Friday, July 1, 2011

Financial Hostages

Some analysts believe that the global financial interdependency will lead to a more stable world. Why start a war with someone that you do business with?

But this way of thinking could also be reversed, why not do business instead of war with the same strategical goal as the war itself?

In the Baltic Sea Gazprom is building the Nord Stream gas pipeline that in the future will transport natural gas to customers in Germany and France.

That will allow more Russian gas exports to bypass Ukraine, through which 80% is currently routed. Differences with Kiev encouraged Moscow to speed up the project, as well as South Stream, running north and south of the EU bloc.

In January 2009, Russian gas supplies to Europe came to a halt for almost two weeks as Moscow and Kiev rowed over prices and transit terms.


Of course this project is good for the economy of Gazprom, but there are a number of other advantages.

- Russia do not need to rely on Ukraine where most of todays gas go through.

- The pipeline will give Russia a reason to patrol the Baltic Sea close to the Swedish island of Gotland. On Gotland Gazprom has built a facility to control the pipeline. This site is located in the small town of Slite where the unemployment has been high. Between 70-90 MSEK will be invested in the Harbour in Slite. Rumors is that Gazprom has invested this money in Gotland not only to ensure the operations of the pipeline, but also to buy goodwill and interest from the local politicians on Gotland. The Baltic states are very worried about this development, but the political discussion in Sweden has been silenced by the financial interests. During the Cold War a Russian presence in Slite and an upgraded harbor perfect for bigger ships to anchor would not have been welcome. Today a lot of people in Sweden believe that anyone that is against this kind of strategic shift of the balance in the Baltic Sea is nothing to worry about. It is only for the best and will improve the relation between Sweden and Russia.

- The pipeline has closed the bridge between Russia, Germany and France. Russia is now buying French Mistral Amphibious Assault Ships. French companies are working together with Russian companies in the delivery of Su-30 MKI to India and Su-30 MKM to Malaysia. If Russia would ever fine a need to use these Assault Ships e.g. against Georgia there will be very little opposition from Germany and France. On the contrary they will in the future have to high financial interests in Russia to oppose against a Russian action against smaller ex-Soviet states.

- The delivery of gas also put Russia in the position of being able to influence the possibility to produce electrical power in Germany and France. Since Germany will in the future close down all atomic power plants they will be even more in the hands of the Russian. This method has been used against Ukraine in 2009 and against Belarus this Wednesday.

China has been using these methods for many years. They have invested heavily in USA. Not only to be nice to he Americans, but also to be able to put pressure on USA by affecting the financial market. The last few years the American military forces personnel has been more affected by the drop on the real estate market due to the crash of the sub-prime loan system than by the wars in Iraq and Afghanistan.

In Sweden the politicians are very aware of this problem. The financial problems of Saab Automobile could be solved by letting the Russian financial Oligark Vladimir Antonov or the Chinese company Pang Da invest in the company. Saab Automobile is desperate to get money and this will of course result in a very good opportunity for the Russian and Chinese. Who knows what clauses will be in the secret parts of the contract? In the future this could result in Swedish interests being controlled by the Russian mafia or the Chinese communist dictators. Neither is wanted by the Swedish politicians and maybe it is from a political and strategical point of view better to let Saab Automobile slowly fade away then to loose control of the politics in western Sweden to foreign influence?

The usefulness of military thinking in business and vice versa has been known throughout history.

Carl von Clausewitz found a lot of similarities between war and business.

"Rather than comparing [war] to art we could more accurately compare it to commerce, which is also a conflict of human interests and activities; and it is still closer to politics, which in turn may be considered as a kind of commerce on a larger scale." On War, Book I, Ch. 3

In China the indirect method has always been preferred to direct assault. The Chinese always remember the wise teachings of Sun Tzu.

"To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy's resistance without fighting."

in more modern times we have John Boyd who invented the OODA-loop for fighter combat. But he later went on in his teachings and used the theories for the OODA-loop into economy. In economy it is more known as PDCA, Plan - Do - Check - Act. When he goes the next step and try to make it into thermodynamics he maybe went a step to far..

Many soldiers has, based upon their war experiences, made a good civilian career as business leaders. They have learned how to lead men and how to take quick decisions. (Note: this does not apply to peace time officers who are not allowed to take any decisions at all by the system).

Why start a war to win territory or natural resources when you can buy them? Why start a war when it is cheaper to buy peace and you will gain the same advantages? On the other hand for some companies war is alway the best thing for business!

In Sweden the Department of Defence is in reality controlled by the Minister of Finance. Maybe Sweden should go one step further and not only control the budget of the military, but also use the military to gain financial advantage? There are a lot of discussions in Sweden about Cyber Warfare, information warfare and IT-soldiers. Why not use this kind of capability in order to make "war" the 21:st century way?

Always remember:

"War is business and business is good".

1 comment:

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