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General News    H4'ed 11/11/10

Tomgram: Juan Cole, The Asian Century?

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This kind of regional near impotence is only reinforced by America's perpetual (yet ever faltering) war machine. Nor, as Obama moves through Asia, can he completely sidestep controversies provoked by the Afghan War, his multiple-personality approach to Pakistan, and his administration's obsessive attempt to isolate and punish Iran. As Obama arrives in Seoul, for instance, Iran will be on the agenda. This fall, South Korea, a close American ally, managed to play a game of one step forward, two steps back with regard to Washington-supported sanctions against that energy-rich country.


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The government did close the Seoul branch of Iran's Bank Milli, sanctioning it and other Iranian firms. Then, the South Koreans turned around and, according to the Financial Times, appointed two banks to handle payments involving trade between the two countries via the (unsanctioned) Tehran Central Bank. In doing so, the government insulated other South Korean banks from possible American sanctions, while finding a way for Iran to continue to purchase South Korean autos and other goods.

Before the latest round of U.N. Security Council sanctions South Korea was doing $10 billion a year in trade with Iran, involving some 2,142 Korean companies. Iran's half of this trade -- it provides nearly 10% of South Korea's petroleum imports -- has been largely unaffected. South Korea's exports to Iran, on the other hand, have fallen precipitously under the pressure of the sanctions regime. Sanctions that hold Iran harmless but punish a key American ally by hurting its trade and creating a balance of payments problem are obviously foolish.

The Iranian press claims that South Korean firms are now planning to invest money in Iranian industrial towns. Given that Obama has expended political capital persuading South Korea to join a U.S.-organized free trade zone and change its tariffs to avoid harming the American auto industry, it is unlikely that he could now seek to punish South Korea for its quiet defiance on the issue of Iran.

China is the last major country with a robust energy industry still actively investing in Iran, and Washington entertains dark suspicions that some of its firms are even transferring technology that might help the Iranians in their nuclear energy research projects. This bone of contention is likely to form part of the conversation between Obama and President Hu Jintao before Thursday's G20 meeting of the world's wealthiest 20 countries.

Given tensions between Washington and Beijing over the massive balance of trade deficit the U.S. is running with China (which the Obama administration attributes, in part, to an overvalued Chinese currency), not to speak of other contentious issues, Iran may not loom large in their discussions. One reason for this may be that, frustrating as Chinese stonewalling on its currency may seem, they are likely to give even less ground on relations with Iran -- especially since they know that Washington can't do much about it. Another fraught issue is China's plan to build a nuclear reactor for Pakistan, something that also alarms Islamabad's nuclear rival, India.

Rising Asia

If you want to measure the scope of American decline since the height of the Cold War era, remember that back then Iran and Pakistan were American spheres of influence from which other great powers were excluded. Now, the best the U.S. can manage in Pakistan is the political (and military) equivalent of a condominium or perhaps a time-share -- and in Iran, nothing at all.

Despite his feel-good trip to India last weekend, during which he announced some important business deals for U.S. goods, Obama has remarkably little to offer the Indians. That undoubtedly is why the president unexpectedly announced Washington's largely symbolic support for a coveted seat as a permanent member of the United Nations Security Council, a ringing confirmation of India's status as a rising power.

Some Indian politicians and policy-makers, however, are insisting that their country's increasing demographic, military, and economic hegemony over South Asia be recognized by Washington, and that the U.S. cease its support of, and massive arms sales to, Pakistan. In addition, New Delhi is eager to expand its geopolitical position in Afghanistan, where it is a major funder of civilian reconstruction projects, and is apprehensive about any plans for a U.S. withdrawal from that country. An Indian-dominated Afghanistan is, of course, Pakistan's worst fear.

In addition, India's need for petroleum is expected to grow by 40% during the next decade and a half. Energy-hungry, like neighboring Pakistan, it can't help glancing longingly at Iran's natural gas and petroleum fields, despite Washington's threats to slap third-party sanctions on any firm that helps develop them. American attempts to push India toward dirty energy sources, including nuclear power (the waste product of which is long-lived and problematic) and shale gas, as a way of reducing its interest in Iranian and Persian Gulf oil and gas, are another Washington "solution" for the region likely to be largely ignored, given how close at hand inexpensive Gulf hydrocarbons are.

It is alarming to consider what exactly New Delhi imagines the planet's former "sole superpower" has to offer at this juncture -- mostly U.S. troops fighting a perceived threat in Afghanistan and the removal of Congressional restrictions on sales of advanced weaponry to India. The U.S. military in Afghanistan is seen as a proxy for Indian interests in putting down the Taliban and preventing the reestablishment of Pakistani hegemony over Kabul. For purely self-interested reasons Prime Minister Singh has long taken the same position as the new Republican majority in the House of Representatives, urging Obama to postpone any plans to begin a drawdown in Afghanistan in the summer of 2011.

The most significant of the Indian purchases trumpeted by the president last weekend were military in character. Obama proclaimed that the $10 billion in deals he was inking would create 54,000 new American jobs. Right now, it's hard to argue with job creation or multi-billion-dollar sales of U.S.-made goods abroad. As former secretary of labor Robert Reich has pointed out, however, jobs in the defense industry are expensive to create, while offering a form of artificial corporate welfare that distorts the American economy and diverts resources from far more crucial priorities.

To think of this another way, President Obama is in danger of losing control of his South Asian foreign policy agenda to India, its Republican supporters in the House, and the military-industrial complex.

As the most dynamic region in the world, Asia is the place where rapid change can create new dynamics. American trade with the European Union has grown over the past decade (as has the EU itself), but is unlikely to be capable of doubling in just a few years. After all, the populations of some European countries, like powerhouse Germany, will probably shrink in coming decades.

India, by contrast, is projected to overtake China in population around 2030 and hit the billion-and-a-half-inhabitants mark by mid-century (up from 1.15 billion today). Its economy, like China's, has been growing 8% to 9% a year, creating powerful new demand in the world market. President Obama is hoping to see U.S. exports to India double by 2015. Likewise, with its economy similarly booming, China is making its own ever more obvious bid to stride like a global colossus through the twenty-first century.

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Tom Engelhardt, who runs the Nation Institute's Tomdispatch.com ("a regular antidote to the mainstream media"), is the co-founder of the American Empire Project and, most recently, the author of Mission Unaccomplished: Tomdispatch (more...)
 

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