Saudi Arabia may cease to be a U.S. ally

President Xi Jinping plans to visit Saudi Arabia soon.  In the video above, Alex Christoforou and Alexander Mercouris of  The Duran speculate that Prince Mohammad bin Salman may be planning to join the BRICS alliance.

If so, this could be a big threat to U.S. power—a much bigger threat than the Russian invasion of Ukraine.

The BRICS alliance consists of Brazil, Russia, India, China and South Africa.  Its ultimate purpose is to create a new reserve currency that would be a substitute for the U.S. dollar.

The fact that most world trade is conducted in dollars, which the U.S. government has the power to print, gives the United States enormous leverage over the world economy, including the power to impose economic sanctions.

If this changed, the United States would lose its financial power as well as much of its ability to finance the world’s largest military budget.

Saudi Arabia back in 1973 agreed, in return for U.S. military protection, to price its oil in dollars, to deposit its dollars in U.S. and allied countries’ banks, and to buy U.S. military equipment.  As the leading oil exporter, Saudi Arabia has a lot of power in the Organization of Petroleum Exporting Countries (OPEC), whose purpose is to control the price and production of the world’s oil

The Biden Administration earlier this year supported the Group of Seven’s plan to cap the price of Russian oil imports.  This must have miffed the Saudis and other OPEC members, because, if successful, the plan would have infringed on the Saudis’ and OPEC’s power to set would oil prices. 

Later President Biden asked Prince Mohammad bin Salman to increase oil production to help keep the price down and offset the loss of Russian oil due to economic sanctions.  Bin Salman turned Biden down.

Christoforou and Mercouris think Bin Salman is taking a big risk.  They expect the U.S. to try to destabilize and overthrow the Saudi regime.  The U.S. is already trying to stir up trouble between Saudi Arabia and Iran.  

Even a direct attack or invasion are not impossible, and Mercouris said Bin Salman needs to be sure of his personal security.

Algeria also has applied to join BRICS.  Other countries are expressing interest.  

In 2023, Saudi Arabia may push Ukraine off the front pages.

Or maybe not.  I don’t have the power to read minds or predict the future.  

But I don’t think President Xi would be planning to visit Saudi Arabia unless he had something in mind.  And I notice that Saudi Arabia is not the only country who leaders are losing both respect for. and fear of, the United States.

LINKS

China’s Xi Jinping to Visit Saudi Arabia Amid Global Reshuffling by Stephen Kalin, Keith Zhai and Summer Said for the Wall Street Journal.

Chinese President Xi To Visit Saudi Arabia By Year End by Tsvetana Paraskova for OilPrice.

Everybody wants to hop on the BRICS Express by Pepe Escobar for The Cradle.  [Added Later]

All Eyes on the Gulf: The Present and Future of Europe’s Energy Supply by Der Spiegel.  [Added 11/12/2022]

Xi of Arabia and  the petroyuan drive by Pepe Escobar for The Cradle [Added 12/17/2022] 

China bids for world leadership

China has the world’s largest or second largest economy, depending on how it is measured.  It is world’s leading manufacturer and exporter.  It has nuclear weapons and the world’s largest standing army.

Its leader, Xi Jinping, has a plan to connect the interior of Eurasia an integrated whole, through construction of railroads and oil and gas pipelines.

This Belt and Roads Initiative, together with China’s informal military alliance with Russia, would make the interior of Eurasia an economic zone dominated by China and largely invulnerable to U.S. sea and air power.

It would mean world leadership for a nation whose leaders explicitly reject such ideas as universal values, intrinsic human rights, freedom of the press and an independent judiciary—ideas that we Americans consider foundations of Western civilization.

How likely is it that China’s leaders can realize these ambitions?  A scholar named Elizabeth C. Economy took a calm and skeptical look at China in a 2018 book entitled THE THIRD REVOLUTION: Xi Jinping and the New Chinese State.

The first revolution, in her view, was Mao Zedong’s victory over Chiang Kaishek in 1949.

Mao made China a unified nation free of foreign influence, and started China on the road to industrialization.  But his utopian dreams and totalitarian government brought China to the brink of collapse.

Hundreds of thousands and maybe millions of Chinese were killed in purges.  Millions and maybe tens of millions starved to death because nobody dared tell the truth about his failed agricultural policies.  Mao’s Cultural Revolution, intended to break up a new emerging social hierarchy, reduced the whole country to chaos.

The second revolution, in her view, was the emergence of Deng Xiaoping.  He accomplished what few leaders in history have been able to do—reform an authoritarian government.   Typically reformers fail to change the system, like Khrushchev, or undermine the stability of what they are trying to reform, like Gorbachev.

Deng loosened the authority of the Communist Party and relaxed economic controls just enough to allow for individual initiative, while keeping control.   He set up a system of collective leadership with an orderly succession.

Unlike Mao, he kept in the background and exercised power from behind the scenes,  On the world scene, his policy was to quietly make China stronger without alarming the existing great powers.

His policies, and not Mao’s, produced a great leap forward in economic development.  China’s rise from the wreckage of the Cultural Revolution was as great an economic miracle as the rise of Germany and Japan from the ashes of World War Two.  Deng was one of the great statesmen of the 20th century.

Many Western observers thought that as China became integrated into the world economy, it would adopt liberal and democratic values.  Xi Jinping’s third revolution is intended to prevent this from happening.

Xi has eliminated tern limits.  He evidently intends to serve for life, which could mean a succession struggle like the one that followed the death of Mao.  He has reaffirmed Communist Party control of the economy, and insists on ideological orthodoxy.

But what is the meaning of Communist ideology in a country with a stock exchange, giant profit-seeking corporations and 485 billionaires?  Under Xi, Communism is reduced to Chinese nationalism and obedience to authority.

One reason for the downfall of the Soviet Union was that people stopped believing in Marxism-Leninism as an ideal.   How long can the Chinese believe in a “socialism with Chinese characteristics” that is indistinguishable from capitalism?

The new Chinese surveillance state

Shoshana Zuboff warned us of the perils of American surveillance capitalism, and Edward Snowden of the American surveillance state.  But China’s ruler, Xi Jinping, is creating a surveillance system that leaves anything else far behind.

I recently read WE HAVE BEEN HARMONIZED: Life in China’s Surveillance State, by a German journalist named Kai Strittmatter, about how the components of the new system are now being put into place in different parts of China.

The components are:

A unified Internet service that combines the functions of a smart phone and a credit card, and allows for tracking of all electronic communication and all financial transactions.

A video surveillance system using facial recognition software that allows for tracking of all public behavior.

An artificial intelligence system capable of integrating all this information.

Algorithms that give people a “credit score” based on the government’s approval or disapproval of their behavior.

This is something like the two-way television sets in George Orwell’s 1984 and something like the East German Stasi’s real-life eavesdropping and surveillance system.

Both the fictional and the real system were limited by the human inability to keep track of everything all of the time.  The Chinese government’s hope is that advanced computer technology can overcome these limits.

At the same time, China is still an old-fashioned Soviet-style police state.  Dissidents are treated the same as in the Soviet Union in the 1970s.  The new controls do not replace the old.  Instead they are layered on top of them.

China, according to Strittmatter, is a virtually cashless society.  Payments are made through the WeChat app on the TenCent smartphone service or the Alipay app on the Alibaba service.  All transactions and all calls are monitored.

Certain words and phrases are forbidden in electronic communication. including “I do not agree,” “my emperor,” “Animal Farm” and “Winnie the Pooh”—the latter a nickname for the tall, stout, benign-looking  General Secretary Xi.

A law imposes three years in prison for anyone who posts a harmful rumor on the Internet, if it is shared 500 times or viewed 5,000 times.  There was a wave of arrests in 2013 for spreading false rumors.

Strittmatter saw a video surveillance system at an intersection that showed the faces of jaywalks on a huge screen, together with their names, home addresses and ID numbers.  These systems do not exist everywhere in China, but they are examples of what might be.

He saw a video surveillance system in a collage classroom that monitored whether students were paying attention.  It also recorded their facial expressions, which were fed into a system that supposedly could evaluate their feelings and emotions.

Robin Li, CEO of Baidu, a leading Chinese search engine company, told Strittmatter that his goal was to insert artificial intelligence into every aspect of human life.

The Chinese government plans to use this data to set up a “social credit” system which will give each Chinese person a score for “social truthworthiness.”  Strittmatter saw such a system being tested in the small city of Rongcheng.

A growing China reboots totalitarianism

Source: Dissident.

My great fear during the Cold War was that the totalitarian USSR would outlast the democratic USA.  I was afraid that a dictatorship would be able to take a longer view than a democracy, and would be better able to prioritize military and diplomatic power.

The philosopher Bertrand Russell, for one, scoffed at these fears.  He said that a democracy would always be able to outlast a dictatorship because dictators insulate themselves from bad news, while, in a democracy, contested elections and a free press provide a reality check.  The fall of Communism in Europe in 1989-1991 appeared to prove him right.

Now the Chinese government has created a new and more effective totalitarianism.  It uses social media and other new techniques to control the population more effectively than Mao ever dreamed of—while keeping the old Communist police state as backup.

When China joined the World Trade Organization in 2001, Western leaders hoped that as China made economic progress, it would become more liberal and democratic.

China has made enormous economic progress.  Hundreds of millions of Chinese have been raised from poverty.  China is a major manufacturing nation.

Economic historian Adam Tooze said Chinese economic expansion was the main force pulling the world out of recession after 2008 and today contributes as much to world economic growth as the USA and Europe put together.

The Chinese Belt and Road Initiative, aka the New Silk Road, involves investing more than $1 trillion over the next 10 years to create a railroad, highway, pipeline and electrical grid extending over the whole of the interior of Eurasia, creating an integrated economy centering on China.

But if there was a possibility that this would make China more liberal and democratic, President Xi Jinping has moved to head it off.  Since 2013, China has been cracking down not only on corruption, but also on human rights lawyers, religious believers and critics o the government.

Xi Jinping has abolished the term limits that bound his predecessors and encouraged a Mao-style cult of personality.  There are even Institutes for the Study of Xi Jinping Thought.

Social media in China are monitored, and the Chinese government is in the process of implementing a scheme by which every Chinese citizen will be given a social credit score, based on an algorithm that takes into account credit history and good citizenship, but also opinions and associations, which can determine access to education, health care, credit and even public transportation.  This is powerful, because there is no individual against whom you can protest or to whom you can appeal.

In Xinjiang, members of the native Muslim Uighur population can be sent to Mao-style reeducation camps for the least little thing, even wearing a beard.  Surveillance cameras using facial recognition technology are everywhere.

China’s leaders have found a way to harness capitalism to the service of a capitalist government—much as Lenin tried to do with his New Economic Policy in the 1920s, allowing limited private business but maintaining ultimate control.  Maybe the USSR would have become like today’s China if not for Stalin’s forced collectivization drives.

There is a possibility that much of the rest of the world may come to regard China as a better example to follow than the United States.  Unless things change, the Chinese totalitarian model may prevail not through subversion or military force, but by force of successful example and as a price of doing business with China.

The selective revelations of the Panama Papers

Update 4/10/2016.  In fact some Americans are named in the Panama Papers documents.  And rich Americans and American corporations have ways to hide their wealth without going abroad.  There’s more in the links below.

Trillions of dollars—an enormous fraction of the world’s wealth—is concealed in secret accounts outside the jurisdiction of the nations of which the owners are citizens.  It is invisible and inaccessible to criminal investigators, tax collectors, bill collectors and divorcing spouses.

Now the world has a glimpse of some of those secret accounts, thanks to a leak of documents from a Panamanian law firm, Mossack Fonseca, to a German daily newspaper, Sueddeutsche Zeitung.  Mossack Fonseca specializes in registering corporations in tax havens.  The leaked documents had information on more than 214,000 companies and 140 world leaders.

The staff of Sueddeutsche Zeitung and the International Consortium of Investigative Journalists spent a year sifting through the leaked documents, and shared their information with other news organizations.

Interestingly few if any of the leaked documents implicated Americans or American corporations.  Maybe Americans don’t happen to use Mossack Fonseca to register their companies.  Or maybe there is more information yet to be revealed.  Or maybe somebody had a hidden agenda.

The passing scene: Links & comments 11/17/14

What really happened in Beijing: Putin, Obama, Xi—and the back story the media won’t tell you by Patrick Smith for Salon.

Patrick Smith explained why the real winner in the new U.S.-Russian cold war is China.

Saudi Arabia is driving down the world price of oil, now about $80 a barrel, by putting oil on the market.  The main point, Smith wrote, is that the Saudis can make a profit so long as oil is priced at more than $30 a barrel, but the Russians, whose oil is harder to get, need a price of $104 a barrel.

The Saudis oppose Russia for supporting Syria and Iran, which are obstacles to Saudi influence in the Middle East.  Other oil-producing nations suffer collateral damage.  Venezuela is currently going through a political and economic crisis due to the fall in the price of oil.

Russia had helped the United States in its negotiations with Iran, by agreeing to reprocess uranium for the Iranians, which would remove the possibility that the reprocessing might be used to make Iranian nuclear weapons.  U.S.-Iranian negotiations also are collateral damage.

All this benefits China, which gets to buy Russian oil and gas at a bargain price.  China is expanding its influence in Asia offering attractive trade deals to nations that don’t want to be drawn into U.S. conflicts.

Ronald Reagan’s secret tragedy: How 70s and 80s cynicism poisoned Democrats and America, an interview of Rick Perlstein by Thomas Frank for Salon.

Rick Perlstein, author of the newly-published The Invisible Bridge: the Fall of Nixon and the Rise of Reagan, said the roots of present-day politics go back to the 1970s, when President Richard Nixon governed based on short-term political gain, and candidate Ronald Reagan encouraged Americans to believe in the myths we tell ourselves.

Democrats meanwhile turned away from working people and New Deal liberalism and embraced an illusory non-partisanship.  This created a politics in which big-business conservatives can pose as  populists and the true representatives of working people.

Act of Faith: the Catholic priest who puts his life on the line to save Muslims in the Central African Republic by Sam Jones for The Guardian.

Father Bernard Kinvi is a true hero who lives up to the best teaching of his church.  His story is well worth knowing.