“War is a racket. It always has been.”
International Forecaster April 2012 (#4) – Gold, Silver, Economy + More
By: Bob Chapman
Sunday, 15 April 2012
“War is a racket. It always has been.” These words are as true now as they were when Major General Smedley Butler first delivered them in a series of speeches in the 1930s. And he should have known. As one of the most decorated and celebrated marines in the history of the Corps, Butler drew on his own experiences around the globe to rail against the business interests that use the U.S. military as muscle men to protect their racket from perceived threats. From National City Bank interests in Haiti to United Fruit plantations in Honduras, from Standard Oil access to China to Brown Brothers operations in Nicaragua, Butler pointed out how intervention after intervention served the business interests of the well-connected even as American taxpayer money went to foot the bill for these adventures. The names and places may have changed, but the old adage holds: the more things change, the more they stay the same.
The National Transitional Council that is nominally in charge of what s left of Libya announced this week that they’re beginning a probe of foreign oil contracts brokered during Gaddafi’s reign by his son, Saif al-Islam. Libya is sitting on the largest oil reserves in Africa, and it is no coincidence that within weeks of the start of the NATO campaign last year the rebels had already secured the country’s oil ports and refineries on the Gulf of Sidra and established their own national oil company for negotiating contracts with the invading forces. Although the oil contract probes are supposedly meant to show the transparency of the new “government” and their willingness to root out the graft and kickbacks inherent in the old regime, it’s quietly acknowledged that the process will be used to reward the nations that most visibly supported last year’s invasions and punish those who were more reticent.
Surprising, then, that the first companies on the block are Italy’s Eni and France’s Total. Both countries fostered close ties with the NTC last year and France was the first country to officially recognize them as the government of Libya. But now Libya’s general prosecutor is reviewing documents related to these companies for possible financial irregularities. The SEC is getting in on the act, too, requesting documents relating to both companies’ Libyan operations to check for suspected violations of the Foreign Corrupt Practices Act. The potential blow to the European giants’ share in the Libyan market is especially painful in light of the upcoming Iranian oil embargo that threatens to squeeze the crude imports of Greece, Italy and Spain. Now, as Libya ramps up oil production to pre-war levels the obvious potential winners in the probe are the American and British majors, who could end up eating up some of Eni and Total’s share in Libya’s oil production should the investigation lead to charges.
China may also have reason to be wary of their standing with the new government. Chinese-Libyan ties were increasingly close in the years leading up to Gaddafi’s ouster, with trade volume having reached $6.6 billion in 2010. In 2007, as the US was beginning to put AFRICOM together and the competitive scramble for African resources was heating up, Gaddafi delivered an address to the students of Oxford University where he praised China’s hands-off approach to investment in Africa. At the time, Gaddafi suggested that Beijing was winning the hearts and minds of Africans with its reluctance to interfere in local politics, while Washington was alienating the population with their heavy-handed interventions. In the wake of the NATO bombing the would-be government of Libya is singing a different tune and relations with China have cooled down. Last August a senior NTC official suggested that China would be punished when it came time to award reconstruction contracts in Libya because of their initial reluctance to support the rebels. Although the statement was downplayed, it was revealed earlier this month that Chinese companies are still waiting to begin negotiations on losses to frozen and outstanding contracts worth $18.8 billion. Relations are still cordial, though, and the Libyan government is assuring China that the contracting companies will be in a better position to resume negotiations after national elections in June.
These latest moves from Tripoli may be as much about projecting the idea that the NTC is actually functioning as a government than anything else, though. Armed militias are still waging violent turf wars throughout the country, with 26 people dying in fighting between rivals in the western town of Zwara earlier this month and 150 dying in skirmishes last month in the southern city of Sabha. One militia stormed a hotel in Tripoli and opened fire, then beat and kidnapped the manager after he told a militia member to pay an outstanding room bill. Last week hundreds marched in Benghazi to call for an end to the violence between the armed gangs. The country is deeply divided along tribal lines and armed militias still occupy government buildings and openly flaunt the pronouncements of the erstwhile government. The idea that the NTC is actually functioning as a government is a pipe dream at this point, but as long as they keep the oil pumping and the victors of last year’s humanitarian love bombing get their spoils, there’s hardly a peep out of Washington, Paris, or London. Smedley Butler wouldn’t be surprised.
Meanwhile in Syria, the racketeers’ plans for a Libyan repeat are proceeding apace. Last week we reported on the so-called “Friends of Syria” and their agreement to begin openly funding the rebels to the tune of millions of dollars. This week we have been watching the inevitable, pre-scripted “break down” in Annan’s UN-brokered ceasefire. Exactly on cue, unverified reports from unnamed activists have begun rolling in to the usual media mouthpieces via foreign-based NGOs proclaiming so many people have died in continued fighting. The unacknowledged elephant in the room, however, is that, exactly as Russian Foreign Minister Sergei Lavrov has been attempting to point out all month, it’s impossible to expect a cessation in fighting when you are openly arming, training and funding an insurgent proxy army that is hell-bent on toppling the government. However, Lavrov is banging his head against a brick wall. The ceasefire was never meant to be a ceasefire and it’s all political theater at this point anyway. Any and every unverified rumor of fighting or violence in the country will now be taken as a sign that Assad has broken the agreement and the pressure to get Beijing and Moscow to acquiesce to the toppling of the Syrian government will intensify.
In the end, this will not be a carbon copy of Libya. There will be no NATO-led bombardment or large-scale military intervention, because Russia couldn’t allow that to happen. Besides, Syria has Russian supplied surface-to-air missiles and no compunction about using them. Instead, political pressure will increase for Assad to step down and the funds and arms to the rent-a-rebel force will continue increasing until the government is toppled. The dangerous factor in this equation is that neither the west nor China/Russia have blinked yet and there is a significant amount of face to lose for one side or the other in this proxy struggle. The one with the most to lose is clearly Iran, which all things being equal would be a dominant power player in regional politics. All things, however, are not equal. With their oil increasingly embargoed, the sanctions getting progressively tighter, and one of their key allies in the region threatening to topple in favor of a hostile Sunni insurgency, Iran has to know that when and if the Syrian domino falls, it falls on them.
At the same time, attention is turning once again to another of the war racketeers’ key interests: Pakistan. There has been newfound congressional interest in the so-called “Free Baluchistan” movement seeking independence for Pakistan’s Baluchi nationals. Citing human rights violations, Rep. Rohrbacher (R-California) has introduced a resolution calling on Pakistan to recognize Balochi self-determination. He has even written an op-ed in the Washington Post where he begins his argument with recourse to human rights and switches seamlessly in the fourth paragraph into noting with evident glee the region’s natural gas, gold, uranium, and copper reserves. Interestingly, Russia agreed last week to pony up $1.5 billion in financing and technical assistance for a proposed Iran-Pakistan gas pipeline. The projected course of the pipeline? It would start in Iran’s southern Assalouyeh Energy Zone and enter Pakistan from the west, crossing straight through Baluchistan. Coincidence, surely. The IP pipeline has had a tumultuous history, complete with plans to run the pipeline all the way to India (an idea from which India has distanced itself but never completely abandoned) and the potential involvement of China, which has flirted with the idea of incorporating the pipeline into a planned logistical network running from the port of Gwadar in Pakistan’s southwest all the way to Xinjiang province. Now, with a proposal for Russian funding on the table the pipeline looks closer than ever to becoming a reality.
From the outset, the US has used every bit of leverage it has to get the parties involved to scrap the idea. Diplomatic pressure has been brought to bear on China, Pakistan, and India, with Beijing and New Delhi both appearing to buckle under the pressure and pull out of the project. The US has backed its own alternative pipeline, a Turkmenistan-Afghanistan-Pakistan-India route, but that idea is looking less feasible by the day. Iran has nearly completed its share of the proposed IP pipeline, but Pakistan has been hesitant. Now along come the racketeers to fund yet another rebel movement in another geostrategically vital corridor, and before you know it “Free Baluchistan” might derail the project altogether. Look for US pressure on the Pakistani government regarding Baluchistan to increase as the pipeline comes closer to completion.
Butler was right. War is a racket, after all. These days the muscle men are rent-a-mobs and insurgents more so than the U.S. military, but the idea is the same: fund, arm and train the fighters to secure the resources and control the strategic areas. In Libya the NATO-backed rebels wrested the oil spigot from the unpredictable Gaddafi. In Syria the “Friends of Syria” are overthrowing a key Iranian ally and taking over an important square on the geopolitical chessboard. In Pakistan, American-backed rebels may succeed in driving a wedge through a key Iran-Pakistan pipeline. And the racket continues. One would do well to remember the grand finale of Butler’s speech: “To hell with war!”