart the EU? I submit the answer lies in examining the ways in which the EU can proceed in whole or in part beyond the current referendum debacle. The best set of scenario options in the face of a 'no' vote by a member state that I have seen is in Charles Grant's What If the British Vote No?, written when only the UK looked set to vote no. The UK has long held the "Euroskepticism" now appearing for combinations of reasons in other continental nations, sits on the periphery of Europe, had not joined the Euro bloc, and had relief from certain EC/EU regulations when it joined. The following alternatives presumed a 24 to 1 vote, thus I submit that the more untidy options rise in the face of multiple no votes from the European core - and two of the founding members of the Common Market:

#1: Muddling along as if nothing happened - other states "accept the death of the constitutional treaty and would simply continue operating with the existing treaties."

Implausible: "most EU governments [as opposed to their polities] do not like the existing treaties and believe that the newly enlarged union [will] not run smoothly without the constitution."

#2: Renegotiate the constitutional treaty, removing or diluting "the most controversial parts"

Implausible: Whereas other states had already made substantive compromises to placate the UK, the core elements of this constitutional change are not easily wavable governance and security changes that do infringe on member state sovereignty. In the current climate, it is not clear that the member states would want to go through the ratification process again.

#3: The 'no' vote state holds a second referendum on the constitutional treaty.

Implausible: The previous voter reversals (Denmark - Maastricht Treaty, 1992 and Ireland - Nice Treaty, 2001) do not apply as accommodations cannot be made for individual states in the constitutional treaty as it "mainly covers matters impossible for a single member to bypass: EU institutions and voting rules."

#4: The assumed "other 24" member states enact the treaty, forcing the 'no' vote state out of the EU. The stratagem to sidestep the legality that the "other 24" cannot adopt the treaty without the ratification of the 'no' vote state is for 24 to "withdraw from the existing EU treaties, redraft the constitutional treaty among themselves, and then sign and ratify it." The 'no' vote state would "have to negotiate an associate status similar to that of Norway and Switzerland."

Implausible: While there are certain circumstances for continental Europe to eject the UK, I find it unlikely that EC members would eject France, a founding Common Market state as well as the political center of Common Market/EC/EU diplomatic initiatives, and whose national, Jean Monnet, created the idea of a common market; and the Netherlands, also a founding Common Market state.

#5: A "hard core" of integrationist states (early on seen as France, Germany and their allies) accept that the constitutional treaty cannot proceed without ratification of the 'no' vote state, establish a new organization that desires a genuine political union, proceeding to harmonize - even merge - legal, economic, military and diplomatic efforts. This "hard core" would "coexist with the broader EU."

Procedurally difficult: The ability to have a "hard core" fractional EU operate with the total EU without friction and rivalry boggles the mind short of regional breakup. Many in Germany believe creating a fractional EU would harm the German economy.

#6: A "messy core" of ratifying states, having failed to eject the 'no' vote state or establish a "hard core" group, implement those parts of the constitutional treaty that do not require EU ratification or breach current treaties, e.g., a European diplomatic service, hold a rump Intergovernmental Conference (IGC) to amend existing treaties, e.g., adopting new rules for majority voting, likely forming its own secretariat as one or more groups of directionally similar groups seek leverage.

Possible: There are antecedents that work, e.g., the Schengen Area of passport-free travel that was later adopted by the full EU. And if Germany "exits" the EU, this is one of likely means. The "messy core" is a slower, but achievable means of creating a "hard core."

There are many ways for Germany, with or without allied EU states, to depart the current EU. Readers should not presume the 'certainty' of a German economic locomotive remaining yoked to the west despite the efforts of France. Regardless of the option that Germany chooses, I agree with this forecast as a minimum of disruption:

Europe would spend several years trying to sort out its institutions, rather than cope with the many security, economic, and environmental challenges that it faces. The EU would stop enlarging. And its chances of pressing ahead with economic reform or developing a coherent foreign policy would diminish dramatically.

Part 3
 
EU crisis escalates after referendums
By Carsten Lietz
Reuters
June 3, 2005; 11:32 AM

The French & Dutch Referendums
Background Question and Answer
Council on Foreign Relations
Updated: June 01, 2005

What If the British Vote No?
By Charles Grant
Foreign Affairs
May/June 2005

Gordon Housworth



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Franco-Dutch constitutional referendum: degraded or abandoned Euro, "multi-polar" politics within the EU, Germany's departure, and degraded anti-terrorism efforts

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Euro-prattle regarding EU constitution treaty viability and the soundness of the Euro after the Franco-Dutch 'no' votes reminded me of the Dead Parrot (or the Pet Shoppe) skit in episode 8 of Monty Python's Flying Circus when Palin tells Cleese:

No no he's not dead, he's, he's restin'! Remarkable bird, the Norwegian Blue, idn'it, ay? Beautiful plumage!

Cleese's frustrated reply to Palin that, THIS IS AN EX-PARROT!! also applies to the treaty. It is almost academic interest to read the individual drivers affecting each member state (France and Netherlands) as if their amalgam brushed away the vote and its effects which I see as a degraded or abandoned Euro, "multi-polar" politics within the EU that degrade Europe's presence on the world stage, Germany's departure from the EU, and significantly degraded anti-terrorism efforts coupled with a continued stillborn independent force projection capacity.

While many said that ratification of the new EU constitution, requiring approval by all 25 members, would alter the manner in which the union operates, few noted that "a rejection [by any state] would throw Europe into a constitutional crisis":

For the first time, an individual would be appointed president of the European Council, overseeing the regular summits of the heads of government of the EU nations and their foreign ministers. The EU would itself have a foreign minister. The amended rules on majority voting would allow a measure to pass if 55 percent of the member states were in favor, so long as they represented 65 percent of the EU's population. And the EU would gain new powers in justice and home affairs, requiring cooperation among interior ministries on immigration, asylum, crime, and justice.

In Electoral buffeting in Europe, June 2004, I noted:

I see the original six signatories of the Treaty of Paris (France, West Germany, Italy, Belgium, Luxemburg and the Netherlands) as the core of European nations that had borne the brunt of fighting on what became the "allied side" of the post WW II divide. (France was intent on anchoring West Germany into western orbit, while blunting its military growth and so deflecting further Soviet ire.) As EC, and now EU, membership expanded southward and now eastward into former Warsaw Pact nations, it has been my opinion that it will be harder and harder for members to find common cause and effective collective policy. (They certainly will bridle under continued French hegemony of EU foreign policy.)

This is hardly the vision that rose with Jean Monnet (also here), arguably Europe's architect of union in the wake of WW II, who voiced the idea that European union was "was indispensable to the maintenance of peaceful relations." I have often wondered where Monnet himself drew the boundary on a functioning European organ.

Europe has grown past the capacity of its founding governance model as it arrives at a trifecta in which the EU constitution treaty and its impact on sovereignty, security, and economy; efforts to reach agreement on the 2007-2013 EU budget; and the blame that many Europeans place on the Euro for an economic slowdown and high unemployment conspire to cause doubt in the Euro-polity that their respective leaderships can be trusted to act in their best interests. (Observers in the UK and the continent note that the UK has done much better in terms of GNP growth and unemployment than continental Europe and it did not join the Euro bloc.)

With the UK, Ireland and Portugal signaling that they might defer their treaty referendums, and Danish polls showing the 'no' camp pulling ahead for their September referendum, the "risk of contagion" following the Franco-Dutch vote is very real. As I believe that the treaty is gone and that a crisis is in the making, if the 16-17 June summit in Brussels cannot reach agreement of a long-term budget then the direction of the postwar European integration model as we know it is certainly halted. 

While the constitution treaty dealt with governance and security issues and had no connection to the Euro established in 1999, the "rejection of the treaty by two EU founding members has raised questions about how committed European countries are to working together to make the single currency a success, and opened the door for Euroskeptics to question its existence." It should be remembered that the relative ease by which 12 EC member states surrendered their national currencies into the Euro was based on the premise of tighter economic and political integration. If the political integration has halted and possibly commenced a reversal, where is the commitment to a single currency in the face of charges that the Euro "has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis." If the constitution is not there, and France is not there to sustain the Bonn-Paris axis, how does Germany respond to its situation of a major EU donor to an expanded less well-off membership during a period of economic malaise? I submit that it could leave.

Part 2

EU crisis escalates after referendums
By Carsten Lietz
Reuters
Friday, June 3, 2005; 11:32 AM

The French & Dutch Referendums
Background Question and Answer
Council on Foreign Relations
Updated: June 01, 2005

Dutch Reject European Charter
By Craig Whitlock
Washington Post
June 2, 2005

France Rejects European Constitution
By Craig Whitlock
Washington Post
May 30, 2005

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Collapsing the Iraqi healthcare system: another attack on the extended supply chain that supports Iraqi government legitimacy

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Predation against the Iraqi health system is yet another progression in the Baathist-jihadist-criminal destabilization of the Coalition-Iraqi extended supply chain. It is instructive to review the progression from hard to increasingly softer targets. In Jihadists extend kidnapping and implied beheading down the coalition supply chain, August 2004, I noted:

Jihadists are nothing if not clever and inventive in their approach to asymmetrical warfare against the US -- and it is the US that is the ultimate target of the current kidnappings as it is the Snow White among largely coalition Dwarfs. The jihadist approach in both Iraq and Saudi Arabia has been to progressively move from hard to soft to softer targets, the latter made especially 'soft' by both physical and domestic political vulnerability… [J]ihadists and Feydayeen quickly withdrew from direct force on force confrontations [early] in the war, shifting to a guerrilla war mode that then shifted into an extensive use of [IEDs]. In short order. attacks extended to antipersonnel strikes on US commercial and contract security assets then, in Saudi Arabia, the attack profile shifted into the soft targets of civilian compounds and commercial office blocks while the attacks in Iraq shifted to nascent Iraqi defense forces and civil authorities.

In Beheadings as ascendant psywar against the periphery of the coalition supply chain, I extended the progression to:

Frighten American and other foreign nongovernmental groups and civilian contractors -- truck drivers and barbers just as much as translators and security personnel -- that complete the extended supply chain that supports US operations in country.

Larry Diamond's What Went Wrong in Iraq is useful in pointing out the lapse of security as the singular instrument by which Baathists and their allies achieve their aims:

In postconflict situations in which the state has collapsed, security trumps everything: it is the central pedestal that supports all else. Without some minimum level of security, people cannot engage in trade and commerce, organize to rebuild their communities, or participate meaningfully in politics. Without security, a country has nothing but disorder, distrust, and desperation-an utterly Hobbesian situation in which fear pervades and raw force dominates.

Diamond notes that four basic components (political, economic, social reconstruction, and security) are required to rebuild a nation rent by war:

political reconstruction of a legitimate and capable state; economic reconstruction, including the rebuilding of the country's physical infrastructure and the creation of rules and institutions that enable a market economy; social reconstruction, including the renewal (or in some cases, creation) of a civil society and political culture that foster voluntary cooperation and the limitation of state power; and the provision of general security, to establish a safe and orderly environment.

The interactions of these components continue to play out in Iraq much as Diamond described them in 2004:

Without legitimate, rule-based, and effective government, economic and physical reconstruction will lag and investors will refuse to risk their capital to produce jobs and new wealth. Without demonstrable progress on the economic front, a new government cannot develop or sustain legitimacy, and its effectiveness will quickly wane. Without the development of social capital-in the form of horizontal bonds of trust and cooperation in a (re)emerging civil society-economic development will not proceed with sufficient vigor or variety, and the new system of government will not be properly scrutinized or supported. And without security, everything else grinds to a halt.

In Forecast for Iraq and Afghanistan: taking the pulse of the war on terrorOctober 2004, I noted that Baathists are in a marriage of convenience with the jihadists - and with criminal and opportunist groups for that matter - as Baathists seek to regain control in a "third coup" (previous ones being 1963 and 1968). I agree with Kenneth Katzman that "former Baathists [are] waiting until the political process fails and Iraq becomes further destabilized. They will then emerge--perhaps violently--and present themselves as the only solution to the nation's security problem." Should the Baathists achieve that victory, they will make short work of the jihadists as well as criminal elements not of use to them.

As part of that commentary, I observed that:

Sunni insurgents will hammer away at the thin supporting infrastructure of cooks, drivers, barbers, and translators, not to mention the security forces -- who, by the way, primarily take up this line of work because the economy has collapsed and there are no jobs to speak of.

It should be remembered that one ubiquitous and critical provider of 'soft' health and human services in a societal reconstruction, the United Nations, was driven from Iraq in 2003 when, in what was a massive blow to the UN organization and to Kofi Annan personally, the UN High Commissioner for Human Rights, Sergio Vieira de Mello, on special assignment to Iraq with a crack team to establish UN services was killed when the UN headquarters in the Canal Hotel was destroyed by a suicide bomber.

Attacks on the private Iraqi healthcare system, once one of the best in the Middle East, in concert with infrastructure attacks on the electricity and water systems and supply interruptions of drug and healthcare commodities have now turned it into one of the most perilous:

In the past year, about 10 percent of Baghdad's total force of 32,000 registered doctors - Sunnis, Shiites and Christians - have left or been driven from work… The exodus has accelerated in recent months [with a] vast majority of those fleeing [being] the most senior doctors… the people who make the doctors, heads of departments… The exodus of senior doctors has resulted in very unpredictable medical service… Patients are not sure whether they will find their doctors. Junior doctors fresh out of medical school are performing complicated surgical operations that ordinarily would be done by more experienced doctors.

Hiwa Osman recently made a thoughtful analysis of the symbiotic cooperation among Iraqi factions and the fear that they impart to the extended Iraqi supply chain, health care included. The health care debacle strikes at the most personal level.

Unless the US and its Iraqi government counterparts can regain and "hold a monopoly on the use of violence," we may again see "one more violence-ridden [society turning] to almost any political force that promises to provide order, even if it is oppressive."

Facing Chaos, Iraqi Doctors Are Quitting
By SABRINA TAVERNISE
New York Times
May 30, 2005

IRAQ: Insurgency Goals
Council on Foreign Relations
Updated: May 20, 2005

What Went Wrong in Iraq
By Larry Diamond
Foreign Affairs
September/October 2004

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Regional markers of despair: Iraqi organ sales explode onto the market

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I follow illicit organ transplants as another marker of distress on the part of the donors - voluntary and otherwise, as a tracker of revenue and other associated, unpublicized grey market activities on the part of the providers, and as a tracker of possible blackmail and criminal prosecution of the donees. So it was with some sadness that almost all of the mirrors of Black market organ trade is Baghdad's new growth industry did little to put the practice and regional upsurge of kidney transplants in Iraq into perspective.

Falling safety and increasing desperation have driven an upsurge in the black market trade in organs, apparently focused on kidneys, in which "a good price" for a kidney is "$1,400 (about £765)" but "Would-be buyers with an eye for a bargain can now pick up a new kidney for as little as $700, given the desperation of fit and healthy Iraqis for money":

With unemployment in Iraq at about 60 per cent, the chance to earn money by touting body parts is a more calculated risk than, say, becoming a $150-a-month rookie policeman at the mercy of suicide attackers. In the main their customers are other Iraqis, for whom kidney problems are common thanks to decades of poor diet, water and medical care. As news of the black market trade has spread, however, wealthier transplant "tourists" from around the Arab world have started flocking to Baghdad, attracted by the rock-bottom prices. [The] price compares favourably to the $5,000 cost of a kidney on the black market in Turkey, or $3,000 in India. In Iraq, the operation itself typically costs $2,000.

Criminal elements have entered the organ market by coercing or duping donors into accepting the most modest sums. Even when the donor can receive "market price," the prices paid will remain depressed and supply plentiful so long as the economic situation continues to falter:

In 2001, the going rate for a donor was $2,000. The fact that the price has tumbled, some doctors say, suggests that Iraqis are even more desperate for money now than they were under Saddam. "It wasn't easy two or three years ago to find a donor," said a senior nurse at another Baghdad hospital. "Now patients' relatives need to make no big effort."

Hospital scruples vary widely with some asking no questions and others only accepting "donors who are relatives of the person needing the transplant":

In Arab society, however, the term "cousin" is often used to describe someone who is a friend or a fellow tribe member. At Al Karama hospital, it is not clear how rigidly the relatives-only rule is applied.

While it is true that Iraq's hospitals are resource short and often suffer hygienic lapses, the capabilities of the black market should not be underestimated. Taking a page from the US mobile Army surgical hospital (MASH) and its successors, the combat surgical hospitals (CSH) and forward surgical teams (FST), all of which were designed as mobile forward-deployed military hospitals providing sophisticated medical attention, it is not at all impossible to establish a clean room environment in an otherwise tainted area. I could see wealthy recipients, Arab and otherwise, funding such facilities. Such facilities would, however, become targets for attacks or kidnappings given the level of violence now present in Iraq.

I wonder how this new donor pattern affects the global illicit organ trade and if the Iraqi situation will devolve in kidnapping for total organ harvesting as criminal kidnapping blossomed into conventional ransom as well as resale to a terrorist group for politicized execution.

The general flow of organs is from poor to rich, from South to North. After that the variations are many:

  1. The level of "commitment" of the donor, i.e., the donor remains living and so gives up an organ for which he or she has redundancy such as a kidney, or the donor dies or is dead so that a full body harvest (corneas, skin, internal organs) can be made. (I have often wondered if one of the unspoken reasons that China moved from a bullet to the rear of the head to lethal injection was to make cornea removals less problematic.)
  2. The location of donor, middleman/removal, and donee, e.g., migrations of Brazilians to South Africa for organ removal which are then transplanted into donees from Israel, Europe and the US; or India where Indians or Bangladeshis have organs removed locally for domestic and international transplantation; or China where the organs of executed criminals are transplanted locally into more wealthy Chinese as well as Japanese, Malay, Taiwanese, and now US visitors.
  3. Seasons and auspicious periods: Asians are especially fond of propitious dates such as the lunar new-year.

For those wishing to learn more start with the work of Nancy Scheper-Hughes of Organs Watch: The Global Traffic in Organs and Organ Trade: The new cannibalism. A view of the China trade can be found at China: The Use of Organs from Executed Prisoners, Sale of Human Organs in China, and Illegal Human Organ Trade from Executed Prisoners in China. A glimpse of the transatlantic trade can be found in Tracking the Sale of a Kidney on a Path of Poverty and Hope and What is a kidney worth?

It will be an illuminating journey should you undertake it.

Black market organ trade is Baghdad's new growth industry
By Saleh Al Jibouri in Baghdad and Colin Freeman
Telegraph (UK)
Filed: 22/05/2005

Organs Watch
University of California, Berkeley

The Global Traffic in Organs
By Nancy Scheper-Hughes
Current Anthropology, V 41 N2:191-224, April 2000
HTML here

Organ Trade: The new cannibalism
By Nancy Scheper-Hughes
The New Internationalist April: 14-17, 1998

Kidney trade probe moves to Israel
By Monica Laganparsad
Pretoria News
February 18, 2005

What is a kidney worth?
By Abraham McLaughlin, Ilene R. Prusher, and Andrew Downie
Christian Science Monitor
from June 09, 2004 edition

Tracking the Sale of a Kidney on a Path of Poverty and Hope
By LARRY ROHTER
New York Times
May 23, 2004

China: The Use of Organs from Executed Prisoners
Amnesty International
28.06.2001

Sale of Human Organs in China
Michael E. Parmly, Principal Deputy Assistant Secretary of State
Hearing Before the Subcommittee on International Operations and Human Rights
Washington, DC
June 27, 2001

China Turns Body Parts of Criminals Into Cash
NewsMax.com Wires
Thursday, May 17, 2001

Illegal Human Organ Trade from Executed Prisoners in China
Case Study: 632, Prison Organs from China
Dena Kram, April 4, 2001

Gordon Housworth



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"Cubazuela" with Russian arms, Chinese economic ties, powered by oil - or perhaps not, conclusion

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Part 4

This weapons acquisition program coupled with a new security doctrine based upon "asymmetric war" using a "decentralized defense" of guerrilla tactics that would involve the "participation of the whole population; adapting ourselves to the geopolitical [situation] of the country" has brought Venezuela squarely into conflict with the US. While the jury is still out as to the target of this new Venezuelan doctrine (the US in a defensive position, or domestic opponents or regional neighbors in an offensive position), a declassified 2005 version of the National Defense Strategy of the USA was shortly followed by a NIC (National Intelligence Council) that stated "U.S. intelligence experts are preparing a list of 25 countries deemed unstable and, thus, candidates for [military] intervention". While the watch list is classified, US policy statements identify Venezuela as one of the 25.

Unlike Cuba, Venezuela has a very different set of international economic suitors beyond the former Soviet Union, notably China. I find it interesting that China has made inroads in the Caribbean basin (also here) and Venezuela (also here [seen note below] and here), not to mention other areas of Central and South America, that would have brought strident US diplomatic responses had the Soviet Union been the investor. A significant Chinese presence would likely mimic Chinese PLA efforts in Asia and Brazil: a tidewater port presence that offers partial or complete opaqueness connected by a strassendorf (street city) style of satellite towns connected by new roads to a processing plant at the primary extraction asset, e.g., coal, oil, minerals, timber, etc. Such patterns are of interest wherever they occur.

All of the above presumes that Venezuelan energy stocks remain readily available and that is not a secure prediction. Petroleos de Venezuela's (PDVSA) net crude oil production is falling precipitously due to:

  • Mismanagement and incompetence by unskilled chavistas who assumed control of PDVSA after thousands of managers, engineers and oil field workers were purged in 2003
  • Insufficient investment in well maintenance and production-capacity development to offset depletion rates
  • Ramping threats, taxes and fees against foreign oil firms that delay essential energy investments, including Brazil, China and Spain identified as "special strategic partners" of the Bolivarian Revolution
  • Perpetually deferred expansion plans

Venezuela's essential domestic and foreign policy instrument has weakened, very likely severely so. Unlike the Saudis that are pumping high, Venezuela cannot offset lower wellhead prices with increased export volumes. Yet Chavez cannot reduce spending as, at a minimum, he retains power through a complex web of payments and bribes to many elements of the Venezuelan society. Unrest and inflation that would flow from efforts to keep spending flowing in the face of lower oil production could be expected to be constrained by Cuban advisors now in country along with Chavez's politically loyal militarized militias. Chavez's move to militarize certain PDVSA installations thereby permits the Cuban government "to exert more direct control over Venezuela's oil industry through Cuban military and security linkages with the FAN" and "chavista generals to seize full control of PDVSA with presidential support," ultimately seizing control of the Energy and Mines Ministry.

I recommend Duarte's Running on Empty which goes so far as to note that the oil markets have not begun to consider the "extremely significant factor" that "Cuba, which is widely believed to have infiltrated FAN, then will become a major player in global oil, and a de facto member of OPEC." Duarte continues to consider short-term Chavez actions in the face of further falloff in production and/or a fall in the price of oil:

  • massive asset liquidation, including U.S. bonds, and U.S. dollars. PDVSA is already trying to sell its U.S. refineries.
  • Yukos-like nationalization of foreign oil company assets in Venezuela

For whatever the US might be planning, I see the possibility that Chavez might force the US's hand. I am no longer sanguine that Venezuela can depend on the fact that the US would not execute a petroleum trade embargo on Caracas (the US has certainly analyzed the last Venezuelan production loss (also here)), a much more containable strategy than the failed blanket embargo against Cuba.

RUNNING ON EMPTY
Venezuela's Oil Production Woes Will Be Felt Widely
by Joe Duarte, MD
Joe-Duarte.com & IntelligentForecasts.com
This article appeared on Marketwatch
May 20, 2005

Chávez arming to fight attack by U.S.
By PHIL GUNSON AND STEVEN DUDLEY
Miami Herald
Feb. 12, 2005

Global Market Brief: Monday, Jan. 3, 2005
Stratfor
Jan. 3, 2005
Mirrored here - scroll down to 'Latin American Countries Committing Strategic Trade Suicide.' Bold face and two extra paragraph breaks were added by poster.

Venezuela's Chavez pledges support for Chinese oil exploration
Beijing (AFP)
Dec 25, 2004

 China Widens Economic Role in Latin America
By LARRY ROHTER
New York Times
November 20, 2004
Original scrolled to archive
Mirrored here

Gordon Housworth



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"Cubazuela" with Russian arms, Chinese economic ties, powered by oil - or perhaps not

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Part 3

It is interesting to see Chavez become a focus of regional challenge to US interests from a group of left of center governments in Argentina, Bolivia, Brazil, Chile, Peru and Uruguay, all nations that remain wary of Cuba even as they treat with Venezuela. Venezuela's impact is all the greater in that it can execute petroleum diplomacy initiatives moderate actions of regional states receiving Venezuelan oil, unilaterally fund FAN remilitarization and leftist groups such as the FARC and other terrorist groups.

Yet left-of-center has its gradations. The administrations of Brazil, Chile and Uruguay are more aligned on a Euro-socialist model less "left" than Chavez. Regional commentators have stated these states would not seriously contest Venezuela unless their national interests were threatened, a condition that I believe that Brazil has quietly recognized as the geopolitical effects of the "Cubanization" of Venezuela addressed in parts 2 and 3 become more extreme in their effects on South American states. Brazil (and Columbia) appears to be increasingly sensitive to Venezuelan support to the FARC whose narcotics and criminal enterprise exports are rapidly expanding out of Columbia and to the export effects of Venezuela's Bolivarian Revolution, e.g., Ecuador, Bolivia, Peru, and Nicaragua.

For its part, Cuba is clearly trumpeting agreements with Venezuela (beneficially priced oil and seconded advisors) and China (here and here) for its return from the brink of economic ruin, so one would assume that Havana will be able to sustain, even grow, its diplomatic activities, a condition that will not be lost on certain South American states. In April 2005 Petroleos de Venezuela (PDVSA) announced that it would manage its Caribbean region commercial operations from a new office in Havana that appears to have little or no economic advantage but significant regional political impact:

Between oil and coercion, the new headquarters is a move to isolate smaller Caribbean and Central American states into a Cuba-Venezuela axis... Since the countries will be dependent on Venezuelan oil from Cuba's capital, don't imagine any of those countries will try to cross Fidel Castro. The countries are small and numerous, but that's why their votes are so valuable to Chavez and Castro in international bodies like the Organization of American States and United Nations.

One wonders why observers would be surprised. Venezuela is 'self-propelled' in terms of having significant energy reserves to fund an often heavy handed petroleum diplomacy and Chavez, who has been described as mercurial, seems to have been consistent on petroleum:

Even before Chavez was first elected [in 1999] he was explicit in describing his views about petroleum. "Oil is a geopolitical weapon, and these imbeciles who govern us don't realize the power they have, as an oil-producing country."

Like Cuba, Venezuela will benefit by increasing Russian arms shipments for a combination of reasons:

  • Rosoboronexport (Russian Defence Export) hard currency sales are essential to sustaining Russian weapons R&D investment
  • Growing Indian and Chinese weapons sales will increasingly eat into Russian sales
  • The eventual lifting of the EU arms embargo on China will decrease Chinese purchases of Russian arms
  • Despite earlier agreements with the US and any diplomatic smiles between Putin and Bush43, I believe that there is sustained Russian distress over US penetration in the Russian near abroad and the Stans
  • While Russia actually benefits from Venezuelan development and extraction blunders in its energy sector, it would still have to have investment access in Venezuelan fields if for nothing else to reduce US opportunity

Part 5 conclusion

Hugo Chavez: Pirate Of The Caribbean
Venezuelan News and Analysis
From Investor's Business Daily/Investors.com,
May 20, 2005
21 May, 2005
[This citation has the map which many mirrors do not]

Latin American Allies of U.S.: Docile and Reliable No Longer
By CHRISTOPHER MARQUIS
January 9, 2004
New York Times
Original scrolled to
archive
Mirrored
here

Gordon Housworth



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