A de-Americanized world

It’s early days yet, but the farce surrounding the ‘debt ceiling’ debate and a clear crisis of governance in USA have some inevitable consequences that bode well for the rest of the world (especially for Iran and BRICS), but not for the US, especially not in the medium term.

For a start, it is hard to refute a strong suspicion of rampant racism among Republicans. Racism in itself is not surprising or unexpected, particularly from the likes of McCain, Palin, Romney and Tea Party members.

What is surprising is their willingness to sacrifice the well being of all Americans in order to hurt a black president.

This extremist tendency is also evident in some Republicans’ determination to crush ‘big government’ without a clear agenda on what their libertarian alternative might be.

Worse still, their determination is not bound by any democratic principles as they have clearly shown that being in a minority (in terms of popular vote count or public opinion) does not hold them back from a willingness to crash the whole economic system.

In fact, their tactics are Mafioso in style and involve blackmail and extortion.

Such extremist idealists are in a position to cause serious hurt to the world economy, and this is a matter that the rest of the world cannot take lightly.

The prime problem for the world is the dollar.

In absolute terms, USA is the world’s most indebted nation by a huge margin. Its current budget farce is about the extent to which its debt ceiling should be raised and for how long.

It is not about how the debt will be repaid. That option apparently is not even on the table.

And the ‘solution’ announced today only covers the next 3 months, after which they are back to square 1.

How can the currency of the world’s most highly indebted nation with such inept management remain the reserve currency of other countries and the currency for international trade for much longer?

Well, the dollar isn’t what it used to be. Many countries have been lowering their dollar liabilities quietly since year 2008.

Reuters today claims:

The political dysfunction has worried U.S. allies and creditors such as China, the biggest foreign holder of U.S. debt, and raised questions about the impact on America’s prestige. The Treasury has said it risks hurting the country’s reputation as a safe haven and stable financial center.

What some Chinese were saying during the Washington budget farce was rather more direct:

Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.

And their remedy?

“For starters, all nations need to hew to the basic principles of the international law, including respect for sovereignty, and keeping hands off domestic affairs of others.”

“Furthermore, the authority of the United Nations in handling global hotspot issues has to be recognized.”

“Apart from that, the world’s financial system also has to embrace some substantial reforms.”

“What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.”

And the purpose of all this?

Of course, the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs.

“To that end, several corner stones should be laid to underpin a de-Americanized world.

Just a couple of days later, several opeds started to openly call on world leaders and China in particular to ‘Dump the dollar‘.

Meet the warmongers

Who are the warmongers of the world we live in today?

With so many accusations and counter-accusations on who is the cause of this or that war in the world, and with the fog of war propaganda coming from all sides, I thought it would be useful to take a hard look at the facts on military expenditure as key indicators.

It is easy to refute claims about who fired the first shot and who was being aggressive or ‘asking for it’, or even who was ‘bad’ or ‘immoral’ or ‘blasphemous’ etc.

But it is not so easy to deny who is buying, selling, producing and using weapons for warfare the most.

A good source of data is the Stockholm International Peace Research Institute.

The charts below are taken from their ‘Recent trends’ section. They provide a clear flavour of the current military spenders hall of fame in the world.

The first is by the highest spenders in 2012 by country:

States-with-the-highest-military-expenditure-in-2012

Another SIPRI Chart for 2012 shows military expenditure by region:

World-military-expenditure-by-region-in-2012

The table below was created to provide a longer-term trend analysis over the 25-year period for which SIPRI’s data is available to compare 5 main regions, namely: Africa, Americas, Asia and Oceania, Europe and the Middle East.

The regions are also sub-divided into their subregions. For example Africa is divided into North and Sub-Saharan Africa, and Asia into Central, East and South Asia together with Oceania.

The table also provides comparative time series data for the first decade of the 21st century, as well as a five-year period following the 2008 financial crisis. This allows us to assess whether and how trends have shifted over the past quarter century.

Source: SIPRI World-military-expenditure-by-region-in-2012

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As the figures demonstrate, North America clearly leads and accounts for 43% of the world’s military expenditures over the past quarter century.

USA alone accounts for 40% of all global military expenditure, averaging at close to $600 billion spent every year on warfare.

America’s dedication to war and conflict spending is 12 times higher than what it spends on ‘aid’, which totalled less than $50 billion in year 2011.

In fact, the US aid figure includes $18 billion of military aid, which leaves a total of $32 billion in economic aid.

So the actual ratio of military expenditure versus economic aid is close to 20 to 1 ($618 bn. versus $32 bn.).

It is therefore fair to say that the US spends 20 times more on terrorising the world than it does on aid and peacemaking.

A worrying feature of the global military expenditure figures is the fact that average annual spending on war machines and weapons of mass destruction has increased since 1988 and the fall of the Berlin wall.

The global average for the period stands at US$1.4 trillion a year between 1988 and 2012. The average for the period 2000-2009 was slightly higher as the table shows. This is not surprising as 9/11 occurred in this period.

What is rather surprising is a significant rise in the West’s military expenditures over the period 2008-2012, which is the period of the Western financial/economic crisis.

Average US military expenditure rose from $560 billion a year before the ‘crisis’ to $699 billion a year – a rise of 25% in military expenditure at a time when the economy was apparently in some trouble.

This is a clear indicator of the centrality of the war industry to the US economy.

Here one can note a divergence between Europe and the US.

North America and Europe together account for 74% of global military expenditures for a quarter of a century (1988-2012). Europe’s share was 31%, but this share has declined to 25% of the total since the 2008 financial crisis.

However, it should be noted that the total amount Europe spends on warfare every year has in fact risen by $26 billion or 7% on average since year 2008 as compared to the average for 2000-2009. It is just their share of global spending that is relatively lower today.

There is a noticeable though slight shift within Europe with a rising share of expenditure by Eastern as compared to Western Europe. Regardless, Western Europe’s expenditure on warfare ($308 billion a year) is close to 3 times higher than that of Central and Eastern Europe combined ($115 billion a year).

The European slack has been taken up by East Asia (16% of total since year 2008 as compared to 13% for the period since 1988).

This is not so surprising in that East Asia’s economic rise would be expected to show such trends for the period.

The above comparisons do not delve into population densities and average expenditures per head of population. A per capita count of military expenditure might be a better indicator of a culture of violence.

According to Wikipedia,  the top 10 military spenders in the world in 2012 were the following:

1. USA ($683 billion = $2,200 per capita)

2. China ($166 billion = $123 per capita)

3. Russia ($91 billion = $436 per capita)

4. United Kingdom ($61 billion = $984 per capita)

5. Japan ($59 billion = $465 per capita)

6. France ($59 billion = $908 per capita)

7. Saudi Arabia ($57 billion = $2,014 percapita)

8. India ($46 billion = $26 per capita)

9. Germany ($43 billion = $524 per capita)

10. Italy ($34 billion = $557 per capita)

Among the top 10 military spenders above, only Saudi Arabia with a per capita military expenditure of $2,014 comes anywhere near USA.

Changing the above table in per capita order of ranking, we get:

1. USA ($2,200)

2. Saudi Arabia ($2,014)

3. United Kingdom ($984)

4. France ($908)

5. Italy ($557)

6. Germany ($524)

7. Japan ($465)

8. Russia ($436)

9. China ($123)

10. India ($26)

China and India are the lowest per capita spenders with the Europeans – including Russia – making up the bulk of the world’s warmongers following the lead of USA, Saudi Arabia and Japan. (yes, Japan!)

Another method for rating the most warmongering nations/governments (personally, I think governments and governance systems are mirror images of societies) would be to look at their level of military expenditure compared to the overall size of their economy, measured as a ratio of total military spending to the Gross Domestic Product (GDP).

The ratio of military expenditure to the overall size of the economy measures the resource commitment of an economy to the military sector. This gives a fairly accurate measure of the priority given to wars and war machines in a nation’s economy. This is where all the talk (hot air) can be checked by hard financial data.

In general, the more a nation’s GDP is skewed by military spending, the more warmongering a nation can be said to be. It is not a definitive measure by itself, but it certainly is a key indicator.

The global average in terms of military expenditure as a share of GDP was 2.5% in 2012. In other words, on average, countries dedicated the equivalent of 2.5% of their economy to military spending in year 2012.

Interestingly, Iran’s military expenditure as a share of GDP stood at 1.8% in 2012, which is significantly (28%) below the global average.

Iran spent $9 billion on its military in 2012, which amounted to about $129 per head of population, compared to USA’s $2,200 and Saudi Arabia’s $2,014.

To put it more starkly: on average, an Amercian citizen ‘spends’ $2,200 on wars in a year, a Saudi spends $2,014, while an average Iranian would spend $129 a year on the same.

What is more, the Iranian would be spending a much smaller percentage of his/her budget on warmongering, as compared to Americans and Saudis.

But American and Saudi warmongers are not even the worst cases in the world today. Iran’s military expenditure of $9 billion with a population of 70 million in 2012 is minuscule compared to Israel’s $15 billion (excluding $3 billion a year in US military aid), which amounts to $2,500 per head of Israeli Jewish population.

Compared to USA and the Saudis, Israel is even a bigger warmonger.

All three make Iran look holy.

In terms of GDP shares, USA spent close to 5% of its GDP on warmongering in 2012. Saudi Arabia spent 9% of its GDP on the same, while Israel spent 6.2% of its GDP on making or preparing for war.

The equivalent for Syria was 4%. The global average stood at 2.5%. Iran’s score was 1.8%.

The threat posed by the world’s main warmongering nations cannot be overestimated.

They are in constant pursuit of more wars and weapons of mass destruction, and their economies are structured to depend on war for growth and ‘prosperity’.

The value of international treaties designed to eliminate the threat posed by these warmongers’ weapons of mass destruction is yet to be realised.

Contrary to how their propagandist media portrays the situation, it is in fact countries like USA, Israel, Saudi Arabia and the Europeans who pose the greatest threat to global peace and stability for they drive and thrive on the proliferation of weapons of mass destruction and their use and reproduction.

These warmongers’ weapons of mass destruction must be brought under control.

Independent and non-aggressive countries with peaceful records have an important role to play in safeguarding our collective future, and in bringing these rouge warmongering nations under some form of rule of law in the international arena.

There is quite some way to go yet, but the recent developments bode well for the peace camp in the world.

Let us hope we can join hands to try and stop these warmongers from destroying our precious planet and its good people.