Tuesday, August 16, 2011

What's going on in the world?

I attended a beer tasting event last week put on by Hoperatives. After a couple of porters, a fellow attendee admitted she was not able to keep on what was going on in the world through our local fishwrap. In particular, she asked if we were still involved in Libya.

First the US and then NATO has convinced themselves that a country of 679,362 square miles (source: National Geographic) can be tackled with merely airpower. Even in the 21st Century, aircraft are not a persistent presence and minus that regime change is difficult. Add the large land mass of Libya and airpower alone will not win the conflict.

Libyans have a saying, "mia, mia" which literally translates to "100 percent". They are found of saying that now indicating more of a "everything is just fine" even after months of bombardment to target one man. NATO is claiming "significant advances" according to a CNN article that you can find at the end of this entry.

Pro-Ghadaffi forces have been hammered (along with innocent bystanders) for months. NATO does not have the long logistical tail of the United States and can't keep bombing Libya indefinitely. Victory has to be declared before NATO forces run out of bombs (the British have come dangerously close to running out of cruise missiles). NATO may be wanting to call it a day more than any real gains through its air campaign.

The question still remains who wanted regime change? By all accounts, Gaddafi has done a fantastic job over the last 40 years in preventing even the merest hint of opposition. If Gaddafi is asked to step down, then who has the political infrastructure and savvy to takeover?

Elsewhere as the American press continues to inundate us with pictures of President Obama's bus tour, another Middle Easter nation continues to rip its own throat out. Anti-government protestors have been fired upon by Syrian authorities. Several videos have been put up by CNN showing the attacks and a horrifying image of a young girl killed by a bullet through her eye. If Gaddafi is worthy of a sustained air campaign, certainly Syria is worthy of some kind of military intervention? I've posted a link to Al Jazeera that details the violence from a Middle Eastern perspective. Syria and Turkey are also shooting at each other and the last time I checked, Turkey is still a member of NATO. What happens when the alliance (NATO in this case) gets attacked? Perhaps this is why NATO is trying to quickly declare victory in Libya.

The S&P dropping of the US from AAA to AA+ bond rating caused most news outlets to ignore a truly amazing story. Oil giant Royal Dutch Shell on Wednesday accepted responsibility for two devastating oil spills in the Niger Delta which lawyers say have destroyed the livelihoods of a fishing community. (Source: Yahoo News).

Americans watched in horror as the Deep Water Horizon spewed millions of gallons of oil into the Gulf of Mexico in 2010. What most Americans don't know is in 2008 and 2009 there were oil spills off the coast of Nigeria that made ours look like a picnic. Nigeria produces 2.2 million barrels a day (source: CIA Factbook) ranking it as the 14th oil producer in the world. Despite that production, less than 20 percent of the profits produced from oil is received by Nigeria. Most of the profits go right to Royal Dutch Shell.

While looking up data on Nigeria, I discovered the the world leader in oil production is....not a Middle Eastern country (or even Venezuela). The world leader in barrels per day of oil is Russia. A little known story is the amount of oil that is produce in Azerbaijan. In 1898, the Azerbaijani oil industry exceeded the U.S. oil production level. At that time, approximately 8 million tons were being produced. In 1901, Baku produced more than half of the world's oil (11 million tons), and 95 percent of all Russian oil.

This long history may explain why Putin has decided to pursue a Eurasian economic union. Basically it is a re-imagined Soviet Union based on capitalism. There are good to be traded and Putin is rightly concerned, in my opinion, about the emerging Chinese economic juggernaut. The American and European economies are stalling and Putin knows he has the one thing China needs, oil. Creating a Eurasian economic union is the only way to keep Russia relevant economically relevant in the future.





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