US rushes to shore up Gulf

President Obama’s announcement to bring home America’s remaining troops from Iraq has apparently fulfilled his promise to end the occupation and war. But Washington is busily reorganising its most reactionary allies in the region to fill any power vacuum.

As always, the hawks in the Republican Party are setting the tone and the White House is responding to avoid being seen as soft when it comes to protecting American interests.

A group of 12 Republican Senators have written to the chairman of the Senate’s Armed Services Committee saying: “The complete withdrawal of our forces from Iraq is likely to be viewed as a strategic victory by our enemies in the Middle East, especially the Iranian regime.”

Together along with their allies in the region, clustered in the ultra-reactionary Gulf Cooperation Council (aka the Gulf Counter-Revolutionary Club), they fear withdrawal will create a power vacuum in the region, crucial for its massive oil deposits and strategic location.

So US Secretary of State Hillary Clinton and Defence Secretary Leon Panetta are building closer bonds between the US and the six most reactionary regimes in the region – Saudi Arabia, Kuwait, Bahrain, Qatar, the United Arab Emirates and Oman.

The aim is to encourage “a new ‘security architecture’ for the Persian Gulf that would integrate air and naval patrols and missile defence,” the New York Times reports.

The GCC, which is dominated by the pro-Sunni Muslim House of Saud, is currently financing one strand in the Syrian movement to topple Bashar al-Assad. On the other side the GCC sent ground forces to put down the Pearl Square democracy movement in Bahrain, as Pepe Escobar of the Asia Times has noted.

Despite widespread criticism of ferocious repression of unarmed, peaceful demonstrators, Panetta and Clinton announced the multilateral military alliance with the Gulf Council in New York last month. The council is due to meet next month in Riyadh to work on collaboration.

Clinton, who is now seen as the chief behind-the-scenes operator in the NATO operation to back the overthrow of Gaddafi, hopes that US support will reassure its client dictators. “We will have a robust continuing presence in the region, which holds such promise and should be freed from outside interference to continue on a pathway to democracy,” she said.

The Obama administration’s planned $250 billion cut in defence spending over the next five years is overshadowed by commitments to spend $700bn on nuclear weapons alone over the next decade. A further $92 billion is to be spent on new nuclear warheads and 12 nuclear ballistic submarines, air-launched cruise missiles and bombs.

A major report published by the British American Security Information Council (Basic) warns that a host of other countries will spend vast amounts on the nuclear weapons industry.

Russia is to spend $70 billion on its “strategic nuclear triad”. China, France, Pakistan, India, Israel and North Korea are stepping up and modernising their nuclear submarines, missiles and other weapons capacities. Pakistan is building several new plutonium reactors.

Meanwhile, both China and the US are piling into one of the world’s most restive and crisis-ridden countries – Pakistan, in an effort to gain supremacy in the area.

A huge disarray and ultimately, as the Afghan debacle show - helplessness - within the US intelligence, politicians and military over their strategies is apparent. The Obama administration is relying on Pakistan’s notorious Inter-Services Intelligence Agency (ISI) to help end in the war in Afghanistan. Some chance.

Corinna Lotz

A World to Win secretary

Profits loom larger than cost of human misery

Analysts are at work trying to minimise the damage to the profitability of the capitalist system from the disaster in Japan. Never mind the towns and villages cut off from all contact without access to food or medical supplies or facing radiation poisoning - the bottom line is the priority.

Big business and the markets are asking what will be the net effect on the oil price if revolution erupts in Saudi Arabia, cutting its production, but demand in Japan falls? And what will that do to the prospects of a global double-dip recession?

In Japan, ports, airports, highways and most manufacturing plants have closed, and the government has predicted “considerable impact on a wide range of our country’s economic activities”.

The damage to nuclear reactors is beyond the worst of the worst case predictions. Eleven reactors are shut down, at least four are broken beyond repair. Swathes of economic activity are at a standstill, and more will follow. Oil imports are bound to soar, adding to the country’s crisis.

Japan is the world’s third largest national economy, having slipped behind China after two decades of unremitting recession. Throughout the period production by world famous brands like Sony, Mitsubishi, Toyota has been kept afloat on an ocean of debt.

After a series of failed attempts to kick start a return to growth, its accumulated national debt was already by far the world’s highest at 225% of gross domestic product. Government income from taxes covers less than half the budget, and pension funds are becoming net sellers of bonds to meet payouts to the elderly.

The Bank of Japan has made 21.8 trillion yen ($US265 billion) available to financial institutions and doubled its asset-buying program to 10 trillion yen, but it hasn’t been enough to stop a global collapse of share values. Japan’s banks are now vulnerable because of the subsequent fall in the value of their equity assets.

As the Financial Times reported: “Economists generally welcomed the central bank’s move as a measure to quell potential panic over access to funds in the wake of a major disaster. But some said the liquidity injection was not likely to be enough to counter the negative impact of the quake and tsunami on the Japanese economy, already weakened by a strong yen and deflationary pressures.”

As the tragedy unfolds, those who operate in the financial markets are weighing their options. Their only concerns are for how money can be made out of the destruction. Reconstruction will need to be funded from somewhere, and that means a big expansion of credit –at a price.

The cost of further borrowing is already on the rise as lenders pile the pressure on the distressed country, just as they are doing in Portugal (whose debt was downgraded last night), Ireland (desperately seeking to renegotiate its bail-out) Greece (paying a staggering 13% to borrow on the bond markets) and Spain (which needs an estimated €130 billion to recapitalise its banks).

The movement of the earth’s crust, hidden from view, has brought two things into even sharper relief:

- continued pursuit of a for-profit system of growth fuelled by oil and nuclear power is simply not sustainable.

- the historic necessity of creating a not-for-profit society in which people produce what they need in a way which repairs the damage to the planet’s eco-system resulting from decades of corporate exploitation.

Today’s unemployment figures in Britain, showing a 17-year high at over 2.5 million, add to the urgency to create an alternative path for humanity in every country.

Gerry Gold

Economics editor

Saudi Arabia: an inconvenient truth

So, according to a New Labour foreign office minister, Britain and Saudi Arabia’s feudal absolute monarchy should work more closely together on the basis of “shared values”. Kim Howells declined to elaborate whether these might include routine torture, imprisonment without trial, amputations, beheadings, stoning, endemic corruption, discrimination against women and gay people as well as support for those who attack Shia Muslims on the basis that they are not “true believers”. Amnesty International says that at least 124 people have been executed in Saudi so far this year, the majority by beheading.

You can be sure that none of these issues will be raised at Buckingham Palace today when the Saudi entourage dine with the Queen or tomorrow when King Abdullah meets Gordon Brown, the man who declared at his party conference that human rights were “universal”. If he wasn’t such a hypocrite, Brown might have added: “There are, of course, exceptions. Our allies like Saudi Arabia, Israel, Egypt have special problems in this regard.” But, let’s face it, Brown is like any other Western leader when it comes to turning a blind eye to human rights abuses when it is politically (or economically) inconvenient.

The inconvenience in this case revolves around oil and weapons. Britain’s relationship with the feudal tyranny is a simple one. You sell us the oil and we will give you as many fighter planes and weapons as you want. And if, along the way, companies like BAE have to pay serious bribes to members of the royal family to win a £40bn contract, we will make sure the British police don’t investigate on grounds of “national security”. Only last month Britain and Saudi Arabia announced a deal for the sale of 72 Eurofighter Typhoon aircraft to the desert kingdom for £4.4bn. Whitehall officials said the potential total value of the contract would be much higher. As always, the contract details are secret.

So the “shared values” Howells talks about are simply a variation on the theme of blood for oil – except in this case it is Saudi blood that is spilled when people try and gain some democratic rights. Apart from John McDonnell – who denounced Howells’ statement – there is a noticeable silence from government benches, which is a further indication of the political degeneration of New Labour into a party of big business that will do anything in the name trade and commerce. It was left to the Liberal Democrats' acting leader Vince Cable to denounce the state visit, while Chris Huhne, a leadership candidate, said: "The accolade of a full state visit is quite wrong. We are feting the reactionary leader of a society that discriminates against women, tortures prisoners, conducts public executions, amputates limbs as a punishment, and bans freedom of expression, assembly and religion. Saudi Arabia's human rights record is atrocious."

But a Foreign Office spokesman said: "Saudi Arabia is one of the UK's most important international partners. King Abdullah's visit will further deepen and broaden that relationship." The message is clear: the greasing of palms will continue. So will the beheadings and the torture. In Downing Street, the hypocrite will continue to prattle on about human rights. Meanwhile, the cries of the victims of the despotic Saudi regime will be drowned out by the sound of British-made fighter planes soaring overhead.

Paul Feldman
AWTW communcations editor