Forging a new Asian economic bloc
By G.K. Menon, Special to Gulf News
Anthony Cordesman, top Middle East specialist at Washington's Center for Strategic & International Studies, says the US and its allies are now engaged in six Long Wars.
These are in Iraq, in Iran over its nuclear project, in Afghanistan over the Taliban and Pakistan, in Israel over the war in Palestine, in Israel over the Lebanon War, and the War on Terror.
He says they are all decade-long wars involving religious, ideological, political and perceptual struggles. The US may lose these wars quickly in some cases, but cannot win quickly in any, as all are subject to local and international pressures.
Wars cost money, and the US is running record high current account and budget deficits. The US dollar is still the dominant currency for world trade and investment, in which Gulf oil producers are major factors.
These so-called Long Wars may have begun to undermine confidence in the flagship dollar, and the Lebanon War failure seems to mark a tipping point.
Asian central banks, with foreign exchange reserves that dominate the world trade and monetary systems, may now need to reconsider their support for the dollar. The danger now is that another setback in another Long War may trigger a panic flight from the dollar. Such danger looms with the West confronting Iran over its nuclear project, with little non-Western support.
Iran's right to enrich uranium for power or other projects may no longer be the issue. The real problem may be the West's self-proclaimed right to dictate such issues, using the UN Security Council, which may no longer represent the global power balance.
They claim to speak for "the international community", when in fact they speak only for the West in opposition to the Rest. Moves to reform the UN and its Security Council have foundered due to the veto power of the Permanent Five, which are relics of the post-World War Two power balance.
Sanctions on Iran, with or without UNSC support, may cause unacceptable chaos in a volatile oil market that sustains global economic growth. The UNSC's impotence during the Lebanon War may further weaken it. There seems a case to forge an alternative institution that reflects the new global power balance.
Power balance
It is the Asian Renaissance heralded by Japan in the first quarter of the last century, followed by Asean, South Korea and China in the third quarter and India and the Gulf in the fourth quarter that has transformed that balance.
With such power goes authority and the responsibility to wield it. So far Asian powers have let the better-organised West run international organisations.
But during the last decade, East Asia led by Asean, has forged the basic infrastructure for Asian economic and monetary integration a la European Union. During last few years, India has been added to the Asean plus Three as a bridge to the Gulf.
At the Asian Summit in Kuala Lumpur last December, Prime Minister Manmohan Singh called for launch of Pan Asian Economic Community, including the Gulf.
Now, public opinion in the US seems to have turned against a Vietnam-style debacle in Iraq, calling for a pullout.
Israel's failure in Lebanon, followed by that of the US in Iraq, may in fact set the stage for incorporating the Gulf into the Pan-Asian Economic Community, due for launch at the Asian Summit this December. That may also act as a springboard for the launch of an alternative to the Security Council and other international institutions.
As the Asian Renaissance has focused on economic growth, their first objective may be to protect that growth. This may be prejudiced by runs on the dollar and euro, due to the West's loss of the Gulf and global hegemony underpinning its fiat currencies.
Thus, the first alternative to be forged may well be an Asian Monetary System (AMS) founded on the internationalised yen or Asyen (Asyuan in China), as sought by Japan's leaders since the mid-1990s.
The Asian Development Bank has prepared the ground for this development by its plans for Asian Currency Units (ACUs), which Gulf producers may back by oil sales denominated by destination in ACUs, dollars or euros. This may give the ACU corporate liquidity for world trade, and clear the way for the launch of the AMS early next year.
The Gulf and Russia may wish to help forge the Pan-Asian Economic and Monetary Community. New international institutions may follow in which the US/UK-led bloc and Franco-German-led EU may be equal partners, with special provisions for Latin America and Africa.
The writer is Editor of Syndic Oil, based in Abu Dhabi, which will soon launch an Oil and Forex Trading Screen from Dubai and Tokyo.
http://www.gulfnews.com/business/Comment_and_Analysis/10070658.html
Anthony Cordesman, top Middle East specialist at Washington's Center for Strategic & International Studies, says the US and its allies are now engaged in six Long Wars.
These are in Iraq, in Iran over its nuclear project, in Afghanistan over the Taliban and Pakistan, in Israel over the war in Palestine, in Israel over the Lebanon War, and the War on Terror.
He says they are all decade-long wars involving religious, ideological, political and perceptual struggles. The US may lose these wars quickly in some cases, but cannot win quickly in any, as all are subject to local and international pressures.
Wars cost money, and the US is running record high current account and budget deficits. The US dollar is still the dominant currency for world trade and investment, in which Gulf oil producers are major factors.
These so-called Long Wars may have begun to undermine confidence in the flagship dollar, and the Lebanon War failure seems to mark a tipping point.
Asian central banks, with foreign exchange reserves that dominate the world trade and monetary systems, may now need to reconsider their support for the dollar. The danger now is that another setback in another Long War may trigger a panic flight from the dollar. Such danger looms with the West confronting Iran over its nuclear project, with little non-Western support.
Iran's right to enrich uranium for power or other projects may no longer be the issue. The real problem may be the West's self-proclaimed right to dictate such issues, using the UN Security Council, which may no longer represent the global power balance.
They claim to speak for "the international community", when in fact they speak only for the West in opposition to the Rest. Moves to reform the UN and its Security Council have foundered due to the veto power of the Permanent Five, which are relics of the post-World War Two power balance.
Sanctions on Iran, with or without UNSC support, may cause unacceptable chaos in a volatile oil market that sustains global economic growth. The UNSC's impotence during the Lebanon War may further weaken it. There seems a case to forge an alternative institution that reflects the new global power balance.
Power balance
It is the Asian Renaissance heralded by Japan in the first quarter of the last century, followed by Asean, South Korea and China in the third quarter and India and the Gulf in the fourth quarter that has transformed that balance.
With such power goes authority and the responsibility to wield it. So far Asian powers have let the better-organised West run international organisations.
But during the last decade, East Asia led by Asean, has forged the basic infrastructure for Asian economic and monetary integration a la European Union. During last few years, India has been added to the Asean plus Three as a bridge to the Gulf.
At the Asian Summit in Kuala Lumpur last December, Prime Minister Manmohan Singh called for launch of Pan Asian Economic Community, including the Gulf.
Now, public opinion in the US seems to have turned against a Vietnam-style debacle in Iraq, calling for a pullout.
Israel's failure in Lebanon, followed by that of the US in Iraq, may in fact set the stage for incorporating the Gulf into the Pan-Asian Economic Community, due for launch at the Asian Summit this December. That may also act as a springboard for the launch of an alternative to the Security Council and other international institutions.
As the Asian Renaissance has focused on economic growth, their first objective may be to protect that growth. This may be prejudiced by runs on the dollar and euro, due to the West's loss of the Gulf and global hegemony underpinning its fiat currencies.
Thus, the first alternative to be forged may well be an Asian Monetary System (AMS) founded on the internationalised yen or Asyen (Asyuan in China), as sought by Japan's leaders since the mid-1990s.
The Asian Development Bank has prepared the ground for this development by its plans for Asian Currency Units (ACUs), which Gulf producers may back by oil sales denominated by destination in ACUs, dollars or euros. This may give the ACU corporate liquidity for world trade, and clear the way for the launch of the AMS early next year.
The Gulf and Russia may wish to help forge the Pan-Asian Economic and Monetary Community. New international institutions may follow in which the US/UK-led bloc and Franco-German-led EU may be equal partners, with special provisions for Latin America and Africa.
The writer is Editor of Syndic Oil, based in Abu Dhabi, which will soon launch an Oil and Forex Trading Screen from Dubai and Tokyo.
http://www.gulfnews.com/business/Comment_and_Analysis/10070658.html
