Category Archives: energy

Latin American Debt Crisis, 1980s

From The Penguin History Of Latin America, by Edwin Williamson (Penguin, 2003), Kindle pp. 364-367:

The mounting problems caused by the economic distortions of import-substituting industrialization [= ISI] and the associated weakening of the state came to a head in the 1980s. The crisis had been deferred in the 1960s by strong world growth, and in the 1970s, when international demand was slack, by foreign loans. But a sudden change in the world financial system effectively cut off the flow of capital to Latin America.

In August of 1982 the Mexican government announced that it was unable to pay the interest on its debt to foreign banks. Mexico was followed shortly by virtually all the Latin American countries, including Cuba. (Suspension of debt payments occurred also in African and Asian countries, but the sheer size of the Latin American debt focused international attention on the continent.) The total outstanding Latin American debt in 1982 was estimated at $315.3 billion, although over $270 billion was owed by just five countries – precisely those which had undergone the fastest ISI growth in the 1960s and 1970s. Brazil was the largest debtor, owing $87.5 billion; Mexico owed $85.5 billion, Argentina $43.6 billion, Venezuela $31 billion and Chile $17 billion.

What had caused the crash? The immediate factor was the steep rise in US interest rates in 1979–82. This was a response to the high rates of inflation and the consequent weakness of the dollar caused by the producers’ cartel, OPEC, sharply raising the price of oil in 1973 and again in 1979. A world recession followed, which had a disastrous effect on the economies of Latin America: commodity prices started to fall on world markets just when higher export earnings were needed to cope with sharply rising interest rates on the foreign debt.

The bonanza of lending and borrowing that Latin American governments and Western banks had indulged in throughout the 1970s had its origins in the very phenomenon that would cause it to come to an abrupt end a decade later: the OPEC cartel’s oil-price rises of 1973 and 1979. High oil prices allowed producer countries, especially the Middle Eastern Arab states, to build up huge surpluses on their balance of payments. Profits from oil exports were too large to be fully absorbed by investment in their domestic economies, and so these OPEC countries deposited vast sums of money in European and North American banks. Western bankers then set about looking for ways of getting a good return on these windfall deposits, and their most willing clients were the developing countries of the Third World, who were hungry as always for development capital.

Latin America was especially susceptible to the blandishments of the Western banks, for in the early 1970s, as we have seen, the most advanced of the industrializing countries in the region had come to the limit of the ‘hard’ phase of import-substitution; the process of state-subsidized inward-looking development could be kept going only by borrowing abroad to cover the yawning deficits between national income and expenditure. There followed a mad spiral of irresponsible, profit-driven lending and unwise borrowing, in which Western bankers as much as Latin American officials appeared to overlook the implications of taking out huge loans on ‘floating’ instead of fixed interest rates. However, after the shock of the second oil-price rise in 1979, conservative administrations in the USA and other industrial countries like Britain decided to bring their domestic inflation under control by restricting the supply of money and credit; this economic policy choked off demand in the West and produced a worldwide recession. International interest rates on foreign debt suddenly started to ‘float’ ever upwards until by the middle of 1982 most Third World countries found it impossible to meet their interest payments.

Indebtedness and high inflation were not, therefore, peculiar to Latin America. In fact, most governments in the industrial countries had been running up debts during the 1970s. The US budget deficit in 1982 was actually larger than that of the worst Latin American debtors, and throughout the 1980s the Reagan administration, for fear of electoral unpopularity, was unwilling to cut it by raising taxes or reducing imports. Yet it was the Latin American debt and not the US deficit which caused international alarm, because a country’s economic health was judged according to its perceived ability to overcome its financial difficulties, a factor expressed in terms of the ratio of interest payments to export earnings. Latin American countries scored badly here, given their relative neglect of the export sector in the pursuit of import-substitution. In 1982 most had ratios in excess of 20 per cent of interest payments to exports; Brazil and Argentina came off worst with ratios of 57.1 per cent and 54.6 per cent respectively, while Mexico, despite being a major oil exporter, had a ratio of 39.9 per cent. In other words, the economies that had grown fastest in the 1970s were the most deeply indebted in the 1980s.

What had gone wrong with ISI development? In essence, it had failed to cure the underlying malaise which had begun to show itself as early as the 1920s – lack of productivity. With the aim of achieving self-sufficiency, economic planners had concentrated on substituting industrial imports by setting up national industries and protecting them behind high tariff walls to the general detriment of agriculture and the export sector. (Brazil was a partial exception since from the mid-1970s it had begun to subsidize industrial exports – an expensive exercise that did not tackle the underlying problem of productive efficiency.) National industry had been overprotected for too long and had failed to become efficient and competitive: the price of its manufactures was often up to three times the world price. Latin American economies therefore ended up with not only an unproductive export sector, dominated still by low-value primary commodities, but also an unproductive industrial sector, which nevertheless consumed expensive imports of technology. The chronic shortfall between exports and imports resulted in high inflation and mounting debts.

To make matters worse, the debt problem had been badly aggravated by the financial instability caused by hyperinflation in the 1970s. As confidence in the economy evaporated in the late 1970s, there occurred massive capital flight. Instead of investing their money at home – where the currency was virtually worthless and industries regularly made losses – rich Latin Americans put it into real estate abroad or deposited it in the very banks that were issuing loans to their own governments and companies. Huge sums were taken out of these countries: the World Bank estimated that between 1979 and 1982, $27 billion left Mexico, nearly a third of its foreign debt in 1982, and $19 billion left Argentina, whose debt in 1982 was $43.6 billion. (Brazil and Colombia were relatively unaffected because of their sustained growth and high domestic interest rates.) US and European bankers colluded fully in this crazy financial cycle, pressing high-yield loans on Latin American governments while turning a blind eye to the lucrative deposits coming in from private Latin American sources (which were more often than not the indirect recipients of those very loans).

When the crash finally came, the wage-earners and the poor felt it most: inflation soared even higher in the 1980s than in the 1970s, real wages fell, and government spending on food subsidies, transport, health and education was slashed. In 1980–84 overall growth in Latin America fell by nearly 9 per cent. Consumption per capita dropped by 17 per cent in Argentina and Chile, by 14 per cent in Peru, by 8 per cent in Mexico and Brazil. Urban unemployment doubled in Argentina, Uruguay and Venezuela between 1979 and 1984, reaching unprecedented proportions everywhere else.

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Japan’s Home Front, 1941

From Storm Clouds over the Pacific, 1931–1941, by Peter Harmsen (War in the Far East, Book 1;  Casemate, 2018), Kindle pp. 253-256:

What kind of nation was Japan in 1941? Who were the 73 million people that would soon find themselves in the most devastating war in their island nation’s long history? Foreign affairs writer Henry C. Wolfe visited Tokyo in the fall of 1941 and was shocked by the gloom and dreariness of life in the once vibrant city of 6.5 million inhabitants. Four years of war and accompanying austerity had turned it into a “capital of shadows” with long lines of customers waiting in front of stores selling low-quality products made from ersatz material. Shoes of real leather could not be found. Clothes were made from a little cotton mixed with bark and wood pulp and ripped easily. Wolfe described what happened when an American diner at a restaurant asked for a second helping of pudding, the only part of his meal that was somewhat palatable. The head waiter replied, “Do you want me to go to jail!”

Wartime regulations had started out in a small way. Local governments had introduced rationing of sugar and matches in 1939, and it had become a national policy in 1940. Since then official controls had exploded, and by the fall of 1941 more than 100,000 goods and services were being regulated. Energy shortages were particularly conspicuous. Many vehicles were converted to run on charcoal, although that fuel was also in short supply. Police were soon forced to stop all public vehicles from running between midnight and 5 am. Adding to the woes, trams and trains were overloaded with people, since cars that had broken down could not be repaired due to a lack of spare parts.

The American trade curbs worsened an already steep decline in the standard of living, but they did not cause it. The tougher conditions faced by the average Japanese were equally due to the priorities of the Japanese rulers, which allocated ever larger resources to military purposes, leaving the civilians to pay. The war in China had taken its toll. In 1931, military expenditures had taken up 31.2 percent of the government budget, but a decade later it had increased to a staggering 75.6 percent. Average wages dropped by more than 20 percent from the mid-1930s until 1941. Meanwhile, there was less and less to be had for the shrinking incomes. The light industrial sector, where consumer products were manufactured, saw its share of overall production drop precipitously over the same period.

The finer things in life were, of course, virtually non-existent. Dance halls had been prohibited, despite their immense popularity, along with most jazz performances. Foreign movies were strictly limited, and Japanese cinemagoers, who were once among the most ardent foreign fans of Hollywood and even copied manners and slang from major American releases, were now limited to grim German propaganda fare with titles such as Victory in the West. The lights were out, also, in a quite literal sense. In Tokyo’s Ginza shopping district, the famous glittering neon signs had been turned off to save electricity. Five-star hotels, too, were wrapped in gloom after they were urged to keep lighting at a minimum.

Miyamoto Takenosuke, vice director of Planning Board, argued that “the people should be satisfied with the lowest standard of living.” He went on: “The craving for a life of luxury must be abandoned. At this time, when the nation is risking its fate, there is no individual any more. What remains is the nation and the nation alone. The storm of economic warfare will become more furious. Come rain! Blow wind! We are firmly determined to fight against the storm.” Japan’s largest candy maker Meijing [sic] Confectionary Company chimed in with an ad campaign featuring the slogan “Luxury is the Enemy!” The National Defense Women’s Association also did its part in imposing wartime rigor, posting members on street corners to stop women who were dressed too extravagantly, passing them handbills with stern admonitions about the need for thrift in light of the national emergency.

At the same time, a thriving black market for regulated goods had emerged almost immediately, and a special economic police set up to rein in the activities made more than two million arrests within just 15 months. The vigorous law enforcement did not curb the illegal transactions, but simply encouraged them to be carried out in more ingenious ways. A modern historian gives an example of how it remained possible to trade coal at the black-market price of 1300 yen, well above the official 1000 yen price tag: “To secure the additional 300-yen profit without running afoul of the law, a vendor, for example, might arrange for a customer to ‘accidentally’ drop 3000 yen next to the vendor’s stall. He would then take the money to the nearest official who would instruct the buyer to pay ten percent in thank-you money (300 yen) to the vendor.”

Despite the hardship, the Japanese government pretended it was in a position not only to care for its own population but for the peoples of all Asia.

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Origin of North Korea’s Nuclear Program

From The Great Successor: The Divinely Perfect Destiny of Brilliant Comrade Kim Jong Un, by Anna Fifield (PublicAffairs, 2019), Kindle pp. 232-234:

In 1962, the Soviet Union and the United States were locked in a thirteen-day standoff over the installation of nuclear-armed Soviet missiles in Cuba, less than one hundred miles from the US coastline. For those two weeks, the world teetered on the edge of nuclear war. But the conflict was resolved diplomatically when Soviet leader Nikita Khrushchev agreed to remove the missiles as long as President John Kennedy agreed not to invade Cuba. A deal was done.

Kim Il Sung viewed this deal as a capitulation by the Soviet Union to the United States, a sign that Moscow was willing to sell out an ally for the sake of its own security. The Great Leader apparently learned from this that North Korea should never entrust its national security to any other government. This injected new momentum into his drive for nuclear independence. Within a few months, Kim Il Sung’s regime had started to explore the possibility of developing a nuclear deterrent of its own. The leader who had espoused a need for a stronger agricultural policy was soon standing before the cadres in Pyongyang to hammer home the importance of putting equal emphasis on economic growth and national defense. This was the first “simultaneous push” policy. The proportion of the national budget devoted to defense rose from only 4.3 percent in 1956 to almost 30 percent within a decade.

The nuclear scientists who returned home from the Soviet Union set about building, about sixty miles northeast of Pyongyang, a similar complex to the one they’d worked at in Dubna. This would eventually become the Yongbyon Nuclear Research Complex.

More impetus came in the early 1970s, when it emerged that North Korea’s other main ally, China, had secretly started to forge relations with the United States, an effort that led to President Richard Nixon’s historic visit to Beijing in 1972.

Meanwhile, in South Korea, the strongman Park Chung-hee, a general who’d seized the presidency through a military coup, was secretly pursuing nuclear weapons of his own. When this news emerged, it was an unbearable blow to Kim Il Sung’s personal vanity and sense of national pride.

Another key factor that must have been weighing on Kim Il Sung’s mind was his own mortality. He was in his sixties by this time and was starting to prepare his son to take over. He thought that having nuclear weapons would make it easier for his son to keep a grip on the state. In lieu of charisma, Kim Jong Il should at least have nukes.

In the late 1970s onward, the North Koreans had built more than one hundred nuclear facilities at Yongbyon alone. American intelligence agencies were alarmed. In the space of about six years, a country with no previous experience had built a functioning nuclear reactor. Three years later came unambiguous proof that the reactor’s purpose was military, not civilian; the country had built a major reprocessing facility that would enable it to turn the fuel from the reactor into fissile material.

But its efforts were not going unnoticed among allies either. The Soviet Union pressured Kim Il Sung into signing the Nuclear Non-proliferation Treaty at the end of 1985. It took seven years for North Korea to allow in the inspectors required under that treaty, and when they got in, they found numerous signs that the regime was secretly working on the very kind of nuclear program it had pledged against. In 1993, Kim Il Sung threatened to withdraw from the treaty, triggering an alarming standoff. North Korea and the United States came the closest to war in forty years.

Talks to resolve the impasse were ongoing when Kim Il Sung suddenly died in the summer of 1994, propelling both sides into unknown territory. They did, however, manage to sign a landmark nuclear disarmament deal called the Agreed Framework, under which North Korea agreed to freeze and eventually dismantle its nuclear weapons program and a US-led coalition agreed to build two civilian nuclear reactors that could be used to generate electricity for the energy-starved country.

Pyongyang had no intention of abiding by this agreement either. Signing the deal was all about buying the Kim regime time to work on its program while maintaining the appearance of cooperating.

North Korea had developed a close relationship with Pakistani nuclear scientist Abdul Qadeer Khan. In the 1990s, while North Koreans were dying of starvation and while Kim Jong Un was watching Jackie Chan movies in Switzerland, the regime was building a uranium-enrichment program. Uranium enrichment wasn’t technically covered under the Agreed Framework. And North Korea loves technicalities.

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Negative Human Development in Resource States

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 211-212:

In 1970, the year the Olympic movement expelled South Africa, the government passed legislation formally stripping blacks of their citizenship and restricting them to destitute “homelands,” and the authorities appointed a barbaric new commanding officer at Robben Island prison to watch over Mandela and his fellow inmates, South Africa produced some 62 percent of the gold mined worldwide. From the early 1970s to 1993 gold, diamonds, and other minerals accounted for between half and two-thirds of South Africa’s exports annually.

South Africa’s gold and diamonds provided the financial means for apartheid to exist. In that sense white rule was an extreme manifestation of the resource state: the harnessing of a national endowment of mineral wealth to ensure the power and prosperity of the few while the rest are cast into penury and impotence. None of Africa’s resource states today come close to the level of orchestrated subjugation of the majority that the apartheid regime achieved. Neither do they employ apartheid’s racial creed, even if ethnicity has combined poisonously with the struggle to capture resource rent in Nigeria, Angola, Guinea, and elsewhere. But as their rulers, in concert with the multinational corporations of the resource industry, horde the fruits of their nations’ oil and minerals, Africa’s resource states have come to bear a troubling resemblance to the divisions of apartheid.

While the children of eastern Congo, northern Nigeria, Guinea, and Niger waste away, the beneficiaries of the looting machine grow fat. Amartya Sen, the Nobel Prize–winning Indian economist who has examined with great insight why mass starvation occurs, writes, “The sense of distance between the ruler and the ruled—between ‘us’ and ‘them’—is a crucial feature of famines.” That same reasoning could be applied to the provision of other basic needs, including clean water and schooling. And rarely is the distance Sen describes as wide as in Africa’s resource states.

Many of Africa’s resource states experienced very high rates of economic growth during the commodity boom of the past decade. The usual measure of average incomes—GDP per head—has risen. But on closer examination such is the concentration of wealth in the hands of the ruling class that that growth has predominantly benefited those who were already rich and powerful, rendering the increase in GDP per head misleading. A more revealing picture comes from a different calculation. Each year the United Nations ranks all the countries for which it can gather sufficient data (186 in 2012) by their level of human development, things like rates of infant mortality and years of schooling. It also ranks them by GDP per head. If you subtract a country’s rank on the human development index from its rank on the GDP per head index, you get an indication of the extent to which economic growth is actually bettering the lot of the average person in that country. In countries that score zero—as Congo, Rwanda, Russia, and Portugal did in 2012—living standards are roughly where you might expect them to be, given that country’s GDP per head. People in countries with positive scores enjoy disproportionately pleasant living conditions relative to income—Cuba, Georgia, and Samoa top the table with scores of 44, 37, and 28, respectively. A negative score indicates a failure to turn national income into longer lives, better health, and more years of education for the population at large. Of the ten countries that come out worst, five are African resource states: Angola (–35), Gabon (–40), South Africa (–42), Botswana (–55), and Equatorial Guinea.

Equatorial Guinea’s score (–97), comfortably the worst in the world, is all the more remarkable because its GDP per head is close to $30,000 a year, not far below the level of Spain or New Zealand and seventy times that of Congo.

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“Survival of the Fattest” in Rentier States

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 188-190:

A governor of one of Nigeria’s thirty-six states is effectively president of his own fiefdom. He has immunity from prosecution and controls the state security budget. The chairman of each of the 774 local governments is answerable to the state governor. To win a presidential primary a candidate needs two-thirds of the states to back him. That backing is in the gift of the governors. The Governors’ Forum is perhaps the most potent gathering in the land. Only about half of Nigeria’s oil revenues are allocated to the federal government. A fifth goes to the local governments. The governors control the quarter of oil revenues that goes to the states.

Oil-producing states receive an additional 13 percent share of Nigeria’s oil income before it is divided between the tiers of government. The state houses of the Niger Delta are powerful pistons of the looting machine. When he agreed to meet me in late 2010, Timipre Sylva had succeeded Goodluck Jonathan as governor of Bayelsa, one of the Delta’s three main states. I had hoped to interview him at Gloryland, the gubernatorial palace set well apart from the shacks that house his constituents. Instead, I was summoned to the penthouse suite of a five-star hotel in Lagos, where Sylva was staying with his entourage during a visit to the commercial capital.

A tall and intelligent man, Sylva was under pressure. Politics in the Niger Delta is unremittingly volatile. Gunmen drift between the militias of MEND, crime gangs, and squads of political thugs that freelance for competing aspirants to power. As Sylva’s rivals sought to force him from office, loyalists were exchanging tit-for-tat attacks with his enemies. Relations with Jonathan, recently elevated to the presidential palace by Yar’Adua’s death, had soured. Little wonder, I suggested, that others coveted his job: his immediate predecessor had found himself president and the one before had siphoned off so much cash that he, like Joshua Dariye and James Ibori, the former governors of Plateau and Delta States, had snapped up enough assets abroad to earn the attention of the British police.

Sylva accepted that there had been widespread corruption among the governors. But he was, he pleaded, just a cog in a patronage system not of his making. “If a chief walks into my office, he expects me to take care of his problems because that is what the military used to do,” Sylva said. “That’s what he’s used to. If I don’t, I’ve got a very big political enemy.”

So you have to “settle” them, I suggested, using the Nigerian term for the dispensing of cash.

“Yes. And you will read that as corruption. But me, I probably will read that as political survival, because I have to survive before I become incorruptible.”

“And you use public funds to do that?” I asked.

“What does he expect me to do? I don’t have that kind of money; the kind of money he’s expecting. Even if I have it privately, I won’t do that with it. And he’s coming to me because I’m governor. If, for example, the big chief comes, and he has to go for a medical check, it shouldn’t be my problem. But it is. If a very big traditional ruler dies somewhere, and they want to do an elaborate burial ceremony, they come to me. I have to do it.”

Me, I probably will read that as political survival. To justify corruption, Sylva reached for the same word—“survival”—that Mahmoud Thiam had chosen when he explained why pariah states are willing to deal with the likes of Sam Pa and the Queensway Group. Said Djinnit, the UN’s man in west Africa, called the competition to control political power in the resource states “a struggle for survival at the highest level.” Paul Collier talks about the law of “the survival of the fattest” in rentier states.

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Africa’s Resource Curse

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 4-6:

The sheer number of people living in what are some of the planet’s richest states, as measured by natural resources, is staggering. According to the World Bank, the proportion of the population in extreme poverty, calculated as those living on $1.25 a day and adjusted for what that wretched sum will buy in each country, is 68 percent in Nigeria and 43 percent in Angola, respectively Africa’s first and second biggest oil and gas producers. In Zambia and Congo, whose shared border bisects Africa’s copper-belt, the extreme poverty rate is 75 percent and 88 percent, respectively. By way of comparison, 33 percent of Indians live in extreme poverty, 12 percent of Chinese, 0.7 percent of Mexicans, and 0.1 percent of Poles.

The phenomenon that economists call the “resource curse” does not, of course, offer a universal explanation for the existence of war or hunger, in Africa or anywhere else: corruption and ethnic violence have also befallen African countries where the resource industries are a relatively insignificant part of the economy, such as Kenya. Nor is every resource-rich country doomed: just look at Norway. But more often than not, some unpleasant things happen in countries where the extractive industries, as the oil and mining businesses are known, dominate the economy. The rest of the economy becomes distorted, as dollars pour in to buy resources. The revenue that governments receive from their nations’ resources is unearned: states simply license foreign companies to pump crude or dig up ores. This kind of income is called “economic rent” and does not make for good management. It creates a pot of money at the disposal of those who control the state. At extreme levels the contract between rulers and the ruled breaks down because the ruling class does not need to tax the people to fund the government—so it has no need of their consent.

Unbeholden to the people, a resource-fueled regime tends to spend the national income on things that benefit its own interests: education spending falls as military budgets swell. The resource industry is hardwired for corruption. Kleptocracy, or government by theft, thrives. Once in power, there is little incentive to depart. An economy based on a central pot of resource revenue is a recipe for “big man” politics. The world’s four longest-serving rulers—Teodoro Obiang Nguema of Equatorial Guinea, José Eduardo dos Santos of Angola, Robert Mugabe of Zimbabwe, and Paul Biya of Cameroon—each preside over an African state rich in oil or minerals. Between them they have ruled for 136 years.

From Russia’s oil-fired oligarchs to the conquistadores who plundered Latin America’s silver and gold centuries ago, resource rents concentrate wealth and power in the hands of the few. They engender what Said Djinnit, an Algerian politician who, as the UN’s top official in west Africa, has served as a mediator in a succession of coups, calls “a struggle for survival at the highest level.” Survival means capturing that pot of rent. Often it means others must die.

The resource curse is not unique to Africa, but it is at its most virulent on the continent that is at once the world’s poorest and, arguably, its richest.

Africa accounts for 13 percent of the world’s population and just 2 percent of its cumulative gross domestic product, but it is the repository of 15 percent of the planet’s crude oil reserves, 40 percent of its gold, and 80 percent of its platinum—and that is probably an underestimate, given that the continent has been less thoroughly prospected than others. The richest diamond mines are in Africa, as are significant deposits of uranium, copper, iron ore, bauxite (the ore used to make aluminum), and practically every other fruit of volcanic geology. By one calculation Africa holds about a third of the world’s hydrocarbon and mineral resources.

Outsiders often think of Africa as a great drain of philanthropy, a continent that guzzles aid to no avail and contributes little to the global economy in return. But look more closely at the resource industry, and the relationship between Africa and the rest of the world looks rather different. In 2010 fuel and mineral exports from Africa were worth $333 billion, more than seven times the value of the aid that went in the opposite direction (and that is before you factor in the vast sums spirited out of the continent through corruption and tax fiddles). Yet the disparity between life in the places where those resources are found and the places where they are consumed gives an indication of where the benefits of the oil and mining trade accrue—and why most Africans still barely scrape by. For every woman who dies in childbirth in France, a hundred die in the desert nation of Niger, a prime source of the uranium that fuels France’s nuclear-powered economy. The average Finn or South Korean can expect to live to eighty, nurtured by economies among whose most valuable companies are, respectively, Nokia and Samsung, the world’s top two mobile phone manufacturers. By contrast, if you happen to be born in the Democratic Republic of Congo, home to some of the planet’s richest deposits of the minerals that are crucial to the manufacture of mobile phone batteries, you’ll be lucky to make it past fifty.

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British Ties with Oman

From Arabian Assignment: Operations in Oman and the Yemen, by David Smiley. (The Extraordinary Life of Colonel David Smiley Book 2; Sapere Books, 2020), Kindle pp. 11-12:

The British connection with Muscat dates from the early days of the East India Company in the seventeenth century, though the first treaty between Britain and the Sultan was not signed until 1798. An agreement followed two years later for agents of the East India Company to reside at Muscat, but the appalling climate killed off so many of them that it lapsed. Throughout the nineteenth century the British and the Sultan, who was then the most important ruler in the Gulf, collaborated closely in suppressing piracy, and the slave trade ceased in the Sultanate under a treaty of 1822. By a treaty of 1852 Britain (and France) recognized the independence of the Sultan, who still conducts his own foreign policy and maintains his own armed forces. Under subsequent agreements he may call on British help in time of trouble.

The trouble came soon after the old Imam’s death; the principal causes were Saudi ambition and, of course, oil. Ever since 1937 the Saudis had been trying to expand their territory beyond the edge of the Rub al Khali [the Empty Quarter], claiming frontiers with their neighbours — the States of the Aden Protectorate, the Sultanate, and the Trucial Sheikhdoms — which those neighbours refused to accept. After the Second World War the two superpowers, Russia and America, became increasingly involved in Arabia and the Gulf, the former pursuing an old imperial design, the latter attracted by fresh discoveries of oil: both with a common interest in reducing the influence of Britain. Encouraged by the new situation, the Saudis in 1952 suddenly occupied the strategic oasis of Buraimi, owned partly by the Sheikh of Abu Dhabi, a Trucial State, and partly by the Sultan of Muscat.

The Sultan gathered a force of between six and eight thousand tribesmen and, but for the ill-advised intervention of the British Government, would have expelled the intruders immediately, thus dealing a sharp blow to Saudi prestige and cementing the loyalty of the Omani tribes. When he failed to move, Saudi intrigue began to prosper.

The dispute went to international arbitration at Geneva, where the Saudi method, perfectly respectable in Arabia, of reinforcing their arguments with offers of large sums in gold to the members of the Tribunal caused such scandal that the President and the British delegate resigned in protest. At the end of 1955 the seemingly inexhaustible patience of Her Britannic Majesty’s Government ran out; in a sudden, bloodless coup the Trucial Oman Scouts descended on Buraimi, expelled the Saudi garrison, and established a garrison of their own and another of the Sultan’s in the Oasis. But the three year delay had been disastrous for the Sultan. The Saudis had made good use of the time to spread their influence in Oman, suborning the tribesmen with lavish gifts of money and arms. Moreover, a new Imam had arisen on the death of the Sultan’s old friend: one Ghalib bin Ali. A weak and colourless personality appointed by a cabal of three sheikhs but never formally elected, he was virtually a Saudi puppet; he possessed, however, a valuable ally in his brother, Talib, the Wali [Governor] of Rostaq, a brave, energetic and extremely ambitious leader with considerable military ability, who soon emerged as the driving force of the movement. Immediately after his election Ghalib, with his brother, toured his domain, setting up his own garrisons in his holy capital of Nizwa and in other strategically important towns and villages in the interior.

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Sichuan’s Ancient Salt Industry

From Yangtze: Nature, History, and the River, by Lyman P. Van Slyke (Stanford Alumni Assn., 1988), p. 95:

While the whole Yangtze Valley east of the Three Gorges was supplied with salt from the Liang-huai district, Szechwan produced its own salt in an industry of great antiquity and technological sophistication. Salt in Szechwan is the result of its geological history. As we have seen, prior to the collision between Indian and Asian crustal plates, Szechwan was submerged by a great primordial ocean. As the land uplifted, Szechwan became an inland sea, then finally took on the mountain-girt basin character it has possessed throughout historic times. This process, dating from Triassic times 250 million years ago, produced large underground brine or solid salt deposits and, from the dense vegetation of many millions of years, large pockets of natural gas and extensive beds of coal.

The underground deposits lie at various depths, though a few brine pools can be found on the surface. We do not know when this salt was first exploited, but the earliest wells are claimed for the third century B.C. and attributed to Li Ping, the engineering genius who conceived All-Rivers Weir above Chengtu…. In early times, these wells must have been quite shallow, but within a few hundred years records indicate dozens of deep wells in the most productive regions. The brine obtained from these wells was evaporated by boiling, with wood (or charcoal) from the abundant forests as the principal fuel. At a later date, coal was also used for this purpose. In a few fortunate locations, even shallow wells brought in natural gas as well as brine. This enabled the brine to be boiled with gas carried by bamboo pipes.

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Three Gorges Dam in Historical Context

From River Town: Two Years on the Yangtze (P.S.), by Peter Hessler (HarperCollins, 2010), Kindle pp. 108-110:

The truth is that the disruption of the dam, which seems massive to an outsider, is really nothing out of the ordinary when one considers recent history in the local context. Within the last fifty years, China has experienced Liberation, the radical (and disastrous) collectivization of the 1958–1961 Great Leap Forward, the Cultural Revolution, and Reform and Opening.

Fuling and the other Yangtze River towns have the additional experience of being a focal point of Mao Zedong’s Third Line Project, which had an especially large influence on the region during the 1960s. The early preparations for this project started in 1950, when Mao sent Deng Xiaoping to the southwest so he could research the feasibility of moving Shanghai’s military industry to remote mountain areas in Sichuan and Guizhou provinces. The American atomic bomb triggered this plan, as Mao became increasingly concerned that China’s heavily concentrated defense industry was too susceptible to a U.S. attack. The Korean War accelerated the project, and eventually three-quarters of China’s nuclear weapons plants were incorporated into the Third Line, as well as more than half of its aeronautics industry. The project was, as Harrison Salisbury describes it in his book The New Emperors, “something like that of picking up the whole of California’s high-tech industry and moving it bodily to the wilds of Montana as they existed, say, in 1880.”

In comparison it seems a small matter to turn the river into a lake. Much of Fuling’s economy had originally come via the Third Line Project, which made the locals accustomed to massive changes. The local Hailing factory, which now produces combustion engines for civilian use, had formerly been a defense industry plant moved from Shanghai. A few miles upstream from Fuling is the Chuan Dong boat factory, which in the old days made parts for nuclear submarines. All of the local Chang’an-brand cabs—the name means Eternal Peace—are made by a Chongqing factory that originally produced firearms for the military.

Many of the old Third Line factories had been converted in this way since Deng Xiaoping came to power and started dismantling the project in 1980. With China’s foreign relations rapidly improving, the American threat seemed less serious (and, in any case, it was clear that there wasn’t much protection in putting factories in places like Fuling). The Third Line had always been a huge drain on the economy; in some years as much as 50 percent of China’s capital budget was spent on the project. Never before had such a massive country reorganized its economy on such a scale—even Stalin’s first Five-Year Plan couldn’t compare—and according to some estimates, the Third Line did more damage to China’s economy than the Cultural Revolution.

Despite its enormous scale, the project had been developed and dismantled in remarkable secrecy, as few locals in Fuling and the other Third Line towns ever had a clear notion of what was going on. They knew that commands were coming in from Beijing, and that these commands were bringing factories from Shanghai; and they also knew that all of this had a military sensitivity that required secrecy. It wasn’t something you asked questions about, and after four decades of that it seemed natural enough not to ask questions about the dam. These things just came and went—just as the Chuan Dong factory, which arrived to build nuclear submarines, was subsequently converted to a boat plant, and eventually would disappear forever beneath the waters of the new Yangtze.

But even with all of this history in mind, I still found the lack of interest and concern about the dam to be remarkable.

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Two Major River Projects in China

From River Town: Two Years on the Yangtze (P.S.), by Peter Hessler (HarperCollins, 2010), Kindle pp. 115-116:

The history of such projects in China has two different aspects. The country has been controlling and harnessing water for centuries—no other civilization on earth has such a long and successful history of turning rivers to man’s use. The development of central Sichuan province was originally sparked by the construction of Dujiangyan, a brilliantly designed irrigation project that was constructed twenty-three centuries ago and even today still functions perfectly, turning the Chengdu Basin into one of the most fertile rice-growing regions in the country. Even the Yangtze has been tamed before, albeit on a much smaller scale; the Gezhou Dam was completed in 1981 on a site downstream from the location of the current project.

But there is also the history of Henan province, where heavy rains in 1975 caused sixty-two modern dams to fall like dominoes, one after another, and 230,000 people died. Although the scale of that particular disaster was unique, the poor engineering was less unusual: 3,200 Chinese dams have burst since 1949. In this [= 20th] century, the failure rate of Chinese dams is 3.7 percent, compared to 0.6 percent in the rest of the world.

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