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     May 6, 2011

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Libya and the decline of the petrodollar system
By Peter Dale Scott

The present campaign by the North Atlantic Treaty Organization (NATO) against Muammar Gaddafi in Libya has given rise to great confusion, both among those waging this ineffective campaign and among those observing it. Many whose opinions I normally respect see this as a necessary war against a villain - though some choose to see Gaddafi as the villain, and others point to US President Barack Obama.

My own take on this war, on the other hand, is that it is both ill-conceived and dangerous - a threat to the interests of Libyans, Americans, the Middle East and conceivably the entire world. Beneath the professed concern about the safety of Libyan civilians lies a deeper concern that is barely acknowledged: the

West's defense of the present global petrodollar economy, now in decline.

The confusion in Washington, matched by the absence of discussion of an overriding strategic motive for American involvement, is symptomatic of the fact that the American century is ending, and ending in a way that is both predictable in the long run, and simultaneously erratic and out of control in its details.

Confusion in Washington and in NATO
With respect to Libya's upheaval itself, opinions in Washington range from that of Republican Senator John McCain, who has allegedly called on NATO to provide "every apparent means of assistance, minus ground troops" in overthrowing Gaddafi, [1] to Republican Congressman Mike Rogers, who has expressed deep concern about even passing out arms to a group of fighters we do not know well. [2]

We have seen the same confusion throughout the Middle East. In Egypt, a coalition of non-governmental elements helped prepare for the nonviolent revolution in that country, while former US ambassador Frank Wisner, Jr, flew to Egypt to persuade Hosni Mubarak to cling to power. Meanwhile, in countries that used to be of major interest to the United States, like Jordan and Yemen, it is hard to discern any coherent American policy at all.

In NATO, too, there is confusion that occasionally threatens to break into open discord. Of the 28 NATO members, only 14 are involved at all in the Libyan campaign, and only six are involved in the air war. Of these, only three countries - the US, Britain, and France - are offering tactical air support to the rebels on the ground. When many NATO countries froze the bank accounts of Gaddafi and his immediate supporters, the US, in an unpublicized and dubious move, froze the entire $30 billion of Libyan government funds to which it has access. (Of this, more later.) Germany, the most powerful NATO nation after America, abstained on the UN Security Council resolution, and its foreign minister, Guido Westerwelle, has since said, "We will not see a military solution, but a political solution." [3]

Such chaos would have been unthinkable in the high period of US dominance. Obama appears paralyzed by the gap between his declared objective - the removal of Gaddafi from power - and the means available to him, given the nation's costly involvement in two wars, and his domestic priorities.

To understand America's and NATO's confusion over Libya, one must look at other phenomena:
  • Standard & Poor's warning of an imminent downgrade of the US credit rating;
  • The unprecedented rise in the price of gold to over $1,500 an ounce;
  • The gridlock in American politics over federal and state deficits and what to do about them

    In the midst of the Libyan challenge to what remains of American hegemony, and in part as a direct consequence of America's confused strategy in Libya, the price of oil has hit $112 a barrel. This price increase threatens to slow or even reverse America's faltering economic recovery, and demonstrates one of the many ways in which the Libyan war is not serving American national interests.

    Confusion about Libya has been evident in Washington from the outset, particularly since Secretary of State Hillary Clinton advocated a no-fly policy. President Obama said he wanted it as an option, and Secretary of Defense Robert Gates warned against it. [4] The result has been a series of interim measures, during which Obama has justified a limited US response by pointing to America's demanding commitments in Iraq and Afghanistan.

    Yet with a stalemate prevailing in Libya itself, a series of further gradual escalations are being contemplated, from the provision of arms, funds, and advisers to the rebels, to the introduction of mercenaries or even foreign troops. The American scenario begins to look more and more like Vietnam, where the war also began modestly with the introduction of covert operators followed by military advisers.

    I have to confess that on March 17 I myself was of two minds about UN Security Council 1973, which ostensibly established a no-fly zone in Libya for the protection of civilians. But since then it has become apparent that the threat to rebels from Gaddafi's troops and rhetoric was in fact far less than was perceived at the time. To quote Professor Alan J Kuperman,
    ... President Barack Obama grossly exaggerated the humanitarian threat to justify military action in Libya. The president claimed that intervention was necessary to prevent a "bloodbath'' in Benghazi, Libya's second-largest city and last rebel stronghold. But Human Rights Watch has released data on Misurata, the next-biggest city in Libya and scene of protracted fighting, revealing that Moammar Khadafy [Gaddafi] is not deliberately massacring civilians but rather narrowly targeting the armed rebels who fight against his government. Misurata's population is roughly 400,000. In nearly two months of war, only 257 people - including combatants - have died there. Of the 949 wounded, only 22 - less than 3% - are women... Nor did Khadafy ever threaten civilian massacre in Benghazi, as Obama alleged. The "no mercy'' warning, of March 17, targeted rebels only, as reported by The New York Times, which noted that Libya's leader promised amnesty for those "who throw their weapons away". Khadafy even offered the rebels an escape route and open border to Egypt, to avoid a fight "to the bitter end.'' [5]
    The record of ongoing US military interventions in Iraq and Afghanistan suggests that we should expect a heavy human toll if the current stalemate in Libya either continues or escalates further.

    The role in this war of oil and financial interests
    In American War Machine, I wrote how:
    By a seemingly inevitable dialectic, ... prosperity in some major states fostered expansion, and expansion in dominant states created increasing income disparity. [6] In this process the dominant state itself was changed, as its public services were progressively impoverished, in order to strengthen security arrangements benefiting a few while oppressing many. [7]

    Thus, for many years the foreign affairs of England in Asia came to be conducted in large part by the East India Company... Similarly, the American company Aramco, representing a consortium of the oil majors Esso, Mobil, Socal, and Texaco, conducted its own foreign policy in Arabia, with private connections to the CIA and FBI. [8] ...

    In this way Britain and America inherited policies that, when adopted by the metropolitan states, became inimical to public order and safety. [9]
    In the final stages of hegemonic power, one sees more and more naked intervention for narrow interests, abandoning earlier efforts towards creating stable international institutions. Consider the role of the conspiratorial Jameson Raid into the South African Boer Republic in late 1895, a raid devised to further the economic interests of Cecil Rhodes, which helped to induce Britain's Second Boer War. [10] Or consider the Anglo-French conspiracy with Israel in 1956, in an absurd vain attempt to retain control of the Suez Canal.

    Then consider the lobbying efforts of the oil majors as factors in the US war in Vietnam (1961), Afghanistan (2001), and Iraq (2003). [11] Although the role of oil companies in America's Libyan involvement remains obscure, it is a virtual certainty that former vice president Dick Cheney's Energy Task Force Meetings discussed not just Iraq's but Libya's under-explored oil reserves, estimated to be around 41 billion barrels, or about a third of Iraq's. [12]

    Continued 1 2

  • Follow the money (Feb 09, '11)




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