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Chinese Foreign Investment or Acquisition. May 2016

 

 

China Rising

In 1991 Mt, Pinatubo, Luzon, Philippines erupted with devastating  results, in addition to the appalling loss of life the eruption altered the Pacific balance of power and the course of history. The volcano destroyed two critical  American military bases, the Clark Air Force Base and the Subic Bay Naval Base, both enormous military arsenals.  America withdrew its assets to Alaska and Hawaii and immediately created a military vacuum. Within months of this withdrawal the Chinese Government promulgated a far reaching decree., “The Law on the Territorial Waters and their Contiguous Areas”. From this all else follows.

With the rise of China manifested by the Chinese Dream and the One Belt One Road aspiration contemporaneously with the Australian mining boom, it is interesting to dwell on the concepts of Foreign Investment versus Foreign Acquisition as they apply to Australian assets.

 

One belt one Road
One Belt One Road. Asian Century Overland and Maritime Trade Routes
(www.china.comfocus)

Germaine to this discussion are four factors relevant to Australian and Chinese commercial and strategic imperatives. (Professor Bath, Chinese and International Law, Sydney University)

  • Australia sees itself as a reliable supplier of minerals and agricultural products; China encourages the acquisition of natural resources to service national growth and its millions of citizens.
  • Australian companies invest for a commercial return; Chinese companies, some with links to Government agencies, are required to supply imports necessary for Chinese growth, profit for the overseas entities is less important.
  • Australia’s capitalist ethos requires returns to shareholders; China’s objective is to sustain growth over generations, profit is secondary. Three year political cycles and associated budgetary gymnastics are viewed with contempt.
  • The Australian government maintains a foreign investment oversight via the Foreign Investment Review Board (FIRB) on media, banking, airlines, airports and telecommunications.  In Australia, China is making significant acquisitions in ports, power companies as well as mining and agricultural projects  These are also subject to FIRB scrutiny with value or national security implications. China’s acquisition of Darwin port or south east Australian power companies appear to have other objectives than purely commercial.

Within informed society, Australia’s relationship with China is an important issue. For China, Australia is only a pawn in a grand expansionist strategy. Integral to the Chinese Dream  are the commercial imperatives of the One Belt One Road policy. This policy is to revive trade and commerce along the ancient Silk Road linking China to western Europe augmented by the maritime trading routes that linked East Asia, East Africa, the Arab Middle East and thence to Venice.

This initiative has been dubbed China’s ‘Marshall Plan’ as it will promote trading links with countries along the transport corridors. This initiative will tend to reduce the importance of the North West Passage as Arctic sea ice retreats. In this grand scheme, Australia appears to be relegated to a ‘colonial ‘ source of minerals and agricultural products specifically for Chinese consumption.

 

China Marshall Plan
The Chinese ‘Marshall Plan’. Chinese Trade along the Maritime Route. (www.csa.com)

It has been noted by Professor Hugh White, Strategic Studies Institute, Australian National University, that the acquisition of Darwin Port by the aptly named Landbridge company, with links to the Chinese government, may be a clue to Chinese ambition for Australia. The urban population of Shanghai is around twenty-two million; Australians must come to terms with the fact that, with a population around twenty-four million, a projection of national influence will be difficult.

 

Chinese Iron Ore Acquisition

Superficially, the foreign acquisition of iron ore mines in Western Australia appears to be a complex of large and small producers jostling for sales contracts; the reality is more sinister. The big picture reduces to a Chinese determination to break the monopoly held by Rio Tinto, BHP/Billiton and Vale de Rio Doce in Brazil. In 2013-14 Chinese steel mills imported 850 million tonnes of iron ore. Australian production was around 610 mt.

To force lower prices, Chinese companies acquired mines with only a modest production of five to fifteen million tonnes. These high cost operations tend to run close to break-even or a small loss. Falling iron ore prices thus means lower feedstock prices to the Chinese steel industry. For every $10 drop in iron ore prices the Chinese economy saves $8.5 billion.  The $70/tonne drop in iron ore prices since 2013 has saved the Chinese economy more than $40 billion. (The Conversation, Canberra. May, 2014)

The Chinese government is astute enough to realise that:

  • increasing supply in an inelastic market, mine revenue will fall but buyers will receive more for less money.
  • upstream investment from unprofitable mine production makes economic sense. This is another form of transfer pricing beloved by multi-national foreign investors.
  • new production onto an oversupplied market is warranted under a Chinese procurement policy, but would not be considered rational by investors not involved into a vertically integrated process.

At any time, production from mines can be halted and the plant mothballed or restarted by a Chinese controlled Australian work force. The concern for the Australian Government is the future of infrastructure, population stability and employment continuity if Chinese state funded entities are investing in new production to force down prices rather than develop a  profitable mining venture.

The economic politics of the West Australian iron ore industry, like a good strip tease, has been laid bare. The State Government will extend its Magnetite Financial Assistance Program for another year to two wealthy Chinese companies in an effort to preserve Australian mining jobs. The government will pay a $41 million subsidy to keep the 1000 strong work force  in employment. The Chinese companies, Citic (profit $7.3 billion) and Ansteel operate the Pilbara Sino Ore and Karara magnetite deposits. Gindalbie Metals Ltd is the minority Australian partner. It appears Chinese mineral acquisition policy has engineered the Australian political system to subsidise local mining operations that ensures low operating costs that maximises profits in China by ensuring low cost feed stock for Chinese steel mills. (The Australian, 13 May, 2016)

Despite the reliability of Western Australia iron ore industry, there are warnings on the horizon. The Chinese objective is to diversify away from Australia and to a lesser extent Brazil as pre-eminent suppliers of iron ore, there may be a myopic tendency to regard Western Australia as an unassailable source of iron ore. There are monster deposits awaiting exploitation in sunburnt or freezing country in Guinea, Liberia, Mongolia and Brazil. (Fortune, Connected Logistics, February, 2016)

Concerning Brazil, it is a stirring giant. By 2018, Vale de Rio Doce is slated to exceed the combined production of Rio Tinto and BHP/Billiton in Western Australia. Currently, China is contributing $5 billion to Vale for the construction of five high tonnage iron ore carriers. (Investing News, November 2015; SMH, January 2014)

 

New Iron Ore Carriers
New Iron Ore Carriers for Brazil. (abc.net.au Kathy Diss)

A conclusion that may be drawn from Chinese acquisition in the Australian iron ore industry, is that economic production in Australia is less important than the ability to source low cost feed stock for Chinese steel mills. This import policy will drive prices down.

In the frenetic fish bowl that small Australian mining entrepreneurs inhabit, the public are encouraged to support Initial Public Offerings (IPOs). Subsequent joint ventures with Chinese acquisitors will ultimately drive share prices into the bulldust to ensure low cost mine product. The Pilbara and Hammersley iron ore provinces have competitors overseas.

Chinese Lithium Acquisition

More than one million electric cars were anticipated to be in circulation by the end of 2015 with a planned 500,000 annual production by 2020. Lithium for car batteries are expected to grow by 10% a year. According to the United States Geological Survey (USGS), global reserves of lithium are in very tight supply,. The top four producers are:

TABLE.  Lithium Producers

CountryProduction (tonnes)Reserves & Resources (tonnes)Ore Type
Chile12,0007,500,000Brine
China5,0003,500,000Pegmatite
Australia13,0001,500,000Pegmatite
Argentina2,900850,000Brine

Despite low production costs in Chile and Argentina, China prefers to obtain lithium ore from Australia. Currently, China is the largest lithium consumer- around 50,000 tonnes at a market price of $6,600/t. The price is forecast to rise as demand outstrips supply. (Batteries, Storage and Fuel Cells,.J Hunt, 2015)

In Australia, lithium reserves and resources are mainly confined to Western Australia where they occur in spodumene (lithium aluminium silicate) rich pegmatites. Deposits currently of interest to Chinese industry are (Investing News, July 2015; WestAustralian, September 2015):

  • Greenbushes. Talison Resources and Chengdu Tianqi Group. This is the world’s largest high grade spodumene deposit running 61.5  mt at 2.8% lithium oxide.
  • Mt Marion. Reed Industrial Minerals and Jangxi Garfeng. Deposit 14.8 mt at 1.3% lithium oxide.
  • Mt Cattlin. Galaxy Resources, formerly with Jiensu Lithium Carbonate Plant, now with General Mining, Canada, planning to re-enter the Chinese market. Deposit 9.9 mt at 1.1% lithium oxide.

Very early in Japanese industrial development, the Japanese government decided to preserve its forests and import timber from overseas. With large reserves of lithium, it appears China has adopted the same policy as the Japanese and is seeking off shore deposits. It is significant that the largest hard rock lithium deposit in the world has slipped from Australian to Chinese control.

Foreign investment in the Australian mining industry is necessary., Taxation policy must minimise transfer pricing and market price manipulation.

Chinese Agricultural Production Acquisition

The Chinese imperative for acquisition  of Australian agricultural production is driven by a population estimate of 1.4 billion by 2050 which is coinciding with declining soil fertility and increasingly polluted water supplies. A UN report states that by 2050 food supply must increase by 50% and water supply by 30%. To meet this threat, the Chinese government has decreed that three billion dollars must be expended with celerity on overseas agricultural security, (Yahoo 7, June 2015) Target regions for agricultural acquisition and expansion are Africa, South America and Australia.

 

Farming Agreement
Another Agricultural Acquisition (agriculturalminister.gov.au)

The acquisition process in Australia has taken on a permanent drip feed character to include all sections of the food chain from crops, animal husbandry to processing plants. These products will not be sold on the domestic market but will be exported to China. The Financial Review (September, 2015) ran the comment that, during the previous two months, agricultural acquisitions had been running at $40 million per fortnight. In the past few years examples of some purchases are:

  • Cubbie Station. Shandong Ruyu. Cotton. $232 million.
  • Van Diemen’s Land. Herman Shao/Ming Hu. Dairy. $200 million.
  • Glenrock Station. Dashang Group. Cattle. $45 million.
  • Cattle Station search. Chongquing. Budget $100 million.
  • Cattle Station search. New Hope Group. Budget $500 million.

The above and below are a fraction of purchases across the agricultural industry that include:

  • Fifty dairy farms in Victoria acquired by ?COFCO Group involving 90,000 cows and 500 million litres of milk annually.
  • Sugar and sorghum development in Western Australia by Shanghai Zongfu. $700 million.
  •  There is a growing trend for wealthy Chinese to enter the wine industry- vineyards are being actively purchased. Australians will soon be come aware of new names  in the industry or on the labels, for example, Zhitai Wang, Kuifen Wang, Xin Jin, Yingda Investment Company and Xingfa Ma. The bottom line is -“the Chinese value land and wineries more than the Australians do”. (BBC News, October 2014)

There are two issues that discomfort the Australian people; first the apparent frequency of acquisitions and second, the opaque nature of the arrangements through the use of shelf companies, trust funds and extended settlements. (Daily Telegraph, February 2014) The FIRB is said to examine all foreign investment proposals exceeding $244 million, however, lower value investments do incur scrutiny. The comment ‘selling off the farm’ raises concern but an Australian Bureau of Statistics table (below) shows there is not yet cause for concern.

SectorAgricultural Land %Agricultural business %
Sheep, Cattle, Grain8799
Other Crop9199
Floriculture9597
Dairy Cattle9799
Fruit, Nuts9797
Deer, Other9799
Vegetables9897
Poultry9897
Grapes-96

TABLE  Australian Agricultural Land and Agricultural Business Ownership.

The acquisition of Australian agricultural assets will continue and an increasing number of Australian managers and labour will have to accept instructions from Chinese owners. It was mooted (ABC RN 9 May) that under the Free Trade Agreement with China, Chinese labour might be permitted to work on agricultural projects.

There could be a financial downside to increasing acquisition of agricultural assets by Chinese interests. Currently,  Australia sells 58% of its food production overseas; this represents 70% of the sector’s total value. Food exports for 2013-14 were valued at $40 billion. With increasing Chinese ownership, this export income will reduce and will tend to be exacerbated by transfer pricing and suppression of farm gate values by a technique similar to that employed in the iron ore trade. (Future Directions, September 2014)

At the end of May, the Bank of China with the Australian Chamber of Commerce hosted a conference principally on the dairy products industry. Over 600 Chinese delegates attended who are aware of the purchasing power of the anticipated three billion Middle Class in East Asia by 2030. (The World Today, ABC, 23 May) It would be naive to anticipate Chinese foreign investment, rather it will be foreign acquisition of Australian agricultural assets as already exemplified in Victoria and Tasmania. It makes commercial sense for foreign investors to acquire virtually a 100% equity and to create a vertically integrated export industry.  An extension of the Mercantilist theory!

The Future

Since the Colonial period, Australia has relied heavily on foreign investment and this will continue into the future. What appears to be changing, is the subtle move away from infrastructure investment to natural resource and agricultural product acquisition, which, if carried out to an extreme,will result in the hollowing out of a nation. Foreign investment should ideally include the construction of tollways, railways, ports and mass housing but this appears not to be happening despite the concept of the Public Private Partnership (PPP) being well established. The problem is that the States are short of money and, like the Federal Government, carry unsustainable debt; hence the sale of Darwin port by the Northern Territory government and the sale of power assets in South Australia, Victoria and New South Wales to Chinese interests. The NSW Trans Grid sale of ‘poles and wires’ to China’s State Grid has recently been approved by FIRB, consideration $9 billion. The proceeds will go towards the rebuilding of sports stadiums. Back to the Roman coliseum!! (Daily Telegraph, November 2015)

A trend has been established and, if continued, there, will be significant redistribution of Australian assets. The President of the National Farmers Federation recently pithily remarked  “foreign investors have spotted an opportunity domestic investors have shunned”. Of deeper impact is Australia’s destiny in the Chinese Dream.

 

 

 

The Chinese Dream and the Chinese Diaspora. April, 2016. Pt 2

 

Meetimg in Sydney
Chinese Patriotic Association of Australia
(SMH, 13 April)

Introduction.  During my career I had the opportunity to observe Chinese culture in Malaya, Indonesia and the Solomon Islands and latterly in Australia. Although domiciled in these host countries the Chinese retained a strong affiliation with China and their heritage.

The Event.  In Sydney, on the 12th April, there occurred a significant event supportive of Chinese activities in the South China Sea  and by extension the ‘Chinese Dream’. The ‘Dream’ involves the betterment of the Chinese people  combined with an aspiration to increase national influence in the East Asian region.  On this day sixty people met under the auspices of the Chinese Patriotic Association of Australia to express unequivocal support for Chinese government policy. The principal points being:

  • A desire to support core interests of the Chinese nation.
  • A recognition the islands in the South China Sea belong to China.
  • Australia might be faced with a crisis situation.
  • These sentiments are the appropriate views of an overseas Chinese elite.

It is significant the Chinese Embassy in Canberra has, apparently, made no public comment but it is certain there  would have been tacit approval.

History and Painful Politics. There are historical and current international issues which have logically conspired to promote this action by the Patriotic Association:

  • Over the past two hundred years China has experienced European aggression, colonialism and commercial exploitation, these yokes are no more.
  • There is a growing awareness among the Chinese population and the diaspora  of 19th and 20th century history and of the dawn of the “Asian Century’.
  • There is a realisation the ‘Asian Dream’ is gaining momentum which engenders confidence and assertiveness among the rising intelligentsia.

Discussion. The wording of the published communique (SMH, 13 April) presents an exquisite problem for the Australian government vis a vis relations with China and with current multicultural policy. As a dictatorship, guided democracy or a Communist regime  there would be a simple solution. As a democracy with enshrined free speech there are clearly more than fifty shades of grey at a time when tensions are increasing. With Australia supporting  iAmerica in the right of untrammelled navigation in the South China Sea the comments of the Patriotic Association are unhelpful. Its stance could  encourage more Chinese Australians to support its philosophy. Remember the Chinese student demonstrations in Canberra in 2008 involving policy on Tibet. It could take only an inflammatory speech or an emotive cause to mobilise a cast of thousands. It is certain the Chinese government is aware of this anti-Australia stance. It would be noted if if the voice of the Patriotic Front was silenced.

Diplomatic and Trade Mission to China.  At the mid-April visit of the Prime Minister to China the Australian desire for peaceful negotiation over the South China Sea disputes was noted. as is the military alliance with America. The response by organs of the Chinese government constituted unveiled threats:

  • “Concerning the territorial disputes this will be a test of Australian leader’s political wisdom”. (National Institute of International Strategy, Beijing)
  • “This disagreement would tend to cast a shadow on promising cooperation if such a tendency keeps developing”. (Institute of World Economics and Politics, Beijing)

 

Political Meeting
Prime Minister Turnbull and Premier Li Keqiang. in Great Hall of the People
(SMH, 15 April, A Meares)

Such pronouncements from senior Chinese officials could encourage more assertive voices in Australia. The Beijing pronouncements should also be evaluated against the news America is positioning war planes in the Philippines. (SMH, 15 April). By an alliance with America  Australia is also involved. An unpalatable conclusion is that support for American activities might damage trade with China as intimated in the above unveiled threats. To this mix add the complication of Chinese control of Port Darwin

The implacability of Chinese negotiation tactics should not be under estimated  In 1981 President Deng  Xiaping met Prime Minister Margaret Thatcher to discuss the Hong Kong handover in 1997. The talks ended with the comment by Deng Xiaping “I could march into Hong Kong any time and take it over if I wished.” President Xi Jinping cannot be any less forceful.

Multiculturalism. The second issue is the effectiveness  of Australia;s multicultural policy in relation to the unpatriotic stance of the Chinese Patriotic Association of Australia. At a security conference in Germany (BBC, February, 2015) the United Kingdom Prime Minister stated multiculturalism had failed. British policy should have included a greater requirement for inculcation of a stronger national identity that could have reduced extremism. Current policy in Britain promotes a sense of separateness not integration.. National ethos that encourages a sense of Britishness is required. A similar logic could apply to Australia. However accommodating multiculturalism might become in Australia it is unlikely the Chinese diaspora will ever forgo their culture or allegiance to their roots.

Australian Defence Force Problems & Darwin Time Bomb March 2016

 

 

Australian Defence Force Problems

  • Preamble
  • Submarines
  • Joint Strike Fighter
  • Coaling Stations, Strategic Ports, a String of Pearls and a Priceless Pendant — the Darwin Time Bomb
  • Postamble

 

Chinese carrier
Chinese Aircraft Carrier
(almasdarnews.com)

 

Preamble

The western Pacific littoral  is verging towards a longitudinal arms race. Never forget Europe sleep walked its way to WW2. Dr Hugh White, Director, Strategic Policy Institute, Canberra (ABC Counterpoint, 14 March) stated ‘China and America are drifting towards a confrontation. They need to pull back’. Unfortunately this may not happen; for China because of the Chinese Dream and for America because it is still a superpower.  The east Asian region and particularly China and Indonesia, together with the United States ‘pivot to Asia’ are beefing up their military forces. There are three problems, among several, facing the ADF:

  • Submarines, the design, lead time, national security and military objective.
  • Joint Strike Fighter, design, cost and combat readiness.
  • Darwin Port, the role of Darwin as a pendant below the Chinese ‘string of pearls’ from the South China Sea to the Persian Gulf.

Submarines.

The Australian Strategic Policy Institute (ASPI) estimates the cost of submarines to replace the Collins class vessels will be between $1.4 billion and $3.04 billion each with an estimated total cost of $36 billion. Submarines may not be ready until the mid-2030s.

National security cannot be overemphasised. At the conference ‘Submarine Choice’ (September 2014) hosted by ASPI Sweden very publicly removed its Kukums submarine contractor from German control citing a concern over militarism. Is there a warning signal for Australia with Japan as contractor?

With respect to the ill disguised position of Japan in the  preliminary discussions, the Australian public is entitled to greater transparency. Is the situation related to the American ‘pivot to Asia’?

America is keen to bolster Japan both militarily and economically as a bulwark against China and it may well be that America will use the opportunity to insert its weapons systems into the construction contract. With a European contractor this might be more difficult.

The Australian Strategic Policy Institute (11th March) has produced a damming report on the dangers of using a Japanese submarine builder:

  • Japanese submarines have a 20-year life, not a 30-year life as required by the Australian navy.
  • Japanese shipyards have not built a submarine for operation in a distant theatre. French and German companies have.
  • The Japanese Soryu class submarines are 2950 tonnes; the Collins class submarines are 3100 tonnes.
  • The Soryu class has only two thirds the range of a Collins class submarine.
  • Japanese builders must redesign the submarines for extended under water propulsion. Beware the F35 debacle.
  • Why did Japan refuse  to build submarines for India in India?
  • Modern submarines have a single pressure hull- the Japanese hulls are composite alloys. This may explain the shorter operating life due to metal fatigue.
  • French and German shipyards have discussed widely with Australian suppliers, Japanese have not.
  • French and German shipyards have built submarines for other navies. Japan has not.
  • Mr Abbott should explain to the Australian people why overt preference has apparently been given to Japan. In the murky world of the armaments trade, was America providing liminal pressure only visible to a Canberra cohort to support Japan?

At the  Submarine Choice conference, there was reference to Australia’s unique requirements for its submarines. What are they? A senior naval consultant stated ‘Australia is the only navy in the world that flogs its submarines thousands of kilometres across the ocean before going on patrol’.

 

Submarine Design
21st Submarine Design
(imagesjpeg)

Among design circles, it has been mooted that due to the threat now caused by autonomous underwater vehicles, consideration is being given to an ‘aircraft carrier’ type concept, that is, a ‘mothership’ servicing smaller, less expensive and more expendable submarines. The problems for submarines patrolling an enemy coastline is they are increasingly vulnerable to sophisticated shore launched undewater drones.

The problem is these vessels have to be relevant for the next thirty years.

 

Joint Strike Fighter.

Grave concerns have surfaced on the design of the US built F35 stealth fighter. They are a long way from being combat ready although delivery to Australia was supposed to commence in 2012. The F35 is a venture between the States and Lockheed Martin, the project overrun is in the billions. The United States has been pressing its allies to accept a share of the cost overrun additional to their contract price.

The F35 is designed as an out -of-sight attack aircraft. In the dog fight situation, pilots state it is slower and less agile than other fighter aircraft and becomes a vulnerable target. Top gun pilots refer to the F35 as the ‘little turd’.

The seriousness of this situation is illustrated by the the Canadian Government; the decision has been made to pull out of the F35 project and its contract to acquire 65 fighters. (defencenews.com, October 2015)

Problems with the F35 are: (Business Insider, March 2015)

  • In flight and on the ground the electronics fail over 32*C.
  • Overall a high electronics failure rate.
  • Navigation and accuracy software is unreliable.
  • Fuel tank explosion problems.
  • Flight control system degrades over time.
  • The $400,000 pilot helmet can kill on ejection.
  • Cyber security not confirmed.

 

The current cost of these stealth fighters for the three services are:($US million)

  • Airforce – F35A – 148 million
  • Marine – -F35B – 251 million
  • Navy – —F35C – 337 million
  • Annual maintenance plus $2 million

 

F35
F35 Stealth Strike Fighter
(image-1.jpeg)

Australia originally agreed to purchase 72 fighters in 2002 with delivery expected in 2012. There were delays. In 2015, the Government confirmed a $24 billion order for 58 aircraft (approx. $A400 million each), despite the problems. At the current March Senate hearings, a US spokesman was unable to confirm how many aircraft are on the production line, he thought between one and sixteen!! Delivery will be sometime in the 2020s.

The immense problem for Australia, as expressed by Dr Joiner, former head of ADF Test and Evaluation Department, is that ‘Australia must show more spine and consider the Canadian decision, otherwise Australia will end up with a plane not knowing what it can do and what it cannot do”. (ABC Background Briefing, March 2016) Who in Australia is prepared to spearhead a decision?

By serendipity, in mid=March, the Chief of the Australian Air Force launched a strident defence of the F35 on ABC News with reporter Andrew Greene. The forceful argument was, however, hedged with a proviso that if the F35 was further delayed F18 Super Hornets would be acquired which entered Australian military service in 2010.

 

Coaling Stations, Strategic Ports, a String of Pearls and a dangling Pendant — the Darwin Time Bomb

At its peak, the British empire protected its trade routes and maintained naval hegemony using its vital coaling stations and strategic ports, for example, Cape Town, Aden, Singapore and Hong Kong. Royal naval presence based in these ports maintained safe passage for British commerce.

Hong Kong was ceded to the British following the First Opium War in 1842. Later, Kowloon and the New Territories were leased to Britain  for 99 years. Hong Kong and Territories were returned to China in 1997. During this 150-year period, Hong Kong was of immense commercial value to Britain.

Jog forward to 2000 AD. For the past 5000 years, empires have risen, collapsed and new ones risen. The Chinese Dream is in the ascendent and has materialised as a crusade for economic, political and military primacy in South-East Asia, Australia and New Zealand. (The Drum, November, 2015)  For the first sixteen years of the 21st Century, the Chinese iron fist inside a silken glove has extended power with a glacial, inexorable momentum. No huffing and puffing by a super power or squeaks from an aspiring middle power has slowed this momentum. Expressions of diplomatic opposition are naive.

As a rising maritime power (like Britain), intent on increasing influence and commerce, China must protect its future maritime trading routes. This process has been dubbed the Chinese ‘string of pearls’. This, in reality, is a number of China friendly ports extending from the South China Sea to include ports in Vietnam, Bangladesh, Pakistan, Sri Lanka, Djibouti and Iran in the oil rich Persian Gulf. From naval bases in these countries China will protect its commercial interests.

 

String of Pearls
String of pearls and northern Australia
(stringofpearlsaroundia.com)

The Darwin Port was leased to China for 99 years in November2015. Darwin constitutes a veritable Kohinoor diamond pendant hanging below the ‘string of pearls’. Darwin controls a strategic region close to the Australian east coast shipping lanes carrying coal and wheat and the west coast lanes carrying iron ore, offshore oil and gas and lithium concentrates. On Darwin’s near north are the oil resources of the Timor sea.

Currently there is a Senate Committee hearing on the Darwin port purchase and the national security implications of Chinese ownership. This is a story that is morphing from the bizarre to the surreal. That a sovereign nation would cede a strategic asset with national security implications to a potential enemy is beyond belief.

This story is gaining widening traction with revelations emanating from the Committee hearings. In November 2015, Landridge, a company with links close to the Chinese government, negotiated a 99-year lease with the Northern Territory Government, consideration $600 million. This is derisory. The application was approved by the Foreign Investment Review Board (FIRB) because ‘numerous subsidiary companies were involved which were under the FIRB radar’. FIRB approached the Australian Defence Force (ADF) three times and was informed the Navy was ‘comfortable’ with the lease, despite the fact that the Australian Navy would be excluded from the port in 25 years. Incredibly, ASIO admitted it had not ‘reviewed Defence needs’ relating to Darwin port. Following this government policy debacle, there is now a move for this type of foreign investment be subject to scrutiny by the National Security Committee. (AFR, 10 March, 2016)

An indication of unease behind the scenes is the US State Department conducting a nation wide opinion poll on Australians’ reaction to the Darwin lease. (AFR, 10 March) This is surreal – what has transpired  within the US State Department to consider this move? The US Ambassador in Canberra has down-played, not denied, this poll.

 

B1 Bomber
B1 Bomber, US Airforce
(Ref.1431668829594)

Because of or inspite of the Darwin lease, a reinforcement is planned for the ‘pivot to Asia’. B1 bombers, capable of carrying nuclear weapons, are to be based near Darwin in order ‘to deter Chinese ambitions in the South China Sea. (SMH, 8 March) No doubt Darwin Port will advise Beijing when these bombers take off and return!  Returning to empires, over the past 5000 years, history shows they die of exhaustion-they are not stopped in there tracks as they increase the size of their overseas possessions.

Unless the Chinese are expelled from Darwin now, because of an irregular FIRB submission, the Darwin facility will remain a thorn in the side of the ADF for 99 years.

 

Postamble. 2016 Defence White Paper (14 March)

Comment on the Defence White Paper will place the foregoing into context. Some elements of the strategic outlook are:

  • The relationship between China and the United States will be one of competition and cooperation. For the next two decades the US will remain the preeminent global power.
  • There will be challenges to global stability, however Australia can only prosper under a rules-based order.
  • The threat of terrorism will increase.
  • The Pacific region will suffer slow growth and modernisation.
  • Asian defence spending is exceeding that of Western Europe.
  • Australia’s military edge will decrease as regional nations modernise.
  • In the next twenty years, half the world’s submarines and  military aircraft will be deployed in in this region.
  • There will be threats from space and cyberspace.

Recast in a different way:

  • The global and regional order will become less civilised.
  • Australia’s military will deal with uncertainty, not containment.
  • The Asian security environment will become more competitive and less cooperative.
  • There is the possibility of unexpected breaches of thresholds making sudden conflict likely.
  • Indonesia is pushing ahead with vigorous military modernisation.

To ensure Australian security the White Paper recommends the ADF:

  • Be empowered to project a more muscular response.
  • Become more agile, capable and responsive.
  • Must maintain a higher level of preparedness.

Overall the White Paper implies a sense of urgency.

A philosophical question –   what is the purpose of the east Asian arms buildup? As in the European World Wars I and II, will the region split into two sides or will it degenerate into nasty little wars as occurred in South America, or will there be the equivalent of the Spanish Civil War where two larger powers tested their weapons on a destabilised country. Pax Deo!

 

 

 

 

 

 

 

 

Islam in Australia. Faith and Fertility Rates. January 2016

CONTENTS

Imagined Reality not the Clash of Cultures

Rural Bliss

Imagined Reality not the Clash of Cultures

 

In December, the former Director General of Security, David Irvine, cautioned Members of Parliament on the danger of expressing speculative opinion following the Paris massacre. This advice implies how ill-informed some politicians are on the nature of Islamic jihad and the irreversible demographic trends changing Australia. The apparent short term political focus in Canberra is concerning since long term policy is required to deal with the changing religious character of Australia.

An ‘elephant in the room’ regarding long term  immigration from the Middle East is the strong ‘imagined reality’ of Islam compared to the declining strength of ‘imagined reality’ within the Christian community. The belief and practice of each faith may be considered inappropriate or heretical by devout members of the other faith.

Despite the low population number of Muslims in Australia, within segments of the Australian community there is concern at the increasing visibility and influence of Islam. The facts below place this concern into context. The 2011 Census showed that 61 %  (67 % in 2001) claimed to be Christian. The ‘No Religion’ cohort was 22 % (15 % in 2001). Minority religions are Buddism 2.5 %, Islam 2.2 %, Hinduism 1.3 %  and Judaism 0.5 %.

 

The 2011 Census recorded 476,300 Muslims (2.2 %) living in Australia. The projected population increase between 2010 and 2050  for Muslims is 75 %,  but for Christians (Caucasians) is 35 %. (SBS News, November 2015) The Census also forecast that during this period (2010 – 2050)  growth trends for Christianity were 3.7 %, Islam 39.9 %, and No Religion 29.4 %.

A significant issue facing the Australian government in the coming decades is the declining ‘imagined reality’ of Christian belief while ‘imagined reality’ in Islam will remain strong. The power of ‘imagined reality’s’ ‘collective fiction’ should not be underestimated. All tribes, nation states and ancient and modern empires were created and ‘glued’ together by myth, legend, deity and religious belief. Arabic immigrants are maintaining a strong ‘imagined reality’ of Allah while Caucasian Australians are losing theirs in relation to God. It is belief in a fiction or legend (embellished history) that draws people together to become a creative strong unified population. There may be a problem if two dominant belief systems are operating in the same social and administrative tribal or national border.

In the early 21st century. increasing numbers of Australians are questioning their religious belief; in its place the Government is seeking to create a national ethos by invoking the ‘Spirit of Anzac’. With an increasing proportion of the population, there can never be a wide acceptance for this Memorial Day. In the same way, Australia Day will never be accepted by the First People. A day that commemorates the birth of an Immigrant Nation might have wider acceptance, that is, 1st January, 1901, Federation Day. Looking towards mid-century, Australia will require a belief or a legend that a population of immigrants and the First People can rally round. The concept of ‘Team Australia’ is derisory.

In 2014, the Australian population was estimated at 24 million. (ABS) The 2011 Census revealed that 54 % of Australians had both parents born in Australia while 34 % had both parents born overseas. This ratio is increasing in favour of new immigrants.  There is possibly an unspoken unease among Caucasian Australians as the declining birth rate continues below the replacement rate of 2.1 per female since the 1970s.  (The Conversation, 2013)  In 2013, the ABS announced the national fertility rate was 1.88, down from 3.1 in the 1950s. By 2026, the ABS has forecast a decline to 1.8. By contrast, the Pew Research Centre (June 2015) announced the Australian Muslim birthrate is 3.1 which supports the 75 % increase by 2050. This has implications for religious diversity for Australia by mid-century.

Against the background of a relative Muslim population increase, the Australian Muslim Party was registered in November. (SMH, 18 November) The proponent, Diaa Mohamed, is a Paramatta  business man who manages ‘ My Peace’, an organisation dedicated to bringing Muslims and Christians together. The objective  is to obtain 500 members and contest a Senate seat at the next election. In the 2013 election,there was a 23 % vote for the minor parties. Currently, 18 Senators sit on the cross benches. Just 2 % of the primary vote is enough to win a Seat. However, some sitting Senators with only 0.04 % of the primary vote have won Seats, namely Stephen Conroy, Julian McGauran and Judith Troeth.(www.aph.gov.au/DocumentStore)

The Muslim community may well support this Party as it will be viewed as supportive of Islam. The Party name will have negative repercussions in the population at large for the following reasons:

  • Australia purports to be a secular society; a party with religious overtones will irritate the electorate.
  • The name implies a favoured faith for its members and may deter Christian membership.
  • Whatever the Party’s manifesto, it will be viewed as more interested in matters of faith than economic policy and social improvement.
  • The Party name will tend to perpetuate lax reporting and political comment due to incorrect use of secular or religious terminology. In public statements and news items Indians, Chinese and Sudanese are reported by nationality but frequently, there is no mention of Syrians, Iranians or Iraquis – more frequently the term Muslim is applied. This is sloppy thinking.

Australia’s multicultural policy is here to stay. The original planners probably never envisaged a need for a multi-faith policy but this omission will need to be addressed, bearing in mind history and the requirement for social accommodation and restraint. This is not a Protestant-Catholic or a Shia-Sunni fault line, this is an interface between Islam and Christianity that will require inspired leadership.

 

Considering the low Australian fertility rate and the declining  immigrant arrivals from Europe, the immigrants from other regions are having an increasing impact on multicultural diversity. The Conversation, Canberra (June 2013) quoted  immigration figures for 2011-12 as Chinese 25,000, Indian 29,000, English less than 25,000, Arabic (Muslim) less than 8,000. (Tables B4 & B6, Markus, 2014) The Tables below indicate immigration trends which, if continued, will clearly alter the ethnic mix in Australia.

Table1. Permanent Additions to Australia’s Population. Top seven countries, percent of annual intake. Caucasian intake in decline. (Dept. of Immigration, www. immi.gov.au/media)

Country2005-0607-0808-0909-1010-1111-1212-13
India9111111101215
China10101112141111
New Zealand1113119121211
United Kingdom1715141210119
Philippines3445554
South Africa3456443
Malaysia3222222

 

Table 2. Off Shore Humanitarian Visa Grants. Top seven countries, percent of annual intake. (Dept oI Immigration. immi.gov.au/media)

Country2006-0707-0808-0909-1010-1111-12
Iraq132126182422
Afghanistan13118101211
Burma182722211628
DR Congo63466-
Iran23--3-
Somalia--432-
Sudan2011633-

The ABS (June 2014) record resident population figures as Chinese 447,400, Indian 397,800 and Muslim (Middle Eastern) 476,300. Chinese and Indians, in public comment, are clearly identified as such, however, the religious term Muslim is used and not country of origin, this is sloppy reporting. The battle for Caucasian ‘hearts and minds’ will be the ‘imagined reality’ of Islam. Throughout history, there has always been a fault line between Islam and Christianity living under the same power base unless controlled by a dictator.

 

St. Basil's Cathedral, Moscow.. (Europeisha)
St. Basil’s Cathedral, Moscow. (Europeisha)
Mosque, Algiers.
Emir Abdelkadar Mosque, Algiers (Beautiful Mosques)

In Australia, concurrent with the policy of identifying radicalisation in young citizens, the Government must introduce a policy promoting hope, a place for them in Australian society and reducing the sense of marginalisation. The difficult long term political policy will be to promote religious tolerance alongside multicultural policy, despite a 2 % – 98% ratio, possibly 5% – 95% by 2050. The fault line in the nation is religion not culture, There can only be one ‘Law of the Land’. According to Dr Ghena Krayem, Faculty of Law, Sydney University, Muslims wish to see principles of Sharia Law integrated into the Australian legal system. This is not practicable –  immigrants and established settlers alike must be treated absolutely equally. Other minority groups with with a 2 % influence may also wish for special treatment, such dispensation would quickly lead to legal chaos.

To summarise the issues:

  • Australian internal security is currently seeking to identify suspect individuals within 2.2 % of the population, a very small number. Viewing this situation objectively, any random terrorist shootings or bombings will never approach the 1,153 road fatalities or the 32,500 serious road injuries recorded in 2014, with similar annual repetitions. (Dept. of Infrastructure, Transport and Regional Economics)
  • With estimated Muslim fertility rate of 3 and an estimated 75 % increase in the Muslim population it will approach 850,000, that is approximately 2.6 % of the population in 2050 within an estimated Australian population of 31 million.
  • Australia’s multicultural policy requires overhaul. Much more attention must be given to the integration of young Muslim citizens into an increasingly secular  Caucasian society.
  • The source of friction between Christians and Muslims is not culture, it is the difference in ‘imagined reality’ between two incomprehensible beliefs and the subliminal dominance sought by each faith.
  • A factor that may require more managed immigration is the increasing imbalance between Muslim males and females. The 2001 Census recorded a male – female ratio 53-47%, Australia 49-51 %. Social scientists will have to advise on potential social instability. If there are Muslims in Australia with more than one wife then the published gender imbalance (53-47)  with respect to unattached males is even worse. A social problem looms.

With Australia’s transition to a Republic, the Head of State will administer a vastly different Commonwealth to that governed by the British Crown at the time of Federation. Due to the changing ethnic mix in Great Britain, the reigning Monarch remains ‘Defender of the Faith’ but in 2012 the Queen, in a speech at Lambeth Palace, signalled a change in emphasis. The Anglican Church now has a duty to protect the free practice of all faiths in the United Kingdom.  So too, the first Australian President will probably be invested with a similar responsibility as ‘Defender of the Faith’. This is a totally new canvas; for the first time in 1,400 years Christian Heads of State will have the responsibility for protecting  Moslems.  Saracens and Crusaders will no doubt be turning in their graves.

Rural Bliss

A quiet coffee on the verandah under a cloudless blue sky. A roaring from the direction of the setting sun, trees at the edge of the garden suddenly in whiplash convulsions, air full of dust and leaves as a 50 metre wide ‘willi willi’ tore through the air just in front of me, it crashed into a  ridge  like a mini-hurricane with a howl that subsided to a rustle of leaves leaving the gum trees in a state of shocked immobility. A tremulous bird song warbles the ‘All Clear’.

Paris Massacre, the Background & Climate Change Tipping Point. December 2015

 

images-3
World War 1 Christmas.  The Infojustice Journal

CHRISTMAS 2015.  MAN’S LAUGHTER or MAN SLAUGHTER? (Lord Thomas Babington Macauley, 1800 -1859)

CONTENTS

Back Ground to the Paris Massacre

Advance toward 1984 via the Spanish Civil War

Prequel to Paris Climate Conference

The Hurricane of Climate Change

Rural Bliss

 

 

Background to the November Paris Massacre

An article in Social Europe has placed the November Paris massacre into context, ‘The Paris Attack, the people are made to pay for disastrous Government policies’ (17 November, 2015), author Dr Mehmet Ugar, Professor of Economics, Greenwich University, London, is instructive. The paper was prompted by recent terrorist attacks in Paris, Ankara and Beirut.

The political elite of the Western World and despotic Middle East acolytes are closing ranks due to the growing realisation that Western Governments have been instrumental in the the rise of Islamic State due to the illegal support provided to the Taliban in Afghanistan during the Russian occupation and culminating in the current bombing in Syria of Islamic State forces. Bombing by Britain and Germany in WW2 did not achieve the objective of breaking the spirit of the people, it built up a strong will to survive and an intense hatred of the enemy.

Ordinary people are now asking questions on national security risk and its relation to Government support provided to various militias and partial warfare against the Islamic State. To call the Islamic State a ‘death cult’  trivialises the situation and does not promote understanding of the issues. This phenomenon  has erupted since Western powers intervention in Afghanistan, Iraq (Mission Accomplished!!), Libya and Syria. Despite religious rhetoric, Al Qaeda and Islamic State grew from the political misadventures forced on the Middle East by Western Governments. The terrorism and terrorist threats now endured by Western nations (as an unintended consequence) has been created from the death and destruction, the power vacuum and the supply of weapons facilitated by the West.

The images of Mission Accomplished’ (May 2003) – fantasy,  and a destroyed Russian war plane over Syria (November 2015) – reality, encapsulates Western policy in the Middle East.

 

Victory Speech, President Bush.
Mission Accomplished (fantasy) in Iraq. President Bush on USS Abraham Lincoln off California coast. May 2003. (AP photo, Scott Applewhite)

 

Destroyed Russian Warplane
Russian warplane shot down by Turkish fighters near Syrian-Turkish border (reality), November 2015. (BBC Europe)

The back ground to this current situation was the formation of a unipolar world following the collapse of the Soviet Union in 1991. This generated a push for market dominance by America and the embryonic European Union. The resulting policy was for a ‘democratisation’ of the Islamic Middle East to produce vast new markets for Western industry (economic colonialism). History has shown this policy to be an abject failure.  Likewise, when the Soviet Union imploded in 1991, Western industry moved in slavering over the vast new markets (the Russian people).This was also a disappointment except for the luxury car manufacturers and legal/financial advisors.  As an aside ,economists are advising the West that it must develop markets in Africa if Capitalism is to thrive. Here the West is already on the ‘back foot’ due to an aggressive investment policy by China. Looking back at the history of European Empires, the prime mover for expansion was commerce swiftly followed by military force.

Our politicians do not remind us it was the United States who armed the Taliban to enable them to fight  the Russians in Afghanistan in the 1990s. In the early 2000s, the Taliban then diverted American funds away from the failed state of Afghanistan. The invasion of Iraq in the early 2000s produced numerous Sunni fighters who formed Al Qaeda in Iraq and created the nucleus for the Islamic State militias in 2006. These groups recruited Sunnis who had lost their jobs and livelihoods under the occupation by American, Australian and other NATO – ISAF members (International Security Assistance Force). From this canvas, the West has created a dangerous Lemaean Hydra.

With the overthrow of Gaddafi in Libya, arms depots were looted and sent to Syria via Turkey, a NATO ally. It was the hope of the West this ordinance  would be used by militias to topple the Syrian President,  Assad. This policy was doomed since Syria is Russia’s only Middle Eastern ally, and Russia would obviously protect its Syrian naval base.

The reaction of Western Governments to the Paris massacre is not reassuring:

  • There is a security reflex action after the event which severely restricts the movement of people- the authorities must be seen to be doing something! As if on cue, at the Griffith lecture on the 2nd  December,  journalist Peter Gresta  stated Western Governments are becoming more repressive, are providing more ‘spin’ and journalists lives, are being made more difficult. Globally, millions in the Christian world are being ‘terrorised’ by tens of thousands from the Islamic world. Why?
  • Western Governments have failed to acknowledge any hand in the catastrophes in Libya, Syria and Iraq through their support of illegal armed militias. Western Governments outcry over the Taliban, Al Qaeda and Islamic State lack credibility since they are the source of the problem.
  • To heighten population anxiety, Western Governments  have not distinguished between political (in house ) terrorism and terrorist (Islamic State ) terrorism. There are examples of political terrorism in Turkey and the war against the Kurds who are battling Islamic State. The West has not challenged Turkey on this as it is regarded as a NATO partner with geopolitical and business advantages.

It is extraordinary that the G20 Summit has just been held in Turkey, despite the fact that the Government did not consider the Islamic State to be a terrorist organisation until recently. Add to this the media restrictions and the state of emergency with the Kurds. Quite obviously, Turkey is important to NATO.  Again, extraordinarily, it has recently come to light there is an illegal oil trade between Turkey and Islamic State (Dr Alexy Moraviev, Curtain University). Credence has been given to this assertion by an ABC News Flash which statedTurkey had shot down the Russian warplane as it was disrupting the oil trade with Islamic State. In early December, CNN also announced the Russian warplane had been shot down to protect the oil trade with Islamic State. On RN Breakfast (3 December), a Terrorist Finance expert (DML Associates, Virginia) indicated Islamic State has an approximate income of $1.5 million  a day from oil fields under its control in Syria and Iraq. Regularly, oil tankers cross the border into Turkey.  The Assad Government also purchases oil from Islamic State.

Western policy has produced a twin-pronged terrorist recruitment problem:

  • The  numbers of the original disaffected Sunnis with military background are being reinforced by Iraqis and Syrians whose families have been destroyed by Western bombing, thereby generating a hatred for Western culture. From this will flow a desire to revenge their own dead and maimed families.
  • Young Sunni men and women in Europe, America and Australia  are open to radicalisation because Governments have not pursued active assimilation. As immigrants, these people feel marginalised and consider they do not have a future.

The announcement that America is to permit Special Forces to operate in Syria has the makings of a macabre Gilbert and Sullivan operetta:

  • Russian troops are in Syria protecting President Assad, a naval base and a military airfield. The troops are bombing Syrian militias who wish to depose Assad and have an interest in neutralising Islamic State just as Russia has concerns for discontent in its own Islamic underbelly.
  • Simultaneously, American forces will be in Syria to destroy the Islamic State and support freedom fighters whose objective is to remove Assad.
  • Both Powers (which include Royal Australian Air Force) are bombing military targets which will involve ‘collateral’ damage.
  • Also under this scenario Russians and Americans are on either side of a firing line.

In conclusion, ordinary citizens will continue to suffer from disastrous Western policies: there will be Government spin and less democratic freedom while  authoritarian regimes will be supported for commercial or strategic reasons. Take home message – always look behind the news. The general public is provided with an ‘approved’ version, not necessarily the unvarnished truth. Peter Gresta’s advice was to be skeptical  of all public information.

 

Advance toward 1984 via the 1936 Spanish Civil War

It is possible the ghost of the Spanish Civil War (1936-1939) now hovers over Syria. The antagonists in Spain were the ‘Right’ army (military and landowners) and the ‘Left’ army (battalions of workers). Fascist Germany and Italy supported the Right and the Soviet Union supported the Left. Historical comments show both Germany and Russia used the war to test and experiment with new techniques of mechanised warfare.

Enter the Syrian crisis onto the world stage: on the Left is Russia supporting a despotic Assad while on the Right are members of the   North Atlantic Treaty Organisation (NATO). Both are engaging Islamic State but Russia is also fighting militias who wish to overthrow Assad while NATO members support and arm the militias –  a dark Gilbert and Sullivan travesty.  Both Russia and NATO forces  are using these hostilities to test precision bombing and other armaments. The disaster that is now Syria has been a ‘Godsend’ to the industrial-military complex which relishes increased sales and the opportunity to test the effectiveness of new weapons on humans.

Enter 1984 in the guise of 2016. George Orwell was a visionary. The current geopolitical situation appears as a progression toward ‘1984’ which is a fiction but current global trends are a concern. Orwell conceived eternal conflict between three global power blocks. There was no victor only shifting alliances to ensure no one power  block became dominant. The waring entities were:

  • Oceania comprising North America, South America, Britain, Southern Africa and Australia.
  • Eurasia comprising Russia and Western Europe.
  • Eastasia comprising China and East Asia.
  • Disputed comprising Central  Africa, India and South East Asia.

 

 

 

1984 World
The World of 1984 as envisaged by Orwell (Map 109, We Come From the Future)

The map is a fiction but it is inescapable that the world is verging towards three power blocks, China, Russia and North America. The current global situation appears to be that:

  • China is a rising military power which is increasing its grip over East Asia. Its foreign investment policy in Africa is vigorous.
  • Russia is flexing naval muscles in the Pacific and is causing NATO angst over Ukraine and Monte Negro and is sending shivers into the Baltic States.
  • The United States is on a shaky ‘pivot to Asia’, and appears to have no counter to China’s policy in the South China Sea. There is a quiet but serious struggle for influence with Russia over Syria.
  • It is important Australia clings tightly to ANZUS; it is not impossible that this continent might also become an Orwellian ‘Disputed Territory’ only valued for its mineral wealth. Is it possible Eastasia has already netted a 99-year lease on the port of Darwin?

The prognosis for 2016 is that current geopolitical trends will consolidate – some in the South China Sea are already set in concrete.

 

Prequel to the Paris Climate Conference

The world has moved from the benign Holocene climate to the benighted Anthropocene (Human Age) that brings fire, flood, hurricane, drought and species extinction. The bottom line of the PCC appears to be that, on present carbon dioxide equivalent pollution, global temperature in fifty years will rise to 2.7*C above baseline – catastrophe. To limit temperature to 2*C will still be a disaster while limiting to 1.5*C will be a calamity that might be managed. The entrails of the Conference have been spread across the planet, no further comment is warranted here.

Apparently, not given prominence was the nexus between global warming and ecological disaster, geopolitical hegemony and Capitalism that drives global commerce and global warming. Comment published by The Guardian (3 September) is relevant:

  • current Capitalism is an impediment to solving climate change,
  • successful Capitalism depends on perpetual economic growth, -this is no longer possible,
  • there is an inherent contradiction between Capitalism and environmental sustainability,
  • Capitalism requires inexhaustible natural resources and increasing production, markets, consumption and waste disposal,
  • neoliberal economic policy has failed; Governments must become more prescriptive and enact restrictive laws,
  • ecological rehabilitation, recycling and greenhouse gas reduction must proceed in lockstep.

 

Cause of Global warming
Capitalism – the cause of Global Warming.
(thewalrus.ca)

 

The cause of Global Warming People
The driver of Global Warming – Consumer Lifestyle.
(The Guardian, Sarah Lee)

A recent publication by E Colbert (2014), ‘Can Climate Change cure Capitalism? This makes for sombre reading:

  • global corporations have become to big too fail,
  • corporations distain civil society- commercial drivers are growth and profit, not the condition of the host country,
  • global corporations operate outside the law and are degrading natural capital,
  • global corporations are generating resentment around the world.

Enter now competitive hegemony and its corrosive addition to global warming. The Monthly Review (2009) published the paper by Dr J Forster, Sociology Department, Oregon University,  “A Failed System – The World Crisis of Capitalism and Globalisation and its effect on China”. In this sombre review, the spectre of  ‘1984’ (George Orwell) is emerging in a destabilised global community. There are three consuming problems:

  • A global financial crisis teetering towards stagflation or deflation. Society living under Capitalism is suffering income inequality and an inability to maintain employment equilibrium. The Achilles’ Heel of Capitalistic production is that it depends on the consuming power of society. The destabilisation of the MiddleEast, the implosion of the Soviet Union and slow African development has not produced the anticipated markets required necessary for a Capitalistic hegemonic power block to survive.
  • An ecological collapse may be a greater threat than a financial collapse. With global temperature around 0.9*C above pre-industrial levels, ecological disasters are sweeping the planet, namely deforestation, overgrazing, desertification, ocean acidification, water shortage, species extinction, industrial and human pollution, polar ice loss and cancerous urban growth.
  • There is increasing imperial global instability originating in a struggle for hegemony and natural resources. Perhaps ‘winning hearts and minds’ has now been replaced by ‘bomb the bastards’ or ‘lock them up’. The cult of Capitalism, by its nature, is ‘imperial’. The ‘centre’ controls the process while the ‘periphery’ provides natural resources and the markets. Originally, both China and Russia were dependant satellites of Western Capitalism; now this is changing as new power blocks are rising to challenge American hegemony.

Capitalism and its impact on the Global Community. The concentration of power (economic, financial, communication, industrial, military) is intrinsic to capitalism as a global system since the world economy was based on wealth accumulation at the ‘centre’.

The Capitalistic world is most stable when there is a single hegemonic power, i.e. Britain in 19th century and America in 20th century. The rise of China is precipitating hegemonic instability and the  the financial system is verging toward crisis. The rise of China and Russia constitute a tectonic geopolitical shift in the Capitalistic system and this can precipitate ecological disaster as military activity ramps up. With decline in power of the United States relative to China, the United States has sought to gain resources and political dominance by establishing military bases round the globe. America regards China as its ultimate major competitor and views with concern its active roll in African resource development. It also has concern for a China-Iran alliance –  to counter this America has a pact with India.  Although the United States and China have strong trade ties the rise of China and the relative decline of United States influence is generating a tense relationship. Current flash points are the  military activity in the South China Sea and the ‘string of pearls’ maritime bases (including Darwin) terminating in the oil rich Persian Gulf.

For Capitalism to flourish wealth must be maintained at the ‘centre’ which was ‘The City’ (London) and ‘Wall Street (New York). The financial centre of gravity is moving eastward across Eurasia towards China.  America now worries about the strength of its dollar. To remain relevant as an economic power, America must maintain its trade settlement and reserve currency status. Currently China is seeking to globalise the renminbi to trade financing capacity and become a currency of last resort. Ultimate international acceptance would weaken United States financial influence. Currently China holds over $600 billion of US Treasury debt: if America devalued, China would regard this as a hostile act of expropriation. The other horn of this dilemma is if China moves away from the dollar this could destabilise the United States and the world economic order.

In the 21st century, classic geopolitical Capitalist theory requires the control of the rim lands of Eurasia, this is in line with American ‘Pivot to Asia’ to ensure economic and military dominance.

Capitalism (production and consumption) is the principal cause of global warning. It is regarded as a failed system by economic experts for several reasons:

  • There  is a threat of global deflation worse than in the 1930s,
  • Ecological disasters due to industrial/economic activity threaten the planet,
  • Neoliberal Capitalism is now discredited,
  • America has attempted to regain hegemony by a ‘War on Terror’
  • At the time of the Global Financial Crisis, the banking industry was bailed out by $4400 billion while the climate change program only netted $13 billion.

Martin Wolf, Chief Economist, (Financial Times Oct. 2015) is concerned the global economic system could break down as in the 1930s. This situation is partly due to the policy of mercantilist countries (China, Germany, Japan) running a large surplus, with insufficient internal demand –  there was a policy of dumping on distressed markets.

Capitalism has been in a long term crisis which has resulted in depression economics as a general global situation. Among ‘democratic’ populations there is now a perception that industrial Capitalism and consumerism are responsible for global warming and ecological disasters. Concurrent with this realisation is the rise of three competing power blocks, America (Oceania), Russia (Eurasia) and China (Eastasia). Collegial cooperation, to ensure global warming objectives, will be more difficult to maintain due to their competing quest for hegemony and resources.

Final Comment. The international community has to surmount several issues if global warming reduction is to become reality:

  • vastly reduce greenhouse gas emissions
  • sequester carbon in sinks, soils, forests, geological formations
  • commence massive recycle programs
  •  reduce product choice in consumerism
  • create a new form of Capitalism based on less consumerism
  • encourage ecologically friendly industries with commensurate returns on investment

Scientific advice is that it will take several decades for current greenhouse gases to work through the system: climatic conditions will continue to deteriorate before improving. Complicating progress will be the three global powers battling for supremacy.

 

The Hurricane of Climate Change

Behind the glitz, carols and incantations of Christmas it has been despair and devastation for millions. The disasters below all encompass the ‘Festive Season’ – on their own an unfortunate occurrence, globally a portent as clear as the ‘Star over Bethlehem’. According to NOAA, globally 2015 was the hottest year to date with the Pacific and Indian Oceans being the warmest ever. Australia’s BOM reports the warmest year for Sydney. The cartoon again illustrates that the lifestyle of Anthropocene mankind is coming back to bite it.

 

Cause of Global warming
Earth responds to its Rape and Pillage
(thewalrus.ca)

A partial picture across the ‘Festive Season’:

  • Australia: flooding south of Darwin, bush fire along the Great Ocean Road, the Kurnell tornado, the South Australian heatwave.
  • Argentina-Paraquay-Brazil-Uruquay: worst floods in fifty years, over 150,000 flee to safety.
  • North America: extensive bush fires in California, floods in Missouri, tornados and blizzards inTexas and New Mexico.
  • England: severe flooding in north and central regions, over 2,000 homes affected.
  • Philippines: typhoon Melor affects over 700,000 people.
  • Ethiopia: drought and famine, over 350,000 children severely undernourished.
  • India: worst floods for over 100 years in Tamil Nadu.
  • The Vatican: ongoing corruption and sleaze trial! (ABC RN Breakfast, 30 December)

 

Rural Bliss

Despite dire warnings of a dry El Nińo weather event, November/December rainfall was seven inches, dams are full, creeks are flowing. For an El Nińo the Southern Oscillation Index is inconsistent –  falling from minus 18 (av.) Sept/Oct to minus 6 (av.) Nov/Dec. Moisture laden winds from the Indian Ocean and East Coast lows are providing unexpected rain. With the Indian and Pacific Oceans’ sea surface temperatures abnormally high the SOI has been driven lower but the El Nińo is still causing havoc in South America and southern Africa.

 

 

 

 

 

Domestic Violence, Radicalisation, Multiculturalism, Elephants in the Room. November 2015.

Elephants in the Room
Elephants in the Room
(ngm.nationalgeographic.com
Brent Sturton)

Elephants in the Room

The Paris Massacre – Guerilla Warfare

Terrorism v Tourism

Harbingers of Climate Change or Coincidence

Pyrrhic Victory

 

 

THE ELEPHANTS IN THE ROOM

Preamble

  • During recent months, Australians have been exposed to and shaken by activities that are widely reported but the fundamental  causes are clearly not discussed and thus remain ‘elephants in the room’. In most situations the common denominator is innate human  behaviour. The activities  with problems for government are domestic (male) violence (5.8%), radicalism (0.03%) and multiculturalism (1.9%) of the population. The following will hopefully broaden the discussion. (Reference – % of population)
  • 5.8% – Women and Safety Survey, ABS, 2005
  • 0.03% – Professor Riaz, University of South Australia
  • 1.9% – Pew Research Institute, Washington

 

Domestic (Male) Violence

Despite its prevalence there appears to have been little discussion on the nature of domestic violence perpetrators. Comment below only applies to Australians of Caucasian origin (The Second People). This is a society where moral and probity values are weakening and where partnering or cohabitation is replacing marriage. The National Crime Vctimisation Survey (2005) reported that between 1979 and 1987, 65%  of crimes on women were committed by boyfriends or ex-husbands where as only 9% were committed by husbands. It was also determined that aggression was twice as violent among cohabiters as it was among married couples. A fundamental problem is that male cohabiters are prone to seek variation while cohabiting females regard the activity as a prelude to marriage. (Domestic violence in marriage versus cohabitational relationships, Citizen Link, June 2010). A factor apparently not considered is the relationship between male violence and the propensity to watch pornography and X-rated violent movies. This must be clarified.

A News Flash on ABC RN mentioned the increasing prevalence  of binge drinking among white middle-class young women. It is a recognised fact that there are social problems among young single mothers in Australia who end up cohabiting with several male partners – domestic violence can then occur. A recent report on child abuse, ‘Australian Statistics on Domestic Violence’, did not differentiate between married and informal relationships but it is an inescapable fact that news bulletins include stories of male cohabiters harming children. (Taking sex differences seriously, Encounter Books, Roads, 2004.)

Family Violence
Family Violence and Destruction of Childhood (123RF)

The human is an omnivorous mammal only ‘recently’ controlled by social custom. In nature, it is a fact that male primates and carnivorous animals will perpetrate lethal violence on off-spring not their own. Have cohabiting male humans totally lost their primal urges? Domestic violence  could be reduced if there was a return to more responsible living. This is not possible in our permissive society. This is  the elephant in the room.

 

Radicalisation

A month after a Police employee was shot dead by a Muslim youth in Western Sydney, the NSW Government has announced a deradicalisation program directed primarily at young Muslims ‘at risk’. The $47 million package is designed to identify and fight violent extremism. About $15 million will fund teams of experts who  will, with cooperation of school staff, seek to identify and ‘detoxify’ young radicals. The Prime Minister has essentially defined the tenor of the program by a public statement that called for rooting out of evil, punishing wrong doers and applying forceful law. Persons of interest will be as young as fourteen.

State Power
Premier Baird and NSW Police Chief Skipione  announcing the program.         (Photo Nic Walker.)

The policy seeks to determine the immediate cause of radicalisation but there appears to be little effort in seeking out the deeper issues that make the young mind susceptible in the first place. This is an elephant the Government has difficulty with. The deeper issues were spelt out in my October blog where experts indicated that Muslim youth needs to anticipate a life of hope and fulfilment. Currently there is a feeling of exclusion and poor job prospects – these young people do not feel part of Australian society. The current approach of requiring teachers to report signs of ‘radicalism’ is likely to be counter productive and will tend to encourage community resentment according to a Federal Government counter terrorism expert, Andrew Zammit, University of Melbourne.

Muslim Demonstration.
Muslim Demonstrators and Police, Hyde Park. (The Australian, October 2015, Simon Bullard.)

Throughout history no ruling elite has been able to destroy the human spirit when ideology is combined with a religious faith. Conviction is not destroyed by punishment or incarceration,  it is merely driven underground. How many times has the phrase  winning ‘hearts and minds’ been uttered in the last century. Examples of survival against persecution where the human spirit prevailed against force:

  • Rome, persecution of Christians
  • China, persecution of Falon Gong
  • Turkey, genocidal activities against the Kurds
  • Europe, Catholic and Protestant warfare

The ‘elephant in the room’ is a combination of the Australian Government being unable to sustain a multicultural policy that engenders a sense of belonging and fulfilment among young people, and unable to combat a vocal rump of Australians who are openly hostile to Muslims.

 

Multiculturism

Australia has not yet buried the backlog of prejudice from its Colonial and early Federation past: the multicultural policy is starting to show rents and tears in the fabric as intolerant factions organise anti-Muslim demonstrations. It should not be forgotten that this continent was rediscovered by Afghan Muslim cameleers as well as explorers and graziers.

Australia is now facing a cultural shift as Muslims from the Middle East make their home in Australia – they are here to stay. To place  the  second great Islamic migration in perspective, the Pew Research Institute has compiled  information on the Muslim component of European countries.

CountryYearPercent YearPercent (est.)
Britain20112.520308.2
France201111.0203010.0
Germany20105.020307.1
Denmark20104.120305.6
Australia20111.920302.8

According  to a Morgan poll, requested by the Q Society (an anti Islamist group) and published in Front Page, New York (Nov. 2013), which indicates Australians have unfavourable views on Muslims, the summarised results are:

  • 70% are not better off because of Islam
  • 53% want full-face covering banned
  • 85% think Islam and terrorism are related
  • 96% want Christmas, Easter and ANZAC to remain unchanged

By comparison, the results of a Social Cohesion Survey (Oct. 2015) by the Scanlon Foundation and Monash University also record a negative attitude to Muslims. Results show 5% of respondents have a negative attitude to Christian and Buddhist faiths but 25% show negative attitude towards the Muslim faith. Around 85% considered multiculturalism good for Australia but, on the basis of the survey, Muslims would not have been included.

Among Caucasian Australians, there is a growing concern the Muslim population is increasing too rapidly. The Pew Research Institute has estimated that between 2010 and 2030 the Muslim population will increase by 80% but the non Muslim (mainly Caucasian Australians) will only increase by 18%, i.e. Muslim numbers will increase from 399,000 (1.9%) to 800,000  (2.8%). Growth is expected to slow after 2030. By 2100 the Institute estimates the Muslim population will be 6.5% .

The problem for Australia is that immigrants from the Middle East are totally different from Greeks and Italians (1950s) and the Vietnamese (1960s). The former were Christians and the latter Buddhists; both rapidly merged into the ‘bull dust’. The Middle Eastern immigrants, mainly from Iraq, Iran, Syria and Turkey, are very publicly devout Muslims, it is this obvious outward manifestation that Australians find disconcerting. Doubly disconcerting is the Pew Institute estimate that by 2050 the Australian population will be 31% professed Christian and 30% devout Muslim. This illustrates drift by Australians away from  their Christian roots.

Chullora Mosque
Chullora Mosque
Knowledge is Light, Worship is Worship
Funded by King Fahd, Saudi Arabia

Comments by Professor Michael Humphrey, Sydney University, and Professor Riaz Hassan, University of South Australia, confirm the plight of Muslims in Australia. Muslims do suffer from their non-white status and social marginalisation. The practice of fasting, veiling and praying  are a challenge to conformity in the public space. Muslim wages tend to be lower than the national average, only 5%  earn over $1,000  a week compared with the national average of 11%.  Muslims are over represented in NSW jails being 9% of the prisoners  but less than 3% of the population. Professor Hassan makes the point that of approximately 500,000 Muslims only 150 have been radicalised (less than 0.03%). Australia apparently has more anti-terrorism laws than any other country.

Comment

As Islamic influence increases in Australia, there will be push-back by Caucasian Australians (The Second People!). The situation in Europe provides a sense of the future events in Australia. Multiculturism, as conceived in Australia, never envisaged a competing faith in a Christian country. Competing faiths seldom exist in harmony within the same national boundary. This is the ‘elephant in the room’ for the Government to manage.

 

THE PARIS MASSACRE – GUERRILLA WARFARE

Islamic State Guerrillas
Islamic State Guerrillas
(news.yahoo.com}

Why France? France has the highest proportion (11%) of Muslims in Europe. It is well known that many Muslims born after 9/11 have not been assimilated into the French community; they feel rejected and marginalised – a fertile breeding ground for subversion.

The Islamic State prosecutes guerrilla war against the West as well as Arab communities. Guerrilla warfare has several consequences:

  • it ties down many more defenders than attackers
  • it is  more costly for the defenders than the attackers
  • the guerrillas will frequently find support and safety within the community under attack
  • guerrillas can obtain their objective, if not immediately, then as time goes by
  • it is not easy to stamp out guerrilla activity by harsh retaliation since ideological resolve is bolstered by unquenchable faith.

Examples of guerrilla warfare are:

  • Malaya – The Emergency – unusually this Chinese fighting force was virtually destroyed
  • Afghanistan – The Taliban – this force has revived after American withdrawal
  • Vietnam – Communist Insurgency – guerrillas prevailed and Americans were forced to withdraw
  • Gaza – Hezbollah – long running battles with Israel
  • South Africa – African National Congress – ultimately gained political power
  • Ireland – Home Rule- Irish won independence from Britain

None of the above closely reflect war with the Islamic State in terms of political objective. In this situation there are two guerrilla variants: first, the hardline fighters in Syria and Iraq and those who have returned; second, the young Muslims – the ‘fertile ground’ – comprising those with empty and marginalised lives in France, Australia, elsewhere in Europe and America. A young French woman, after the massacre on 14 November, wept into the microphone “What has happened to us?” What has happened is the unthinking neglect by the French Government resulting in the lost ‘hearts and minds’ of a large section of the Muslim population. Australia is in the same predicament. In a comment on ABC RN (16 Nov.) Senator Marise Payne, Minister of Defence, is the first politician who (to my knowledge) has used the term ‘hearts and minds’. Until France can provide an inclusive sense of domicile for young Muslims, a fertile ground for insurrection will grow and strengthen. Raising the drawbridge and lowering the portcullis will achieve little since the home grown enemy is within. The same applies to Australia.

Whether the Islamic State is destroyed is up to the military and the politicians but, as in the Malayan Emergency, it would need to be total. Currently Western powers are in Austria discussing a negotiated political settlement, as with many negotiated settlements following guerrilla warfare all parties sit at the ‘table’. Would Islamic State have a seat at the ‘table’?

Following the Paris bombings on the 13th November the Australian Prime Minister addressed Parliament on the 24th November. There appeared to be an ‘elephant in the room’ omission.  For Australia the future ‘enemy within’ (leaving out those adult fighters who wish to return) will be the disaffected and  marginalised children of appreciative Muslim immigrants. The speech alluded to “young minds need assistance” but the problem may be the Australian people  might lack the enthusiasm to fully win over the ‘hearts and minds’ of young Muslims  and provide them with a rich and rewarding future. Young minds are susceptible to radicalisation because what is on offer is more attractive than their long term future in the suburbs  of Australian cities.

 

TERRORISM V TOURISM

Sharmel el-Sheikh
Sharm el-Sheikh holiday hotels, Red Sea. (shutterstosck.com)

Following the downing of a Russian airliner, an ABC RN comment caught my ear. Russia was sending 44 aircraft to pick up  about 11,000  stranded holiday makers and Britain was sending 14. This was a major airlift. The holiday capacity of Sharm el-Sheikh on the Red Sea is boggling – there are 62,000 rooms (minimum 124,000 guests) – and is responsible for 33% of Egyptian tourist trade. Small  wonder there is such reluctance to attribute the disaster to terrorism.

 

HARBINGERS of CLIMATE CHANGE or COINCIDENCE

A juxtaposition of natural events could be considered coincidence or there could be a more sinister interpretation. How relevant is the information below to the imminent Paris Conference on Global Warming? The apparently unrelated events are:

  • Another case of meningitis encephalitis caused by the amoeba Naegleria fowleri has been identified. This parasite thrives in fresh water. North-west Queensland graziers have been instructed to chlorinate all water from lakes, dams, creeks and bores prior to domestic consumption.
Naegleria fowleri
Naegleria fowleri, a waterborne amoeba parasite.

 

Contaminated bore water. (Marc Smith)
Water probably contaminated by Naegleria fowleri, north-west Queensland.(Marc Smith)
  • The BOM has announced the Sydney minimum winter temperatures are the highest ever recorded.
  • South-eastern Australia for the past six months has been under the influence of an El Niño. The sea surface temperature in the central Pacific, at 2.4 *C above the average, is the highest ever recorded. The Southern Oscillation Index, a measure of the intensity of the El Niño at minus 21.3 for October, is among some of the lowest recorded. (Qld. Gov. Dept. of Science.)
  • For a large area of south-eastern Australia which should be experiencing hot dry El Niño conditions, the region is having unusual widespread heavy rain from Southern Ocean ‘lows’ that are bringing rain from the south east, that is, the Tasman Sea. This is unexpected.

Individually these events are unusual but combined, over a common time frame, there could be a sinister significance.

 

PYRRHIC VICTORY

It is incredible that a month after the announcement on the 99-year lease of Port Darwin to Chinese interests the Labor Party has, at last,  raised the matter of due diligence with the Government. This is an amazing situation. The Secretary of Defence, Denis Richardson, has mentioned Government is maintaining a watching brief but the silence on informed comment is deafening.

Darwin Port is well placed to service the planned multi-million dollar oil and gas activity in the Arafura and Timor Seas. Prior to the Port acquisition the Landridge Group acquired a 31% controlling interest in  Westside Corporation for $178 million (Aust. Bus. Review, July 2014), coal seam LNG will be exported to China through Gladstone. Is Darwin about to become and oil and gas hub controlled by foreign investors?

 

 

 

 

Xenophobic Australia & Islam in Australia. OCTOBER 2015

 

The Author
The Author, Winter Antarctic Vortex, Circular Quay, Sydney.,2015

The Clash of Cultures

Xenophobic Australia

The Prime Minister is Sacked.  Long Live the Prime Minister

A Pyrrhic Victory?

Rural Bliss

 

The Clash of Cultures

The assassination of a NSW Police employee by a 15 year old Muslim youth has promoted verbal heat and smoke but not much light. Except for the Prime Minister, politicians have indulged in platitudes while experts have contributed to an intellectual discussion on the emerging problem,  the ‘radicalisation’ of Australian youth. This contribution will summarise Government knee jerk reaction, reasoned comment by specialists and a wrap-up discussion.

Initial Government reaction is to consider more restrictive anti-terrorist legislation (control orders and 28 day detention) and an exhortation to schools, mothers and clerics to do more to identify incipient ‘radicalism’.

Not in my Name
Young Muslims against Jihad (telegraph.com.uk)

Informed comment has been made by several including:

  • Fergal Davis, Director, Tobin Centre of Public Law, UNSW
  • Charlie Winter, Senior Researcher, Quilliam Foundation, UK
  • Brett Walker, SC. Independent National Security Legislation Monitor, Canberra
  • Ahmed Fahour, CEO, Australia Post

Fergal Davis  (The World today, 13 Oct 2015) considers it is a mistake for Government to enact more laws. Current laws , if used intelligently, are adequate. The UK experience is that ‘control orders’ are not a very useful investigatory tool. The problem is that the Government must be seen to be doing ‘something’. In the UK ‘control orders’ had a chilling effect on investigations and inhibited ready cooperation with the local community. The UK is now rolling back some of its anti-terror laws. In the UK, the 28 day detention is no longer used and detention without charge is limited to 14 days. In Australia,  an increase in anti-terror legislation will require more resources and this will be difficult. Davis thought Government policy should not be tougher – just a lot smarter. He is concerned the extension of ‘control orders’ will antagonise the community and make it less cooperative.

Charlie Winter is an expert on Transnational Jihadism and is advisor to the UK Parliament and the Terrorism Research and Analysis Consortium, Washington. His major concern is that Muslim youth must be given a life of hope and fulfilment; currently there is a sense of exclusion and poor job prospects.

Brett Walker SC considered that tough new laws will be counter productive and that extending the reach of ‘control orders’ will produce resentment in the local community.

Ahmed Fahour  The Australian Government made Fahour Special Envoy  to the Organisation of Islamic Cooperation whose objective is to safeguard  the interest of Muslims by encouraging peace and harmony. His concern is that Muslim youth require improved opportunity and a greater sense of belonging to Australia.

By contrast, Prime Minister Turnbull has come out with a strong exhortation to root out evil, punish wrong doers and respond to threats that challenge authority with forceful law. A polarised situation.

Comment  Australian authorities are calling on schools, mothers and clerics to be the front line to identify ‘radicalising’ behaviour. Behind this facade the Government has a monumental problem it is reluctant to expose. Adult immigrants, arriving in Australia from the Arab world, appreciate the opportunity to start a new life and they work to improve their situation. Their young children, however, grow up under an Islamic tradition and gradually become aware of their marginalised condition and an inability to participate in Australia’s nominally Christian democracy. Academics and experts have alluded to this problem, the adjective ‘hopeless’ being expressed. For Australia to confront this problem, it will require a policy of ‘inclusiveness’ into a Western society. Ed Husic, Western Sydney Federal MP (ABC RN, 15 Oct 2015) made the prescient comment that fertile ground must be available for ‘radicalisation’ to take root. This is the ‘elephant herd’ in our community but the Government is refusing to openly discuss it.

The Jerusalem Post (13 Oct 2015) has reported a spate of attacks on Jews by Palestinians. Among the killers were two boys of 13 and 17  years. They had nothing to lose by taking up weapons.  Comment was made on the ‘hopeless’ situation  that many Palestinians believe they are in. For Australia, are young citizens being ‘radicalised’ because they have a perception that their prospects within Australian society are hopeless – an understanding that seeps into them from a young age? Amidst all the political rhetoric there appears to be no serious endeavour to understand why young people are being ‘radicalised’.

A factor, not given publicity but possibly relevant  in the ‘radicalisation’ mix, is that the vast majority of Muslims in Australia are Sunni (Islam in Australia, 2015). The civil war in Syria pits Assad Alawites (Shia) against the Sunni majority. The Sunni ISIS phenomena, in part, owes its origin to the chaos in Syria and the power vacuum in Iraq. It is not lost on better-informed Australian Sunni citizens that Australia has done nothing to reduce the genocide by Assad. With Russian entry  into this theatre an opportunity has been lost.

The Sequel  Within two weeks of the assassination of the police employee, the Australian Prime Minister arranged a Canberra conference on ‘Radicalisation’; delegates appeared to be only police and bureaucrats. A communiqué afterwards appeared to deal only with identification and suppression of radicalism. It did not appear to consider “fertile ground” and the opinions expressed by Davis, Winter, Walker, Fahour, Husic and others. It may be that Australia has only the choice of two options:

  1. A legal forceful approach
  2. Address issues relating to ‘fertile ground’

Obviously a combination of these two is the only acceptable option. Banning Islam would destroy the reputation of a multi-cultural Australia.

Footnote  According to the 2011 Census there are 476,291 Muslims in Australia (2.2% of the population and almost 50% are under 24 years old. ( House of Representatives, Social Policy, March 2007). Kevin Andrews, former Minister of Immigration and Defence, in an updated statement (SBS, 24 Feb 2014) warned that Australia should have a serious discussion on the growth of the Muslim population.

 

Xenophobic Australia

In recent months Australia has witnessed demonstrations by fringe collectives against Muslim immigrants. Heavy-handed Government action might drive them underground but, as in Europe, they will not be silenced. These groups also require ‘deradicalisation’.
Some details below:

  • Australian Defence League  This group is based on the English Defence League. There are alleged to be thousands of Facebook users. The League obtains spiritual nourishment from the Q Society associated with the radical Dutch politician, Geert Wilders. The leader of the ADL is a believed to be Mr R Cerminara (ABC News 24/12/2014). The membership appears to be undistinguished. It has been revealed that RAN crew employed on Operation Sovereign  are members and supporters of the Australian Defence League. (newmatilda.com 29/1/2014)
  • Reclaim Australia  This is alleged to be an inclusive collective of nationalities and faiths making a stand against racial extremism. This body seeks patriotic Australians who wish to protect the Australian ‘way of life’. The objective is to is to reclaim lost rights and resist a declining Christian dominance diluted by multiculturalism. The leader is Mr D Nilliah. (SBS, 8/10/2015) The membership is sometimes audible but undistinguished.
  • United Patriotic Front   A nation wide movement opposing Left Wing ideology and the spread of Islam. It is an offshoot from Reclaim Australia. Apparently there are several leaders but at the apex is a Mr S Burgess. Members may be vocal but undistinguished.
Fringe Party Supporter
Right Wing Party Member (herald sun.com)
  • The Australian Liberal Alliance  Mr Geert Wilders, a Dutch MP and leader of the ‘Party for Freedom’ in Holland with 12% of the democratic vote, has assisted in the formation of the Australian Liberty Alliance Party. The objective of both parties is to stop the spread of Islam in Holland and Australia. Three candidates, Bernard Gaynor, Kirralee Smith, Debbie Robinson, (all educated) will stand for Senate positions at the next election. This party will differ from its Australian counterparts in that membership will tend to be more intellectually distinguished.
ALA, Senate candidates
Australian Liberal Alliance Senate candidates. (ABC, Glynn Jones)

Comment  With the exception of the Australian Liberal Alliance, membership of these organisations appears to be more xenophobic than intellectual, however, they are able to interest and co-opt rowdy supporters. Culminating activity this month was in Bendigo objecting to mosque construction. The Government must recognise this situation is another deradicalisation and education problem. My July Blog alluded to this problem of the radicalising of electorates. Australia is never far behind Western Europe.

 

The Prime Minister is sacked. Long live the Prime Minister

Soon after the demise of Prime Minister Abbott, the Director of the Australian Liberal Party, Brian Loughnane, opined that Mr Abbott could have won the next election. Loughnane has missed the point. Abbott was sacked because attributes necessary to run a positive export-oriented economy were lacking. The Directors ( Members of Parliament) considered a competent CEO, not a ‘talented’ individual, was required. This was a hardheaded decision based on non-performance and a lack of confidence in leadership qualities. Until politicians make appointments based on competence, not talent, Australia will languish as a viable democracy. 

 

A Pyrrhic Victory?

Th 99 year lease for the port of Darwin granted to Landbridge, owned by Chinese billionaire Ye Cheng, is riveting news. Consideration is $506 million for an 80% interest. The agreement requires $200 million  on capital works over the next 25 years with $35 million to be expended by 2020. The plan is to create a massive entrepôt for Northern Australia. Defence officials in Canberra are discussing security implications and the Executive Director of the Australian Strategic Policy Institute is reported to be wary. (World Today, 15 Oct 2015) To ensure access to the port, the Australian Defence Department has a fifteen year agreement in place. Both American and Australian naval sources indicate the port is not suitable for modern requirements. The Government has therefore approved an $18 million construction budget for a military barge facility for giant amphibious ships near Darwin.

Strangely, the NT Chief Minister (NT News, 16 October) has refused to say if lease arrangements were discussed with the US marines based in Darwin. The port facilities are vitally important to their current activities. No comment from Washington has been sighted. Each year the US navy carries out multinational military exercises and hosts foreign warships in the port. One of the corner stones of the US ‘pivot to Asia’ and cooperation with Australia is based out of Darwin. Back tracking, the Ghan railway to Darwin was completed by Haliburton, a major contracting group for the US military. It is part of a military strategy that would not have considered a Chinese presence. Dr Bateman, University of Wollongong, has made comment that China has acquired an interest in ports from the South China Sea, across the Indian Ocean to the Gulf States for commercial reasons. Historically, commercial shipping is always followed by naval protection. Darwin will now be pendant to the Chinese ‘string of pearls’.

Darwin Port
Darwin Wharves (NT Times)

Some hanging questions:

  • Will Chinese military personnel or equipment be based at the port?
  • What protocols will be required of Australian and American warships to enter a privately owned harbour?
  • Under international maritime law, does any vessel have the right to enter a privately owned port within designated sea lanes?
  • Considering the implication of ANZUS and potential tension with China, what are scenario alternatives?
  • Fifty years hence, will this arrangement be considered the precursor to an antipodean Hong Kong?
USS Larsen
USS Larsen on patrol (Reuters. US Navy)

In late October a United States navy guided missile destroyer, USS Larsen,  cruised within 12 miles of the Spratley Islands in the South China Sea. This action has deliberately escalated tension between China and America.  Are there implications for the port of Darwin? (www.theblaze.com and ABC News)

 

Rural Bliss

Drought
Drought

Over 80% of Queensland remains in an extended drought. El Niño is now increasing its grip on south eastern Australia.
May animal suffering be rare and short.

–––ooo–––

 

 

 

SEPTEMBER 2015 CURRENT AFFAIRS FLASHPOINTS

Arriving in European Waters
Asylum  Seekers arriving in European Waters (Indian Express)

Asylum seekers are persons made in God’s image and are worthy of respect and dignity. (Genesis 1:26,28)

Democracy means Government by discussion, but is only effective if you can stop people talking. (Clement  Attlee,1957)

 

The Great Migrations (John Hayward, 2008, Quercus.)

The Politics of Failing Democracy

The Prime Minister is sacked. Long live the Prime Minister.

Rural Bliss and the Winds  of Climate Change

 

The Great Migrations

Since mankind migrated “Out of Africa” more than 100,000 years ago, small bands, tribal groups and populations have been driven out of their homelands by war or famine.  Their fate has either been absorption into a host culture or they have forged their own culture onto resisting indigenous inhabitants.

To place the current migration “Out of Africa” and “Out of the Middle East” into context, I have referred to John Haywood’s tome – The Great Migrations.  The decade 2010-2020 will be a critical one for western Christendom; its very foundations and future culture are to be tested.  Examples of significant migrations in the 19th and 20th centuries are instructive:w

  • The Boer Great Trek in southern Africa between 1835-1840.  The Boers were driven north to form the Orange Free State and the Transvaal, in all some 25,000 were involved.
  • The Trail of Tears – North America.  Between 1830-1840 over 100,000 Red Indians were forced off their lands by the United States Government to make way for new settlers.
  • Indian Migration in the British Empire between 1834-1947.  Movements of indentured Indian labour following the abolition of slavery, in millions were – Malaya 1.75, Burma 1.16, Ceylon 2.3, Africa 0.19.  During the partition of India in 1947, some 6.5 million Hindus fled from Pakistan and around 7 million Muslims fled from India.
  • The Armenian Genocide and Migration.  Over 80,000 Armenians fled to the United States following Turkish genocide between 1894-1896.  Another great wave of migration followed the 1915-1922  Ottoman slaughter of some 1.4 million Armenians.
  • Second World War and Aftermath – 1939-1972.  Europe was unstable for many years after WWII.  Nazi Germany had conscripted millions of Eastern Europeans into their war effort while millions of Ukrainian Slavs were displaced.  Finally, when the Soviet armies advanced over Europe  millions of Slavs and Eastern Europeans fled westward, never to return to their homes.
  • In 1989,  the Civil War in Greece generated by Russian ambition created 700,000 Greek refugees.
  • From the 1950s onwards, thousands of West Indians, Indians and Pakistanis migrated to Britain.  Germany encouraged thousands of Turkish “guest workers” and France encouraged the migration of thousands of Africans.  All these immigrant movements are now leading to increasing civil tension.
  • In 1994, the Ruanda civil war between Hutu and Tutsi, resulted in 1.75 million refugees destabilising much of Central Africa.

In volume and complexity, the current refugee/asylum seeker assault on Western Europe is on a par with the great people movements after WWII.  However, there is one fundamental difference– the vast majority are Muslim which will have a long term effect on the Christian character of Europe.

The basic facts on the current waves of refugees from Africa and the Middle East are provided by Amnesty International (4 Sept. 2015).  Currently there are around 4 million displaced Syrians.  Over 95% are supported in camps (in millions):  in Lebanon – 1.2; Jordan – 0.65; Turkey – 1.9; Egypt – 0.13; Iraq – 0.25.  Also, within Iraq there are 3 million internally displaced persons (IDP). The UNHCR (18 June, 2015) states 219,000 Mediterranean crossings have been undertaken.

Since the commencement of the refugee crisis following American Middle East ‘adventures’, only 104,000 resettlement places have been offered globally while over 400,000 Syrians require immediate resettlement.  According to The Guardian (30 July 2015), Germany is expecting 450,000 refugees in 2015 and so far this year, 180,000 have applied for asylum.

 

Boat Arrivals to Europe
Boat arrivals (‘000s), Jan-June 2015 (UNHCR-Graph 3a)

Amnesty International (September 2015) has noted telling trends in international refugee acceptance:

  • The Gulf States, Qatar, UAE, Saudi Arabia and Kuwait refuse to accept refugees.
  • Russia, Japan, Singapore and South Korea refuse to accept refugees.
  • Germany will resettle 350,000 in 2015 (75% of EU total), a later figure of 800,000 has been quoted. The German decision may prove to be farsighted as this intake will provide labour for future German industry.
  • Germany and Sweden have received 47% (of EU intake) of Syrian refugees between 2011 and July 2015.
  •  Remaining EU countries have pledged 8,700 resettlement places – 0.2% of Syrian refugees.
  • Australia has committed to resettle 12,000 refugees.

For Western Europe and the United Nations, the great international problem is to impose stability and rule of law, not democracy, on rogue states that are exporting refugees.  Resettled adult refugees will become good industrious citizens, however, young marginalised offspring will become a next generation problem – trawling grounds for a future terrorist organisation.  Penultimately, where in the world do two totally different faiths peacefully co-exist inside the same national boundary?

 

Overloaded Vehicle
Overloaded vehicle leaving  Central African Republic. (Humanconcern.org)

Hidden from the radar of the chattering classes is the continuing refugee  tragedy in central Africa. The Central African Republic is embroiled in the old chestnut  of the Christian-Muslim antagonism. Since December 2013 more than 930,000 have been displaced and have fled to Cameroon, Chad, Congo and Democratic Congo Republic (UNHCR Operation Profile, CAR, January, 2015).

An ultimate looming threat is that climate change may cause further instability in the Sahal and the Middle East.  There is a long term rocky road ahead.

The mega picture is that by end of 2014 there were 59.5 million people forcibly displaced from their homes  and are now asylum seekers, refugees and IDPs. In 2014 13.9 million people became newly displaced and the situation is worsening (UNHCR, Worldwide Displacement, 18 June, 2015).

In 1961, Bertrand Russell wrote ‘Has Man a Future?’ This was followed up  by ‘Civilised Man’s Eight Deadly Sins’ written by Konrad Lorenz in 1974. The question must be asked but will not be answered – has the United Nations lost the ability to save humanity from itself?

The Politics of Failing Democracy

The Western Democracies may be witnessing the rise of a totally modern unstable democratic system.  The current democratic model has probably reached a tipping point where now perhaps over 50% of the “western” populations are feeling economic and social pain.

The first of the new political leaders are Jeremy Corben – Labour, UK and Bernie Sanders, Democrate Presidential aspirant, USA.

Corben was elected leader due to his appeal to the bottom half of Britain’s economic pile.  His appeal to the masses is, in part, based on ending austerity, imposing rent controls and nationalising rail and power.

Sanders has sent a clear message that he wishes to halt the 40 year decline in the American middle class, decrease the gap between the very rich and everyone else, provide a living wage and distance politics from the billionaire class. It has been reported that the American dream is fading, housing is becoming unaffordable in Australia for young home-buyers and workers can no longer afford to live in London. These numbers are increasing.

Within the western democracies whole industries, driven by the wealthy, fleece the poor with payday loans and hire purchase/leasing agreements. On Social Europe website Dr. Simon Hix, London School of Economics (17 Sept., 2015) has provided informed insight into the relevance  of Jeremy Corben. He has mobilised young people and the expanding lower income population, key issues of the deprived have been clearly annunciated and he has mobilised the latent aversion towards the political establishment. In short, he has tapped into the anger of rising inequality. Politicians in Australia and America should commence some serious introspection.

 

A New Dawn
A New Dawn-At Last
Advance Australia Fair (Image-3)

Much has been made of five Australian Prime Ministers in five years. Reasons have been advanced for this merry-go-round. A contributory factor may be the electorate is becoming increasingly angry with irrefutable  evidence  of rising inequality that is difficult to annunciate in political terms and banal reporting.

Within democratic systems today, politicians should be well aware that home owners voting for stable government may well be  verging towards a minority  while the disaffected and those suffering economic stress, deprivation and fading aspirations are in the ascendent.   The days of the cosy Government-Capital relationship are coming to an end.  The political-economic model spawned by the Industrial Revolution is losing relevance.

The Prime Minister is sacked. Long live the Prime Minister.

The verbiage associated with the demise of Prime Minister Abbott and the ascension of Prime Minister Turnbull is nauseating. When the Chief Executive of a major corporate under performs  he/she is sacked with minimum fanfare before inflicting further damage on the company.

The Protagonists
The Protagonists at Question Time (AAP, Sam Mooy)

When the Chief Executive of Australia Com. is removed for under performance, the ether is filled with epithets on loyalty, disloyalty, merit, talent, back stabbing and the spoils of power, while the term ‘brutal’ resounds as if from a many headed hydra. Australia needs competent executives focused on results not numbers.

In reality the process was a crass exhibition of cabals seeking power (for the most honourable public motives) while discredited cabals sought to retain power, prestige and entitlements irrespective of poor performance. A nightly press unable to discuss serious issues facing Australia and a salacious audience ensures low standards. Australia cannot be a great democracy unless the level of debate is raised.

In the last days of September, Mr Abbott proved he is only a politician and unfit for the position of CEO Australia Com. He spoke of his lost chance of winning the next election; despite poor polls, he did not speak of increasing Australia’s export income or of running a profitable Australia, concepts critical to the wellbeing of Australians. He is condemned by his own words.

 

Rural Bliss and the Winds of Climate Change

The bull bar and winch wrere stolen from my truck while parked at Scone railway station. Police and garage mechanics have expressed total amazement at this act of vandalism- fortunately an insurance job. To rub salt into my insurance company claims                                        it has been established the hail storm last month so damaged the iron roof and the weather side of the house that both will have to be replaced.

The hail storm in the Murrurundi locality has produced damage running into hundreds of thousands of dollars – hail stones were the size of cricket balls. What is concerning is that storm cells producing  large hail are very violent. A few days ago the Central Coast suffered a devastating hailstorm, so heavy t looked like snow. All this and it is not yet the summer thunder storm season. At some stage we all will experience a very serious  weather problem.

 

Central Coast Hail Storm
Central Coast Hail Storm. (17 Sept.2015.
dailytelegraph.com)

 

 

 

 

 

 

 

 

 

 

 

 

 

AUGUST 2015 Current Affairs Flashpoints

Commodore Perry with Japanese dignitaries
Commodore Perry with Japanese dignitaries.(Library of Congress/Wikimedia)

War is nothing but a continuation of politics by other means. (Karl von Clausewitz, 1780 – 1831)

I sometimes sense the World is changing to fast for its inhabitants.(Elizabeth 11, 1997)

VJ Day 70 Years On
Aboriginal Constitutional Recognition                                                                                  Shares versus Bonds – a Red Alert                                                                        The Hurricane of Climate Change                                                                   Rural Bliss

VJ Day 70 Years On
Around the Pacific Rim nations remember VJ (Victory in Japan) Day, 14th August, 1945, when Japan surrendered  to Allied Forces.

The antagonism to the United States and other Western Powers originated in the 1850s when Commodore Perry  of the US navy forced Japan to sign trade treaties. This destroyed Japanese self respect and generated a deep resentment. The Japanese government was also terrified the nation would suffer the same humiliation as China that flowed from Western aggression, the Opium Wars  and the annexation of Hong Kong.

After the Russians drove the Japanese out of Siberia in 1918, the ruling elite turned eyes towards South East Asia for rubber, oil, iron and other minerals well before the start of WW2. It was an aggressive expansive nationalism fuelled by the realisation that without an Empire (like Western democracies) it could never become a world power.

By the 1920s, Japan was in a desperate  economic situation with the population on the verge of revolt. The Great Depression of the early 1930s hit Japan hard as the vast silk trade with the United States collapsed. Japanese  leaders considered the way to resolve economic problems was to acquire South East Asian colonies similar to Western European empires. The Emperor Hirohito was rendered impotent by his sabre rattling military.  During this period Japan invaded Manchuria, Mongolia and Korea to secure raw materials. The League of Nations expostulated and Japan withdrew its membership.

In 193, the United States restricted the supply of oil and metals which drove Japan to contemplate the energy supplies of Indonesia.  In194, the United Stated imposed a total oil embargo on Japan – a desperate situation.Thus Japan attacked Pearl Harbour in 1942. Japan’s fatal mistake was the failure to destroy the Naval Base and sink the remaining three aircraft carriers. The rest is history.

In the words of a Japanese military commander “We have woken a sleeping giant and filled him with a terrible resolve”.                 (www.quora.com/japanesenationalism)

Casualties (thousands) | WW2 | Asia and Pacific Rim
NationKilledWoundedPrisoners Civilians
Australia9.514.021.70
USA111.6253.121.60
China4 million3 million018 million
Japan1.7 million94 41.4393.0

The atomic bombs were not the prime reason for Japanese surrender. On the day Nagasaki was destroyed, the Russians with a 1.8 million man army attacked Manchuria and smashed the Japanese army. The Japanese feared the Soviets more than the Americans.   (Tsuyoshi Hasigawa,  Associated Press,  August 2014)

Aboriginal Constitutional Recognition                                                                 The Government has rubbed iodine into festering news by the decision not to financially support Aboriginal gatherings to discuss an amendment to the Australian constitution. The given reason is that there is no wish to see discussions degenerate to a ‘log of claims’. This opinion is an insult to the Aboriginal leadership and denigrates the tenor of anticipated discussion. The Government now appears to be softening and Aboriginal forums may be facilitated. It is still the Government’s objective to closely manage the deliberations by bringing the two principal relevant ethnic strands to the same table for a disinterested exchange of ideas. For legal precision, the term ‘Aboriginal’ requires clarification.

A  word on definitions relevant to settlement in new lands:                    **custodian – a person who has responsibility for taking care of or protecting  something                                                                                                         **occupier – a person residing on or using property as if the owner       **inhabitant – a person who lives in or occupies a place.

In any migration, a person will become an inhabitant and subsequently will become an occupier and possibly a custodian. For the purpose of legal clarity, any addition to the Constitution should recognise Aborigines as the first ‘inhabitants of the land’ now known as Australia.

The First Aboriginal Footprint on the great South land.
The ‘first’ Aboriginal footprint on the Great South Land

In 2014 on ABC News, Celeste Liddle, National Tertiary Education Union, opined  Australia is clearly not ready to vote for constitutional change and the electorate was clearly against the terms ‘sovereignty’ and ‘treaty’, both potential mine fields.

To place this constitutional discussion in perspective, Australia is compared with other Anglo-Saxon immigrant nations with minority indigenous populations (as %): Australia 2.5%, Canada 3.5%, United States 1.6% and New Zealand 18%.  America has over 300 treaties with Indian tribal groups and New Zealand is quite different from Canada and Australia.

Canada recognises the rights of first peoples in the constitution  and has negotiated treaties with aboriginal groups that provide for dwelling rights, hunting and food production (but only on a scale prior to European settlement). However, rights are not absolute under Canadian law.  The Government has retained the right to enter treaty lands, following consultation, for the purpose of economic development, power generation and environmental protection. In small areas, where local self-government has been granted, this has become a knotty problem. (Aboriginal Rights, Canadian Encyclopaedia, Bell and Henderson, 2015).

There are elements in the Australian Aboriginal community that favour a treaty as well as constitutional change. It is important that recognition be given that Aborigines were the first inhabitants of Australia, but to enhance the cause beyond that of other ethnic groups in the nation to have the potential to cause community tension.

The Expert Panel on Constitutional Recognition of Aboriginal and Torres Strait Island People (2012) has recommended that the Constitution be amended as follows:                 —-Remove Sect. 25. Banning of voting on racial grounds.                                  
—-Remove Sect. 25xxvi. Ban racial discrimination laws.                                                 —-Add Sect. 116A. Ban race discrimination.                                                             —-Add Sect. 127A. Recognise the first Aboriginal languages. (The implication of this Section  must be carefully considered. If the ‘first inhabitants ‘are recognised, then ipso facto, the language is also recognised).

The stated benefits, according to the Committee  to a Constitution change, would be a redress of a previous exclusion, increasing feeling of self worth and trust would be encouraged between communities. The context of future discussions would change for the better. In this latter point,the term “discussion” requires definition.                                                                       
A suggested wording that would closely link first inhabitants to later immigrants in a common cause might resemble “It is recognised the first Aboriginal inhabitants and their descendants  have been joined by later immigrants to jointly populate Australia.”

Shares versus Bonds –   a Red Alert                                                                       –For those in employment and for those at the rear end of the gravy train, humanity has lived through an extraordinary epoch. For the past thirty years, leaving aside the Chinese phenomenon, there has been an imperceptible decline in economic activity in the Capitalistic West,  which has lead to an irregular decline in interest rates and a slow exodus in equities. Concurrently, there has been a steady increase in bond market activity that has enabled Western governments to fund their obligations as income tax receipts decrease. Currently, interests rates are the lowest on record, which has facilitated in a three decade long bond rally.

Western World Interest Rates. %
Switzerland(0.75)Britain0.5
Singapore(0.75)EMU0.75
Japan0.00Canada1.0
America0.25Australia2.0

Janet Yellen, Chair of the Federal Reserve, has warned that interest rates could rise in 2015 with the caveat that economic activity must improve. Any increase will cause angst in the bond markets.

Janet Yellen pondering interest rates?
Janet Yellen pondering interests rates? (Intelligent Investor)

Perusal of interest rates proves the Industrial West is suffering a decline in economic activity. During this period capital has moved into the bond markets at the expense of equities. Currently, bond markets are overvalued, particularly with an interest rate rise in the offing. Bond prices are much higher than they have been for many years: yields are low but are still ahead of Government rates. (See table). Few people remember the bond markets in the ’70s and ’90s when large financial losses were incurred. There is an approaching ‘crunch’ as the Fed considers a rise in interest rates driven by an indication that  American economic activity is improving.

As interest rates rise, bond holders will scramble to sell their bonds before discounts reduce value, although yields will increase. This will encourage a shift into equities. The rise in the American interest rate will be the first in nine years. In May 2015, Warren Buffet, Berkshire Hathaway, commented that long term bond rates are very overvalued. (Intelligent Investor)

For distressed Australian investors, there will be a double whammy  for those holding bonds and property when interest rates rise. Bonds will fall in value, interest rates on bank loans will rise and equity in property will fall as the real estate bubble  deflates.

Return Comparison, Australian Assets
Return % pa to 2012
(ABS, Thompson Reuters, AMP Capital)
5 years 10 years
Shares(1.8) 9.1
Bonds8.36.4
Property3.3 5.3

Even more, pundits are warning that  Australia is facing a recession in 2015. The RBA has lowered growth forecast to 2.75 % and  unemployment may exceed 6.4 %, the highest for over a decade. Terms of trade are estimated to fall to 3.9 % in 2015. ((Business Insider and Executive Committee of Australian Business Economics, November 2014)

Based on the above,he Government catch-cry should not only be jobs-jobs-jobs but exports-exports-exports.

The Hurricane of Climate Change                                                                                   The National Oceanic and Atmospheric Administration (NOAA) has announced global temperatures for July were the hottest on record. To put this in perspective, below are the Intergovernmental Panel for Climate Control (IPCC) carbon dioxide and temperature limits necessary to prevent a global climate catastrophe.

Carbon Dioxide  Critical Level  400 ppm                                                                * Pre-industrial Level (1880)——–270-280 ppm                                               * Current Level————————400 ppm                                                          * Rate of Increase———————1.9  ppm/year                                               (NASA Institute of Space Studies)                                                                             *Level by 2050 est.——————–460 ppm

Carbon Dioxide additions
Fossil Fuel and Cement Carbon Dioxide additions to atmosphere in Giga Tonnes. 2015 levels now 400 ppm (CDIAC/GCP/Friedlingstein)

Temperature 
Critical Level 2
*C above 1880 temperature.                      
* Pre-industrial Level————–Base Line (BL)                                               * Current Temperature————0.85*C above BL                                          
* Rate of Increase (2013-14)—–0.116
*C/decade (NOAA)                      
* Level by 2050 est.—————-1.26*C

Global Temperature Increase.
Global Temperature Increase from 1880 to 2015. (Paul Horn, Inside Climate News)

A leading climate scientist, Dr Mann (NOAA), opined in Scientific American (March 2014) that the critical 2*C could be reached by the mid 2030s,  based on current fossil fuel consumption.

The critical issue is carbon dioxide emissions. If temperature is to remain below 2*C above pre-industrial levels, then it is estimated green house gas emissions will have to be reduced by 80-90% by 2050.  (J Morgan, Director, World Resources Institute) This will require a seismic shift in the rate of increase  in the use of non- renewable energy. The critical 2*C was originally proposed by Dr. Nordhaus (Yale University) in the mid-1970s as an accommodation between science and political reality. A paper published by the German Institute for International and Security Affairs, considers the Climate Change Meeting in Paris in December 2015 will be unable to keep temperatures below the 2*C level.

A NOAA study released in June 2015, has confirmed the rate of global warming is increasing. Their  findings summarised:                          *1950-1999 —-0.113*C/ decade                                                                               *1998-2012—-0.086*C/decade                                                                                *2013-2014—-0.116*C/decade

The period 1998-2012 did not signify a hiatus in global warming –  it was the oceans operating as a heat sink.

Concluding Comment

1— 2006.  A Stern Commission quote “It was obvious that 2*C was far beyond any danger limit definition”.

2— 2008. International Energy Agency quote “It is obvious 2*C is catastrophically dangerous as is 1.5*C,  while 1*C  is the danger limit. (By 2050, the temperature will be 1.26*C on current  estimate.)

3— 2014. IPCC 5th Assessment quote “2*C is intolerably dangerous due to projected multiple disastrous to catastrophic impacts on human populations”.

Considering the foregoing, the current global disruptive weather events can only intensify since carbon dioxide levels exceed 400 ppm and global temperature is pushing towards the critical 1*C and rising.

Rural Bliss                                                                           
On Sunday, 23rd August, the Upper Hunter region was hit by the most violent storm cell recorded in the region since 1948. On the farm, 52 mm of rain fell in a couple of hours followed by a devastating hail storm with hail stones the size of tennis balls. Such was the intensity in the district, that solar panels and roof tiles were smashed and a young calf suffered a broken back. On my property, the hail fractured a water pipe and over 20,000 litres of potable water was lost. The storm surge in the creek threw the solar pump two meters up the river bank. This was the severest storm since my arrival  fifteen years ago.

This storm originated in the Indian Ocean. It created wide spread rain and hail in central New South Wales, a cyclonic storm cell in the Central West and floods along the South Coast hinterland.

July 2015 Current Affairs Flash Points

National Parties in Europe
THE CLASH OF CULTURES   EUROPEAN NATIONAL PARTIES  as percentage of electorate with immigration concerns. (Economist, Social Europe)

Contents

The Clash of Cultures
The Winds of Climate Change
The Eurozone Underbelly
Indonesia,  A Power Stirs
Rural Bliss
Towards the Final Hour

We have just enough religion to make us hate but not enough to make us love one another.  (Clash of Cultures)
Thoughts on various subjects. Jonathon Swift, 1711.

I said “It is most extraordinary weather for this time of year”. He replied “Ah, it isn’t this time of year at all”.  (The Winds of Climate Change)
Oliver St. John Gogarty. 1878-1957.

The Clash of Cultures
—-The ‘Reclaim Australia’ demonstrations round Australia in mid-July were predictable and are a distant reflection  of more violent events in Europe. The local demonstrations were a sinister mix of Cooee, Mateship and Advance Australia Fair.
—-For several years Europe has been  unsettled by increasing tension and friction between Islamic immigrants and Caucasian  ‘Christian’ inhabitants. Throughout Europe nationalistic parties have formed to voice concern over a perceived threat  to national identity by minorities with a different faith. Twelve European nations have been fractured by aggressive Patriotic political parties whose distilled concerns are:
*  feel threatened by Islam
*  fear a loss of national identity
*  fear a decline in conservative Christian culture.
—-These  National parties have gained additional popular  support due to the depressing economic conditions (GDP growth <1%), high unemployment and an uncertain future. Electoral support in eight European democracies varies between 13% and 26% while two National parties are represented in the European Parliament.The principal driver to this phenomenon is religion, not ethnicity. The critical question is whether completely different faiths and their associated culture can coexist under a democracy (Europe News).
—-On a historical basis a common thread in Western culture in the first decades of the 20th Century  was anti-Semitism. Economic and social conditions for the masses before and after the First World War were terrible. After the War the British Government promised  ‘a land fit for heroes’, it totally was not for the Europeans.  One hundred years later in the 21st century Western culture is suffering similar conditions therefore a rising Islamophobia is not unexpected. Recently the political heads of France, Germany and Italy have endeavoured  to calm national unrest without success.
—-Australia is in a difficult situation. For decades the Government has extolled the success of multiculturalism which was based on ethnic  not religious integration. To maintain this policy it must consider the concerns  of ‘Reclaim Australia’ which are natural while simultaneously allaying the fears of Australian Islamic society. An added complication is that our Muslim neighbour, Indonesia, will be keenly observing how Australia handles the threat of rising nationalism and simultaneously ensuring a peaceful domicile for its Muslim citizens. Russia was forceful when its citizens  in the Baltic States and Central Asia were under pressure  after the disintegration of the  Soviet Union.
—-“Reclaim Australia” is not an aberration, it has common cause with compatriots in Europe. It cannot be disbanded  by political pressure, the concerns of its supporters and sympathisers will have to be addressed.
—-So too today, a hundred years later, Western Europe including Australia is struggling under poor economic conditions, unemployment and uncertainty. Religion and associated customs are again magnified and have been exacerbated by Western democracies waging war, for what ever reason, on Islamic cultures in the Middle East for almost a generation. Propaganda by Western governments  have had the unintended consequence of encouraging  an unfavourable perception of Islam. This is an intractable problem which can only be partially solved by an improvement in national economies and the political leaders providing a more certain future for its citizens.
—-A philosophical question, can two mutually exclusive faiths peacefully coexist in a demoracy if one is a perceived as a threat  by the other?

The Winds of Climate Change

Antarctic Vortex, July '15
Cold air and snow precipitation.
( BOM, Australia)

—-RN Breakfast, 17 July, has aired another climate change warning. The National Oceanic and Atmospheric Administration has announced that 2014 was  a year of multiple records, globally the hottest, average sea level the highest, sea surface temperatures the warmest and the Arctic sea ice area the smallest. All the  major indicators  are rushing towards Hades while in Australia the political elite indulge in petty pedestrian politics.
—-A Polar vortex is currently sweeping over south-east Australia to the delight of the winter sports industry, so far unheard is an informed comment on its significance. Hearsay is this is the coldest regional event for over 50 years with snow within cooee of the Tropic of Capricorn. It was only a few months ago that a northern  Polar vortex swept over the United States dumping snow on 48 of the 50 American States. What does this mean?
—-The Antarctic Polar vortex is a 200 km/hr super cold wind circling the remnants of the ozone hole round the Antarctic continent. Normally this wind delivers rain to the Roaring Forties that nourishes southern Australia. Global warming is shrinking the diameter of the vortex  thus  dragging rain away from Australia and so worsening the usual drought cycles.
—- The current cold air from the vortex  over south-east Australia is due to global warming. There is an increasing temperature differential  between the equatorial and polar regions, this causes a distortion of the southern hemisphere jet stream which permits vortex air to migrate north  to dump snow and cold rain over south-east Australia (National Climate Centre, Canberra). The long term significance of this weather event for Australia could be profound but there has been a deafening silence of informed comment.

The Eurozone Underbelly

Greek Tragedy
Athens in the shadow of its past glory. The debt crisis.

—-Ffinancial convulsions that have consumed Europe, Greece and Greek communities round the world, however there is a larger canvas on which a more worrying picture is  emerging. The attached table derived from The  Economist World Debt Summary compares  Eurozone members and includes  Australia and its south-east Asian competitor and trading partner, South Korea. The table grades from the weaker to the more robust economies.

Country———-Public Debt——–Debt/person————2015
Population–M——-% GDP————–$US–‘000——–*Bud Bal> %
Greece——-11———177——————-22—————-(2.4)
Portugal—–10———153——————-27—————-(8.8)
Italy———-61———122——————-38—————-(3.0)
Britain——-64———101——————-43—————-(3.0)
America—321———-90——————–34—————-(2.5)
Spain——–47———-88——————–23—————-(4.5)
Germany—81———-85——————–34—————-(0.8)
Australia—24———-27——————–16—————-(1.4)
S Korea—–51———-27———————7—————-+0.8
*Budget Balance %

—-From the table it is clear Greece and Portugal are in a parlous financial situation. A principal difference is that Portugal plans to repay a $14 billion bail-out loan to the IMF while Greece has been unable to meet a $1.7 billion interest payment to the IMF. Portugal has maintained an onerous austerity program while Greece has failed. Within the EU there is a worry, however, that Portugal and possibly Italy may eventually default as the financial data is not encouraging (P. Wise, EU Economy). In contrast the more stable stronger economies are characterised by lower public debt and healthier Budget Balances.
—-Although Greece is responsible for only 2% of EU GDP Europe is riven by a divisive convergence, Germany requires Greece to remain in the Union for economic reasons (which have now been questioned) while France requires Greece to remain in the fold for political reasons. By mid-July the EU granted a further $80 billion bail-out for the third time but this is no solution to the problem!!
—–The larger picture is that five members of the EU (Ireland, Cyprus, Spain, Portugal, Greece) have been provided with financial packages from the ECB and the IMF. Spain as one of the largest economies in Europe has been of particular concern, since the GFC in 2008 it has received cash injections of over $US 200 billion. Spanish austerity measures and increasing competitiveness have improved the situation but its budget deficit is a concern. A major cause of Euro Zone problems was that the introduction of the euro was not accompanied by a common fiscal system. The statement by Mario Draghi, President of the ECB, that he ‘will do whatever it takes to preserve the euro’ may come to haunt him.
—-Despite the dire warnings of the Australian Government it is clear that within the OECD orbit (table above) Australia’s financial position is better than most, however, this is unsustainable unless Australia massively increases its exports.

Indonesia, a Power Stirs.

Twelve new submarines planned.
Plans for twelve new submarines. (S Kygsman, theaustralian.com.au)

—-In this Asian century America has announced it is expanding military cooperation with Indonesia, since this nation’s islands are washed by the South China Sea this is an understandable move. Indonesia is planning to establish a military base in this region as the rise of China can no longer be considered peaceful. Indonesia has already crossed verbal swords with China due to its claim on the Indonesian island of Natuna.
—-Australia is now facing the reality of an expanding military power as its closest nation. There is a relative shift in wealth and power away from Australia toward Indonesia and it is incumbent on Australia to manage this transition and remain on good terms with its near northern Islamic neighbour. PriceWaterhouseCoopershave estimated that by 2050 Indonesia will possess a GDP three times that of Australia. The Indonesian population is around 250 million, ten times that of Australia. Crucially the size of an economy is determined by the number of workers and their output. When Indonesia reduces corruption and improves it politics it will be well on its way to becoming a power house providing its 5% growth rate can be maintained.
—-Despite Australia being a country of immigrants its current immigration policy may ‘come back to bite it’. History can be instructive but never quite repeats itself. The Afrikaans nation went into decline because it was a minority group that wished to retain its national purity. Bearing in mind Australia’s high labour costs, its reliance on natural resources and its lack of a population critical mass Australia will be unable to match Indonesia’s GDP growth.
—-The point of this discussion is that Indonesia has indicated it requires its armed forces to be superior to its neighbours including Australia. As Indonesia grows in power it will become more involved in Asian and international affairs as, in relative terms, Australia’s military influence and GDP decreases (Strategic and Defence Studies, Canberra). Although over 50% of Indonesian military equipment is over thirty years old it pushing ahead with its military expansion. The objective is to build a modern military force by 2024 comprising 180 jet fighters, 300 warships and 12 submarines. This will be a three phase project, the first phase was completed in 2014 (Straits Times, 2015).
—-A historical flash back to 2014 provides a snapshot of comparative military might along with that of Japan and China:
Nation———Australia—–Indonesia—-Japan——-China
Personnel——57,000——-0.3 m———-0.23 m—–2.3 m
Tanks————-149———-0————–880——–6550
Aircraft———-109———96————–340——=1970
Large Ships——12———30—————-52———–80
Submarines——6———-13—————-16———–65
( Institute for Strategic Studies, News.com.au, February, 2014)
—-It behoves Australia to cultivate a more cooperative demeanour with Indonesia as perforce Indonesia’s enemy from the north will be Australia’s.
—-The Arafura and Timor seas that separate Australia and Indonesia represents an immense cultural, religious and social divide that will require a sea change in Australia’s foreign policy approach, an attitude that smacks of hubris will have to go. The 250 million citizens can no longer be taken for granted and Australia’s foreign aid can have no real effect on future growth and may be rejected as charity. The fantasy that “Indonesia has no better friend than Australia” will, to Australia’s relief, hopefully be replaced by “Australia has no better friend than Indonesia”.
—-Once again — History and change happen. There are those among us who wish this was not so.

Rural Bliss
—-Incensed, the mare, Maggie, galloped to the water trough scattering several calves wetting their noses. With Maggie drinking the calves closed in behind jumping and shaking their heads as if laughing.

Towards the Final Hour
—-Armageddon?

Quo Vadis Homo sapiens
The rise of Artificial Intelligence. (Credit: Shutterstock)

Quo Vadis Homo sapiens. The future Hamlet?
“Alas poor Yorick, I have destroyed my Creator”

—-Over one thousand scientists and engineers sent an open letter to the United Nations requesting it ban the production of autonomous warfare systems, that is artificial intelligence killing machines. The letter originated in Buenos Aires in late July at the International Joint Conference on Artificial Intelligence. Signatures include those of intellectual giants of our species, namely Stephen Hawking, Elon Musk, Noam Chomsky and Steve Wozniak. The letter mentioned three weapons revolutions, guns (past), nuclear (present) and artificial intelligence (now upon us).
—-The future is murky. Two powers, the Soviet Union and the United States, consummated the the Strategic Arms Limitation Treaty (SALT) in 1972 which limited the proliferation of nuclear weapons. Now some forty-five years later how much more difficult will it be when technically advanced rising powers, China and Iran, also require a place at the top table. There are two other complications; Britain, Israel and Norway already deploy missiles and drones that can attack targets without direct human control (New york Times, November 2014). Secondly this technology is not difficult to master and the concern is rogue nations or terrorist groups could manufacture their own artificial intelligence weapons.
—-According to Steven Hawking “full artificial intelligence in weapons could spell the end of the human race”. Homo sapiens–Quo Vadis?