“Who controls the food supply controls the people; who control the energy can control whole continents; who controls money can control the world.”…variations of this quote are attributed to Henry Kissinger.
This is the ominous centennial year of 1914 and “The War to End All Wars”.
In 1914 Africa had already been chopped up and divided by the colonial powers Belgium, France, Germany, Italy, Portugal, Spain and the United Kingdom. It was the European squabbling for African, Asian and Middle East colonies; and their tremendous wealth that was a significant cause of WW1.
Africa has historically been absolutely vital to the industrialization of Europe as a source of natural resources and human labour. Modern Europe owes its development to the availability of Africa’s natural resources which were hauled home and then turned into finished manufactured products for value-added export.
The competition for colonies was a cause of World War I
Beginning in the late 19th century Europe dominated, divided and exploited Africa by force of arms and colonial rule. Europeans drew the map of Africa to divide and conquer it. Now with economic globalization, Africa is in play again for its natural wealth by all of the developed countries of the world. The competition is fiercer than ever.
Many of the protagonists of 1914 are the same ones today. Many of them never really left Africa. After African colonies won independence in the mid-20th century, for many of them it was just a token independence. They got a seat at the United Nations. But old colonialists simply paid off corrupt African leaders and continued to rape the continent. Few Africans benefited except the elites. For others, it just brought more of the same: The Resource Curse and exploitation.
Now 100 years after World War 1, add the global dynamos of the United States, China, Japan, Russia, India, Turkey, Israel, South Korea and Brazil among the fierce competitors for Africa’s riches. All of these countries use state-supported corporations, transnational corporations, world organizations, foreign aid, loans, diplomacy and military intervention to further their national agendas.
Africa exports exotic fruits, vegetables and flowers to Europe and the Middle East,
yet now has to import much of its staple food supplies from the West.
The African continent is extremely rich in scarce resources. It is rich in oil, uranium, copper, gold, platinum, tin, diamonds, timber, export-based agriculture, biofuels, biodiversity, land and people. As an example, a single old-growth tree from the rainforests of Africa can be worth more than $20,000 on the world market.
Africa is also rich in strategic minerals such as coltan which is essential for modern electronics such as cell phones and computers. Coltan is a hard metal that is an excellent conductor of electricity. Child and slave labour are used in places such as the (un)Democratic Republic of the Congo to mine the metal. Modern technology and the demand for coltan have resulted in armed conflict, corruption, pollution and grief for many people in Africa.
Africa is one of the few places in the world that is a source for vanadium. Vanadium gives steel more strength and flexibility. Vanadium is used in automobiles, aeroplanes, electronics, medical equipment, pipelines, military weapons and high-speed tools. Its importance cannot be overemphasized. Vanadium is also highly toxic and its mining causes deadly pollution.
Many children in Africa live in extreme poverty, slavery and as child soldiers.
Yet with all the richness of the African continent, most of its people live in abject poverty. Their governments do not provide them with even the most essential of services such as clean drinking water, medical care, and the availability of electricity, education and basic infrastructure. How does one explain all the poverty among all the wealth? The simple explanation is local corruption and foreign exploitation.
Global corporations and foreign nations cut deals with corrupt leaders for billions of US dollars and then turn their head while despots raid the people’s treasury. There are violence and wars in Africa between the ruthless elites fighting over the loot.
Armed gangs roam the country-side stealing the wealth and extorting protection money from foreign corporations. Private companies hire mercenaries to guard their properties and shoot trespassers on sight. Often the killed trespassers are just children trying to eke out a few dollars’ worth of minerals.
Even though Africa is an important source of natural resources the US government had ignored much of Africa for a long time as not being of strategic importance. As a result, China and other powers have a big head-start over the US in Africa.
The US is no longer ignoring Africa. It is the new frontier for the American Empire. In February 2007 President George W. Bush created the United States African Command (AFRICOM). Under President Obama, the US has greatly increased the military activities of AFRICOM. The US is in a high-stakes competition with China.
President Obama has greatly expanded the activities of AFRICOM.
Tensions between the two nuclear global powers have been spinning out of control. The US has very publicly announced its military pivot to Asia to militarily encircle China. The pivot to Africa has been less noise. The current war in South Sudan is a proxy war between the two. China has obtained much of the rights to the oil-riches of South Sudan. The US wants the Chinese out.
China is still fuming over having been driven out of the North African country of Libya where it was a big player in oil production. The Libyan oil is the light-sweet oil that is easier to refine. Geographically Libya is also strategically located to ship the oil to Europe.
Muammar al-Gaddafi had displeased the US with his visions of Pan African nationalism. Gaddafi had been an unreliable ally of the US in the War on Terror, so he was driven out by NATO and the US on the pretext of the Arab Spring, human rights and democracy. Never mind that Gadhafi’s Libya had ranked number 2 on the UN Human Index Scale for Africa; before the US, French and British 7 months of humanitarian bombing. Hillary Clinton bragged with mirthful laughter: “We came, we saw, he died.”
Camp Lemonier conducts “stability operations” in Africa.
The USA uses the War on Terror, humanitarian hand-wringing, the dogma of democracy and capitalism, international peacekeepers and voodoo neoliberal economics to camouflage its quest for hegemony. The USA Empire is powered by oil, military supremacy and international finance. For the oil weapon to be effective the USA needs to control all of it everywhere and all the time. To do that the US Empire has foreign military bases all over the world.
Africa is the “new Middle East” and the next frontier for the US Empire. It is already an import source of oil for China and gaining importance for the US and the world. Africa could also be the host of another protracted US military quagmire. President Obama cannot be counted upon to prevent another hot war by putting the generals and neocons on a short leash. So far that leash in Africa has been extremely slack.
The US has a heavy military presence in Africa called AFRICOM. Its stated mission is to “advance U.S. national interests and promote regional security, stability, and prosperity”. It is a good rhetorical question to ask: “Security, stability and prosperity for whom: Africans, American taxpayers, empire, hegemon, oil companies, who?” AFRICOM does not say.
The USA has military bases all over the world for strategic dominance and spends more on its military than the next twenty countries combined.
The American public has grown too tired and sceptical of always blaming oil for all the US wars and foreign expeditions. Oil alone is an over-simplistic and an indolent way to explain US strategic, military and geopolitical foreign policy. Oil is not as simple as the dictionary definition of “a thick, black liquid that comes from the ground…”
Firstly, “Oil” is code that really means oil, gas, pipeline routes, sea lanes, and deep-water ports. “Oil” is all sources of energy and natural resources. It is human resources, markets, food and finance. It is anywhere and everywhere on the planet that is strategically located for US global hegemony.
Secondly, oil is a powerful financial weapon used to maintain the dominance of the US dollar. The black liquid physical commodity that comes out of the ground is mostly priced and traded in US dollars on the world market. The US dollar is backed by its ability to buy oil instead of gold.
The US Dollar was as good as gold making it the World reserve currency after World War 2.
To support the dollar the US must control the supply of all oil: Who gets it, who doesn’t get it, when, how much, at what price and in US dollars. When oil prices are high the dollar is strong. When oil prices are low the dollar is weak. This may seem counter-intuitive so an explanation follows below.
Until 1971 the US dollar was convertible into gold bullion at $35 per ounce by the US treasury. Because of the massive chronic US balance of trade deficit, the world was being flooded with US dollars. Foreign governments were concerned and speculation caused a run on the US gold supply at Fort Knox.
The US literally was being dramatically drained of its gold. In desperation, President Richard Nixon abandoned international agreements and closed the gold window taking the US off the official Gold Exchange Standard. The value of the dollar plunged. Still, the US continued to run massive trade deficits exacerbating the problem. The world was flooded with US fiat paper currency that became known as Euro-Dollars.
The “Oil Shock” of 1973 helped to solve the Euro-dollar crises. Following the Yom Kippur War between Israel, Egypt, Syria and other Arab nations; the US backing of Israel resulted in the Organization of Petroleum Exporting Countries (OPEC) embargo of oil to the US. The reduced flow of OPEC oil caused the price of it to quadruple. Initially, this caused runaway inflation in the US and the worst economic crisis for the American people, at that time, since the Great Depression.
Conspiracy theories attribute the Oil Shock to the Bilderberg Group, Henry Kissinger, David Rockefeller and Chase Bank…some conspiracies are true…but for purposes here they will be foregone. Likewise foregone are the events leading up to and President Jimmy Carter admitting the de-Peacock Throned Shah of Iran to the US for cancer treatment and the resulting “Iran hostage crisis”. Regardless, high world oil prices resulted and helped to prop up the ailing US dollar.
The Bilderberg Hotel in Oosterbeek Netherlands was
the Sight of the first meeting of the Secretive Bilderberg Group in 1954.
The Bilderberg Group and the Conspiracies to Manipulate the Price of Oil
The important point is that the spike in world oil prices by the OPEC countries caused those Euro-Dollars to be soaked up by high oil prices. OPEC was taking those Euro-Dollars out of circulation just as the Federal Reserve Bank does when it wants to support the value of the dollar.
The US dollar is now supported by oil instead of gold.
The OPEC countries of Saudi Arabia, Kuwait, Iraq, Libya and others were now hoarding US dollars that were labelled Petro-Dollars. These Petro-Dollars were then largely recycled and repatriated back to the USA.
Euro-Dollars became Petro-Dollars that OPEC used to purchase military weapons from the US for continuous wars, to threaten their neighbours and for self-defence. Petro-dollars were also used to purchase luxury consumer goods and highly tax-payer subsidized US agricultural grains.
OPEC used their surplus Petro-dollars to make financial investments in stocks and bonds and to buy massive amounts of US treasury bills. The financial cycle of the dollar was completed without having to raid Fort Knox of its gold. Americans were able to continue buying cheap foreign imports without endangering the dollar. The world accepted US dollars because they were as good as oil.
The above brings to mind an Orwellian-ism: “Continuous war for continuous peace”…and good for the US dollar too. Here is another Orwellian contradiction: “High imported oil prices are bad for the US except when they are not”. Thus it is paramount for the US hegemon to control oil…all of it everywhere all the time.
It is also vital for the US hegemon to control oil prices. Oil prices are determined by supply and demand. Economists call that the “Law of Supply and Demand”. But it is not a real law, it is broken all the time and nobody is ever prosecuted for breaking it. Both supply and demand can be manipulated to fit US geopolitical policies.
Black Gold: The US must control all of it everywhere to back the dollar.
Today demand for oil can be virtually manipulated in the financial and commodity futures markets. Future contracts for oil can be purchased by speculators and manipulators who never plan on ever taking delivery of a single drop of oil. There are sophisticated financial derivatives that can be used by oil companies, oil producing countries, governments and speculators to corner the market in oil and driving up its price.
Virtual drilling for oil can manipulate its world market price both higher and lower.
Oil prices can also be manipulated by keeping oil off the market driving up its price. Oil can be deliberately held off the market by oil companies. US client countries such as Saudi Arabia, Kuwait and other US protectorates can be encouraged to pump less oil. Non-compliant oil-producing countries such as Iran can be embargoed. Others can find their oil producing capacity halted by political instability, war and violence.
With the massive trade deficit that the US has with China, it is important to keep China from developing their own oil supplies at the sources. As long as China has to buy its increasing demand for oil on the world market in US dollars it is good for the dollar. As a military challenger to the US, weak though it is, the US needs to be able to cut off China’s oil supply if a war broke out between the two.
Likewise, for national security, China wants self-sufficiency in oil and to be able to access oil at the source instead of having to rely on the world market in oil. China also wants to diversify its holding of US dollars into productive assets. To grow markets and their domestic economy, China needed to go global. For all of these reasons, Africa is an important investment to China as a source of oil, raw materials such as copper, markets, land and even migration of their over-populated people.
The military might of the USA dominates world oil supply and protects the American Dollar.
One of AFRICOM’s unspoken but well-known secrets is the mission to confront China. War, terrorism and political instability can and has worked havoc on China’s investments in Africa. War and political instability can shut down oil production and increase its price dramatically too. AFRICOM is very good at promoting instability to “deter and defeat transnational threats in order to advance U.S. national interests and promote regional security, stability, and prosperity.”
Just what these transnational threats are and who benefits from deterring them AFRICOM does not say. The US taxpayer seems to benefit very little and the people of Africa not much at all. The African rulers and corporations walk away with billions of dollars.
AFRICOM Mission Statement: “…deters and defeats transnational threats in order to advance U.S. national interests and promote regional security, stability, and prosperity.”
Usually, high oil prices benefit US geopolitical and financial objectives. Especially if perpetual wars and the threat of wars can keep the sale of US weapons manufacturers high. All those petrodollars then need to come back home to roost in order to pay for the wars, weapons and the aftermath of reconstruction. Wars help to sell US taxpayer subsidized surplus grains to starving refugees and to a war-torn population no longer able to provide itself with food self-sufficiency.
US Foreign aid to finance weapons, the rebuilding of war-destroyed cities, infrastructure projects and food aid ends up being paid back to the US many times over. The first time US aid money is paid back to the US in when the conditions of the loan require that the money is spent for US weapons, grain, goods and services. The second time the US aid money is paid back is when it is paid back with interest. Often there is a third and even fourth time the US aid money is repaid when the loans have to be rolled-over with additional interest charged.
Just the fear of war anywhere, especially in the Middle East, can cause oil prices to spike up. The fear of peace has the opposite effect. The fear of peace drives down the price of oil. A US and Iran reconciliation could open up Iran’s vast amount of oil to the world market driving down oil prices. The oil weapon is a double-edged sword and sometimes temporary low oil prices can accomplish US geopolitical foreign policy goals just as they did in the 1980’s against the Soviet Union.
The IMF imposes austerity and foreign corporate domination on debtor nations.
As Henry Kissinger said, the world can be controlled by controlling the money. By controlling oil the US controls the money. It is not enough for the US to simply control enough oil to be self-sufficient. It must control all the oil everywhere, all of the time so that it can control international finance.
Another part of the US plan to control money is by dominating international financial organizations such as the International Monetary Fund, the World Bank and the World Trade Organization. These organizations act as loan sharks to get countries in debt, keep them in debt and to infringe on their national sovereignty. Debtor countries lose control over their own economy and the ability to delivery vital medical care, food, fuel, infrastructure and services to their own people.
World trade organizations and trade agreements open up countries rich in natural resources to foreign exploitation. They prevent poor countries from developing their own value-added industries by keeping them dependent on the exportation of raw materials. Corrupt leaders are all too willing to enrich themselves by selling out their own countries with sweetheart deals to foreign corporations and countries.
Trade agreements prevent countries from controlling foreign investors who extract raw materials and export-driven agricultural products. These investors buy up the common land that peasants depended on for food survival. Plantations for exotic crops for export drain off the scarce water with irrigation projects. Mineral extraction leaves behind toxic land, water and air pollution. The clearing of natural habitats of timber and for export-agriculture is endangering rare species.
The endangered mountain gorilla has few natural enemies other than humans.
Ironically, it has been the US imposed free-trade agreements which have opened up Africa to Chinese investors. The Chinese have a policy of non-interference with the internal affairs of foreign countries. The Chinese strive for what they call win-win foreign investments.
China has gained influence by making loans that do not impose the harsh austerity voodoo-economics of the IMF and the World Bank on aid recipients and debtor countries. Nor does China subject African elites to lectures on corruption, transparency, human rights and democracy as does the often hypocritical USA.
China is not without its problems too. It is not always viewed as the benevolent saviour of Africa. China often requires that foreign aid is spent on hiring Chinese companies. China often brings in its own labourers because they are skilled, do not have to be trained and work for lower wages. The use of Chinese labour does little to help the local African economies.
The US woke up to the fact that China has made vast inroads to the natural resource riches of Africa. Often China is looked upon as more favourable to do business with that is the USA. China has invested heavily in African aid. It has invested in so-called soft-diplomacy of gift-aid, infrastructure projects and favourable loans. China calls it a smart-diplomacy of win-win.
China and the USA are two of the fiercest competitors in Africa today.
The latest hot spot in US-China competition in South Sudan. The situation is complicated with civil war, ethnic and religious tensions, and billions of dollars in oil loot. The violence has international hidden hands driving the war too. Many of South Sudan’s neighbours and armed gangs have a stake in the outcome. The US would benefit from driving out China’s oil investments.
China is still fuming over the loss of their Libyan oil investments. Is China going to now watch their big investments in South Sudan end up as “dry holes” too? The USA hopes so. With the war now in South Sudan, the USA is pushing for an international trustee to take over the oil fields. An international trustee would be the first step in driving the Chinese out.
In the past 100 years, three World Wars have been won or lost due to oil. In WW1 and WW2 Germany literally lost the wars because they ran out of fuel for their tanks and trucks. During the Cold War, the Soviet Union lost to the West because it went bankrupt. Low manipulated oil prices during the 1980’s helped to financially ruin the USSR. The USSR was financially dependent on the export market for its tremendous oil and gas resources.
China is going to need increasing supplies of oil and energy for future growth and development. Its sovereignty and national security depend on it being able to obtain secure sources of oil, energy and raw materials at the source. China cannot depend on the mercy of the US-dominated world markets to always be willing to sell it strategic resources under any and all possible circumstances.
Africa is rich in exotic foods, culture, land, natural resources,
yet often cannot feed its own people.
The US also wants to secure its own strategic supply of oil. It too wants to diversify its dependence on the Middle East. For the US to be the hegemon it must dominate the world’s oil markets everywhere. That leaves the USA and China locked into a fierce competition for oil, gas, uranium, pipelines, sea lanes and strategic natural resources in Africa and elsewhere for a long time.
George Orwell predicted totalitarian control with perpetual war and newspeak.
George Orwell might have appreciated the double-speak of AFRICOM: “Stability from Instability”. It seems that everywhere in Africa that has oil and mineral riches, they are experiencing instability. The USA attributes instability to terrorists. Others might attribute Africa’s instability to a US war for oil and hegemony.
