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Towards Two Poles, Venezuela, China & The US

8.22.2005

The recent talk about increasing Ruso-Sino relations and the increasing cooperation of the two states (see their recent festival of war games), is proving troublesome for many in the US and their allies. News, then, that the nemesis of American Imperialism, Hugo Chavez, and his national oil company are to open an office in central asia soon should raise a few eyebrows. The news comes from AP. Growing cosiness of nations who align themselves,if not anatagonistically then certainly outside of, US interests looks set to cause ructions.
In this era of $60 oil and growing scarcity of capacity to refine, we look to have a wounded bear scenario on our hands in terms of the US consumer. Weaned for years on an economy and society that took cheap oil and gas for granted, the recent upsurge in prices is hurting already low savings levels and affecting the consumption boom.
The venezualan move to sell 300,000 barrels of oil per day to the chinese economy looks like a smart positioning of interests between the two players shaping up to slug it out over the next 25 years. It is a position of consistency for a man who enjoys close relations with China and still uses his oil to keep doctors coming in from Cuba. The benefits for Venezuela in selling oil to two states looking to begin challenging (well China challenges while Russia holds on and hopes) are numerous.
In diversifying interests, Venezuela is creating an environment where in a few years, scarcre supply will allow him to name his price between the two/three different poles. This is a dangerous position however and here again Chavez has managed to cover himself.
The US has always reserved the right to treat Central and South America as a fiefdom, since the days of the Roosevelt Corollary of Monroe Doctrine, and this act by Venezuela of shipping oil to a country which is not the US or a special ally is going to bring a great deal of consternation Chavez' way. Hold on a tick though, this second part of the grand strategy looks to be the fact that in China and Russia he has two major players. As the worlds greatest exporter of goods, China holds a great deal of US treasuries in its vault, any prospective US agresssion toward Venezuela may spark Chinese recriminations. The prospect of a US-Sino trade war is not something many cheer over. The US is growing deeply reliant on the rest of the world to fund its deficit problem and over consumption.
This advantage is double locked for Chavez through the Russian veto. Not since the cold war days have we really considered division of relatively equal powers each tending their own fiefdoms. This prospect may yet re emerge as resource become scarcer and the two major economies slug it out for juice.
So where to from here then? Venezuela has a reputation for being a bit of a cowboy country, its recent show of solidarity with the Argentines, buying up treasury bonds and effectively underwrinting debt for the country, shows Chavez is a man seeking his own 'third way' in doing so however he is more than happy to allow the first two ways to benefit him. Thus the major US corporates are still present in the capital.
In positioning himself between two poles, Chavez is running a tight line. He cannot be guaranteed safety, nor can he ever wholly trust a suspicious US.
The actions of Chavez are greeted differently and attitudes toward him are coloured by ideology. The man does seems to have some good points and certainly some policies have merit, notably his means of supplying oil for doctors. His actions however may begin getting him into trouble when it gets to the crunch in terms of oil supply and every barrel counts. At such time the US will not sit idly by and allow him to ship 300,000 barrels a day to Asia.
The positionings of China and Russia over the last few months and years suggest a willingness on their part to get stuck into the messy business of peddling influence and supporting unsavoury characters in the name of national interest and global power. This is a proven trajectory of empire as far back as history can recall. The US is but the most recent beneficiary of such a strategy.
It seems that with a population of over a billion, 60% of which have yet to be industriaised, growth in China has enormous potential. They are in the black and net exporters. The US is in the red and a net importer. Its position at the top relies on a complex of debt and consumption. I fear that these actions are but a small step on the path to a bipolar world though not the one Jacques Chirac desired.
Those who oppose US imperial tendencies, should begin developing a similar critique of China and new ways to get heard.
On the other side of the ocean, what exactly is China's intention with South America, recent trade visits have gone well and deals with many countries have been signed. Activity round the southern cone is an obvious affront to the Monroe Doctrine but not so grevious an insult to lead to attack. CNBC is worried about the potential strategic loss of 15% of US supplies of oil. Other contributions have been less helpful. The long term strategy of China is to displace the US at the top of the tree, how this may happen is not very clear. It took two world wars for the US to achieve it over the UK and a further 45 years to become sole superpower.
Is the rise of China and the building of alternative alliances an affront to the US which is cannot halt? Is the return to a multi-polar palnet inevitable. Is there really a need for superpowers anyway? These questions look set to be answered in retrospect.
For the moment little looks set to come of the Venezuelan diversification, it will take a few years for china's refineries to become calibrated to Venezuelan oil. When that happens, oil will still be expensive and we will be closer to peak oil, not matter when it is. The increasing scrabble for hydrocarbons, the increasing scarcity of these minerals and two strategic alliances forming should make that time a forment of imperial activity.
Sitting on the sidelines in little old ireland, I fret over one thing. If oil gets too expensive for companies to locate anywhere but india and china, what does that do for our jobs market? HOw many of you reading this work in a multi national. Should they pull out for cost reasons, what will all of you do?
The Prescott-esque tectonic plates are moving slowly. Its likely they will stop at a bi-polar world of two alliances. Yet again those who get squeezed out are pro-democracy campaigners. In a world of options, the peoples voice is too hard to predict and control, democracy only works in those cases where options are controlled and outcomes certain anyway.
Ultimately, the driver in all of this is oil, who has it, who wants it. The conflicts looking set to emerge in years to come will be geo-political nad geo-strategic. Some argue they all are. How can those of us who care about Human Rights and Democratic empowerment create the conditions of stability and freedom from empire? I am unsure but if there is a time to begin considering it, perhaps it is now.
From a little post on oil to a broader post on international relations. I hope it isnt as jumbled as i fear.
RR

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