Saturday, December 31, 2005



If globalisation continues as America planned in the 1940's and 1950's, the nation will likely decline in economic wellbeing and political influence internationally. Open trade and cross-border flows of capital mean that the rest of the world will prosper.

"American policy in the 1940's and 1950's was directed expressly at the rehabilitation rather than the punishment of defeated nations, as America led the effort to establish world-wide free trade through [GATT, now WTO], and to protect financial stability, including the IMF and the World Bank. It also initiated its own lending programmes such as the Marshall Plan", wrote Bill Emmott in the book '20:21 Vision'.

Saturday, December 24, 2005


Russia plans to lead the world in energy

Extracts from a report yesterday in India's press:

Energy security would be one of the main issues at the G-8 summit in St Petersburg next summer as Russia is to get the rotating G-8 presidency from Britain on January 1, 2006. US, Canada, France, Germany, Italy and Japan are also members of the elite club of the world’s most-industrialised democracies.

[The President of Russia] said Moscow was willing to open new gas and oil pipelines to reach the Asian markets to create new energy set-up in the world to avoid conflicts among future generations over energy resources. "We must use these positions in the interests of the whole international community, but not to the detriment of our national interests," Putin said in his opening remarks, televised on Thursday night by main Russian TV channels. "This energy set-up should be equally fair for the producers and consumers of energy resources for the sustained economic growth in the world," he underscored.


The aim of the Russian presidency of the G8 in 2006 seems to be to sustain economic growth in the world.

In this connection, the Chinese press report statistics from the International Monetary Fund:

1. The world economy will grow by 4.3 percent in 2005;
2. China and India will continue their rapid progress with annual growth of 9.0 and 7.1 percent respectively. The U.S. economy will grow by 3.5 percent, the euro-zone 1.2 percent, Russia 5.5 percent and the Japanese economy will start recovering with a growth of 2 percent;
3. Economic growth in Africa and Latin America will also reach 4.5 and 4.1 percent next year.

"However, threats remain to the world economy, and at the top of all the disturbing factors loom the high oil prices. Other potential threats include a deteriorating current account balance in the United States and consequent dollar fluctuation, an increase in long-term interest rates, falls in property prices, and a major outbreak of bird flu."

Sunday, December 11, 2005


Russia to chair G8 in 2006?

Russia's chairmanship of the G8 in 2006 is under threat from a few senators and congressmen in the United States. These people claim that Russia has an unacceptable culture.

It is worth reflecting though that the countries reckoned to be economic giants in about forty years - the BRICS countries - will also be culturally different. Only one is currently a member of the G8. The BRICS countries are Brazil, Russia, India, China and South Africa - Iran and Venezuela are observers. They are reported to have 75% of the world’s population and 80% of the natural resources.

Moreover, "Washington and London are desperately looking to Putin to deal with pariah states such as Syria and Iran. . . It started after 9/11, when Putin became an important ally in the war on terror by letting the US military operate out of bases in central Asia."


1. Putin Seeks Membership of Asian Business Club: Russia is disillusioned with its role of outsider in European integration and keen to get on board a similar process in Asia. "The process of globalization is beginning to have an Asian look about it," Foreign Minister Sergei Lavrov said in his annual foreign policy review. "This makes the fast-developing Asia-Pacific region a top priority for us." Asian countries are looking to Russia to provide much of the energy for their booming industries.

2. BRIC nations: No one should doubt the economic [and political] resilience of the US and Western Europe, except that it rests on multinational corporations that are moving production, capital and jobs around the world willy-nilly. More capital is sure to bolster the BRIC nations and re-align income and life-standard globally. Growing economic prowess by these new players will lead them to clamor for better recognition in international [political] forums like the United Nations (UN) and World Trade Organization (WTO). In global trade talks exporters from poor countries are now teaming up with India, China and Brazil to argue against agricultural subsidies in European Union and US.

Tuesday, December 06, 2005



The G8 are surely not equipped to deal with the global energy crisis. Moreover they're asking for a report on the situation in 2008.

However there is greater urgency in Asia. Businessweek reports today that two countries not in the G8 - India and China - have plans to act shortly. A pan-Asian oil and gas grid is in the offing.

"Chinese state oil giants have so far had an edge over their Indian counterparts in the search for energy resources because of a head start and deeper pockets. They've beaten Indian rivals in the race for some blocks in Angola, Myanmar, and Indonesia. But the Chinese see the importance of collaboration over confrontation, Aiyar [India's Oil Minister] asserts, citing a string of discussions between his ministry and authorities in Beijing since early 2005."

"The 64-year-old minister, who had built a long career in India's foreign diplomatic corps before joining politics, emerged optimistic from the Nov. 25 roundtable concerning cooperation between North and Central Asian producers and the main regional consumers China, Japan, South Korea, and India. He used the occasion to reiterate his call to former Soviet bloc producers and the vital transit country of Turkey to pay adequate attention to Eastern markets, instead of focusing solely on Europe."

"SECURITY IS KEY. While the message went down well with the producers -- Russia, Kazakhstan, Azerbaijan, Uzbekistan, and Turkmenistan -- Aiyar found an especially strong ally in Turkish counterpart Mehmet Hilmi Guler. "Hilmi Guler belongs to an Islamic conservative party and therefore has some sense of discomfort with a purely Western orientation," Aiyar told reporters in a post-event briefing. "He has become a great advocate," said Aiyar, referring to a "north-south" oil and gas supply relationship he has championed with Turkey in the past few months."


It is reported that Russia wants to prioritise energy when it chairs the G8 in 2006.

Monday, December 05, 2005


Energy - solution by 2008 from IEA?

The G8 in 2005 asked the International Energy Agency (sister of the OECD) to help solve the world's energy crisis. The work will focus on six broad areas:
- Alternative energy scenarios and strategies.
- Energy efficiency in buildings, appliances, transport and industry.
- Cleaner fossil fuels.
- Carbon capture and storage.
- Renewable energy.
- Enhanced international co-operation.

A report is to be delivered in 2008 to Japan when it is scheduled to chair the G8.

Some of the challenges were reported by 'The International Herald Tribune' in an article A World without easy oil. What now?. The article sets out points arising from a debate they hosted, which included:

"To get the Chinese to the level of per-capita consumption that Taiwan is today. . . is physically impossible."

"I think all four of us are having trouble understanding how the United States will shift its policies. There is the belief that the market will do it. Well, in the '70s the market didn't do it."

"One provocation for rethinking U.S. energy policy will be when Chinese investment in Canadian tar sands and Venezuelan oil development make it increasingly difficult for us to get access to the resources. The problem with the Chinese is that they don't know that the Canadian oil is ours. And neither do the Canadians."

"by our going into Iraq, we displaced a $1 billion investment by the Chinese to develop Iraqi fields. That has motivated the Chinese to do things like buy into the Canadian oil sands and to look into buying Unocal. And it has encouraged them to invest in highly volatile oil provinces that are in opposition to the United States, including the Sudan"

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