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Korean Crisis Control

Having just been on holiday with two very strong-willed little boys aged 8 and 9, I feel particularly well qualified to explain why the two Koreas went to the brink of war over some loudspeakers, but didn’t go over the edge. George and James could explain the process even better themselves, but child labour laws prevent them from writing for newspapers, so I’ll do it for them.

It began with a land-mine explosion in the Demilitarised Zone between the two countries that severely wounded two South Korean army sergeants. The mine was of an old Soviet design, so Seoul said it must have been put there by North Korea and demanded an apology from Pyongyang.

The North Korean denied it, of course, but Pyongyang gets very upset every year around this time, when South Korea and the United States hold their annual joint military exercises.

So to punish North Korea, South Korea re-activated the loudspeakers that used to broadcast anti-North Korean propaganda across the DMZ until they were turned off eleven years ago. Nobody could hear the propaganda except North Korean soldiers on the other side of the DMZ, so it’s hard to see what actual harm it was doing, but North Korea rose to the bait with alacrity.

Last Thursday afternoon, North Korean troops fired a rocket and several artillery shells at the loudspeakers, though none seem to have hit them. South Korea responded with a barrage of dozens of 155mm artillery rounds, which led North Korean leader Kim Jong-un (the pudgy one with the very bad haircut) to declare a “semi-state of war” and set a 48-hour deadline for the loudspeakers to be turned off.

Otherwise, Kim said, his troops would carry out “indiscriminate strikes” against the South. This would have been a grave threat if he actually meant it, since most of Seoul, a city of 25 million people, is within artillery range of the DMZ, but the Saturday deadline passed without further shooting.

Instead, urgent talks began on Saturday in the “truce” village of Panmunjom, in the middle of the DMZ, between Hwang Pyong-so, the political director of the North Korean armed forces, and Kim Kwan-jin, national security adviser to the South Korean president.

The talks lasted more than three days, with the South Korean loudspeakers still blaring out and North Korean artillery, landing craft and submarines moving towards the frontiers. “If nothing is agreed, we have to continue the broadcasting,” said the South Korean representative at the talks. “We are tired of speaking the language of escalation.”

That last sentence didn’t even make sense. Were Kim Kwan-jin and his North Korean counterpart really flirting with the idea of a war that would certainly kill hundreds of thousands of people, and might even turn nuclear, over some loudspeakers? Maybe, but there was a distinct lack of panic in other capitals, and in the end they made a deal.

That brings us back to the two litle boys. Siblings who are close in age, even if they are friends, are also rivals, and they generally squabble a lot. They often get locked into quarrels over matters of little or no importance and seem unable to walk away from them.

What keeps these struggles from ending in real violence, and usually restores order in the end, is adult intervention. Even if they resent it, the kids also secretly welcome it, because it frees them from the trap of their own emotions.

The adults, in this case, are the great-power allies of the two Koreas: China for the North, and the United States for the South. It’s not that Americans and Chinese are really more grown-up than Koreans, but being farther away, they could see how petty the confrontation really is, and they had no intention of being dragged into a war over it.

So in the end North Korea expressed “regret” about the land-mine, and South Korea turned off the loudspeakers, and everybody lived grumpily ever after. Or something like that.

Gwynne Dyer is an independent journalist whose articles are published in 45 countries.

Fracking Is Winning

“No one can set the price of oil. It’s up to Allah,” said Saudi Arabian Oil Minister Ali al-Naimi in May. But less devout people believe that Saudi Arabia has been trying very hard to set the price of oil – and to set it low. Moreover, it has been remarkably successful, because last week the price of oil was in the mid $40s per barrel, down from just over $100 last May. But Riyadh is not achieving its objective.

Saudi Arabia, like any oil producer, likes a high price for its oil, but since it is very rich and has huge reserves it thinks long-term. Watching American oil production almost double in the past seven years, mainly thanks to the rapid rise of fracking, the Saudis could see that they risked losing their role as the “swing producer” who can raise or lower the oil price just by cutting or increasing its own production.

The only way Saudi Arabia could keep that role was to drive the American frackers out of business. Production costs are secret in the oil world, but the Saudis assumed that the injection of water, sand and chemicals into shale rock at high pressure makes hydraulic fracturing – fracking – very expensive.

So the Saudi strategy is to keep its own production high in order to push the the oil price down. If the price stays low enough for long enough, high-cost producers like the frackers will have to close down. Then, once the competition had been eliminated, Saudi Arabia jacks the price back up by cutting its own production, and the glory days return.

In the meantime Saudi Arabia is losing income too, of course, and oil revenues account for 90 percent of the national budget. It can live on savings for a while, but it needs a fairly quick win.

It would be politically unwise to cut the lavish government spending that keeps the Saudi population happy, and the government is also involved in an expensive war in Yemen. The missing income has mostly been replaced by withdrawals from the country’s huge foreign reserves, estimated a year ago at $700 billion – but those reserves have fallen by $65 billion in the past year.

The Saudis don’t want to run those reserves down too far: without them, it could not afford to play the role of “swing producer”, and would lose most of its diplomatic clout. So last week, for the first time in eight years, Saudi Arabia started selling government bonds, planning to raise $27 billion by the end of the year. The strain is starting to show.

The strain of this attritional battle is also showing in the United States, where various shale oil producers have cancelled or postponed new drilling projects. But the shale producers have consolidated into bigger companies and increased the efficiency of their production processes, and US oil production is actually continuing to grow this year. It is now at about 90 percent of Saudi production.

The brutal fact is that the Saudis are losing this battle. When the US was the biggest producer of oil, before about 1970, it was the swing producer. Within a few years, it will have overtaken Saudi oil production and will be the swing producer again. And there is nothing Riyadh can do about it.

The Saudis made two mistakes. The first was to overestimate the cost of US shale oil production, and assume that any price below about $80 per barrel would make it unprofitable. There are some shale oil plays for which this is true, but the costs vary wildly, according to the local geology, and can be as low as $20 per barrel. Most shale oil is profitable at $60 per barrel, and that proportion is rising rapidly as consolidation proceeds and efficiency rises.

Their other, bigger mistake was to believe that victory was possible at all. When you stop production from a conventional oil well, there is a large permanent loss of flow when you restart production. The pores in the oil-bearing rock clog up, and that permanently reduces the “bottom-hole” pressure that forces the oil to the surface.

Stopping production at a shale-oil site incurs no such loss, since the producers create the pressure themselves. Uncap it, and the flow resumes as before.

So even if the Saudis succeeded in forcing most of the shale-oil sites to close, the shale producers would just turn the flow on again as soon as Saudi Arabia declared victory and cut production to get the price of oil back up.

It will take a little more time to the Saudis to acknowledge their mistake, and they may not even be able to get the price back up to where they need it by cutting production. American production will continue to rise, and Iranian oil will probably also be coming back on the market in a big way by next year.

The Saudis will stay rich, but they will have to cut their spending and they will suffer a permanent loss of influence. Their only consolation will be that Iran, which they see as their greatest enemy, won’t be able to use its oil to buy influence either.
To shrten to 725 words, omit paragraphs 7 and 8. (“The Saudis…production”)

Japan: Gutting Article 9

Fifty-five years ago Nobosuke Kishi, Japan’s prime minister, resigned just after winning the battle to push the treaty revising the country’s military alliance with the United States through parliament. The demonstrations against it were so massive and violent that his political capital was exhausted. Today his grandson, Prime Minister Shinzo Abe, is waging a quite similar battle, but he will probably get away with it. More’s the pity.

Abe, like his grandfather, is on the right of Japanese politics, and his target this time is Article 9 of Japan’s post-war “Peace Constitution”. That clause undermines his vision of Japan as a “normal country” (like the United States, Britain or France) that sends its troops overseas to fight wars.

The language of Article 9 is clear. It says that “the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes….Land, sea, and air forces, as well as other war potential, will never be maintained.” It would take a pretty sharp lawyer to get around that.

Moreover, it’s very hard to change the Japanese constitution. It would take a two-thirds majority in each house of parliament, plus a national referendum, to change or drop Article 9. Abe would certainly lose that referendum: 80 percent of Japanese like Article 9 just the way it is.

This is deeply ironic, since it was written into the post-war Japanese constitution in 1946 by the American occupation authorities, who feared that otherwise Japan might re-militarise and become an international threat again. By the mid-1950s, however, the United States was locked into the Cold War confrontation with Communist China and the Soviet Union, and it badly wanted Japanese military support in Asia.

But by then the Japanese population had fallen in love with Article 9. After three million war dead, followed by the atomic bombings at Hiroshima amd Nagasaki, they wanted nothing more to do with militarised great-power politics. Article 9 became their foolproof excuse for staying out of the whole stupid, bloody game.

Those are the opinions of ordinary Japanese, however. They are not so widely held among the elite – and Japan has an elite like few other countries.

A Japanese historian once told me in confidence that he reckoned around four hundred people – politicians, industrialists and senior bureaucrats – make almost all the decisions in Japan. Moreover, they have been inter-marrying for generations, and are almost all distantly related to one another. Which explains, perhaps, why the grandson of a “Class A” war criminal is now the prime minister of Japan.

There’s an interesting contrast between Nobosuke Kishi, who became Minister of Munitions in the Imperial Japanese government in 1941, and Albert Speer, whom Hitler appointed as Minister of Armaments and War Production in early 1942. Both men were arrested at war’s end, and Speer was sentenced to 20 years in prison.

But Kishi was never charged, and while Speer languished in Spandau prison Kishi was freed, helped to found the Liberal Democratic Party that has dominated Japanese politics ever since, and was elected prime minister in 1957. In fact, the great majority of the “400” of that era were back in business by the mid-1950s: the United States needed to get Japan back on its feet in a hurry, and it had nowhere else to turn.

So here we are, half a century later, and their descendants are still in charge. Japan is a democracy, but the voters mainly get to choose between members of the “400”. Kishi’s brother, Eisaku Sato, was prime minister for eight years in the 1960s and early 1970s, and his grandson Shinzo Abe became prime minister for the first time in 2006.

It’s safe to say that most members of the elite have always wanted Japan to become a “normal country” that is free to fight wars again. They aren’t thinking about aggressive wars, of course; only “just” wars, probably alongside their American allies. The big stumbling block has always been popular opinion – but Shinzo Abe has found a way around that.

If you can’t win a referendum on constitutional change, then don’t hold one. Just “reinterpret” Article 9 so it means the opposite of what it seems to say. Shinzo Abe’s cabinet did that last year, declaring that Article 9 really allows the military to go into battle overseas to protect allies — so-called “collective defence” — even if there is no direct threat to Japan or its people. That covers just about every contingency you can imagine.

Last week Abe pushed two bills through parliament that reshape military policy and structures in accord with that “reinterpretation”. The opposition parties walked out and thousands demonstrated outside the parliament building, but the deed is done, and there won’t be any referendum about it.

Unless some mass movement arises to protest against this cynical manipulation of the law, Abe will get away with it. The “Peace Constitution” will need a new name, and the United States will finally have a Japan willing to fight by its side. No doubt that will make the world a safer place.
To shorten to 725 words, omit paragraphs 5 and 6. (“This is…game”)

After the Iran Nuclear Deal

The thing to bear in mind about Tuesday’s deal between Iran and the P5+1 countries (the United States, Britain, France, Germany, Russia and China) is that without it Iran could get nuclear weapons whenever it wants in a short tme. It has the technologies for enriching uranium, it could make the actual bombs any time it likes (every major country knows how), and the sanctions against Iran could not get much worse than they are now.

If you don’t like the current deal, and you really believe that Iran is hell-bent on getting nuclear weapons, then your only remaining option is massive air strikes on Iran. Not even the Republican Party stalwarts in the US Congress are up for committing the US Air Force to that folly, and Israel without American support simply couldn’t do it on its own.

Then what’s left? Nothing but the deal. It doesn’t guarantee that Iran can never get nuclear weapons. It does guarantee that Iran could not break the agreement without giving everybody else at least a year to respond before the weapons are operational. Sanctions would snap back into place automatically, and anybody who thinks air strikes are a cool idea would have plenty of time to carry them out.

So the deal will survive. Israel’s Prime Minister Binyamin Netanyahu can fulminate about how it is a “an historic mistake” that will give Tehran “a sure path to nuclear weapons,” but he cannot stop it.

Netanyahu is obsessive about Iran, but even his own intelligence services do not believe that Tehran has actually been working on nuclear weapons in the past decade. The Israeli prime minister has burned all his bridges with US President Barack Obama, and his Republican allies in the US Congress cannot stop the deal either.

John Boehner, the speaker of the House of Representatives, said that the deal will “hand a dangerous regime billions of dollars in sanctions relief while paving the way for a nuclear Iran,” and he can probably muster a majority in Congress against it. (Congress, as Washington insiders put it, is “Israeli-occupied territory.”) But he cannot muster the two-thirds majority that would be needed to override Obama’s inevitable veto.

There will be a 60-day delay while Congress debates the issue, but this deal will go through in the end. So far, so good – but this is not happening in a vacuum. What are the broader implications for Middle Eastern politics?

Ever since the victory of the Islamic revolution 36 years ago, Iran and the United States have been bitter enemies. They have not suddenly become allies, but they are already on good speaking terms. Since almost all of America’s allies in the Arab world see Iran as a huge strategic threat, they are appalled by the prospect of a US-Iran rapprochement.

That is not a done deal yet. While Iran strongly supports Bashar al Assad’s beleaguered regime in Syria, Washington still advocates Assad’s overthrow and arms some of the “moderate” rebels. It even supports Saudi Arabia’s bombing campaign against the Houthi rebels who now control most of Yemen, and publicly accepts the Saudi claim that the Houthis are mere pawns who are being armed and incited to revolt by Iran.

But nobody in the White House, the State Department or the Pentagon really believes that the civil war in Yemen is an Iranian plot. Very few believe any longer that Assad can be overthrown in Syria without handing the country over to the Islamist fanatics who dominate the insurgency there. And the most powerful force among those fanatics is “Islamic State”, whose troops are already being bombed by the United States in both Syria and Iraq.

The highest US priority in the Middle East now is to prevent Iraq and Syria from falling into the hands of Islamic State and its equally extreme rival, the Nusra Front. Iran is giving both the Syrian and the Iraqi governments military support that is essential to their survival, so there is obviously the potential for closer US-Iranian cooperation here.

By contrast Saudi Arabia and Turkey, currently America’s two most important allies in the region, are pouring money and weapons into the Nusra Front in Syria, which is why it has been winning so many battles against the Assad regime in recent months. The prospect of an Islamist regime in power in Damascus is acceptable to Riyadh and Ankara, but it is deeply unwelcome in Washington.

So yes, a grand realignment of American alliances in the Middle East is theoretically possible now that the long cold war between the US and Iran is over. In practice, however, it is most unlikely to happen. The long-standing military and economic ties between Washington and its current allies will probably triumph over cold strategic logic, and American policy in the Middle East will continue to be the usual muddle.
To shorten to 725 words, omit paragraphs 9 and 10. (“That is…Iraq”)