Friday, 13 July 2012

NATO not delivering for GCC (PO)

M D Nalapat

While television channels across the world have been focussing on the “pain and hardship” being endured by populations in Spain, Greece and other Eurozone countries that are in effective default (although not admitting the fact), one of the biggest losers of the financial policies and institutions of key NATO states has been the GCC. Investors across the alliance of Arab monarchies lost $1.3 trillion during the 2008 crash, and are on track to watchhelplessly as another $2 trillion disappears in a Eurozone meltdown. Despite the certainty that the Eurozone is unsustainable, and that what is being created is an illusion of salvage ability, GCC investors have remained locked into NATO-based financial institutions, rather than immediately taking steps to diversify into real assets in locations where there is not the constant threat of sequestration for political reasons. The frequent expropriation of assets invested in NATO capitals indicates that these are safe only as long as their holders do not go against the wishes of NATO. Once they do, the amounts get taken over the way Libya’s assets were. Incidentally, less than 20% of the seized Libyan assets have thus far been returned to the post-Kadhafi dispensation in Tripoli, even though this is itself a creation of NATO.

Investors outside the charmed circle of NATO and it’s satellites face huge risks in placing their funds in institutions based within the military alliance. Apart from the economic risk of a collapse of the euro Nd consequent effects on the dollar, there is the risk of takeover of assets. This is being resorted to with impunity within the NATO bloc, even while they protest when Argentina, for example, takes over the assets of a Spanish company that refuses to invest any surplus in added production, preferring to drain the profits homewards to Spain. Countries within NATO have also been very critical of Moscow, because that capital has not allowed companies such as British Petroleum to continue to exploit the resources of Russia on the same giveaway terms as were offered during the Yeltsin period. Only NATO, it would seem, has the right to seize assets at will and not any other alliance or country.

As mentioned in these columns, NATO is seeking to deliver services and outcomes to the GCC in order to ensure that the group continue to place at risk their national savings by keeping them in financial institutions in West Europe and the US. Within the Arab world, NATO has systematically sought to remove from power regimes that are anti-monarchist, and has thus far succeeded in the case of Iraq and Libya. Both Saddam Hussein as well as Muammar Kadhafi opposed the sheikhdoms of the GCC, and both have paid the price for such a view. Their opposition was based on the proposition that the sheikhdoms did not do anything more than lip service to the Palestine cause, while they themselves did much more, although of course in the final years of his reign, Kadhafi too abandoned the Palestinians in favour of attempting to make peace with NATO. Today, regionally, there are only two countries that still oppose the very existence of the State of Israel, and these are Iran and Syria. Once both witness political change that ensures regimes that are less tractable, it would be an immense geopolitical victory for NATO and its GCC allies. Hence neither can be blamed for working hard to ensure regime change in Teheran and Damascus.

However, while Libya was a cakewalk, thus far the alliance has not succeeded in Syria. The regime of Bashar Assad is still in power, and still in possession of sufficient means to deter the growing band of NATO-backed insurgents that have plunged the country into civil war. Given that the GCC has invested $4.6 trillion in the NATO bloc, about 40% of which is likely to go up in smoke once the Eurozone collapses, this is an unsatisfactory state of affairs. The GCC countries are entitled to greater geopolitical returns, i view of the immense financial contribution they are making. Hence the acceleration in back-channel contacts in Moscow and Beijing, to force through a Chapter 7 resolution in the UN Security Council that would lift all restraints on regime change, so that Syria can go the way of Libya, including the end of the ruling family in dungeons and in execution chambers. In the case of Russia, the NATO capitals are placing their faith in Prime Minister Medvedev, who is their man and who is waiting to pounce as soon as President Putin falls in public standing before he takes over full powers. In the case of China, there is no Medvedev within the Politbureau, and hence only economic incentives will work. However, i its wakened state, NATO needs China as much or more than China needs NATO, and hence leverage is low.

Should the Assad regime go the way of Kadhafi, it would be clear to the international community that Russia and China are not reliable friends, and that they would be willing to sacrifice their allies should the price be right. It is unlikely that either Vladimir Putin or incoming Chinese President Xi Jinping would agree to such a climb down. Both are proud nationalists, and are known to be tough bargainers. Hence what is likely is that NATO will continue to weaponise the insurgents against Assad, without being able to deliver a knockout blow to the regime. The danger in such a strategy is that theinfection (of armed insurgency) could easily spread to Turkey, Bahrain and even Saudi Arabia, where there exist huge pockets of disaffected individuals. Once such a fire spreads, putting it down would become almost impossible. NATO is playing with fire in Syria but the alliance has no choice. Having made GCC investors lose so much cash, and after having placed even larger sums of money at risk by their policies of greed and graft, the alliance has no choice but to continue to act as a mercenary force that will ensure regime change for its financiers.

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