Battleground Beirut: Western colony or back to the East?

Battleground Beirut: Western colony or back to the East?

August 12, 2020

By Pepe Escobar – republished from Asia Times by permission of author

As much as Covid-19 has been instrumentalized by the 0.001% to social engineer a Great Reset, the Beirut tragedy is already being instrumentalized by the usual suspects to keep Lebanon enslaved.

Facing oh so timely color revolution-style “protests”, the current Lebanese government led by Prime Minister Diab has already resigned. Even before the port tragedy, Beirut had requested a $10 billion line of credit from the IMF – denied as long as trademark, neoliberal Washington consensus “reforms” were not implemented: radical slashing of public expenses, mass layoffs, across the board privatization.

Post-tragedy, President Emmanuel Macron – who’s not even capable of establishing a dialogue with the Gilets Jaunes/Yellow Vests in France – has opportunistically jumped in full neocolonial mode to pose as “savior” of Lebanon, as long as the same “reforms”, of course, are implemented.

On Sunday, France and the UN organized a videoconference to coordinate donor response – in conjunction with the European Commission (EC), the IMF and the World Bank. The result was not exactly brilliant: a paltry 252 million euros were pledged – once again conditioned by “institutional reforms”.

France came up with 30 million euros, Kuwait with 40 million, Qatar with 50 million and the EC with 68 million. Crucially, neither Russia nor Iran were among the donors. The US – which is harshly sanctioning Lebanon – and GCC allies Saudi Arabia and UAE pledged nothing. China had just a pro forma presence.

In parallel, Maronite Christians in Brazil – a very powerful community – are sending funds for the color revolution protests. Former President Michel Temer and industrialist tycoon Paulo Skaf even flew to Beirut. Former Lebanese President Amin Gemayel (1982-1988) maintained a lot of businesses in Brazil with funds he skimmed when in power.

All of the above points to neoliberalism taking no prisoners when it comes to keeping its deadly grip on Lebanon.

The Hariri model

Lebanon’s profound economic crisis, now aggravated by the Beirut port blast, has nothing to do with Covid-19 or the US proxy war on Syria – which brought a million refugees to the nation. It’s all about proverbial neoliberal shock and awe, conducted non-stop by the Hariri clan: former Prime Ministers Rafiq, assassinated in 2011, and Saad, chased out of power last January.

The Hariri model was focused on real estate speculation and financialization. The Solidere group, controlled by Arab investors and a few Lebanese, Hariri included, destroyed Beirut’s historical downtown and rebuilt it with luxury real estate. That’s the classical rentier neoliberalism model that always profits a tiny elite.

In parallel, the Bank of Lebanon was attracting funds from the tony Lebanese diaspora and assorted Arab investors by practicing very generous interest rates. Lebanon suddenly had an artificially strong currency.

A small middle class sort of flourished throughout the 2000s, comprising import-export traders, the tourism sector and financial market operators. Yet, overall, inequality was the name of the game. According to the World Inequality Database, half of Lebanon’s population now holds less wealth that the top 0.1%.

The bubble finally burst in September last year, when I happened to be in Beirut. With no US dollars in circulation, the Lebanese pound started to collapse in the black market. The Bank of Lebanon went berserk. When the Hariri racket imposed a “Whatsapp tax” over calls, that led to massive protests in October. Capital embarked on free flight and the currency collapsed for good.

There’s absolutely no evidence the IMF, the World Bank and assorted Western/Arab “donors” will extricate a now devastated Lebanon from the neoliberal logic that plunged it into a systemic crisis in the first place.

The way out would be to focus in productive investments, away from finance and geared towards the practical necessities of an austerity-battered and completely impoverished population.

Yet Macron, the IMF and their “partners” are only interested in keeping monetary “stability”; seduce speculative foreign capital; make sure that the rapacious, Western-connected Lebanese oligarchy will get away with murder; and on top of it buy scores of Lebanese assets for peanuts.

BRI or bust

In stark contrast with the exploitative perpetuation of the Western neoliberal model, China is offering Lebanon the chance to Go East, and be part of the New Silk Roads.

In 2017, Lebanon signed to join the Belt and Road Initiative (BRI).

In 2018, Lebanon became the 87th member of the Asia Infrastructure Investment Bank (AIIB).

Over the past few years, Lebanon was already taking part in the internationalization of the yuan, offering bank accounts in yuan and increasing bilateral trade in yuan.

Beijing was already engaged in discussions revolving around the upgrading of Lebanese infrastructure – including the expansion of Beirut harbor.

This means that now Beijing may be in the position of offering a renewed, joint rebuilding/security deal for Beirut port – just as it was about to clinch a smaller agreement with Diab’s government, focused only on expansion and renovation.

The bottom line is that China has an actual Plan A to extricate Lebanon from its current financial dead end.

And that’s exactly what was, and remains, total anathema to US, NATO and Israel’s interests.

The Trump administration recently went no holds barred to prevent Israel from having China develop the port of Haifa.

The same “offer you can’t refuse” tactics will be applied with full force on whoever leads the new Lebanese government.

Beirut is an absolutely key node in BRI’s geopolitical/geoeconomic connectivity of the Eastern Mediterranean. With Haifa temporarily out of the picture, Beirut grows in importance as a gateway to the EU, complementing the role of Pireus and Italian ports in the Adriatic.

It’s crucial to note that the port itself was not destroyed. The enormous crater on site replaces only a section quayside – and the rest is on water. The buildings destroyed can be rebuilt in record time. Reconstruction of the port is estimated at $15 billion – pocket money for an experienced company such as China Harbor.

Meanwhile, naval traffic is being redirected to Tripoli port, 80 km north of Beirut and only 30 km away from the Lebanon-Syria border. Its director, Ahmed Tamer, confirms “the port has witnessed during the past years the expansion work by Chinese companies, and it has received the largest ships from China, carrying a big number of containers”.

Add to it the fact that Tripoli port will also be essential in the process of Syria reconstruction – to which China is totally committed.

BRI’s Southwest Asia connectivity network is a maze including Iran, Iraq, Syria and Lebanon.

China is already planning to invest in highway and railroads, further to be developed into high-speed rail. That will connect BRI’s central China-Iran corridor – fresh from the $400 billion, 25-year strategic partnership deal soon to be signed – with the Eastern Mediterranean.

Add to it the role of the port of Tartus in Syria – bearing a strong Russian naval presence. Beijing will inevitably invest in the expansion of Tartus – which is crucially linked by highway to Lebanon. The Russia-China strategic partnership will be involved in the protection of Tartus with S-300 and S-400 missile systems.

Historically, in a larger axis that went from Samarkand to Cordoba, with strong nodes such as Baghdad and Damascus, what slowly evolved in this part of Eurasia was a syncretic civilization superimposed over an ancestral regional, rural and nomad background. The internal cohesion of the Muslim world was forged from the 7th century to the 11th century: that was the key factor that shaped the lineaments of a coherent Eurasia.

Apart from Islam, Arabic – the language of religion, administration, trade and culture – was an essential unifying factor. This evolving Muslim world was configured as a vast economic and cultural domain whose roots connected to Greek, Semitic, Persian, Indian and Arab thought. It was a marvelous synthesis that formed a unique civilization out of elements of different origin – Persian, Mesopotamian, Byzantine.

The Middle East and the Eastern Mediterranean were of course part of it, totally open towards the Indian Ocean, the Caspian routes, Central Asia and China.

Now, centuries later, Lebanon should have everything to gain by ditching the “Paris of the Orient” mythology and looking East – again, thus positioning itself on the right side of History.

The unbearable lightness of China

April 26, 2020

By Pepe Escobar – posted with permission

This image has an empty alt attribute; its file name is Kishore-Mahbubani-300x198.jpg
Singaporean ex-diplomat and author Kishore Mahbubani speaks at an Asia Society event in a file photo. Photo: Flickr Commons

As a living embodiment of how East and West shall meet, Mahbubani is immeasurably more capable to talk about Chinese-linked intricacies than shallow, self-described Western “experts” on Asia and China.

Especially now when demonization-heavy hybrid war 2.0 against China is practiced by most factions of the US government, the Deep State and the East Coast establishment.

Distinguished fellow at the National University of Singapore’s Asia Research Institute, former president of the UN Security Council (from 2001 to 2002) and the founding dean of the Lee Kuan Yew School of Public Policy (2004-2017), Mahbubani is the quintessential Asian diplomat.

Ruffling feathers is not his business. On the contrary, he always deploys infinite patience – and insider knowledge – when trying to explain especially to Americans what makes the Chinese civilization-state tick.

All through a book elegantly argued and crammed with persuasive facts, it feels like Mahbubani is applying the Tao. Be like water. Let it flow. He floats like a butterfly reaching beyond his own “paradoxical conclusion”: “A major geopolitical contest between America and China is both inevitable and avoidable.” He centers on the paths towards the “avoidable.”

The contrast with the confrontational, stale and irrelevant Thucydides Trap mindset prevalent in the US could not be starker. It’s quite enlightening to observe the contrast between Mahbubani and Harvard University’s Graham Allison – who seem to admire each other – at a China Institute debate.

An important clue to his approach is when Mahbubani tells us how his Hindu mother used to take him to Hindu and Buddhist temples in Singapore – even as in the island-state most Buddhist monks were actually Chinese. Here we find encapsulated the key cultural/philosophical India-China crossover that defines “deep” East Asia, linking Confucianism, Buddhism and the Tao.

All about the US dollar 

For Asia hands, and for those, as in my case, who have actually lived in Singapore, it’s always fascinating to see how Mahbubani is the quintessential Lee Kuan Yew disciple, though without the haughtiness. As much as his effort to understand China from the inside, across the spectrum, for decades, is more than visible, he’s far from being a disciple of the Chinese Communist Party (CCP).

And he stresses the point in myriad ways, showing how, in the party slogan, “Chinese” is way more important than “Communist”: “Unlike the Soviet Communist Party, [the CCP] is not riding on an ideological wave; it is riding the wave of a resurgent civilization … the strongest and most resilient civilization in history.”

Inescapably, Mahbubani outlines both Chinese and American geopolitical and geo-economic challenges and shortcomings. And that leads us to arguably the key argument in the book: how he explains to Americans the recent erosion of global trust in the former “indispensable nation,” and how the US dollar is its Achilles’ heel.

So once again we have to wallow in the interminable mire of reserve currency status; its “exorbitant privilege,” the recent all-out weaponization of the US dollar and – inevitably – the counterpunch: those “influential voices” now working to stop using the US dollar as reserve currency.

Enter blockchain technology and the Chinese drive to set up an alternative currency based on blockchain. Mahbubani takes us to a China Finance 40 Forum in August last year, when the deputy director of the People’s Bank of China, Mu Changchun, said the PBOC was “close” to issuing its own cryptocurrency.

Two months later, President Xi announced that blockchain would become a “high priority” and a matter of long-term national strategy.  It’s happening now. The digital yuan – as in a “sovereign blockchain” – is imminent.

And that leads us to the role of the US dollar in financing global trade. Mahbubani correctly analyzes that once this is over, “the complex international system based on the US dollar could come tumbling down, rapidly or slowly.” China’s master plan is to accelerate the process by connecting its digital platforms – Alipay, WeChat Pay – into one global system.

Asian Century 

As Mahbubani carefully explains, “while Chinese leaders want to rejuvenate Chinese civilization, they have no missionary impulse to take over the world and make everyone Chinese.” And still, “America convinced itself that China has become an existential threat.”

The best and the brightest across Asia, Mahbubani included, never cease to be amazed at the American system’s total inability to “make strategic adjustments to this new phase in history.” Mahbubani dedicates a whole chapter – “Can America make U-turns?” – to the quandary.

In the appendix he even adds a text by Stephen Walt debunking “the myth of American exceptionalism.” There’s no evidence the Exceptionalistan ethos is being seriously contested.

A recent McKinsey report  analyzes whether the “next normal” will emerge from Asia, and some of its conclusions are inevitable: “The future global story starts in Asia.” It goes way beyond prosaic numbers stating that in 20 years, by 2040, “Asia is expected to represent 40% of global consumption and 52% of GDP.”

The report argues that, “we may look back on this pandemic as the tipping point when the Asian Century truly began.”

In 1997, during the same week when I was covering the Hong Kong handover, I published a book in Brazil whose translated title was 21st: The Asian Century (excerpts from a few chapters may be found here). By that time I had already lived in Asia for three years, and learned quite a few important lessons from Mahbubani’s Singapore.

China then was still a distant player on the new horizon. Now it’s a completely different ball game. The Asian Century – actually Eurasian Century – is already on, as Eurasia integration develops driven by hard-working acronyms (BRI, AIIB, SCO, EAEU) and the Russia-China strategic partnership.

Mahbubani’s book, capturing the elusive, unbearable lightness of China, is the latest illustration of this inexorable flow of history.

Has China Won? The Chinese Challenge to American Primacy (Kishore Mahbubani), published by Public Affairs (US$19.89).

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