tag:blogger.com,1999:blog-26475810393138429672024-03-09T01:33:39.038+05:30Welcome to Seshadri Kumar's Web HomeRuminations on Politics, Music, Movies, Literature, and All the News that's Fit to ScreenSeshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.comBlogger103125tag:blogger.com,1999:blog-2647581039313842967.post-13276432054593838422022-11-25T11:31:00.319+05:302022-12-06T01:43:33.430+05:30The Coming European Economic Apocalypse
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Written by Dr. Seshadri Kumar, 25 November, 2022
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Copyright © 2022 Dr. Seshadri Kumar. All Rights Reserved.
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Executive Summary
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<p align="justify" class="western" style="direction: ltr; font-family: "Liberation Serif", serif; font-size: 12pt; line-height: 16px; margin-bottom: 0cm;">At the start of the human tragedy that is the Ukraine war, I delved into the underlying causes of the conflict from the perspective of a historian and political scientist. That analysis, “Understanding The Great Game in Ukraine,” is available <span style="color: navy;"><span lang="zxx"><u><a href="https://medium.com/@nayakan88/understanding-the-great-game-in-ukraine-330897142aaa">here</a></u></span></span>.</p><p align="justify" class="western" style="direction: ltr; font-family: "Liberation Serif", serif; font-size: 12pt; line-height: 16px; margin-bottom: 0cm;">Events have progressed since then, and an important fallout of the war has been economic. In this article, I look at the role and situation of Europe from the perspective of an economist.</p><p align="justify" class="western" style="direction: ltr; font-family: "Liberation Serif", serif; font-size: 12pt; line-height: 16px; margin-bottom: 0cm;">The European Union has taken a very definite political stance on the Russia-Ukraine conflict, aligned with the United States. It has applied 8 rounds of economic sanctions against Russia, and at the time of writing, is working on a 9<sup>th</sup> package.</p><p align="justify" class="western" style="direction: ltr; font-family: "Liberation Serif", serif; font-size: 12pt; line-height: 16px; margin-bottom: 0cm;">What has the <b>economic</b> impact of these sanctions been - on Russia and on Europe itself? What will happen in the months to come? That is the focus of the present article. I conclude that</p><p></p><ul style="font-family: "Liberation Serif", serif; font-size: 12pt; text-align: left;"><li>The war in Ukraine that started on February 24, 2022, is going to be the most consequential change in the world since the Second World War. It is going to fundamentally change power relationships in the world. The dominance of the Western world will end and be replaced by a multipolar world.</li><li>Europe’s prosperity of the past few centuries is likely to end because of short-sighted and poorly-thought-out decisions related to the Ukraine conflict, taken by European leaders with the full support of their people. These have to do primarily with the ill-considered economic sanctions that Europe has unilaterally applied on Russia, that have started to boomerang on Europe, with the high probability of things getting much worse in the coming months.</li></ul><p></p>
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The analysis presented here is primarily an economic one, and mainly looks at the effect on the economies of Europe of prolonged sanctions (and, in the present context, “prolonged” could even mean another six months) imposed by the West on Russia.
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I present evidence that makes the case that Western sanctions on Russia have hurt Europe a lot more than they have hurt Russia in the nine months since they were imposed, and in the coming months will continue to severely degrade Europe’s economies, while only marginally affecting Russia’s. The primary reason for this is that Russia is far more self-sufficient than Europe is. The only action that will save Europe is an unconditional revocation of its self-destructive sanctions and a peace agreement in Ukraine on Russia's terms.
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The only major assumptions I have made in this analysis are that, in the next two to three months,</p><p></p><ol style="text-align: left;"><li>The war in Ukraine does not end in complete defeat for Russia</li><li>Ukraine and Russia do not reach a peace agreement, and</li><li>Vladimir Putin is not ousted in a coup in Russia — and hence, the current economic and military policies of both Europe and Russia will continue for the foreseeable future. </li></ol><p></p>
<p>Although Russia looks unlikely to be affected very significantly by Western sanctions, and is in a strong position on the battlefield, because of its high inherent economic and military strength (recent reported gains by Ukraine notwithstanding), <strong>I argue that in the unlikely case event that Russia were to appear likely to lose the war on the battlefield or on the economic front, China will do whatever it takes to prevent such outcomes, to secure its own future.</strong></p><p>
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This essay is organized in six chapters, followed by a summary and conclusions chapter:
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<strong><a href="#TOC1">Chapter I</a></strong> details the background of the events that have happened since February 24, 2022, until today, especially the West’s economic sanctions as a response to Russia’s invasion, and highlights the fact that these sanctions, as well as the West’s military and economic aid to Ukraine, have not had the effect on Russia that the West had hoped for.
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<strong><a href="#TOC2">Chapter II</a></strong> discusses various indicators related to the Russian economy and concludes that it is in better health than many Western nations, especially in the context of the protracted economic war between Russia and Europe that has been initiated by Europe through the enforcement of Western sanctions on Russia.
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<strong><a href="#TOC3">Chapter III</a></strong> talks about Russia’s interconnectedness with the rest of the world and, especially, with Europe, in terms of trade balances, and concludes that Russia is far more important to Europe than Europe is to Russia. It also concludes that an embargo of Russian goods would not fatally harm the Russian economy.
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<strong><a href="#TOC4">Chapter IV</a></strong> talks specifically about Europe’s energy dependency on Russia, and shows that <strong>Europe’s energy crisis is not one of price but of supply</strong> — that the energy supplied by Russia cannot be replaced by any other source; that most European nations are critically dependent on irreplaceable Russian supplies of natural gas, crude and refined petroleum, and coal; that a European energy embargo on Russia will be devastating to European economies and cause the de-industrialization of Europe, while causing minimal and manageable losses to Russia.
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<strong><a href="#TOC5">Chapter V</a></strong> talks about the de-industrialization of Europe which has started to happen because of the West’s sanctions on Russia that have resulted in depriving Europe’s economies, not only of Russian gas, oil, and coal, but potentially of food, fertilizer, and several valuable minerals that Russia is a dominant supplier of, and how this de-industrialization is going to intensify in the coming months and years. It also explains how this crisis is two years in the making, and that the war in Ukraine is just the last nail in Europe’s economic coffin. It also talks about the negative consequences on Europe of the impending oil price cap that it plans to impose on Russian oil exports.
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<strong><a href="#TOC6">Chapter VI</a></strong> talks about what Europe can do in response to these challenges, by discussing the most commonly floated solutions: gas storage in Europe, LNG (Liquefied Natural Gas), and renewable energy; and shows how none of these options will be adequate to stave off the coming economic apocalypse for Europe.
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Finally, a <strong><a href="#TOC7">SUMMARY AND CONCLUSIONS</a></strong> chapter talks about the longer-term impact of the West’s sanctions on Russia, and how they will fundamentally change the power calculus in the twenty-first century.</li>
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Table of Contents
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<a href="#TOC1">CHAPTER I: BACKGROUND AND CURRENT STATUS</a>
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<a href="#TOC1a">The Failure of the Economic Blitzkrieg</a>
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<a href="#TOC1b">The Stoppage of Russian Gas and the Nord Stream Sabotage</a>
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<a href="#TOC1c">Who Will Win the Military and Economic Wars?</a>
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<a href="#TOC1d">Those Who Forget History...</a>
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<a href="#TOC1e">A Tale of Ineffective Sanctions</a>
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<a href="#TOC1f">Key Takeaways from Chapter I</a>
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<a href="#TOC2">CHAPTER II: THE STRENGTH OF THE RUSSIAN ECONOMY</a>
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<a href="#TOC2a">Sanctions are Not New to Russia</a>
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<a href="#TOC2b">Russia’s Economic Parameters: GDP</a>
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<a href="#TOC2c">Russia’s Economic Parameters: Debt-to-GDP Ratio</a>
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<a href="#TOC2d">Russia’s Holdings of US Treasury Bonds</a>
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<a href="#TOC2e">Russia’s Strength in Armaments Production</a>
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<a href="#TOC2f">Key Takeaways from Chapter II</a>
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<a href="#TOC3">CHAPTER III: RUSSIA’S INTERCONNECTEDNESS WITH THE WORLD</a>
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<a href="#TOC3a">Trade Imbalances and Export/Import Ratios</a>
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<a href="#TOC3b">The Green Transition and the Role of Gas</a>
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<a href="#TOC3c">Destinations of Russian Exports and Origins of Russian Imports</a>
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<a href="#TOC3d">The China-Russia “No Limits” Partnership</a>
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<a href="#TOC3e">A Detailed Look at Some Bilateral Relations</a>
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<a href="#TOC3f">Russia’s Trade Balances with European Nations</a>
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<a href="#TOC3g">Replacing Europe’s Exports to Russia</a>
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<a href="#TOC3h">Key Takeaways from Chapter III</a>
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<a href="#TOC4">CHAPTER IV. EUROPE’S ENERGY DEPENDENCE ON RUSSIA</a>
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<a href="#TOC4a">Russian Fossil Fuels Do Not Cost Europe Much</a>
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<a href="#TOC4b">Europe’s Energy Needs and Sources</a>
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<a href="#TOC4c">The Global Gas Market and Europe’s Needs</a>
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<a href="#TOC4d">The Global Oil Market and Europe’s Needs</a>
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<a href="#TOC4e">The Global Coal Market and Europe’s Needs</a>
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<a href="#TOC4f">Individual Country Profiles</a>
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<a href="#TOC4f1">Germany</a>
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<a href="#TOC4f2">Poland</a>
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<a href="#TOC4f3">The United Kingdom</a>
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<a href="#TOC4f4">Italy</a>
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<a href="#TOC4f5">France</a>
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<a href="#TOC4g">Summary of Europe’s Energy Dependencies on Russia</a>
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<a href="#TOC4h">Key Takeaways from Chapter IV</a>
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<a href="#TOC5">CHAPTER V. THE DE-INDUSTRIALIZATION OF EUROPE</a>
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<a href="#TOC5a">Industry Shutdowns</a>
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<a href="#TOC5b">A Crisis Long Overdue</a>
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<a href="#TOC5c">Natural Gas as a Feedstock</a>
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<a href="#TOC5d">The Impact of the Oil Price Cap</a>
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<a href="#TOC5e">More than Oil and Gas</a>
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<a href="#TOC5f">The Chinese Domination of the Commodity Market</a>
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<a href="#TOC5g">The Infeasibility of Economic Sanctions Against Both Russia and China</a>
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<a href="#TOC5h">Key Takeaways from Chapter V</a>
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<a href="#TOC6">CHAPTER VI. EUROPE’S ENERGY OPTIONS</a>
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<a href="#TOC6a">Europe’s Gas Storage Tanks</a>
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<a href="#TOC6b">LNG to the Rescue?</a>
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<a href="#TOC6c">Key Takeaways from Chapter VI</a>
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<a href="#TOC7">SUMMARY AND CONCLUSIONS</a>
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<a href="#TOC7a">“Not One Step Backward!”</a>
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<a href="#TOC7b">The Sanity Check that Europe Should Have Done in March</a>
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<a href="#TOC7c">Where Do We Go From Here?</a>
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<a href="#TOC7d">Overall Conclusions</a>
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<a href="#TOC8">LIST OF FIGURES</a>
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CHAPTER I: BACKGROUND AND CURRENT STATUS
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<a href="https://en.wikipedia.org/wiki/Russo-Ukrainian_War">The war in Ukraine</a> is in its tenth month. Europe has reacted in unprecedented ways to <span id="fig001">Russia’s invasion of Ukraine.</span> They have imposed several rounds of sanctions designed to choke the Russian economy and bring it to its knees, in order to force it to stop its military operations, in spite of the fact that Europe has been heavily dependent on Russian energy, Russian wheat, Russian fertilizers, and many other commodities originating from Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE7Wb8LCsQ-HRBP6OMyrmEywUt1LXkwgeDMPjACEIrlZj0HkXKeful1f1BngEnoP7SKrhPst5eFh5IOVTbO0KOXTDY4-mX-hp-D_sV_x7gWseOzvJt5Kve7LttYfBAM6bxqp4-3TA3HPFPaXFLF1d92vzPAFjRGiXgRf8psey6x-SaOoOv023cVwv3Lg/s1920/fig001_2022_Russian_invasion_of_Ukraine.svg.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1290" data-original-width="1920" height="269" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE7Wb8LCsQ-HRBP6OMyrmEywUt1LXkwgeDMPjACEIrlZj0HkXKeful1f1BngEnoP7SKrhPst5eFh5IOVTbO0KOXTDY4-mX-hp-D_sV_x7gWseOzvJt5Kve7LttYfBAM6bxqp4-3TA3HPFPaXFLF1d92vzPAFjRGiXgRf8psey6x-SaOoOv023cVwv3Lg/w400-h269/fig001_2022_Russian_invasion_of_Ukraine.svg.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Figure 001. The Russian Invasion of Ukraine</td></tr></tbody></table><br /><p><br /></p>
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The Failure of the Economic <span id="blitz">Blitzkrieg</span>
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The initial sanctions from Europe were unprecedented in their severity. The West imposed crippling economic sanctions against Russia, including banning most Russian banks from the SWIFT payment mechanism, which meant that Russia could no longer do business in US dollars. The US seized about half of Russia’s dollar reserves, more than $300 billion worth, that had been deposited in Western banks. The West threatened to sanction any country that was buying oil from Russia. Many prominent Western businesses closed shop in Russia.
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The US and Europe believed that these sanctions would be enough to deal a crushing blow to Russia’s war machine and force them to pull back from Ukraine in exchange for the sanctions to be withdrawn. But this did not happen. More than eight months since these “crippling economic sanctions” were imposed, most Russians have barely felt their impact. The lives of ordinary Russians have yet to be impacted in any meaningful way. <a href="https://indianexpress.com/article/explained/mcdonalds-russia-rebranding-vkusno-i-tochka-ukraine-war-7987709/">Yes, <span id="fig002">McDonald’s has sold its operations to a Russian company</span>, but business for the new company is still going strong.</a> Russians love their burgers under any name.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh58MDuSyM-GfxwluyDd7zz_QJe4XvF3I6bsJNlEdSIDT7MZhTzzlLdqwWmTJEbY6DJkF7EmIsQyDxnRNFoiF389Z9yRGHYFZ2j3FvYy9_-0IiRaBHUmI44OKvz_4PQEGPVo-xJ6XJNDNOh4If77iqPMkUki7jz-sUEP5qHGq5Qv11Cx7DaMCDnybXxqw/s1200/fig002_McD-new.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="667" data-original-width="1200" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh58MDuSyM-GfxwluyDd7zz_QJe4XvF3I6bsJNlEdSIDT7MZhTzzlLdqwWmTJEbY6DJkF7EmIsQyDxnRNFoiF389Z9yRGHYFZ2j3FvYy9_-0IiRaBHUmI44OKvz_4PQEGPVo-xJ6XJNDNOh4If77iqPMkUki7jz-sUEP5qHGq5Qv11Cx7DaMCDnybXxqw/w400-h223/fig002_McD-new.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 002. The Renamed McDonald's in Moscow</td></tr></tbody></table>
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While oil sales from Russia to the West have dropped, other countries, such as <span id="fig003">China and India, have ramped up their purchases of Russian oil.</span> <a href="https://www.reuters.com/business/energy/russian-oil-fuel-revenue-up-even-exports-fall-iea-2022-06-15/">Russia has earned record revenues from oil sales ever since the war broke out, even as it gives huge discounts to countries buying its oil.</a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbJbfs7PwTGGxzOD0gJWBF9iEAqXnWUz6ag8yasKNeQIulzFb2-vvWXnL7yL6r-2BdMHeSINfumpCFXqcvOQoYtMsUg4IP-KRIkykKQ64ueEhuCGSfwQa8xQofaEYwnOzQcCuhoLsp9fSXav0dy_q5jyy9BmIvgHRbOUtTPZvlLmQF9sIycxCzN-_tYA/s611/fig003_russianoilprodrevs.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="525" data-original-width="611" height="344" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbJbfs7PwTGGxzOD0gJWBF9iEAqXnWUz6ag8yasKNeQIulzFb2-vvWXnL7yL6r-2BdMHeSINfumpCFXqcvOQoYtMsUg4IP-KRIkykKQ64ueEhuCGSfwQa8xQofaEYwnOzQcCuhoLsp9fSXav0dy_q5jyy9BmIvgHRbOUtTPZvlLmQF9sIycxCzN-_tYA/w400-h344/fig003_russianoilprodrevs.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 003. Russian Oil Revenues Since the Start of the War</td></tr></tbody></table>
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On the battlefield, <span id="fig004">Russia today controls 15%-20% of Ukraine’s former territory</span>, <a href="https://www.aljazeera.com/news/2022/9/30/putin-announces-russian-annexation-of-four-ukrainian-regions">and has even formally added parts of territory that once belonged to Ukraine to Russia.</a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcv3t9UNZAvtbiwH-BBAqctnB3r4DmUizQCx0y0hOKSJir8YZSqL46FU00wvRsS9ok02U6CCQLhVn3gmaFUOS6U_pElkrwTNMW9ZhME5gLBy0zhO56m74AkwLqkbdpUfSOBkYoTmMC1qVs4wZpI5T0OC6IQzR4-en5ObVBPtLOBEaC6P661WScP1SFfg/s1524/fig004_UkraineTerritoryAnnexed.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1174" data-original-width="1524" height="309" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcv3t9UNZAvtbiwH-BBAqctnB3r4DmUizQCx0y0hOKSJir8YZSqL46FU00wvRsS9ok02U6CCQLhVn3gmaFUOS6U_pElkrwTNMW9ZhME5gLBy0zhO56m74AkwLqkbdpUfSOBkYoTmMC1qVs4wZpI5T0OC6IQzR4-en5ObVBPtLOBEaC6P661WScP1SFfg/w400-h309/fig004_UkraineTerritoryAnnexed.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 004. The Four Provinces Formally Annexed by Russia</td></tr></tbody></table>
<p>
This was not supposed to happen. Russia was not supposed to have the capacity to still wage war after eight months. <span id="fig005">The Western sanctions policy has failed – at least until now.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9w5MJPia0fyu0fpwAbsgmt4SCcVMnfe0eOgIKOJ7CxdizaTf1JWU66llYyPdmT5VwwBDkzq3QGPx3R0yUNf_kvrgNcjKluRp6PhlNyKmG9kWtrdrBmN6yu7gtiwXkEwv60JHPAS74sOuvxDaV7G9E9xqTqS3xH4nC13pvIXPXpb6yV2P33rNDTY86tA/s1052/gcp.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="744" data-original-width="1052" height="283" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9w5MJPia0fyu0fpwAbsgmt4SCcVMnfe0eOgIKOJ7CxdizaTf1JWU66llYyPdmT5VwwBDkzq3QGPx3R0yUNf_kvrgNcjKluRp6PhlNyKmG9kWtrdrBmN6yu7gtiwXkEwv60JHPAS74sOuvxDaV7G9E9xqTqS3xH4nC13pvIXPXpb6yV2P33rNDTY86tA/w400-h283/gcp.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 005. Ganesh Prasad's Representation of Europe's Sanctions Against Russia</td></tr></tbody></table>
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Faced with the failure of their sanctions policy so far, the West (mainly, Europe, the US, Canada, Australia, Japan, and South Korea) had two choices. One, abandon sanctions, pursue negotiations with Moscow, and persuade Ukraine to accept Russian terms to end hostilities; or two, double down, both on economic sanctions and military assistance to Ukraine, in the hope that continued economic sanctions will eventually destroy the Russian economy and continued military aid will eventually swing the war decisively in Ukraine’s favor.
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The Stoppage of Russian Gas and the Nord Stream Sabotage
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Had the West chosen the first option, the war would have ended, gas supplies from Russia to Europe would have restarted, and possibly the already-ready Nord Stream 2 pipeline would also have started supplying even cheaper energy to Europe in addition to Nord Stream 1, powering Europe’s industry to be world leaders. Of course, this would be seen as a betrayal of Ukraine, after all the bombast involved in European leaders extending their support to the Ukrainians. It would mean a loss of face for European leaders and the ascent of Russia in Europe as the first among equals.
</p>
<p>
So the West chose the second option, in the hope that eventually, Russia would be defeated. Europe decided that they would wean themselves off Russian gas slowly, and that by December 2022 they would stop importing Russian oil. They “decided,” unilaterally (inasmuch as one can realistically decide such things in a bilateral relationship), that they would continue importing gas from Russia, albeit at reduced volumes, until such time as when they had built enough capacity through alternative means, such as renewable energy. Unfortunately for Europe, it could not control when it would stop using Russian gas. Russia claimed it was having some technical issues that forced it to stop pumping gas to Europe. This caused panic in Europe, with winter more than two months away. In recent times, the entire metallurgy industry in Europe has said that it would be closing down. <a href="https://www.seattletimes.com/business/crippling-energy-bills-force-europes-factories-to-go-dark/">Some factories have already been shut down, perhaps permanently.</a> <a href="https://www.bbc.com/news/world-europe-62891018">Rising energy prices are causing small businesses in the UK and elsewhere in Europe to shut down.</a>
</p>
<p>
As businesses started closing down all over Europe in response to this development, and just when it seemed like things could not get any worse, an act of sabotage took place that rocked Europe. Both the Nord Stream pipelines were blown up under water and seriously damaged.
</p>
<p>
Who blew up the pipelines has still not been conclusively established. But it is clear that
</p>
<ul>
<li>
Europe would not have wanted to do so, since it was not happy with Russia’s decision to stop pumping gas. <a href="https://www.euractiv.com/section/energy/news/germanys-scholz-visits-canada-to-build-reliable-network/">German Chancellor Olaf Scholz was so keen to have Russia start to pump gas through Nord Stream again that he took extra trouble to get the gas turbine that was being serviced in Canada back to Germany to ship to Russia.</a>
</li>
<li>
Russia would not be interested in blowing up its own pipeline, because it needed only to turn off the tap if it did not want to supply gas to Europe. Also, having an active pipeline gives Russia great leverage over Europe, because Russia could offer to pump gas to Europe in exchange for sanctions to be lifted. So Russia would not have blown up the pipeline.
</li>
<li>
That leaves the US or the UK as the most likely candidates to have blown up the pipelines. The pipelines were blown up in Danish and Swedish territorial waters, and only a US or UK submarine could have entered those waters without causing a general alarm. The US also has the motive to blow up the pipeline. One, the US has been against the Nord Stream pipelines from the very start. Two, the absence of Russian gas means that Europe has no option but to buy expensive American LPG. This would mean a windfall for American oil and gas companies. America prospers, Europe suffers. Further, the UK is not terribly affected by the loss of Nord Stream gas. Continental Europe is.</li>
</ul>
<p>
Europe imports a large percentage of its energy needs. Along with gas, oil is a major import for the European continent. As in the case of gas, Russia has been a major supplier of oil to Europe. Europe has been reluctant to sanction oil because of its huge dependence, but it has been trying to impose a price cap on Russian oil, so that Russia’s revenue from oil sales can be controlled. <a href="https://theprint.in/diplomacy/russia-will-stop-oil-supply-if-g7-price-cap-imposed-says-envoy-to-india-denis-alipov/1140037/">Russia has said that it will stop supplying to anyone who agrees to the oil price cap.</a> Although the price cap has not been finalized by the West (a unilateral move that Russia has not accepted), many European countries have been voluntarily reducing consumption of oil from Russia. Russia is selling its surplus oil to Asian countries such as China and India. But because the US, UK, and several other Western countries have stopped buying Russian crude, there is a shortage of crude oil and its derivatives, such as diesel and petrol (gasoline), in the Western world. This has had the effect of raising petrol prices in the US, the UK, and Europe. <span id="fig006">The US has tried to ameliorate the situation in America by releasing almost a million barrels of oil every day from its strategic reserve for the past few months.</span> <a href="https://ycharts.com/indicators/us_ending_stocks_of_crude_oil_in_the_strategic_petroleum_reserve">This has greatly reduced the storage in the American Strategic Petroleum Reserve, and cannot continue for ever.</a> Since the beginning of the war, the level of the strategic petroleum reserve of the US has dropped by nearly a third. Recently, the US tried to influence Saudi Arabia to raise production to compensate for the lack of Russian oil. <a href="https://www.cnbc.com/2022/10/05/oil-opec-imposes-deep-production-cuts-in-a-bid-to-shore-up-prices.html">But the Saudis refused, leading to strong reactions in Washington.</a> So the problem of an oil shortage will last for a long time. Thus, Europe will have to deal with an oil and a gas shortage.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgInB9FVk1zU169uQ58dvq5k_cHagUX7jXk8QNxt5JYbXbLF21fxXNSpEony8zAsZUvcQjwpgTo6cxNZkx66hVn3Fh6oGTFaeOqVFyb3Vhlnnhs3YA3KAKeSHdGxu5phpZKfEwwiGancVk5kUJ0fwUlTsZAo94gsWyUrbS_yIC1W_Gs9Djgvu3THMP1VA/s1948/fig005_US_SPR_Level.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="882" data-original-width="1948" height="181" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgInB9FVk1zU169uQ58dvq5k_cHagUX7jXk8QNxt5JYbXbLF21fxXNSpEony8zAsZUvcQjwpgTo6cxNZkx66hVn3Fh6oGTFaeOqVFyb3Vhlnnhs3YA3KAKeSHdGxu5phpZKfEwwiGancVk5kUJ0fwUlTsZAo94gsWyUrbS_yIC1W_Gs9Djgvu3THMP1VA/w400-h181/fig005_US_SPR_Level.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 006. The Decline in US Strategic Petroleum Reserve Stocks</td></tr></tbody></table>
</div>
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</section>
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<section>
<header>
<h3 id="TOC1c">
Who Will Win the Military and Economic Wars?
</h3>
</header>
<div>
<p>
At this juncture, it is unclear what the outcome of the military conflict will be. But we can be certain about a few things. The only possible outcomes are that Russia wins the war or that there is a stalemate. Russia cannot be defeated. The reasons for this conclusion are:
</p>
<ul>
<li>
Russia is a far larger economy and a country with a much bigger population.
</li>
<li>
Russia is more prosperous than Ukraine and has a bigger industrial base.
</li>
<li>
The US and NATO will not directly intervene on Ukraine’s side, even as they might provide military advisors and military equipment.
</li>
<li>
China is on Russia’s side.
</li>
</ul>
<p>
Let us expand a little on the above points. It was <a href="https://thediplomat.com/2014/11/everything-you-know-about-clausewitz-is-wrong/">Carl von Clausewitz, the famous military strategist, who said, “War is the mere continuation of policy with other means.”</a> That means that war cannot and should not be seen in isolation — it must be seen as an accompaniment to economics and politics. And therefore, the side that usually prevails in war is the one that is stronger economically and more stable politically.
</p>
<p>
Ukraine had a GDP of $200 billion in 2021, and Russia had a GDP of $1.78 trillion in the same year — nearly nine times the GDP of Ukraine. Ukraine had a population of 44 million in 2021; Russia had a population of 143 million in the same year. Also, on a purchasing power parity (PPP) basis, Russia has a GDP per capita that is more than twice that of Ukraine ($27,970 vs $12,944). All this means that Russia has a higher ability to replace losses in both men and materiel, and a higher ability to endure hardship. This makes it harder for Ukraine to win a war of attrition, which is what this war has now become.
</p>
<p>
Politically, too, Russia is far more stable than Ukraine. Ukraine is essentially controlled by the US (it was the US that engineered a coup in Ukraine in 2014 and ousted the pro-Russia President, Viktor Yanukovich), whereas Russia is ruled by Vladimir Putin with an iron hand. He has complete control of every aspect of Russia, and has been in power for decades. So Putin not only has the economic resource and a higher population with which to wage war, he also has the authority to demand every resource he needs – such as his calling on reserves to serve in the military, as he recently did. Despite reports in the Western press of unhappiness in Russia at the move, there has been no challenge to Putin’s authority.
</p>
<p>
The West has made it abundantly clear, and on multiple occasions, <a href="https://www.nato.int/cps/en/natohq/opinions_208063.htm">that it would simply not consider directly entering the war in Ukraine.</a> <a href="https://www.bbc.com/news/world-us-canada-60499385">This has been clarified both by the US</a> and by NATO. The reason is obvious. Russia is a nuclear-armed state with about 7000 nuclear warheads that are armed and ready, as is the US. The last thing the world needs is the two nuclear superpowers to be directly involved in a confrontation. One misunderstanding, and the whole world will cease to exist.
</p>
<p>
The last point in the list above, regarding China, deserves amplification. The West in general, and the US in particular, ever since Donald J. Trump’s presidency, have viewed China as an adversary and as their number one global rival. The US has seen China through the lens of a zero-sum game. The US has been actively trying to stop the rise of China, the latest indication of which is <a href="https://carnegieendowment.org/2022/10/27/biden-s-unprecedented-semiconductor-bet-pub-88270">the US sanctions announced by President Biden on high-tech semiconductors with regard to China.</a> China, therefore, would not want Ukraine, which is merely a proxy for the US, to prevail over Russia, an ally, in this conflict. And so, in the unlikely scenario where Russia, on its own, appears to be losing this war, China will provide enough support to Russia (both economic and military) to prevent this from happening, <strong><em>because if Russia falls into American control, China will be next. That would mean a repeat of Western domination over China, a repeat of the “<a href="https://en.wikipedia.org/wiki/Century_of_humiliation">century of humiliation</a>” that every Chinese learns about in school, and is determined to prevent, at any cost whatsoever</em>.</strong> This is seared into the consciousness of every Chinese citizen. Given that China is a superpower, it will be impossible for the West to defeat Russia as long as China is allied with it – unless, of course, as stated above, the US directly enters the conflict. It is true that if the US and NATO were to get directly enmeshed in this conflict, they could defeat Russia militarily – however, such direct intervention carries with it the risk that a Russia that appears to be losing the war will send a few of its hypersonic nuclear weapons to strike at the US mainland, prompting the US to level Russian cities with nuclear weapons from European NATO sites. This is a worst-case scenario (WWIII), and nobody wants it. If China decides to support Russia more directly than it already has so far, the US and Europe cannot retaliate economically against China because of how deeply China is enmeshed with Western economies and with the Western supply chain (explained in greater detail later in this article). A move to retaliate economically against China will destroy the US and Europe completely, even as it terribly hurts the Chinese economy. And so, if at all it seems likely that Russia will lose, either economically or militarily, China will prevent it from losing.
</p>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC1d">
Those Who Forget History...
</h3>
</header>
<div>
<p>
It is important to emphasize that China intervening to protect its own national security interest vis-a-vis the United States in a military conflict that does not directly involve it has historical precedent. Communist China has always seen the US as its biggest rival and adversary. China has always refused to countenance the presence of American troops on its borders. <a href="https://en.wikipedia.org/wiki/Korean_War">In 1950, this is what led to <span id="fig007">the three-year Korean war between the US and China</span>.</a> The North Koreans invaded South Korea and were on the verge of forcing the Americans out of South Korea. At this juncture, General MacArthur came up with a brilliant plan for <a href="https://lewtonbus.net/editorials/fleet-week-operation-chromite/">an amphibious landing at Inchon to encircle the North Koreans.</a> The plan was successful, and MacArthur was able to beat the North Koreans back to the pre-invasion border — the 38th parallel.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGpz_P49cH-81egEWcnLcUu7JLrlHaCnLrVYZ3fJjeR6PeRnZbenTmDUygxPf_-mDzd0Diw966UdvknZwXZXTj8iPcrlWG2U8Sgq6MGpPY9-7Wt6pTFwUj4cYD1Twr6NNAbmej4InCnQH8TKGzr5iCc0n9KqGzYqpWtg16U7Hf14nzw3NESpCwmZOqiQ/s865/fig006_phases_of_the_korean_war_1950-1953_60462.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="640" data-original-width="865" height="296" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjGpz_P49cH-81egEWcnLcUu7JLrlHaCnLrVYZ3fJjeR6PeRnZbenTmDUygxPf_-mDzd0Diw966UdvknZwXZXTj8iPcrlWG2U8Sgq6MGpPY9-7Wt6pTFwUj4cYD1Twr6NNAbmej4InCnQH8TKGzr5iCc0n9KqGzYqpWtg16U7Hf14nzw3NESpCwmZOqiQ/w400-h296/fig006_phases_of_the_korean_war_1950-1953_60462.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 007. The Evolution of the Korean War (1950-53) and China's Entry into the War</td></tr></tbody></table><p>But MacArthur was not content with this, and pushed US forces further and further north, until they reached the Yalu river, the border between China and Korea. Mao Zedong had always been clear that he would never tolerate American forces on the Chinese border, and warnings were made diplomatically by China. Unfortunately, these warnings were not heeded by General MacArthur or President Truman.</p>
<p>
And therefore, China entered the war in November 1950, sending 300,000 soldiers across the Yalu river and routing the American forces. The Americans had to again retreat south, until MacArthur was replaced by General Matthew Ridgway, who stabilized the front back at the pre-war border, the 38th parallel.
</p>
<p>
The Korean War cost about 50,000 American lives, but it cost a million Chinese lives. Most of the Chinese troops were lightly armed, with only rifles, as compared to the heavily armed and equipped American troops. But Mao wanted to draw a red line. He had made his point. China would never tolerate America on its borders.
</p>
<p>
And that is why China will never allow Russia to be defeated militarily or become a Western puppet through a coup. We cannot forget that Russia is actually a buffer state (albeit a giant buffer state) between Europe and China. If the US manages to install a puppet in Moscow, that means that NATO weapons can potentially be stationed on the vast Russia-China border, presenting an existential threat to China. This would be a serious threat to Chinese sovereignty. <strong><em>Thus, the Chinese will do whatever it takes to stop a Western victory in Ukraine. This is why none of the current battlefield reverses (as widely reported in the Western press), such as the Ukrainian takeover of Kherson, really matter. If push comes to shove, the Chinese will throw their considerable weight behind Putin to ensure that Putin does not lose. They simply cannot afford to have an unfriendly government in Russia. They will absorb whatever economic consequences that follow from such a decision, because this is an existential issue.</em></strong>
</p>
<p>
We must therefore only consider the situations where Ukraine a) either loses this war or b) continues to hang on grimly in a stalemate situation, perhaps even for years, if at all it can hold out for that long. If Ukraine loses this war quickly, there is a possibility that Europe breaks free of America’s influence and quickly mends fences with Russia. In such a scenario, Europe might escape relatively unscathed.
</p>
<p><strong><em>
But if this war rages on inconclusively for an extended period (and, in this context, even a war that lasts several more months could be thought of as “extended”), Europe will be utterly destroyed economically. This is the most likely scenario at the current time, as European countries, most perplexingly, have actually hardened their stance despite eight months of a failed combination of economic sanctions against Russia and military aid to Ukraine.
</em></strong></p>
<p>
The reason why Europe will be destroyed if this war continues is their extensive dependence on Russia and China. I have so far only alluded to oil and gas, but Europe is so dependent on these two countries that it simply cannot survive with a policy that is hostile to either of these countries. Currently, many major European countries, such as France and Germany, are openly hostile to both countries. This will result in their total economic destruction, unless they reverse course fairly soon.
</p>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC1e">
A Tale of Ineffective Sanctions
</h3>
</header>
<div>
<p>
Russia is a nation with huge natural resources, and is therefore indispensable to the global economy. Despite this reality, since the start of Russia’s invasion of Ukraine, the West has imposed several rounds of unprecedented economic sanctions on Russia. The stated aim of these sanctions has been “to reduce Putin’s ability to wage war.” Are these sanctions likely to have the intended effect? Let us analyze this.
</p>
<p>
<a href="https://en.wikipedia.org/wiki/International_sanctions_during_the_2022_Russian_invasion_of_Ukraine">The main thrusts of the sanctions were along the following directions:</a>
</p>
<ul>
<li>
Western governments seized Russian assets without compensation, such as Russian government assets in Western banks. This is little short of outright theft, and amounted to the seizure of about $400 billion of Russian Central Bank reserves. In addition, assets of influential and wealthy Russian citizens, such as yachts of Russian oligarchs, were also illegally seized by Western governments without compensation. The freezing of the Russian Central Bank reserves was considered by most economists to be an unprecedented measure, almost like a “nuclear option” on the Russian economy. Most Western leaders expected the Russian economy to collapse overnight due to hyperinflation. But the Russian economy recovered after a brief period of high inflation, when the ruble temporarily sharply lost value. But now the ruble is trading at levels which are higher than its levels were before the war began.
</li>
<li>
The US and Canada banned the import of Russian oil, gas, and coal. Many other countries voluntarily chose to not import Russian fossil fuels.
</li>
<li>
Western countries voted to ban Russia from using the SWIFT payment mechanism. Essentially, this meant that any country that used SWIFT to transfer money to Russia could no longer do so, and that Russia could no longer use SWIFT to transfer money to any other country. The SWIFT ban affected not only trade between the West and Russia, but between any other country, such as India or China, with Russia, because it made it impossible for these countries to pay Russia in dollars for their gas or coal or oil. Russia anyway could not buy anything with these dollars, because most Western markets had been closed to them when SWIFT was made unavailable to Russia. They could not pay India or China or the UAE with dollars to buy goods from them because they had been locked out of SWIFT.
</li>
<li>
Some countries banned specific technologies and products. South Korea banned the export of semiconductors, IT equipment, sensors, lasers, maritime equipment, and aerospace equipment, something that was also done by the USA. The EU banned the export of aircraft spare parts to Russia.
</li>
<li>
Many companies stopped their operations within Russia – for example, McDonald’s closed down their operations in Russia and sold them to a Russian firm; BP exited its joint venture with Rosneft, in which it had invested $25 billion; and Shell also exited its Russian ventures. Many of these moves were forced, because these companies could no longer do business in Russia without violating Western sanctions against Russia.
</li>
<li>
Germany suspended the opening of the Nord Stream 2 pipeline just when construction was complete.
</li>
<li>
Western governments sanctioned specific individuals, such as Russian President Vladimir Putin, Foreign Minister Sergei Lavrov, and more than 300 members of the Russian Parliament, the Duma.
</li>
<li>
Europe has pondered stopping the buying of Russian fossil fuels on numerous occasions, but has been stopped by practical considerations every time. For instance, on 8 March, 2022, the EU proposed reducing gas purchases from Russia by up to two-thirds by the end of 2022, and completely phasing it out by 2030. On 18 May, 2022, the EU presented an updated plan to completely end reliance on Russian oil, gas, and coal by 2027. Neither of these plans ever got complete agreement, and so were never implemented. A key reason, as we shall see later, is that some countries in Europe are extremely dependent on Russian energy, whereas others are not. On 2 September, 2022, the EU proposed to cap the price of Russian oil so that Russia could not profit from oil sales. In response, Russia said that it would not sell oil to any countries that sought to impose a price cap on it. The price cap would be enforced by denying shipping insurance (by Lloyd’s of London, the leading insurer of maritime shipping) to any vessel that was not complying with the price cap. The price cap on Russian oil was finally agreed to by all EU countries on October 6, 2022, with the price to be finalized on December 5, 2022.
</li>
<li>
Australia banned the export of alumina, bauxite, and other aluminum ores to Russia.
</li>
<li>
Many countries closed their airspace to Russia, inviting retaliatory closures to their aircraft by Russia.
</li>
</ul>
<p>
This is not a comprehensive list, but probably lists the most significant steps. I am not covering the truly silly moves, such as refusing to teach Dostoyevsky in Universities and not allowing Russian sportspersons to participate in competitions. But even many of the measures described above are not that far removed from such silliness. For instance, seizing the yachts of billionaire Russians is highly unlikely to make Putin want to stop his invasion. It is just Western governments being petty. Similarly, sanctioning Putin or Lavrov or members of the Duma has little more than symbolic value. And closing your country’s airspace to Russia is a stupid idea, because when Russia retaliates, it is you who are going to have a much harder time, given how big Russia is.
</p>
<p>
Incidentally, <a href="https://commons.wikimedia.org/wiki/File:Sanctions_against_Russia_and_Belarus_2022.svg">as the map below shows</a> (created by Artemis Dread, CC BY-SA 4.0 <https: by-sa="" creativecommons.org="" licenses="">, via Wikimedia Commons), <span id="fig008">most of the sanctions come from the Western world and from a few non-Western countries, such as Japan, South Korea, and Singapore, that are closely tied with the West.</span> So the sanctions regime against Russia are primarily a Western enterprise. The rest of the world does not want any part of it.
</https:></p><p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUEWljuffgVVcYRFoTAj-uv-ZuAuMBfBawjVmCh8thc14KfMAnRSVAhF5vxbYJQI7TWniassR1udG-KzlmypKClNBKR-WGA75yNK5Suut2WW7sN3c5kSYOQeQ0s2Vs6VZaUro325g_rlEvzUTqVxPmnkCJDCuAOeFzSn7a78CZ0kj35_QzdlY2iUxq8A/s2133/fig007_SanctionsMap.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1396" data-original-width="2133" height="261" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUEWljuffgVVcYRFoTAj-uv-ZuAuMBfBawjVmCh8thc14KfMAnRSVAhF5vxbYJQI7TWniassR1udG-KzlmypKClNBKR-WGA75yNK5Suut2WW7sN3c5kSYOQeQ0s2Vs6VZaUro325g_rlEvzUTqVxPmnkCJDCuAOeFzSn7a78CZ0kj35_QzdlY2iUxq8A/w400-h261/fig007_SanctionsMap.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 008. How Sanctions Against Russia are a Western Enterprise</td></tr></tbody></table><https: by-sa="" creativecommons.org="" licenses=""><br /></https:><p></p>
<p>
So, keeping that in mind, let us understand what the material and significant aspects of Western sanctions are, before moving on to understand if they can be effective in realizing their aim.
</p>
<p>
Clearly, freezing half of Russia’s foreign exchange reserves was a major blow to the Russians. But then, by banning Russia from SWIFT, the West escalated things further and made all of Russia’s foreign exchange irrelevant, because they could not use all that money to buy anything.
</p>
<p>
The banning of Russia from SWIFT was supposed to be the West’s masterstroke. Everyone in the West truly believed that it would bring Russia to its knees. If anything could have crippled the Russian economy, this was it. And indeed, for a short while, these sanctions appeared to have had their effect. Overnight, the ruble crashed and, from a pre-war level of about 79 rubles to the dollar, it fell to nearly 139 rubles to the dollar, before the Russian central bank acted decisively and stopped the rout. Since then, by placing export controls on the ruble and by insisting on payment for gas in rubles, Russia managed to get the ruble back up, <span id="fig009">and today it trades at a higher level (around 62 rubles to the dollar) than it did before the war.</span> Of course, this level is not terribly useful, because not many rubles are being exchanged for dollars or euros, because nobody in the West is even allowed to trade with Russia, except for the gas and oil sales. But there has been no run on the Russian banks, and the Russian financial system survived the West’s “nuclear strike.”
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHgPnMvMFQifk-ZFFxjSKJ-Rh8MjxAGufC9LrJ1XfL6ddViHxIA5wdJNNBxNZ4B9Nqd54nYMvMPCaN4AXbIcNkz5OgleNdeyMFVJCmPZqWL7yvLnMcdfaE7PNAxJx0QUJkleFFEBbcVc4Ko1wpJbmnVqZbWTVN3rAZfvRvjWVbnvFPOadXRjDOjXOruQ/s2587/fig008_DollarRuble.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1354" data-original-width="2587" height="209" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhHgPnMvMFQifk-ZFFxjSKJ-Rh8MjxAGufC9LrJ1XfL6ddViHxIA5wdJNNBxNZ4B9Nqd54nYMvMPCaN4AXbIcNkz5OgleNdeyMFVJCmPZqWL7yvLnMcdfaE7PNAxJx0QUJkleFFEBbcVc4Ko1wpJbmnVqZbWTVN3rAZfvRvjWVbnvFPOadXRjDOjXOruQ/w400-h209/fig008_DollarRuble.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 009. The Fall and Rise of the Ruble After the Invasion of Ukraine, 2022</td></tr></tbody></table><p>Since then, the Russians have been making money hand over fist, because the price of crude oil and natural gas shot through the roof in Europe. Since Europe was still highly dependent on Russia for natural gas, oil, and coal, some Russian banks were still allowed to use the SWIFT system. Europe was therefore unable to completely stop financing Russia’s war on Ukraine, and in fact Russia made far more money in six months than they normally would make in a year. It is to plug this loophole that Europe is now thinking of placing a price cap on Russian oil. But Russia knows that it has the winning hand here. There is no reason for Russia to agree to any cap on its price, and Putin has clearly told Europe that if any country tries to impose a price cap, he will simply stop selling to that country.</p>
<p>
The West seems to be gambling on the idea that Russia needs Europe’s money so badly that they will eventually be forced to agree to the price cap. <strong><em>There doesn’t appear to be any “Plan B” in case Putin refuses to comply with the price cap.</em></strong>
</p>
<p>
Some of the other sanctions, such as denying Russia high-tech equipment and semiconductors, might eventually hurt Russia, but these are higher-level concerns, and so they will take a long time to start biting. Energy to heat the home and power industry is a far more basic concern. Russia can live without advanced semiconductors; but can Europe live without gas and oil to heat their homes in the winter and to power their industry and cars?
</p>
<p>
So, what we need to understand is:
</p>
<ol><em><strong>
<li>
How strong is the Russian economy? How badly will Russia be hurt if Europe, the US, Japan, Korea, Canada, and Australia refuse to buy its fossil fuels? In other words, what is the economic impact of a Western ban on Russian fossil fuels?
</li>
<li>
How strong are European economies? How badly will European countries be hurt if they do not have access to Russian fossil energy?
</li>
<li>
What other economic levers (other than fossil fuels) exist that can influence the outcome of this economic war?
</li>
<li>
What is going to be the effect of all this on the economies of Europe?
</li>
<li>
Are there any solutions that can help Europe avoid the worst consequences (such as moving from pipeline gas to LNG, or using renewable energy?)
</li>
</strong></em></ol>
<p>
Indeed, we can turn Clausewitz’s famous words around, because the converse is also true: <strong><em>Economic war is merely the continuation of political and military war with other means.</em></strong> So the West is using economic war against Russia in preference to sending their soldiers to die. They are happy to export weapons to Ukraine and let them do the fighting, but they want to defeat Russia “with other means” — in this case, economic means.
</p>
<p>
In the next two chapters, we will see if this is possible, and will try to answer the questions posed above.
</p>
</div>
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</section>
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<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC1f">
Key Takeaways from Chapter I
</h3>
</header>
<div>
<ul>
<li>
The West imposed unprecedented sanctions on Russia after the start of the war
<ul>
<li>
These sanctions have failed to crush the Russian economy or stop their war effort
</li>
<li>
Despite the sanctions, Russia has made huge profits on the sale of oil and gas because of skyrocketing prices
</li>
<li>
Russia continues to sell oil and gas to India and China
</li>
<li>
The non-Western world did not join in the sanctions
</li>
<li>
While the value of the Ruble temporarily dropped, it quickly recovered
</li>
<li>
The West has been incrementally adding more sanctions, with little to show for them
</li>
</ul>
</li>
<li>
Russia today controls 15-20% of the former territory of Ukraine
</li>
<li>
The Nord Stream pipelines were sabotaged
<ul>
<li>
They are now unusable and will not be usable for a long time
</li>
<li>
Based on motives, the US is the prime suspect behind the sabotage
</li>
</ul>
</li>
<li>
The US and NATO have repeatedly ruled out getting directly involved in the war
</li>
<li>
China will not let Russia lose either the military or the economic war
</li>
<li>
The West is going to try to impose an oil price cap on Russia
</li>
<li>
Russia has said that it will stop selling oil to countries that participate in the cap
</li>
</ul>
</div>
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</section>
</section>
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<section>
<header style="padding: 2em;">
<h2 id="TOC2">
CHAPTER II: THE STRENGTH OF THE RUSSIAN ECONOMY
</h2>
</header>
<div>
<p>
</p>
</div>
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<section>
<header>
<h3 id="TOC2a">
Sanctions are Not New to Russia
</h3>
</header>
<div>
<p>
One of the things that is often missed by Western commentators is the fact that sanctions are not new to Russia. Russia has been sanctioned ever since 2014, when they invaded and annexed the Crimea in response to the US-backed coup in Ukraine that ousted the democratically-elected President Viktor Yanukovich and installed the hand-picked American puppet, Arseniy Yatsenyuk, as President. Yatsenyuk was later succeeded by Petro Poroshenko as President and then by Volodymyr Zelenskyy, who is the curent President. <a href="https://en.wikipedia.org/wiki/International_sanctions_during_the_Russo-Ukrainian_War">Starting in 2014, the West imposed several rounds of sanctions on Russia.</a> The initial sanctions only consisted of travel bans and some asset seizures against specific individuals. But the Third Round of sanctions, applied on 17 July 2014 by the US, had some wide-ranging measures. This included an embargo on sales of arms and arms-related materials to Russia, a ban on sales of dual-use (civilian/military uses) materials, and a ban on export of equipment related to the oil industry in Russia. The measures also had restrictions on buying of long-term bonds by Russia. In the following months, many European countries followed suit with similar measures, including restrictions on the ability of Russian businesses to obtain medium and long-term loans from European banks. On 11 September 2014, the US imposed restrictions on the Russian oil industry, specifically preventing them from accessing US technology related to oil exploration and banning the sharing of technology between American oil companies and Russian oil companies such as Rosneft, Gazprom, and Lukoil. The US also imposed restrictions on Russia’s largest bank, Sberbank, and a large arms manufacturer, Rostec, limiting their ability to access the US debt markets. On 3 October, 2014, then-US Vice President Joe Biden claimed that the US actions had been hugely successful, when he said, “And the results have been massive capital flight from Russia, a virtual freeze on foreign direct investment, a ruble at an all-time low against the dollar, and the Russian economy teetering on the brink of recession.” <a href="https://finance.yahoo.com/chart/RUB%3DX#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-">VP Biden claimed this even though the ruble had only gone down from around 35 rubles to a dollar to around 40 rubles a dollar.</a> Western sanctions did hit Russia badly, but eventually the ship righted itself: <span id="fig010">the ruble would eventually go down to as much as 82 rubles to the dollar before eventually settling down to a stable level of about 60 rubles to the dollar in late 2014</span>, which is where the ruble is today in 2022, after the West’s best efforts. Despite Biden’s grandiose claims of “massive capital flight” and the Russian economy “teetering on the brink of recession,” Russia seems to have done quite allright. Biden has clearly not lost his penchant for hyperbole in the last eight years for, after the “nuclear” sanctions imposed by the West in February 2022, whereby Russia’s foreign currency assets were seized and it was barred from SWIFT, he again gloated, in response to the temporary crash in the value of the ruble, saying “the ruble is now rubble.” Of course, <span id="fig010">rumors of the death of the Russian economy turned out to be vastly exaggerated.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi26eB1FANmF29AMkHAlr9Vgaz1lNqqK5cEfWBzKiGcNpnp_njKU6TdJDyulwgw4P2iHdDD-I7dRsc8OKErAOtQOZw0AbD7VLqZgM3EB_A1X7TkKom_zTZLSv1t8TChb2uJAgOwzBM0lBYDlgM24zXNJWcnnIc8i8ibHlWAB8Aoir8GhEXGC3SxEtX5oQ/s2591/fig009_DollarRuble2014.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1343" data-original-width="2591" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi26eB1FANmF29AMkHAlr9Vgaz1lNqqK5cEfWBzKiGcNpnp_njKU6TdJDyulwgw4P2iHdDD-I7dRsc8OKErAOtQOZw0AbD7VLqZgM3EB_A1X7TkKom_zTZLSv1t8TChb2uJAgOwzBM0lBYDlgM24zXNJWcnnIc8i8ibHlWAB8Aoir8GhEXGC3SxEtX5oQ/w400-h208/fig009_DollarRuble2014.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 010. How Western Sanctions Affected Russia in 2014</td></tr></tbody></table><p>So Russia has been subject to sanctions since 2014, and especially on sanctions related to weapons and weapons-related technology. They have had eight years of adjusting to a new way of doing things, of being more self-reliant in terms of technology and defense equipment. This is why the claims of American media commentators that the current sanctions have forced Russians to ransack their washing machines for microprocessors to use in their weapons are ludicrous.</p>
</div>
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</section>
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<section>
<header>
<h3 id="TOC2b">
Russia’s Economic Parameters: GDP
</h3>
</header>
<div>
<p>
While the current (post-February 24, 2022) sanctions on Russia are rightly described as unprecedented, the sanctions of the previous eight years were pretty rough on Russia as well. Let us see how Russia coped under those sanctions, to understand the resilience of the Russian economy and industrial base.
</p>
<p>
Russia has a <span id="fig011">fairly advanced manufacturing and engineering base</span> and, in fact, <a href="https://databank.worldbank.org/reports.aspx?source=2&series=NY.GDP.MKTP.KD.ZG&country=#">has been spending more on manufacturing as a share of GDP than most European countries over the past decade</a>, with the exception of Germany. Manufacturing constitutes close to 13% of Russia's GDP, as compared with France, Great Britain, and the US, where it contitutes in the range of 9-11% of GDP. So, the idea that Russia is a weak and backward country is ludicrous.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFBIoEqjctMC26Ikl_aTaMUjodIwwMu9bNSzrEiz8hadfiPpWa3nMIVIaeVmnQGYcmU1GtV7FNlnNpKc6KARISDlF3NB5LHRuEEnBfcxQG8qFNm9M-9Fog1Z45nrAEjRddnDm4FHJJntxRV4_1r3vZ_mRjT4dKd79A7oneHpqIwUK2miWAYbOt1UW6iQ/s605/fig010_Manufacturing.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgFBIoEqjctMC26Ikl_aTaMUjodIwwMu9bNSzrEiz8hadfiPpWa3nMIVIaeVmnQGYcmU1GtV7FNlnNpKc6KARISDlF3NB5LHRuEEnBfcxQG8qFNm9M-9Fog1Z45nrAEjRddnDm4FHJJntxRV4_1r3vZ_mRjT4dKd79A7oneHpqIwUK2miWAYbOt1UW6iQ/w400-h225/fig010_Manufacturing.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 011. Manufacturing as % of GDP, Russia v/s Europe and USA</td></tr></tbody></table><p>That Russia has weathered the sanctions storm it has faced since 2014 rather well is also seen in <span id="fig012">a comparison of average annual GDP growth rates of Russian and major world economies since 2000</span>, when Vladimir Putin assumed control of Russia. Despite the 2007-8 financial crisis, the US-China trade war of 2018, and various other issues, Russia has clearly outperformed Europe, the UK, and the US.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQjCLbz0u1kqd1f7IcvyJFdGOAwid7kWHVFoZcPEajL2C_lucRcTmD1q1AhFPu-IYjSWGpnzEVcyp6kVlEZloXQpGOxjwXXNHULc6V42XdbEZn1khPHQscuoGZqqIGxAoo3Ug8rmRI3lnE9fDvLkp2KRjYIF8O_LJDANKUX988TybLLQDC1pd1yZDKNg/s605/fig010a_GDPGrowthRate.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQjCLbz0u1kqd1f7IcvyJFdGOAwid7kWHVFoZcPEajL2C_lucRcTmD1q1AhFPu-IYjSWGpnzEVcyp6kVlEZloXQpGOxjwXXNHULc6V42XdbEZn1khPHQscuoGZqqIGxAoo3Ug8rmRI3lnE9fDvLkp2KRjYIF8O_LJDANKUX988TybLLQDC1pd1yZDKNg/w400-h225/fig010a_GDPGrowthRate.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 012. Avg. GDP Growth Rate, 2000-2019, Russia v/s Europe and USA</td></tr></tbody></table><p><span id="fig013">You cannot survive eight years of tough sanctions and have a prosperous economy unless you have made adjustments</span> to account for the fact that you will not be able to import many essential products. Despite the ban on weapons technology and dual-use items that has been in force since 2014, Russia still has a viable arms industry. So, to imagine that they will suddenly collapse under the weight of the newer sanctions is delusional.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdDOKhFGfLJf37D3IlGmecvjwcc7ZBsNYeQ2J4wP9yK0xpkxO3MvdiqY5ekpjcPaeGtKkenDkD4JlUFq-ORqvS7FQOI1-1yFXx5kcc4To3tInG098_AwbseG1sAX1-X3CWssjWwZMBZdBXxMq8ql8nTfYyzGpXc0sFQ7FApKPDVW_dwOMe24yXSlTfsg/s605/fig011_AnnualGDPGrowthRate.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjdDOKhFGfLJf37D3IlGmecvjwcc7ZBsNYeQ2J4wP9yK0xpkxO3MvdiqY5ekpjcPaeGtKkenDkD4JlUFq-ORqvS7FQOI1-1yFXx5kcc4To3tInG098_AwbseG1sAX1-X3CWssjWwZMBZdBXxMq8ql8nTfYyzGpXc0sFQ7FApKPDVW_dwOMe24yXSlTfsg/w400-h225/fig011_AnnualGDPGrowthRate.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 013. Annual % GDP Growth Rate, 2000-2018, Russia, UK, Germany</td></tr></tbody></table><p>Under Vladimir Putin, Russia has slowly become economically stronger, although it is still a developing country, as its GDP per capita, indexed to purchasing power parity (PPP), shows. While it still has a way to go in catching up to the level of a developed country like the US or a Western European country like France or Germany, the <span id="fig014">GDP per capita, PPP</span>, has increased by a <span id="fig015">compounded annual growth rate of more than 3% in the last 20 years</span> under Vladimir Putin (from $14,570 to $29,970, in constant 2017 USD), as the two graphs below show. While Ukraine, too, has grown robustly in these 20 years, the absolute level of Ukraine’s GDP per capita (PPP) is less than half of Russia’s, at $12,944. This is one more reason why we cannot expect Ukraine to hold out too long against Russia.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWmtcI7HGKiYrDK57BzMOnsjT5LpP-hFzSYG5oEO8sgCYpUjPBfNNMepD-59fWPZ5nSd3cngQ7cqW0KCEeeo9uXTn1eXpUU58kQwt1-ZEt5XQFiAJKSVuwtBagmj76yGqXi6ayednGH46GFv7fUT-OGMfTeTOXRh0gi0BIplEEIUcrjqgc2JmWBDg2pg/s605/fig012_GDP_PerCapita_PPP.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWmtcI7HGKiYrDK57BzMOnsjT5LpP-hFzSYG5oEO8sgCYpUjPBfNNMepD-59fWPZ5nSd3cngQ7cqW0KCEeeo9uXTn1eXpUU58kQwt1-ZEt5XQFiAJKSVuwtBagmj76yGqXi6ayednGH46GFv7fUT-OGMfTeTOXRh0gi0BIplEEIUcrjqgc2JmWBDg2pg/w400-h225/fig012_GDP_PerCapita_PPP.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 014. GDP Per Capita, PPP, 2000-2021</td></tr></tbody></table><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW296_watJEzkGQdi2iWP5IlMvUjR3pvtH3SKWUfvv5w9UfA2E8BG-V0w6pCoY5x7U7yqQLvZ-S0Ed9TnwLARK_70THbFHILq6yxN_OiAC5PkUxgqwN5GM2L4SgEd4c1VRzF3lxughS_3kyLGf8YKENWOiXca0VzPtsZkoFvEq-ykGZKT5Fy_o25jd-w/s605/fig013_Average_GDP_PerCapita_PPP.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW296_watJEzkGQdi2iWP5IlMvUjR3pvtH3SKWUfvv5w9UfA2E8BG-V0w6pCoY5x7U7yqQLvZ-S0Ed9TnwLARK_70THbFHILq6yxN_OiAC5PkUxgqwN5GM2L4SgEd4c1VRzF3lxughS_3kyLGf8YKENWOiXca0VzPtsZkoFvEq-ykGZKT5Fy_o25jd-w/w400-h225/fig013_Average_GDP_PerCapita_PPP.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 015. Average % annual growth, GDP per capita, PPP, 2000-2021</td></tr></tbody></table><div class="separator" style="clear: both; text-align: center;"><br /></div>
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<section>
<header>
<h3 id="TOC2c">
Russia’s Economic Parameters: Debt-to-GDP Ratio
</h3>
</header>
<div>
<p>
Another indicator of Russian self-reliance is the <span id="fig016">total debt-to-GDP ratio, which is the lowest among all the countries in this cohort</span>, by far, close to 20%. This shows how responsibly Russia has managed to develop its economy and industry. Having a low debt-to-GDP ratio means that you are more self-sufficient and independent than other countries. The US is highly indebted (debt around 100% of GDP in 2018, <a href="https://usdebtclock.org">but around 135% today</a>), but is not unduly bothered by this, because it holds the reserve currency, the US dollar. So, whenever a financial crisis hits the country, it prints more paper money, as it started doing since the Global Financial Crisis in 2007, which was caused by inadequate regulation of the US housing market. Since the US dollar is the world reserve currency, other countries invest their surpluses buying US Treasury bonds as a safe investment, and run up huge deposits of US treasuries. <span id="fig017">Both China and Japan have huge holdings of US Treasury bonds.</span> That’s one reason why Japan’s debt is 200% of its GDP. Other European countries are also highly indebted – the UK’s debt was around 160% of GDP in 2018, and France’s and Spain’s debt were both around 100% of GDP in 2018.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguXPqDQgsrI-M80AItrkLHz_MBSeuxpkBJTH7RDu7MSJVShZaiQZsSluGjfHsSBOcb_DF6RG2ejOfs8WlgF2gl9coNs-f6cZ7OgdHIKW4MfiBEOnwOCxbPMf0AvVf8QvkJE7BVugoTpfLlV4T6rBH9S6cHNjeglz0Vouixvyg5UxQSTW-gjhBkq4yZlQ/s605/fig014_DebtGDP.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguXPqDQgsrI-M80AItrkLHz_MBSeuxpkBJTH7RDu7MSJVShZaiQZsSluGjfHsSBOcb_DF6RG2ejOfs8WlgF2gl9coNs-f6cZ7OgdHIKW4MfiBEOnwOCxbPMf0AvVf8QvkJE7BVugoTpfLlV4T6rBH9S6cHNjeglz0Vouixvyg5UxQSTW-gjhBkq4yZlQ/w400-h225/fig014_DebtGDP.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 016. Total Debt as a Percentage of GDP, for Russia and Various Advanced Countries</td></tr></tbody></table><div class="separator" style="clear: both; text-align: center;"><br /></div><div class="separator" style="clear: both; text-align: center;"><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhum8rjGDxspZETrlrS7FwDWY4wQZgEZ1mB7PTOUiWCaWkfctrLqXGgatcpYTjL4iBaYiCe0zF5uTb-hjrD0vXpqT8w0uWodsulW_aSxhR2dD3GstFunFb99poK6goQlire_hionxO9JQHeqMhNxQgtLfESjpjkIcZOhsIOLeAS2W3Ec7KCykY_ptXtzA/s360/fig015_JapanChina_USBonds.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="240" data-original-width="360" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhum8rjGDxspZETrlrS7FwDWY4wQZgEZ1mB7PTOUiWCaWkfctrLqXGgatcpYTjL4iBaYiCe0zF5uTb-hjrD0vXpqT8w0uWodsulW_aSxhR2dD3GstFunFb99poK6goQlire_hionxO9JQHeqMhNxQgtLfESjpjkIcZOhsIOLeAS2W3Ec7KCykY_ptXtzA/w400-h266/fig015_JapanChina_USBonds.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 017. The Rise in China and Japan's Ownership of US Treasury Bonds</td></tr></tbody></table>
<p>
<a href="https://elibrary.worldbank.org/doi/epdf/10.1596/1813-9450-5391">The World Bank has done a detailed study</a> of the impact of high debt on the economic health of a country, and has come up with a “tipping point” of 77% for the debt-to-GDP ratio, up to which it is safe to have national debt, and after which the annual GDP growth rate takes a hit of 0.017% for every percentage point that the debt is higher than 77%. Thus, if the national debt is 136% of GDP (and hence 59% above 77%), the reduction in annual GDP growth rate will be 0.017x59 = 1%. Keep in mind that this will be compounded for every year that the national debt is higher than 77%.
</p>
<p>
<span id="fig018">Based on this formula, the annual reduction in GDP growth rate caused by the high debt in several countries can be calculated each year. I have done this, and the results can be seen in the next graph.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpDgpNrqAhDKDC7T0J21IVJQYmqhXy7HwhDJ2iSLCqwUtPrKR5CdTdElBSChZ5Ljnh8PbqNNzRYzOjmbtZsY9G3y-1GzQG-SWx4umti7rCX7xJTHRGzuG0T9Ydyh3P7hm3BiE57Ji2JqxqweLq5DNIpU9YkSdn9mNz1SQdkrm09QLk5G9dJj_B5C0bvQ/s605/fig016_GDPGrowthRateReductionHighDebt.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjpDgpNrqAhDKDC7T0J21IVJQYmqhXy7HwhDJ2iSLCqwUtPrKR5CdTdElBSChZ5Ljnh8PbqNNzRYzOjmbtZsY9G3y-1GzQG-SWx4umti7rCX7xJTHRGzuG0T9Ydyh3P7hm3BiE57Ji2JqxqweLq5DNIpU9YkSdn9mNz1SQdkrm09QLk5G9dJj_B5C0bvQ/w400-h225/fig016_GDPGrowthRateReductionHighDebt.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 018. Annual GDP Growth Rate Due to High Debt</td></tr></tbody></table><p>The results are striking. Japan, with a very high level of indebtedness, is losing nearly 2 percentage points of GDP growth each year currently due to its high national debt. The United Kingdom is losing nearly 1.5% of GDP growth each year because of high levels of debt. France, the US, and Spain are all losing nearly 0.5% of GDP growth currently because of high debt.</p>
<p>
What is also noticeable is that levels of indebtedness rose dramatically after the Global Financial Crisis of 2007-08, as countries started borrowing to get out of the crisis, powered by the paper dollars of the US and by buying US Treasury bonds. This is only a band-aid approach, and does not address the root cause of the crisis, which was lax regulation leading to criminal malfeasance. <a href="https://en.wikipedia.org/wiki/Quantitative_easing#United_States">The US continued the practice of printing money, also known as “Quantitaive Easing” (QE) for four years, finally stopping it in 2012, after accumulating $4.5 trillion of new assets.</a> When the Covid pandemic hit, the US again resorted to QE in March 2020 to provide relief to Americans. The results of this reckless policy are now becoming evident with skyrocketing inflation in Western countries over the last year. As the old American saying goes, “There is no such thing as a free lunch.” By printing money since 2007, the United States simply kicked the can down the road. But you cannot keep kicking the can endlessly. At some point, you have to pay for it. That point, coincidentally, happened to be almost the same point as the time when Vladimir Putin started his “special military operation” against Ukraine: Russia invaded Ukraine on February 24, 2022; the US Federal Reserve ended Quantitative Easing on March 10, 2022. The US chose the worst possible time for a confrontation with Russia – at a time when its treasury was artificially puffed up. This is because all debt eventually needs interest payments – this is called debt servicing. As long as you are printing more money, it is easy to pay the interest (debt service) on your existing debt. But once you stop the QE, you have to start paying the interest on the debt you owe, and you are not printing any more money. This is the reason for the high inflation in the US.
</p>
<p>
It is possible to look at the long-term compounded effects of this annual reduction to the GDP growth rate (because of high indebtedness) on the projected GDP after a number of years. I have done this calculation by using elementary compound interest calculation based on yearly compounding, and the results can be seen below in the charts for <span id="fig019">Japan, Great Britain</span>, <span id="fig020">and the USA</span>, three countries with high levels of indebtedness.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwtu8-drq-R6GFaSBD0VsbBNtoo7H5dk4WuUEV3LQmaLwswnt8dw3G12yuhZQk2LNQrOXgTTg3UG_YcrwJdTiRhKXutJSU7YrCRR02hWKS00SIHIlinO05veHpxNxw0LfhKlqiAgfT-fNu_CPg5-eySsXIEmvCXrzYQa2O59nJEmiyLGuA89iGAcPHLg/s605/fig017_CompoundedGDPGrowthFactor_JPN_GBR.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwtu8-drq-R6GFaSBD0VsbBNtoo7H5dk4WuUEV3LQmaLwswnt8dw3G12yuhZQk2LNQrOXgTTg3UG_YcrwJdTiRhKXutJSU7YrCRR02hWKS00SIHIlinO05veHpxNxw0LfhKlqiAgfT-fNu_CPg5-eySsXIEmvCXrzYQa2O59nJEmiyLGuA89iGAcPHLg/w400-h225/fig017_CompoundedGDPGrowthFactor_JPN_GBR.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 019. Compounded GDP Growth Factor with Year 2000 as Base, Japan and UK</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgivK3Xj4n8cq5_B6BxRS6BXX5puhZf6X5DD3SgfSR6-msxNIbySIlCsucWB4Ot76c9fW797j7x4k66xTdMr8M0ajIKCAGjjC3Xjo2ATBgw3SBnkjenDY2zk4frw8qgNM_jyG_lisNeASW3iqgmSSQnB7YaO9O_cJDf89JIV8Zbyz6MfeZFwROlX21HAg/s605/fig018_CompoundedGDPGrowthFactor_USA.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgivK3Xj4n8cq5_B6BxRS6BXX5puhZf6X5DD3SgfSR6-msxNIbySIlCsucWB4Ot76c9fW797j7x4k66xTdMr8M0ajIKCAGjjC3Xjo2ATBgw3SBnkjenDY2zk4frw8qgNM_jyG_lisNeASW3iqgmSSQnB7YaO9O_cJDf89JIV8Zbyz6MfeZFwROlX21HAg/w400-h225/fig018_CompoundedGDPGrowthFactor_USA.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 020. Compounded GDP Growth Factor with Year 2000 as Base, USA</td></tr></tbody></table><p>Let me explain what these charts mean. The “Id” curve (for “Ideal”) is the value of one dollar of GDP (at the beginning of the year 2000) at the end of any year, based on the reported annual GDP growth rates from 2000 to 2018, by doing annual compound interest calculation. The “Act” curve (for “Actual”) is the value of one dollar of GDP (at the beginning of the year 2000) at the end of any year, but by using the corrected annual GDP growth rates (= reported GDP growth rate – hit on GDP growth rate by using the World Bank formula), again by doing annual compound interest calculation. The point corresponding to each year on the x-axis is the value of the dollar at the end of the year. That is why the value for the year 2000 is higher than 1, because the GDP has grown.</p>
<p>
So, what we can infer from these charts is that since the GDP for the USA in the year 2000 was $13.75 trillion (constant 2015 US dollars), the projected value at the end of 2018 based on the reported GDP growth rates would be 1.47 times the 2000 value, but the actual value at the end of 2018, based on the corrected GDP growth rates would be 1.44 times. This may not seem like a big deal at first, but given that they multiply a very large number, the difference is substantial: $413 billion. This is the amount that the USA has lost by having such a large public debt. For reference, the actual ratio of the GDP values for the United States for 2019 and 2000 is 1.45 (which is not surprising, because I have used a simple model of annualized compound interest above, and so one would not expect an exact match.)
</p>
<p>
The differences for the UK and Japan are much worse. The projected value of $1 of GDP at the start of 2000 for the UK would be $1.41 at the beginning of 2019 based on the reported growth rates and $1.24 at the corrected GDP growth rates. That is a difference of $0.17 per dollar. In absolute terms, that amounts to $393 billion, which is a significant amount for the UK. For Japan, the values are $1.18 and $0.92 (in fact, the model suggests that the Japanese economy is contracting since 2010 because of its huge debt to the USA, because the projected value of $1 is less than $1 from that year onwards), which amounts to $1037 billion, or $1.037 trillion of GDP loss at the beginning of 2019.
</p>
<p>
Countries which are already highly indebted are not in the best position to get into an extended physical or economic war. Their economies cannot take further blows. The US and European economies are already highly indebted. War (whether military or economic) is a very expensive proposition. The West came out of the Global Financial Crisis not too long ago (2008) and then endured a horrific slowdown because of Covid-19 in 2019-20. Western economies are very fragile, and Western leaders should have thought a thousand times before deciding that military confrontation with Russia was worth it. They appear to have suffered from delusions of overconfidence. <a href="https://www.brown.edu/news/2021-09-01/costsofwar">What has added to US national debt is the huge spending on the military caused by the 20-year wars in Iraq and Afghanistan, each of which is estimated to have cost America $2 trillion, with the total bill of the American "War on Terror" estimated at $8 trillion.</a>
</p>
<p>
With such low levels of indebtedness (a debt-to-GDP ratio of less than 20%), Russia is better positioned to survive both a physical as well as an economic war, as well as any economic blockade by the West.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC2d">
Russia’s Holdings of US Treasury Bonds
</h3>
</header>
<div>
<p>
It is because of these reasons, and because of the implications of high levels of US Treasury bonds on its national interests, that China began divesting its US Treasury bonds, starting in 2017, when Donald Trump made it America’s enemy number one and started a trade war against China. China realized the danger of having so much of its wealth locked up in US financial instruments. At the time, the US had not yet demonstrated its will to use its Treasury Bonds as a financial weapon yet. But they finally did it when Russia invaded Ukraine, when they froze Russian reserves held in the US. China was worried about it when tensions began to soar with the US under Trump, and the US’ actions with respect to Russia have only confirmed their suspicion. And that is why, since 2017, <span id="fig21">China has been steadily selling off its holdings of US Treasury bonds.</span> The chart below only shows the values until January 2022, but holdings have continued to drop, <a href="https://ticdata.treasury.gov/Publish/mfh.txt">and in August 2022, they had gone down to $970 billion from a peak of more than $1.2 trillion.</a> That is a drop of more than 25% in five years. China has been doing this slowly and gradually, because a sharp sell-off would mean a drop in the value and cause them a loss. But it is clearly a carefully coordinated strategy.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYHsu5RjC0DeevEGVn48qulIVHFqCwqLZg9oBu5rYwdsWjNAtM1WntmXljZ_QgRfHKlHKMT2FrIIilL2qgI3SOM8Rn7C5wYs9bKInmY0ZVZ1QVCp3Swnq1Pydce3fM9LiSJPWQwpMbsyCcicr_8uSlsW6ofj4XIqRa6L_WPDA-YubMzn6i-COeOuvP9g/s1774/fig019_China_USTreasuries.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="786" data-original-width="1774" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgYHsu5RjC0DeevEGVn48qulIVHFqCwqLZg9oBu5rYwdsWjNAtM1WntmXljZ_QgRfHKlHKMT2FrIIilL2qgI3SOM8Rn7C5wYs9bKInmY0ZVZ1QVCp3Swnq1Pydce3fM9LiSJPWQwpMbsyCcicr_8uSlsW6ofj4XIqRa6L_WPDA-YubMzn6i-COeOuvP9g/w400-h178/fig019_China_USTreasuries.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 021. Reduction in China's Ownership of US Treasury Bonds</td></tr></tbody></table><p>Russia had already faced hostile sanctions from the US, and so it began preparing for America’s economic war well in advance. <a href="https://wolfstreet.com/2018/07/17/russia-dumped-most-all-its-us-treasury-holdings-disappeared-from-list/">In <span id="fig22">the period between October 2017 and May 2018, Russian holdings of US treasury bonds fell</span> from more than $100 billion to less than $15 billion as they sold off most of their holdings.</a></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWlV7CcNRfT5ZmPe6VCZXPdjDODroU6jGecKQDm0ON8dS7_Rs12WQ-BYMVAGsmhMJFzRWF7wkEw0F-rXsCXVWc2yF2a57DkQIUiokoJ6WUe4yFB6zTAi0kJm0jIYnMams_OPzZyy2ZOe_GrlWhZaKunWnZGhIqb1okOXJysfKG4uGJA-xfvQTXK2NxOw/s508/fig020_US-treasury-holdings-Russia-2018-05-.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="450" data-original-width="508" height="354" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiWlV7CcNRfT5ZmPe6VCZXPdjDODroU6jGecKQDm0ON8dS7_Rs12WQ-BYMVAGsmhMJFzRWF7wkEw0F-rXsCXVWc2yF2a57DkQIUiokoJ6WUe4yFB6zTAi0kJm0jIYnMams_OPzZyy2ZOe_GrlWhZaKunWnZGhIqb1okOXJysfKG4uGJA-xfvQTXK2NxOw/w400-h354/fig020_US-treasury-holdings-Russia-2018-05-.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 022. Drop in Russia's Ownership of US Treasury Bonds in 2017-18</td></tr></tbody></table><p><a href="https://www.statista.com/statistics/1226054/value-of-united-states-treasury-securities-held-by-russia/">More recently, <span id="fig23">between 2000-2022, Russia sold off even more of its holdings of US Treasury bonds</span>, from $12.5 billion to just $2 billion.</a> This was very useful to them when the US decided to freeze Russian assets after the start of the war.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKci4-rhUE0Hh--ySAkntCG753XmPCJ-QCYMmRoPfgtkWyynA2VXhT46cNg4HES4i3LLw3N_3f9w4pEkQDITHaBoUyatw0pSAXPpPCBO26uGcoqxT6D-ZF77lNvGtXE6SSdvT4IFExWU9Bo1IS8gwovaB54xBe74EQ5sfGj_GJ02x6PP8ei7k0-skL0g/s1446/fig021_Russia_USTreasuryBonds_2020_22.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="909" data-original-width="1446" height="251" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiKci4-rhUE0Hh--ySAkntCG753XmPCJ-QCYMmRoPfgtkWyynA2VXhT46cNg4HES4i3LLw3N_3f9w4pEkQDITHaBoUyatw0pSAXPpPCBO26uGcoqxT6D-ZF77lNvGtXE6SSdvT4IFExWU9Bo1IS8gwovaB54xBe74EQ5sfGj_GJ02x6PP8ei7k0-skL0g/w400-h251/fig021_Russia_USTreasuryBonds_2020_22.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 023. Recent Drop in Russian Ownership of US Treasury Bonds</td></tr></tbody></table><p>So, if Russia was reducing its dependence on the US dollar for its reserves, where was it storing its wealth? The answer: Gold. <span id="fig024">Russian stockpiles of gold have skyrocketed in recent years.</span> <a href="https://tradingeconomics.com/russia/gold-reserves#:~:text=Gold%20Reserves%20in%20Russia%20averaged,the%20second%20quarter%20of%202000.">From less than 500 tons of gold in 2000, Russia today has a stockpile of more than 2,200 tons.</a> <span id="fig025">Russia started dumping dollars and buying gold after the financial crisis of 2007-08</span>, a sign that Russia (along with much of the rest of the world) had begun to lose confidence in the West’s financial system. Their purchases and stockpiling (Russia is also one of the top producers of gold in the world) of gold helped their reserves grow by five-fold in the last 20 years. <a href="https://www.ceicdata.com/en/indicator/russia/gold-reserves">In value terms, Russia’s gold reserves increased from less than $5 billion in 2000 to more than $130 billion by 2022.</a> All this was done to protect Russia against hostile economic moves by the US.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB0eDCExWFbY5d0bJ0bTK2SdRuozBC91ETl8P-H3f-86KUZSbYqFv2M1z3FOdgMF_IdNaXfMVu3IobdFlw0cHSWva7Wlys7s8OjKR8G0EqZaRh3oZxRh_kuiM5zmy9eb0yMTuedHMkmi0oZEM3f81RcfkDqH91ToT58Vk-R1KkVGZ6i_ZN4tN2FWHNXQ/s2459/fig022_RussiaGoldReserves_Value.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1089" data-original-width="2459" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB0eDCExWFbY5d0bJ0bTK2SdRuozBC91ETl8P-H3f-86KUZSbYqFv2M1z3FOdgMF_IdNaXfMVu3IobdFlw0cHSWva7Wlys7s8OjKR8G0EqZaRh3oZxRh_kuiM5zmy9eb0yMTuedHMkmi0oZEM3f81RcfkDqH91ToT58Vk-R1KkVGZ6i_ZN4tN2FWHNXQ/w400-h178/fig022_RussiaGoldReserves_Value.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 024. Growth in Russian Gold Reserves in Million USD</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3e_eRWBAJMNsTduWc2SAPWK5gXzePimS62tj_fFF6oqvyxYe3DCnCfWzfGQwlk0NdBYqOwwlF3w9wqnrRHyhjqCRXwkkeBjxwWE7eKs9bK8EZquXksakM2wrE_t04axeB2VVYpEFBmsjfEi9juHCZvQIfgIfHN5EbPUq0FvgeIeOSaEFlWACGidxSsA/s1458/fig023_RussiaGoldReserves_Tonnes.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="705" data-original-width="1458" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3e_eRWBAJMNsTduWc2SAPWK5gXzePimS62tj_fFF6oqvyxYe3DCnCfWzfGQwlk0NdBYqOwwlF3w9wqnrRHyhjqCRXwkkeBjxwWE7eKs9bK8EZquXksakM2wrE_t04axeB2VVYpEFBmsjfEi9juHCZvQIfgIfHN5EbPUq0FvgeIeOSaEFlWACGidxSsA/w400-h194/fig023_RussiaGoldReserves_Tonnes.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 025. Growth in Russian Gold Reserves in Tons of Gold</td></tr></tbody></table><p>The rest of the world had reposed their trust in the US by depositing their excess funds in US treasuries. But once the US showed a willingness to weaponize this dependence of other countries by trying to blackmail them, as they have now done with Russia, the rest of the world does not feel their money is safe with the US. As many commentators have reported, <a href="https://seekingalpha.com/article/4553000-de-dollarization-proceeds-apace">there is now a move to “de-dollarize” the world – to do business in currencies other than the dollar and the Euro</a>, and instead move to other currencies such as the yuan, and to use payment mechanisms other than SWIFT, <a href="https://oilprice.com/Energy/Energy-General/Russias-Financial-Exile-Could-Have-Profound-Implications.html">such as the Russian SPFS</a> and the <a href="https://www.csis.org/analysis/sanctions-swift-and-chinas-cross-border-interbank-payments-system">Chinese CIPS.</a></p>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC2e">
Russia’s Strength in Armaments Production
</h3>
</header>
<div>
<p>
Russia has also traditionally had a strong arms industry, second only to the US. Until 2012, the production of arms by the US and Russia was comparable. Since then, there has been a decline, but Russia is still the second-largest arms producer in the world. An indication of this <span id="fig026">can be seen by looking at the following chart</span>, which shows the top 4 arms exporters in the world. This is obtained from the website of the <a href="https://www.sipri.org/databases/armsindustry">Stockholm International Peace Research Institute (SIPRI).</a> The values on the y-axis deserve explanation. SIPRI likes to show arms exports not by financial values of exports (because these can vary with supply and demand, and so may not reflect the inherent value of the weapons traded), but by the production cost, which they call Trend Indicator Value. <a href="https://www.sipri.org/databases/armstransfers/background">As they explain their methodology on their website,</a>
</p>
<blockquote>
<p>
SIPRI statistical data on arms transfers relates to actual deliveries of major conventional weapons. To permit comparison between the data on such deliveries of different weapons and to identify general trends, SIPRI has developed a unique system to measure the volume of international transfers of major conventional weapons using a common unit, the trend-indicator value (TIV).
</p>
<p>
The TIV is based on the known unit production costs of a core set of weapons and is intended to represent the transfer of military resources rather than the financial value of the transfer. Weapons for which a production cost is not known are compared with core weapons based on: size and performance characteristics (weight, speed, range and payload); type of electronics, loading or unloading arrangements, engine, tracks or wheels, armament and materials; and the year in which the weapon was produced. A weapon that has been in service in another armed force is given a value 40 per cent of that of a new weapon. A used weapon that has been significantly refurbished or modified by the supplier before delivery is given a value of 66 per cent of that of a new weapon.</p></blockquote><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3gWUaPJNV5Bb30mvVtL7JZ73WlXXfV0VKRHAwblOr16GNoEjU1jkOoOjfXlIhiaeMEUzR-JaNDBlx2okbM97D8rJMH79pu6lvGxgGdikfFeLFdKCDBOcb3zu7aPF6g7c5sM-byIpbm30Qn5KCkI49JhM4vhJnJFT_wdMVXLxiQOZ_vQYM7fRZU94yFQ/s605/fig024_TopArmsExportersWorld.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3gWUaPJNV5Bb30mvVtL7JZ73WlXXfV0VKRHAwblOr16GNoEjU1jkOoOjfXlIhiaeMEUzR-JaNDBlx2okbM97D8rJMH79pu6lvGxgGdikfFeLFdKCDBOcb3zu7aPF6g7c5sM-byIpbm30Qn5KCkI49JhM4vhJnJFT_wdMVXLxiQOZ_vQYM7fRZU94yFQ/w400-h225/fig024_TopArmsExportersWorld.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 026. World's Largest Arms Exporters, 2000-2020</td></tr></tbody></table><p>Russia’s arms manufacturing capability is another measure of its self-reliance. Unlike most other countries, it does not need to depend on other countries for weapons. Given that it is one of the leading global arms exporters, making weapons for itself, such as aircraft, tanks, and missiles, should not be difficult. This is another reason why sanctions will not hurt Russia’s ability to continue this war. It should be noted that Russia’s arms industry has been under sanctions since 2014, and still has not collapsed, managing to develop and sell several world-leading weapons, so it is fair to say that Russia’s armaments industry has found ways to survive Western sanctions. Ukraine, on the other hand, is highly dependent on the West for its weapons.</p>
<p>
In 2021, the US Congress authorized a study to determine the threat to the US from the Russian Defence Industry. <a href="https://crsreports.congress.gov/product/pdf/R/R46937">Its report (Congressional Research Service report R46937) was released in October 2021.</a> Among the things the report concluded were (quotes from the report):
</p>
<blockquote>
<ul>
<li>
Russia’s defense industry is capable of producing advanced systems across most weapons categories.
</li>
<li>
Russia’s 2014 invasion of Ukraine and the imposition of Western sanctions reinforced an existing tendency of self-sufficiency, with Russia’s defense industry attempting to become even more self-reliant.
</li>
<li>
In 2011, Russia launched a 10-year armament program, known as GPV-2020, with a goal to modernize the military’s weaponry. According to external analysis, the program funding allowed the sector to recapitalize many of its stagnant sectors, import precision tools, recruit a high-quality workforce, increase production, and resume development of R&D programs that had been on hold since the 1990s. According to Russian officials, the defense industry has largely achieved the goals of GPV-2020 and developed capabilities to produce systems across all major weapons categories.
</li>
<li>
Russia asserts it has increased its ability to serially produce upgraded systems, increase production volumes, and innovate new designs (such as hypersonic and cruise missiles, electronic warfare, and air defense systems). Analysts generally consider such new systems to be formidable, increasing Russia’s military capability and competitiveness in foreign arms sales.
</li>
</ul>
</blockquote>
<p>
And so, even as Western <a href="https://www.theguardian.com/world/2022/oct/20/the-army-has-nothing-new-russian-conscripts-bemoan-lack-of-supplies">media reports since the start of the 2022 Ukraine war suggest that the Russian military is poorly equipped, and that Russian military equipment is outdated relative to that of NATO</a>, the US government clearly knows better. It knows that it is dealing with a state-of-the-art military machine. As CRS R46937 says, Russia’s defence industry has been becoming more and more self-reliant since sanctions were imposed on it after the annexation of Crimea in 2014. This is why it is hard to imagine that the new sanctions imposed in February 2022 will considerably impact Russia’s ability to produce aircraft, tanks, and weapons to continue to prosecute the war. As CRS R46937 notes,
</p>
<blockquote>
The Russian government and senior government officials have directed an extensive import substitution program to shift the defense industry toward a reliance on domestically produced components. Import substitution could reduce the defense industry’s exposure to foreign sanctions, improve the purchasing power of domestic military expenditure, and increase profit from foreign arms sales. This policy has become more important now that European and U.S. sanctions have limited Russian access from key suppliers and Ukraine has severed access to its defense industry. Russia’s import substitution program has been somewhat successful in replacing Western components and developing domestic manufacturing and production expertise; before 2014, Russia relied on Western producers for dual-use goods, especially high-end technology.
</blockquote>
<p>
The report also points out that Russia has successfully been able to shake off its reliance on the Ukrainian defense industry:
</p>
<blockquote>
Russia’s defense industry has been increasingly successful in reducing its reliance on systems and components produced in Ukraine before 2014. Prior to Russia’s invasion of Ukraine, the Ukrainian defense industry provided materiel such as helicopter engines, transport aircraft, rockets and missiles, and gas turbine engines and power components for naval vessels. The loss of Ukrainian engines affected Russia’s shipbuilding, with delays and cancellations of ships under construction. For example, the loss of Ukrainian producers appears to have led Russia to sell Project 11356 frigates to India and to have contributed to delays in the production of Project 22350 Admiral Gorshkov class frigates. Russia has begun to replace imported diesel/gas turbine engines with domestically produced ones.
</blockquote>
<p>
The US Congressional Research Report also explains why several countries, such as India, cannot abandon or sanction Russia — their defense requirements and weapons inventories are too closely tied to Russia. The report uses data from SIPRI to give the value of arms exports from Russia to several key countries. <span id="fig027">Below are figures</span> <span id="fig028">from the report</span> showing <span id="fig029">Russian arms exports</span> to <span id="fig030">different countries</span>, using Trend Indicator Values to measure exports.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6f1MLVvUP8tRorvarBQKVhlZ8ToaVrgVnyN2y6LCVfLYIS_KIqlV4kKoW4rRkewAsWTV4PKewMkN1BkwTHHlAg0gQkkA7IC-U7QQH-wqB8dnJfU6ghPwT6Hm6zC8-z3VVxrnlcvC_OcLpryWyUvb4umGlb5h036pSlE7SD2qfsBDPhetPh7wRhEFY9A/s1418/fig025_RussiaArmsExportsAlgeria.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="948" data-original-width="1418" height="268" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6f1MLVvUP8tRorvarBQKVhlZ8ToaVrgVnyN2y6LCVfLYIS_KIqlV4kKoW4rRkewAsWTV4PKewMkN1BkwTHHlAg0gQkkA7IC-U7QQH-wqB8dnJfU6ghPwT6Hm6zC8-z3VVxrnlcvC_OcLpryWyUvb4umGlb5h036pSlE7SD2qfsBDPhetPh7wRhEFY9A/w400-h268/fig025_RussiaArmsExportsAlgeria.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 027. Russian Arms Exports to Algeria, 1991-2020</td></tr></tbody></table><div class="separator" style="clear: both; text-align: center;"><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD2fCWRFh5EyHZgRt854TFJ1V_QsUBH3MZRexUq-8-NBKg-SywM5JZ5Ms--LEmQsBZXx5m3yHtzu-1FvOqBwdV-JJ7rhC9mtKcryMeD8rnie6o1QREpW5Ixarwqg-mOwQ-0IQfBTETo2Sbm2Pj0J5TRdJob06N8TS2nCnXp8nTCM7c93v_qzmPFtHwGw/s1428/fig026_RussiaArmsExportsChina.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="938" data-original-width="1428" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD2fCWRFh5EyHZgRt854TFJ1V_QsUBH3MZRexUq-8-NBKg-SywM5JZ5Ms--LEmQsBZXx5m3yHtzu-1FvOqBwdV-JJ7rhC9mtKcryMeD8rnie6o1QREpW5Ixarwqg-mOwQ-0IQfBTETo2Sbm2Pj0J5TRdJob06N8TS2nCnXp8nTCM7c93v_qzmPFtHwGw/w400-h263/fig026_RussiaArmsExportsChina.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 028. Russian Arms Exports to China, 1991-2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq-2_bagCQ6At-e2WVqf4QhDkpJCpu1aTmxZhKzdXwQA5nq66qtK_4O7A6EiMcjiH5exldzTBGqpUw44G8efsZZXUlAosI0zwpJU5yUCPuFTNqodVIKsEgC-cNgHYX-egsy24dO94_IA6_Xco6rJpzNF1QTs68uBEz9k8lPuSmbOLwzDSJ0uzhlLPcBg/s1400/fig027_RussiaArmsExportsEgypt.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="918" data-original-width="1400" height="263" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiq-2_bagCQ6At-e2WVqf4QhDkpJCpu1aTmxZhKzdXwQA5nq66qtK_4O7A6EiMcjiH5exldzTBGqpUw44G8efsZZXUlAosI0zwpJU5yUCPuFTNqodVIKsEgC-cNgHYX-egsy24dO94_IA6_Xco6rJpzNF1QTs68uBEz9k8lPuSmbOLwzDSJ0uzhlLPcBg/w400-h263/fig027_RussiaArmsExportsEgypt.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 029. Russian Arms Exports to Egypt, 1991-2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKWN7L_1Qgd34XwF5zqyiITePg4pAnMjr93YbWRYeHQeuzb5SA_isD856R0x3B7eWE6FnNiQio2PWVp6XnQU9OL11HO3R4_0XW4J2KL-TCVm365vnWIP_Rjj7iTniS8ibSxSHKaycIhfJZa-aZoF_qdV6ME5BjkwV2-mfL8UuLE23bCmbkCou74wtrBw/s1425/fig028_RussiaArmsExportsIndia.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="924" data-original-width="1425" height="259" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKWN7L_1Qgd34XwF5zqyiITePg4pAnMjr93YbWRYeHQeuzb5SA_isD856R0x3B7eWE6FnNiQio2PWVp6XnQU9OL11HO3R4_0XW4J2KL-TCVm365vnWIP_Rjj7iTniS8ibSxSHKaycIhfJZa-aZoF_qdV6ME5BjkwV2-mfL8UuLE23bCmbkCou74wtrBw/w400-h259/fig028_RussiaArmsExportsIndia.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 030. Russian Arms Exports to India, 1991-2020</td></tr></tbody></table><p><br /></p>
</div>
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</section>
<div id="floatclear"></div>
<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC2f">
Key Takeaways from Chapter II
</h3>
</header>
<div>
<ul>
<li>
Russia has lived with sanctions since 2014
</li>
<li>
Russia’s economy has grown well even under these sanctions
<ul>
<li>
Its average GDP growth rate is better than all Western countries
</li>
<li>
Average GDP growth rate, per capita, PPP, is better than all Western countries
</li>
<li>
Manufacturing is robust at 13% of GDP
</li>
</ul>
</li>
<li>
Russia has a very low debt-to-GDP ratio (20%)
<ul>
<li>
This makes it very independent
</li>
<li>
Russia is capable of absorbing economic shocks
</li>
<li>
The West, with much higher debt-to-GDP ratios (of the order of 100% or more) cannot handle more shocks
</li>
</ul>
</li>
<li>
Russia has been making itself independent of the West
<ul>
<li>
By divesting itself of US Treasury bonds
</li>
<li>
By reducing its US dollar holdings
</li>
<li>
By investing its wealth in gold
</li>
<li>
By forging a global partnership to de-dollarize
<ul>
<li>
Other countries like China have also reduced their US Treasury holdings
</li>
</ul>
</li>
</ul>
</li>
<li>
Russia is a major arms manufacturer and exporter
<ul>
<li>
Technologically independent of the West
</li>
<li>
Has a greater ability to continue war than Ukraine
</li>
<li>
Modern and competitive with the West, according to US assessment
</li>
<li>
Shown an ability to survive severe Western sanctions since 2014
</li>
</ul>
</li>
</ul>
</div>
<a href="#TOC">Back to TOC</a>
</section>
</section>
<div id="floatclear"></div>
<section>
<header style="padding: 2em;">
<h2 id="TOC3">
CHAPTER III: RUSSIA’S INTERCONNECTEDNESS WITH THE WORLD
</h2>
</header>
<div>
<p>
Normal trade embargoes work well if you can choke another country which is in desperate need of something and cannot get it because of your embargo. A prime example of this is the Pacific War in the Second World War, which was triggered because the US imposed a trade embargo on Japan because of its invasion of China in 1933. Japan had a vision of imperial conquest of Asia, which was unacceptable to Great Britain and the USA, because it conflicted with the imperial visions of these two empires. Japan needed raw materials even to sustain its empire in Manchuria. The American embargo was preventing the Japanese from buying vital raw materials to sustain its ambitions. The only way to break the embargo was prosecute war against the US and Great Britain. Japan’s immediate problem was Great Britain, because they could get most of their raw materials from East Asia, specifically Malaya and the Dutch East Indies (modern Malaysia and Indonesia). But they were worried about the naval power of the US and knew they had to knock them out. The result of that calculation was the attack on Pearl Harbor on December 7, 1941. Unfortunately for the Japanese and fortunately for the rest of the world, their calculations went wrong, and they could not hit the American aircraft carriers at Pearl Harbor because those had previously sailed out and therefore escaped the carnage of the surprise attack. This left the Americans with enough naval strength to defeat the Japanese on the high seas.
</p>
<p>
But the current situation involving Russia is an embargo in reverse. The West does not want to deny Russia goods. They want to deny them income. The embargo on Japan was fairly easy, because Japan wanted to import iron ore, coal, rubber, tin, zinc, and a host of other materials that their small island could not produce. Russia, on the other hand, produces gigantic quantities of commodities. They need markets for their commodities. The West believes that by not allowing Russia to sell these commodities, they can starve Russia of the income it would derive from selling these commodities. The US had earlier done this with Iraq after the 1991 Gulf War, where it refused to allow Iraq to sell its oil; and it has imposed similar sanctions on Iranian oil today. But while the sanctions on Iran have caused hardship, decades of sanctions against the Islamic regime in Iran have not succeeded in removing them from power or seriously eroded their support among the people. (It is true that there is currently some unrest in Iran, but it is unrelated to the US sanctions.)
</p>
<p style="font-style: italic; font-weight: bold;">
The question then becomes: who needs whom more? Does Russia need the income from selling commodities more than the West needs the commodities themselves?
</p>
<p>
There are two sub-questions here:
</p>
<ol style="font-style: italic; font-weight: bold;">
<li>
Can a complete embargo on Russian sales of its commodities be imposed?
</li>
<li>
If a complete Western embargo could be imposed on Russia’s energy sales, could Russia survive?
</li>
</ol>
</div>
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<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3a">
Trade Imbalances and Export/Import Ratios
</h3>
</header>
<div>
<p>
To understand this, we need to understand a concept known as the trade imbalance. The trade balance of a country (also known as the Balance of Trade, or BoT) is defined as the value of its exported goods and services minus the value of its imported goods and services. If the value of the exports exceeds the value of the imports, the country is said to have a trade surplus. If the value of the imports exceeds the value of the exports, the country is said to have a trade deficit. These quantities can be defined for a country as a whole (with respect to the rest of the world) or for a country with respect to a region (for instance, for Russia with respect to Asia) or for a pair of countries (for instance, for Russia with respect to Germany).
</p>
<p style="font-style: italic; font-weight: bold;">
If one country has a trade surplus with respect to another country, then that means that the first country sells more to the second country than the second country sells to the first. In such a case, it is meaningless for the second country to try to have a trade embargo with the first country, because if trade between the two countries is stopped, it is the second country that will suffer more without the goods from the first country.
</p>
<p style="font-style: italic; font-weight: bold;">
Any country that has a trade deficit with respect to another country cannot realistically impose a trade embargo on the other country.
</p>
<p>
A second metric that is useful to understand trade imbalances is the export to import ratio. While the trade balance is an absolute number, and can depend on the sizes of the two economies involved, the export/import ratio (Exim ratio) is a normalized way to understand trade imbalances. If Russia’s Exim ratio with respect to another country or entity (like the EU or Asia) is greater than 1, it means that Russia is exporting more to that country than it imports from it. In other words, Russia has a trade surplus with that country or entity. If it is less than 1, it means that Russia is importing more from that country than it exports to it. In other words, Russia has a trade deficit with that entity.
</p>
<p>
Let us examine Russia’s trade balances with the world, with different regions, and with other countries <span id="fig031">The figure below shows Russia’s Balance of Trade (BoT) with the world as a whole and with the Euro Area</span> (<a href="https://data.imf.org/regular.aspx?key=61013712">data from the International Monetary Fund</a>). It can be clearly seen that Russia enjoys a healthy trade surplus with both the rest of the world and Europe. As of 2020, this surplus with the rest of the world amounted to $106 billion and with Europe amounted to $29 billion. That means Europe bought $29 billion worth of goods and services more from Russia than Russia did from Europe, and the world bought $106 billion worth of goods and services more from Russia and Russia bought from the rest of the world.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPHCed-cR4iQs2VQZEdNFk0hpQ_xq6-GSb_paHXfD-W7H4w98oAEXYAdpjLn0Y7YQlbqApJDynrM8QGw1dhkJUROgED4wX51fVdoNwFXYKI1nJcHFNoMu9hDHI3dTL4FE5qcqg1w-cunaA2lH07seqh65zbNs4lNZ7-hK6GRXXkM8DCIuPt1aIr8OYEw/s605/fig029_Russia_TradeSurplus_Euro_World.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPHCed-cR4iQs2VQZEdNFk0hpQ_xq6-GSb_paHXfD-W7H4w98oAEXYAdpjLn0Y7YQlbqApJDynrM8QGw1dhkJUROgED4wX51fVdoNwFXYKI1nJcHFNoMu9hDHI3dTL4FE5qcqg1w-cunaA2lH07seqh65zbNs4lNZ7-hK6GRXXkM8DCIuPt1aIr8OYEw/w400-h225/fig029_Russia_TradeSurplus_Euro_World.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 031. Russia's Trade Surpluses with the entire World and the Eurozone, 2000-2020</td></tr></tbody></table>
<p>
<span id="fig032">The next figure shows Russia’s Exim ratios with the World and the Euro region.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikDED04hp0xYBrDoaE1os3dsUq-sGlnBtdJGreDrtJloh6wlRtbDA6e5fqJczBV2bW4qAtPSu6hXn7yUsLNFfhJ-wCpP00SLs4rBiLqPpVOPx_4JQiZ9xhlRlRZYVsH9aXXZN5FdXhaKiqvqUkqVIKeJWANXYfmi3GTOeZsJBwajtJxHGB041V6M4YIw/s605/fig030_EximRatio_Russia_Euro_World.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikDED04hp0xYBrDoaE1os3dsUq-sGlnBtdJGreDrtJloh6wlRtbDA6e5fqJczBV2bW4qAtPSu6hXn7yUsLNFfhJ-wCpP00SLs4rBiLqPpVOPx_4JQiZ9xhlRlRZYVsH9aXXZN5FdXhaKiqvqUkqVIKeJWANXYfmi3GTOeZsJBwajtJxHGB041V6M4YIw/w400-h225/fig030_EximRatio_Russia_Euro_World.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 032. Russia's EXIM Ratios with the entire World and with the Eurozone, 2000-2020</td></tr></tbody></table>
<p>
We can see that, while the Exim ratio has been reducing over the last 20 years, it is still pretty high at 2020, at 1.5, with both the world and the Euro region, indicating that Russia is exporting 1.5 times to the rest of the world what it is importing from it, and the same with respect to Europe. This indicates that Russia is an extremely important trade partner for Europe as well as the rest of the world, and explains why the rest of the world is extremely reluctant to abide by Washington’s dictates telling them to stop doing business with Russia. Most countries cannot stop trading with Russia. Their economies would collapse. Europe is a wealthier continent than Asia or Africa, so even though Europe’s leaders know that Europe would suffer with a boycott of Russian goods, they are willing to endure it in the short term if it can help defeat Russia in Ukraine. <strong><em>In effect, they are trading prosperity for ideology.</em></strong>
</p>
<p>
It is also instructive to see <span id="fig033">how this trade imbalance is distributed between different countries in Europe. This can be seen from the following graph.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8YZ8elPeOiSkN8CuB2lreM0tBb74m1XdrJIWwEmyylbozf9ZdeTenwMb6rMDfMm_FuSVs11eaPYLYTJhoDvo08AsuuBo1EC1DbaYGZt84F-XuxkD5AUddRfQYullqjgOwq5kAnW5Soihvr-lGKIqSAFf_hN0khBk2Dq42zQMJvlukMferkOKwlx2HJQ/s605/fig031_EximRatio_Russia_VariousEuropeans_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8YZ8elPeOiSkN8CuB2lreM0tBb74m1XdrJIWwEmyylbozf9ZdeTenwMb6rMDfMm_FuSVs11eaPYLYTJhoDvo08AsuuBo1EC1DbaYGZt84F-XuxkD5AUddRfQYullqjgOwq5kAnW5Soihvr-lGKIqSAFf_hN0khBk2Dq42zQMJvlukMferkOKwlx2HJQ/w400-h225/fig031_EximRatio_Russia_VariousEuropeans_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 033. EXIM Ratios for Russia with Various European Countries in 2020</td></tr></tbody></table>
<p>
This is an interesting chart, and makes us wonder: what is the reason for these huge differences between countries? France and Germany clearly export more to Russia than they import from it; Italy exports as much as it imports; Spain, the Czech Republic, and Sweden all export more to Russia than they import from it; and the other countries in this graph import more from Russia than they export to it. The examples of the Netherlands and Norway are particularly interesting, because both countries are energy-rich. The Netherlands has huge gas fields at Groeningen, and Norway is a huge energy surplus country. What could they possibly be importing from Russia?
</p>
<p>
To understand these differences, it helps to look at a breakup of the import and export numbers. The <a href="https://en.wikipedia.org/wiki/The_Observatory_of_Economic_Complexity">Observatory of Economic Complexity (OEC) at MIT</a> helps us do this. <span id="fig034">Let us look at the details from Norway.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA7uI8dZDls5S-FAWwwrkjXu0VlszeHD-xhiGsov4whYeH2kh8zsZtxBs5RzHFaEsVR8oRwRBgLBCyUfNpUsg8vjw2kj3s2WSN_ol2bmragNqkUUN_LovEpNdERd3vJ_CspVHd0VOPw_6a60e20B_RfoobCs8_9cK9HSqYAkpz01vptq7dr2X-8RCroQ/s1510/fig032_Exports-from-Russia--to-Norway--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA7uI8dZDls5S-FAWwwrkjXu0VlszeHD-xhiGsov4whYeH2kh8zsZtxBs5RzHFaEsVR8oRwRBgLBCyUfNpUsg8vjw2kj3s2WSN_ol2bmragNqkUUN_LovEpNdERd3vJ_CspVHd0VOPw_6a60e20B_RfoobCs8_9cK9HSqYAkpz01vptq7dr2X-8RCroQ/w291-h400/fig032_Exports-from-Russia--to-Norway--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 034. Breakup of Russia's Exports to Norway, 2020 ($1.1 Bn)</td></tr></tbody></table>
<p>
What we see, contrary to the stereotypes have been fed in popular media, is a very mixed picture. About 20% of energy-rich Norway’s imports from Russia are crude oil and refined petroleum (diesel and petrol), about 5% is natural gas (“petroleum gas”), and about 2.5% are coal-based products, including raw coal. Fuels only form 27.5% of a total import bill of $1.1 billion, or about $303 million. A wide variety of items comprise the remaining $800 million in the list, some of which are raw materials and some of which are finished goods: about 16.3% is rapeseed oil; nearly 10% is raw aluminium; nearly 5% is nickel matte, an intermediate metallurgical product (nickel sulfide) in the processing of nickel ore; ammonia (6.5%); soybean meal (2.3%); fertilizer (around 1%); wheat gluten (3.3%); rubber tires (3.1%); carbon-based electronics (0.64%), special-purpose ships (1%), prefabricated buildings (0.83%); refrigerators (0.32%); and a host of other items form the balance. The presence of so many non-fuel related items tells us that when US Senator John McCain called Russia “a giant gas station,” he had no idea what he was talking about. Russia is a diversified economy with much more than gas and oil to it. As already mentioned, it has a strong manufacturing sector.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section style="border-color: rgb(0, 255, 0); border-radius: 20px; border-style: solid; border-width: 7px; color: darkgreen; padding: 1em;">
<header>
<h3 id="TOC3b">
The Green Transition and the Role of Gas
</h3>
</header>
<div>
<p>
The obvious question one would have on reading the previous paragraph is why exactly a country like Norway, with extensive oil and gas reserves, would even import oil and gas from Russia. The answer lies in Europe’s persistent efforts to decarbonize over the last 30 years – a journey in which cheap Russian oil and gas have played an oversized role. Simply put, cheap oil and gas from Russia has fueled Europe’s transition from highly polluting coal to green technologies, such as wind and solar energy, by cushioning the impact of the transition. <span id="fig035">Indeed, if one looks at the percentages of power produced in Europe by different means over the last 30 years</span>, <span id="fig035">one sees that the share of renewables and biofuels has gone up dramatically, whereas the share of fossil fuels has dramatically dropped over this period</span>. Russia’s supply of cheap gas as a transition fuel has been crucial to this transformation.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxHNjvdKjgrrjASZ3TFhJYFX7_h69v2OtwIGvqh-yr0U1OtKiJ8rdD22XeSXfnjNykoTbcxIIaBFCt4X-F10ZkOv0xGwCougfZKxBMXYncvw8FsbDWrNaAZ6VQbEfa7s8NoAjVfKigoWuM66vDKwM4rztSIdD4UhUW_-MDD_tUPq3bvAbGMsnhoeYNjw/s1464/fig033_Primary_energy_production_by_fuel,_EU,_in_selected_years,_1990-2020_Petajoule_(PJ).png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="956" data-original-width="1464" height="261" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhxHNjvdKjgrrjASZ3TFhJYFX7_h69v2OtwIGvqh-yr0U1OtKiJ8rdD22XeSXfnjNykoTbcxIIaBFCt4X-F10ZkOv0xGwCougfZKxBMXYncvw8FsbDWrNaAZ6VQbEfa7s8NoAjVfKigoWuM66vDKwM4rztSIdD4UhUW_-MDD_tUPq3bvAbGMsnhoeYNjw/w400-h261/fig033_Primary_energy_production_by_fuel,_EU,_in_selected_years,_1990-2020_Petajoule_(PJ).png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 035. Proportion of Various Means of Energy Production in Europe, 1990-2020</td></tr></tbody></table>
<p>
Green technology costs money to develop, and the incredibly cheap rates at which Russia has been supplying gas to Europe has meant that even energy surplus countries like Norway could start investing in green technologies. <span id="fig036">Today, only 58% of Norway’s energy comes from fossil fuels</span>, as can be seen from the figure below. (Source for data: <a href="https://ec.europa.eu/eurostat">The European Commission’s Eurostat website.</a>)
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDD5MM6ze0lCautYADcIpI3fIcau2r7z6bYxllAv3pigPIumf229-n5SxMPq79ugygMe9jdc9KRM78qOfmhV9znKgDhnwxolxO2LuG4LtfFdUWEt5H_h3mWK8igLYgbq_922CYi8cn2WH9yf8VADfOh9oqfA81ldCZ0ac7Kod8MCrQeoS5ElOXD3Xc8w/s605/fig034_NorwayEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDD5MM6ze0lCautYADcIpI3fIcau2r7z6bYxllAv3pigPIumf229-n5SxMPq79ugygMe9jdc9KRM78qOfmhV9znKgDhnwxolxO2LuG4LtfFdUWEt5H_h3mWK8igLYgbq_922CYi8cn2WH9yf8VADfOh9oqfA81ldCZ0ac7Kod8MCrQeoS5ElOXD3Xc8w/w400-h225/fig034_NorwayEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 036. Percentage Breakup of Norway's Energy Sources, 2020</td></tr></tbody></table>
<p>
As seen from the previous image on Europe’s primary energy production over the last 30 years, <span id="fig037">the greatest reduction has been in the use of highly polluting coal, the use of which has gone down from 13,000 PetaJoules (a Joule is the <em>Système International</em>, or SI (International System), unit of energy; one Petajoule is 1000 trillion joules) to about 3,000 PetaJoules</span>. <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Coal_production_and_consumption_statistics#:~:text=Production%20of%20hard%20coal%20in,compared%20to%2071%20%25%20in%201990.">This can also be seen in the graphic below.</a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjh0eUp_B9vVMxSaC9vyC6ZkWvb10G59psVI4ki9jtwcAYBWLUlDMYmqxNVZT6KyB8Cz-gGuwyB8nl-UpdITak3jE6ZtXfW06vy-oLtOS_QvUWN4K07u2vMIzMFibA4fUIz5cryaKLXiDIr4GRJkIvek7CfrHqbT61cEUBpRWXzR1a9v6nicNP1P1oKUw/s1207/fig035_EUCoalProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="798" data-original-width="1207" height="265" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjh0eUp_B9vVMxSaC9vyC6ZkWvb10G59psVI4ki9jtwcAYBWLUlDMYmqxNVZT6KyB8Cz-gGuwyB8nl-UpdITak3jE6ZtXfW06vy-oLtOS_QvUWN4K07u2vMIzMFibA4fUIz5cryaKLXiDIr4GRJkIvek7CfrHqbT61cEUBpRWXzR1a9v6nicNP1P1oKUw/w400-h265/fig035_EUCoalProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 037. The Decline of Coal in Europe Over the Last 30 Years</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
Essentially, cheap Russian gas has helped Germany completely phase out coal, and has reduced overall coal consumption in 2020 to 20% of the levels that were consumed in 1990.
</p>
<p style="font-style: italic; font-weight: bold;">
Russia has made Europe’s transition to a green economy possible.
</p>
<p>
However, the journey is as yet incomplete. Even with all this help from Russia, <span id="fig038">the adoption of renewable technologies in Europe is still very inadequate, as can be seen below</span>.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEispukDeCv2dfqxTaOAopXansmsHq9SEbGagxBTiPyIfEawiZy-d55BHnPdMGNs1jBvQj_qyN6ZEjOzA1U7jOMOPIGEOVsc4vVHSdFAaefvoRdWYNpEVkAOY4p2y4XQAcIqmvqRMynw3XM93PYXe6lx_z-rtpuccZQFq2vCpkWF64IBlDd0xeC23rEYIw/s605/fig036_FossilFuel_Renewables_Dependence.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEispukDeCv2dfqxTaOAopXansmsHq9SEbGagxBTiPyIfEawiZy-d55BHnPdMGNs1jBvQj_qyN6ZEjOzA1U7jOMOPIGEOVsc4vVHSdFAaefvoRdWYNpEVkAOY4p2y4XQAcIqmvqRMynw3XM93PYXe6lx_z-rtpuccZQFq2vCpkWF64IBlDd0xeC23rEYIw/w400-h225/fig036_FossilFuel_Renewables_Dependence.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 038. Fossil Fuel Dependence of Major European Nations, 2020</td></tr></tbody></table>
<p>
While a couple of countries in the chart above (Finland and Denmark) are close to the 40% level of renewables adoption, many are still in the 10%-20% range of adoption. Fossil fuels still loom large over the European landscape. And, as we shall soon see below, Russia is a huge part of that fossil fuel dependence. It is the economic advantage that Russia provided Europe with its supply of cheap gas that made even this 10%-40% dependence on renewables possible, but that transition clearly still needed a few decades to be complete. The present war, <a href="https://medium.com/@nayakan88/understanding-the-great-game-in-ukraine-330897142aaa">brought upon by European refusal to accept Russia’s legitimate concerns about their encirclement by NATO</a>, is going to set back three decades of progress in Europe’s move to a green future. Natural gas is an essential part of that transition, and that is why wise German leaders like Gerhard Schroeder and Angela Merkel worked closely with Russia to build, first, the Nord Stream 1 gas pipeline, and later, the Nord Stream 2 gas pipeline – which Germany has now foolishly abandoned under American pressure.
</p>
<p>
That is why hopes of a rapid transition from fossil fuels to renewables to overcome Europe’s dependence on Russia in an extremely short time frame are overly optimistic.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3c">
Destinations of Russian Exports and Origins of Russian Imports
</h3>
</header>
<div>
<p>
<span id="fig039">We can investigate where Russia exports the majority of its goods and services to</span>. This can be seen in the graphic below. Most of Russia’s exports in 2020 flowed to Europe, with a value of $160.9 Bn. Closely following Europe was Asia, with $138.8 Bn. The other continents’ shares are small in comparison.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPgaUO2L8JqZAfKE7GaK9crvBwowk7yiNk90Fpxhl5f1LhYYFYfU9cciH_Q1hZ9mFpOAEQvushfy0YT8fAupWfHoTNBa2QN0LiHmRm8-zn-pHk6fbTqrI06Qt7Oal-jwuj6IRXveFSqDDpkVkARSD3XObNTqLuFBlnJYQcDSH6fYjPuUCFqGGFKC1dCg/s605/fig037_RussiaExportsContinent.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPgaUO2L8JqZAfKE7GaK9crvBwowk7yiNk90Fpxhl5f1LhYYFYfU9cciH_Q1hZ9mFpOAEQvushfy0YT8fAupWfHoTNBa2QN0LiHmRm8-zn-pHk6fbTqrI06Qt7Oal-jwuj6IRXveFSqDDpkVkARSD3XObNTqLuFBlnJYQcDSH6fYjPuUCFqGGFKC1dCg/w400-h225/fig037_RussiaExportsContinent.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 039. Breakup of Russia's Exports by Destination Continent, 2020</td></tr></tbody></table>
<p>
<span id="fig040">A similar chart can also be ploted of Russian imports by continent of origin</span>. Again, Europe is the main continent of origin of Russian imports, with $111.1 Bn in imports, followed by Asia, at $93.6 Bn. The other continents are minor.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLJwo36kTYsRKybtV2fwLc0YYl6sRtLszyAaCFNkOOyXzKQpARAMVwRvrMBMGQJL4z3SUbiLtWpogY9HlnFD4GsGwQaxtCfgllNSATvmVld_8TZz4N-KzAotSTtuebHins4pT2so78r0tBYa3PPbXHwPSH1TZt8SvQN0G0yUeQRUO6kthXr4Rip9pVrw/s605/fig038_RussiaImportsContinent.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLJwo36kTYsRKybtV2fwLc0YYl6sRtLszyAaCFNkOOyXzKQpARAMVwRvrMBMGQJL4z3SUbiLtWpogY9HlnFD4GsGwQaxtCfgllNSATvmVld_8TZz4N-KzAotSTtuebHins4pT2so78r0tBYa3PPbXHwPSH1TZt8SvQN0G0yUeQRUO6kthXr4Rip9pVrw/w400-h225/fig038_RussiaImportsContinent.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 040. Breakup of Russia's Imports by Origin Continent, 2020</td></tr></tbody></table>
<p>
Clearly, Europe is Russia’s leading trading partner, both for imports and exports, and is closely followed by Asia.
</p>
<p>
We can drill down deeper into this to find out <span id="fig041">who the major recipients of Russian exports</span> <span id="fig042">are in Europe</span> and in Asia. The next two charts show this.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWCxmbQqxGhjthGl9z8ZCdSFrdyk3C2g4lTAmsMM9pWjX2Fey-BWYBG8bXoZ_vrvg7Ixbx43sqCaVZYsMS4C2ae3s5PTXtNQKrEMiTvhLRi0zECy8HLNwEebjWE8lrk2aNL4CbwccugCKHRNR72krXP-0Ba3dXW70ooKFyEtT7NovTUXCHE1vx-IbQxA/s605/fig039_Russia_TopAsianExportCountries.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWCxmbQqxGhjthGl9z8ZCdSFrdyk3C2g4lTAmsMM9pWjX2Fey-BWYBG8bXoZ_vrvg7Ixbx43sqCaVZYsMS4C2ae3s5PTXtNQKrEMiTvhLRi0zECy8HLNwEebjWE8lrk2aNL4CbwccugCKHRNR72krXP-0Ba3dXW70ooKFyEtT7NovTUXCHE1vx-IbQxA/w400-h225/fig039_Russia_TopAsianExportCountries.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 041. Key Destinations for Russian Exports in Asia, 2020</td></tr></tbody></table>
<p>
China is, by far, the biggest destination for Russian exports in Asia, at 35.5% of the total exports ($49.3 Bn), followed by neighbor Kazakhstan (10%, $13.8 Bn), Turkey (9.4%, $13.1 Bn), and South Korea (9%, $12.5 Bn), Japan (6.7%, $9.3 Bn) and India (4.3%, $5.9 Bn).
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqwBzuMHzOqiNyIfb0MoqqWXPE5fbaT2a9B8MN8wuc2IeeIJ28Z9XlrW8zGxp3aeyeA0SWwtga-vWNObBEBe4gq_OeoKGLlkqhm1HyOkQGG2H4E_CSjxgWtPq2jC2lrqmmXSCOTr4ho_7w8EFQDCOAcndfips8rF5p5UCAAxVCGz_NeyBbpYCTDeFigA/s605/fig040_Russia_TopEuropeanExportCountries_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgqwBzuMHzOqiNyIfb0MoqqWXPE5fbaT2a9B8MN8wuc2IeeIJ28Z9XlrW8zGxp3aeyeA0SWwtga-vWNObBEBe4gq_OeoKGLlkqhm1HyOkQGG2H4E_CSjxgWtPq2jC2lrqmmXSCOTr4ho_7w8EFQDCOAcndfips8rF5p5UCAAxVCGz_NeyBbpYCTDeFigA/w400-h225/fig040_Russia_TopEuropeanExportCountries_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 042. Key Destinations for Russian Exports in Europe, 2020</td></tr></tbody></table>
<p>
In Europe, the UK leads the pack for 2020, at nearly 16% (15.7%, $25.3 Bn), followed by the Netherlands (14.5%, $22.5 Bn), Belarus (9.8%, $15.8 Bn), Germany (8.8%, $14.2 Bn), and Italy (7.4%, $11.9 Bn) to complete the top 5. The distribution of exports to European countries is more uniform than that in Asia, and this is because a big component of Russian exports to Europe is fuel, and all countries need fuel for home heating, industrial heating, and chemicals production. This is because Europe as a whole is a cold continent that is highly developed, with high energy needs.
</p>
<p>
Let us, similarly, look at <span id="fig044">the distribution of imports</span>. <span id="fig043">The next figure shows the main import origins for Russia among Asian countries.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiN9hDAv6LD0_KGdGlZpOSOYIOyeZnLiGcXtnnG5k4z8lZ-RDgy4GpdKgrarqtAaRg3SdrsRBSI-4hN5L-f8slm6PGjFgENCQgaHqtKRU9Ifj7-bv96uYm7j_fGvKH8seibOyz6QWKMcysjTWAcWpr5mVI72NfZT3ZhPYgO5-9bZcLMMdmIaDhq9Zab0Q/s605/fig041_Russia_TopAsianImportCountries_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiN9hDAv6LD0_KGdGlZpOSOYIOyeZnLiGcXtnnG5k4z8lZ-RDgy4GpdKgrarqtAaRg3SdrsRBSI-4hN5L-f8slm6PGjFgENCQgaHqtKRU9Ifj7-bv96uYm7j_fGvKH8seibOyz6QWKMcysjTWAcWpr5mVI72NfZT3ZhPYgO5-9bZcLMMdmIaDhq9Zab0Q/w400-h225/fig041_Russia_TopAsianImportCountries_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 043. Key Origins for Russian Imports in Asia, 2020</td></tr></tbody></table>
<p>
China is by far the biggest source of imports for Russia among Asian nations, at 54.2% ($50.7 billion). The contribution of the other countries is much lower: South Korea (8.5%, $7.9 Bn), Japan (6.0%, $5.6 Bn), Kazakhstan (5.5%, $5.2 Bn), and Turkey (4.8%, $4.5 Bn), to round off the top five.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6ZofKB6qPFR4G_kn4ck-vac-OyOGdLjE4M93_McpwVJsCZRCMuflus8h6QyrZ_68BPPjDztBb3Rny6NLaGes1Efs4d-_t2sCfgU1TWRIZFob_qyIyZopQp2UAIBX1X8oHGagOIfCn5qJvjHM5ZIx5n2DXZcyDFCLcXnn3pe2IRRBBDKyQQ5F8_l0sxQ/s605/fig042_Russia_TopEuropeanImportCountries_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6ZofKB6qPFR4G_kn4ck-vac-OyOGdLjE4M93_McpwVJsCZRCMuflus8h6QyrZ_68BPPjDztBb3Rny6NLaGes1Efs4d-_t2sCfgU1TWRIZFob_qyIyZopQp2UAIBX1X8oHGagOIfCn5qJvjHM5ZIx5n2DXZcyDFCLcXnn3pe2IRRBBDKyQQ5F8_l0sxQ/w400-h225/fig042_Russia_TopEuropeanImportCountries_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 044. Key Origins for Russian Imports in Europe, 2020</td></tr></tbody></table>
<p>
In Europe, Germany is the dominant source of imports for Russia, at 23.5% ($26.1 Bn). The distribution of imports is not as well-distributed as the distribution of exports among European countries. Russia’s connection with Germany is extremely strong – the two countries are highly dependent on one another, both in imports and exports. Belarus follows at 11.5% ($12.8 Bn), followed by Italy (6.9%, $7.7 Bn) and Poland (6.9%, $7.6 Bn), Netherlands (5.8%, $6.5 Bn), and France (5.4%, $ 6.0 Bn).
</p>
<p>
Another way to understand Russia’s connection with the rest of the world is to look at the <span id="fig045">Tree Level map of Russia’s exports</span> (by destination) <span id="fig046">and imports (by origin)</span> provided by the OEC lab at MIT. These are shown below:
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1od5Y-fEazNuevWV7TJg8GrzuQ3vgIuC6-NOhWQcroqidSi-FqchAHSBZZ_FrcEkn5kzB8KHX8LKCpFLc3U_N6u8oG670wZM737jKeZAecEZvF_xBaKSa02-a64Qcd_lQfZ7rOHAKVQ-lkBDckWjlWdNm7uT45D1NhRZOH5bC8y1570koPowEAepcVQ/s2314/fig043_RussiaExportsDestination.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1124" data-original-width="2314" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1od5Y-fEazNuevWV7TJg8GrzuQ3vgIuC6-NOhWQcroqidSi-FqchAHSBZZ_FrcEkn5kzB8KHX8LKCpFLc3U_N6u8oG670wZM737jKeZAecEZvF_xBaKSa02-a64Qcd_lQfZ7rOHAKVQ-lkBDckWjlWdNm7uT45D1NhRZOH5bC8y1570koPowEAepcVQ/w400-h194/fig043_RussiaExportsDestination.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 045. Tree Map of Russia's Export Destinations in 2020 (Total $330 Bn)</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_YVj8gXy-dB9nubLuNnm-YCIcSijmnZVmzrZlUjAV1GifVOL4_KWQOatSfWLNYqzd62RX73ORRUFgKvjFaS2gQHAGrwTI1yHakosgMPeCaLfWRg4t7VqWjtZ0A5MlwRcRneJBOujsxXkkExK_A-zp_cG8oXYvbuNAfJyafrSwfQoitTXmnhkiIZvFjg/s2314/fig044_RussiaImportsOrigin.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1124" data-original-width="2314" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi_YVj8gXy-dB9nubLuNnm-YCIcSijmnZVmzrZlUjAV1GifVOL4_KWQOatSfWLNYqzd62RX73ORRUFgKvjFaS2gQHAGrwTI1yHakosgMPeCaLfWRg4t7VqWjtZ0A5MlwRcRneJBOujsxXkkExK_A-zp_cG8oXYvbuNAfJyafrSwfQoitTXmnhkiIZvFjg/w400-h194/fig044_RussiaImportsOrigin.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 046. Tree Map of Russia's Import Origins in 2020 (Total $220 Bn)</td></tr></tbody></table><p>While this provides a macro view, it is sometimes more useful to examine bilateral relations. The export/import ratio (Exim ratio) provides a very good way of understanding Russia’s importance to the rest of the world. <span id="fig047">The graph below shows Exim ratios of Russia with various Asian countries.</span></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqDd4fMWyMy7lmTSYSujRFrh4dQrl26sfVSyipdX3rKHVRBE6XuK8I8JQnDO-GfDqWMnojL1y0QYincF6AC82Yh4pih8qYDcNkfXfiOwojiQjnGz5LineIWJSmzrdzmOl7XMwvRe89HtzPM0fLeAS4BDysgrkzwLAz3SYsA0ORqz-VX68v1yvQhDi_1w/s605/fig045_Exim_Asia.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqDd4fMWyMy7lmTSYSujRFrh4dQrl26sfVSyipdX3rKHVRBE6XuK8I8JQnDO-GfDqWMnojL1y0QYincF6AC82Yh4pih8qYDcNkfXfiOwojiQjnGz5LineIWJSmzrdzmOl7XMwvRe89HtzPM0fLeAS4BDysgrkzwLAz3SYsA0ORqz-VX68v1yvQhDi_1w/w400-h225/fig045_Exim_Asia.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 047. EXIM Ratios of Russia with Various Asian Countries, 2020</td></tr></tbody></table><div><br /></div><div>It is clear that most countries in Asia are highly dependent on Russia. Russia’s high export/import ratios with most countries in Asia tells us that Russia exports far more to these countries than it imports from them. Furthermore, what is revealing about the chart above is the fact that Russia has a high Exim ratio with several major oil and gas producers, such as Saudi Arabia, the UAE, Kazakhstan, and Azerbaijan. This tells us that Russia is a provider of many goods, including finished goods, manufactured goods, engineering equipment, and many such items outside of the fossil fuel portfolio. This is why the Western tendency to portray Russia as a “giant gas station” is deeply flawed and self-delusional.</div>
<p>
Let’s now look at <span id="fig048">Russia’s Exim ratios with European countries.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgjPpPbz16HFxQ3JIhXEZr09Zhn5mOzuOsnMSlQx208zoXEgJStfeYXy-sNOYR9dq6VHbmKluKOqevkOtOGL-X1UlExeIBnuSEaByC163tcebqDcY8aSt2R2t1G4m0IgqqaXK5sLhMm1zYk9Em5-TY60lhwtvmb-u3GosxHv_3VQAZyYvJdJsCEHkDRA/s605/fig046_Exim_Europe.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhgjPpPbz16HFxQ3JIhXEZr09Zhn5mOzuOsnMSlQx208zoXEgJStfeYXy-sNOYR9dq6VHbmKluKOqevkOtOGL-X1UlExeIBnuSEaByC163tcebqDcY8aSt2R2t1G4m0IgqqaXK5sLhMm1zYk9Em5-TY60lhwtvmb-u3GosxHv_3VQAZyYvJdJsCEHkDRA/w400-h225/fig046_Exim_Europe.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 048. EXIM Ratios of Russia with Various European Countries, 2020</td></tr></tbody></table>
<p>
Again, with the exception of France, Germany, Czechia, and Lithuania, most European countries are heavily dependent on Russian imports. Even France and Germany are fairly dependent. The Exim ratio hides the fact that absolute trade numbers in both directions are extremely high. For example, France imports $4.93 billion worth of goods and services from Russia and exports $5.97 billion worth of goods and services back to Russia. Germany imports $14.2 billion worth of goods and services from Russia and exports $26.1 billion worth of goods and services to Russia. These are huge dependencies, and if Russia is suddenly blocked from trading with Europe, these supply deficiencies are very hard to fill.
</p>
<p>
Finally, let us look at <span id="fig049">Russia’s Exim ratios with the countries of the African continent</span>. <span id="fig050">Because many of these countries are so dependent on Russia</span>, I have been <span id="fig051">forced to use three graphs</span> with different scales to be able to show all the dependencies.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6FBZf1F01KPlDiFPiEjWXT7cc9YVuU24t4bS_7Q9GNCmtINGpnGoJGDtxLq_ub8gpO3dkGlb4-ytu_U4sq1dZFH1vHszlbeN3UoSNd8OHdZloqMB8ma_uiroLvJ741UdvGqOLFuiES47FymoHuf5kigcqQeX-ldIR4QvgMAd_4-9jaK-EPR_bXbw20w/s605/fig047_Exim_Africa_1.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6FBZf1F01KPlDiFPiEjWXT7cc9YVuU24t4bS_7Q9GNCmtINGpnGoJGDtxLq_ub8gpO3dkGlb4-ytu_U4sq1dZFH1vHszlbeN3UoSNd8OHdZloqMB8ma_uiroLvJ741UdvGqOLFuiES47FymoHuf5kigcqQeX-ldIR4QvgMAd_4-9jaK-EPR_bXbw20w/w400-h225/fig047_Exim_Africa_1.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 049. EXIM Ratios of Russia with Various African Countries, 2020 (1/3)</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEil1ebHEBK0hQgjKyU5Ua14s7lL6VJULliUORHuMieSuwsiWmVKjtcEM1PiA-mENuYNnKehwZg6izZDCv2VlQykTAA4XAqZH4ucGd-9PjLwSFGEZ5P_0sB0M9NBMbLCl5SgdC3RnegcaAqdXtE9DJKXp7rgtM5ak4KuBnBf0nR4rZGIoSaZpT3VRUzcow/s605/fig048_Exim_Africa_2.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEil1ebHEBK0hQgjKyU5Ua14s7lL6VJULliUORHuMieSuwsiWmVKjtcEM1PiA-mENuYNnKehwZg6izZDCv2VlQykTAA4XAqZH4ucGd-9PjLwSFGEZ5P_0sB0M9NBMbLCl5SgdC3RnegcaAqdXtE9DJKXp7rgtM5ak4KuBnBf0nR4rZGIoSaZpT3VRUzcow/w400-h225/fig048_Exim_Africa_2.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 050. EXIM Ratios of Russia with Various African Countries, 2020 (2/3)</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPDjTf-d5i2QRDnm51tXUYfP_dnR87lSISUCFQ8cN1_9C73BypyygJRLKRDjVNTglJxLIxoIwocMHiQOhV_RFYC8k8Gjj7eQ0mZ9Y95hu4_zy37SmWkNbjXw-0_fZc0nBaj4_pshWNTwVgaL5AV1Gwi2ondBwkMkTxwCfHYPLZqVN7deGVYz2_ol8dkw/s605/fig049_Exim_Africa_3.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPDjTf-d5i2QRDnm51tXUYfP_dnR87lSISUCFQ8cN1_9C73BypyygJRLKRDjVNTglJxLIxoIwocMHiQOhV_RFYC8k8Gjj7eQ0mZ9Y95hu4_zy37SmWkNbjXw-0_fZc0nBaj4_pshWNTwVgaL5AV1Gwi2ondBwkMkTxwCfHYPLZqVN7deGVYz2_ol8dkw/w400-h225/fig049_Exim_Africa_3.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 051. EXIM Ratios of Russia with Various African Countries, 2020 (3/3)</td></tr></tbody></table>
<p>
Just one look at these graphs should help the reader understand why most Asian and African countries abstained from UN resolutions criticizing or condemning Russia. They are too dependent on Russia for so many of their needs, and they cannot risk alienating Russia by criticizing them. This also explains why, when <a href="https://tass.com/politics/1329117">Russia organized the Eastern Economic Forum at Vladivostok recently, representatives of 60 countries attended the summit</a>. Trying to isolate Russia diplomatically or economically is, therefore, a non-starter.
</p>
<p>
Looking at Exim ratios also helps us understand why Belarus is such a close ally of Russia, and why Turkey is careful not to jeopardize its relationship with Russia while still being part of NATO, a fact that has helped it in the role of a peacemaker. It also explains why Saudi Arabia refused to go along with Washington’s diktat to increase production of crude to lower prices, because such a move would reduce oil prices, and Russia did not want prices to go down further.
</p>
<p>
To see the diversity of Russia’s economy, let us look at the <span id="fig052">tree view of Russia’s exports in the year 2020.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmtslgWUoKHD-Q9YdBiF7Fk4x_ayyE2qBiS3cJt53w1pbTLseKijYs5UZUpJVx8k0dR4-OXSspyCGr3fyi-5OW6hPUgnltcNfEG8vvNtF9SYysNmm-Ntuit4AXB_WgMhPBVmLlLuce9qpqsvyQM3LFgf_wofWjK_tpT-OOg3lN6J_Q-wPlKnkXvSfRcA/s2314/fig050_RussiaExports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1124" data-original-width="2314" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmtslgWUoKHD-Q9YdBiF7Fk4x_ayyE2qBiS3cJt53w1pbTLseKijYs5UZUpJVx8k0dR4-OXSspyCGr3fyi-5OW6hPUgnltcNfEG8vvNtF9SYysNmm-Ntuit4AXB_WgMhPBVmLlLuce9qpqsvyQM3LFgf_wofWjK_tpT-OOg3lN6J_Q-wPlKnkXvSfRcA/w400-h194/fig050_RussiaExports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 052. Breakup of Russia's 2020 Exports by Category (Total: $330 Bn)</td></tr></tbody></table>
<p>
From the tree view of Russia’s exports, we see that of the $330 billion that Russia exported in 2020, $166 billion, or 50%, are of mineral products, consisting of crude oil, refined petrol, natural gas, coal, iron ore, coal tar oil, and a few other ores and mineral products. About 11.2%, or $37.1 billion comprise of metals, mainly copper, iron, aluminium, nickel, both in raw and finished forms, such as wires and pipes. Precious metals form the third big category in Russia’s exports, comprising $33.5 billion, or 10.2%. The main exports in this category are gold (5.7%) and platinum (3.2%). These are followed by chemicals ($18.7 Bn, 5.7%), agricultural products (mainly wheat) ($14.5 Bn, 4.4%), machinery ($12.7 Bn, 3.8%), wood products ($8.4 Bn, 2.6%), foodstuffs ($7.4 Bn, 2.2%), plastics and rubbers ($6.6 Bn, 2%), animal products ($5.7 Bn, 1.7%), transportation (cars, ships, planes, trucks, etc., and their parts) ($5.1 Bn, 1.5%), paper goods ($4.4 Bn, 1.3%), animal and vegetable by-products (mainly seed oils) ($4 Bn, 1.2%), stone and glass products ($1.6 Bn, 0.5%), instruments ($1.5 Bn, 0.5%), textiles ($1.2 Bn, 0.4%), footwear ($265 Mn, 0.08%), weapons ($192 Mn, 0.06%), animal hides ($192 Mn, 0.05%), arts and antiques ($24 Mn, 0.007%), and miscellaneous items ($963 Mn, 0.3%).
</p>
<p>
To see this better, it is better to understand Russia’s substantial exports that exclude the fossil fuel piece (that form 50% of exports) and the metal and metal ore piece (that form 11.2%). <span id="fig053">The balance comes to a hefty $127 billion, and can be seen graphically below.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjLhljZd00n8-Q7mvOD79WTM_sBpFDAWYC9UXkxxRwZsT2XRTF8qnvdVcX19w25lEoXHc4hOcIQq1kDK11Vma7h41Ul4CiiFy176PnDi0yYL_5MV0Z3YuMU352BR49LUI5Gu7uzm5dJ5WD7czouaJfd39ZdKtdGqtfkPJ0x4wFk4peI8tRwTRLrGit2gA/s605/fig051_NonFossil_NonMineral_Russia_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjLhljZd00n8-Q7mvOD79WTM_sBpFDAWYC9UXkxxRwZsT2XRTF8qnvdVcX19w25lEoXHc4hOcIQq1kDK11Vma7h41Ul4CiiFy176PnDi0yYL_5MV0Z3YuMU352BR49LUI5Gu7uzm5dJ5WD7czouaJfd39ZdKtdGqtfkPJ0x4wFk4peI8tRwTRLrGit2gA/w400-h225/fig051_NonFossil_NonMineral_Russia_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 053. Percentage Distribution of Non-Fuel and Non-Mineral Russian Exports by Category, 2020 (Total $127 Bn)</td></tr></tbody></table>
<p>
<span id="fig054">The share of fossil fuels in Russia’s exports has remained relatively unchanged in the last 20 years, around 50%, as this graphic from the year 2000 shows.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGfPNhG4H5LEAJmzg7A66Syx2RFbZ9rc6ATfK0YwqFI7Klzr31nC-1Bjzj2mRIDOtuWZL6vZoNB0TnjR31XTUcb1_B_zgP3JsvEgaiUiuK7J3teY8SvVeHZZRnc8e5mrSq9wvxLjWZPEVEkaCW9Mc0ZcwCRTdyAKB26NvAz6RwvfiDEUVijovt3IdRRg/s1536/fig052_Exports-2000---Click-to-Select-a-Product.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1536" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhGfPNhG4H5LEAJmzg7A66Syx2RFbZ9rc6ATfK0YwqFI7Klzr31nC-1Bjzj2mRIDOtuWZL6vZoNB0TnjR31XTUcb1_B_zgP3JsvEgaiUiuK7J3teY8SvVeHZZRnc8e5mrSq9wvxLjWZPEVEkaCW9Mc0ZcwCRTdyAKB26NvAz6RwvfiDEUVijovt3IdRRg/w306-h400/fig052_Exports-2000---Click-to-Select-a-Product.png" width="306" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 054. Breakup of Russia's 2000 Exports by Category (Total: $104 Bn)</td></tr></tbody></table>
<p>
<span id="fig055">Russia’s exports have grown at a healthy compounded annualized growth rate (CAGR) of about 4%, which is better than that of the leading European countries as well as the US, as the following chart shows.</span> Since the share of fossil fuels in Russia’s exports has remained relatively unchanged in the last 20 years (about 50%), this means that the non-fossil-fuel pieces of its exports are also growing at a compounded annualized growth rate of 4%.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_nTMzhFZEdU_nR7UWBGOsV8PxdQNTRnxUkgg2d-xWaD8IvWCxiO7FQ33VuoDHRnJPZnCiJbYA2tRDj3FLV4-SGXEMydnvJmTu_plgCy0jGqNzhf0sqL-Ay_CNBsh3S6Ze3RMDD_LjUE6hMJ_iqeJp9HwlQWxsPClrSCJJAXFMXozN1iGIsI89m7IQlw/s605/fig053_Exports_CAGR_2000_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_nTMzhFZEdU_nR7UWBGOsV8PxdQNTRnxUkgg2d-xWaD8IvWCxiO7FQ33VuoDHRnJPZnCiJbYA2tRDj3FLV4-SGXEMydnvJmTu_plgCy0jGqNzhf0sqL-Ay_CNBsh3S6Ze3RMDD_LjUE6hMJ_iqeJp9HwlQWxsPClrSCJJAXFMXozN1iGIsI89m7IQlw/w400-h225/fig053_Exports_CAGR_2000_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 055. CAGR of Russia's Exports, 2000-2020</td></tr></tbody></table>
<p>
The tree view of Russia’s exports is very important to understand in light of Europe’s economic sanctions so far. There has been an inordinate amount of attention given to natural gas in the last nine months, and much energy has been expended on various fora, television channels, and press conferences on why a blockade of Russia’s gas sales must be achieved to “stop Russia’s ability to wage war.” <strong><em>But, as the graph above shows, natural gas (“petroleum gas”) only formed about 6% of Russia’s $330 billion worth of exports in 2020. How would preventing Russia from selling gas, even if it were possible to achieve this, “stop Russia’s ability to wage war?” It makes you wonder if Western politicians understand even the basics of economics and international trade before making important policy decisions.</em></strong>
</p>
<p>
Furthermore, the chart shows that even oil only amounts to 37% of Russia’s sales ($122 billion). Given that China and other countries outside Europe are not interested in sanctioning Russia, in light of their dependence on Russia, as mentioned earlier, how much of this can realistically be sanctioned? The OEC site again comes to our rescue. <a href="https://oec.world/en/profile/bilateral-product/crude-petroleum/reporter/rus">From the OEC site data</a>, <span id="fig056">we can see that in 2020, Russia exported 45.1% of its crude oil to Asia, and 53.1% to Europe.</span> Taking this to be the figure for both crude oil and refined petroleum (just to get an estimate), we can see that of the $122 billion worth of crude oil and refined petroleum that Russia exported in 2020, $55 billion was exported to Asia and $65 billion was exported to Europe. <strong><em>That amounts to just 19.7% of the total Russian exports of $330 billion.</em></strong> Similarly, the total export of natural gas from Russia in 2020 was 6% of $330 billion, or $19.8 billion. <a href="https://oec.world/en/profile/bilateral-product/petroleum-gas/reporter/rus">Again, from the OEC site data</a>, <span id="fig057">we can see that 72% of Russia’s total gas output goes to Europe.</span> <strong><em>Thus, the value of the natural gas exported by Russia to Europe is $14.3 billion. This is only 4.3% of Russia's total exports of $330 billion. Thus, even if Europe managed to block all exports of oil and gas from Russia to Europe, the total value would be $79.3 billion. This amounts to only 24% of Russia’s total exports. Clearly, this is not a fatal blow to the Russian economy.</em></strong> The real question, though, which we will explore further on in this article, is: how big a blow is it to Europe’s economies? (I have assumed, of course, that all of Europe will block Russian fuels, and that all of Asia will accept Russian fuels, and this is not accurate. For example, Japan and Korea will not buy Russian fuels, even though they are in Asia; but on the other hand, Belarus, which is in Europe, is a big recipient of Russian fuels, as is Hungary. So for a rough approximation, this analysis is good enough.)
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtWWWDXPDEBPQwo4YpYaMFYpW6K3CtAyqjmSp_QWTyfSKbSBlN6Mw1NF_vqAfW6U22m6THXGBVV-1xevzBoQjb4_TaK92C4Sws-ew8xGGLX35HJibMKdIlUd2IcggGsmhlqBudERj0uQkQ0sRnywl9MWYtVzunqsDOYpyndEeUmomSpURJZRzZ9w-QmQ/s1716/fig054_Russia_OilExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1716" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtWWWDXPDEBPQwo4YpYaMFYpW6K3CtAyqjmSp_QWTyfSKbSBlN6Mw1NF_vqAfW6U22m6THXGBVV-1xevzBoQjb4_TaK92C4Sws-ew8xGGLX35HJibMKdIlUd2IcggGsmhlqBudERj0uQkQ0sRnywl9MWYtVzunqsDOYpyndEeUmomSpURJZRzZ9w-QmQ/w256-h400/fig054_Russia_OilExports_2020.png" width="256" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 056. Russia's Oil Exports by Destination, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJVSM8gVI4c2ZPZP4J0ZCLXddwvgIJfhxMsYNIxM3-rHSkiSpgUu4x1AR15LyLJVjgiyY7r2ouI5537ihxY54Y_3W4NbijTwLgkYVnE05YIxRr2ztwdNbPsgmXxRnPY2_GNx1Si-C15MKbT0U7vhub43ar5foh6uAfGyPmuc_5KtglJt_puilaxlNEdA/s1716/fig055_Russia_GasExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1716" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJVSM8gVI4c2ZPZP4J0ZCLXddwvgIJfhxMsYNIxM3-rHSkiSpgUu4x1AR15LyLJVjgiyY7r2ouI5537ihxY54Y_3W4NbijTwLgkYVnE05YIxRr2ztwdNbPsgmXxRnPY2_GNx1Si-C15MKbT0U7vhub43ar5foh6uAfGyPmuc_5KtglJt_puilaxlNEdA/w256-h400/fig055_Russia_GasExports_2020.png" width="256" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 057. Russia's Natural Gas Exports by Destination, 2020</td></tr></tbody></table>
<p>
How does the West plan to bring Russia to its knees by just preventing it from exporting a fourth of its exports? <strong><em>Has anyone in Europe done even basic checking of economic data before going ahead with sanctions?</em></strong></p></div><br />
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3d">
The China-Russia “No Limits” Partnership
</h3>
</header>
<div>
<p>
Given the strong connections between Russia and certain countries, as seen in the preceding paragraphs, it might be worth, in concluding this section, to examine certain bilateral trade relations. Of special interest is Russia’s trade relationship with China, given that China is both Russia’s leading export destination as well as the origin of most its imports. <span id="fig058">The figure below shows the breakup of Russia’s $49.3 billion exports to China.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNIAigPNOFPaPtr84GWi0q36h47MGNTqPGsxCTs5tZf0SJ2oEmrz03T8ZNC5RkIlDQEsOop6rs4Z7WHxLtVjTNFq72gyAWvC6xFvj7Jz4GgwuynbKHci-Pi1nRwFvzc52Qv4J4IbW5ZkSw3iBC5ijzAumwbNLZmPf9kg5FCchpbYy2hNWywgszJsGoSg/s1208/fig056_Exports-from-Russia--to-China--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiNIAigPNOFPaPtr84GWi0q36h47MGNTqPGsxCTs5tZf0SJ2oEmrz03T8ZNC5RkIlDQEsOop6rs4Z7WHxLtVjTNFq72gyAWvC6xFvj7Jz4GgwuynbKHci-Pi1nRwFvzc52Qv4J4IbW5ZkSw3iBC5ijzAumwbNLZmPf9kg5FCchpbYy2hNWywgszJsGoSg/w390-h400/fig056_Exports-from-Russia--to-China--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 058. Category-wise Break-up of Russia's Exports to China (2020)</td></tr></tbody></table>
<p>
Crude oil and refined petroleum make up 52.7% of Russian exports to China. Gas adds another 2.6%. These are extremely important to China, as it seeks to economically develop its hinterland in the West of China. Of greater interest is the <a href="https://oec.world/en/visualize/tree_map/hs92/export/chn/rus/show/2020/">map of imports of goods from China into Russia</a>. This is a very diverse map, and show that Russia will be able to get practically anything they want from China in exchange for the oil that they can provide to fuel China’s growth, at discounted rates. This means that Russia can completely substitute imports from Europe with imports from China, especially because manufacturing capacity in China is practically limitless and will continue to increase as it continues to develop the country in the West. To get an idea of the diversity of the imports from China into Russia, a sample of the items in the list (the list has 1,060 items) are broadcasting equipment for $4.63 billion; computers for $2.83 billion; motor vehicle parts for $930 million; cars for $456 million; medical instruments for $417 million; large construction vehicles for $384 million; microphones and headphones for $384 million; spark-ignition engines for $380 million; video recording equipment for $342 million; rubber tires for $337 million; knit socks and hosiery for $330 million; integrated circuits for $281 million; centrifuges for $256 million; special purpose ships for $258 million; carbon-based electronics for $197 million; transmissions for $178 million; semiconductor devices for $171 million; vaccines, blood, antisera, toxins, and cultures for $151 million; electric batteries for $191 million; brooms for $185 million; fork lifts for $112 million; industrial printers for $108 million; bicycles for $100 million; antibiotics for $98 million; plastic pipes for $98 million; toilet paper for $95 million; processed fish for $76 million; onions for $77 million; processed mushrooms for $70 million; pens for $67 million; knit T-shirts for $65 million; knit women’s undergarments for $65 million; plastic wash basins for $61 million; gas turbines for $56 million; copper pipe fittings for $56 million; fruit juice for $54 million; buses for $44 million; electromagnets for $41 million; tea for $39 million; carboxyamide compounds for $35 million; disc chemicals for electronics for $26 million; electric musical instruments for $24 million; styrene polymers for $11 million; friction material for $4.1 million; steam turbines for $3.96 million; copper wire for $3.37 million; microorganism culture preparations for $2.27 million; photocopiers for $1.2 million; railway track fixtures for $0.64 million; nuclear reactors for $0.3 million; and raw iron bars for $0.12 million. In terms of categories, out of the $50.7 billion worth of goods that China exported to Russia in 2020, the following was the breakup:
</p>
<ul>
<li>
Machinery for $22.9 billion
</li>
<li>
Textiles for $5.35 billion
</li>
<li>
Metal manufactured items for $3.77 billion
</li>
<li>
Chemicals for $2.94 billion
</li>
<li>
Transportation (Motor vehicles, ships, aircraft, and their parts) for $2.63 billion
</li>
<li>
Plastics and rubbers for $2.58 billion
</li>
<li>
Footwear and headwear for $1.75 billion
</li>
<li>
Instruments for $1.73 billion
</li>
<li>
Stone and Glass items for $881 million
</li>
<li>
Foodstuffs for $668 million
</li>
<li>
Agricultural products for $680 million
</li>
<li>
Items made from Animal Hides for $472 million
</li>
<li>
Paper goods for $435 million
</li>
<li>
Animal products for $272 million
</li>
<li>
Mineral products for $195 million
</li>
<li>
Wood products for $127 million
</li>
<li>
Jewellery and Precious Metals for $60.2 million
</li>
<li>
Paintings and Sculpture for $9.82 million
</li>
<li>
Animal and Vegetable By-Products for $7.8 million
</li>
<li>
Weapons for $1.35 million
</li>
<li>
Miscellaneous Items for $3.42 billion (including Other Toys, Light fixtures, Seats, Sports Equipment, Party Decorations, Other Furniture, Brooms, Pre-Fabricated Buildings, Mattresses, Pens, Zippers, Vacuum Flasks, Fishing and hunting equipment, Medical furniture, Video and Card games, Lighters, Scent Sprays, Combs, Pencils and Crayons...)
</li>
</ul>
<p>
<span id="fig059">China is a one-stop shop for Russia, and can provide anything Russia needs in return for crude oil and refined petroleum and, increasingly, after the operationalization of the Power of Siberia gas pipelines, natural gas.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEici3KCLf6a1b--Y06XlQVA0bDO1jXgrm7nc1u1ussnmhshVUkzCHfLseZrwRMqrUISpq0YQF6CtkfLGvdwTVGTQEoGfIKo8ahm2TyljA6mNgWCVgC06gEPcOjoKaWZr9WPiobVVRJ1hGFg70wW0cn0jpK9OOWgpAwQnGGSVTd23OU3urdcjdho70eHKw/s2314/fig057_ChinaExportsRussia.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1124" data-original-width="2314" height="194" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEici3KCLf6a1b--Y06XlQVA0bDO1jXgrm7nc1u1ussnmhshVUkzCHfLseZrwRMqrUISpq0YQF6CtkfLGvdwTVGTQEoGfIKo8ahm2TyljA6mNgWCVgC06gEPcOjoKaWZr9WPiobVVRJ1hGFg70wW0cn0jpK9OOWgpAwQnGGSVTd23OU3urdcjdho70eHKw/w400-h194/fig057_ChinaExportsRussia.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><br />Fig. 059. Category-wise Break-up of China's Exports to Russia in 2020 (Total: $50.7 Bn)</td></tr></tbody></table>
<p>
It is important to note that the relationship between China and Russia is more or less equal in monetary terms. Russia’s exports to China are worth $49.3 billion, whereas it imports $50.7 billion from China. But the relationship is more important than the monetary values indicate. China is getting a dedicated source of energy that is vital to the complete modernization of the whole of China. The opportunity cost of getting the same energy from the open market would be very high for China. China gets Russian energy at a significant discount to the market price, and would like to have this supply for at least a decade, if not two, as it does two things simultaneously: develops its less-developed regions, and moves to renewable sources of energy. In fact, the sanctions applied on Russia after the start of the war mean that while oil and gas become extremely expensive in the world, they remain cheap for China. This allows China to have a competitive advantage with respect to Europe and the USA, and should help it tremendously in its rise to the top. This energy supply line is also immune to Western sabotage attempts, because it lies entirely within Russian and Chinese-controlled territory. It is quite likely that this was the topic of discussion when Vladimir Putin went to see Xi Jinping in Beijing on February 20, just four days before the invasion of Ukraine, during the Beijing Winter Olympics — to ensure that this special relationship between Russia and China would continue in spite of any sanctions the West might impose on Russia in retaliation for its invasion of Ukraine. And clearly, judging not only from Xi’s response in February but also China’s consistent support for Russia since the invasion, that agreement has been set in stone — the agreement to ensure that Russia will be impervious to Western sanctions in exchange for Xi getting guaranteed energy to develop China will hold no matter what happens.
</p>
<p>
This is what is meant by the “no limits” friendship between Russia and China. Their trade ties are so strong and so mutually beneficial that no matter what sanctions the West seeks to impose on Russia, the people of Russia will not lack anything.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3e">
A Detailed Look at Some Bilateral Relations
</h3>
</header>
<div>
<p>
Some other relationships are also worth investigating after seeing the previous graphs. For instance, why does Russia have such a high Exim ratio with the Kingdom of Saudi Arabia (KSA)? <span id="fig060">The tree view from OEC helps us understand this.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlHVZCmkRMf4B1zglEzwW23oTYVKUTfsDB1lF_o_tzYveX2VCk320nO9tWlNi49q0wsDSv8AH8usgptAXr0xMa7hPjVCHJ9JPinEhjUPfuxAbJ0HuPpKtf8MyrMThHniyRe5u_0oIQsIYHmF44mW83PHgwl_PH1r_XlAfbBn8yVGKieq5M8UX_0qRJuQ/s1510/fig058_Exports-from-Russia--to-Saudi-Arabia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlHVZCmkRMf4B1zglEzwW23oTYVKUTfsDB1lF_o_tzYveX2VCk320nO9tWlNi49q0wsDSv8AH8usgptAXr0xMa7hPjVCHJ9JPinEhjUPfuxAbJ0HuPpKtf8MyrMThHniyRe5u_0oIQsIYHmF44mW83PHgwl_PH1r_XlAfbBn8yVGKieq5M8UX_0qRJuQ/w291-h400/fig058_Exports-from-Russia--to-Saudi-Arabia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 060. Break-up of Russian Exports to Saudi Arabia by Category, 2020 ($1.58 Bn)</td></tr></tbody></table>
<p>
Barley is a big component of Russia’s export to the KSA, forming 33% of the total import bill of $1.58 billion for Saudi Arabia. Agricultural products make up 37% of the KSA’s imports from Russia. For an oil producer like Saudi Arabia, the fact that it imports so much refined petroleum from Russia also suggests that the KSA only extracts crude oil and does not refine much of it. The rest of the products from Russia are mixed, with metals (12%) and food items (7%), including, prominently, chocolate, being big imports. <span id="fig061">In return, the KSA does not have much to offer Russia, with their exports to Russia only amounting to $202 million.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgA5nvOi-fmtJmdGDUljRo1yC5zNK7inqKOxK4cNGE04m7BiH0FrGaqmxxrtsJwdOC8HlPeuXxsmaKf6jelgKTPXCnhPKqTpw8O5Tg9SDVoypD6Ve59TiU5-Ab47sVrHayaf3pNZyFPBHyZ_TT1Y7e5Z2g86CL6g4S6mTHBhdoCwfGUORHSukhPNEpAAQ/s1510/fig059_Exports-from-Saudi-Arabia--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgA5nvOi-fmtJmdGDUljRo1yC5zNK7inqKOxK4cNGE04m7BiH0FrGaqmxxrtsJwdOC8HlPeuXxsmaKf6jelgKTPXCnhPKqTpw8O5Tg9SDVoypD6Ve59TiU5-Ab47sVrHayaf3pNZyFPBHyZ_TT1Y7e5Z2g86CL6g4S6mTHBhdoCwfGUORHSukhPNEpAAQ/w291-h400/fig059_Exports-from-Saudi-Arabia--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 061. Break-up of Exports from Saudi Arabia to Russia by Category, 2020 ($202 Mn)</td></tr></tbody></table>
<p>
<span id="fig062">Russia’s exports to the UAE are also very interesting.</span> As in the case of the KSA, refined petroleum forms a big part of the UAE’s imports, suggesting that they do not refine much of the oil they extract. This highlights an important aspect in which Russia is very different from other major energy producers such as Saudi Arabia and the UAE. Russia is an advanced nation and so has the technology to do downstream processing of crude oil and natural gas. That is why it has the abiity to do the refining of crude oil as well as the chemical conversion of natural gas to ammonia and fertilizers. Because of this, it is able to export refined petroleum even to major oil producers.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggLLebyBAF5qu60y_bpTz-KJKL5LSeyMSmFfGAWd240REpb-rxZCuAtfzJxF9zmSRBtwd5LxtOBTzTVPZ8jhGOxWnhXWPK1OrXw50I8hD7Ae06QyjSaTNgGRGqN5JHA7NzF_8zmBB5M7v1JOE3qtSZmbYFePbnR14dNoTHJVe547RvR3FqckER35sRQA/s1606/fig060_Exports-from-Russia--to-United-Arab-Emirates--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1606" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggLLebyBAF5qu60y_bpTz-KJKL5LSeyMSmFfGAWd240REpb-rxZCuAtfzJxF9zmSRBtwd5LxtOBTzTVPZ8jhGOxWnhXWPK1OrXw50I8hD7Ae06QyjSaTNgGRGqN5JHA7NzF_8zmBB5M7v1JOE3qtSZmbYFePbnR14dNoTHJVe547RvR3FqckER35sRQA/w274-h400/fig060_Exports-from-Russia--to-United-Arab-Emirates--2020.png" width="274" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 062. Break-up of Exports from Russia to the UAE by Category, 2020 ($2.59 Bn)</td></tr></tbody></table>
<p>
Two important commodities feature in the import list: diamonds, at nearly 31% of a $2.59 billion import bill, and wheat, at 5.7%. This tells us something about the diversity of Russia’s strength in commodities, something we shall return to in a later part of this article. Wheat, diamonds, and barley are all commodities in which Russia is a world leader.
</p>
<p>
<span id="fig063">The UAE’s exports to Russia are much smaller ($561 Mn) and more spread-out.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3ll-HVbt5N2HeEZ8bI-cZrKCCZmqP-Pmqj2bSzZNAHRHsYwIuSlec5eo--k7tH6fBB4h9OSjpIVg-l17An8hC69MUmSsuY2AGp14BmTWcJnMInhEVkiaptfaVEkZKcBi-KfmYO1TaldBlmh79u_lOJha4aW52R4e4yqxbSCuSHMvaQpPst1AyDhpaAQ/s1606/fig061_Exports-from-United-Arab-Emirates--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1606" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh3ll-HVbt5N2HeEZ8bI-cZrKCCZmqP-Pmqj2bSzZNAHRHsYwIuSlec5eo--k7tH6fBB4h9OSjpIVg-l17An8hC69MUmSsuY2AGp14BmTWcJnMInhEVkiaptfaVEkZKcBi-KfmYO1TaldBlmh79u_lOJha4aW52R4e4yqxbSCuSHMvaQpPst1AyDhpaAQ/w274-h400/fig061_Exports-from-United-Arab-Emirates--to-Russia--2020.png" width="274" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 063. Break-up of Exports from the UAE to Russia by Category, 2020 ($561 Mn)</td></tr></tbody></table>
<p>
Let us next look at Turkey, another nation which has a significant trade deficit with Russia. <span id="fig064">The next figure shows the composition of Russia’s exports to Turkey.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwfVKIviqPYlZntQR0UlFHhscPyRb8a5YwAztJ1hMTAB9oiuHoSE6dRvStMoBCnxjEQZFgjUThX3xBQvgEHPniYfcMxNKhGqPqGVFroJnhgjJr0G_VlxR7dvjCOxh-ApYCUDjKnowAgg2PYG2gY82yqNyOb-aLLrCpk2O0nO8uuZKC_cfxluG7rHgH9A/s1510/fig062_Exports-from-Russia--to-Turkey--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwfVKIviqPYlZntQR0UlFHhscPyRb8a5YwAztJ1hMTAB9oiuHoSE6dRvStMoBCnxjEQZFgjUThX3xBQvgEHPniYfcMxNKhGqPqGVFroJnhgjJr0G_VlxR7dvjCOxh-ApYCUDjKnowAgg2PYG2gY82yqNyOb-aLLrCpk2O0nO8uuZKC_cfxluG7rHgH9A/w291-h400/fig062_Exports-from-Russia--to-Turkey--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 064. Break-up of Russian Exports to Turkey by Category, 2020 ($13.1 Bn) </td></tr></tbody></table>
<p>
Turkey relies very heavily on Russia both for fossil fuels (35%), metals (28.3%) and agricultural products (17.3%) in its $13.1 billion imports from Russia. <span id="fig065">Russia’s imports from Turkey, in contrast, only amount to $4.5 billion and are extremely diversified.</span> It is this dependence on Russia that is the reason for Turkey’s refusal to take a hard line on Russia — not only after the Ukraine invasion, but even before it, when Washington tried to pressure it not to buy Russian S-400 air defense systems.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV9VVSKiNfJjAMjdQGcMctjMNrLW-OGhMR57ZrXySFgmgHAR1J9kXt0ZpIQny_JcmvIbwm16Z3aTr1ZxqTHxpXUX_YNyLIczn1Hvn-P7QxhmbnxNr6T6KQxsCd9m8kfOn8G7LsFIda478uOmcQ6L6m4DP--LYFFHRcPDEBZd7JL9UYjwi3OF18Mx0iuw/s1510/fig063_Exports-from-Turkey--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjV9VVSKiNfJjAMjdQGcMctjMNrLW-OGhMR57ZrXySFgmgHAR1J9kXt0ZpIQny_JcmvIbwm16Z3aTr1ZxqTHxpXUX_YNyLIczn1Hvn-P7QxhmbnxNr6T6KQxsCd9m8kfOn8G7LsFIda478uOmcQ6L6m4DP--LYFFHRcPDEBZd7JL9UYjwi3OF18Mx0iuw/w291-h400/fig063_Exports-from-Turkey--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 065. Break-up of Exports from Turkey to Russia by Category, 2020 ($4.5 Bn)</td></tr></tbody></table>
<p>
A look at <span id="fig066">Russia’s exports to</span> and <span id="fig067">imports from Kazakhstan</span> explain why Russia has such a huge trade surplus with Kazakhstan.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5gx1nEACjpThngnghV4_PuvvzuWaupLcwDKO65IucIVnUDcP1I0iywtA0R-JUXStQ0IUIyGmdxJj5z896vqLNy7WL6vRDGCWU5xGIu03MDPHxz2d2i_Y0EEGpSVfQNLgvaAGu13_ERcJ6QRWJmVomRhvt4yGLWXYodELUK-9ckAyKQQh20oagzp3LvA/s1510/fig064_Exports-from-Russia--to-Kazakhstan--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5gx1nEACjpThngnghV4_PuvvzuWaupLcwDKO65IucIVnUDcP1I0iywtA0R-JUXStQ0IUIyGmdxJj5z896vqLNy7WL6vRDGCWU5xGIu03MDPHxz2d2i_Y0EEGpSVfQNLgvaAGu13_ERcJ6QRWJmVomRhvt4yGLWXYodELUK-9ckAyKQQh20oagzp3LvA/w291-h400/fig064_Exports-from-Russia--to-Kazakhstan--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 066. Break-up of Russian Exports to Kazakhstan by Category, 2020 ($13.8 Bn) </td></tr></tbody></table>
<p>
Russia’s exports to Kazakhstan are very diverse, covering everything in the spectrum. Russia is essentially the main provider of all of Kazakhstan’s needs.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXeRh4oky0Uwbn1X5H1PKiD9MA_0J0vNL6pqZNAJk8GVnE6U5ng7mbKF6Su2WGPpGOTVI6s8xinrXEHql1bvmo7dbVxRtZYsb3h0mWdTUkCrGPD2bqdn1-1eLiZ5NSMMBdlcpX4s3Y8oxjf-iQlLNXJoMAQYv8mGUAo2GSeRbXEPR1gXamFcEsxw2eTA/s1510/fig065_Exports-from-Kazakhstan--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgXeRh4oky0Uwbn1X5H1PKiD9MA_0J0vNL6pqZNAJk8GVnE6U5ng7mbKF6Su2WGPpGOTVI6s8xinrXEHql1bvmo7dbVxRtZYsb3h0mWdTUkCrGPD2bqdn1-1eLiZ5NSMMBdlcpX4s3Y8oxjf-iQlLNXJoMAQYv8mGUAo2GSeRbXEPR1gXamFcEsxw2eTA/w291-h400/fig065_Exports-from-Kazakhstan--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 067. Break-up of Exports from Kazakhstan to Russia by Category, 2020 ($5.18 Bn)</td></tr></tbody></table>
<p>
In contrast, Kazakhstan is mainly a supplier of mineral sources, mainly metals and uranium, of which Kazakhstan is the world’s largest producer, producing 40% of world supply. The landlocked country depends completely on Russia and is completely within Russia’s orbit.
</p>
<p>
What we see is that even though fossil fuels are one of Russia’s chief exports because so many countries need fossil fuels so badly, Russia does export manufactured goods to many countries because of its diverse manufacturing base.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3f">
Russia’s Trade Balances with European Nations
</h3>
</header>
<div>
<p>
Next, let us explore some trade balances of Russia with European countries. <span id="fig068">We start with Finland.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUwz1JckbHnZIQkDRVJMVfz9UDekl97l5KJlJAbjVZIm2-yjo3re7HLFCcI1Cqycr7a4PTg3sH_Lze4-8NMUF9hxCQNTYb-BZp0zQ8jseQ5zofcDfpWfMOvLvY2OGiEndEwdKQrEo3a3vow9VXMLHtd6jbeWQGu4qbw0oqakjX4xdHbyfe07TKYHdERQ/s1510/fig066_Exports-from-Russia--to-Finland--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUwz1JckbHnZIQkDRVJMVfz9UDekl97l5KJlJAbjVZIm2-yjo3re7HLFCcI1Cqycr7a4PTg3sH_Lze4-8NMUF9hxCQNTYb-BZp0zQ8jseQ5zofcDfpWfMOvLvY2OGiEndEwdKQrEo3a3vow9VXMLHtd6jbeWQGu4qbw0oqakjX4xdHbyfe07TKYHdERQ/w291-h400/fig066_Exports-from-Russia--to-Finland--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 068. Break-up of Russian Exports to Finland by Category, 2020 ($6.81 Bn)</td></tr></tbody></table>
<p>
About $3.6 billion of Russia’s $6.8 billion worth of exports to Finland, or about 53%, is in fossil fuels. Of this, 40%, or $2.73 billion, is through crude oil; 9.5%, or $646 million, is in refined petroleum (diesel/petrol/etc.), and only 1.3%, or $86 million, is from natural gas. Thus, even though natural gas is much discussed in the media, its contribution in monetary terms is not very high. Its contribution in practical value to Finland is very high, as we shall see shortly. <span id="fig069">Russia’s imports from Finland</span> ($3.46 billion, or only 51% of what Finland imports from Russia) are fairly diverse, which means that Finland is not a monopoly supplier of any item, and Russia can get the items it gets from Finland from other suppliers in case Finland decides not to trade with Russia. Russia is, therefore, at a huge advantage with respect to Finland.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdz_3G8GCIkAVAkHJWhYZh2e0hkyX4lmOjqmeao2b_hgaVp9JTCuo_JNK1-Ed46nEUhWjI9M4bDYzhgilWrAVTWIP-7r8J83gSOPJda2x-KVt2Earf9JyI1hx2_MDR0TzmVRUCO6zMeaIXqqEZA6nIlRYVTIsdEWlJ55Xr1FZcU_bm7P_kB9pGr0lIlg/s1510/fig067_Exports-from-Finland--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdz_3G8GCIkAVAkHJWhYZh2e0hkyX4lmOjqmeao2b_hgaVp9JTCuo_JNK1-Ed46nEUhWjI9M4bDYzhgilWrAVTWIP-7r8J83gSOPJda2x-KVt2Earf9JyI1hx2_MDR0TzmVRUCO6zMeaIXqqEZA6nIlRYVTIsdEWlJ55Xr1FZcU_bm7P_kB9pGr0lIlg/w291-h400/fig067_Exports-from-Finland--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 069. Break-up of Exports from Finland to Russia by Category, 2020 ($3.46 Bn)</td></tr></tbody></table>
<p>
A similar story is seen with the Netherlands. <span id="fig070">Netherlands has plenty of gas from its gas fields in Groeningen, but it has no oil, and so depends heavily on Russia for crude oil and refined petroleum.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEic1a9SkJwFLOxynmeSNpKrEOEg8naZg6Z9fwnWPRpLPuTeg84qHqTe-LRXVR3Y9ugbOhaEqe9cgMp3Jk24UFPpuBAVwQyT6h3hmpu84qUAaU-BoJS_8ijtzZCgWyMpWfXb7CCHGbldnVl0OwlHhpzSo63JbCjPdizwamfnA7F6Vg7k0bqxy-N7tDfueA/s1558/fig068_Exports-from-Russia--to-Netherlands--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1558" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEic1a9SkJwFLOxynmeSNpKrEOEg8naZg6Z9fwnWPRpLPuTeg84qHqTe-LRXVR3Y9ugbOhaEqe9cgMp3Jk24UFPpuBAVwQyT6h3hmpu84qUAaU-BoJS_8ijtzZCgWyMpWfXb7CCHGbldnVl0OwlHhpzSo63JbCjPdizwamfnA7F6Vg7k0bqxy-N7tDfueA/w283-h400/fig068_Exports-from-Russia--to-Netherlands--2020.png" width="283" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 070. Break-up of Russian Exports to the Netherlands by Category, 2020 ($22.5 Bn)</td></tr></tbody></table>
<p>
<span id="fig071">Russia exports $22.5 billion worth of goods to the Netherlands, and receives only $6.5 billion worth of goods in return.</span> Netherlands’ exports are fairly distributed, whereas Russia’s exports comprise largely of $17.5 billion of fossil fuels (78%) and $3.1 billion of metals (14%). If trade with Russia were to be stopped, that’s a huge hole in the Netherlands’ fuels and metals supply.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2Q1ZAV_qXePi_LiGS42DdqTfVY5BPL5NT3tVK3Ob7SYUCf-fTTx_t5EXfv4bDPvxYL8IdFn79z_vfXYXUPHRiL6U9miPz-_LOlJEWrUlaBEztrZbn-fKV-F1MTyFDyD-jt3VplwPY5Yapyk9DYQyrzLKsygv_DG633tZFGt9DcJYckAp4yqarUzi-qg/s1558/fig069_Exports-from-Netherlands--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1558" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg2Q1ZAV_qXePi_LiGS42DdqTfVY5BPL5NT3tVK3Ob7SYUCf-fTTx_t5EXfv4bDPvxYL8IdFn79z_vfXYXUPHRiL6U9miPz-_LOlJEWrUlaBEztrZbn-fKV-F1MTyFDyD-jt3VplwPY5Yapyk9DYQyrzLKsygv_DG633tZFGt9DcJYckAp4yqarUzi-qg/w283-h400/fig069_Exports-from-Netherlands--to-Russia--2020.png" width="283" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 071. Break-up of Exports from the Netherlands to Russia by Category, 2020 (6.46 Bn) </td></tr></tbody></table>
<p>
Similar stories are seen across Europe. We can look at Poland, for instance. <span id="fig072">Russia exported $8.7 billion worth of goods to Poland in 2020</span>, of which $6.2 billion, or 71%, was fossil-fuel-related. Metals comprised another $866 million, or 10%, while chemicals comprised $633 million, or 7.3%, of which $218 million was for fertilizers. Thus, three categories — fossil fuels, metals, and chemicals — added up to more than 88% of Poland’s imports from Russia. </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipPlWjvy6OPoWM22RFWSjXscXIfpJwKhE1opXolADkyjspY2rqo9O9dGg_8cupe0IpXtJOO4L2Pe0VvBwotOipcQJuIOkN6-a3oCDcNhAcDmTamgzNKSRt5HLxdY5ErktMURVa4OUu_cPfCmBsAJWJRh8Sv-AmuSX0pCzHSrUFdgmt_W6DR9FVzlHoig/s1558/fig070_Exports-from-Russia--to-Poland--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1558" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipPlWjvy6OPoWM22RFWSjXscXIfpJwKhE1opXolADkyjspY2rqo9O9dGg_8cupe0IpXtJOO4L2Pe0VvBwotOipcQJuIOkN6-a3oCDcNhAcDmTamgzNKSRt5HLxdY5ErktMURVa4OUu_cPfCmBsAJWJRh8Sv-AmuSX0pCzHSrUFdgmt_W6DR9FVzlHoig/w283-h400/fig070_Exports-from-Russia--to-Poland--2020.png" width="283" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 072. Break-up of Russian Exports to Poland by Category, 2020 ($8.66 Bn) </td></tr></tbody></table><p>It is worth pointing out that (as will be shown in the next section) although Russia is the dominant supplier of natural gas for Poland, its value in monetary terms is relatively low — a mere $477 million, or 5.5% of Russia’s exports to Poland. As can be seen, <span id="fig073">Polish exports to Russia in 2020 ($7.6 billion) were very diverse.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMOgBU7hAK2-zRSDnZtajIhavFjvNHtNMkqr_Zip6ef_PFfD2bMOrVlh6AWbt8hboU1-Rrc_xBRdA_5VnvHvJ3GXetZ4jKzUTXShT2mejafPeWtaLeL4Kj7zSjn-LG63nkb0PmXy6K-NtniQZcdI862POHDkrMLhX6Ht4sBGSjo-nE16McEPYznL978Q/s1558/fig071_Exports-from-Poland--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1558" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMOgBU7hAK2-zRSDnZtajIhavFjvNHtNMkqr_Zip6ef_PFfD2bMOrVlh6AWbt8hboU1-Rrc_xBRdA_5VnvHvJ3GXetZ4jKzUTXShT2mejafPeWtaLeL4Kj7zSjn-LG63nkb0PmXy6K-NtniQZcdI862POHDkrMLhX6Ht4sBGSjo-nE16McEPYznL978Q/w283-h400/fig071_Exports-from-Poland--to-Russia--2020.png" width="283" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 073. Break-up of Exports from Poland to Russia by Category, 2020 ($7.63 Bn)</td></tr></tbody></table>
<p>
<span id="fig074">A similar story plays out in Italy</span>; however, the proportional value of natural gas in Italy’s import mix is much higher.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7YYEZrfN0w_Et1DNyvlCvFadbCBzdRAtUKo6aewzbxdKOSe5NCAz_zUHXDvcjZW0NNH3IOU5B_xIcpj2MR1EY1f2ISJU0ZB7xwivJGwVgOFYzD_uz9lexHthttfTzLkc5_FKIa5UIvEMkocVd94-GlsVC2S6iXUU-R3gPqGeaoubrJYKUqnjFOmsl8g/s1510/fig072_Exports-from-Russia--to-Italy--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg7YYEZrfN0w_Et1DNyvlCvFadbCBzdRAtUKo6aewzbxdKOSe5NCAz_zUHXDvcjZW0NNH3IOU5B_xIcpj2MR1EY1f2ISJU0ZB7xwivJGwVgOFYzD_uz9lexHthttfTzLkc5_FKIa5UIvEMkocVd94-GlsVC2S6iXUU-R3gPqGeaoubrJYKUqnjFOmsl8g/w291-h400/fig072_Exports-from-Russia--to-Italy--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 074. Break-up of Russian Exports to Italy by Category, 2020 ($11.9 Bn) </td></tr></tbody></table>
<p>
As in the case of the other countries discussed earlier, fossil fuels form a very high part of Italy’s imports from Russia, accounting for $9.6 billion out of a total of $11.9 billion, or 81%. However, in Italy’s case, natural gas, too, is monetarily very important, forming 34% of imports at $4.1 billion. Metals are again important, coming to $1.1 billion (9.2%) in Italy’s case and comprising of iron, aluminium, and copper. Italy also imports $532 million worth of platinum and gold from Russia (4.5%). So, these three categories: fossil fuels, metals, and precious metals — add up to nearly 95% of Italy’s total imports from Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh58Ce1mSaOUuUY3H0DaTPISnLlrIFzHn793Da1MhitjkCEXI7lAqP4WDux7F_d22wGDVecLZ-Wvhtvk4kppiNQPwOEQHMwWF_0uSIwFaxJuSr3uZkL38MyS5fyv9hGckEofl7ftBectTNVlChQ0TKsV6G_-tz-Km7uDR10dAPG7ScQpVCfJwJYKq1m4w/s1510/fig073_Exports-from-Italy--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh58Ce1mSaOUuUY3H0DaTPISnLlrIFzHn793Da1MhitjkCEXI7lAqP4WDux7F_d22wGDVecLZ-Wvhtvk4kppiNQPwOEQHMwWF_0uSIwFaxJuSr3uZkL38MyS5fyv9hGckEofl7ftBectTNVlChQ0TKsV6G_-tz-Km7uDR10dAPG7ScQpVCfJwJYKq1m4w/w291-h400/fig073_Exports-from-Italy--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 075. Break-up of Exports from Italy to Russia by Category, 2020 ($7.71 Bn)</td></tr></tbody></table>
<p>
In contrast, <span id="fig075">Italy’s exports to Russia</span> are extremely diversified, as can be seen in the tree map. This means that Italy is not a dominant supplier of any good and therefore is not in a strong bargaining position relative to Russia.
</p>
<p>
No discussion of Europe would be complete without discussing the two European giants, France and Germany — two countries that actually have a trade surplus with Russia. Germany is of particular interest, since it has been in the news for the last nine months because of its extreme reluctance to sanction Russian gas because of how important Russian gas has been to German industry and home heating. Angela Merkel, who was once hailed as a visionary for getting the Nord Stream pipeline and, with it, cheap energy, to Germany, is today being reviled as the cause of Germany’s problems. It is very clear that natural gas is very much the centerpiece of all discussions in Europe. Many other European countries have tried to get Germany to agree to embargo Russian gas, but the Germans have resisted. Of course, now it is irrelevant, because Nord Stream itself has been blown up. Going by all the noise, we would imagine that the monetary value of the natural gas supplied by Russia to Germany is huge, if Europe hopes to punish Russia by denying it this income. Is this really the case? Let us look at <span id="fig076">Russia’s exports to Germany.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY8VVbDcEG6lBzQ8XeGhY4D9ltCRNThw7cr76-pMVJiBHzEUYvmH2kvjdr7l3Nx-iP5RgQMAfsyKBgzECqGZI8dm9gl_OphhyViwu2AKqUYrqp0457ksmdnA4W2KfjUdqms5uet-bV-IFIeDBMOfpn3KmD2Ey4uqm_f9b98wzWgVGVsBx0hcmu5Wrghw/s1246/fig074_Exports-from-Russia--to-Germany--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1246" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgY8VVbDcEG6lBzQ8XeGhY4D9ltCRNThw7cr76-pMVJiBHzEUYvmH2kvjdr7l3Nx-iP5RgQMAfsyKBgzECqGZI8dm9gl_OphhyViwu2AKqUYrqp0457ksmdnA4W2KfjUdqms5uet-bV-IFIeDBMOfpn3KmD2Ey4uqm_f9b98wzWgVGVsBx0hcmu5Wrghw/w378-h400/fig074_Exports-from-Russia--to-Germany--2020.png" width="378" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 076. Break-up of Russian Exports to Germany by Category, 2020 ($14.2 Bn) </td></tr></tbody></table>
<p>
The map of Russia’s exports to Germany is confusing — where is the natural gas? Actually, it is there, one just has to look very carefully. You may either take my word for it, or go to the OEC website to see exactly where it is. But the value of Russia’s natural gas exports to Germany in 2020 was only $32.1 million, and it formed only 0.26% of Russia’s exports to Germany in 2020. The much bigger piece of the puzzle is oil exports. Crude oil and refined petroleum products made up more than 60% of Russia’s exports to Germany ($8.6 Bn out of a total of $14.2 Bn), and the total fossil fuel bill (including coal) came to $9.72 Bn, which is about 68% of the total exports. Metals made up $1.44 Bn, or 10.1%; precious metals, especially platinum, made up $879 Mn, or 6%. The remaining 15.3% was quite diversified. So the lion’s share of Russia’s exports, as with the other European countries we have seen, is crude and refined oil, with coal being another significant fuel. <em>It is, of course, a bit unbelievable that Russia's gas exports to Germany only amount to $32 million, because it does not square with the data on gas volumes, presented later in this report, whereby Russia supports about 66% of Germany's gas imports, and more gas than it supplies Italy, for instance. So something is not quite correct. Perhaps the amounts are distributed within Europe. There may be an error in OEC's data reporting, but I cannot do anything about it. Nevertheless, the overall import of gas into Europe is about right, at about 4% of Russia's exports, even if the amounts for individual countries may not fully make sense.</em> I have to take the information I have, and this is the best out there.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCP01wqoEo8kGchZSKULSGygtJT71uET_9iXNueM4ADV2DVQJ1vv0uwtBCdpz0qBH6QFpZJLRSDV4RYdSmeEjKpRRVRceXp_6PgzqDP0GOwCkN4xxeipMBUtPFbTaS8YDsDrRTkWMPkbk3oeUAdxZz9y6zV2sqQx7Ndrkbm7_gQirvi75uZ1WGC2tkyA/s1246/fig075_Exports-from-Germany--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1246" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCP01wqoEo8kGchZSKULSGygtJT71uET_9iXNueM4ADV2DVQJ1vv0uwtBCdpz0qBH6QFpZJLRSDV4RYdSmeEjKpRRVRceXp_6PgzqDP0GOwCkN4xxeipMBUtPFbTaS8YDsDrRTkWMPkbk3oeUAdxZz9y6zV2sqQx7Ndrkbm7_gQirvi75uZ1WGC2tkyA/w378-h400/fig075_Exports-from-Germany--to-Russia--2020.png" width="378" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 077. Break-up of Exports from Germany to Russia by Category, 2020 ($26.1 Bn) </td></tr></tbody></table>
<p>
<span id="fig077">Germany’s exports to Russia</span> totaled $26.1 Bn in 2020, and are quite diversified, as can be seen. Cars and car parts are a big part of those exports, as are packaged medicaments.
</p>
<p>
France, too, has a trade surplus with Russia. Its overall imports from Russia are much lower than that of Germany, as are its exports to Russia. As with every European country, the lion’s share of <span id="fig078">Russia’s exports to France</span> are fossil fuels, comprising $4.2 Bn out of a total of $4.93 Bn, or 85.2%. Of this, natural gas contributes to $665 Mn.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBsMk3SXA9F8mrj9b3teSXTdUTEpX0ChjvokAKDWeHNQc0aPI8jhTpMNh7GBbdUwYx2Yd2MoRslpzTKeicyyvzAODLFAEjonxrPg2YJ8bvC5xEhgiH-8whvXqO1ayuGBiT8DWiqeiupVn4XU6SIdv5YTCBYXkZqKujXsZjY81ZUc-LRzPz-HYeptKJQw/s1510/fig076_Exports-from-Russia--to-France--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBsMk3SXA9F8mrj9b3teSXTdUTEpX0ChjvokAKDWeHNQc0aPI8jhTpMNh7GBbdUwYx2Yd2MoRslpzTKeicyyvzAODLFAEjonxrPg2YJ8bvC5xEhgiH-8whvXqO1ayuGBiT8DWiqeiupVn4XU6SIdv5YTCBYXkZqKujXsZjY81ZUc-LRzPz-HYeptKJQw/w291-h400/fig076_Exports-from-Russia--to-France--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 078. Break-up of Russian Exports to France by Category, 2020 ($4.93 Bn)</td></tr></tbody></table>
<p>
As with other European countries, <span id="fig079">France’s exports to Russia</span> are quite diversified.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzPZdq6P-GJLBCl7SL_7NkjC6EOoB7suPZMSv-RnFrffp_4omFN5yqvdEw6SCKcLrBqsWG7rH-sY5drW8vieLuIA5arfrtue9J1ZBjiEirXqdaGa9QvAA4nZLuWiN0ZjaJrdcDnGO7iVD8kuV5Dmp6hOT7Cu5X32m6-aUdtEP0SCmMO6CCQHDlpx6LBA/s1510/fig077_Exports-from-France--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1510" data-original-width="1098" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzPZdq6P-GJLBCl7SL_7NkjC6EOoB7suPZMSv-RnFrffp_4omFN5yqvdEw6SCKcLrBqsWG7rH-sY5drW8vieLuIA5arfrtue9J1ZBjiEirXqdaGa9QvAA4nZLuWiN0ZjaJrdcDnGO7iVD8kuV5Dmp6hOT7Cu5X32m6-aUdtEP0SCmMO6CCQHDlpx6LBA/w291-h400/fig077_Exports-from-France--to-Russia--2020.png" width="291" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 079. Break-up of Exports from France to Russia by Category, 2020 ($5.97 Bn)</td></tr></tbody></table>
<p>
Finally, let us come to the UK. As noted earlier, the UK had a huge trade deficit with Russia in 2020. Let us see what the <span id="fig080">trade balance between Russia and the UK</span> looks like.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_VUz9E7AwQwaHUpQdYABUoZgILAyirDz9sy9zVHJuVYkSgmxomV9Usdn0ghNDCbM2Gix6QjQrvomPvGVh_R3VulP-hWKPM_Y3alMReZ-g6MItSew4OYPce8_JdjRbrLvY0DTCwv0J3iArZQBysMiQ9_gjTArep2pBEFoDJY035VKxxfTZ99u9Gw-nvw/s1208/fig078_Exports-from-Russia--to-United-Kingdom--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_VUz9E7AwQwaHUpQdYABUoZgILAyirDz9sy9zVHJuVYkSgmxomV9Usdn0ghNDCbM2Gix6QjQrvomPvGVh_R3VulP-hWKPM_Y3alMReZ-g6MItSew4OYPce8_JdjRbrLvY0DTCwv0J3iArZQBysMiQ9_gjTArep2pBEFoDJY035VKxxfTZ99u9Gw-nvw/w390-h400/fig078_Exports-from-Russia--to-United-Kingdom--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 080. Break-up of Russian Exports to the UK by Category, 2020 ($25.3 Bn)</td></tr></tbody></table>
<p>
We see that $21 Bn of the UK’s $25.3 Bn worth of imports from Russia in 2020, or 83%, were for precious metals, of which $16.9 Bn was for gold and $3.78 Bn was for platinum. As mentioned earlier, too, Russia is a key producer of precious metals. Another $3.54 Bn of the imports, or 14% is in fossil fuels. Essentially, 97% of all Russian exports to the UK fall in these two categories.
</p>
<p>
Russia’s huge export of precious metals to the UK deserve some explanation. All this gold is not for the internal consumption of the UK. London is home to the London Bullion Market (LBMA), the world’s largest over-the-counter (OTC) market for the trading of gold, silver, and platinum in the world. Much of the precious metal that London receives from Russia is exported to other entities that buy the metal through the exchange, as the following graph of the UK’s exports shows. As can be seen, even though <span id="fig081">the UK imports $21 Bn worth of gold and platinum from Russia, it exports $27.5 billion worth of gold and platinum.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkdgez18kDzoauKSGl-HnvnnDcZ9Jb2_ilm4GPMXaa3ORoVtZqMaZ6bUX97AmlKX87qbmkoSfyjwaxLW6HGShV0N4rUeS_4zCEblzvRdqTIObCk10Q5CDoVLiqiZlh0-WXqzxDX5yZ33ReRQDTRvtTNEFENh0mTByJMdNwznWGJbwLfvpMxwt_AHI9Zg/s1388/fig081_Exports-2020--UK.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1388" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkdgez18kDzoauKSGl-HnvnnDcZ9Jb2_ilm4GPMXaa3ORoVtZqMaZ6bUX97AmlKX87qbmkoSfyjwaxLW6HGShV0N4rUeS_4zCEblzvRdqTIObCk10Q5CDoVLiqiZlh0-WXqzxDX5yZ33ReRQDTRvtTNEFENh0mTByJMdNwznWGJbwLfvpMxwt_AHI9Zg/w339-h400/fig081_Exports-2020--UK.png" width="339" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 081. Break-up of UK Exports by Category, 2020 ($371 Bn)</td></tr></tbody></table>
<p>
Therefore, in the case of the UK alone, we need to analyze the trade relationship after removing the precious metal piece from consideration to get a more comprehensive picture. The following is the picture of <span id="fig082">Russian imports into the UK minus precious metals.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimIPF2gNfyp49USUb7Mvq_ZDqTi8N4iQeg0DODCTPq9J8jgsCVIYNiMg05XWSImYSzmK6PZnADmHJATah6L3Rcwl0inbSe8WZHfiLg18YHefwnuaCzAR8Gn1M1gR6QM1F6xfjw_xZNic6R3E4-geQM9EyWudfZMyG-A3QQWOUvzg25Nj0S2yv1qhlawA/s1208/fig079_Exports-from-Russia--to-United-Kingdom--2020_nonPrecious.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEimIPF2gNfyp49USUb7Mvq_ZDqTi8N4iQeg0DODCTPq9J8jgsCVIYNiMg05XWSImYSzmK6PZnADmHJATah6L3Rcwl0inbSe8WZHfiLg18YHefwnuaCzAR8Gn1M1gR6QM1F6xfjw_xZNic6R3E4-geQM9EyWudfZMyG-A3QQWOUvzg25Nj0S2yv1qhlawA/w390-h400/fig079_Exports-from-Russia--to-United-Kingdom--2020_nonPrecious.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 082. Break-up of Russian Exports to the UK by Category, without Fossil Fuels, 2020 ($4.35 Bn)</td></tr></tbody></table>
<p>
Of the $4.35 Bn total exports, fossil fuels and iron ore comprise $3.54 Bn, or 81%. But the precious metal piece is important because <a href="https://www.euronews.com/2022/03/07/ukraine-crisis-russia-gold">in early August, the LBMA banned the sale of bullion from Russia through the LBMA</a>. We now know that this amounts to about $21 Bn. But this ban is largely symbolic, because <span id="fig083">there are other exchanges where Russia can sell its gold, including in Shanghai.</span> Russia will never have a problem selling its gold. <a href="https://www.gold.org/gold-market-structure/global-gold-market">If anything, the move by the LBMA only hurts itself. Since 2015, London has been losing market share in the bullion business to the US and China, and London’s loss will be China’s gain.</a> And it is impossible to track gold by origin, since it can be so easily melted and re-made into bricks.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_GDSdnhSMwCQkMDZaOReMQhqsAiT7EK8laJndgwNho7o1je27KGpOg1BlCm3OMe8eDmcLtV27dw5Cdcr3jdNxwgl6RqZaDn5LWt9IlxvsFetV1CWmL8TWKf7GaR0waXuMMm9GncaWcITx62Qavu151LPpWkdHC1oLLLqmTZ3IEsgSogs2thu-QWHYYw/s1760/fig080_GoldExchangesWorldwide.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1083" data-original-width="1760" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_GDSdnhSMwCQkMDZaOReMQhqsAiT7EK8laJndgwNho7o1je27KGpOg1BlCm3OMe8eDmcLtV27dw5Cdcr3jdNxwgl6RqZaDn5LWt9IlxvsFetV1CWmL8TWKf7GaR0waXuMMm9GncaWcITx62Qavu151LPpWkdHC1oLLLqmTZ3IEsgSogs2thu-QWHYYw/w400-h246/fig080_GoldExchangesWorldwide.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 083. Sale of Gold in International Gold Exchanges </td></tr></tbody></table>
<p>
The <span id="fig084">UK’s exports to Russia</span> only total $2.84 Bn, and are fairly diversified. Machinery (31%), including prominently gas turbines (4.8%), chemicals (22.7%), including prominently packaged medicaments (7%), transportation (20.1%), including prominently cars (14.5%), and foodstuffs (5.6%), including prominently hard liquor (1.7%), are the dominant exports.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgd5McET-W1BH5F5qp1tS-EXgXyqTIuFxd6Xlpq1k9EpDknMVYXmgWhKkwJWn9kFK_iK56t-YD7DrAI6-bl9sPjlB41-CwsHAORQf8jmRK3jjPDoZR_U5PwWVXUlXLXz9e84SE2L74kIgjxiZku68J5cM_hngyGFV0FaSAoUoObWuFpp1n0vIlIduE3qQ/s1208/fig082_Exports-from-United-Kingdom--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgd5McET-W1BH5F5qp1tS-EXgXyqTIuFxd6Xlpq1k9EpDknMVYXmgWhKkwJWn9kFK_iK56t-YD7DrAI6-bl9sPjlB41-CwsHAORQf8jmRK3jjPDoZR_U5PwWVXUlXLXz9e84SE2L74kIgjxiZku68J5cM_hngyGFV0FaSAoUoObWuFpp1n0vIlIduE3qQ/w390-h400/fig082_Exports-from-United-Kingdom--to-Russia--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 084. Break-up of Exports from the UK to Russia by Category, 2020 ($2.84 Bn) </td></tr></tbody></table>
<p>
Again, as in the case of the other European countries, Russia has far more leverage over the UK than the UK has over Russia. Russia can manage without British cars on its roads, but if the UK needs gold or platinum or hydrocarbons, it would be hard pressed to fill those giant holes in its import basket — $21 Bn in precious metals and $3.54 Bn in fossil fuels. It is futile to say that the UK can do without these commodities — if it did not need them, it would not be importing them.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC3g">
Replacing Europe’s Exports to Russia
</h3>
</header>
<div>
<p>
From the preceding, it is clear that Russia has a huge advantage over Europe, because what Russia provides to Europe cannot be easily replaced, whereas what Europe provides Russia can be easily replaced. We have already seen that China supplies Russia with more than $50 billion worth of goods annually. That is probably more than the combined exports of Europe to China (I have not added them up.) If Europe blocks Russia from receiving its products over Russia’s invasion of Ukraine, China can easily double its production of goods to sell to Russia. One of the key motivations of the Belt and Road Initiative for China was to develop its West and South. The idea was to build transportation corridors to the rest of Asia and Africa so that goods produced by factories in Xinjiang could be sold in Asian and African markets with as little transportation cost as possible. But if Europe’s embargo on Russia continues, China could achieve the same goal without the expense of building the BRI, because Russia is just across the border from Xinjiang and Tibet. An annual requirement of another $50 billion from Russia would give a tremendous boost to the Chinese economy and probably help it achieve its goal of the highest GDP-per capita in the world much faster. It would have almost a captive economy in Russia with zero competition from the West. Its only competition for goods exports to Russia would be other Asian developing countries, such as India, Malaysia, and Vietnam, who too have refused to join the embargo against Russia. India has steadfastly refused to rule out buying Russian goods (and we have seen the reason earlier in this article). <a href="https://www.freemalaysiatoday.com/category/nation/2022/05/08/we-dont-recognise-sanctions-says-saifuddin-on-ties-with-russia/">Malaysia’s foreign minister has clearly said that unless sanctions are authorized by the UN, it will not follow them.</a> Likewise, <a href="https://tass.com/politics/1419293">Indonesian President Joko Widodo has also said that his country has no plans to join sanctions against Russia.</a>
</p>
<p>
In 2020, <span id="fig086">Vietnam exported $3.15 Bn</span>, <span id="fig087">India $2.87 Bn</span>, and <span id="fig085">Malaysia nearly $1 Bn</span> to Russia. If demand from Russia picks up, economic activity in all these three developing economies would speed up dramatically.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6l-71qq0SpFOY_sCLK_wzTyD7ubHUkGB-5GnDif2Fe-fGBLgquWX0GO4D6l3toAI0y6XALPUeAfIEvCE_JqbDpzcJgmUlcRQI9NKQvcd6cWgYgvlNGR22c8xMd4HF2hI-ncJbcjX8cwGQX4NGLJ-VXK5Z91EvDRwx5wbcCLzGcF_bVD5wxM8bcVFHEA/s1208/fig083_Exports-from-Malaysia--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6l-71qq0SpFOY_sCLK_wzTyD7ubHUkGB-5GnDif2Fe-fGBLgquWX0GO4D6l3toAI0y6XALPUeAfIEvCE_JqbDpzcJgmUlcRQI9NKQvcd6cWgYgvlNGR22c8xMd4HF2hI-ncJbcjX8cwGQX4NGLJ-VXK5Z91EvDRwx5wbcCLzGcF_bVD5wxM8bcVFHEA/w390-h400/fig083_Exports-from-Malaysia--to-Russia--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 085. Break-up of Malaysian Exports to Russia by Category, 2020 ($959 Mn) </td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLC0xxki4SZ5zCuXfRGM9sASw_KUUVggHUZ3RGxnhncl523aFyeAl16bmZbw6l_4vifnSzl66HDpWCzHmR1IS_G6Syhg4UWclHLhHe2ilbxJ7FMuacoob-spS7jzwDGYYpiUZEMXlJOXAN9Oy7yjMfmgz6HlHSh3Z-6sVGbJSpc2kuEDlZOyXiyuIKPA/s1208/fig084_Exports-from-Vietnam--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLC0xxki4SZ5zCuXfRGM9sASw_KUUVggHUZ3RGxnhncl523aFyeAl16bmZbw6l_4vifnSzl66HDpWCzHmR1IS_G6Syhg4UWclHLhHe2ilbxJ7FMuacoob-spS7jzwDGYYpiUZEMXlJOXAN9Oy7yjMfmgz6HlHSh3Z-6sVGbJSpc2kuEDlZOyXiyuIKPA/w390-h400/fig084_Exports-from-Vietnam--to-Russia--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 086. Break-up of Vietnamese Exports to Russia by Category, 2020 ($3.15 Bn) </td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJK_z9di5dCLU4e8kFjUEyQ7rDj6aKuZC_uDMEHOI_XR9w7Hbh3-n9OENeF91jm70u0uCFCk4IE_y8WQTtp_hkgFpsM9GraeRV4nxWvuQZBCKbOl8GK7hqM9cMY5bTmieMoF_XK6MBg8WOPbI92XWv0i1sAnEAD71J3xBgOz1X41uwdw_rhbmOEFA-LQ/s1208/fig085_Exports-from-India--to-Russia--2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJK_z9di5dCLU4e8kFjUEyQ7rDj6aKuZC_uDMEHOI_XR9w7Hbh3-n9OENeF91jm70u0uCFCk4IE_y8WQTtp_hkgFpsM9GraeRV4nxWvuQZBCKbOl8GK7hqM9cMY5bTmieMoF_XK6MBg8WOPbI92XWv0i1sAnEAD71J3xBgOz1X41uwdw_rhbmOEFA-LQ/w390-h400/fig085_Exports-from-India--to-Russia--2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 087. Break-up of Indian Exports to Russia by Category, 2020 ($2.87 Bn) </td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
If Russia needs $50 Bn of goods to replace the imports it was previously receiving every year from Europe, it can only get them from Asia, and one cannot imagine the tremendous resulting boost in manufacturing this shift would give these Asian economies and, indeed, all the economies of Asia. Western sanctions could be a boon for Asia, without affecting Russia very significantly.
</p>
<p style="font-style: italic; font-weight: bold;">
But Europe has no easy way to replace what it is getting today from Russia. In particular, there is no easy way to fill the huge hole caused by the absence of Russian fossil fuels from European markets. The energy crisis facing Europe, as we shall see in the next chapter, is primarily a supply crisis.
</p>
<p>
We come back to the two questions we asked early in this chapter:
</p>
<ol style="font-style: italic; font-weight: bold;">
<li>
Can a complete embargo on Russian sales of its commodities be imposed?
</li>
<li>
If a complete Western embargo could be imposed on Russia’s energy sales, could Russia survive?
</li>
</ol>
<p>
The answer to the first question is clearly no. Russia has plenty of customers who want the things it sells, be those fuels, gold, diamonds, wheat, metals, chemicals, or manufactured goods. Russia is too important a player in the world to be effectively embargoed.
</p>
<p>
The answer to the second question is clearly yes, because Europe only buys 24% of Russia’s exports (in the form of energy). If they stopped buying that energy and Russia had no other place to sell it, they will lose 24% of their export revenue. However, given how much China needs Russian oil, and how much the rapidly developing economies of Asia need oil, Russia will be able to sell most, if not all the oil it was selling to Europe. Gas is a trickier proposition, because it requires pipelines. However, only 6% of Russia’s exports (by monetary value) to Europe consisted of gas. This is hardly going to be a huge loss for Russia. They will probably flare (burn) it if they cannot sell it. As we will see in the next chapter, gas is far more valuable to Europe than it is to Russia.
</p>
<p>
In the next chapter, we will explore the energy piece in detail and show how the absence of Russian energy will likely deal a death blow to European economies.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC3h">
Key Takeaways from Chapter III
</h3>
</header>
<div>
<ul>
<li>
Russia’s exports have grown at an annual CAGR of 4%, higher than any European country
</li>
<li>
Apart from fossil fuels, which forms 50% of exports, Russia exports a wide variety of goods, including precious metals, chemicals, agricultural products, machinery, wood products, foodstuffs, and plastics and rubbers
<ul>
<li>
This makes Russia an indispensable trade partner for much of the world
</li>
</ul>
</li>
<li>
Russia has very significant trade surpluses with the world as a whole
<ul>
<li>
It has significant trade surpluses with many European nations
</li>
<li>
It has giant trade surpluses with African nations
</li>
<li>
With the exception of China, Russia has huge trade surpluses with all Asian nations
</li>
<li>
Because of this, Asian and African countries will not sanction Russia
</li>
</ul>
</li>
<li>
China is a major trading partner for Russia
<ul>
<li>
China comprises 35.5% of Russia’s total exports to Asia and 54.2% of its imports from Asia
</li>
<li>
China supplies more than $50 billion worth of goods to Russia
</li>
<li>
China can replace all the goods that Russia was importing from Europe
</li>
<li>
Russia can replace exports of oil to Europe with exports to China
</li>
<li>
China needs Russian oil to develop its West and South
</li>
</ul>
</li>
<li>
The West’s total imports of oil, gas, and coal from Russia form only 24% of Russia’s exports
<ul>
<li>
Gas imports by Europe amount to only 4% of Russia’s exports
</li>
<li>
Europe’s embargoes on Russian energy do not cripple Russia’s economy
</li>
</ul>
</li>
<li>
In contrast, fossil fuels are a huge percentage of the import bill of European countries from Russia, amounting to as much as 80%
<ul>
<li>
Essentially, Europe needs to buy Russian fossil fuels a lot more than Russia needs to sell them to Europe
</li>
</ul>
</li>
<li>
Europe refusing to sell its goods to Russia can be a boon for the economies of Asia, as their production capacities increase to supply Russia’s needs
</li>
<li>
Russian gas helped Europe reduce its dependence on fossil fuels and move into renewables, and by sanctioning Russian energy, Europe is taking a huge step backward
</li>
</ul>
</div>
<a href="#TOC">Back to TOC</a>
</section>
</section>
<div id="floatclear"></div>
<section>
<header style="padding: 2em;">
<h2 id="TOC4">
CHAPTER IV. EUROPE’S ENERGY DEPENDENCE ON RUSSIA
</h2>
</header>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4a">
Russian Fossil Fuels Do Not Cost Europe Much
</h3>
</header>
<div>
<p>
In the previous chapter, we saw some numbers on how much European countries were spending on importing hydrocarbons from Russia. <span id="fig088">Poland imported $6.2 billion worth of fossil fuels</span>; <span id="fig089">Italy, $11.9 billion</span>; <span id="fig090">Germany, $9.72 billion</span>; <span id="fig091">France, $4.2 billion</span>; and <span id="fig092">the UK, $3.54 billion</span>. While these numbers look large, they are really not very significant as percentages of these countries’ total imports. To see this, let us look at some distribution of countries’ imports by destination.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbKVJE4Y1H7y72q6rfksMe9ljecDcjBVR0UBibaRmZzFokhlBpv0bc3D_VeurrhYrfO3IxjKXjilws2fFo37lH67J9aZyfIbdui8enMzyqc1iCxuHo7PDJu8Bmgo_zYNnKI9QrJeM0qFFP01fji3d4xdWT2femx_CX7pZfn9DjWVs2Xe2TZDqaD4zYzw/s2448/fig086_PolandImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="2448" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhbKVJE4Y1H7y72q6rfksMe9ljecDcjBVR0UBibaRmZzFokhlBpv0bc3D_VeurrhYrfO3IxjKXjilws2fFo37lH67J9aZyfIbdui8enMzyqc1iCxuHo7PDJu8Bmgo_zYNnKI9QrJeM0qFFP01fji3d4xdWT2femx_CX7pZfn9DjWVs2Xe2TZDqaD4zYzw/w400-h198/fig086_PolandImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 088. Poland's Total Imports, by Country of Origin, 2020 (Total: $269 Bn)</td></tr></tbody></table><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivTB0tptjNaNdnGpvmD__bPGCww6pIgqu8gOMPbpic4t7d1dFTe97-bcus7GrQB__UljyWTuXzNX_yJymXse5ncfNt3oSYjtttpZeS0Py-B5ySQUi8gKmW2-cXe2TuZPyd5WkM9nXOXpoF8ecvz8XYKEVO2u6WyrJvtuIsyoUfr5lmJfa_-i3rvAvl6w/s2448/fig087_ItalyImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="2448" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivTB0tptjNaNdnGpvmD__bPGCww6pIgqu8gOMPbpic4t7d1dFTe97-bcus7GrQB__UljyWTuXzNX_yJymXse5ncfNt3oSYjtttpZeS0Py-B5ySQUi8gKmW2-cXe2TuZPyd5WkM9nXOXpoF8ecvz8XYKEVO2u6WyrJvtuIsyoUfr5lmJfa_-i3rvAvl6w/w400-h198/fig087_ItalyImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 089. Italy's Total Imports, by Country of Origin, 2020 ($429 Bn)</td></tr></tbody></table><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglUt_yBGMZ9krxa8lM58VWiZUCrgX89KlGylJ5FmLdGS_fa-1z3d6Fc6KTFL_sgxlByKs3WAs2J3GBplEmHuvwkKz0uX5mdD70xXsgexIo3vu65s89pptaoXUjhchMJb9SNHGUGe7lUtuLCEDxVjFsAHBeT_ZgJe1PL_O9FBf56puaPKoWHDh4oGimvQ/s2448/fig088_GermanyImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="2448" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEglUt_yBGMZ9krxa8lM58VWiZUCrgX89KlGylJ5FmLdGS_fa-1z3d6Fc6KTFL_sgxlByKs3WAs2J3GBplEmHuvwkKz0uX5mdD70xXsgexIo3vu65s89pptaoXUjhchMJb9SNHGUGe7lUtuLCEDxVjFsAHBeT_ZgJe1PL_O9FBf56puaPKoWHDh4oGimvQ/w400-h198/fig088_GermanyImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 090. Germany's Total Imports, by Country of Origin, 2020 ($1.1 Tn)</td></tr></tbody></table><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVDGz7ibjL2y6R2vPhtT12oPSeGeoSyjNrzoB7k3hvTBpM1-6U6SYXhj1teBnggn7frwXX5TFp_ZxWvNfP8F_ufibbLfn6h_6MLHXImtZ2jaqpBXqiGa74pfjWJukS9RaA3t2f2TVknUAXc3XqLyERSI08ROL7RDS_ggvHi_I34wP7pCY4e_xz4trC4g/s2448/fig089_FranceImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="2448" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVDGz7ibjL2y6R2vPhtT12oPSeGeoSyjNrzoB7k3hvTBpM1-6U6SYXhj1teBnggn7frwXX5TFp_ZxWvNfP8F_ufibbLfn6h_6MLHXImtZ2jaqpBXqiGa74pfjWJukS9RaA3t2f2TVknUAXc3XqLyERSI08ROL7RDS_ggvHi_I34wP7pCY4e_xz4trC4g/w400-h198/fig089_FranceImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 091. France's Total Imports, by Country of Origin, 2020 ($562 Bn)</td></tr></tbody></table><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvoq2q9prXoKUl08dtZgqBPlVjGvzSH7eVfQnqurOb3aA3c5-Quvk_yD9h-9mkOSg_nN_9SPJWWeiSrXTLSHw8uG8u61Yru-0BuPbtLa0fE1tvN3LRfWmmudmqzipaqzG48rVgV2rD3LvTcJ45Yr8tGMhJqH7LOGl_lVj2qNSR1vDYfCrDASl1YCNN0Q/s2448/fig090_UKImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="2448" height="198" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvoq2q9prXoKUl08dtZgqBPlVjGvzSH7eVfQnqurOb3aA3c5-Quvk_yD9h-9mkOSg_nN_9SPJWWeiSrXTLSHw8uG8u61Yru-0BuPbtLa0fE1tvN3LRfWmmudmqzipaqzG48rVgV2rD3LvTcJ45Yr8tGMhJqH7LOGl_lVj2qNSR1vDYfCrDASl1YCNN0Q/w400-h198/fig090_UKImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 092. The UK's Total Imports, by Country of Origin, 2020 ($610 Bn)</td></tr></tbody></table>
<p>
<strong><em>As can be seen, total imports from Russia form only 3.2%, 2.8%, 1.3%, 0.9%, and 4.2% of the import budgets of Poland, Italy, Germany, France, and the UK, respectively; and fossil fuels form between 50%-80% of that small percentage. Yet, they play an outsized role in determining the health of these economies. The much talked-about gas imports are even more miniscule: for Poland, the value of gas from Russia is less than 0.2% of Poland’s total imports; for Italy, just under 1%; for Germany, 0.003%; for France, 0.012%, and for the UK, 0.06%.</em></strong> Yet, the media is full of reports about how the lack of natural gas is going to force Europe to ration gas this winter, and about how businesses are closing down because of the gas crisis in Europe.
</p>
<p>
What this tells us is that <strong><em>fossil fuels play a role in the economies of European countries that is disproportionate to their monetary value. This is why sanctions are misplaced, because they are focused on the monetary value.</em></strong> As has already been explained in the previous part, the total fossil fuel exports that can be affected even if Europe bans the import of all oil, gas, and coal from Russia will not amount to even a quarter of Russia’s exports. Let us understand in this chapter how something that is not financially so important ends up being so important in determining the economic fates of European economies.
</p>
<p>
In particular, what needs to be understood, and what will hopefully be clear after reading this part, is that Europe’s problem is not a financial one. It is not the increase in price of gas or oil that is going to hurt Europe. Europe can afford that. Take Germany, for example. Its total imports amounted to $1.1 trillion in 2020. Gas only came to 0.003%, or $33 million. Even if the cost of gas went up 20 times, that would only be $660 million, or still only 0.06% of Germany’s imports. It is a miniscule amount for the German government. It is not miniscule for companies, because their profits are greatly impacted by such changes in price. But the government could easily keep companies afloat by bailing them out for the high prices.
</p><p><i><b><span style="color: red;">For nine months, the Western media has been parroting the same false information: that sanctions are necessary to stop Russian gas sales to Europe, so that “Russia's ability to wage war” is degraded. Germany, in particular, has been the cynosure of all eyes, because of its heavy dependence on Russian gas. Yet, what we see here is that Germany's imports of gas from Russia only amounted to 0.26% of its total imports from Russia — only around $37 million out of a $14.2 billion import bill. Essentially, Europe's entire Russia strategy in the wake of the Ukraine conflict has been based on a red herring.</span></b></i></p>
<p style="font-style: italic; font-weight: bold;">
So Europe’s problem is not a financial problem; it is a supply problem. Europe’s problem is that it needs energy, the energy that it has banned from Russia, and that it has no way in the short term (1-2 years) of getting from anywhere else. And that neither its people nor its industry can do without that energy for 1-2 years.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4b">
Europe’s Energy Needs and Sources
</h3>
</header>
<div>
<p>
<a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_statistics_-_an_overview#Gross_available_energy">Europe’s Gross Available Energy (GAE), which is the total energy that the continent uses, across all the countries of Europe and across all sources, amounted to 62,847 PetaJoules (PJ) in 2019 and 57,743 PJ in 2020</a> (One Petajoule is 1000 trillion Joules; a Joule is the basic international unit of energy. A million Joules is around 0.28 kWh, and 1000 Joules is about 0.95 BTU, or British Thermal Units). The year 2020 was a year of lower demand than usual because of the Covid pandemic, yet the division between the different sources of Europe’s energy was roughly the same, as can be seen from the two charts below that show <span id="fig093">the breakup of this energy supply in 2019</span> <span id="fig094">and in 2020.</span> Hence, moving forward, I will mostly talk about the 2020 numbers, unless the numbers for 2020 are not available, in which case I will discuss the 2019 numbers.
</p><p>2019:</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhB1F06hEwyNkSmdhT_11PIsvRTUNR7My6HuU0Iw_TIOavLN7mbS9ohgHxOeiITLyKZRO-gPIcp8rVtGtTuS9ty8AmvLzzhG1TAem9WqI60nDvAAd4_UT4aCyrT9YJJDrJQ6Br2waXuz3TTHyiaWf5EZeSilZOAO52soQG0c-Uz58-DJz6P0wnebwBufg/s605/fig091_Europe_GAE_2019_GJ.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhB1F06hEwyNkSmdhT_11PIsvRTUNR7My6HuU0Iw_TIOavLN7mbS9ohgHxOeiITLyKZRO-gPIcp8rVtGtTuS9ty8AmvLzzhG1TAem9WqI60nDvAAd4_UT4aCyrT9YJJDrJQ6Br2waXuz3TTHyiaWf5EZeSilZOAO52soQG0c-Uz58-DJz6P0wnebwBufg/w400-h225/fig091_Europe_GAE_2019_GJ.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 093. Break-up of Europe's Total Energy Use by Energy Source, 2019 (Petajoules)</td></tr></tbody></table><br /><div class="separator" style="clear: both; text-align: center;"><br /></div>2020:</div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_R9zGUaVWYUTauSpO8CrBU2JVh4Ipc0EqmcZPc937v6lWWyV6mwy3I_70GvAzOrcxBZzqkFNKOgj-ZwCTf2iv4JcVXjRp8K4gx-Bb26nXMxot27Wr_5b56PKNaAEk3q5eHUNed4wRA7cdIFXnbzarQNwzCxoas87oOggfGL70fqY00M9e3vXzFJC5KQ/s605/fig092_Europe_GAE_2020_GJ.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj_R9zGUaVWYUTauSpO8CrBU2JVh4Ipc0EqmcZPc937v6lWWyV6mwy3I_70GvAzOrcxBZzqkFNKOgj-ZwCTf2iv4JcVXjRp8K4gx-Bb26nXMxot27Wr_5b56PKNaAEk3q5eHUNed4wRA7cdIFXnbzarQNwzCxoas87oOggfGL70fqY00M9e3vXzFJC5KQ/w400-h225/fig092_Europe_GAE_2020_GJ.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 094. Break-up of Europe's Total Energy Use by Energy Source, 2020 (Petajoules)</td></tr></tbody></table><div>
<p>
This can be understood in <span id="fig095">percentage terms in the next figure</span>.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB49O0LSb3GkjsuOOU5Zd00W3xc3QXrxCOrglCmg5eyZoAOAWjw34Oe1lvBWKiZmDp-G7Xk0H2Gn50hvPQZstBWYIT2m1gRgu_CkCcbMhRvYRlSffXIe9Q2b4I2NkzptirAQUjKqnbZhdubzY4U8qldo9WS6dmAjH94eUZVLxnLxSfY0YIOpvxnlPadA/s605/fig093_Europe_GAE_2020_Percentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjB49O0LSb3GkjsuOOU5Zd00W3xc3QXrxCOrglCmg5eyZoAOAWjw34Oe1lvBWKiZmDp-G7Xk0H2Gn50hvPQZstBWYIT2m1gRgu_CkCcbMhRvYRlSffXIe9Q2b4I2NkzptirAQUjKqnbZhdubzY4U8qldo9WS6dmAjH94eUZVLxnLxSfY0YIOpvxnlPadA/w400-h225/fig093_Europe_GAE_2020_Percentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 095. Break-up of Europe's Total Energy Use by Energy Source, 2020 (Percentages) </td></tr></tbody></table>
<p>
Essentially, 32% of the energy that Europe uses is obtained from oil, 22% from natural gas, 16% from renewables, 12% from nuclear energy, 9% from solid fossil fuels (coal, etc.), and 1% from other sources. However, Petajoules are not a very useful measure for most people to understand, so let me explain what this means in practical terms for the most common sources. One billion cubic metres (bcm) of natural gas, the standard unit of measurement of gas, equals 37.68 petajoules of energy. Likewise, one petajoule of energy equals 0.16 million barrels of oil equivalent of energy. And one petajoule of energy is equal to 34,121 tons of coal equivalent. <strong><em>Using these, we can understand Europe’s 2020 energy needs to be 3,187 million barrels of oil, 363 bcm of natural gas, and 200 million tons of coal.</em></strong>
</p>
<p>
However, at this point I need to caution the reader that there is considerable variation in these numbers when looking even at official EU sources. For example, in contrast to <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_statistics_-_an_overview#Gross_available_energy">the figures above, which gives the total gross available energy for the EU in 2020 to be 363 bcm of natural gas</a>, <a href="https://circabc.europa.eu/ui/group/3ef9355f-1ffe-4c82-ba19-f60a3ed2f652/library/1c41e352-2cfd-4fe9-a0b9-8d2613791499/details">another official EU source, the Fourth Quarterly Report on European Gas Markets, 2020, gives that same number to be 394 bcm of natural gas</a>. After many attempts to reconcile these contradictory figures, I have decided to go with one source, keeping in mind that what is important are the broad orders of magnitude of the problem and the broad partitioning of the energy needs of the continent and its countries. There can be small variations (this is just a difference of less than 8%) in the totals, but the percentages (such as how much is imported, and from which countries) are reasonably close.
</p>
<p>
<strong><em>Of the 57,743 PJ that Europe required in 2020, it only produced 24,027 PJ, leaving it with a shortfall of 33,716 PJ, or 58% of its total energy needs. This needed to be imported.</em></strong> <span id="fig096">The next figure shows how this production of energy is subdivided.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYsFWK62q4YDBkQFKJWUnsQy1ktnpV88xRTj08KWrbQLpqiQejRxcRhr6g_KrwRgQtOEGejlxzNjKQEQi6MpPphvaAtyaKhfrGwzKHGOdMWVexO2tcNKEWsa-iKyXqsQRlRD6cx3fT3MCoJ2rslplAK5hyZnuQKBjgb1lrGE6foF1CwII7yTmXkh64hw/s605/fig094_Europe_PrimaryEnergyProduction_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYsFWK62q4YDBkQFKJWUnsQy1ktnpV88xRTj08KWrbQLpqiQejRxcRhr6g_KrwRgQtOEGejlxzNjKQEQi6MpPphvaAtyaKhfrGwzKHGOdMWVexO2tcNKEWsa-iKyXqsQRlRD6cx3fT3MCoJ2rslplAK5hyZnuQKBjgb1lrGE6foF1CwII7yTmXkh64hw/w400-h225/fig094_Europe_PrimaryEnergyProduction_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 096. Break-up of Europe's Energy Production, by Energy Source, 2020 (Petajoules)</td></tr></tbody></table>
<p>
Again, using the equivalents explained above, it can be seen that Europe produces 142 million barrels of oil, 46 bcm of natural gas, and 120 million tons of coal. It is clear that <strong><em>most of Europe’s energy production comes from renewables (41%), followed by nuclear energy (31%), and solid fossil fuels (15%). About 7% comes from natural gas and 4% comes from oil.</em></strong>
</p>
<p>
From these, we can find out the energy deficit that Europe faces on an annual basis. In 2020, as we already know, the total shortfall in energy was 33,716 PJ. <span id="fig097">The next figure shows how this shortfall is partitioned.</span> Only coal, natural gas, and oil are shown, because there is hardly any shortfall in renewables and nuclear power. <strong><em>It is important to show the energy deficit in this manner because, for instance, a utility boiler that has been designed to run on coal cannot be trivially modified to use natural gas; or a chemical plant that uses an oil fired furnace cannot be trivially modified to use natural gas.</em></strong>
</p><p><strong></strong></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5aDphAZHCb9hz98ul_84JwFr6b9FFT6KQvux18k8t5DbHQG28sC-ffB9xhbZVki9QaFuKtD7Y7pObVoPkKsbLeGQkBYpIdJiJPeWtwsAzjT3SQCkl7C4XHGau4yhSA-__TgJackykicPVHRUoIESJ1SM6bMgUJxvG9nqE8P_z5KCUdP5jajvR8hGXQQ/s605/fig095_Europe_EnergyImportRequirements_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi5aDphAZHCb9hz98ul_84JwFr6b9FFT6KQvux18k8t5DbHQG28sC-ffB9xhbZVki9QaFuKtD7Y7pObVoPkKsbLeGQkBYpIdJiJPeWtwsAzjT3SQCkl7C4XHGau4yhSA-__TgJackykicPVHRUoIESJ1SM6bMgUJxvG9nqE8P_z5KCUdP5jajvR8hGXQQ/w400-h225/fig095_Europe_EnergyImportRequirements_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 097. Europe's Energy Shortfall, 2020 (Petajoules)</td></tr></tbody></table><div class="separator" style="clear: both; text-align: center;"><strong></strong></div><p></p>
<p>
As before, we can convert the PJ units into quantities that are easier to understand. <strong><em>Europe’s energy shortfall in 2020 amounted to 3,044 million barrels of oil, 315 bcm of gas, and 81 million tons of coal.</em></strong>
</p>
<p>
<span id="fig098">The next figure shows how this looks like on a percentage basis.</span> What this graph tell us is: of Europe’s installed plants, how much coal, natural gas, and crude oil is needed as a percentage of the total demand?
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigZl1t__Hq-vRRXHPmwGuUil702BW0gdjXgiF3BkPyaATHUjV7RLSloTjp-XbmnCBj4D3FNgQcUpCLe2f22CYwD9KqN4GT4A36LZwP0mwKKq-P2lvGvnrRjMzmQWZB5tDTjnafAr97IJrE0guotQjUmvRD_bqHMJdLRai2rd1b_RqBEQuOa0QKpbpTEw/s605/fig096_Europe_EnergyImportRequirements_Percentages_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigZl1t__Hq-vRRXHPmwGuUil702BW0gdjXgiF3BkPyaATHUjV7RLSloTjp-XbmnCBj4D3FNgQcUpCLe2f22CYwD9KqN4GT4A36LZwP0mwKKq-P2lvGvnrRjMzmQWZB5tDTjnafAr97IJrE0guotQjUmvRD_bqHMJdLRai2rd1b_RqBEQuOa0QKpbpTEw/w400-h225/fig096_Europe_EnergyImportRequirements_Percentages_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 098. Europe's Energy Shortfall in Percentage Terms by Energy Source, 2020</td></tr></tbody></table>
<p>
This graph is very instructive. <strong><em>Essentially, in 2020, Europe needed to import 40% of its total coal requirement, 87% of its total natural gas requirement, and 96% of its total oil requirement.</em></strong> Even if there are slight errors in the data reporting on the EU websites, or slight variations from year to year, the broad trends are unmistakable. <strong><em>Europe is heavily dependent on imports for its energy needs.</em></strong>
</p>
<p>
<span id="fig099">The next figure shows how dependent many individual countries in Europe are on energy imports for their energy requirements.</span> Most countries in this list import between 40-80% of their total energy needs.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgX392_K-3C_KKGjuKRWfiOqpqHaX052NPtI14jMXM85gQiGKjm8lX8ZIFq010LQJ3Goft-Gij0wat4PaA2NUDBGEl0S_ZHe3MIqNkGohNXZ0YFARxtp00ST8aS1_jD-7QtktV78zEOEsJHlG_cGaZqcfHDi-L9009YyVotwiCEcuj_zAJov1fMB8Cm_w/s605/fig097_Europe_EnergyImportDependency_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgX392_K-3C_KKGjuKRWfiOqpqHaX052NPtI14jMXM85gQiGKjm8lX8ZIFq010LQJ3Goft-Gij0wat4PaA2NUDBGEl0S_ZHe3MIqNkGohNXZ0YFARxtp00ST8aS1_jD-7QtktV78zEOEsJHlG_cGaZqcfHDi-L9009YyVotwiCEcuj_zAJov1fMB8Cm_w/w400-h225/fig097_Europe_EnergyImportDependency_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 099. Energy Import Dependency of Various European Countries, 2020</td></tr></tbody></table>
<p>
These are massive energy dependencies. Let us now see where Europe gets these fuels from. On a gross level, as the <a href="https://ec.europa.eu/eurostat/cache/infographs/energy/bloc-2c.html">Eurostat website</a> reports (emphasis mine)
</p>
<blockquote>
In 2020, almost three quarters of the <strong><em>extra-EU crude oil imports came from Russia (29 %)</em></strong>, the United States (9 %), Norway (8 %), Saudi Arabia and the United Kingdom (both 7 %) as well as Kazakhstan and Nigeria (both 6 %). A similar analysis shows that over three quarters of the EU's <strong><em>imports of natural gas came from Russia (43 %)</em></strong>, Norway (21 %), Algeria (8 %) and Qatar (5 %), while more than half of <strong><em>solid fossil fuel (mostly coal) imports originated from Russia (54 %)</em></strong>, followed by the United States (16 %) and Australia (14 %).
</blockquote>
<p>
<strong><em>So Europe is hugely dependent on Russia for its energy needs. From the previous data presented, it follows that Europe imports 5,519 PJ of oil (about 883 million barrels, or 2.4 million barrels/day), 5,145 PJ of natural gas (about 135 billion cubic metres of natural gas), and 1,278 PJ of coal (43.6 million tons equivalent) from Russia every year.</em></strong> (Again, the other EU source mentioned earlier, viz., the Fourth Quarterly Report on European Gas Markets, 2020, gives a slightly higher dependence on Russia – to the extent of 156 bcm of gas. But I am sticking to one source in order to be consistent. These values are close enough for the discussion in this article. In fact, as will be clear, I am being conservative by taking the lower dependence on Russia for my analysis.)
</p>
<p style="font-style: italic; font-weight: bold;">
This means that Europe, as a whole, currently imports 27.7% of its total oil requirement, 37.6% of its total gas requirement, and 21.8% of its total coal requirement from Russia.
</p>
<p>
<span id="fig100">This is shown in the graph below.</span>
</p><p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQNZxdxWBKPfM3erwwA8jwzIRpkj4RDZbLezXPYpNgWIH6Q-qi6Hj0Z_uigDroMFy-rA02vOaqHPNz3AvgNBkUGpvcV-wH7zLNCHAdnbmd1xRhPZbLqPlgvy6kWHXEB8j5A8CVtmqqTep36g3iVSaq9Tv1INNyRVYfV3IKGw3JSU414Sw34UXJwlRLTQ/s605/fig098_EuropeRussiaImportRequirements.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQNZxdxWBKPfM3erwwA8jwzIRpkj4RDZbLezXPYpNgWIH6Q-qi6Hj0Z_uigDroMFy-rA02vOaqHPNz3AvgNBkUGpvcV-wH7zLNCHAdnbmd1xRhPZbLqPlgvy6kWHXEB8j5A8CVtmqqTep36g3iVSaq9Tv1INNyRVYfV3IKGw3JSU414Sw34UXJwlRLTQ/w400-h225/fig098_EuropeRussiaImportRequirements.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 100. Europe's Requirement for Energy Imports from Russia, by Energy Source, 2020</td></tr></tbody></table><p></p><p>Currently, Europe is getting no gas from Russia. It is also proposing to have an oil price cap on Russian oil, to which Russia has responded by saying that if such an oil price cap (which is due to come into force on December 5, 2022) is agreed to by any country, Russia will simply stop supplying oil to that country. In light of what we learned in the previous part, viz., that oil only constitutes 20% of Russia’s total exports, we can understand that this is not a bluff. Russia will take a hit, but it can survive with a 20% reduction in exports. In addition, <a href="https://www.euronews.com/my-europe/2022/08/11/eu-embargo-on-russian-coal-comes-into-force">on August 10, 2022, the EU agreed to a total embargo on Russian coal.</a> Given that Europe is moving towards a total ban on Russian fossil energy, where might they get the energy from? Who are the global suppliers of these fossil fuels?
</p>
</div><div class="separator" style="clear: both; text-align: center;"><br /></div><br />
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4c">
The Global Gas Market and Europe’s Needs
</h3>
</header>
<div>
<p>
Gas is what much of Europe’s industry runs on. It is also what much of its electricity infrastructure and domestic heating runs on. Some numbers will help the reader understand the scale of the problem. As already discussed, Europe’s gas shortfall is of the order of 135 bcm.
</p>
<p>
<a href="https://yearbook.enerdata.net/natural-gas/world-natural-gas-production-statistics.html">The global production of natural gas in 2020 was around 4000 bcm (billion cubic metres) of gas, and Russia’s production was 722 bcm of that, or nearly 18%.</a> More important than the total production of natural gas is <a href="https://en.wikipedia.org/wiki/List_of_countries_by_natural_gas_exports">the total export volume of natural gas, because many countries consume much of the gas they produce.</a> <span id="fig101">The figure below shows the exports of natural gas by country in 2020</span>, which total to 1203 bcm. Russia is the largest exporter of natural gas, at nearly 17% of world total, exporting 200 bcm of gas annually. They are followed by the USA (150 bcm, 12.4%), Qatar (144 bcm, 11.9%), Norway (113 bcm, 9.4%), Australia (102 bcm, 8.5%), and Canada (71 bcm, 5.9%). Germany appears as one of the top exporters in the chart, but that is deceptive, because Germany’s exports are internal European rearrangements of Russian gas.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHqc3fzAGK4AfOKLmZwLruP4GW6Uj4savALRq-u0fFvz7FpeAoI0JKMk3qva59okv9JowSLpPdr1mzBcv1G0HOuLNboUgY4BoFBXti_3RKuLiUqUWG5JCzHS-5wCZ-zN90kcCgKMab6aoMvEXeciF5Ig3V-ye-a4XbWu0DA51bf55MBsnlHw_TelAh9Q/s605/fig099_GasExports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiHqc3fzAGK4AfOKLmZwLruP4GW6Uj4savALRq-u0fFvz7FpeAoI0JKMk3qva59okv9JowSLpPdr1mzBcv1G0HOuLNboUgY4BoFBXti_3RKuLiUqUWG5JCzHS-5wCZ-zN90kcCgKMab6aoMvEXeciF5Ig3V-ye-a4XbWu0DA51bf55MBsnlHw_TelAh9Q/w400-h225/fig099_GasExports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 101. Top Gas Exporters in the World</td></tr></tbody></table>
<p>
As previously mentioned, Europe’s annual needs of natural gas, based on 2020 figures, are about 315 bcm, of which it gets 135 bcm (43%) from Russia. Needless to say, these are representative figures, and change from year to year. However, the percentages are roughly in this region, and give an idea of the energy dependence, even if the actual numbers may vary (from 43% to 48%, for example). The total actual demand of natural gas may also vary from year to year, but will probably be in the 300-400 bcm range.
</p>
<p>
So Europe’s gas imports from Russia amount to about 11 % of the total global exports of natural gas. This gas has now vanished from Europe. If Europe has to power its industry and keep its people warm, it will need to get this 135 bcm, or 11% of the world’s natural gas exports, from other places. Unfortunately for them, most of the natural gas production in the world is already booked, because gas cannot be stored near the well beyond a certain amount, because it is so voluminous. All the natural gas that is extracted in the world today is already committed to existing customers. The only way to get more natural gas than what has been already committed to other countries is to drill new wells. That takes time, and if Europe wants more gas from gas producing countries, it also means that Europe will have to commit to buying this gas from the producer for a long time, say for 20 years, much as it did with Russia and Nord Stream, so that the cost of drilling these wells can be recovered.
</p>
<p>
Even if some of this gas requirement could be obtained, the problem with natural gas is that there are only two ways to get natural gas from a supplier. One is to transport it by pipeline and the other is to compress it into liquefied natural gas and ship it. <span id="fig102">Europe has no major pipelines supplying gas except for: the Nord Stream pipelines that were flowing under the North Sea; the Yamal pipeline, which flowed through Belarus; the old Brotherhood pipeline, which flowed through Ukraine and was built during Soviet times; and the Turkstream pipeline, which carries gas from Russia to Europe through Turkey.</span> The flows through all four pipelines has now stopped. The Nord Stream pipeline flows were stopped by Russia on technical grounds in late September 2022. Subsequently, the Nord Stream pipelines were blown up, ostensibly by Western submarines, as already discussed. In April 2022, the flow of gas through the Yamal pipeline was stopped by Russia because Poland and Bulgaria refused to comply with Gazprom’s demand that payment for gas be made in rubles, since Western countries had made it impossible for Russia to exchange their dollars and euros. In May 2022, Ukraine closed down the Brotherhood pipeline because the war made it impossible for them to control it. The Turkstream pipeline transports Russian gas to Turkey from below the Black Sea, and onwards to Bulgaria. However, in April 2022, Bulgaria refused, like Poland before it, to pay Russia in rubles, and so flows to Bulgaria from Turkey through Turkstream were stopped.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1JsD5eyIJs6C-sWHKeVK5mfz2smQImbdcf-QFWyWeELsujKuuNbX8uGRTqxgD2Coyg5DdH7PoW6pzQ7Whk9YlA8SA_PFTmlnirVrav_h9mcWTh1OcIv1KddBbemPojmmxSXJZjzOovOOpzJK7h43FaXktZ8kVDth4mFiJzskhUf9TMDHRMzHw0xLM-g/s2390/fig100_RussiaEuropeGasPipelines.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="2390" data-original-width="1920" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh1JsD5eyIJs6C-sWHKeVK5mfz2smQImbdcf-QFWyWeELsujKuuNbX8uGRTqxgD2Coyg5DdH7PoW6pzQ7Whk9YlA8SA_PFTmlnirVrav_h9mcWTh1OcIv1KddBbemPojmmxSXJZjzOovOOpzJK7h43FaXktZ8kVDth4mFiJzskhUf9TMDHRMzHw0xLM-g/w321-h400/fig100_RussiaEuropeGasPipelines.png" width="321" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 102. The Gas Pipelines from Russia to Europe</td></tr></tbody></table>
<p>
Thus, Europe currently receives no gas from Russia from the various pipelines connecting Russia with Europe, and which have been constructed after investing billions of dollars. Europe also does not have enough LNG terminals to receive liquefied natural gas and enough infrastructure to decompress natural gas and transport it internally via pipelines if it tries to import LNG from the US, Canada, the UAE, or Qatar. These have to be built, and it will take several months to years to get them ready (discussed later in this article); and even when they are ready, the world does not have enough extra LNG to power all of Europe. So Europe has a serious supply problem for the coming winter.
</p>
<p>
To the extent that Europe can manage to get some gas to bridge the shortfall in supply, they are going to pay through their noses, because the shortage of gas in the Western world is going to push up prices, as it already has. The total gas import bill for Europe in 2020 was € 36.5 billion, down from € 59.4 billion in 2019. This gives us an order of magnitude idea of how much the annual import bill from gas for Europe has been. 2020 was actually not a good representative year, because Covid reduced demand worldwide. Given that Russia accounts for roughly half of Europe’s gas imports, that means that, on average, in a year, Europe spends about € 25 billion in gas payments to Russia (these figures are derived from the Eurostat data. The data from the OEC website, used earlier, give somewhat different figures, but are in the same ballpark). In contrast, <a href="https://beyond-coal.eu/russian-fossil-fuel-tracker/">in the seven months since this war began, Europe already spent more than € 46 billion on gas payments to Russia alone</a> because of skyrocketing gas prices.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4d">
The Global Oil Market and Europe’s Needs
</h3>
</header>
<div>
<p>
The oil picture is not very different from the gas picture. <span id="fig103">The figure below shows</span> (<a href="https://www.eia.gov/international/data/world/petroleum-and-other-liquids/annual-crude-and-lease-condensate-exports?pd=5&p=00000000000000000000000000000000000000000000000000000000000g&u=0&f=A&v=mapbubble&a=-&i=none&vo=value&&t=C&g=00000000000000000000000000000000000000000000000001&l=249-ruvvvvvfvtvnvv1vrvvvvfvvvvvvfvvvou20evvvvvvvvvvnvvvs0008&s=315532800000&e=1577836800000">data from the US Energy Information Adminstration</a>) <span id="fig104">the top crude oil exporters in the world in terms of the percentage</span> of total oil exported in 2018 (The data for the US and Canada is updated to 2020 because it was available). <span id="fig105">The list is topped by the Kingdom of Saudi Arabia (KSA) at 15.4% (375 million tons out of 2,439 Mtons/y), followed by Russia at 10.9% (266 Mtons/y), Iraq at 8.3% (203 Mtons/y), US at 6.7% (162 Mtons/y), Canada at 6.3% (154 Mtons/y), UAE at 5.1% (124 Mtons/y), Iran at 4.7% (114 Mtons/y), Nigeria at 4.0% (97 Mtons/y), Kuwait at 3.8% (94 Mtons/y), and Kazakhstan at 3.2% (78 Mtons/y) to round off the top 10.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX6RPtQjbJikdCCfgf1twv9KHujql7cR73FC24Zf-a2a81YHDDusr8CzoInWXUp3HXrDH3SXblyFwLOTIS3rfPXDpGsHOJaEouOzOX3PFns0Kib5_mEsKZcTqPN37l-ejvxhVR6_O3ezqCDkqtjO_IWMMewMiHviPuyvQU-HpsJe9wEps4vgJSPwl6TA/s605/fig101_TopOilExporters.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjX6RPtQjbJikdCCfgf1twv9KHujql7cR73FC24Zf-a2a81YHDDusr8CzoInWXUp3HXrDH3SXblyFwLOTIS3rfPXDpGsHOJaEouOzOX3PFns0Kib5_mEsKZcTqPN37l-ejvxhVR6_O3ezqCDkqtjO_IWMMewMiHviPuyvQU-HpsJe9wEps4vgJSPwl6TA/w400-h225/fig101_TopOilExporters.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 103. Top World Exporters of Crude Oil, Percentages of Total, 2018</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAXPZa6fI3VvigaEjj8Osr6SVlkg4ZghwwE8EKX-G2jw2v0C1SkaQ9CHc5llhd0saFS4iQJvLRiqUVsemeB16RsYGJIyTRVjPLV8q7wHl_k5OKEBzil-EtJHfS9-ppDfsV475q33yqXeVQRYuKMpjAgacXOGISQZa-3sPdZ0GX2DXhVerPMgeV5BV0eQ/s605/fig102_TopOilExportersPie.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAXPZa6fI3VvigaEjj8Osr6SVlkg4ZghwwE8EKX-G2jw2v0C1SkaQ9CHc5llhd0saFS4iQJvLRiqUVsemeB16RsYGJIyTRVjPLV8q7wHl_k5OKEBzil-EtJHfS9-ppDfsV475q33yqXeVQRYuKMpjAgacXOGISQZa-3sPdZ0GX2DXhVerPMgeV5BV0eQ/w400-h225/fig102_TopOilExportersPie.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 104. Top World Exporters of Crude Oil, Percentages, 2018</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA3pQQ4HOm2ndkU-dDNLmG9a4ikyzvnVv-nWO_fGyORHlVinMAL1qmToIHCMRVLXVhuoE62r4bEgit_9XQxh_QY6pDoYGOcK6FlQftbp5FWF7JWyLEsNv9au8r5xkTi0eYT-dDVWOu-Uzi9jjsGDUVWdA1jYzDWtdlp9xDhhrd1QHC2G7OuFigsXS9QA/s605/fig103_TopOilExportersPieTons.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjA3pQQ4HOm2ndkU-dDNLmG9a4ikyzvnVv-nWO_fGyORHlVinMAL1qmToIHCMRVLXVhuoE62r4bEgit_9XQxh_QY6pDoYGOcK6FlQftbp5FWF7JWyLEsNv9au8r5xkTi0eYT-dDVWOu-Uzi9jjsGDUVWdA1jYzDWtdlp9xDhhrd1QHC2G7OuFigsXS9QA/w400-h225/fig103_TopOilExportersPieTons.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 105. Top World Exporters of Crude Oil, Million Tons Per Year, 2018</td></tr></tbody></table>
<p>
As explained previously, Europe imported around 883 million barrels of oil (124 million tons) a year from Russia in 2020. Assuming that the data for 2018 exports of oil is not too different from that in 2020 (the US and Canada data, have been updated, and these are the most important figures that need updating, because of the exploration of shale oil in the US), that would amount to 5.1% of total world output. This oil will vanish from Europe on December 5, 2022 when Europe announces its oil price cap on Russia. So Europe will have to find some way to fill this giant hole in its crude oil supply. <strong><em>Europe will have to get the rest of the world to supply it an extra 124 million tons of oil a year, or an extra 0.34 million tons of oil (2.4 million barrels) every day from the remaining producers of crude oil who currently extract 5.5 million tons of oil (39 million barrels) every day, because Europe will not do business with Russia. That’s asking for an extra 6.2% production in crude oil output. That’s practically impossible. The most that a country like Saudi Arabia can do is increase production by about half a million barrels a day. And Saudi Arabia is the biggest producer of oil.</em></strong> Asking for 2.4 million barrels a day is an impossible request. European industry and oil-based power utilities will have to shut down. <strong><em>There simply isn’t that much spare crude oil capacity lying around in the world.</em></strong> It can be explored and pumped in some time, but not in time for this winter, and probaby not even in time for next winter. Indeed, <span id="fig106">as the annual production of crude oil figures show</span>, over a long time, the long-term average growth of crude oil production is about 0.64 million barrels/day per year. The reasons for this are the same as the reasons why gas production cannot be suddenly increased: once an oil well is dug, it keeps releasing oil, and someone must be willing to buy it. <strong><em>So oil companies like to have long-term customers. In light of Europe making pledges to wean itself off fossil fuels, this is not what Europe is looking for.</em></strong> Yet, without that kind of commitment, nobody will dig new wells to get more oil for Europe. And even if such long-term deals are agreed to, it will take at least a year for the new wells to be dug and become operational. Europe will likely have to manage without its oil for this winter and probably the next winter.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1ecZQbngI641CKvMz-JGThi4nH8Xjj3tH6m7h6SteT3aQVdLpD1nnd5SmP_4slJNWV48qaxFvRTq9NyRWrVcOR_Lz83o2egID1Q1cvOHflH2Iwm-wtO1069kEh1L6togX69WYBQbwA2Zz7WG_sHv0QpS8ouEOSCcdCwLkxlKnUTbe1vSvqWpFgfYlbg/s605/fig104_TotalCrudeOilExports_1980_2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj1ecZQbngI641CKvMz-JGThi4nH8Xjj3tH6m7h6SteT3aQVdLpD1nnd5SmP_4slJNWV48qaxFvRTq9NyRWrVcOR_Lz83o2egID1Q1cvOHflH2Iwm-wtO1069kEh1L6togX69WYBQbwA2Zz7WG_sHv0QpS8ouEOSCcdCwLkxlKnUTbe1vSvqWpFgfYlbg/w400-h225/fig104_TotalCrudeOilExports_1980_2018.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 106. Increase in Annual Global Exports of Crude Oil, 1980-2018</td></tr></tbody></table>
<p>
A similar picture is seen when <span id="fig107">one looks at total crude oil production</span>, not exports, which is not surprising. The average annual increase is 0.71 million barrels a year. </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKOt5xm1aNIK99XpuXDQ8Unl-eV12jDz_C5CbVsB6k2yhaSO8UF9ohgbOLKMUzuUD491K_OY1tVLrqqEkYGUa56Vnp9PO3DcIzG3itUbIIWRN2kyJRPBGRjNCxhuU-GhTd78MOKErRmTmttIZ1dD08LQABiXHGIx2w-pKcy80z8mZyYmLwJZO0vNn06w/s605/fig105_TotalCrudeOilProduction_1980_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKOt5xm1aNIK99XpuXDQ8Unl-eV12jDz_C5CbVsB6k2yhaSO8UF9ohgbOLKMUzuUD491K_OY1tVLrqqEkYGUa56Vnp9PO3DcIzG3itUbIIWRN2kyJRPBGRjNCxhuU-GhTd78MOKErRmTmttIZ1dD08LQABiXHGIx2w-pKcy80z8mZyYmLwJZO0vNn06w/w400-h225/fig105_TotalCrudeOilProduction_1980_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 107. Increase in Annual Global Production of Crude Oil, 1980-2020</td></tr></tbody></table>
<p>
What will Europe do without oil? <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Emergency_oil_stocks_statistics#Emergency_oil_stocks_statistics">EU countries have emergency oil stocks to use in case of emergencies.</a> In July 2022, these amounted to about 103.6 million tons of oil, which at the rate of 1.15 million tons a day will sustain Europe for 90 days, or three months. Europe also keeps track of commercial oil stocks. Again, in July 2022, these amounted to 51.4 million tons, which again, at the burn rate of 1.15 million tons a day, will last Europe for 45 days. If the conflict with Russia lasts much longer than that, what can Europe do for oil after that?
</p>
<p>
<a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Emergency_oil_stocks_statistics#Emergency_oil_stocks_statistics"><span id="fig108">The chart below shows the number of days</span> that the emergency stocks for each country will last it.</a> As of July 2022, ten countries did not even have 3 months emergency stocks. With no oil supply from Russia and no one else to supply it, how will Europe survive?
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUO06UrsphHw8Mxu5jw8a_w99xt_zgc5xUO1OQCYmkpjMJkpNj18ybUdFILRSiTf8ngKbuAJnZ4NsEMb-vj-Z_U3cj8QV888cBfApnDXv-sFflmAuAE-Xdj4Rs1WrEwF8gfZ7dsQ7pZRVXu28XL0HZ0Fx62kuCjoTbmE4SFJuNmPcoQtGjbQ7qK8FCGg/s904/fig106_EU_EmergencyStocks_Days.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="904" data-original-width="897" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhUO06UrsphHw8Mxu5jw8a_w99xt_zgc5xUO1OQCYmkpjMJkpNj18ybUdFILRSiTf8ngKbuAJnZ4NsEMb-vj-Z_U3cj8QV888cBfApnDXv-sFflmAuAE-Xdj4Rs1WrEwF8gfZ7dsQ7pZRVXu28XL0HZ0Fx62kuCjoTbmE4SFJuNmPcoQtGjbQ7qK8FCGg/w398-h400/fig106_EU_EmergencyStocks_Days.png" width="398" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 108. Emergency Stocks of Crude Oil in Different European Countries, July 2022</td></tr></tbody></table>
<p>
The US tried to persuade the Kingdom of Saudi Arabia to increase production of crude to help with the crisis. <a href="https://www.aljazeera.com/news/2022/10/6/why-is-opec-cutting-global-oil-production">However, on October 5, 2022, OPEC+ took a decision to reduce production by up to 2 million barrels a day, keeping in mind the slowing global economy</a>, despite US pressure. Far from increasing output by 2.4 million barrels a day, <strong><em>OPEC+ has decided to reduce output. </em></strong></p><p><strong><em>In addition, <a href="https://oilprice.com/Energy/Energy-General/The-US-Shale-Boom-Is-Officially-Over.html">the oil shale boom in the US is coming to an end</a>, which makes it unlikely that US shale producers can fill Europe's giant oil gap.</em></strong></p><p><strong><em>This means that there is simply no way for Europe to fill the giant hole caused by Russia’s oil vanishing from Europe in case Russia refuses to sell oil to Europe if Europe decides to go ahead with an oil price cap.</em></strong>
</p>
</div>
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</section>
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<section>
<header>
<h3 id="TOC4e">
The Global Coal Market and Europe’s Needs
</h3>
</header>
<div>
<p>
<span id="fig109">The charts below show</span> <a href="https://www.theglobaleconomy.com/rankings/coal_exports/">the top coal exporters in 2020</a>, both in terms of total tonnage <span id="fig110">and percentages</span>. In 2020, the total global production of coal was 1,329 million metric tons, or 1,487 million short tons. Of this, Indonesia is the world leader at 410 million metric tons, followed by Australia at 390 million metric tons, and Russia in third place with 222 million metric tons.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJvW4gIDYOexXrNuoZUylUbyVUURUs9Qi4US_2aYW2O60bAy_vBSxYHZqWiP1O_bkmqL-VEUIsOCZZZTLFwqWPoeURa0kdnqaqIiqMDJ8sC99fyBS5DPCfzoPFhvT_PUWtFX5Cg_V9Oc7jV7Uq_BAuoN-C-n8h1DwihSOdQ8kHWwSAylkwKflj1xS5NQ/s605/fig107_TopCoalExporters2020Tons.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJvW4gIDYOexXrNuoZUylUbyVUURUs9Qi4US_2aYW2O60bAy_vBSxYHZqWiP1O_bkmqL-VEUIsOCZZZTLFwqWPoeURa0kdnqaqIiqMDJ8sC99fyBS5DPCfzoPFhvT_PUWtFX5Cg_V9Oc7jV7Uq_BAuoN-C-n8h1DwihSOdQ8kHWwSAylkwKflj1xS5NQ/w400-h225/fig107_TopCoalExporters2020Tons.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 109. Top World Coal Exporters, Million Metric Tons, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4mJeFp_wdYADbR18RuG7gGrzMS_PpJj4wzg53Fh25RHTr1lpm_b-GZmE116liUdDdLl9qDoeJXuGNWmxp6VBCDe6bVYRW5ZZfxXopwCPoCf5DovEWI0xhkQuh7XlHdPCGVqfIKbKAs0yHh7fLTue_HiuMpwSzFucHcXzkFRNCNJ7dAEGxVhSuq2Y0qw/s605/fig108_TopCoalExporters2020Percentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4mJeFp_wdYADbR18RuG7gGrzMS_PpJj4wzg53Fh25RHTr1lpm_b-GZmE116liUdDdLl9qDoeJXuGNWmxp6VBCDe6bVYRW5ZZfxXopwCPoCf5DovEWI0xhkQuh7XlHdPCGVqfIKbKAs0yHh7fLTue_HiuMpwSzFucHcXzkFRNCNJ7dAEGxVhSuq2Y0qw/w400-h225/fig108_TopCoalExporters2020Percentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 110. Top World Coal Exporters, Percentages, 2020</td></tr></tbody></table>
<p>
As discussed before, Europe imports 43.6 million metric tons of coal from Russia. That is a small percentage (3.2%) of the global total coal supply of 1,349 million tons. The low need for coal in Europe is because of the conscious shift away from coal in the past 30 years in the quest for greener sources of energy. This is not particularly problematic to replace with other sources such as Australia. So we need to mainly concern ourselves with oil and gas in further discussions.
</p>
<p>
However, there is one situation in which the above considerations become important. <strong><em>If Europe finds that it cannot get any natural gas or oil for its heating and industry needs, and wants to go back to coal out of desperation, then it will need an extra 364 million tons of coal to completely switch from both oil and natural gas to coal. That would amount to nearly 27% of current global exports of coal. Since Russian coal has to be excluded because of the sanctions, that would actually amount to 32% of the remaining global coal supply.</em></strong> Of course, Europe would not need to import all of that coal – it could re-open its coal mines. As a previous graph showed, coal production in Europe in 1990 was 277 million tons, and has come down to 57 million tons today. If Europe were to go back to those levels, the import requirement might come down by 200 million tons, but <strong><em>Europe would still need 164 million tons out of a total of 1127 million tons, which is nearly 15% of current exports. Not only will getting 15% more coal take time, but it will also take time to re-open the old mines in Europe to unlock those 200 million tonnes.</em></strong></p>
<p>
Two things need to be mentioned about the above paragraph. One, this scenario is an extreme one, because Europe has been committed to green energy over the last 20 years, as exemplified even in their recent COP27 addresses, so they would be loath to go back to dirty, polluting coal. <strong><em>But pollution is better than death, and in extreme situations, you resort to extreme measures.</em></strong>
</p>
<p>
Two, it is far from trivial to go back to using coal when you have been using natural gas or oil. All your furnaces need to be re-engineered to accept coal. There are significant engineering challenges in using coal, such as slag formation, flyash, and significant pollution, both from particulate solids as well as from sulfur and nitrogen oxides. So it is not an overnight switch and will take years. As a result, none of these solutions is workable in the short term.
</p>
<p style="font-style: italic; font-weight: bold;">
What we have learned from the discussion in the last three sections is that Europe’s shortfalls in natural gas and oil that are going to be caused by their unilateral boycott of Russian gas and oil cannot be bridged with the remaining (i.e., excluding the Russian supply) available global supply of natural gas and oil; and if, faced with this predicament, Europe tries to switch from oil and gas to coal, there will not be enough coal for their needs from the available global supply of coal, either.
</p>
<p>
Having understood that Europe’s fossil fuel deficits cannot be bridged by the available supply of fossil fuels in the world, <a href="https://ec.europa.eu/eurostat/cache/infographs/energy_trade/entrade.html">let us look at what this means for individual countries in Europe.</a> What deficits in fossil fuels do individual countries in Europe face, and what might this mean for them? This is considered in detail in the following sections.
</p>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4f">
Individual Country Profiles
</h3>
</header>
<div id="floatclear"></div>
<section>
<header>
<h4 id="TOC4f1">
Germany
</h4>
</header>
<div>
<p>
The <a href="https://www.iea.org/countries/germany">International Energy Agency</a> gives us statistics on energy usage for various countries. <span id="fig111">Let us look at the distribution of energy sources for Germany in the following figure.</span> Germany uses 11.6 exajoules annually (1 exajoule = 1 billion billion joules), of which 34% comes from oil, 27% comes from natural gas, 16% from coal, 11% from biofuels and waste, 6% from renewables such as wind and solar, 6% from nuclear energy, and 1% from hydro power.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhysRrdY1nvSuKVaTjqfC_HlS72_TJp8eOwtr5OB-B0xO4SXjrL9u07b4FvmsrYCfQ3908YaJei39jkWr9mBQZta9pYzL6_p6NuQzXDIqlesnccsFr7yLTPXrXu_BpVZjzH01nuh5MB2X_oLinxIz5i8YoCeiGcgkrN45LObLM8h2B5n307xg9mvO5Shg/s605/fig109_GermanyEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhysRrdY1nvSuKVaTjqfC_HlS72_TJp8eOwtr5OB-B0xO4SXjrL9u07b4FvmsrYCfQ3908YaJei39jkWr9mBQZta9pYzL6_p6NuQzXDIqlesnccsFr7yLTPXrXu_BpVZjzH01nuh5MB2X_oLinxIz5i8YoCeiGcgkrN45LObLM8h2B5n307xg9mvO5Shg/w400-h225/fig109_GermanyEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 111. Break-up of Germany's Energy Usage by Energy Source, 2020</td></tr></tbody></table>
<p>
In terms of actual numbers, Germany needed 61.8 million tons of coal, 82.8 bcm of natural gas, and 632.7 million barrels of oil (or 88.6 million tons of oil) in 2020. Let us see how much of those requirements was imported. <span id="fig112">The picture of Germany’s natural gas imports is seen below.</span> Germany imports a total of 79 bcm of natural gas, or almost its entire requirement, and 52 bcm of that, or 66.1% (which is 39% of all of Europe’s natural gas imports from Russia) is imported from Russia, as the map below shows. Now Germany has to make up that shortfall from other sources. Thus, Germany imports 62.8% of its total natural gas needs from Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9IrgkyphohpEEYqZlZxhsekZbl1oTHLBuRxMzEQ4I8mYaLzCAOKwKXdCZZ1NzFu49dYtBLGsqL16eqqVew-CXmDgHRFnIy6Y-kx6RkvQetq6PLrswDUPxUQz0RHWOdtHtRFFq1I4QYJsoDqFt-Hgabsn6cuin9OQUylPHjjTr_VBE8Jt8z01vL5dQpA/s1200/fig110_imports-of-natural-gas-germany.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj9IrgkyphohpEEYqZlZxhsekZbl1oTHLBuRxMzEQ4I8mYaLzCAOKwKXdCZZ1NzFu49dYtBLGsqL16eqqVew-CXmDgHRFnIy6Y-kx6RkvQetq6PLrswDUPxUQz0RHWOdtHtRFFq1I4QYJsoDqFt-Hgabsn6cuin9OQUylPHjjTr_VBE8Jt8z01vL5dQpA/w400-h266/fig110_imports-of-natural-gas-germany.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 112. Germany's Imports of Natural Gas by Origin Country, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwGFwM1BQn4uJuZZnFbm83jTJKXu09V9BZzpWhXFYelQV3d3cYwXb60IGbEvarQxzBGqQGqRCu3OC3MozvE15F2ejmXUoYnRVHw9RR640Focy03NG_XZiGsd9kcEK7V7EMm7az5HAR-unJHI00-F6DJVtFc5opJlY5IaYC93B2K4EIPlFW4MBLx1ImRQ/s1200/fig111_imports-of-oil-and-petro_germany.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwGFwM1BQn4uJuZZnFbm83jTJKXu09V9BZzpWhXFYelQV3d3cYwXb60IGbEvarQxzBGqQGqRCu3OC3MozvE15F2ejmXUoYnRVHw9RR640Focy03NG_XZiGsd9kcEK7V7EMm7az5HAR-unJHI00-F6DJVtFc5opJlY5IaYC93B2K4EIPlFW4MBLx1ImRQ/w400-h266/fig111_imports-of-oil-and-petro_germany.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 113. Germany's Imports of Oil and Petroleum Products by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig113">Although Germany only needed 88.6 Mtons (million tons) of oil in 2020, it imported 117.5 million tons (a good part of which was re-rexported to other countries).</span> Of this 133 million tons, Germany imported 29.7% of its oil and petroleum product needs from Russia, which amounts to 34.9 Mt (million tons) of oil. That amounts to 44% of Germany’s annual need for oil, and about 8.3% of Europe’s total import of oil from Russia.
</p>
<p>
As mentioned above, <span id="fig114">a good portion of Germany’s imports ended up being exported to other countries in Europe, to the tune of 22.3 million tons, as can be seen below.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLPLrDa-cf_H79av4IyR9FiG7MQG15kRnBMj1dy6kPxFOIPgsso7_-a58BLkqbx4h7shcLQPCc9E4HOQNPhtt2z4th8FpcD9NkFcG-xniRvHfd_GEE3TrXnuWIACBS8oxq0_d6pP5yDtqGvfSsEzemwL9l01EZg6HFirhyU0NvqQSAYDibqm_X8bXqeA/s1200/fig112_exports-of-oil-and-petro_germany_22pt3.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgLPLrDa-cf_H79av4IyR9FiG7MQG15kRnBMj1dy6kPxFOIPgsso7_-a58BLkqbx4h7shcLQPCc9E4HOQNPhtt2z4th8FpcD9NkFcG-xniRvHfd_GEE3TrXnuWIACBS8oxq0_d6pP5yDtqGvfSsEzemwL9l01EZg6HFirhyU0NvqQSAYDibqm_X8bXqeA/w400-h266/fig112_exports-of-oil-and-petro_germany_22pt3.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 114. Germany's Exports of Oil and Petroleum Products by Destination Country, 2020</td></tr></tbody></table>
<p>
Of its 61.8 Mtons of coal requirement, Germany imported 31 Mtons of coal in 2020. <span id="fig115">Of that, it imported 46% from Russia, or about 14.3 Mt of coal.</span> That amounts to 23% of Germany’s annual needs, and a third of Europe’s total annual import of coal from Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoBWwacTRpiQ3WV0u1jUN-5EECigTmjPJlbp4O97ItSnIiXUyBWmrQxP5T7CjBNoK975CezEQEOrGib2KasM65Yk5EPx4ejkIPxjGBwM9J2s2Na_6NHTUbAhnMV89peNhgCL0uFrY9OHZIr79nbYTvKOO7C6FL6phBy2QVepANUGQB_943xN3Bm7uPkQ/s1200/fig113_imports-of-solid-fossil_germany.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoBWwacTRpiQ3WV0u1jUN-5EECigTmjPJlbp4O97ItSnIiXUyBWmrQxP5T7CjBNoK975CezEQEOrGib2KasM65Yk5EPx4ejkIPxjGBwM9J2s2Na_6NHTUbAhnMV89peNhgCL0uFrY9OHZIr79nbYTvKOO7C6FL6phBy2QVepANUGQB_943xN3Bm7uPkQ/w400-h266/fig113_imports-of-solid-fossil_germany.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 115. Germany's Imports of Coal by Origin Country, 2020</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
In summary, Germany is heavily dependent on Russia on all three fuels, which probably explains its extreme reluctance to go along with sanctions against Russia. It imports 62.8% of its natural gas needs, 44% of its crude oil needs, and 23% of its coal from Russia. These shortfalls will be impossible to fill.
</p>
</div>
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</section>
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<section>
<header>
<h4 id="TOC4f2">
Poland
</h4>
</header>
<div>
<p>
<span id="fig116">The figure below shows the total energy usage for Poland</span>, as reported by the IEA. Of the total energy needs of 4,054 PJ in 2020, 41% came from coal, 18% from natural gas, and 30% from oil. In actual numbers, Poland used 56.9 Mtons of coal, 19 bcm of gas, and 27.2 Mtons of oil.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7-FGW6gZ1ns3pKIdAHx56OwLJwMuHoPLkgFEFzBfAd4adGQd_QoJc0s-iDRk7NQqBUyQHgJqEyCuHrMENGhIP0uLqRpp3FjxuiY3sOvT4jN1gHupBrwSS5neLAHUPaYeEVE3g047276pn5K1v6sM3jWuTjoTHosOd2M0Dsccvx1184QgUJ1aTG_OqIA/s605/fig114_PolandEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7-FGW6gZ1ns3pKIdAHx56OwLJwMuHoPLkgFEFzBfAd4adGQd_QoJc0s-iDRk7NQqBUyQHgJqEyCuHrMENGhIP0uLqRpp3FjxuiY3sOvT4jN1gHupBrwSS5neLAHUPaYeEVE3g047276pn5K1v6sM3jWuTjoTHosOd2M0Dsccvx1184QgUJ1aTG_OqIA/w400-h225/fig114_PolandEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 116. Break-up of Poland's Energy Usage by Energy Source, 2020</td></tr></tbody></table>
<p>
In 2020, Poland imported 17.4 bcm of natural gas. <span id="fig117">Of that it got 75.4% from Russia — 54.8% directly from Russia and 20.6% via backflows from Germany.</span> In effect, it got 13.1 bcm from Russia (that’s 9.7% of Europe’s total imports of natural gas from Russia). That means that Poland got 68.9% of its annual natural gas from Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu-zj_97dDgUVgMitbs5m4V8IERW3Mr2zMPkHLlE5N3RLmKmof8CxpFNiYaKW6IWrEDuILz5zVlfPYPYx1vZ6Acm5BJtEIU3O99ciUoFZlxgY8GmrGF5oSbCW3mu170ArR94JUqdax9KaulAQs0ckbpxZj-As1iwAxiMlri3VLTdYP4ZpzkS59zAEttg/s1200/fig115_imports-of-natural-gas-poland.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu-zj_97dDgUVgMitbs5m4V8IERW3Mr2zMPkHLlE5N3RLmKmof8CxpFNiYaKW6IWrEDuILz5zVlfPYPYx1vZ6Acm5BJtEIU3O99ciUoFZlxgY8GmrGF5oSbCW3mu170ArR94JUqdax9KaulAQs0ckbpxZj-As1iwAxiMlri3VLTdYP4ZpzkS59zAEttg/w400-h266/fig115_imports-of-natural-gas-poland.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 117. Poland's Imports of Natural Gas by Origin Country, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhra9Xm6ORxb5BK923jhEWD-_V2tpwlwH4qRuYSy55xTIj4LayLtub5ra_faZUyeJ6xQYbjtTiRai-tDV60cS2-V2Y_0rG5XsTrwCpqkDF-e5c1YAWZPE63hwozAs8avxwYdRbFq6u000aAtfpEw9-wxrVHgBZgBqg6moO7JJC5HiSTMZuKYkvZL-_Syg/s1200/fig116_imports-of-oil-and-petro_poland.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhra9Xm6ORxb5BK923jhEWD-_V2tpwlwH4qRuYSy55xTIj4LayLtub5ra_faZUyeJ6xQYbjtTiRai-tDV60cS2-V2Y_0rG5XsTrwCpqkDF-e5c1YAWZPE63hwozAs8avxwYdRbFq6u000aAtfpEw9-wxrVHgBZgBqg6moO7JJC5HiSTMZuKYkvZL-_Syg/w400-h266/fig116_imports-of-oil-and-petro_poland.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 118. Poland's Imports of Oil and Petroleum Products by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig118">Poland also imported 32.9 Mtons of oil and petroleum products; 67.5% of that, or 22.2 Mt of oil, from Russia (that’s 5.2% of Europe’s total oil and petroleum products imports from Russia).</span> That amounts to 81.6% of Poland’s total annual oil needs. Poland has imported more than it needs,because it has exported some of that oil to other countries. <span id="fig119">The graph below shows Poland’s oil exports to other countries, which amounted to 4.81 Mtons in 2020.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQu0KanxZxMH-rtDgEge4WLxvaoXjvN-L9OvJHeHPbw6ybr6KubXSetOXvbhif95hTjfAnEHLr6jisj_omUXwIIhaTVDkDZlSoDNA4AsHUJIy0yTOZFYCvFgKgQon67zpN2bBije4Fjw_6wlSLKBoKSTvkHsxnvaAqqygCLxzEBnxJTLzb4bqXzSE4ZA/s1200/fig117_exports-of-oil-and-petro_poland.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQu0KanxZxMH-rtDgEge4WLxvaoXjvN-L9OvJHeHPbw6ybr6KubXSetOXvbhif95hTjfAnEHLr6jisj_omUXwIIhaTVDkDZlSoDNA4AsHUJIy0yTOZFYCvFgKgQon67zpN2bBije4Fjw_6wlSLKBoKSTvkHsxnvaAqqygCLxzEBnxJTLzb4bqXzSE4ZA/w400-h266/fig117_exports-of-oil-and-petro_poland.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 119. Poland's Exports of Oil and Petroleum Products by Destination Country, 2020</td></tr></tbody></table>
<p>
<span id="fig120">Poland also imported 15.1 Mt of coal; and 63% of that, or 9.5 Mt, from Russia in 2019</span> (2020 figures not available). Assuming these numbers are not very different in 2020, that amounts to 22% of Europe’s total coal imports from Russia. It also amounts to 16.7% of its annual coal needs. (Among all European nations, Poland is the one that has taken the slowest time to transition from coal. The Polish government estimated that it might take it until 2049 to completely wean itself away from coal.)
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwXrJM3emfNPrWOfOxzXiw0XDLTQA9Q_A3OWVbpWzg6_chl22llvJ7KnKkGrDn5vUetCkDD8FnPSm89Btl_8cpJaJL7HzNbrNomY4YfphrKubtVQh1PxjAV5DgWAXGoSMnOlF64lLiilfeUchj01micTX8xr4xFWxO7K0GKv2xrUIlN_m96NzJvv8N5w/s1200/fig118_imports-of-solid-fossil_poland_2019.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiwXrJM3emfNPrWOfOxzXiw0XDLTQA9Q_A3OWVbpWzg6_chl22llvJ7KnKkGrDn5vUetCkDD8FnPSm89Btl_8cpJaJL7HzNbrNomY4YfphrKubtVQh1PxjAV5DgWAXGoSMnOlF64lLiilfeUchj01micTX8xr4xFWxO7K0GKv2xrUIlN_m96NzJvv8N5w/w400-h266/fig118_imports-of-solid-fossil_poland_2019.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 120. Poland's Imports of Coal by Origin Country, 2019</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
So, as can be seen, Poland imports 68.9% of its total natural gas, 81.6% of its oil and refined petroleum, and 16.7% of its total coal from Russia. Yet, they have been the most vocal proponents for sanctions against Russian energy. Nobody in Poland seems to have asked what Poland would do without Russian energy.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h4 id="TOC4f3">
The United Kingdom
</h4>
</header>
<div>
<p>
<span id="fig121">The figure below shows the partition of the total energy needs of the United Kingdom for the year 2020.</span> Of its total energy consumption of 6,487 PJ, only 3% (7.5 Mtons) came from coal; 41% (70.9 bcm) came from natural gas; and 32% (46.3 Mtons) came from oil.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2IO8N745yS1Wo995dj70-FSQINeIkxDi-7RzRvNOqx27EpWcfQI4DxKb2EkxtwsNin0_Brc2J84va2UyH4nkt33AWCUZX-YWDbv9w7l0MFboXW9cFLEGzdXzJ60yD9Lq0qmQaWaOJtjTztcGufSuREvpWBfXvFAE-fj7tBe5PpvTvAHCl0lSkh06dQA/s605/fig119_UKEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2IO8N745yS1Wo995dj70-FSQINeIkxDi-7RzRvNOqx27EpWcfQI4DxKb2EkxtwsNin0_Brc2J84va2UyH4nkt33AWCUZX-YWDbv9w7l0MFboXW9cFLEGzdXzJ60yD9Lq0qmQaWaOJtjTztcGufSuREvpWBfXvFAE-fj7tBe5PpvTvAHCl0lSkh06dQA/w400-h225/fig119_UKEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 121. Break-up of the UK's Energy Usage by Energy Source, 2020</td></tr></tbody></table>
<p>
The United Kingdom has been quite aggressive in asking for energy imports from Russia to be banned, and a look at their import dependence tells us why. They are not terribly dependent on Russia, with <span id="fig122">less than 7% of their natural gas imports coming from Russia</span> (around 3.2 bcm in 2019). This amounts to just 4.5% of their annual natural gas needs. Most of their natural gas imports come from Norway, and they also produce their own natural gas in Scotland. It was therefore easy for the UK to demand sanctions against Russia.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsd14EDvQc_4LZMwWaPkgmtXjSvWtY3CWNt9WSH6SG4nT4pBLNzaT8mOEnF7E0ThnFm5byJIp_DVS1ZmPfSOZH58eRg9HY6eDns0JwejBWGop8so8YoQHAdQ8RsKEXZYbcIjlDoh0bZ3d6ZDZoffpVU3WnDLO9hdHOwsX9ycySOvc4TvkLxyOik8D3Rg/s1200/fig120_imports-of-natural-gas-uk.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhsd14EDvQc_4LZMwWaPkgmtXjSvWtY3CWNt9WSH6SG4nT4pBLNzaT8mOEnF7E0ThnFm5byJIp_DVS1ZmPfSOZH58eRg9HY6eDns0JwejBWGop8so8YoQHAdQ8RsKEXZYbcIjlDoh0bZ3d6ZDZoffpVU3WnDLO9hdHOwsX9ycySOvc4TvkLxyOik8D3Rg/w400-h266/fig120_imports-of-natural-gas-uk.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 122. The UK's Imports of Natural Gas by Origin Country, 2019</td></tr></tbody></table>
<p>
<span id="fig123">A similar story is seen in oil</span> and coal. The UK only imports 12.2% of its oil and petroleum product imports, or 10.4 Mt (22.5% of its total annual needs), from Russia. This comes to 22.5% of its total oil needs.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieq0Kq_baJDmuX8dGMfHnTAroyXKn0C0HuEyT3MMbSQno_M3rtAKm0cM9xsbFtJ_nYccq7WraAa6OWBliC7snAoWd-mI5rC7naGU2LySssEExMTvZ2wERTdlfLf-PwRsiRhxyaRnBCbpT3ZmKl5cyTkuSvbf0oDmGyO0ggJDP17ktWQTdNEGlHB5QnWg/s1200/fig121_imports-of-oil-and-petro_uk_2019.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieq0Kq_baJDmuX8dGMfHnTAroyXKn0C0HuEyT3MMbSQno_M3rtAKm0cM9xsbFtJ_nYccq7WraAa6OWBliC7snAoWd-mI5rC7naGU2LySssEExMTvZ2wERTdlfLf-PwRsiRhxyaRnBCbpT3ZmKl5cyTkuSvbf0oDmGyO0ggJDP17ktWQTdNEGlHB5QnWg/w400-h266/fig121_imports-of-oil-and-petro_uk_2019.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 123. The UK's Imports of Oil and Petroleum Products by Origin Country, 2019</td></tr></tbody></table>
<p>
<span id="fig124">The UK also exported 65.4 Mt of oil and petroleum products to a variety of countries.</span> Keep in mind that this represents oil and petroleum products, so it combines both crude oil and its distillates such as diesel, gasoline, and aviation fuel. So the UK might be importing crude from Russia and exporting diesel to China.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOLB270bOnOa5xSMQ2BQoKflzPBr_qyye_aMqvE5RbAN-CG4_S2VIV30VxkOeTO-9yjWP2tl71uVP66uf3_zA3jmnmCMwUpptfjamFcDUsFqYZT9kgSnnZlPZxaC_LDn_AgPxDxyqbon2PWqWdulaUyJvd6f2PLrT5lRBTPLw2PDUDEmI1U2Bllb5_Cw/s1200/fig122_exports-of-oil-and-petro_uk.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjOLB270bOnOa5xSMQ2BQoKflzPBr_qyye_aMqvE5RbAN-CG4_S2VIV30VxkOeTO-9yjWP2tl71uVP66uf3_zA3jmnmCMwUpptfjamFcDUsFqYZT9kgSnnZlPZxaC_LDn_AgPxDxyqbon2PWqWdulaUyJvd6f2PLrT5lRBTPLw2PDUDEmI1U2Bllb5_Cw/w400-h266/fig122_exports-of-oil-and-petro_uk.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 124. The UK's Exports of Oil and Petroleum Products by Destination Country, 2019</td></tr></tbody></table>
<p>
<span id="fig125">The UK does import a third of its coal imports from Russia</span> (2.5 Mt, or a third of the UK’s annual coal needs), but given that its dependence on coal is so low (just 3% of total energy needs), this is not too significant.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilutAkMVtcR-YrgvwtyGT7v-c4yJzhkhl_JlOc3MRyHCRXUcv1gSMsg2dNwjy7mZqEzS3ipfyt_f2AJ5-i6jMAZNo7w00ovVVv3x7H8Rg2DB-yyihK5mZGtlAl8Nljm-kaVhHhEoH7oduIDYruhjEiGpUTyNKAJ_ax7bl8Av-JDyb7sK3d4ALHFPAcZw/s1200/fig123_imports-of-solid-fossil_uk_2019.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEilutAkMVtcR-YrgvwtyGT7v-c4yJzhkhl_JlOc3MRyHCRXUcv1gSMsg2dNwjy7mZqEzS3ipfyt_f2AJ5-i6jMAZNo7w00ovVVv3x7H8Rg2DB-yyihK5mZGtlAl8Nljm-kaVhHhEoH7oduIDYruhjEiGpUTyNKAJ_ax7bl8Av-JDyb7sK3d4ALHFPAcZw/w400-h266/fig123_imports-of-solid-fossil_uk_2019.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 125. The UK's Imports of Coal by Origin Country, 2019</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
Overall, the UK imported 4.5% of its annual gas needs, 22.5% of its annual oil needs, and 33% of its annual coal needs from Russia.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h4 id="TOC4f4">
Italy
</h4>
</header>
<div>
<p>
Italy’s annual energy requirement, as of 2020, was 5,661 PJ. <span id="fig126">Of that, Italy needed 6.8 Mtons of coal (4% of total energy), 65 bcm of natural gas (43%), and 41.3 Mtons of oil (33% of total energy).</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtiKO4Z0cujVSb7iBAQh1I_mUHsAE7wl4dpAGLfJ_xI_2Q388P80dU4-Z8wij4I-gFqRDkCkKBffHtOSSCzqjt5GofsPjyD7zYY3OyotZ_d_-uIoJn0vMilxbwkkeo1hcsypQ9sFzVp8gQhLD0U65DHrBbOqdtvWEVp83yjDmy3A2UdN1bkJto5jC0Ug/s605/fig124_ItalyEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtiKO4Z0cujVSb7iBAQh1I_mUHsAE7wl4dpAGLfJ_xI_2Q388P80dU4-Z8wij4I-gFqRDkCkKBffHtOSSCzqjt5GofsPjyD7zYY3OyotZ_d_-uIoJn0vMilxbwkkeo1hcsypQ9sFzVp8gQhLD0U65DHrBbOqdtvWEVp83yjDmy3A2UdN1bkJto5jC0Ug/w400-h225/fig124_ItalyEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 126. Break-up of Italy's Energy Usage by Energy Source, 2020</td></tr></tbody></table>
<p>
<span id="fig127">Italy imported 66.7 bcm of natural gas in 2020. Of that, more than 43%, or 28.7 bcm came from Russia (and that is 21% of Europe’s natural imports from Russia).</span> This is 44% of Italy’s annual natural gas needs as of 2020. Fortunately, because of their proximity to Africa, Italy also gets Algerian, Norwegian , Libyan, American, and Qatari gas (through LNG), but 44% is a big number that is impossible to compensate for.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivFJvMScaA215qNiUqJwOFJ9srjMlOagXbTcxfQ7tp1886jEHaIlPhXClmLEQpU583xQ766kIKU4psoWbHarWo2m5oFWhmm6sExOzb5PSBTqiQNeTd-sikcpqjqcv7YYqUuPkZcV7kMjtSSmZBRJQRv6MyNWnfVdadozHAM9MTpwMQULTllHE5q2ihbA/s1200/fig125_imports-of-natural-gas-italy.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivFJvMScaA215qNiUqJwOFJ9srjMlOagXbTcxfQ7tp1886jEHaIlPhXClmLEQpU583xQ766kIKU4psoWbHarWo2m5oFWhmm6sExOzb5PSBTqiQNeTd-sikcpqjqcv7YYqUuPkZcV7kMjtSSmZBRJQRv6MyNWnfVdadozHAM9MTpwMQULTllHE5q2ihbA/w400-h266/fig125_imports-of-natural-gas-italy.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 127. Italy's Imports of Natural Gas by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig128">Italy also imported 65.4 Mt of oil and petroleum products in 2020, and 12.5% of that, or 8.2 Mt, from Russia.</span> This amounted to 19% of Italy’s total oil and petroleum products need for 2020.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5NoGXGcE-gR1SvDGiB6futRjUfZigy560u-fisn_XGcjyxgLUQWDZG9lFcOlBt3KPZKEu6H-R_NgjgTwclTe1BMivuZW8b0f6hcm6WAnTazKTl0ShIcZ38dEvnwZZwUm2R7BsfELQMuj7JojoEkkT9DqkZzJ2yhwgH4Gtx26EmYmp1H7XqeWBLP4ldQ/s1200/fig126_imports-of-oil-and-petro_italy.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5NoGXGcE-gR1SvDGiB6futRjUfZigy560u-fisn_XGcjyxgLUQWDZG9lFcOlBt3KPZKEu6H-R_NgjgTwclTe1BMivuZW8b0f6hcm6WAnTazKTl0ShIcZ38dEvnwZZwUm2R7BsfELQMuj7JojoEkkT9DqkZzJ2yhwgH4Gtx26EmYmp1H7XqeWBLP4ldQ/w400-h266/fig126_imports-of-oil-and-petro_italy.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 128. Italy's Imports of Oil and Petroleum Products by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig129">Italy imported 7.6 Mt of coal in 2020, and 52.7% of that, or 4 Mt, was from Russia.</span> This amounted to 58.8% of its total needs of coal for 2020.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs7cLzt7Ehab87p8h8-A2P0Oor9rE9AXMdFhH5LGpVG_9AEReQfTzCIjBIPQ87pJjtuCGlc4nZX4ZOLtf_XSRjYKRW3En92ndPHrnLfXcRMRivPIzXuOk3yTqsJyatFrktpiQJ4D1n4f8MCZ5FoNLbAVmbvwdOU-FzZ5ZSfxb4BVRfnxDa14-PvpOwIw/s1200/fig127_imports-of-solid-fossil_italy.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjs7cLzt7Ehab87p8h8-A2P0Oor9rE9AXMdFhH5LGpVG_9AEReQfTzCIjBIPQ87pJjtuCGlc4nZX4ZOLtf_XSRjYKRW3En92ndPHrnLfXcRMRivPIzXuOk3yTqsJyatFrktpiQJ4D1n4f8MCZ5FoNLbAVmbvwdOU-FzZ5ZSfxb4BVRfnxDa14-PvpOwIw/w400-h266/fig127_imports-of-solid-fossil_italy.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 129. Italy's Imports of Coal by Origin Country, 2020</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
In summary, Italy imported 44% of its natural gas, 19% of its oil, and 59% of its coal from Russia in 2020. Sanctions on Russia, therefore, will have a significant deleterious effect on its economy.
</p>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h4 id="TOC4f5">
France
</h4>
</header>
<div>
<p>
<span id="fig130">France needed a total of 9.280 Petajoules of energy in 2020. Of this, 228 PJ. or 2%, came from coal (7.8 Mt of coal); 2,582 PJ, or 28%, came from oil (57.8 Mt of oil); and 1,464 PJ, or 16% came from natural gas (38.8 bcm).</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5k2D7g0F2rKWANO9OWcc8gaGr62jRm_GE8IeS9CW0PdeD_jf0gR-xwvO4nlaM_xe5nagzgn6QmFbXbPsNqJAMW1FDHfYFs1Y8qoiKuiNdxvqc1iiEoaFV-xnwQHqarYemMGqg2E9kvnwxYdE_2a700vGES7N-F9rqdNBn3atgXto36vVAQ0PQ8GAyzg/s605/fig128_FranceEnergySourcesPercentages.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj5k2D7g0F2rKWANO9OWcc8gaGr62jRm_GE8IeS9CW0PdeD_jf0gR-xwvO4nlaM_xe5nagzgn6QmFbXbPsNqJAMW1FDHfYFs1Y8qoiKuiNdxvqc1iiEoaFV-xnwQHqarYemMGqg2E9kvnwxYdE_2a700vGES7N-F9rqdNBn3atgXto36vVAQ0PQ8GAyzg/w400-h225/fig128_FranceEnergySourcesPercentages.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 130. Break-up of France's Energy Usage by Energy Source, 2020</td></tr></tbody></table>
<p>
<span id="fig131">France imported 46.4 bcm of natural gas in 2020; of this, 16.9%, or 7.8 bcm of gas, came from Russia.</span> This amounted to 20.2% of France 2020 natural gas requirement.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqwCXlxSLVbuyErgV_shqURzPZt5Sfg1eqqqiw_48F8zK_Vowx-77bqLQ9280GtvU7Zj3-UBtBdWuyEn6oDRcdcWNQ5mZ1FE9NbX12ulSLKdG_bHF_WU5OROlcUNeUIq3VhJbbZeFgT7JSAearE-REtj4z6MatLFIvz4Jo8HT8Wx9yvjQu8jjpRV8w8Q/s1200/fig129_imports-of-natural-gas-france.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhqwCXlxSLVbuyErgV_shqURzPZt5Sfg1eqqqiw_48F8zK_Vowx-77bqLQ9280GtvU7Zj3-UBtBdWuyEn6oDRcdcWNQ5mZ1FE9NbX12ulSLKdG_bHF_WU5OROlcUNeUIq3VhJbbZeFgT7JSAearE-REtj4z6MatLFIvz4Jo8HT8Wx9yvjQu8jjpRV8w8Q/w400-h266/fig129_imports-of-natural-gas-france.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 131. France's Imports of Natural Gas by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig132">In 2020, France imported 76 Mt of oil and petroleum products. Of this, 13.3%, or 10.1 Mt, was imported from Russia.</span> This amounted to 17.5% of France total 2020 requirement.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVjJpBZriXw0JjKSOrj5YxcWK7_-Dpo3NGV5YuNDTJNWwplcPXt3S5b0m7NsAiPnJwjPdzlkjD7plbBK33Tifxh-Ywgy8RBRHNU0k0MuZ6Lw9xG8r_ra5FOJDlk4hkxWzvkOZ4K49CGYD1OilBoUFfdiwHMpFFTC-pq_evm6NlmlI08LlwmNbhE0MnEQ/s1200/fig130_imports-of-oil-and-petro_france.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVjJpBZriXw0JjKSOrj5YxcWK7_-Dpo3NGV5YuNDTJNWwplcPXt3S5b0m7NsAiPnJwjPdzlkjD7plbBK33Tifxh-Ywgy8RBRHNU0k0MuZ6Lw9xG8r_ra5FOJDlk4hkxWzvkOZ4K49CGYD1OilBoUFfdiwHMpFFTC-pq_evm6NlmlI08LlwmNbhE0MnEQ/w400-h266/fig130_imports-of-oil-and-petro_france.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 132. France's Imports of Oil and Petroleum Products by Origin Country, 2020</td></tr></tbody></table>
<p>
<span id="fig133">In 2020, France imported 7.7 Mt of coal, of which 2.5 Mt, or 31.8%, came from Russia.</span> This formed 32 % of France’s 2020 requirement.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjP0E96vWfhVZVP8qpc-XIrPlrRe7okh15YtlTJpbrbPNlc_bz5GEvvlhwR7qpvJHNyUN_zT9IrRU7WGcE0rDU8YTZR5-1hbJGT693_2w3IniKzuCo6gNZR1FUcCLCLfQ6se4axczWMTDFQTrf6rnUXXkyCOSvfbRNyD24ashj1RtmP87zr8pFo1tcTNw/s1200/fig131_imports-of-solid-fossil_france.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="800" data-original-width="1200" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjP0E96vWfhVZVP8qpc-XIrPlrRe7okh15YtlTJpbrbPNlc_bz5GEvvlhwR7qpvJHNyUN_zT9IrRU7WGcE0rDU8YTZR5-1hbJGT693_2w3IniKzuCo6gNZR1FUcCLCLfQ6se4axczWMTDFQTrf6rnUXXkyCOSvfbRNyD24ashj1RtmP87zr8pFo1tcTNw/w400-h266/fig131_imports-of-solid-fossil_france.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 133. France's Imports of Coal by Origin Country, 2020</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
In summary, in 2020, France imported 20.2% of its total natural gas requirement, 17.5% of its total oil requirement, and 32% of its total coal requirement.
</p>
</div>
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</section>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC4g">
Summary of Europe’s Energy Dependencies on Russia
</h3>
</header>
<div>
<p>
The above analyses were performed for all the major European countries. The results can be summarized in the following graphs, one each for gas, oil, and coal.
</p>
<p>
<span id="fig134">Let us first look at the graph for gas imports from Russia.</span> It is clear that Russia forms 100% of gas imports for many countries in Europe, and a dominant percentage for a few other countries. The UK, Spain, Sweden, and France are noteworthy in the low levels of import of natural gas from Russia. But most of Europe is heavily dependent on Russian gas.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJERiIrEnAyXtaiz664VyI6KsYSO23MGUhfAfmeCZHsIHBXnk1aSsRQ3ck0LX7eToG4hbSTHqGCrxckeieOCjqktrBm4EFIo8miiO9kK5zJoukltzQrNGXVs4WHZtHWrw5U84FH-EsiOkyggMUMluN5tyNpOuiOmavfTpjyNx1RLNA4DWj11IiIa7chQ/s605/fig132_GasImportsRussiaPercTotGasImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJERiIrEnAyXtaiz664VyI6KsYSO23MGUhfAfmeCZHsIHBXnk1aSsRQ3ck0LX7eToG4hbSTHqGCrxckeieOCjqktrBm4EFIo8miiO9kK5zJoukltzQrNGXVs4WHZtHWrw5U84FH-EsiOkyggMUMluN5tyNpOuiOmavfTpjyNx1RLNA4DWj11IiIa7chQ/w400-h225/fig132_GasImportsRussiaPercTotGasImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 134. Percentage of Total Gas Imports Originating from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
<span id="fig135">The countries of Eastern Europe are more heavily dependent on Russian oil imports, as the next graph shows us.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJ0pF79x3Is16RGbxeOU0VVTXmFN_9F1LKJwrX9VYudvAsarjmFv8qhIovNooaHrkF7iXlv52WgkTOPrrkYxMPzJS0OktcHflGS4_5FDWe5ovPcgc84PHKGHlQnf0DMRIB9aO0hDViAho3DcKLaMT_iQzCwZMtMrZy1w47Hs8A9_024mVjmR1yYgVnNg/s605/fig133_OilImportsRussiaPercTotalOilImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJ0pF79x3Is16RGbxeOU0VVTXmFN_9F1LKJwrX9VYudvAsarjmFv8qhIovNooaHrkF7iXlv52WgkTOPrrkYxMPzJS0OktcHflGS4_5FDWe5ovPcgc84PHKGHlQnf0DMRIB9aO0hDViAho3DcKLaMT_iQzCwZMtMrZy1w47Hs8A9_024mVjmR1yYgVnNg/w400-h225/fig133_OilImportsRussiaPercTotalOilImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 135. Percentage of Total Oil Imports Originating from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
<span id="fig136">Much of Europe is also very dependent on Russian coal.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjcSE_6CzykZhonZVo-oKi02AYomxH9Ra6GLRwPP2dFd8qkHZcver3Sy0mJ-oa7X0hYW6l_8BHareeKlGJ5AviDUwbg6oCivewueGfoMr3TQBGEQnfkglm646ryKnptFOfWaNKjmSod29bh8j6yiZyO0bWMAqLWUoSzHt9Vp3VRi_qp9-fx3GUPOdr-w/s605/fig134_CoalImportsRussiaPercTotalCoalImports.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjcSE_6CzykZhonZVo-oKi02AYomxH9Ra6GLRwPP2dFd8qkHZcver3Sy0mJ-oa7X0hYW6l_8BHareeKlGJ5AviDUwbg6oCivewueGfoMr3TQBGEQnfkglm646ryKnptFOfWaNKjmSod29bh8j6yiZyO0bWMAqLWUoSzHt9Vp3VRi_qp9-fx3GUPOdr-w/w400-h225/fig134_CoalImportsRussiaPercTotalCoalImports.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 136. Percentage of Total Coal Imports Originating from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
<strong><em>More important than the percentage of total imports is the percentage of a country’s requirements that Russian fossil fuels amount to.</em></strong> <span id="fig137">The graph below shows the percentage of a country’s national requirement for natural gas that comes out of its import of Russian natural gas.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWqIDFMWo6GQypoq6bI_UMVaIlY-IKONsvYy8fWLf2xJ4oNZgmKtKbFmXQvSTzkNlKXs4xx2H-9axO8AngekFaxt3nGPunRUDg7PeF9W1YvHfpHi96Z-Qb2LZ4qxhqUJ3iSZDsBQqSXOIQJaxqUYVFXQhwNhyoiFkf7WvgQBA2XRgL7GH9MIsen4GKjw/s605/fig135_GasImportsRussiaPercNationalRequirement.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWqIDFMWo6GQypoq6bI_UMVaIlY-IKONsvYy8fWLf2xJ4oNZgmKtKbFmXQvSTzkNlKXs4xx2H-9axO8AngekFaxt3nGPunRUDg7PeF9W1YvHfpHi96Z-Qb2LZ4qxhqUJ3iSZDsBQqSXOIQJaxqUYVFXQhwNhyoiFkf7WvgQBA2XRgL7GH9MIsen4GKjw/w400-h225/fig135_GasImportsRussiaPercNationalRequirement.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 137. Percentage of National Gas Requirement Imported from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
Some percentages in the above graph are more than 100%, and the reason is that these countries act as transshipment hubs within Europe. They get Russian gas and sell it to other countries. In calculating the gas import from Russia, the ultimate supplier is considered. For example, when we look at Poland’s imports of natural gas, technically 54.8% comes from Russia and 20.6% comes from Germany. But Germany has no gas of its own to export to Russia. All the gas it is selling to Poland is actually Russian gas that it is sending via reverse flows on the pipelines. Similarly, Romania technically gets 44.8% of its gas from Russia and 52.8% from Hungary. But again, Hungary has no gas of its own to export to Romania. It is all Russian gas. The goal in this study is to understand the dependence on Russia. So when Germany gets 66% of its imports of natural gas from Russia, it exports some to other countries. The reason this export is not deducted from the figure treated as Germany’s import from Russia in the figures above is that the goal is to understand what will get cut off when sanctions are imposed: in Germany’s case, that 66% of the imports will get cut off, and in Poland’s case, 75.4% of gas imports will get cut off, and that is the important thing to note.
</p>
<p>
<span id="fig138">Similar adjustments are made while calculating imports of oil. Germany has no oil of its own to export. So when the Czech Republic’s oil imports are considered, 29.1% comes from Russia and 18.9% comes from Germany. But Germany’s oil is actually Russian in origin. Thus, the Russian dependence is actually 48% and not 29.1%.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAroOohtP27IIxF-ufkSLkZwtKqRLGlnqB02GW6YWuUwmnYqCVLPIJ6XdVnwgjffbk78dPnI4ERPWMOVu_12NIk40ranKxvyELFqAJ8czY-VAr6N-C8PouRfbMzsIYFRRseNYrRHXfJgmoiFzFV5Ray9CDHfAG0k6Q2U83-aq3HX5SAqKAdDnN29TMQQ/s605/fig136_OilImportsRussiaPercNationalRequirement.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAroOohtP27IIxF-ufkSLkZwtKqRLGlnqB02GW6YWuUwmnYqCVLPIJ6XdVnwgjffbk78dPnI4ERPWMOVu_12NIk40ranKxvyELFqAJ8czY-VAr6N-C8PouRfbMzsIYFRRseNYrRHXfJgmoiFzFV5Ray9CDHfAG0k6Q2U83-aq3HX5SAqKAdDnN29TMQQ/w400-h225/fig136_OilImportsRussiaPercNationalRequirement.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 138. Percentage of National Oil Requirement Imported from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
As in the case of gas, some percentages are more than 100% because these countries act as transshipment hubs for Russian oil. Lithuania supplies to the other Baltic republics, Finland supplies Sweden, and so on.
</p>
<p>
<span id="fig139">The coal dependence is not as high for most European countries as the gas or oil dependence.</span> But there is another aspect to this, and that is the fact that Europe has gradually been reducing its dependence on coal. With the exception of a few countries like Poland, most countries have weaned themselves off coal by now.
</p>
<p>
Nevertheless, it is useful to look at some countries which are highly dependent on Russia on multiple axes. Prime examples are Lithuania, with 55% of its gas requirement, 239% of its oil requirement, and 81% of its coal requirement imported from Russia; Slovakia, for whom the corresponding figures are 82%, 177%, and 32%; Finland, 73%, 167%, and 34%; Denmark, 117%, 33%, and 105%; Netherlands, 52%, 114%, and 55%; Hungary, 119%, 63%, and 11%; Poland, 70%, 82%, and 17%, and so on.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-UvLKIQuEBs2lEluuA7g1-crjTZconyVuHZB7nPYwWtojP-4IZOkXZSgmlMAt8_Th0T6xNDlHJs1sPvZ3c3ln-Q-kEquTENc7avjnXyHK8V_unpfztkbNUMozeW3Ny2FRYeCNvoW7fpibovsR3zRg7tdS5i-fLRvueDIHkwdoay3NrkxS9VGytbp6mw/s605/fig137_CoalImportsRussiaPercNationalRequirement.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg-UvLKIQuEBs2lEluuA7g1-crjTZconyVuHZB7nPYwWtojP-4IZOkXZSgmlMAt8_Th0T6xNDlHJs1sPvZ3c3ln-Q-kEquTENc7avjnXyHK8V_unpfztkbNUMozeW3Ny2FRYeCNvoW7fpibovsR3zRg7tdS5i-fLRvueDIHkwdoay3NrkxS9VGytbp6mw/w400-h225/fig137_CoalImportsRussiaPercNationalRequirement.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 139. Percentage of National Coal Requirement Imported from Russia, 2020 (UK: 2019)</td></tr></tbody></table>
<p>
<strong><em>These three charts, viz., the amount of gas, oil, and coal imported from Russia as a percentage of the country’s total requirement – are the clearest way to understand the country’s dependence on Russia, with the right level of granularity.</em></strong> For instance, if the home heating in Germany is primarily driven by gas heating, and if most chemical processes use fired heaters powered by natural gas, then the percentage of the national requirement that is constituted by Russian imports of natural gas is very important. In the case of Germany, that number is 63%. That means that because of the sanctions imposed by Germany on Russia, it is not getting 63% of the natural gas it needs. Similarly, Finland imports 73% of its natural gas needs from Russia. That means that if natural gas is used to heat Finnish homes, most of that gas is coming from Russia, and Finland has to find a way to replace that 73% of its national requirement, which amounts to 1.7 billion cubic meters of gas. That’s a lot of gas.
</p>
<p>
Another way to understand Europe's fossil fuel dependence on Russia is through the use of energy flow diagrams, also called Sankey charts. These charts show quantities flowing from one country to another using arrows, the width of which are proportional to the quantity of goods flowing in that direction. Below, I show <span id="fig139a">the energy flow diagram for the flow of natural gas from Russia to Europe.</span> I consider primarily two flows: flows of gas from Russia to European countries on the one hand, and flows (supplies) of gas from all other sources — be those from domestic production, from other European countries, or from countries external to Europe, such as Qatar or Algeria, on the other hand. The idea is to understand how dependent Europe is on Russia. The sum of the two flows adds up to the national requirement of natural gas for that country. If Russia supplies the entirety of a country's needs, there is no flow to that country from other sources.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyKNhPRrMEgMJTXXNnYRwbUGK9Dl8tLfcL68eDNLj0gBzFYhJte95jMIcupeJg8HPbVvH1rXPrPNzY2Jm8W8e4bklXqBtnBf5dJyyYa1rnfN13PEynPf99noCTjlOZoavOocDgqIoOw68Gpp4_LATUtD2SdZwTdJO-I3FhGkp36B6Q2n74f5ANVUiLnw/s2020/EuropeGasDependencyRussiaTitle.png" style="display: block; margin-left: auto; margin-right: auto; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1765" data-original-width="2020" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyKNhPRrMEgMJTXXNnYRwbUGK9Dl8tLfcL68eDNLj0gBzFYhJte95jMIcupeJg8HPbVvH1rXPrPNzY2Jm8W8e4bklXqBtnBf5dJyyYa1rnfN13PEynPf99noCTjlOZoavOocDgqIoOw68Gpp4_LATUtD2SdZwTdJO-I3FhGkp36B6Q2n74f5ANVUiLnw/s400/EuropeGasDependencyRussiaTitle.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 139a. Energy Flow Chart Showing Russia's Gas Supply to Europe</td></tr></tbody></table>
<p>
<span id="fig139b">The next graph shows the energy flow diagram for oil flows into Europe.</span> As in the previous graph, there are two flows for each country: flows from Russia and flows from all other sources, including domestic production.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVIHI_WYmKs7Gs7jXNkx8WzxUYszhOPqmbH5iqGzC5rAJmdOm_LlT-CxKkwuErkip84kwSF-VpkG-9s39yMJBALWqyN7SUWVxLE8nFGDA-afbIC5fkMCG0EZsTSyAnAVYuuPM3v65mFjn4lqo-BbOoikh4YTXUG2xupksgF8p_x9j_ovjnfo1lm9g9KQ/s1862/EuropeOilDependencyRussiaTitle.png" style="display: block; margin-left: auto; margin-right: auto; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1778" data-original-width="1862" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVIHI_WYmKs7Gs7jXNkx8WzxUYszhOPqmbH5iqGzC5rAJmdOm_LlT-CxKkwuErkip84kwSF-VpkG-9s39yMJBALWqyN7SUWVxLE8nFGDA-afbIC5fkMCG0EZsTSyAnAVYuuPM3v65mFjn4lqo-BbOoikh4YTXUG2xupksgF8p_x9j_ovjnfo1lm9g9KQ/s400/EuropeOilDependencyRussiaTitle.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 139b. Energy Flow Chart Showing Russia's Oil Supply to Europe</td></tr></tbody></table>
<p>
<span id="fig139c">The next graph shows the energy flow diagram for coal.</span>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ6D-K1Ec7WOdsBsHIGXzko8Rl9bLe5gTZKcPnIUFaHduuweeevp4lDvbb7FJ0A9oSBJ2Y8LbJbmZdTe_LFVO8vUxqrU1X78F_xxkwWS18aQE2V6vDZJ6fzlsCf_fxpDGigqSI8KK6kYz6_5aUNxAJU7z6kIdGpXMD9_zKXSCB3wJisLina3woj_VRBw/s2020/EuropeCoalDependencyRussiaTitle.png" style="display: block; margin-left: auto; margin-right: auto; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1783" data-original-width="2020" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQ6D-K1Ec7WOdsBsHIGXzko8Rl9bLe5gTZKcPnIUFaHduuweeevp4lDvbb7FJ0A9oSBJ2Y8LbJbmZdTe_LFVO8vUxqrU1X78F_xxkwWS18aQE2V6vDZJ6fzlsCf_fxpDGigqSI8KK6kYz6_5aUNxAJU7z6kIdGpXMD9_zKXSCB3wJisLina3woj_VRBw/s400/EuropeCoalDependencyRussiaTitle.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 139c. Energy Flow Chart Showing Russia's Coal Supply to Europe</td></tr></tbody></table>
<p>
With the flows for each country known, one can look at the energy flows from Russia into the entire continent. Unfortunately, I found that this becomes very complicated to look at with a lot of countries, especially given that there are three flows for each country — one for gas, oil, and coal each, and from two sources: Russia and other sources. Things can end up looking like spaghetti very soon. To avoid this, <span id="fig139d">I show below the energy flow diagram for fossil fuels from Russia into Europe for just three major economies</span>, in order for the reader to understand just how tightly enmeshed Europe is with Russia.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhH6hY-3n2LomO5DsYjngMTb-4XL1Y05ohxA0wV0kDdGVmwgAPqNi6WGZKBdH1bkmOaCbDd2aYZLvRf-YF6AIYrGzxB3s6sQcZsQUvJuxL-X1KB5n62LF5kpiUUjgagMWwhyqeguqPiGBZd2eugqnQo2OHipSiyFdnTLncfcYTD4MyAn8Z2mKfiYU9H0A/s2672/EuropeFossilFuelDependencyRussiaTitle.png" style="display: block; margin-left: auto; margin-right: auto; padding: 1em 0px; text-align: center;"><img alt="" border="0" data-original-height="1786" data-original-width="2672" height="427" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhH6hY-3n2LomO5DsYjngMTb-4XL1Y05ohxA0wV0kDdGVmwgAPqNi6WGZKBdH1bkmOaCbDd2aYZLvRf-YF6AIYrGzxB3s6sQcZsQUvJuxL-X1KB5n62LF5kpiUUjgagMWwhyqeguqPiGBZd2eugqnQo2OHipSiyFdnTLncfcYTD4MyAn8Z2mKfiYU9H0A/w640-h427/EuropeFossilFuelDependencyRussiaTitle.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 139d. Energy Flow Chart Showing Europe's Fossil Fuel Dependency on Russia</td></tr></tbody></table>
<p>
But is there a quantitative way to measure overall energy dependence across multiple fuels? Actually, there is. We know the total energy supply that is required by each country in the above list, thanks to the data from the IEA. Every country in Europe is not part of the IEA, so the IEA does not have data on the total energy requirements of every country, but every country that is in the previous graphs (for which I have shown percentages of the national requirement) is part of that database. So now we know, thanks to the above graphs, how much of that national requirement comes from Russia. If we remove that energy from the mix, we now know what the new total energy mix for that country is. And thus we can measure the energy shortfall.
</p>
<p>
An example will make this clear. Let us consider the case of Finland. In 2020, Finland needed 88 PJ of natural gas energy, 299 PJ of energy from oil, and 118 PJ of energy from coal. Of that energy, it imported 73% of its gas energy from Russia, 167% of its oil energy (hence all) from Russia, and 34% of its coal energy from Russia. It also had 747 PJ of non-fossil energy (254 PJ of nuclear energy, 406 PJ of biofuels and waste energy, 57 PJ of hydro energy, and 30 PJ of wind, solar, and other renewable energies). Only the fossil piece is affected by the sanctions on Russia (at least directly). Since Finland will not be importing any more energy from Russia, the fossil pieces now become 27% of the original 88 PJ of natural gas energy, 0% of the 299 PJ of oil energy, and 66% of the energy from coal, or 24 PJ, 0 PJ, and 77 PJ, respectively, which when added to the non-fossil piece, gives a total available energy of 847 PJ. The shortfall in energy is therefore 1251 PJ – 847 PJ = 404 PJ, which in percentage terms relative to the original energy consumption becomes 32.3%. The shortfall in the fossil fuel energy alone is 404 PJ, which relative to the original 505 PJ, comes to an 80% shortfall.
</p>
<p>
In this way, the <span id="fig140">overall energy shortfall for all the European countries</span> in the IEA database is calculated, and the results are shown in the next figure.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf-OUFStGBxA_dO2_CAfgPcgT_NWvs93g1OEc_vcFNjm1cfWb3wNhaPc1nfFsG-GxDIQCabefyEAhFgM039Kf08SP8PcqJdLYTC-jdBZ9ATztxYnkl6L9ohxIFH1xHQNiLVFJliNhW4MCymBH7mj-0wX07D67LXhikRl62OiBtL7HEDKPhZ0Oz9IMwSQ/s605/fig138_EU_EnergyShortfall.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgf-OUFStGBxA_dO2_CAfgPcgT_NWvs93g1OEc_vcFNjm1cfWb3wNhaPc1nfFsG-GxDIQCabefyEAhFgM039Kf08SP8PcqJdLYTC-jdBZ9ATztxYnkl6L9ohxIFH1xHQNiLVFJliNhW4MCymBH7mj-0wX07D67LXhikRl62OiBtL7HEDKPhZ0Oz9IMwSQ/w400-h225/fig138_EU_EnergyShortfall.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 140. Overall Energy Shortfall and Fossil Energy Shortfall in European Countries Due to European Sanctions on Russia, Based on 2020 Data (UK: 2019 Data)</td></tr></tbody></table>
<p>
This is a very interesting graph. It tells us that Norway, Portugal, Spain, the UK, and France are the countries least affected by the sanctions, with energy shortfalls that are in the 10% range or lower. In contrast, Germany, the engine of Europe, has an energy shortfall of 34%. <strong><em>That means that Germany must either find a way to come up with that 34%, or it must shut down its industry or let its citizens freeze, or both.</em></strong> The country we just discussed, Finland, has a huge fossil energy shortfall, at 80%. But since its energy sources are quite diversified, as we have just seen, with nuclear and biofuels playing a big role, it was not too badly affected by the huge fossil energy shortfall, and has an overall shortfall of 32% (which is still very problematic.)
</p>
<p>
The worst-affected countries are the Netherlands, which has a total energy shortfall of 63.5% and a fossil energy shortfall of 72.2%; Lithuania, which has a total energy shortfall of 60.4% and a fossil energy shortfall of 81.1%; Greece, which has a total energy shortfall of 58.6% and a fossil energy shortfall of 69.9%; Hungary, which has a total energy shortfall of 53.9% and a fossil energy shortfall of 76.5%; Slovakia, with a total energy shortfall of 46.6% and a fossil energy shortfall of 77%; and Poland, with a total energy shortfall of 43.6% and a fossil energy shortfall of 49.1%.
</p>
<p>
<strong><em>But the fact is that all countries in Europe are in a bad situation, because anything close to 30% or greater in the total energy shortfall is a very serious situation</em></strong>, and only five countries, as already stated earlier – Norway (which is a net energy producer, so this is not a surprise), Spain and Portugal (which are saved by the fact that they get much of its supply from North Africa, the Persian Gulf, the US, and various other sources), the UK (which again is partly saved because it has its own production in Scotland, and also benefits from sea-borne oil and LNG), and France (largely because of its dependence on nuclear power) – are going to be able to survive the loss of Russian energy.
</p>
<p>
This explains why different European countries have different attitudes towards Russia, and why discussions between France and Germany on the subject of sanctions on Russia have been so tense. France can afford to sanction Russia, and so wants Germany to go along, but Germany’s position is a lot more precarious than that of France.
</p><p>This graph also gives us a way to measure the effect of European sanctions on Russia. The rhetoric by most Western leaders, amplified faithfully by Western media, is that sanctions against Russia are a necessary inconvenience for the citizens of Europe because the sanctions “hurt Russia's ability to wage war by denying them income from sales of fossil fuels.” Well, we can see how true this is now. From the previous graph, we now know how much of an energy shortage each nation in Europe is facing on an annual basis. From the OEC data, we also know how much each of these nations has been spending on buying Russian coal, oil, and gas every year. <span id="fig141">If we look at the total amount each nation spends on Russian fuels per year, and calculate the percentage of total Russian exports that amounts to, we get a quantitative idea of how much revenue each nation would be depriving Russia of by refusing to buy their fossil fuels.</span> Of course, as explained earlier, there are some strange anomalies in the way that the revenues for fossil fuels are accounted for in the OEC data. In particular, we saw that the revenue from gas exports to Germany from Russia was only seen to be $32 million in the OEC data, which is odd given that Germany imports 66% of its total gas from Russia and is the biggest importer of gas from Russia by volume (52.4 bcm). One possible explanation is that the costs are spread around different countries in some complex payment system. Regardless, we have to make do the best we can with the best available data. And so, in what follows, I use the OEC data to calculate how much each country spends on Russian fossil fuels. In this way, we can make a judgement as to how much suffering of European citizens is resulting in how much deprivation of income for Russia to continue its war against Europe. This graph is shown below.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvq5HC8K_OnVu_vdxqWmO5FhTPS1QulUt-1QtpIikQBh57SNwsLDWt1SaY7DoV-3jBvTczXjoF7wWvKgvR-PRI5onD_3HSba4rUertkUcvCpXy_EE5KSjgonls9vmRduMkK0iy3IwKbQQmy2rf4n_CV9kc6qkV1ZZy-HbL-AVhOhi7FUVP0bDXnrGdYg/s605/EuropeSanctionsRussiaExportsImpact.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvq5HC8K_OnVu_vdxqWmO5FhTPS1QulUt-1QtpIikQBh57SNwsLDWt1SaY7DoV-3jBvTczXjoF7wWvKgvR-PRI5onD_3HSba4rUertkUcvCpXy_EE5KSjgonls9vmRduMkK0iy3IwKbQQmy2rf4n_CV9kc6qkV1ZZy-HbL-AVhOhi7FUVP0bDXnrGdYg/w400-h225/EuropeSanctionsRussiaExportsImpact.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 141. Cost-Benefit Analysis of European Sanctions on Russia</td></tr></tbody></table><p>What is clear from this graph is that no country in Europe is even causing a 6% dent in Russia's export income. The sum total impact of the 17 major countries considered here is just over 20% of Russia's export income. </p><p>The worst affected countries are Lithuania, Greece, and Hungary, which have energy shortfalls of 60.4%, 58.6%, and 53.9%, respectively, whereas their impacts on Russia's export revenues are 0.3%, 0.7%, and 0.5%, respectively. It is, of course, for the citizens of these nations to decide if their sacrifice is worth it, but clearly, they are losing between 50-60% of their total energy by sanctioning Russia, while each making about half a percentage point impact on Russia's revenues on average. Slovakia and Poland have energy shortfalls of 46.6% and 43.6%, respectively, while what they are getting in return for their sacrifice is a one to two percent impact on Russia's export revenues. Both Germany and Italy have close to a 3% impact each on Russia's export revenues; in return for this, they suffer energy shortfalls of 33.9% and 27.6%, respectively. Netherlands is the country with the greatest impact on Russia's export revenues, with 5.2% impact; but the price it pays for this “success” is a 63.5% overall energy shortfall.</p><p>Finland, Denmark, and Czechia have energy shortfalls of 32.3%, 31.4%, and 30.3%, respectively, and what they get for their sacrifice are impacts on Russia's export revenues of 1.1%, 0.3%, and 0.5%, respectively.</p><p>The UK, Sweden, France, and Spain are among the least-affected countries in Europe, with total energy shortfalls of 12.2%, 10.6%, 8.8%, and 8.3%, respectively, and they affect Russia's export revenues to the tune of 1.1%, 0.2%, 1.3%, and 0.5%, respectively.</p><p>Portugal and Norway are the least-affected of the 17 countries that I have investigated here, with energy shortfalls of 5.9% and 3.9%, respectively; they also have the least impact on Russia's export revenues, with impacts of 0.1% each. <b><i>Clearly, no pain, no gain; but citizens of Europe have to decide for themselves if they are happy with this “gain” for this level of "pain."</i></b></p>
<p>
<strong><em>We should also keep in mind that the total energy shortfall is a very optimistic number, because it treats all energy, whether it be gas, oil, coal, hydro, nuclear, or wind, as the same. In actual terms, these energies are not interchangeable.</em></strong> For instance, most home heating in Europe uses natural gas. You cannot use nuclear energy or wind energy or solar energy to substitute for gas heating in homes, because the mechanism is different. Home heating using gas relies on burning gas in a furnace to then heat water using the combustion gas and then using hot water pipes in the home. Home heating using wind or solar or nuclear energy relies on electric heating of the same water to heat the water in the pipes. One would have to completely change the heaters in every home to replace gas with nuclear or wind energy.
</p>
<p>
Similarly, if you have a chemical plant that is powered by coal heating or natural gas heating, you cannot substitute electrical energy for it. That would require a major redesign and take at least a year or two to convert. So what we should look seriously at is the individual graphs on the percentages of national requirements that were coming from Russia in 2020.
</p>
<p>
So if you lose your natural gas, then, in the short term, you lose whatever you used that natural gas for. If all your home heating was done using natural gas, you are in deep trouble. Nuclear energy will not save you until the next winter.
</p>
<p>
This segues into the next section, which deals with the coming de-industrialization of Europe because of the non-availability of fossil fuels.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC4h">
Key Takeaways from Chapter IV
</h3>
</header>
<div>
<ul>
<li>
Fossil fuels have an impact on European economies that cannot be measured in terms of their monetary value.
</li>
<li>
Europe needs to import 22% of its total coal requirement, 38% of its total gas requirement, and 28% of its total oil requirement from Russia.
</li>
<li>
To replace the gas that Europe was importing from Russia would require the world to produce an extra 11% of the total world output of gas
<ul>
<li>
There isn’t that much spare production capacity
</li>
<li>
Gas producing countries will only increase production if Europe commits to 20-25 year contracts
</li>
<li>
It will take at least one year to get the extra supplies of gas
</li>
</ul>
</li>
<li>
To replace the oil that Europe was importing from Russia would require the world to produce an extra 6.2% of the total world output of oil
<ul>
<li>
This amounts to asking for an extra 2.4 million barrels a day to be produced
<ul>
<li>
OPEC+ has decided to cut production globally by 2 million barrels a day
</li>
</ul>
</li>
</ul>
</li>
<li>
Europe’s emergency stocks of oil will only last it for 45 days at the most
</li>
<li>
If Europe wishes to substitute coal for its shortage of gas and oil, it will require an additional 32% of the total world coal supply (excluding Russian coal)<ul>
<li>
This is impossible for Europe to obtain
</li>
</ul>
</li>
<li style="color: blue;">
Only five countries in Europe are less than 40% dependent on Russia for gas: Norway (0%), UK (5%), Portugal (10%), Spain (11%), and France (20%)
</li>
<li style="color: green;">
Only six countries in Europe are less than 30% dependent on Russia for oil: Portugal (8%), Spain (10%), Norway (10%), France (18%), Italy (20%), and UK (22%)
</li>
<li>
Only eight countries in Europe are less than 30% dependent on Russia for coal: Portugal (0%), Czechia (2%), Greece (11%), Hungary (11%), Poland (17%), Norway (19%), Sweden (22%), and Germany (23%)
</li><li><span style="color: #800180;">Only five countries in Europe have a fossil energy shortfall less than 30%: Norway (8%), Portugal (8%), Spain (12%), UK (14%), and France (19%)</span></li>
<li style="color: red;">
Only seven countries have an overall energy shortfall less than 30% (including all renewable sources of energy): Norway (4%), Portugal (6%), Spain (8%), France (9%), Sweden (11%), UK (12%), and Italy (28%)
</li>
</ul></div>
<a href="#TOC">Back to TOC</a>
</section>
</section>
<div id="floatclear"></div>
<section>
<header style="padding: 2em;">
<h2 id="TOC5">
CHAPTER V. THE DE-INDUSTRIALIZATION OF EUROPE
</h2>
</header>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC5a">
Industry Shutdowns
</h3>
</header>
<div>
<p>
European industry has already started shutting down in response to the high costs and unavailability of energy. Because of this, demand for gas has been falling, and so price has been going down, even though supply has also decreased.
</p>
<p>
As <a href="https://www.intellinews.com/energy-crisis-europe-s-industry-shutting-down-255913/?source=poland">this news report in BNE Intellinews</a> says,
</p>
<blockquote>
<p>
The closures could do long-term damage to Europe’s industrial base. In Germany, Europe’s industrial powerhouse, the most energy-intensive industries are already being hit hard by unsustainable costs: energy accounts for 26% of the metallurgy industry costs; 19% of basic chemical production; 18% of glass manufacture; 17% for paper; and 15% of construction materials, according to Destatis. European carmakers have already begun hoarding windscreens in anticipation of a glass shortage in the months to come.
</p>
<p>
Over half of Europe’s aluminium smelters have already been affected by the power crises. The EU has temporarily lost 650,000 tonnes of primary aluminium capacity, or about 30% of its total, Eurometaux said. Some of Europe’s biggest steel and chemical plants have also been taken offline and there is no clear idea of when they can start up again. And Europe's fertiliser industry association says more than 70% of the continent's fertiliser production has been either shut or slowed due to sky-high gas prices.
</p>
</blockquote>
<p style="font-style: italic; font-weight: bold;">
But, as already shown, Europe’s biggest problem is not one of price, but of supply. There simply isn’t enough gas, at any price, to power Europe’s homes and factories. The costs of gas have gone up, but that is not because of the price in the spot gas market. That is because Europe never had to rely on the spot gas market except for sudden spurts in demand. For the bulk of their needs, they were depending on gas that they were getting at an assured, low, locked-in price – thanks to the wisdom of Gerhard Schroeder and Angela Merkel. The spot market, from which they now have to buy the gas, is six to seven times as expensive.
</p>
<p>
One of the biggest casualties of the energy shortage is the chemical industry. Germany’s <a href="https://cen.acs.org/business/finance/CENs-Global-Top-50-2022/100/i26">BASF, with sales of $93 billion in 2021, is the biggest chemical company in the world</a>. Its largest facility is in <a href="https://fortune.com/2022/10/25/basf-russia-gas-ukraine-europe-energy-crisis/">Ludwigshafen in southern Germany, where it employs 39,000 people, in a facility that uses as much energy as all of Switzerland.</a> And BASF has issued a warning that if the current situation continues for much longer, they will be forced to shutter down the Ludwigshafen plant. As this <a href="https://fortune.com/2022/10/25/basf-russia-gas-ukraine-europe-energy-crisis/">Fortune article</a> says,
</p>
<blockquote>
<p>
“A shortage of natural gas would…have a double impact on chemical production,” said BASF’s spokesperson. “On the one hand, there would no longer be enough energy available for the production processes, and on the other hand, natural gas would be missing as an important starting material for the manufacture of products. Natural gas cannot be substituted in chemical production in the short term, either as a raw material or as an energy source.”
</p>
<p>
“If supply were to fall significantly and permanently below 50%, we would have to shut down the production site while maintaining the necessary safety standards,” the spokesperson said. “If production is significantly curtailed or discontinued, significant impacts on the basic supply of the population (not only in Germany) and thus on the community can be expected.”
</p>
</blockquote>
<p>
The problem with a prolonged period of high gas prices (and Europe has already seen high gas prices for five months or so now, because they are not getting gas at the contract rate of €15 per MWh or so that they used to pay Gazprom for gas from NordStream, but anywhere between €100 and €350 for the past few months, or 7 to 25 times the price they used to pay) is that once factories have to be shut down because it becomes unviable to operate them, customers go elsewhere. And once they go elsewhere, they may never come back. For the chemical industry, both gas and oil are not only fuels for energy, but also feedstocks (building block chemicals) to produce other chemicals. For instance, crude oil is the primary feedstock in making every kind of plastic and polymer in the world. Every polyethylene and polypropylene bottle comes from oil. Similarly, natural gas is the feedstock for making ammonia and nitrogenous fertilizer.
</p>
<p>
As the BASF spokesperson says in the above Fortune article,
</p>
<blockquote>
<p>
According to Mayer, BASF’s warnings are unprecedented and show how deep its crisis is becoming. And he warns it is very likely that the Ludwigshafen complex is doomed regardless of rationing, since persistently high European gas prices reduce the competitiveness of BASF’s German products against rivals from the U.S. and Middle East.
</p>
<p>
“The problem is that, over the last two years, logistical costs have been so high that all markets have basically been regional markets,” Mayer said. “Now that logistical costs are down so much, all markets are open for imports. This is particularly the case for Europe. Cheaper products from outside Europe are now coming to Europe…Our expectation is that this situation will remain for the future.”
</p>
<p>
To combat those exorbitant European gas prices, BASF has already cut ammonia production at Ludwigshafen and another Verbund site in Antwerp, Belgium, and is now relying more on ammonia production in Freeport, Texas, where gas is much cheaper. Its complexes in the U.S., Malaysia, and China may help the company weather this crisis to an extent, but Mayer noted that it’s not just BASF that’s in trouble. “Energy-intensive businesses will partly or fully be closed down in Germany in particular,” he said, “but all across Europe there will be a capacity reduction.”
</p>
</blockquote>
<p>
There have been various other warnings. In October 2022, <a href="https://24hoursworlds.com/politics/261901">Gerald Haug, the President of the German National Academy of Sciences, talking about the need to move extremely fast to renewable energies to counter the energy shortage in Germany arising from the sanctions, said,</a>
</p>
<blockquote>
“I’m very worried that if we don’t act now, we’ll lose entire industrial sectors — especially in the raw materials industry,” warned the Leopoldina President. “That would mean a much higher dependency on Asia and especially China.” For example, outsourcing the chemical industry completely from Germany and Europe would be a “fundamental mistake” — especially in view of the goal of climate neutrality by 2045.
</blockquote>
<p>
Another industry that is extremely energy-intensive is the paper industry. Eight months of skyrocketing energy prices have pushed the European paper industry to the brink of collapse, <a href="https://www.printweek.com/briefing/article/the-paper-market-and-energy-crisis">as this report from August 31 explains.</a>
</p>
<blockquote>
<p>
German papermaker Feldmuehle is switching fuel from gas to light heating oil at short notice due to the gas supply crisis, which requires a €2.6m (£2.17m) spend. But that is just one, 250,000tpa mill.
</p>
<p>
Over the summer Norske Skog — which had already taken drastic action at its Bruck mill in Austria back in March with a temporary shutdown — said that raw materials and energy prices were expected to remain “high and volatile” in the second half of 2022, and may cause further short-term stoppages in production.
</p>
<p>
“The turbulent operating environment, especially on the energy side, may result in further temporary or permanent closures in the industry,” the group noted.
</p>
<p>
Corrugated packaging giant Smurfit Kappa opted to cut production by some 30,000-50,000 tonnes in August because “with the current price of energy there’s absolutely no sense whatsoever to make stock.”
</p>
<p>
European paper industry federation Cepi has warned that possible disruptions in the industry’s gas supply “would affect the entire logistics of the EU, availability of paper packaging for food and pharmaceuticals, as well as essential hygiene products.”
</p>
<p>
Flexible Packaging Europe has also flagged concerns over potential disruption to flexible packaging materials which are also made using continuous processes.
</p>
<p>
It’s not just the continent that is affected. Energy intensive industries in the UK are also struggling with the spiralling cost of energy here.
</p>
<p>
Papermaker Portals cited energy prices as one of the reasons behind the recent shock announcement that it planned to close its historic Overton banknote paper mill in Hampshire.
</p>
</blockquote>
<p>
Over the short term, European governments are offering bailouts to companies such as BASF and Papermaker Portals to help them stay alive. But this is assuming that the crisis is temporary and things will come back to “normal” soon. But the problem with a shutdown is twofold.
</p>
<p>
One is that with some industries, such as glassmaking or steelmaking, you can never really afford to shut the plant down. A shutdown in a glass factory would mean that the nozzles that supply gas to the furnace that burns inside and releases heat can get clogged with glass and other residue. In normal operation, the high temperatures make sure that nothing solidifies on the nozzles. But once a furnace goes cold, all kinds of problems arise, and it may not be economical to revive a furnace after six months of disuse.
</p>
<p>
Two, if I own a steel mill and have customers in Japan and Brazil waiting for their orders, and I have decided to shut my plant down because of a gas shortage, they cannot wait for their steel — they will take their business elsewhere, say to China. And since most business operates on long-term contract to lock in low rates, they will not come back to me in six months if I tell them that my gas problem has gone away and I am open for business. Essentially, I have lost all my customers. The world waits for no one. As the BASF spokesperson said, even BASF is deciding to focus on fulfilling orders with their American operations.
</p>
<p>
Essentially, the gas crisis will mean the de-industrialization of Europe. And the winners will be the US, which has huge reserves of shale gas, and China, which is benefiting from getting gas very cheaply from Russia via the Power of Siberia line. In fact, the reason that Germany has been able to fill their storage tanks to more than 90% is that they have been furiously buying LNG from China because China is in the middle of a Covid-induced slowdown and so cannot use all the gas it got from Russia (this is discussed in more detail below). So it is liquefying the cheap gas it got from Russia and selling it back to Europe at huge profits. As <a href="https://www.dw.com/en/is-china-reexporting-russian-gas-to-europe/a-63146922#:~:text=China%20accelerating%20exports%20of%20gas&text=That%20represents%20about%207%25%20of,million)%20to%20a%20European%20buyer.">this report from DW News from 16 September 2022 explains</a>,
</p>
<blockquote>
<p>
So far this year, Chinese companies have sold 4 million tons of LNG on international markets. That represents about 7% of Europe's gas consumption for the first half of the year. Evidence of this came from China's JOVO Group, an LNG broker, which said it had sold an LNG cargo worth as much as $100 million (€103 million) to a European buyer.
</p>
<p>
China's biggest oil refiner, Sinopec Group, also said it had been channeling excess LNG into the international market. Local media said Sinopec had sold 45 cargoes of LNG, or about 3.15 million tons.
</p>
<p>
“If Europe is buying LNG from China, then yes, potentially some of it may be Russian, if it's mixed in particular,” Anna Mikulska from the Center for Energy Studies at Rice University's Baker Institute for Public Policy told DW. “I do not believe there are any rules of content origin — in the end it is still an issue of displacement of volumes really.”
</p>
<p>
This seems like getting around sanctions on Russia, although the EU has not sanctioned Russian gas. Russia has systematically cut the supply and LNG markets are interconnected.
</p>
<p>
“There is nothing the EU can do beyond not buying from China but then exposing themselves to potentially serious gas shortages in the winter,” Mikulska added. “This way it's China and not Russia that captures the potential additional profits from reselling this gas.”
</p>
<p>
Russia's sales of pipeline gas to China grew by almost 65% in the first six months of the year compared with 2021. Since the Russian invasion of Ukraine, China's spending on energy imports from Russia has jumped to $35 billion, from $20 billion a year earlier, Bloomberg reported.
</p>
<p>
Russia's Gazprom and the China National Petroleum Corporation (CNPC) signed a $400 billion 30-year agreement in 2014 to build the Power of Siberia, a pipeline with a 3,000-kilometer (1,865-mile) section in Russia and 5,000 kilometers in China. The pipeline was launched in late 2019 and is expected to supply China with up to 38 billion cubic meters of gas a year once it reaches full capacity in 2025.
</p>
<p>
Experts warn that Europe cannot expect Chinese suppliers to cover its energy shortages, given that the total amount of gas that China can export to Europe is limited, compared with other sources like Russia.
</p>
<p>
Also, as economic activity revives in China, the situation will reverse, leaving Europe dependent on Beijing for its gas at higher prices.
</p>
</blockquote>
<p>
<span id="fig142">The European metals industry is on the verge of an existential catastrophe.</span> <a href="https://gmk.center/en/infographic/eu-decreased-steel-production-by-6-7-y-y-in-july-2022/">As of 6 September, 2022, 15 steel plants in Europe had been idled or completely shut down</a> (see figure below). Steel production in July 2022 was down 6.7% y-o-y.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxrfq6USN0fTXieAbr6_wuXIm_Pvk1qgvSkUMM_8WiedglYXwPSyKwu_hiW1OpdcK5HqOIKYXNKkU4paoExq5s2851VtVf9eBgL0gYpAGQQ9UJv_h3jgRI161kAhREKDKQ9Sx2FGZIRCi28p80e_rSA1AA4Ljdfrvk4xIDlp7rGUj7zOlfwErPTmtk1w/s960/fig139_EuropeMetalsShutdown.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="897" data-original-width="960" height="374" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxrfq6USN0fTXieAbr6_wuXIm_Pvk1qgvSkUMM_8WiedglYXwPSyKwu_hiW1OpdcK5HqOIKYXNKkU4paoExq5s2851VtVf9eBgL0gYpAGQQ9UJv_h3jgRI161kAhREKDKQ9Sx2FGZIRCi28p80e_rSA1AA4Ljdfrvk4xIDlp7rGUj7zOlfwErPTmtk1w/w400-h374/fig139_EuropeMetalsShutdown.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 142. Idled Steel Plants in the EU as of September 6, 2022, Because of Energy Shortages</td></tr></tbody></table>
<p>
<a href="https://eurometaux.eu/media/qnhn5k30/non-ferrous-metals-ceo-letter-on-energy-crisis-06-09-2022.pdf">On 6 September, 2022, the President of Eurometaux, the Europeans Metals Association, wrote a letter to Ursula von der Leyen, President of the EU</a>, <span id="fig143">in which he said that</span>
</p>
<blockquote>
<p>
Our sector has already been forced to make unprecedented curtailments in the last 12 months. We are deeply concerned that the winter ahead could deliver a decisive blow to many of our operations, and we call on EU and Member State leaders to take emergency action to preserve their strategic electricity-intensive industries and prevent permanent job losses.
</p>
<p>
50% of the EU’s aluminium and zinc capacity has already been forced offline due to the power crisis, as well as significant curtailments in silicon and ferroalloys production and further impacts felt across copper and nickel sectors. In the last month, several companies have had to announce indefinite closures and many more are on the brink ahead of a life-or-death winter for many operations. Producers face electricity and gas costs over ten times higher than last year, far exceeding the sales price for their products. We know from experience that once a plant is closed it very often becomes a permanent situation, as re-opening implies significant uncertainty and cost.</p></blockquote><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4BaBEVbjuNO7SYBcG2bcr5yHVGssOAw7eBu5lUQaGZKo7aTq_UapZ7bfWTVMMtHOFvistJlbJMIa6m1DAGeTomX_bxmzNdBtAGsIsH19W4qJ30UjZ7ELECmojTLQvKLpvy1FQb6ghjixfpKbOhwmGTmbiFD1UGJkoAwJpWDqZ5UWLnlfynYmCs1Z59A/s1420/fig140_EurometauxLetterSeptember62022.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1420" data-original-width="1264" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj4BaBEVbjuNO7SYBcG2bcr5yHVGssOAw7eBu5lUQaGZKo7aTq_UapZ7bfWTVMMtHOFvistJlbJMIa6m1DAGeTomX_bxmzNdBtAGsIsH19W4qJ30UjZ7ELECmojTLQvKLpvy1FQb6ghjixfpKbOhwmGTmbiFD1UGJkoAwJpWDqZ5UWLnlfynYmCs1Z59A/w356-h400/fig140_EurometauxLetterSeptember62022.png" width="356" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 143. Letter from Eurometaux to EU President Ursula Von Der Leyen, September 6, 2022</td></tr></tbody></table>
<p>
Also, <a href="https://www.ft.com/content/46d3c3fb-e79a-464c-afe1-7079d3e4f23c?fbclid=IwAR2nfMLHROVIoMV4VjMlYtp_6KIyKBrIHTV9hpEYebnJc6QNpxEB2WOyS7Q">as this report in the Financial Times</a> explains,
</p>
<blockquote>
<p>
On Tuesday, Aluminium Dunkerque, Europe’s largest primary smelter for the metal, said it would curtail production by 22 per cent because of high electricity prices. Outokumpu, the largest producer of stainless steel in Europe, also announced that it would delay the restart of one of its ferrochrome furnaces following maintenance. Ferrochrome is a type of alloy.
</p>
<p>
Aluminium, also known as “solid electricity”, is coming under a particularly acute threat because those smelters are extremely energy intensive, cannot easily adjust production volumes and are difficult to restart once halted.
</p>
<p>
Nick Keramidas, European and regulatory affairs director of Mytilineos, a Greek industrial conglomerate that produces aluminium, said the electricity, at current market prices, needed to produce a tonne of aluminium would cost about €10,000 but it would sell for less than €2,500. His company has long-term power purchasing contracts in place, he said, but the whole industry would struggle when contracts expire.
</p>
<p>
As a result of the current market situation, Eurometaux said that more smelters will shut at the start of 2023 once their hedging for this year runs out unless the EU makes urgent, far-reaching interventions in the power market.
</p>
<p>
Ami Shivkar, principal analyst of aluminium markets at Wood Mackenzie, a consultancy, said a further 600,000 tonnes of aluminium production was at risk of temporary closure in Europe in the next few months.
</p>
<p>
“To restart a smelter you need a humongous amount of capital,” she said in a warning that temporary closures can turn into permanent ones.
</p>
</blockquote>
<p>
<span id="fig144">Also, on 6 September, 2022, an alliance of industry associations, including Fertilizers Europe; CEMBUREAU, the European Cement Association; Glass Alliance Europe; Euromines; EULA, the European Lime Association; EXCA, the European Extended Clay Association; Euroalliages, the Association of European Ferro-Alloy Producers; CEFIC, the European Chemical Industry Council; CEPI, the Confederation of European Paper Industries; EUROFER, the European Steel Association; Eurometaux, the European Non-Ferrous Metals Association; and Cerame-Unie, the European Ceramic Industry Association, wrote a joint letter to EU President Ursula von der Leyen</span> (see image below), in which, they said,
</p>
<blockquote>
<p>
With the EU gas peaking at 334 €/MWh TTF spot prices two weeks ago, which is 15 times its pre-crisis level, 10 times more than the US prices and well above the prices in Asia, it is clear that the relation with a normal market is lost. Beyond the current impact on citizens through inflation, destructive consequences on gas and electricity industrial users are inevitable.
</p>
<p>
The last weeks saw a great number of industrial plants shutting their doors or reducing their production in Europe and more are expected in the forthcoming weeks. These massive plants curtailments will increase Europe’s dependency on third markets for strategic supply chains and will drastically increase the global carbon emissions.
</p>
<p>
For many energy intensive industries there is currently no business case to continue production in Europe nor visibility and certainty for investments and further developments. The effects of those closures are also starting to have a severe impact on our value chains endangering European industrial base and the availability of essential products more broadly.
</p>
</blockquote>
<p>
The letter goes on to plead for control of gas and electricity prices in order to help industry survive.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0TxtdsqS6AdrDTlaoDVSW0aHTFWP1hEOU2MS4eXP1uQ8pb6xBxrTDZQeG5hnIi_R5mACMtPIVvqbdw3FmC838LBI1cx4UvdzXZN0zTayLVsSEvti-huBHBYhI98eajBaawNu51gGsS4XufLVPq4EmSp5xJ7tEiMstHCsiyAER2hnjoY9ceA6s60zUGA/s1424/fig141_UrsulaLetter_06Sept2022.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1424" data-original-width="1120" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0TxtdsqS6AdrDTlaoDVSW0aHTFWP1hEOU2MS4eXP1uQ8pb6xBxrTDZQeG5hnIi_R5mACMtPIVvqbdw3FmC838LBI1cx4UvdzXZN0zTayLVsSEvti-huBHBYhI98eajBaawNu51gGsS4XufLVPq4EmSp5xJ7tEiMstHCsiyAER2hnjoY9ceA6s60zUGA/w315-h400/fig141_UrsulaLetter_06Sept2022.png" width="315" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 144. Joint Letter from European Industry Associations to EU President Ursula Von Der Leyen, 6 September 2022</td></tr></tbody></table>
<p>
But there are some important issues to understand here.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC5b">
A Crisis Long Overdue
</h3>
</header>
<div>
<p>
<strong><em>The most important one is that Europe was already well into economic crisis much before the war began. This crisis did not begin in February 2022.</em></strong> We have to go back two years, to the start of the Covid-19 pandemic. Because of lockdowns and closures of complete economies, demand nosedived. <a href="https://www.forbes.com/sites/thebakersinstitute/2020/11/10/why-have-us-natural-gas-prices-increased-post-covid/?sh=6c4f53113958">Because of this, oil and gas companies closed down wells rather than run them unprofitably and extract oil with no place to send them to or store them.</a> Gas prices hit rock bottom around June 2020 and then, in response to well closures, started stabilizing. <span id="fig145">But prices remained low until the following year, when demand started picking up in February 2021, as can be seen from the graph below.</span> It is hard to pinpoint a time when the crisis “began,” so to speak, but gas prices started rising steadily in 2021, from about €15 per MWh on February 24, 2021 (exactly one year before the Ukraine war began), reaching a peak of about €115 per MWh on October 6, 2021 (That’s a rise of a factor of 7.7 in just 7.5 months.) Prices went down to about €60 per MWh by November 1, before rising again to €180 per MWh on December 21, 2021. Things cooled off again, so that, just before the war began, prices had gone down to about €75 per MWh. So, for the entire year before the war in Ukraine began, gas prices had been at least 4-5 times higher, and had been as high as 12 times the historic prices of gas, say two years prior. This price volatility had already caused contingency funds in Europe’s companies to dry up, so that by the time the war in Ukraine broke out, European industry was already standing on its last legs. Since then, Western sanctions on Russia have ensured that spot prices of natural gas have skyrocketed and, even when going down in response to reducing demand, remain quite high. In spite of European demand dropping by 25% on average since the start of the conflict, European gas prices today are at around €115 per MWh. After two years of high gas prices, and after losing guaranteed, low-price, contracted gas from Russia, European industry can no longer afford these energy costs. The spot market was never supposed to provide for the bulk of industry’s gas needs. It was there to absorb sudden spikes in demand. Yet, today, Europe’s industry is being forced to rely on the spot market for all its needs.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh90kBXfp2mccSHxdSWnEV0W9kqL3NCAoKLDMPe0qgc0yNR7YPZGGduwzujdKwEw1G2YMLT2w_CKrX0RMJSqagwuGGPQzVs1cDN_hquDz1oUZe_Q4u4LtMrXe8gJS2-2H0OPqtNn6_-EWaI27uSq_brv7p9eZBhJaGqXrQJWrxjBGyaBXOuvwYS8khFCA/s954/fig142_TTFGasPrices_Feb22_2021_Nov20_2022.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="579" data-original-width="954" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh90kBXfp2mccSHxdSWnEV0W9kqL3NCAoKLDMPe0qgc0yNR7YPZGGduwzujdKwEw1G2YMLT2w_CKrX0RMJSqagwuGGPQzVs1cDN_hquDz1oUZe_Q4u4LtMrXe8gJS2-2H0OPqtNn6_-EWaI27uSq_brv7p9eZBhJaGqXrQJWrxjBGyaBXOuvwYS8khFCA/w400-h243/fig142_TTFGasPrices_Feb22_2021_Nov20_2022.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 145. Start of the Gas Price Crisis in February 2021 Due to Post-Covid Rise in Demand</td></tr></tbody></table>
<p style="font-style: italic; font-weight: bold;">
The second important thing to note from the 2021 gas crisis is that the price of gas hit some serious pain points, such as €180 per MWh — prices which would certainly have made national governments ask oil and gas producers to increase production and supply of natural gas. And yet, oil and gas companies were not able to increase production significantly to bring the price of gas back to pre-pandemic levels. This tells us that the supply of natural gas is fairly inelastic. And that means that today, too, when Europe has lost all access to Russian natural gas because of their own decisions — for many countries, losing between 40% - 100% of their total gas supply as a result — their ability to make up for this loss by increased production from gas producers is extremely limited. This means that there is no relief in sight for Europe’s beleaguered industry anytime soon.
</p>
<p>
Despite all the negative news for Europe, one factor has mitigated its problems. This has been China’s economic slowdown this year because of Covid. China is committed to a policy of “Zero Covid” — that is, they will not accept a single Covid case, even if it means completely shutting down business. Because of this, the demand for oil and gas from China has actually dropped massively. As a result, even though gas prices spiked when Russia said that it was stopping gas supply to Europe, it has been dropping ever since.
</p>
<p>
<a href="https://www.barchart.com/futures/quotes/TG*1"><span id="fig146">The chart below shows that gas prices, which were € 80/MWh before the war, rose to a maximum of € 350/MWh at the peak of the gas crisis, but strangely have been dropping steadily since Russia’s announcement that it would not supply any more gas to Europe.</span></a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibBtRzoDxnAOWXP821q1o_RXCIjfe8_ixXiYq371mBBlBS7rMYUa-XzWqSyQO5KGec8iRQSdAPsI8dqEj1Q_JCQs6mFaSoe2MnIPoRX3V5njDo_ZtkspOYV_J9vOEtnqHTFLiO_VtP7uboOxP8Kh2F08zzzYtO5RvkpY-6ZVm0jzBxi7ReKt2jsocc_Q/s952/fig143_TTFGasPrices_Feb24_Nov20.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="576" data-original-width="952" height="243" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibBtRzoDxnAOWXP821q1o_RXCIjfe8_ixXiYq371mBBlBS7rMYUa-XzWqSyQO5KGec8iRQSdAPsI8dqEj1Q_JCQs6mFaSoe2MnIPoRX3V5njDo_ZtkspOYV_J9vOEtnqHTFLiO_VtP7uboOxP8Kh2F08zzzYtO5RvkpY-6ZVm0jzBxi7ReKt2jsocc_Q/w400-h243/fig143_TTFGasPrices_Feb24_Nov20.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 146. Drop in EU Gas Prices Since the September 2022 Peak After the Rise Due to the War</td></tr></tbody></table>
<p>
There are two main reasons for the dropping price of gas. One is, as just mentioned, that demand from China has dropped drastically. If and when the Chinese economy picks up, this picture will change.
</p>
<p>
Keep in mind that these are spot gas prices. Long-term contract rates are usually significantly lower (explained below) than these prices. There are people in Europe and the US who are rejoicing that the spot gas prices in Europe have come down significantly since the highs of late September — they are now trading close to €130 per MWh after going down as low as €95 per MWh.
</p>
<p>
But this is no cause for celebration. <span style="font-style: italic; font-weight: bold;">The fact is that before the war began, and even during the war, Europe was never paying the astronomical spot rates that were appearing on the TTF exchange. That is because the gas flowing through Nord Stream was being paid for by Europe at a contracted long-term rate. In fact, the gas price in Europe has only shot up in the last two years. For years, the price of gas per MWh in Europe was hovering around 15 Euros.</span> During the pandemic, because of slowed demand, the price dropped precipitously, but in June 2020, the spot price started picking up in response to increased demand. But the price paid by Germany to Russia remained the same. That is the advantage of a long-term contract — you can lock in a low rate and protect yourself from volatility. <span style="font-style: italic; font-weight: bold;">The problem for Europe today is that there is no contract with Russia, and so Europe has to buy spot gas at the market. So Europe is paying €120 per MWh for gas that they were earlier getting at €15 per MWh as per the contract. This is why companies across Europe are going bankrupt.</span> Their financial models cannot handle such a high cost of fuel.
</p>
<p style="font-style: italic; font-weight: bold;">
Even this eightfold cost increase is so low only because of the demand slowdown in China. If the Chinese economy were to pick up, gas costs in Europe would go up twenty-fold relative to their earlier long-term contract rates.
</p>
<p>
Despite this reality, the fact that demand is low in China is temporary relief to Europe. The other factor that has reduced the pain of high gas prices in Europe is that <a href="https://www.bruegel.org/dataset/european-natural-gas-demand-tracker#:~:text=So%20far%20in%202022%2C%20we,August%202022%20was%2023%25%20down"><span id="fig147">demand for energy in Europe has gone down because of industry shutdowns, as can be seen from the figures below</span></a>. <span style="font-style: italic; font-weight: bold;"> While there has been an overall decrease in demand for natural gas between January and October, <span id="fig148">the drop in demand in October has been particularly precipitous.</span> This indicates the rapid de-industrialization of Europe.</span>
</p><p></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgl-UXJtP52hV8AwrajsXIozjYQ1NcfaI8M5OnS_53uHBLUxIRJOtC7dUxJ5Z0NfX6F1dSfghmECC8SsjCCQ0sQEYQC3Vqv9aCsCFoaNwDFuOTu0f-Wg8dVd_1dZo_MBNldvDiplgXaNn6bxbP0Hx6iKP7D5CKTup2aySb1vSGvvAI9ssdsl0Wv5XW09A/s1344/fig144_DropEuroDemand1.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1344" data-original-width="1161" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgl-UXJtP52hV8AwrajsXIozjYQ1NcfaI8M5OnS_53uHBLUxIRJOtC7dUxJ5Z0NfX6F1dSfghmECC8SsjCCQ0sQEYQC3Vqv9aCsCFoaNwDFuOTu0f-Wg8dVd_1dZo_MBNldvDiplgXaNn6bxbP0Hx6iKP7D5CKTup2aySb1vSGvvAI9ssdsl0Wv5XW09A/w345-h400/fig144_DropEuroDemand1.png" width="345" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 147. Drop in EU Gas Demand, January to October 2022</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieUFvQ3xgerA7wkUgwar7hD9PdZiRu79eb8rmCr063KOmQUik2_7vzW9AH7ksjLHJuIaJ8FH0BFJl66PavQlYlzJegexz3Bgq_IDsquOupsQdA0B_eqTkEE-6KZvcrxMDDiJOfawtseAulYxs6qBKoDPiswH_BEodVBshYSt836riSLtgZWCSrXc4sNw/s1333/fig145_DropEuroDemand2.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1333" data-original-width="1150" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEieUFvQ3xgerA7wkUgwar7hD9PdZiRu79eb8rmCr063KOmQUik2_7vzW9AH7ksjLHJuIaJ8FH0BFJl66PavQlYlzJegexz3Bgq_IDsquOupsQdA0B_eqTkEE-6KZvcrxMDDiJOfawtseAulYxs6qBKoDPiswH_BEodVBshYSt836riSLtgZWCSrXc4sNw/w345-h400/fig145_DropEuroDemand2.png" width="345" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 148. Drop in EU Gas Demand, October 2022</td></tr></tbody></table><p></p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC5c">
Natural Gas as a Feedstock
</h3>
</header>
<div>
<p>
Natural gas is important not only because it is a source of energy, but because it is a feedstock. One of the most important ways in which natural gas is important to people is that it is used to produce ammonia, which is then converted into nitrogenous fertilizer, such as ammonium nitrate and di-ammonium phosphate (DAP). The natural gas shortage in Europe has had huge effects on the production of fertilizer in Europe. This, in turn, will seriously affect Europe’s ability to grow food in the coming years.
</p>
<p>
<a href="https://www.aa.com.tr/en/economy/energy-crisis-in-europe-hits-fertilizer-production/2697912#:~:text=Firms%20in%20Europe%20reduce%20ammonia%20production&text=In%20Spain%2C%20Fertiberia%20has%20closed,Azoty%20and%20Anvil%20reduced%20production.">Thus far, 70% of the total capacity of ammonia production in Europe has been shut down. As this report details,</a>
</p>
<blockquote>
<p>
Norwegian chemical company, Yara, operating in Italy, France, Norway, and Germany and German ammonia producer, SKW, as well as German chemicals company, BASF, have reduced ammonia production.
</p>
<p>
In the UK, CF Fertilizers has already scaled down production and began plans to cease production, according to ICIS data.
</p>
<p>
In Spain, Fertiberia has closed some plants and lowered production in others. Yara and OCI have curtailed urea and ammonium production in the Netherlands, while Yara and BASF in Belgium have also restricted production.
</p>
<p>
In Poland, Grupa Azoty and Anvil reduced production. In Romania, Azomures' activity slowed. The Duslo company in Slovakia stopped production while Nitrogenmuvek suspended production in Hungary.
</p>
<p>
Agropolychim and Neochim companies closed in Bulgaria. In Croatia, Petrokemija's urea and ammonia production facilities closed. In Lithuania, Achema has suspended production while Lifosa has temporarily deferred production.
</p>
</blockquote>
<p>
<a href="https://www.icis.com/explore/resources/news/2022/10/04/10811649/epca-22-european-shut-ammonia-production-unlikely-to-return-analyst/#:~:text=BERLIN%20(ICIS)–The%2070,(BCG)%20said%20on%20Tuesday.">According to a report in the Independent Commodity Intelligent Services (ICIS), this capacity is unlikely to return to Europe.</a> One of the key reasons for this, as the <a href="https://www.ceps.eu/wp-content/uploads/2014/01/Ammonia.pdf">Centre for European Policy Studies (CEPS) explained in its 2014 report on ammonia,</a> is that <span id="fig149">the cost of natural gas is, by far, the biggest factor in the cost of ammonia, as seen in the figure below.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUqGDuQ-DrD8zhJrK5aENAxQ84d4E0TVb6o5bOSTq0yxEqMrYdYvMtQXuO01DgLtUxQ0sEKUBeXrROsgNElj40If4NYghdPS5vuI9yi6yPJUfdW1zSv1CL7OvYGYWCzzYd8THPQwq8d_gQD-tU2O2HbI9onByVTrNIquwfN0et7JrQiDv_LZfqJmRX2Q/s960/fig146_AmmoniaProductionCosts.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="960" data-original-width="731" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiUqGDuQ-DrD8zhJrK5aENAxQ84d4E0TVb6o5bOSTq0yxEqMrYdYvMtQXuO01DgLtUxQ0sEKUBeXrROsgNElj40If4NYghdPS5vuI9yi6yPJUfdW1zSv1CL7OvYGYWCzzYd8THPQwq8d_gQD-tU2O2HbI9onByVTrNIquwfN0et7JrQiDv_LZfqJmRX2Q/w305-h400/fig146_AmmoniaProductionCosts.png" width="305" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 149. Components of Ammonia Cost in Different Geographies</td></tr></tbody></table>
<p>
Since 2014, the cost of natural gas has become much lower in the US because of the expansion of shale gas production in the US. So this same graph will look much worse for European ammonia production today. Thus, current European ammonia (and hence fertilizer) production was already being done with some serious headwinds. With cheap American gas, and with Russian gas vanishing from Europe, fertilizer production might just be completely doomed.
</p>
<p>
What is making things worse for fertilizer production in Europe is that the EU is not self-sufficient in ammonia production for fertilizer. <span id="fig150">The chart below (from the ICIS report of 2014, but things have not changed dramatically today) shows the partitioning of ammonia production in the world.</span>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBfQ9fxxkwraoqBp0u_RAJOz5ZxfzUzO8HTVTqZsDpEM9sOZL14bvuo4hRY2DPgfNwI7ZtpblNimOsVTmd4hMrMhJwZdOJwwCwHC90l4Le1FlYXFBuC8xst3NUVc4WFAF3_UUQl68Vftwx-VaLm4Dl1a2kfGL0N5JRTv_pRwwjN2iNfvSNpgBk3cQLuA/s1667/fig147_TopTenAmmoniaProducers.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1353" data-original-width="1667" height="325" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBfQ9fxxkwraoqBp0u_RAJOz5ZxfzUzO8HTVTqZsDpEM9sOZL14bvuo4hRY2DPgfNwI7ZtpblNimOsVTmd4hMrMhJwZdOJwwCwHC90l4Le1FlYXFBuC8xst3NUVc4WFAF3_UUQl68Vftwx-VaLm4Dl1a2kfGL0N5JRTv_pRwwjN2iNfvSNpgBk3cQLuA/w400-h325/fig147_TopTenAmmoniaProducers.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 150. Top Ten Global Ammonia Producers, 2012</td></tr></tbody></table>
<p>
If natural gas is getting too expensive for Europe to make ammonia in the EU, would it be possible for it to import it from other countries?
</p>
<p>
China, Russia, and Ukraine are leading world exporters of fertilizer — including ammonia, as seen in the figure above. However, in 2021, China imposed a blanket ban on all exports of fertilizer in order to secure its own domestic supplies. As a result, a huge piece of the world supply pie vanished. India’s production does not really matter, as most of it is used for internal consumption. That left Europe with only a few major suppliers — Russia, the US, Ukraine, Trinidad and Tobago, Indonesia, and Canada. But Indonesian fertilizer is also largely for domestic use. But after the war in Ukraine began in 2022, both Russian and Ukrainian supplies went off the radar. Ukraine was too busy fighting a war, and Russian supplies were blocked from being sent to Europe because of sanctions. <a href="https://www.spglobal.com/ratings/en/research/articles/220912-the-russia-ukraine-war-is-reshaping-the-fertilizer-industry-12484018">Russia used to ship most of its ammonia to Europe via Odessa in Ukraine and via Estonia and Latvia in the Baltic sea, and both routes are now blocked because of European sanctions.</a> So Europe is not getting ammonia from Russia because of the sanctions it has imposed on Russia. The fertilizers themselves are not subject to sanctions, but transport of Russian cargo through these regions is not allowed. So, in an attempt to punish Russia, Europe (yet again) is shooting itself in the foot.
</p>
<p>
So, now more than 58% of the global ammonia production is off-limits to Europe. <span id="fig151">It is elementary to guess that this will lead to a spike in ammonia prices and, hence, fertilizer prices in Europe</span>, and <a href="https://www.spglobal.com/ratings/en/research/articles/220912-the-russia-ukraine-war-is-reshaping-the-fertilizer-industry-12484018">this is exactly what has happened, as can be seen in the chart below.</a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgidmZJZ_iPwrDmgaGh1SpL_nhjhmcxn8DLUjtqeyJs06pmSIowheWrk3ffsrgwHnzUhVWeji2_gOiAxyHadXmNezd40QHYwrd2PLlMJsUKRteZ3iuzMwG_-9tJIFaObUlymYVjrG9ZCTTp1T0PeCmTka1ZOmqMMAeGMmBLidYVGvSFI69ee0P2M5KPuQ/s675/fig148_FertilizerPrices.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="400" data-original-width="675" height="238" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgidmZJZ_iPwrDmgaGh1SpL_nhjhmcxn8DLUjtqeyJs06pmSIowheWrk3ffsrgwHnzUhVWeji2_gOiAxyHadXmNezd40QHYwrd2PLlMJsUKRteZ3iuzMwG_-9tJIFaObUlymYVjrG9ZCTTp1T0PeCmTka1ZOmqMMAeGMmBLidYVGvSFI69ee0P2M5KPuQ/w400-h238/fig148_FertilizerPrices.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 151. Rise in Fertilizer Prices Since February 2021</td></tr></tbody></table>
<p>
But, as in the case of natural gas prices, it is important to note that the spike in fertilizer prices did not start on February 24, 2022, when war broke out in Ukraine. It had been increasing since February 2021. For example, as can be seen from the above figure, the cost of urea went up from $200/metric ton to about $600 just before the onset of war, and then spiked to $800, before coming back down; the price of DAP went up from about $300/metric ton in November 2020 to about $800/metric ton before the onset of the war before spiking to $1100 before coming back down. So what the war has done is make an already bad situation worse.
</p>
<p>
Of course, with fertilizers, it is not just ammonia that is the problem, because Europe does not produce that much fertilizer anyway. Most of it is imported, because the leading producers of fertilizer are outside Europe. <a href="https://www.spglobal.com/ratings/en/research/articles/220912-the-russia-ukraine-war-is-reshaping-the-fertilizer-industry-12484018"><span id="fig152">Russia, Belarus, and Ukraine are leading exporters of all three types of fertilizers (N, P, and K), as the chart below shows.</span></a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOVPiNlV1CViNB-9ufLYGBESs5RWYJaUf44fzwH-BY6SCUsl7jWYYuAGXOFg3Yib9N15kNKshNeUhQI-Rw9joFwitP_x0hscTylixXNamHrC_iT60GlG15D0iSTFOXQIe17nFYKYgSbxRYDrs9JfdbhrcpiKY1NxhJqpiwh29ys7RW3pWHk8lMltsHoA/s675/fig149_WorldFertilizerShare.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="390" data-original-width="675" height="231" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgOVPiNlV1CViNB-9ufLYGBESs5RWYJaUf44fzwH-BY6SCUsl7jWYYuAGXOFg3Yib9N15kNKshNeUhQI-Rw9joFwitP_x0hscTylixXNamHrC_iT60GlG15D0iSTFOXQIe17nFYKYgSbxRYDrs9JfdbhrcpiKY1NxhJqpiwh29ys7RW3pWHk8lMltsHoA/w400-h231/fig149_WorldFertilizerShare.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 152. Market Share of Russia, Ukraine, and Belarus in Major Fertilizers</td></tr></tbody></table><p>With no viable route to fertilizer supplies from these three countries because of war and sanctions, Europe (as well as the rest of the world) is staring at a major fertilizer crunch. This is yet another indication of how important Russia is to the world, and why we must not rely too much on the words of an ignorant and jingoistic American Senator in judging Russia’s importance to the world economy.</p>
<p>
A scarcity of fertilizers will lead to a huge food crisis in the world and in Europe as well. This may not be reflected immediately because of stockpiles of fertilizers that every country has for the purposes of food security, but will be obvious in the next sowing cycle when these reserves run out.
</p>
<p>
But there are other ripple effects of the fertilizer crisis. One of those is a carbon dioxide crisis. To understand this, we must understand how ammonia is made. Natural gas is mostly composed of a gas called methane, with the chemical formula CH4. Natural gas is reacted with steam and air in a process called steam reforming, which converts methane (CH4), oxygen (O2) from the air, and water from steam (H2O) to carbon dioxide (CO2), carbon monoxide (CO), and hydrogen (H2). In addition, there is the nitrogen (N2) from the air. After separation and conversion of the carbon monoxide to carbon dioxide, the carbon dioxide is separated. The nitrogen from the air and the hydrogen produced in steam reforming are then separated and reacted together in a process called the Haber process for ammonia production. So carbon dioxide is a major byproduct of the ammonia production process. This CO2 is then used to create fizzy drinks such as Coca Cola, as well as fizzy beers. Now, most beer and soft drink companies are suffering from a shortage of carbon dioxide. <a href="https://www.politico.eu/article/alarm-ringing-pub-farmer-fertilizer-plant-threaten-shutdown/">This is putting the future of the entire European beer industry at risk.</a>
</p>
<p>
There are other problems for the food industry arising from the shortage of carbon dioxide that are even more serious than flat beer. One is the use of carbon dioxide as a preservative. Potato chips and meats are often packed in a carbon dioxide atmosphere so that the food does not spoil in the presence of oxygen. Carbon dioxide is also used in its solid form, also known as dry ice, to keep food refrigerated. It is also used to decaffeinate coffee in a process called <a href="https://en.wikipedia.org/wiki/Supercritical_carbon_dioxide">supercritical extraction, in which carbon dioxide, because of its unique properties, is transformed into a state known as a supercritical state, in which it acts as a solvent and can extract the caffeine out of coffee seeds.</a> <a href="https://www.dw.com/en/flat-beer-could-be-another-byproduct-of-the-energy-crisis/a-63731630">Carbon dioxide is also used to humanely kill cattle by asphyxiating them in slaughterhouses.</a>
</p>
<p>
As this example shows, the world is very interconnected, and the lack of one key commodity, viz., natural gas, has consequences that can break a whole range of downstream industries.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC5d">
The Impact of the Oil Price Cap
</h3>
</header>
<div>
<p>
So far, we have only talked about the effect of the disappearance of natural gas from Europe’s landscape. But there is another looming blow that Europe is about to inflict on itself. On October 6, 2022, the EU voted to cap the price at which Russia could sell oil to any country. The actual price is yet to be determined and will be announced on December 5, 2022, at which point the oil price cap will take effect. This cap will be enforced through insurance agents. Most shipping worldwide is insured by Lloyd’s of London. The oil price mechanism works by requiring Lloyd’s to only insure oil tankers if they can give a written, verifiable undertaking that the oil they carry from Russia will be sold at a certain maximum price. Russia has reacted to the announcement of the oil price cap by the EU by saying that it will simply not sell oil to any country that supports the oil price cap. The question, then, is, who is bluffing here, and who will blink. The West thinks, wrongly, that Russia will be crippled if its oil sales are prevented, and so it will tamely acquiesce to an oil price cap. But, as has already been shown, the revenue that Russia gets from Europe for its oil sales (including both crude and refined oil) is of the order of $65 billion, or 20% of its total export revenue. Given that Russia’s total exports are of the order of $330 billion, based on 2020 data, and based on the fact that it is a $1.8 trillion economy this is not a debilitating blow, although it is a loss of revenue. So Russia can let this revenue go and carry out its threat of not selling oil and oil derivatives to Europe. But what Europe will lose if Russia does this is far more substantial. To recapitulate some of the figures described earlier, Finland, the Netherlands, Slovakia, and Lithuania are completely dependent on Russian oil products (crude and refined); Greece is dependent up to 96%; Poland, 82%; Czechia and Hungary, 63% each; Germany, 39%; Sweden, 38%; Denmark, 33%; the UK, 22%; Italy, 20%; and France, 18%. Other countries will also lose more than what appears on paper, because currently some countries import far more than they need: Finland imports 167% of its national requirement of crude and refined oil; Lithuania, 239%; the Netherlands, 114%; and Slovakia, 177%. Many of these excess volumes are likely being re-exported to neighboring countries. To say that such catastrophic losses of crude oil and refined oil products will completely cripple these economies is to massively understate the scale of the problem. <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy_statistics_-_an_overview#Gross_available_energy"><span id="fig153">The graph below shows the final distribution of the total energy in Europe.</span></a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tyTNYTVjBd8rNYGAElrAuYIvhGFqF0mhfiMUpfhme_XqhrjvTz825Vf7xv408QK2CKSJeu5uUXInq0s1K8N0UTZh7ehWjTjZjq27y8gjH_zVtjqiIYTxuNYJsxFWzcfvbCOVMWAdx4soveC_UXCesZE_XJhF_pKNqOgP-YM5RSsK6czRtQzntTcRJg/s1493/fig150_FinalEnergyConsumptionEU.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1386" data-original-width="1493" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6tyTNYTVjBd8rNYGAElrAuYIvhGFqF0mhfiMUpfhme_XqhrjvTz825Vf7xv408QK2CKSJeu5uUXInq0s1K8N0UTZh7ehWjTjZjq27y8gjH_zVtjqiIYTxuNYJsxFWzcfvbCOVMWAdx4soveC_UXCesZE_XJhF_pKNqOgP-YM5RSsK6czRtQzntTcRJg/w400-h371/fig150_FinalEnergyConsumptionEU.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 153. Final Energy Consumption by Sector in the EU, 2020</td></tr></tbody></table>
<p>
Roughly a third of the energy goes into household heating, a third into transportation (cars, the metro, Eurorail, internal railways in European countries, tramways, buses, planes), and a third into industry. When winter arrives, you cannot let people freeze, so the energy for home heating will have to continue as before, so both transportation and industry will suffer in shares more than proportional to their dependence on Russia. For instance, since Poland depends 82% on Russian oil and oil products, most of their cars will be off the road, and most of their industry will have to shut down. Most European cities will run out of petrol and diesel for their cars and trucks. Not having petrol (gasoline) for cars may just be an inconvenience; but not having fuel for trucks means that goods cannot be transported to supermarkets. Goods cannot be transported from ports inland to factories which need them, via road or rail, if there is a shortage of diesel and gasoline. People will find it difficult even to take public transport to commute to other cities, because such services will have to be severely rationed in the absence of oil from Russia. One thing needs clarification here. The price cap that is being enforced on December 5 will only affect crude oil, not derivatives such as gasoline and diesel. So, to the extent that Europe is importing crude and refining it itself, it will be affected by the oil price cap because Russian crude will vanish from Europe. But Russian petrol, diesel, kerosene, fuel oil, and aviation fuel will still be imported into Europe until February 5, 2023, at which time a ban on all oil related product imports into Europe will go into effect. Of the $65 billion of oil and oil derivatives that was imported into Europe in 2020, 60% was crude oil and 40% was refined crude. That means the financial impact on Russia of the price cap of December 5, 2022, will be the loss of $39 billion (60% of $65 billion), which is just 11.8% of its total export revenues. The December 5 oil price cap will apply to crude oil, not to oil derivatives; however, Russia might, in response, decide to stop deliveries of both crude and refined oil to Europe. We simply do not know how they will respond at this time, and so must assume the worst.
</p>
<p>
But it is the industry piece that is the most interesting, because its effect on the economies of European nations is not transitory. As in the case of natural gas, crude oil, too, is an important feedstock. The entire plastics industry runs on crude oil. <a href="https://cen.acs.org/business/finance/CENs-Global-Top-50-2022/100/i26">According to a 2022 article in Chemical & Engineering News,</a> the world’s most valuable chemical company was the German company BASF, with $93 billion sales in 2021. Sixth on the list is British company INEOS, at $39.9 billion. Eighth on the list is Dutch company Lyondellbassell, at $39 billion. At #21 is German company Covestro, with $18.8 billion. At #23 is German company Evonik, with $17.7 billion. At #24 is British company Shell, with 2021 sales of $17.0 billion. At #35 is Belgian company Solvay with sales of $13.5 billion. At #37 is French company Arkema, with sales of $11.3 billion. At #42 is British company Johnson Matthey, with sales of $10.4 billion. At #45 is Austrian company Borealis, with sales of $10.2 billion. At #49 is German company Lanxess, with sales of $8.9 billiion. There are other European companies in the list, but what is notable about the companies mentioned above is that all of them are petrochemical companies. They rely entirely on crude oil as a feedstock. The list above should give an idea of the value that depends on crude oil. <a href="https://plasticseurope.org/wp-content/uploads/2021/09/Plastics_the_facts-WEB-2020_versionJun21_final.pdf">The total 2019 sales of plastics (polymers) in Europe amounted to more than $350 billion.</a> In 2019, Europe produced 57.9 million tonnes of plastics.
</p>
<p>
The total demand for polymers in Europe in 2019 was 50.7 million tonnes. Of that, Germany constituted 24.2%, while Italy was 13.8%, France was 9.5%, Spain was 7.8%, the UK was 7.1%, and Poland was 7%. Plastics affect every aspect of life, from containers to spectacle frames to clothes and jackets to automotive parts to electronics packaging to adhesives to paints and coatings to films to appliances to toys to bicycle tires to rubber items to wire sheaths and food packaging.
</p>
<p>
Plastics would be impossible without crude oil and its derivatives, and one can directly treat a drop in the supply of crude oil to a country as the drop in polymer production in that country. So, for instance, since BASF had sales of $93 billion in 2021, we can say that, since Russia contributes to 39% of Germany’s annual crude oil requirement, BASF’s sales will go down by $36 billion. That’s the kind of hit European chemical companies are going to take when they go ahead with that oil price cap on Russia. If you just take the German chemical companies mentioned in the list, the cumulative loss in sales for these companies because of the lack of oil from Russia will be $54 billion, based on 2019 sales figures. If you count all the European polymer manufacturers I have listed above, then the total loss that Europe’s polymer chemical companies are going to suffer because of the decision to impose oil price caps on Russian crude will be $109 billion.
</p>
<p style="font-style: italic; font-weight: bold;">
In short, Russia will suffer a 20% loss of its sales, to the tune of $66 billion. Eleven European chemical companies, combined, will suffer a 39% loss of sales, to the tune of $109 billion.
</p>
<p>
But the pain does not end there, because European citizens will still need these plastic and polymer items for daily use. For example, you need glue for various things or plastic toothbrushes or plastic bottles or bags. If European companies cannot supply those goods for daily use, then Europe must import those from China or the US at very high prices, and the costs will be passed on to the consumers.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC5e">
More than Oil and Gas
</h3>
</header>
<div>
<p>
Most of the attention in the last nine months has focused on the energy piece. But Russia is far more than just oil and gas. Some recognition of this fact finally dawned when an agreement was brokered between Ukraine and Russia by the UN and Turkey, which allowed Ukrainian grain to leave Black Sea ports to supply grain worldwide. This is because Russia and Ukraine are both leading suppliers of wheat. As a result of the territory Russia has conquered in this war so far, some of Ukraine’s agricultural and mineral wealth has fallen into Russian hands. Hence it is worth looking at the resources of both countries. <span id="fig154">Russia is the world's largest producer of wheat, and Ukraine is the fifth (see figure below)</span>.</p><p><span id="fig155">Russia is also the second-largest producer of sunflower oil, after Ukraine.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghN_rQQtPjHTclURG1MeuChI7ChC5UVQO1WQn-O3w0tWNsksX0pGCj5P-7j9B1VmLKfMqR783n_09f-wrjpGJlog9w7tDw9oHZCgVVLNAam_pDCf9FnRD5mjWv3hPZqNem2Q13LqEOZ8D4tQE7T7QMARN5H85NNOw158xsYXsqKecneLMk2Z0hlxg7Zw/s605/fig151_Wheat.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghN_rQQtPjHTclURG1MeuChI7ChC5UVQO1WQn-O3w0tWNsksX0pGCj5P-7j9B1VmLKfMqR783n_09f-wrjpGJlog9w7tDw9oHZCgVVLNAam_pDCf9FnRD5mjWv3hPZqNem2Q13LqEOZ8D4tQE7T7QMARN5H85NNOw158xsYXsqKecneLMk2Z0hlxg7Zw/w400-h225/fig151_Wheat.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 154. Top World Producers of Wheat, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMYn2vwrZsWIz1pPVPxLenLdAzlv27pHkCGrBZ8LcSShZG2Qf9iFWgsFFVg0NsR2Y6c_PBWksrJQQjsqgjS90bW8Rfdip2aLzY06U8Cx0dQxhmU94U0zGfOAdFGGMOf6T7xyGZsiSDo__EISpd1wTUXXC3htl-Z1UHkdaseeGsGcIYTRpWWxlBeCZfyw/s605/fig152_SunflowerOil.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMYn2vwrZsWIz1pPVPxLenLdAzlv27pHkCGrBZ8LcSShZG2Qf9iFWgsFFVg0NsR2Y6c_PBWksrJQQjsqgjS90bW8Rfdip2aLzY06U8Cx0dQxhmU94U0zGfOAdFGGMOf6T7xyGZsiSDo__EISpd1wTUXXC3htl-Z1UHkdaseeGsGcIYTRpWWxlBeCZfyw/w400-h225/fig152_SunflowerOil.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 155. Top World Producers of Sunflower Oil, 2020</td></tr></tbody></table>
<p>
As was discussed in the previous section, Russia is a major producer of fertilizer in the world. Russia ranks <a href="https://www.nationmaster.com/nmx/ranking/potash-fertilizer-production">second in the world in potash fertilizer production, fourth in the world in phosphate production, and fourth in the world in nitrogen fertilizer production.</a> Overall, Russia is the world’s largest exporter of fertilizer, <a href="https://farmdocdaily.illinois.edu/2022/03/war-in-ukraine-and-its-effect-on-fertilizer-exports-to-brazil-and-the-us.html">accounting for 23% of ammonia exports, 14% of urea exports, 10% of processed phosphate exports, and 21% of potash exports.</a>
</p>
<p>
<a href="https://en.wikipedia.org/wiki/List_of_countries_by_titanium_production">Russia and Ukraine combined produce more than 24% of the world’s titanium.</a> <a href="https://investingnews.com/daily/resource-investing/battery-metals-investing/manganese-investing/manganese-reserves/">Ukraine has 140 million tons of manganese reserves, second only to South Africa at 200 million tons.</a> <a href="https://investingnews.com/daily/resource-investing/battery-metals-investing/graphite-investing/top-graphite-producing-countries/">Russia and Ukraine are the 6th and 7th largest producers of graphite in the world.</a> <a href="https://world-nuclear.org/information-library/nuclear-fuel-cycle/mining-of-uranium/world-uranium-mining-production.aspx">Russia is the 6th largest producer of uranium, and Ukraine is the 9th largest producer.</a> <a href="https://en.wikipedia.org/wiki/Neon">Ukraine and Russia produce about 70% of the world’s supply of neon gas, and about 40% of the world’s krypton gas.</a> <a href="https://www.nrcan.gc.ca/our-natural-resources/minerals-mining/minerals-metals-facts/iron-ore-facts/20517">The two countries, combined, produce 6.6% of the world’s iron ore, but have nearly 18% of total known reserves of iron ore.</a> <a href="https://prd-wret.s3-us-west-2.amazonaws.com/assets/palladium/production/atoms/files/mcs2019_all.pdf"><span id="fig156">Russia is also the third-largest producer of gold (9%) in the world</span>, and has the third-largest known reserves of gold in the world (9.8%).</a>
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwf1qk9Oqx9DNZ7dFwKeXvMho8spU0vSDE5V95V7Nre2Mb3T8B7HC7zuVp_TLBt9STVbudlXey5IlfYBvl61ORFcKMR68BF5Hwf5wt_-jx7TKEgLLJ2TX2z8K9tRqmMRH1gGk3vu2bPvvnPJZWpGyMh4akM5STZd1XJGdCiKmioWvMbbz9tAVelj-RGQ/s605/fig152a_Gold.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwf1qk9Oqx9DNZ7dFwKeXvMho8spU0vSDE5V95V7Nre2Mb3T8B7HC7zuVp_TLBt9STVbudlXey5IlfYBvl61ORFcKMR68BF5Hwf5wt_-jx7TKEgLLJ2TX2z8K9tRqmMRH1gGk3vu2bPvvnPJZWpGyMh4akM5STZd1XJGdCiKmioWvMbbz9tAVelj-RGQ/w400-h225/fig152a_Gold.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 156. Top World Producers of Gold, 2021</td></tr></tbody></table>
<p>
The graphs below (data from USGS) give some idea of the dominant presence of Russia in the minerals space. Many of these minerals are not huge in tonnage but are very important. For example, titanium and vanadium are very important in high-strength alloys. Tellurium is extremely important in solar panels. The important thing to realize here is that Putin has several levers he can crank to greatly increase the pain dial on the West; he has shown restraint and not done so in the face of the aggressive sanctions by the West. If Putin were to ban the sale of these minerals to the West, many industries would find the going quite tough. Let us look at some of these minerals.
</p><p>These are production numbers, not export numbers, and so do not directly indicate the importance of Russia and China. For many of these commodities, it was not possible to get export numbers in terms of tonnage. However, especially for Russia, production is directly relatable to export volume, because Russia's population is not very large, and hence cannot absorb large volumes of commodities. This is certainly true of wheat and sunflower oil. But for many other commodities, a large share of production is itself indicative of market control, because these materials are not high-volume commodities. For example, a commodity like germanium or gallium is used in small quantities. There is no way that Russia or China can use that much germanium or gallium for internal consumption; and so, they must export it. Also, ike natural gas for Europe, the value of gallium is way higher than its market price would indicate. It is a vital and essential mineral for semiconductor manufacture. A similar story holds true for rare earths. Most modern electronics, such as mobile phones, are heavily dependent on rare earths.</p><p>For some items, top exporters are listed in terms of export revenues (dollars) on the OEC website. When possible, I have given that information as well. Of course, as expected, the trend in exports does not always follow the trend in production. There are some things that complicate matters. One is the buying and selling of commodities. A particular example is that of precious metals and jewels. The UK is seen as one of the top importers as well as exporters of gold and platinum, even though the UK does not mine either of these metals. The reason for this is the London Bullion market, which buys and sells precious metals. Similarly, India is seen both as a top importer and exporter of diamonds. The reason is that India is one of the world's hubs in diamond processing. Similar things occur in the chemical industry. An example is the import of lower purity silicon to produce higher purity (for semiconductor) silicon. In this case, the same country is listed as both an importer and an exporter of silicon. This becomes clearer when we look at lists of commodities with the purities specified. Similarly, a country which is a majority producer of a metal ore might not be listed as the leading supplier of that metal itself But without the ore, no one else can manufacture the metal.</p><p>The whole exercise can get exceedingly complex. Sometimes raw materials on the OEC website are not listed singly in commerce lists of materials, but in groups. This makes it hard to relate the production of a single mineral as seen on thet USGS datasheet with export numbers from the OEC site. Sometimes, there are various grades of a single mineral, from ore to 99.9999999% purity, and different countries are involved in this value chain. One such example is the case of iron, where we have iron ore, wrought iron, pig iron, sponge iron, steel, carbon steel, stainless steel (which itself involves various other metals, such as manganese and molybdenum). Who is important? The ore miner? The steel producer? The stainless steel producer? The answer is that all of them are important to the global economy. <i><b>If anything, what this exercise shows is that economic sanctions are fundamentally wrongheaded in an interdependent world.</b></i> Still, whenever possible, I have shared export numbers from the OEC website in the discussion below. What I hope the reader takes away from this section is an understanding of how vital both Russia and China are to the world economy, and how many links in the chain they occupy. <i><b>This is why the sanctions idea was stupid right from the start.</b></i></p><p>But still, even without export information, the production numbers in the USGS report are themselves very important in the context of sanctions, because they indicate self-reliance. For instance, if China is the world's largest producer of sulfur, then it is mostly, if not entirely, self-reliant in sulfur. If China is the number one producer of a number of commodities, then embargoing it will not hurt China. A similar story holds for Russia. And, in the context of the "no-limits" partnership between China and Russia, if one of these two countries is self-reliant in a a particular mineral, that means that the other country is, too.</p><p>With that preamble, let us consider several commodities in which Russia is a world-leading producer. Let us first continue with the agriculture piece. <span id="fig157">The OEC data on wheat exports</span> mirrors the USGS data on wheat production that was shown earlier. Russia and Ukraine export 19.5% and 9% of world wheat totals, in the same proportions that they produce wheat.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbevR4ssk6FPLVodeTv8H9xNo2vJHI7j1SWTtRnLesHh1CykwfatLfNqyi7XlxvJsk9Wo2NcR7LhT4cjDzsUctJ6PgdEwKC-KvDzZ4Vcvka19cFNfqtlFgQ9t3uiIBOaMjtwBEd1olzm_oeWG1PXLpgTASENgxsmmpeiYlsvvHsV7rhK4PS70F09JsDg/s1177/WheatExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbevR4ssk6FPLVodeTv8H9xNo2vJHI7j1SWTtRnLesHh1CykwfatLfNqyi7XlxvJsk9Wo2NcR7LhT4cjDzsUctJ6PgdEwKC-KvDzZ4Vcvka19cFNfqtlFgQ9t3uiIBOaMjtwBEd1olzm_oeWG1PXLpgTASENgxsmmpeiYlsvvHsV7rhK4PS70F09JsDg/w400-h359/WheatExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 157. Exports of Wheat by Origin Country, 2020</td></tr></tbody></table><p>It is instructive to see who imports wheat, and who, therefore, is greatly impacted by the absence of 27.5% of world wheat output. <span id="fig158">This can be seen from the distribution of world wheat importers</span>.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUebuCJiZn39CT0Q2n584P_yp0K-HVcr8s6yvV3KcMaT-YwhqokTIEHqT5t6pU1B_c-dGk7tgfzu65wcud2gwa7ELahjpIoX8HgDyN1D6aZYALnzZLbjsF_O4IdKxKo-8nsvJQCQuDNpQEo3wjH4e-poj0m_2gPaW_mOrXZgdRR4Vhi3_BSLerApx9Q/s1177/WheatImports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjRUebuCJiZn39CT0Q2n584P_yp0K-HVcr8s6yvV3KcMaT-YwhqokTIEHqT5t6pU1B_c-dGk7tgfzu65wcud2gwa7ELahjpIoX8HgDyN1D6aZYALnzZLbjsF_O4IdKxKo-8nsvJQCQuDNpQEo3wjH4e-poj0m_2gPaW_mOrXZgdRR4Vhi3_BSLerApx9Q/w400-h359/WheatImports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 158. Importers of Wheat by Destination Country, 2020</td></tr></tbody></table><p>Clearly, wheat has a global impact. We can drill down deeper into this, to understand the countries which are directly impacted by Russian wheat exports. Russian wheat exports account for about $10 Bn out of the global total of $51 Bn, nearly 20%. <span id="fig159">The figure below shows where this wheat goes.</span></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmud2Hf4KLlUgESMaRzeuHDUXfEWxwkU4i-KygUFbncJflYNkEtWPAFNGB9AmeBkTHPrxtHCHNSX5llRF7FPpH23pDlBuE1XkQSXGthmETQo_f4jawhFKGR1_TXQ-TlbfGEvw6bYkxt0p3V8GTDM_lwZvA9id4_txzaD_SQ5g9O8PcY5f4a8jrRgb6qg/s1177/WheatImportsRussia_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmud2Hf4KLlUgESMaRzeuHDUXfEWxwkU4i-KygUFbncJflYNkEtWPAFNGB9AmeBkTHPrxtHCHNSX5llRF7FPpH23pDlBuE1XkQSXGthmETQo_f4jawhFKGR1_TXQ-TlbfGEvw6bYkxt0p3V8GTDM_lwZvA9id4_txzaD_SQ5g9O8PcY5f4a8jrRgb6qg/w400-h359/WheatImportsRussia_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 159. Importers of Russian Wheat, 2020</td></tr></tbody></table><p>From this figure, it is clear how important Russia is to so many countries in Asia and Africa. This goes a long way in explaining why these countries are extremely reluctant to criticize Russia. No amount of threats or exhortations or sanctions from the West is going to change that. <b><i>People need food, and they will find ways to pay for them. If you force them to choose between the dollar and survival, they will abandon the dollar and choose survival.</i></b></p>
<p>Another agricultural example is the previously-cited one of sunflower oil. We had seen the total production of sunflower oil. The data from OEC shows the <span id="fig160">export of both sunflower seeds</span> <span id="fig161">and safflower oil</span>, both of which are vital food commodities in large parts of the world.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6HuJmhR4_pRhwF3pNrEYULmdCbNOXylFKn_GMdhMjXAZPCy3QVwGanyWsCXvo3Gxs4ZMgeJ-cu5VP44cGUJgKDqUzrQMDG-RY8c4wKtxxagUROxpWyVjjkDZj2co8WN7ascBXlcu5xbswGGbRXrk_pzZLCPVFtIbo3VN3ENPVNO4yiHbuaVNthXJnng/s1177/SunflowerSeedsExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6HuJmhR4_pRhwF3pNrEYULmdCbNOXylFKn_GMdhMjXAZPCy3QVwGanyWsCXvo3Gxs4ZMgeJ-cu5VP44cGUJgKDqUzrQMDG-RY8c4wKtxxagUROxpWyVjjkDZj2co8WN7ascBXlcu5xbswGGbRXrk_pzZLCPVFtIbo3VN3ENPVNO4yiHbuaVNthXJnng/w400-h371/SunflowerSeedsExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 160. Exporters of Sunflower Seeds, 2020</td></tr></tbody></table><br /><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIHCJZ38JiclsotkHUuQu7cK4jHH2VleXdWkazRpnmhfjvppMhGCYnHjy2_JtsPbVRUU_P4iP04EVcpTq7WqCNPmL7njjrFzLIyB7HNWlIxTOjrbmFaItJhjquHelBz3Mskxfmn7kPww3waeL5mKDYubXb9SzimoF-v7nzQgTkMPtXWInElcJ44Yl42w/s1177/SunflowerSeeds_SafflowerOil_Exporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIHCJZ38JiclsotkHUuQu7cK4jHH2VleXdWkazRpnmhfjvppMhGCYnHjy2_JtsPbVRUU_P4iP04EVcpTq7WqCNPmL7njjrFzLIyB7HNWlIxTOjrbmFaItJhjquHelBz3Mskxfmn7kPww3waeL5mKDYubXb9SzimoF-v7nzQgTkMPtXWInElcJ44Yl42w/w400-h398/SunflowerSeeds_SafflowerOil_Exporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 161. Exporters of Sunflower seed and safflower oil, crude, 2020</td></tr></tbody></table><p>The second image from OEC corresponds closely to the earlier-shared graphic on production of sunflower oil by country. The same countries in that chart are the chief exporters. One of the things this example highlights is how a product can be represented in multiple categories on the OEC site. Sunflower oil can be manifested as oil seeds or as crude sunflower oil, so it is important to track both. Also, places where sunflower is grown are also places where safflower is grown, and both are important sources of cooking oil.</p><p>If we just take <span id="fig162">the Russian exports of sunflower and safflower, shown above, and see who imports them</span>, we again get an idea of Russia's importance to the developing world. In particular, shortages of sunflower and safflower oil are felt acutely in India. This is another reason why India is not keen on imposing any kind of sanction on Russia.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKwAKubB9CR7Trb84VEkjcK_mbnXYy6WzyWr245s3qo_cDiNmjv8JIc6jhqZMBq1cyM_wU90TR_UDBc8myiL9ujOAehZXOhy7r37suZmgAA7ClkrK66cW7VE9k_nXaMgaANVaboY0d4CgJWHunsqy74XC5MH_lCmUtUnf_IYg74tyUV75nlAwMY7309w/s1177/SunflowerSeedsSafflowerOil_Importers_Russia_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKwAKubB9CR7Trb84VEkjcK_mbnXYy6WzyWr245s3qo_cDiNmjv8JIc6jhqZMBq1cyM_wU90TR_UDBc8myiL9ujOAehZXOhy7r37suZmgAA7ClkrK66cW7VE9k_nXaMgaANVaboY0d4CgJWHunsqy74XC5MH_lCmUtUnf_IYg74tyUV75nlAwMY7309w/w400-h398/SunflowerSeedsSafflowerOil_Importers_Russia_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 162. Importers of Sunflower seed and Safflower Oil, crude, 2020</td></tr></tbody></table><p>Continuing with the agriculture theme, let us look at exports of fertilizers. <span id="fig163">The next graph shows the leading exporters of urea</span>, one of the most important nitrogenous fertilizers.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMKbDg0vq81NVpEwD4my0egQnva3UJGR161mq8TO--bdN3PqP2k_4jfzFd6kZuQQ_ak-vQ7Ui1KV6KyTtc0I-4aBKrioQZKBB3j6LpylxQgzMP-RcBThje6UWz1AlKDyxZdf50fpaHx605hMRsEoyS2yS3lmLsOAvK1jGiUPrxwufKQ0_KGlMs2hX1BA/s1177/UreaExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiMKbDg0vq81NVpEwD4my0egQnva3UJGR161mq8TO--bdN3PqP2k_4jfzFd6kZuQQ_ak-vQ7Ui1KV6KyTtc0I-4aBKrioQZKBB3j6LpylxQgzMP-RcBThje6UWz1AlKDyxZdf50fpaHx605hMRsEoyS2yS3lmLsOAvK1jGiUPrxwufKQ0_KGlMs2hX1BA/w400-h398/UreaExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 163. Exporters of Urea, 2020</td></tr></tbody></table><p>This graph makes sense, because urea is made from ammonia, which is made using natural gas as a feedstock. And so, the leading natural gas producers are the ones who make both ammonia and urea. Essentially, natural gas is transformed into carbon dioxide and hydrogen; the hydrogen is reacted with nitrogen in the air to form ammonia, and the ammonia and carbon dioxide are reacted to form ammonium carbamate, which is converted into urea. So all this is typically done in an integrated fashion. That is why you see the leading producers of urea, above, are the major gas producers: Russia, Saudi Arabia, Qatar, Oman, Algeria, Indonesia. At 11.3% of world total, Russia is the leading exporter of urea in the world. <span id="fig164">It is also the second-largest exporter of ammonia in the world, as the following chart shows</span>. This chart also highlights the difficulty of understanding the importance of global players. How much of natural gas does a natural gas producer decide to export as natural gas? How much do they decide to convert to ammonia? How much of that ammonia is converted to urea? These are business decisions each country makes. But having vast supplies of a key feedstock (in this case, natural gas) is critical in the value chain.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzBuOAz6tPXNtyU4KjFSOoe8yPX3BX2JD3wqSN4_Ss2CFGMbfnnSjlAJcgEKA7FK2KpqDbAwqw3FDgndPPPOyI-Skx2ZLl0W3mP5co4S5XBqmlxCxcoRtu5P5LMx08nGJcvxQ4N3zjQcSxY2Nxv7t9I17Wfv4w_pSeFZcE8OR56wiabcbSJeUpIgrug/s1177/AmmoniaExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgQzBuOAz6tPXNtyU4KjFSOoe8yPX3BX2JD3wqSN4_Ss2CFGMbfnnSjlAJcgEKA7FK2KpqDbAwqw3FDgndPPPOyI-Skx2ZLl0W3mP5co4S5XBqmlxCxcoRtu5P5LMx08nGJcvxQ4N3zjQcSxY2Nxv7t9I17Wfv4w_pSeFZcE8OR56wiabcbSJeUpIgrug/w400-h384/AmmoniaExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 164. Exporters of Ammonia, 2020</td></tr></tbody></table><p>Let us continue the discussion of agricultural exports by talking about one more key ingredient in agriculture: potassic fertilizers. As everyone knows, agriculture requires three families of fertilizers - nitrogenous (N), potassic (K), and phosphatic (P) fertilizers. Sometimes, these can be mixed, as is diammonium phosphate (DAP), which is a mixed N-P fertilizer. Most potash fertilizer is found in mines as potassium chloride (hence called K-fertilizer, from the Latin word for the element potassium, Kalium). <span id="fig165">The graph below (from USGS data) shows the top global producers of potash in the world.</span></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZOiQ0snhAWMOU9Vh9xq5Y4ZQE_9EWxI0bx1v4jCCcKDg9rlrKiFkja4i3ZDDB8s3D-HTab0Q_z1M5i9Xi-llRe3-Y_HgLWbKKOXfLbpIbiwK2HNZdIxLF2mqMbs9sN-6PDYFj_D5mI_DPHXZaVoMyzeKtKk2GSj511Jm8dJWlmJM6kKh7mt0bwF4prQ/s605/PotashProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZOiQ0snhAWMOU9Vh9xq5Y4ZQE_9EWxI0bx1v4jCCcKDg9rlrKiFkja4i3ZDDB8s3D-HTab0Q_z1M5i9Xi-llRe3-Y_HgLWbKKOXfLbpIbiwK2HNZdIxLF2mqMbs9sN-6PDYFj_D5mI_DPHXZaVoMyzeKtKk2GSj511Jm8dJWlmJM6kKh7mt0bwF4prQ/w400-h225/PotashProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 165. Top World Producers of Potash, 2021</td></tr></tbody></table>
<p>Russia is the second-largest producer of potash in the world, at about 20%, after Canada. Its ally, Belarus, follows closely behind, at around 18%. Together, they produce 38% of the world's supply of potash.</p><p>Exports are more relevant to global supply than production, <span id="fig166">so the graph below shows the major exporters of potassic fertilizer in the world.</span></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIxU-QVtm5PFYMl4EJ3R0XG-NwzZrqjKXgq3jkI2LOUaRnr_KcspnKK2er3YYyUp3IJAS_fcMuUd-NnwvppL75IxWwEmq1MGj7q21JGv6efGOCN0Hkb2MN2PpJJFhWkhLvnQnPJhURMNP1fZC6x77NYI8GL-b4f4SG5pbCjDxFpGih2mb_mt2WrDE5iQ/s1177/PotassicFertilizerExports_2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjIxU-QVtm5PFYMl4EJ3R0XG-NwzZrqjKXgq3jkI2LOUaRnr_KcspnKK2er3YYyUp3IJAS_fcMuUd-NnwvppL75IxWwEmq1MGj7q21JGv6efGOCN0Hkb2MN2PpJJFhWkhLvnQnPJhURMNP1fZC6x77NYI8GL-b4f4SG5pbCjDxFpGih2mb_mt2WrDE5iQ/w400-h371/PotassicFertilizerExports_2018.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 166. Exporters of Potassic Fertilizer, 2018</td></tr></tbody></table>
<p>Russia is the third-biggest exporter of potash, after Canada and Belarus. As with production, along with Belarus, Russia controls almost 38% of the world's supply of potassic fertilizer. The two graphs below show <span id="fig167">who is importing these fertilizers from Russia</span> <span id="fig168">and Belarus.</span> <b><i>To imagine that these countries will risk their food security by supporting sanctions against the providers of such crucial raw materials is overly optimistic. Only Europeans could be so unrealistic.</i></b></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheg0GkCYs3Ht7LTqSnt51dTXAl1NgyjIDuRwece9EpMV0n3v33voUPcRVWNo3fbsC-_7Gyw9DksR82ty_iONLy_2Lj16O7CFcbfo6IhBz3lgIw7hcJwghI9dwFKqg-CPjEg-9vfUlm1uTCtBtfMH5Lpro4leVZXSDc_o-8QwmPHDF5-TmTV_-KXm47sg/s1177/PotassicFertilizers_Importers_Russia_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="976" data-original-width="1177" height="331" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEheg0GkCYs3Ht7LTqSnt51dTXAl1NgyjIDuRwece9EpMV0n3v33voUPcRVWNo3fbsC-_7Gyw9DksR82ty_iONLy_2Lj16O7CFcbfo6IhBz3lgIw7hcJwghI9dwFKqg-CPjEg-9vfUlm1uTCtBtfMH5Lpro4leVZXSDc_o-8QwmPHDF5-TmTV_-KXm47sg/w400-h331/PotassicFertilizers_Importers_Russia_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 167. Importers of Potassic Fertilizers from Russia, 2020</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoAUObnRywKMWGgGCTRvIJuBXMI7iZfbGrpjGg6b9wn-GWgNb4ieWnRTrO6UGzegte6XyhObszfAY5XdXKFLbRSsKfdPOIGjd428fea2Ncsv0UXVHf6bFOZJFlF76OufKIyRoCIBrOBSeLaPStFmzaBwk01bD6GaUtsAOnZ1kHOxWH4sorz-qEW2ztAQ/s1177/PotassicFertilizers_Importers_Belarus_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoAUObnRywKMWGgGCTRvIJuBXMI7iZfbGrpjGg6b9wn-GWgNb4ieWnRTrO6UGzegte6XyhObszfAY5XdXKFLbRSsKfdPOIGjd428fea2Ncsv0UXVHf6bFOZJFlF76OufKIyRoCIBrOBSeLaPStFmzaBwk01bD6GaUtsAOnZ1kHOxWH4sorz-qEW2ztAQ/w400-h371/PotassicFertilizers_Importers_Belarus_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 168. Importers of Potassic Fertilizer from Belarus, 2020</td></tr></tbody></table>
<p>The third category of fertilizers is phosphatic fertilizers. Phosphatic fertilizers are obtained from deposits of phosphate rock, which are deposits of phosphorous-containing rocks. These are then processed to get phosphorous and, from it, phosphoric acid, from which phosphatic fertilizers are made. <span id="fig169">The graph below shows the top global producers (miners) of phosphate rock</span>.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd3-xLY9W0CF3gG86czCyFXrExC1-RtqBKcTAHBwgJ77ywdiuul005cW3fhjsIjLq_gMge1dB62E8nsXtYLfNkMI4Ru_YGmVUSde3DvVlJFNqpsZisAtY4tUOyK1_DGXiSDASjVwO913SSDSmpxdLqtfEwC2n4F9YXcuTzR4z7bF64CkGhvr5UvibdsQ/s605/PhosphateRockProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd3-xLY9W0CF3gG86czCyFXrExC1-RtqBKcTAHBwgJ77ywdiuul005cW3fhjsIjLq_gMge1dB62E8nsXtYLfNkMI4Ru_YGmVUSde3DvVlJFNqpsZisAtY4tUOyK1_DGXiSDASjVwO913SSDSmpxdLqtfEwC2n4F9YXcuTzR4z7bF64CkGhvr5UvibdsQ/w400-h225/PhosphateRockProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 169. Top World Producers of Phosphate Rock, 2021</td></tr></tbody></table><br />
<p>It can be seen that Russia is the fourth-largest producer of phosphate rock, at 6.4% of global output, after China (39.1%), Morocco (17.5%), and the USA (10.1%). However, for global supply, it is important to see the top exporters, not just producers. <span id="fig170">This is shown in the next graph.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigv1xLap9Or2LRho-OOkt7xhsez1i0aJv-1OApDlw0Fo0Xa4NePQQqLy0uaE_Y1Rvftw7CjuUAARJ0sUVK59p5cUK3RmD75nctBFhBIvb_dFI0uaxpyt5XSJ7MASDUCrHXhJCvtJAHV9e4Ek3oCc2s6dMYZUzvKqMWf7QCi2XAQ-z4IOsPC4WKPsJM3Q/s1177/PhosphaticFertilizer_Exporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEigv1xLap9Or2LRho-OOkt7xhsez1i0aJv-1OApDlw0Fo0Xa4NePQQqLy0uaE_Y1Rvftw7CjuUAARJ0sUVK59p5cUK3RmD75nctBFhBIvb_dFI0uaxpyt5XSJ7MASDUCrHXhJCvtJAHV9e4Ek3oCc2s6dMYZUzvKqMWf7QCi2XAQ-z4IOsPC4WKPsJM3Q/w400-h384/PhosphaticFertilizer_Exporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 170. Exporters of Phosphatic Fertilizer, 2020</td></tr></tbody></table>
<p>We can see that China and Morocco are again the top two exporters of phosphatic fertilizer, but the export shares of the US and Russia have come down greatly. Very likely, this is because of the high internal consumption within these two countries (Wheat for Russia and Corn for the USA). But certainly Russia is self-sufficient in phosphatic fertilizer, being a net exporter at about 0.6% of world total.</p>
<p>Phosphate is converted to phosphorous and then to phosphoric acid. The phosphoric acid may be converted to a fertilizer such as monoammonium phosphate (MAP) or diammonium phosphate (DAP), or just exported as such. <span id="fig171">A good portion of China's phosphoric acid is also directly exported, as seen in the graph below.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiBjrEMFmLMIjTi3GUTh6uLUSf7HRd-ArWqyUoO3Ai9za8qz9fNlempe6qOm1bVqdBuW066AX0IFqsdvRDoS4KIVo9B0wD0tZOmW5KQxs6t1C4vYTxcOoJyE-fU-JXJn4nAwUD6GN06weLrQWCLWKAwA5VHnY8aaFiu7Z5-oDHIzNvsjgavNi_kTdSTw/s1177/PhosphoricAcid_Exporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiiBjrEMFmLMIjTi3GUTh6uLUSf7HRd-ArWqyUoO3Ai9za8qz9fNlempe6qOm1bVqdBuW066AX0IFqsdvRDoS4KIVo9B0wD0tZOmW5KQxs6t1C4vYTxcOoJyE-fU-JXJn4nAwUD6GN06weLrQWCLWKAwA5VHnY8aaFiu7Z5-oDHIzNvsjgavNi_kTdSTw/w400-h384/PhosphoricAcid_Exporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 171. Exporters of Phosphoric Acid, 2020</td></tr></tbody></table>
<p>Let us now come to minerals. Aluminium is a major commodity. Without aluminium, you cannot build cars and airplanes. China produces 57% of the total world output of aluminium. Russia is the third-largest producer of aluminium in the world, at 5.4%. The US imports 44% of its aluminium needs. <span id="fig172">The graph below, using data from the US Geological Service (USGS)</span>, shows the major producers of aluminium.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSICUBlU_gsWSBtNnoEPXc_le8GedT7xz6goaobszdmWZi1ZF1XSlEtLQz8pnVGk8X7lmcq-zNV2zLMqGiUFRHQ-GPN21tjuYQC_PFyg0jix8B182cdCyUs32ph9a6UQ6B0RJcTk3IymgvRPhsOOvApC6A4z6r9WWlM_DI9qC-Mkbmngfb-0T_fWsyDA/s605/fig153_Aluminium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSICUBlU_gsWSBtNnoEPXc_le8GedT7xz6goaobszdmWZi1ZF1XSlEtLQz8pnVGk8X7lmcq-zNV2zLMqGiUFRHQ-GPN21tjuYQC_PFyg0jix8B182cdCyUs32ph9a6UQ6B0RJcTk3IymgvRPhsOOvApC6A4z6r9WWlM_DI9qC-Mkbmngfb-0T_fWsyDA/w400-h225/fig153_Aluminium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 172. Top World Producers of Aluminium, 2021</td></tr></tbody></table>
<p>We can also see the major exporters of aluminium <span id="fig173">in the graph from OEC below.</span></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOj2HzapQlomr9k2PM3v6X3QBQ8TyfzOur5MJmYuoMP4a09urf8fhRUoyejCGMDKLtMFvjx4nfmriJ-t4yOOLmuJdDGb8TVYRZ7zUKKFzFtwbfElzB6aTKwex88cfpDl5hysVtlKDE9WEQMBoD0kGun3FdPTJ6TXrt7aj_tyMhin1QdVEHEduWS9eWFQ/s1177/AluminiumExports_2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOj2HzapQlomr9k2PM3v6X3QBQ8TyfzOur5MJmYuoMP4a09urf8fhRUoyejCGMDKLtMFvjx4nfmriJ-t4yOOLmuJdDGb8TVYRZ7zUKKFzFtwbfElzB6aTKwex88cfpDl5hysVtlKDE9WEQMBoD0kGun3FdPTJ6TXrt7aj_tyMhin1QdVEHEduWS9eWFQ/w400-h371/AluminiumExports_2018.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 173. Exporters of Aluminium, 2018</td></tr></tbody></table>
<p>The exports chart looks quite different from the production chart. A big part of the reason is that aluminium is a major input to any economy. India produces a lot of aluminium, but uses all of it. China also uses a lot of the aluminium it produces, but produces sufficient excess to still be the world's top exporter. Part of the problem for aluminium is that aluminium is mainly mined as alumina or bauxite, which are then refined to produce aluminium metal. A lot of the ore is exported by China and the final aluminium is produced by the destination countries. Unfortunately, export data on alumina and bauxite was not available for comparison.</p>
<p>Next, we come to one of the most important metals in the world: iron. Iron and steel are the most important construction metals in the world because of their strength and durability. However, because iron is so widely used, in so many forms, it is very hard to track its value chain. There are countries that mine iron ore, but those are not necessarily the countries that refine the ore and produce elemental iron. Even in elemental iron, there are various grades, from wrought iron to pig iron to steel to carbon steels with different levels of carbon in them, as well as stainless steel and various alloys of iron. Iron, as well as steel, may be bought and sold in various forms. One country may buy ingots of steel and export steel pipes; another may buy pig iron and sell steel; some may buy ingots of metal and make wire. All this makes tracking iron and steel very difficult. But I have tried my best to give a reasonable idea of the importance of Russia and China in this regard, which is the focus of this article.</p>
<p>The USGS data gives production data on the mining of iron ore. This is, of course, the basic step in the process. <span id="fig174">The graph below shows the top iron ore producers in the world.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZqAaSHoFllOJhULKU8owAuHOi-LMSeEXQPYZ_C9gMT94HKx6KQC4kTH-LGah0rtXmxmnN8QKXIjr1Jr6iVjFDkpasbccFZKAk5qFdmJ81SfakqK7D37lqhMG8Pp8sjhAF3_qd8VUuOVd4Rmkig2L9dt39r75HROXcTp_KxPBVu2rGN3toycOCP2w0VQ/s605/IronOreProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgZqAaSHoFllOJhULKU8owAuHOi-LMSeEXQPYZ_C9gMT94HKx6KQC4kTH-LGah0rtXmxmnN8QKXIjr1Jr6iVjFDkpasbccFZKAk5qFdmJ81SfakqK7D37lqhMG8Pp8sjhAF3_qd8VUuOVd4Rmkig2L9dt39r75HROXcTp_KxPBVu2rGN3toycOCP2w0VQ/w400-h225/IronOreProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 174. Top World Producers of Iron Ore, 2021</td></tr></tbody></table><br /></div>
<div>China is the third-largest producer of iron ore, at 14% of global output (based on iron content), and Russia is the fifth-largest producer, at 4.5% of global output. <span id="fig175">But neither of these countries exports much of this ore, as can be seen from the following graph.</span></div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNtl5t0ti9MIV3YzU37FClcq_3fGRzUulZY8o-AfwAbaPzRREsPV3AvPzfQ1WOW0slucfKNpE3FQQWI9fBfmaPEsTPxWcPc6tGwSTPrAwNVplC9hJM28iV1_F3wk9rp1EOLA5-ql-8aDtsnB18NlltVjkhrKR2G655BskSDLD0g7E43o9eTFtKM2_JA/s1177/IronOreExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPNtl5t0ti9MIV3YzU37FClcq_3fGRzUulZY8o-AfwAbaPzRREsPV3AvPzfQ1WOW0slucfKNpE3FQQWI9fBfmaPEsTPxWcPc6tGwSTPrAwNVplC9hJM28iV1_F3wk9rp1EOLA5-ql-8aDtsnB18NlltVjkhrKR2G655BskSDLD0g7E43o9eTFtKM2_JA/w400-h359/IronOreExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 175. Exporters of Iron Ore, 2020</td></tr></tbody></table><br />
<div>Russia's exports of iron ore form only 1.45% of global exports, whereas China's exports form only 0.98% of global exports. <span id="fig176">Instead, they refine the ore to produce pig iron and steel</span>, <span id="fig177">as the following graphs show.</span></div>
<div><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkT3K_ZEE8GT2LgpQp1-5U5pr6D8N9RIzCuk6UbS2eg87QTtPlMbFht3oKTdA20SvXfbJknJ1QGLvOg7LKkubBuQxzY2OTFPPEQj-E-wxbSZoKCkpOFjMiyx_taBqLfWDKRLL4RXSFfhjz19RlOdGG_JG2mvjRl6EP-IjkuXdTRKRG2yEkW5eARShOSg/s605/PigIronProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjkT3K_ZEE8GT2LgpQp1-5U5pr6D8N9RIzCuk6UbS2eg87QTtPlMbFht3oKTdA20SvXfbJknJ1QGLvOg7LKkubBuQxzY2OTFPPEQj-E-wxbSZoKCkpOFjMiyx_taBqLfWDKRLL4RXSFfhjz19RlOdGG_JG2mvjRl6EP-IjkuXdTRKRG2yEkW5eARShOSg/w400-h225/PigIronProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 176. Top World Producers of Pig Iron, 2021</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv7A-BBcw0cYyi2pVaFMKqDAz3gy2w-WdvEasaqFGhrkwk170_vcfQaVJ3n8xJuyXeFebIrhsdTqXZaz91el1203aQzC_4SjLnypxKg9NXGwpzyEcMQAtr_Y4mBw7WhyKukV1OFaBZwa5t9V1yvKf_AsRTOFMhyDLGd5UvJpEmSvshf48YxELLlMvrqA/s605/RawSteelProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjv7A-BBcw0cYyi2pVaFMKqDAz3gy2w-WdvEasaqFGhrkwk170_vcfQaVJ3n8xJuyXeFebIrhsdTqXZaz91el1203aQzC_4SjLnypxKg9NXGwpzyEcMQAtr_Y4mBw7WhyKukV1OFaBZwa5t9V1yvKf_AsRTOFMhyDLGd5UvJpEmSvshf48YxELLlMvrqA/w400-h225/RawSteelProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 177. Top World Producers of Raw Steel, 2021</td></tr></tbody></table>
<div><p>China is the world's leading producer of pig iron, at 64.1% of global production, and the leading producer of raw steel, at 57.3% of global production. Russia is the fourth leading producer of pig iron in the world, at 3.9% of global output, after China, India, and Japan. It is also the sixth leading producer of raw steel in the world, at 3.8% of global output.</p><p>However, China has been growing at such a high rate that despite its production of iron ore, <span id="fig178">it needs to import iron ore for its own needs, as can be seen from the graph below.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjk7xn92itf1IyTYV1LgeE8fD19yLzUh4JjL3wtQIHCulUJJPYV2w8JMQ8gWksOMB-gQH_hRGWh7Tc5nZJzFkO62jrdCWzTUpqGneUWRejm6jdx9f7APo_6ttGqRPwKPkeIcKk5KQZznbO_JRUBgWrdlzDAt7toPFs-yXWNZvsdZaDKKS3BONfVXUBW2Q/s1177/IronOreImporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjk7xn92itf1IyTYV1LgeE8fD19yLzUh4JjL3wtQIHCulUJJPYV2w8JMQ8gWksOMB-gQH_hRGWh7Tc5nZJzFkO62jrdCWzTUpqGneUWRejm6jdx9f7APo_6ttGqRPwKPkeIcKk5KQZznbO_JRUBgWrdlzDAt7toPFs-yXWNZvsdZaDKKS3BONfVXUBW2Q/w400-h359/IronOreImporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 178. Importers of Iron Ore, 2020</td></tr></tbody></table>
<p>China imports more than 70% of the global iron ore exported in the world. <span id="fig179">Russia, however, is the top exporter in the world of pig iron, the basic product of the blast furnace that produces iron from iron ore, at more than 28% of world exports, as the following graph shows.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTaWo8dWupYBfPWMdkuo-Yq65kd5e0iObgr0NptPm7gTY35ybHYwremnohJTEQDnPrSFpInN4zHLOqJRy-wpXoFd5JSb0TxC8dL6lwSpLZr1L9HZsp1uwDMawucOckViNgDcAKKepb2VFigaSIbxugndqpz31GscSVMY-Xi8e1i5j5L3LZkYfL-tsCvg/s1177/PigIronExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTaWo8dWupYBfPWMdkuo-Yq65kd5e0iObgr0NptPm7gTY35ybHYwremnohJTEQDnPrSFpInN4zHLOqJRy-wpXoFd5JSb0TxC8dL6lwSpLZr1L9HZsp1uwDMawucOckViNgDcAKKepb2VFigaSIbxugndqpz31GscSVMY-Xi8e1i5j5L3LZkYfL-tsCvg/w400-h359/PigIronExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 179. Exporters of Pig Iron, 2020</td></tr></tbody></table>
<div><br /></div>
<div><span id="fig180">Russia is also the top exporter of iron ingots, as can be seen in the graph below.</span></div>
<div><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNx1i5nfpdAyM9s9iHwEov9B947olGjRVU3G2oTct1_UDLXxSK-BRYjW21XKPc_qh_kBl_XBaOCTEN7YmoznXmLWat7kx3hosgYx6geHZTHD5hLt87f56oBsNNwyJcbDvftNuD0zfqN-Ly5rivTtvClZNxQJwSEYqJ0_k_h4TncHI-lHS444jvXoWJrQ/s1177/IronIngotsExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNx1i5nfpdAyM9s9iHwEov9B947olGjRVU3G2oTct1_UDLXxSK-BRYjW21XKPc_qh_kBl_XBaOCTEN7YmoznXmLWat7kx3hosgYx6geHZTHD5hLt87f56oBsNNwyJcbDvftNuD0zfqN-Ly5rivTtvClZNxQJwSEYqJ0_k_h4TncHI-lHS444jvXoWJrQ/w400-h371/IronIngotsExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 180. Exporters of Iron Ingots, 2020</td></tr></tbody></table><br />
<div>It can be seen that China is also a significant exporter of iron ingots, producing more than 4% of global supply.</div><div><br /></div>Who buys the pig iron that Russia exports (more than a fourth of world supply?) <span id="fig181">The answer is seen in the following graph.</span></div>
<div><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6TkUX-5JjwJEVvviDh2k3sEV1DVMdIdieoQD8jfRkTOy591nhb6y553LWZ4e1nCUUcoa2ctnnnW2k5t3ZlMkqxCHNaydGjIRFxqPr9EuC2L7rVgI2KOmuckAwKf9m06Cjzz1GY19-bHiNhyKled19E4-pUxGw4yYU3qh7__Nk5D9fv7xwRzE3OlShqg/s1177/PigIronImporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi6TkUX-5JjwJEVvviDh2k3sEV1DVMdIdieoQD8jfRkTOy591nhb6y553LWZ4e1nCUUcoa2ctnnnW2k5t3ZlMkqxCHNaydGjIRFxqPr9EuC2L7rVgI2KOmuckAwKf9m06Cjzz1GY19-bHiNhyKled19E4-pUxGw4yYU3qh7__Nk5D9fv7xwRzE3OlShqg/w400-h359/PigIronImporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 181. Importers of Pig Iron from Russia, 2020</td></tr></tbody></table><br />
<div>So we see that China is the third largest miner of iron ore, and in addition it not only imports more than 70% of global iron ore exported, and in addition imports 33% of the total pig iron that is exported in the world. What does it do with it? China has a huge developing population and, as we just saw above, it is the top producer of raw steel in the world. China uses its own iron ore, plus the imported iron ore, to produce iron items, such as wires, rods, sheets, pipes, and tubes. Much of this is used in its own building and construction industry, but China produces enough excess to export to the rest of the world.<br />
<p>China exports roughly a fourth of the global trade in <span id="fig183">iron pipes</span>, <span id="fig184">iron cloth</span>, and <span id="fig182">iron wires</span>, and almost <span id="fig185">half the supply of iron nails</span> in the world. </p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjys8q9SIkBuTggksnoBRICW4indlbVgTcLGMe8q81JEAZRu2O2yEcKaieycjhMYmoYBQNbPCX1h4aF-cOQfbiCJp4X_7_34hccc2Hi4qTxD2KB-YOKg98VM6YD028ufqwAhB2LaWRMvmRUmUtTQKwE2Q6wGNJyZOEWx_pz2fvi5CL4UTg5IplfvvtUDg/s1177/IronWireExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjys8q9SIkBuTggksnoBRICW4indlbVgTcLGMe8q81JEAZRu2O2yEcKaieycjhMYmoYBQNbPCX1h4aF-cOQfbiCJp4X_7_34hccc2Hi4qTxD2KB-YOKg98VM6YD028ufqwAhB2LaWRMvmRUmUtTQKwE2Q6wGNJyZOEWx_pz2fvi5CL4UTg5IplfvvtUDg/w400-h359/IronWireExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 182. Exporters of Iron Wire, 2020</td></tr></tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiT4VJtM80NoY6p3H7IdMw1_Rl1rVoGzQdxwClwAht5zis2IEbUmyFqMyPcPsfYo19PEDrueR3FqKf8vAhzAe196-XtUDnumOZx0YeAvZ_Yz_gDdHjngoxmAf_FADOaepvwF3gE0L9U2RrlNNURoYrqIkqus5GZsfxRrRhRAONCaRazwE57Fg0R-jTyZA/s1177/IronPipesExporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiT4VJtM80NoY6p3H7IdMw1_Rl1rVoGzQdxwClwAht5zis2IEbUmyFqMyPcPsfYo19PEDrueR3FqKf8vAhzAe196-XtUDnumOZx0YeAvZ_Yz_gDdHjngoxmAf_FADOaepvwF3gE0L9U2RrlNNURoYrqIkqus5GZsfxRrRhRAONCaRazwE57Fg0R-jTyZA/w400-h371/IronPipesExporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;"><br />Fig. 183. Exporters of Iron Pipes, 2020</td></tr></tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2OmVdE5gtiPFt06RLjVZ3vIfdBQW9T7DjFVQV3yI4ktvFwmgxkYa2Y_Krm-sAxfpv7S4Su2AVQlNeGG6ICYLEOusjZIa0SmICVZDIF_MxsM_jXGpL5xreT0NOjT3qCd1WJeR2qFLkU9WmSp33o89MitZsSn679UEJBvmNh2gAB-9V1w4DqCzmABdcoA/s1177/IronClothExporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2OmVdE5gtiPFt06RLjVZ3vIfdBQW9T7DjFVQV3yI4ktvFwmgxkYa2Y_Krm-sAxfpv7S4Su2AVQlNeGG6ICYLEOusjZIa0SmICVZDIF_MxsM_jXGpL5xreT0NOjT3qCd1WJeR2qFLkU9WmSp33o89MitZsSn679UEJBvmNh2gAB-9V1w4DqCzmABdcoA/w400-h371/IronClothExporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 184. Exporters of Iron Cloth, 2020</td></tr></tbody></table>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7VOYVfo4Uwzp95XZMkUh-mG_a4WxJBAIZqR7rvPveZ0DHG-4cy3kIwUFwBX-UbJwK7NpTVPYQ5E3v6O19et9JRT6zXgTG_fxtdOJEVdK3P9AWPoTYlLJDe0hxcnUoCjhXAg6M6XP9vJuAuFzKD2WL1CFrh7beuobPsg67nYN2lZ6ftlQGnXTGVg8CWQ/s1177/IronNailsExporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi7VOYVfo4Uwzp95XZMkUh-mG_a4WxJBAIZqR7rvPveZ0DHG-4cy3kIwUFwBX-UbJwK7NpTVPYQ5E3v6O19et9JRT6zXgTG_fxtdOJEVdK3P9AWPoTYlLJDe0hxcnUoCjhXAg6M6XP9vJuAuFzKD2WL1CFrh7beuobPsg67nYN2lZ6ftlQGnXTGVg8CWQ/w400-h359/IronNailsExporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 185. Exporters of Iron Nails, 2020</td></tr></tbody></table>
<p><span id="fig186">China is also the second-largest exporter of stainless steel wire, after India.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXuESRBeCz_niLbWZUOqFHZ6YBIwB8AyMbmZJBVhIKm29Yc_h-jJ8P7kjLLjPe8auhFKD3Dohem8jNZWpWjgz1o3r7zxJLKLRB9zVz80hHETV-f1IkLbDgYBafP-gl0ejawpnugBGZ4nCsIINaBaFl9CHNtCZXo6thVAo30vnDeS7K0Tdyhb6uvyxw4w/s1177/StainlessSteelWireExporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXuESRBeCz_niLbWZUOqFHZ6YBIwB8AyMbmZJBVhIKm29Yc_h-jJ8P7kjLLjPe8auhFKD3Dohem8jNZWpWjgz1o3r7zxJLKLRB9zVz80hHETV-f1IkLbDgYBafP-gl0ejawpnugBGZ4nCsIINaBaFl9CHNtCZXo6thVAo30vnDeS7K0Tdyhb6uvyxw4w/w400-h371/StainlessSteelWireExporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 186. Exporters of Stainless Steel Wire, 2020</td></tr></tbody></table>
<p>A similar story is seen with copper. <span id="fig187">The graph below shows the leading producers of copper ore in the world.</span> China is third in the world in copper extraction (by ore) at 8.6% of world output, and Russia is eighth at 3.9% of world output.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGRZwJrtnDt7WXbqOCKoxzfo7COEeuwvbKBDgGlHnAVhlsEK_mlbJRBc-UHej1Z8ZIHMiqjGvyIC63lvknMPM7YXVD6zVJORHxWSbmeGTty9b1yuSz3_ItDixepHSBYzEsqGK4hotqsWZeH7RadhMHmdzlqypsuUJLnU42wK2_new_zyrGbjDxglCxNQ/s605/CopperMineProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGRZwJrtnDt7WXbqOCKoxzfo7COEeuwvbKBDgGlHnAVhlsEK_mlbJRBc-UHej1Z8ZIHMiqjGvyIC63lvknMPM7YXVD6zVJORHxWSbmeGTty9b1yuSz3_ItDixepHSBYzEsqGK4hotqsWZeH7RadhMHmdzlqypsuUJLnU42wK2_new_zyrGbjDxglCxNQ/w400-h225/CopperMineProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 187. Top World Producers of Copper Ore, 2021</td></tr></tbody></table><br />
<p>But neither China nor Russia <span id="fig188">features among the top exporters of copper ore.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYj44IBpEde_r0fUx8E0qqKEyzJ8LaiwStfoCUnXI5xLdOVlU3u3Q_yRdo00iUATI6Yn8B614ssnd1Ju5TVcn0MxO5_IwWpxar6-x7jjsmCNJlF_o7KkUmNIpE2y4UfgMZjR1d-nqB9uxS821kJf0wgkhWrGlBFMCnk4x6Vwwl6nzGArRICPIXuVAJIQ/s1177/CopperOreExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYj44IBpEde_r0fUx8E0qqKEyzJ8LaiwStfoCUnXI5xLdOVlU3u3Q_yRdo00iUATI6Yn8B614ssnd1Ju5TVcn0MxO5_IwWpxar6-x7jjsmCNJlF_o7KkUmNIpE2y4UfgMZjR1d-nqB9uxS821kJf0wgkhWrGlBFMCnk4x6Vwwl6nzGArRICPIXuVAJIQ/w400-h371/CopperOreExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 188. Exporters of Copper Ore, 2020</td></tr></tbody></table>
Quite to the contrary, <span id="fig189">China is the top importer of copper ore because of its huge developmental needs</span>. Copper is one of the vital needs to a developing economy, just like sulfuric acid. Copper is needed everywhere because of the ubiquitousness of copper wire in electrical connections.</div><div><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJOoSS1Z7znLaOsZ8s7eUUXoIdT3lrY89UVDAxnzlmeAUW511nAZVwKSRS8hI_mNkftYxR24G1VGYZwE1NzkkwpRqpXZX1rLo5mRLuKRW1fWwppFX70OwZvuRYEV5YEp9GrkLNJaR3ZaeF1uyCZbhIo2pBwqvZt0t0b4-qFJ2jcbF2QKP9C-0p_nIW8w/s1177/CopperOreImporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJOoSS1Z7znLaOsZ8s7eUUXoIdT3lrY89UVDAxnzlmeAUW511nAZVwKSRS8hI_mNkftYxR24G1VGYZwE1NzkkwpRqpXZX1rLo5mRLuKRW1fWwppFX70OwZvuRYEV5YEp9GrkLNJaR3ZaeF1uyCZbhIo2pBwqvZt0t0b4-qFJ2jcbF2QKP9C-0p_nIW8w/w400-h371/CopperOreImporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 189. Importers of Copper Ore, 2020</td></tr></tbody></table><br />
<div>While Russia does not import any copper ore, China imports more than half the global exports of copper ore. <span id="fig190">The next figure shows what China does with all that ore.</span></div><div><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyszdccSALsPBo7w79zmGfTH1mlr1xiOdRooEZT27Ifhr__l6_shduvQRuf5GAQLlRpEvS7QJVjkXBdLBDft8QXoTv2JNE68rjiS7jjBpgoMdd0Bw0UrvjG7t-f6ho2cpJYsBGMQq-6uiA5PRkrcok9q5bQCrlbpsku6gHx-n8phNTAUwoOzymAPQXoQ/s605/CopperRefineryProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="180" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyszdccSALsPBo7w79zmGfTH1mlr1xiOdRooEZT27Ifhr__l6_shduvQRuf5GAQLlRpEvS7QJVjkXBdLBDft8QXoTv2JNE68rjiS7jjBpgoMdd0Bw0UrvjG7t-f6ho2cpJYsBGMQq-6uiA5PRkrcok9q5bQCrlbpsku6gHx-n8phNTAUwoOzymAPQXoQ/s320/CopperRefineryProduction.png" width="320" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 190. Top World Producers of Metallic Copper, 2021</td></tr></tbody></table><br />
<div>This graph shows the production of raw copper from copper ore. China is the world leader, producing 38.5% of global production of raw copper. Russia is sixth at 3.5%. <span id="fig191">Both Russia and China export a significant portion of this copper, as the next graph shows.</span> Despite China producing much more than Russia, it exports less as it has a bigger population and hence greater internal demand.</div><div><br /></div><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqC-HhPQju2niyx0jZ44V8bg7R_r-My_1-_Bu7ipDsNYP2GuqgayglAJRzqq6JY5-bf1aE4UMh5kyV5xgQe8z6dwSJzw1hgEtC0FseO9VLJ3EY-mzgMnppcuqKdmbaGPOqiAolrv9KwW92C1VA00t3uqJJhTG34_JsF8al7swTKZBQG7DDea4mvOuuvg/s1177/CopperExporters2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiqC-HhPQju2niyx0jZ44V8bg7R_r-My_1-_Bu7ipDsNYP2GuqgayglAJRzqq6JY5-bf1aE4UMh5kyV5xgQe8z6dwSJzw1hgEtC0FseO9VLJ3EY-mzgMnppcuqKdmbaGPOqiAolrv9KwW92C1VA00t3uqJJhTG34_JsF8al7swTKZBQG7DDea4mvOuuvg/w400-h359/CopperExporters2018.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 191. Exporters of Copper, 2018</td></tr></tbody></table>
<div><p>One can also see China and Russia's importance in copper refining in the <span id="fig193">world exports of copper wire</span> <span id="fig192">and copper pipes</span>, two very important end uses of copper.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW3vItC8kp9Q-CsjeMCe8DX8p1Ir3tWlvF2ZTmAB-h7GXGk0pOzdgg-CueMr7jQtZguAyB5XdYaCv0L2_wXRjhEECdK_yCSo2vT9IFazJjXpALGbhs-8KPIu5-1ajHLS5SUyCsP83jWDM6RETByaH-N-9ejibYEloYSDalTcXj0AZ_657WGqTNtDjvZw/s1177/CopperPipesExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiW3vItC8kp9Q-CsjeMCe8DX8p1Ir3tWlvF2ZTmAB-h7GXGk0pOzdgg-CueMr7jQtZguAyB5XdYaCv0L2_wXRjhEECdK_yCSo2vT9IFazJjXpALGbhs-8KPIu5-1ajHLS5SUyCsP83jWDM6RETByaH-N-9ejibYEloYSDalTcXj0AZ_657WGqTNtDjvZw/w400-h371/CopperPipesExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 192. Exporters of Copper Pipes, 2020</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjVNS2O8zHpNwdLbWaUobN1XhDclHiE2mI0jaSKt6Ac5ZzBqWVNbOKDv4AqSruR3evix4I6VZVylZUpaYw6JnspZibaL3rXsN34knml8n2wPA1mBJ23miZe2sG_k407pYkBT3Ke9bnaMs7qkwLRsMxTUb5XarY5u2lJljKFulNELf8T0Jyk7Oo-ks7wA/s1177/CopperWireExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjVNS2O8zHpNwdLbWaUobN1XhDclHiE2mI0jaSKt6Ac5ZzBqWVNbOKDv4AqSruR3evix4I6VZVylZUpaYw6JnspZibaL3rXsN34knml8n2wPA1mBJ23miZe2sG_k407pYkBT3Ke9bnaMs7qkwLRsMxTUb5XarY5u2lJljKFulNELf8T0Jyk7Oo-ks7wA/w400-h384/CopperWireExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 193. Exporters of Copper Wire, 2020</td></tr></tbody></table>
<p>
<span id="fig194">China produces almost 85% of the world output of magnesium metal. Russia is second in the world at 6.3%.</span> Magnesium is mainly used in the automotive industry and aircraft industry as alloys. The US is import-dependent up to 50% for its magnesium needs.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh42zGf28EXLh4CjUzzfnnXXRUFkXUwvQkBMWAKn1ozbEil66WkQY83OJULhFL6Hd-CgSb_iU9O6YvdYJq_HQAhCYmLsTI-8u9NT8nguGvx92SLoghiJZU8DSPlAIGEzmk1OV3wtlHl3rjhqXPYmT29pXvPz5R4D9FNFkvWv10pWj5XXYchoum4-Dbjig/s605/fig154_Magnesium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh42zGf28EXLh4CjUzzfnnXXRUFkXUwvQkBMWAKn1ozbEil66WkQY83OJULhFL6Hd-CgSb_iU9O6YvdYJq_HQAhCYmLsTI-8u9NT8nguGvx92SLoghiJZU8DSPlAIGEzmk1OV3wtlHl3rjhqXPYmT29pXvPz5R4D9FNFkvWv10pWj5XXYchoum4-Dbjig/w400-h225/fig154_Magnesium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 194. Top World Producers of Magnesium, 2021</td></tr></tbody></table>
<p>The <span id="fig195">export chart looks different than the production chart for magnesium</span>, in that Russia is not as significant an exporter as a producer, but China is still a major exporter.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8--NGd1jRNAjVWgjCS5Aqq5bmS0D8cOanrsqxdDHoahSK8_JMnQMm-DYHjE2LsU2JvSJTrRoLakF78S1MfhVVQm1_Ay8KI_5LeokvFlOX2LrdSL3lM2usOzyr3CahTcbNlAMKuNgAYcp6elpigb6ycKV2Mu--rQ5R4Vg3A-uXa5nr7QIdzxrMmNmdcA/s1177/MagnesiumExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8--NGd1jRNAjVWgjCS5Aqq5bmS0D8cOanrsqxdDHoahSK8_JMnQMm-DYHjE2LsU2JvSJTrRoLakF78S1MfhVVQm1_Ay8KI_5LeokvFlOX2LrdSL3lM2usOzyr3CahTcbNlAMKuNgAYcp6elpigb6ycKV2Mu--rQ5R4Vg3A-uXa5nr7QIdzxrMmNmdcA/w400-h371/MagnesiumExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 195. Exporters of Magnesium, 2020</td></tr></tbody></table>
<p>Magnesium, is a crucial metal that most of the world imports, <span id="fig196">as the chart below shows.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh9Qs1OPiRtLb6AgvyS8MVcCCnh-nh1e8lkw1LOdXd3VICu_4NJCDc8-JlHKQIIH3vqwZnsIWXTN2zvMxtiEt4hqnFhAG9_kE5HYyYFAfXxst7zwFt4pwun-SH0fOGGo1IM5PzL5KDGPJO6SKTrwXb578IV7quwIQSyYAy3tiayKF4oQqBz8LPAwwHYA/s1177/MagnesiumImports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhh9Qs1OPiRtLb6AgvyS8MVcCCnh-nh1e8lkw1LOdXd3VICu_4NJCDc8-JlHKQIIH3vqwZnsIWXTN2zvMxtiEt4hqnFhAG9_kE5HYyYFAfXxst7zwFt4pwun-SH0fOGGo1IM5PzL5KDGPJO6SKTrwXb578IV7quwIQSyYAy3tiayKF4oQqBz8LPAwwHYA/w400-h371/MagnesiumImports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 196. Importers of Magnesium, 2020</td></tr></tbody></table>
<p>
Nickel is mainly used in the production of stainless steel (68% of global production) and alloy steels. It is also a very important catalyst in the chemical industry in the form of organo-nickel complexes as well as in nickel-aluminium alloys (Raney nickel). Nickel is also a key component in rechargeable batteries. Nickel mesh is used in fuel cells. <span id="fig197">Russia is the third-largest producer of nickel ore, producing 9.1% of global output.</span> The US is 48% import-dependent for its nickel needs, as of 2021.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3MCOJYUfggfnnxGsJx1m9nuLvSm4vgMY2o_98C_qse3rV3nOO1B_rx9bd2kG6L9Hd7ATXzS6XFtouidtD6G23KtDtu0OXqZvdlk4OfIo_JgWHoxmDhAh8QoEZCHQ5_2QPvqUIiN_cPsyE0yKhsUIqMukzsBa38sY-V3bBVfZoXkV6AhJP3Y85AcNCKg/s605/fig155_Nickel.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3MCOJYUfggfnnxGsJx1m9nuLvSm4vgMY2o_98C_qse3rV3nOO1B_rx9bd2kG6L9Hd7ATXzS6XFtouidtD6G23KtDtu0OXqZvdlk4OfIo_JgWHoxmDhAh8QoEZCHQ5_2QPvqUIiN_cPsyE0yKhsUIqMukzsBa38sY-V3bBVfZoXkV6AhJP3Y85AcNCKg/w400-h225/fig155_Nickel.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 197. Top World Producers of Nickel, 2021</td></tr></tbody></table>
<p>A slightly different picture is seen from the <span id="fig198">exports of finished nickel</span> as well as from the <span id="fig199">exports of nickel ore.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmw9AM4_jbf2t3UJU5ha5JioVAYCmKYI63MkXa0Zml8xjGXwe0wn7ZmHGbhDfYLwCGArnK-xygXcIKqXW0NvUgoNyQD8of4iZmJ-DzhlRaaM9zkw_kHuqzNhrZBcdZXcq7HHcD4oDxs4nD5JX_TRjf18kT5KA-9kTmoMOn1cf6SmAYvZfb911yhehHiA/s1177/NickelExports_2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmw9AM4_jbf2t3UJU5ha5JioVAYCmKYI63MkXa0Zml8xjGXwe0wn7ZmHGbhDfYLwCGArnK-xygXcIKqXW0NvUgoNyQD8of4iZmJ-DzhlRaaM9zkw_kHuqzNhrZBcdZXcq7HHcD4oDxs4nD5JX_TRjf18kT5KA-9kTmoMOn1cf6SmAYvZfb911yhehHiA/w400-h371/NickelExports_2018.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 198. Exporters of Nickel, 2018</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiItIu5Wl8EwGUj50W2BjOEuIXjj4RcP-_6tFH-I77SgqMHiOI9nhJflcGALutDC8zfyXBxNrBcIFsJW2UbxTuUwbKu-sVneAlfg-jPlqo3KZ_dtDS2cy2bekOuw4RVIgWMuz1dv_xKqd5L08Ik9Wd7-ZDFMaswhU9PQxw0V9Fk3nRlwmupFN1aRSr7cg/s1177/NickelOreExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiItIu5Wl8EwGUj50W2BjOEuIXjj4RcP-_6tFH-I77SgqMHiOI9nhJflcGALutDC8zfyXBxNrBcIFsJW2UbxTuUwbKu-sVneAlfg-jPlqo3KZ_dtDS2cy2bekOuw4RVIgWMuz1dv_xKqd5L08Ik9Wd7-ZDFMaswhU9PQxw0V9Fk3nRlwmupFN1aRSr7cg/w400-h384/NickelOreExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 199. Exporters of Nickel Ore, 2020</td></tr></tbody></table>
<p>The Philippines are the top exporters of nickel ore, but Russia is the world's top exporter of finished nickel, at 16.4% of global exports. This again points to the complex nature of supply and value chains in the world. One cannot do without the raw material; but likewise, one cannot do without the refiner; and one cannot do without the entity that produces the final product. </p>
<p>There is an extra complication with nickel. One of the important steps in the refining of nickel ore is the conversion of the ore into a form called nickel matte, or nickel sulfide. Many countries convert nickel ore (either their own mined or or imported ore) into matte, and then convert it to nickel or export the matte. <span id="fig200">The graph below shows the importers of nickel ore.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDStIPpubPkoPodTOsicilDiVhtKh90i8wS3Tvv8rFUrXXHRNEw8zrLAagpIORAvI9B98KOB5CnOzBU4NmKx7kOu05bKkWmUZ-cE-nqIQXJ67m-sBRG3LuLCzSLD8ElzHo4Xm8W5qdmlc8LKXcIyqqkrAbgCZV4q6Czwm3XN2lf2pPVa21Qv4Bg8kHgw/s1177/NickelOreImporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDStIPpubPkoPodTOsicilDiVhtKh90i8wS3Tvv8rFUrXXHRNEw8zrLAagpIORAvI9B98KOB5CnOzBU4NmKx7kOu05bKkWmUZ-cE-nqIQXJ67m-sBRG3LuLCzSLD8ElzHo4Xm8W5qdmlc8LKXcIyqqkrAbgCZV4q6Czwm3XN2lf2pPVa21Qv4Bg8kHgw/w400-h384/NickelOreImporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 200. Importers of Nickel Ore, 2020</td></tr></tbody></table><br />
<p><span id="fig201">The next graph shows the exporters of nickel matte.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje_aj8_iDOVS5Echqly4C3DC-IX5CLYLmH52Hv5ldnBI_t527f0v-D2tN2jGCMBnzBiPNGqpH6VVXMvsxyz01io8L71JmvFWrftY5MfJz1vIwEce1fj6gBkoC0RO_yOb72z2XrAPrvOtFaeINjwCbw1cKOGmO0ncNJDiZhzRD5IFEfqv5i-BoK0auqrw/s1177/NickelMattesExporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEje_aj8_iDOVS5Echqly4C3DC-IX5CLYLmH52Hv5ldnBI_t527f0v-D2tN2jGCMBnzBiPNGqpH6VVXMvsxyz01io8L71JmvFWrftY5MfJz1vIwEce1fj6gBkoC0RO_yOb72z2XrAPrvOtFaeINjwCbw1cKOGmO0ncNJDiZhzRD5IFEfqv5i-BoK0auqrw/w400-h371/NickelMattesExporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 201. Exporters of Nickel Matte, 2020</td></tr></tbody></table><br />
<p>The nickel matte then gets refined into pure nickel. <span id="fig202">The next graph shows the top importers of nickel matte.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2rz_FI0hhWqewTSz-Xwx34ykGVKH_XG_aQWXVxyoP7qsni-OMIs7QsDJVQZFB-yBrr9Y0VflnUoZMetpWeKwmeshCGGdPmXmAGw4KeMOZ7a8hOZzUEf8ms97Wh8ah9k54cVbGsAuptk2vuYFx0nzB-9L4GuaBWJhzldrnclUW8KRmthyk_Xus32JlSg/s1177/NickelMattesImporters2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi2rz_FI0hhWqewTSz-Xwx34ykGVKH_XG_aQWXVxyoP7qsni-OMIs7QsDJVQZFB-yBrr9Y0VflnUoZMetpWeKwmeshCGGdPmXmAGw4KeMOZ7a8hOZzUEf8ms97Wh8ah9k54cVbGsAuptk2vuYFx0nzB-9L4GuaBWJhzldrnclUW8KRmthyk_Xus32JlSg/w400-h371/NickelMattesImporters2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 202. Importers of Nickel Matte, 2020</td></tr></tbody></table><br />
<p>So what we see is that some countries export nickel ore and some process the ore and export the matte. Indonesia is the top producer of nickel ore, followed by the Philippines, Russia, New Caledonia, and Australia. But the top exporters of nickel ore, in descending order, are the Philippines, New Caledonia, Australia, Zimbabwe, Indonesia, Finland, and Canada. The top exporters of nickel matte, in descending order, are Canada, Russia, Indonesia, Finland, Philippines, Papua New Guinea, and New Caledonia. Russia, Canada, and Indonesia export a lot more matte than they do the ore. Australia and New Caledonia export a lot more ore than matte. </p>
<p>From the chart on nickel exporters, we see that, in addition to the main exporters of nickel ore, certain countries that do not produce nickel ore are important exporters of nickel. Some examples are the UK, Norway, China, Japan, and South Africa. How is this possible? It is understandable when we look at the chart of importers of matte and ore. China imports more than 63% of global ore exported and nearly 22% of total nickel matte exported. But it only exports a small amount of nickel. That means it is using most of it internally. South Africa and Finland are major importers of nickel ore, and Japan, the UK, and Norway are major importers of nickel matte.</p>
<p>If economic sanctions are applied against Russia, the world might suddenly see nickel vanishing from world markets because Russian nickel might be off limits. That will mean that all industries that are downstream will not get raw nickel for their needs, for example, rechargeable nickel hydride batteries. Even if nickel is exempt by the West from sanctions, Russia might decide to impose sanctions on the export of nickel, seriously crippling Western industry. <b><i>Economic sanctions are a blunt instrument and hence a very foolish idea, and it is hard to believe that any economist would support such self-destructive ideas.</i></b></p>
<p>
Sulfur is mainly used to produce sulfuric acid, which is a very important bulk chemical in the chemical and fertilizer industry, to produce, among other things, ammonium sulfate. About 60% of sulfuric acid is used for fertilizer production. <span id="fig203">Russia is the third-largest producer of sulfur in the world (9.4%), after China (21.3%) and the USA (10.2%).</span> One could say that, with a huge population, a large percentage of China's sulfur production is used for domestic needs. While this is undoubtedly true, the manufacturing volumes still give a sense of China's independence from the West. In the event of a total break with the West, China will be reasonably self-sufficient in sulfuric acid.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivmeTScS-kWQ0RE3m1402Dg7ma8ZZOOab2QvWiQskexmfj-MOyEOp1IDkuguivKWm3Wo-KoFMfcbJvdZtER0aN-rM5PZFImol8RfdPMdQ6xCOPk2tsm_hMSZZP7kdSAcr6_-MeB0EclZ1nuUP9wIG1KaOKkZ7gah4ZPPQWE1lxVMX4FYh7rqxCDCBlnw/s605/fig156_Sulfur.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivmeTScS-kWQ0RE3m1402Dg7ma8ZZOOab2QvWiQskexmfj-MOyEOp1IDkuguivKWm3Wo-KoFMfcbJvdZtER0aN-rM5PZFImol8RfdPMdQ6xCOPk2tsm_hMSZZP7kdSAcr6_-MeB0EclZ1nuUP9wIG1KaOKkZ7gah4ZPPQWE1lxVMX4FYh7rqxCDCBlnw/w400-h225/fig156_Sulfur.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 203. Top World Producers of Sulfur, 2021</td></tr></tbody></table>
<p><span id="fig204">That most of the sulfur produced in China is used up in domestic consumption is clear from the next graph</span>, which shows the global exports of sulfur, where China makes up just 1.6% of global exports. The USA also does not feature in the list of top exporters, despite being the second-largest producer of sulfur. Russia forms only 2.4% of global exports, indicating that it, too, is using most of the sulfur it producer for internal consumption.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnbNRwUR4c6biXrRDH9GpSZ1PPCYJWPKdCWoY0kSNFcSifiKtQWIRmgxXnCsRM7n2ohGepwUvBnEOYaBHZcJ360okQHaxLHvO-q5ofPi926_JEK1aDR3ppKLVNsLR05gsSTki0di__mUv3Vg3BbTWbqLsIKqOpyHN8jv8YjjPOVBS8XqTDzCMCGxxhAw/s1177/SulfurExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnbNRwUR4c6biXrRDH9GpSZ1PPCYJWPKdCWoY0kSNFcSifiKtQWIRmgxXnCsRM7n2ohGepwUvBnEOYaBHZcJ360okQHaxLHvO-q5ofPi926_JEK1aDR3ppKLVNsLR05gsSTki0di__mUv3Vg3BbTWbqLsIKqOpyHN8jv8YjjPOVBS8XqTDzCMCGxxhAw/w400-h371/SulfurExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 204. Exporters of Sulfur, 2020</td></tr></tbody></table>
<p>However, in further evidence of the difficulty of tracing commodities, <span id="fig205">China also uses a lot of its sulfur to produce ammonium sulfate, one of the important fertilizers, and is one of the leading exporters of ammonium sulfate.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiX9YrDMOnaRiU_LQpaCUEJ_sArgL80nCup6ZEqRu2eK5P6PZXMdeyglc0rhXP6Znxv-BMaX1DQga2o078DkzHUUs5PqkDWg9B-MNBc8TtYOwKcdGCG_bveOciE8jqIjV3rq4TyWuyO0Bip6MO3aoKi_jdpw5YyXgblGPnGu0q2qgZPK7JqrDktjky7Qg/s1177/AmmoniumSulphate_Exporters_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiX9YrDMOnaRiU_LQpaCUEJ_sArgL80nCup6ZEqRu2eK5P6PZXMdeyglc0rhXP6Znxv-BMaX1DQga2o078DkzHUUs5PqkDWg9B-MNBc8TtYOwKcdGCG_bveOciE8jqIjV3rq4TyWuyO0Bip6MO3aoKi_jdpw5YyXgblGPnGu0q2qgZPK7JqrDktjky7Qg/w400-h398/AmmoniumSulphate_Exporters_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 205. Exporters of Ammonium Sulfate, 2020</td></tr></tbody></table>
<p>
Titanium is a metal that gives a lot of strength to other metals in alloys. So it is used in aircraft bodies because it provides high strength with low weight. Titanium dioxide is also used in the paint industry because it provides a brilliant white colour. <span id="fig206">China is the top producer of titanium in the world, producing 57.9% of total output; Russia is third at 13% of world output.</span> Together, the two countries produce 71% of world output.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxI4wjtuM__LNLPFK7KOMDCIjVo5K2Gw162JrakZ5mHsTjO900cCk8B0RRrP4q2WL5VchnoHA68xc-nX9ftRZopROr260pL1vK7hAj8S--HqTsuqSq_Ty9Mz5sRe2CmK8c16Fd9mMeRVPn2Nt9MxGop1WcKlhPUmiZUGlHtKtKHV-sjeqa4scNDoexzg/s605/fig157_Titanium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjxI4wjtuM__LNLPFK7KOMDCIjVo5K2Gw162JrakZ5mHsTjO900cCk8B0RRrP4q2WL5VchnoHA68xc-nX9ftRZopROr260pL1vK7hAj8S--HqTsuqSq_Ty9Mz5sRe2CmK8c16Fd9mMeRVPn2Nt9MxGop1WcKlhPUmiZUGlHtKtKHV-sjeqa4scNDoexzg/w400-h225/fig157_Titanium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 206. Top World Producers of Titanium, 2021</td></tr></tbody></table>
<p><span id="fig207">Russia and China are also two of the top exporters of titanium, as the chart below shows</span>, totaling to more than 20% of world exporters. The US is the leading exporter of titanium in the world, at 31%.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4y1DtNVco7Bw0_jCu98jFWYYSH86KCOfnsHV9AuJ1z5amm-Xil0cE7UCgCSV-NhPgak4yHPQBelZp0YTu1EM0v3GqzY99mm3zx36Iv9naBbhkkwoamHuK7sif6MNuYHYNWh4bxzNUvul1CUtnAfvP8FnxgK_uWJB12nQtgSbd4OAZuQH4NghJYX7dpQ/s1177/TitaniumExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4y1DtNVco7Bw0_jCu98jFWYYSH86KCOfnsHV9AuJ1z5amm-Xil0cE7UCgCSV-NhPgak4yHPQBelZp0YTu1EM0v3GqzY99mm3zx36Iv9naBbhkkwoamHuK7sif6MNuYHYNWh4bxzNUvul1CUtnAfvP8FnxgK_uWJB12nQtgSbd4OAZuQH4NghJYX7dpQ/w400-h359/TitaniumExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 207. Exporters of Titanium, 2020</td></tr></tbody></table>
<p><span id="fig208">A look at who imports Russian titanium is seen in the graph below.</span> It can be seen that European countries spend $259 million, buying 55% of Russia's total exports of titanium. The US buys $132 million worth of Russian titanium.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfZKBKu5h2lkNgX8hlTsZXvWRVUqxpJHbEpVY3GSs1Hst1jJNfiWQm6DoOJqgC94zxosXjfSubjmYWIoS46tywRH0BndRPlJyPqMl9ygvw2E4sn9TMXbZim3OzfAs9TzTgmCf5j9R4ubaUfTIXZp3KF0roBVgaG6CuDxgvQek1aT4uRDhM1GjSFyPJWw/s1177/Titanium_Importers_Russia_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1054" data-original-width="1177" height="359" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfZKBKu5h2lkNgX8hlTsZXvWRVUqxpJHbEpVY3GSs1Hst1jJNfiWQm6DoOJqgC94zxosXjfSubjmYWIoS46tywRH0BndRPlJyPqMl9ygvw2E4sn9TMXbZim3OzfAs9TzTgmCf5j9R4ubaUfTIXZp3KF0roBVgaG6CuDxgvQek1aT4uRDhM1GjSFyPJWw/w400-h359/Titanium_Importers_Russia_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 208. Importers of Titanium from Russia, 2020</td></tr></tbody></table>
<p>
Vanadium is mainly used in high-strength alloys with iron and steel; but another important use (in smaller quantities) is the use of vanadium pentoxide, which is the crucial catalyst used in the manufacture of sulfuric acid. <span id="fig209">China produces two-thirds of the world output, and Russia produces 17.6%.</span> The US is completely dependent on imports for its vanadium needs. In 2021, the world produced 110,000 tons of vanadium.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYkzyk1d68GdH3fua7k0E7l53Lg41AQh0w41vPKmbfrrl11E51vam3A6SONAzt9H4agxPneporMwjeRzMc2Ms-y8uZ5eb9FRD3y624-kElrdbmS2z-S0RhrzoSYQIiu5Qms_BtnQUMnctlnPdxxBbBfuLbp03mUjRA8iIw9c3d52QdV_U4BY_Dnum1XA/s605/fig158_Vanadium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYkzyk1d68GdH3fua7k0E7l53Lg41AQh0w41vPKmbfrrl11E51vam3A6SONAzt9H4agxPneporMwjeRzMc2Ms-y8uZ5eb9FRD3y624-kElrdbmS2z-S0RhrzoSYQIiu5Qms_BtnQUMnctlnPdxxBbBfuLbp03mUjRA8iIw9c3d52QdV_U4BY_Dnum1XA/w400-h225/fig158_Vanadium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 209. Top World Producers of Vanadium, 2021</td></tr></tbody></table>
<p>
Tellurium is used to make cadmium telluride, which is used to make thin-film solar cells. It is also used to make bismuth telluride, which is used in thermoelectric devices for both cooling and energy generation. It is also used in alloying because it provides malleability to alloys and makes machining easier. <span id="fig210">China is the world leader, at nearly 60% of world output; Russia is third, at more than 10%.</span>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6h_WSzOoPzU-IJHHVl2XrX3L-JagZc8J0z4C3WIhiPF3rniMRwmpJxw9oPZ-iiUCs9UUF8S-XEMp_yCgG6lErF7Uof5S2dS5NILA46koVeNlZivrWjoVszHrSOpzc0BEnVvj9zW9WSg3j1t6NYbbC6khZFGJaAUSwBJIFMrKSWWosxFnvGP-ferlucg/s605/fig159_Tellurium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6h_WSzOoPzU-IJHHVl2XrX3L-JagZc8J0z4C3WIhiPF3rniMRwmpJxw9oPZ-iiUCs9UUF8S-XEMp_yCgG6lErF7Uof5S2dS5NILA46koVeNlZivrWjoVszHrSOpzc0BEnVvj9zW9WSg3j1t6NYbbC6khZFGJaAUSwBJIFMrKSWWosxFnvGP-ferlucg/w400-h225/fig159_Tellurium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 210. Top World Producers of Tellurium, 2021</td></tr></tbody></table>
<p>
Cobalt is used to make extremely hard and durable alloys, and for this reason a major use of cobalt is in the manufacture of aircraft gas turbines. It is also used to make wear-resistant machinery. Cobalt compounds are also very important catalysts, especially as organometallic complexes in the chemical industry. The US is 76% import-dependent for cobalt. <span id="fig211">Congo is the world leader in cobalt production, at more than 72% of world output; Russia is second, at 4.6%.</span> One reason why Russia’s position is very important is that Congo has always been unstable politicially, and therefore supplies from the Congo may not always be guaranteed.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMLC3ARRCHT-l7MmlnHgfe13BcVgotUqbHBUhj_wrTzxDiMwZvHdz6nNP5sljhSZ5C8EJVyPPeYgQ67gew5MyRraJTOdGb1lKVNdDJxxALxJJBDgyNJG9sxK5pERgmqYeOaEuLHVrFGnU7c1PRzvYuFhUt1_TjSkVkJv7a67IFShUxPI5S2Co7nhuyWg/s605/fig160_Cobalt.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgMLC3ARRCHT-l7MmlnHgfe13BcVgotUqbHBUhj_wrTzxDiMwZvHdz6nNP5sljhSZ5C8EJVyPPeYgQ67gew5MyRraJTOdGb1lKVNdDJxxALxJJBDgyNJG9sxK5pERgmqYeOaEuLHVrFGnU7c1PRzvYuFhUt1_TjSkVkJv7a67IFShUxPI5S2Co7nhuyWg/w400-h225/fig160_Cobalt.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 211. Top World Producers of Cobalt, 2021</td></tr></tbody></table>
<p>
Germanium is an extremely important mineral that is a vital part of the new economy – it is used to make semiconductors, to make solar cells, and for fiber optics (as germanium tetrachloride). <span id="fig212">China produces 67.9% of the world’s supply of germanium; Russia is a distant second, at 3.6%.</span> The US is more than 50% import-dependent for Germanium.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmg5pEYt6rowq5c6UxJ9kDCq5hMHVPxGOcB15FSQL_3TW4SrFn_GUarVTW2gIGgOWo-fCLJBcGQeJdWnGTU36_NZubNc4_mYDF1vQ4Bdkx7kA-QLIdcnKXb4wm27wlX9jP-Q9HONrr3ugLQqD6g0yyox7wMgHzAcHzT7w-boTgg3thh-dCH-skiz16pw/s605/fig161_Germanium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjmg5pEYt6rowq5c6UxJ9kDCq5hMHVPxGOcB15FSQL_3TW4SrFn_GUarVTW2gIGgOWo-fCLJBcGQeJdWnGTU36_NZubNc4_mYDF1vQ4Bdkx7kA-QLIdcnKXb4wm27wlX9jP-Q9HONrr3ugLQqD6g0yyox7wMgHzAcHzT7w-boTgg3thh-dCH-skiz16pw/w400-h225/fig161_Germanium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 212. Top World Producers of Germanium, 2021</td></tr></tbody></table>
<p>
Tungsten is used to make wear-resistant tools and machinery, such as the drilling bits used by the oil drilling industry. It is also used as tungsten wires in light bulbs and heating equipment. <span id="fig213">China produces 83.3% of the world’s tungsten, followed by Vietnam at 5.7% and Russia at 3%.</span> Together, 92% of the world’s tungsten is made by these three nations. The US is more than 50% dependent on imports of tungsten for its needs.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmJVWCEX-ZWAStOKK1BoCZ-CUt4lHyRNwRWntk4FTeIa9YxGMsoxos-JVusde2GyTHukdUsJcOvno2S3fYi5ZtWrYnFEnhtr16WWCfB4mUUgEKzyi6D5jN2DIfhHPEJQ1wu6zrz4_OAk0NFicNQo4qKsEd8UmC0BpoVTRqX4zUwSgHDAcA61H3I1RweA/s605/fig162_Tungsten.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmJVWCEX-ZWAStOKK1BoCZ-CUt4lHyRNwRWntk4FTeIa9YxGMsoxos-JVusde2GyTHukdUsJcOvno2S3fYi5ZtWrYnFEnhtr16WWCfB4mUUgEKzyi6D5jN2DIfhHPEJQ1wu6zrz4_OAk0NFicNQo4qKsEd8UmC0BpoVTRqX4zUwSgHDAcA61H3I1RweA/w400-h225/fig162_Tungsten.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 213. Top World Producers of Tungsten, 2021</td></tr></tbody></table>
<p>
<span id="fig215">Russia is also one of the leading producer of the platinum group of metals, which comprises platinum</span>, <span id="fig214">palladium</span>, rhodium, ruthenium, iridium, and osmium. The main use of the platinum group of metals is in catalytic converters in internal combustion engine cars. These are used to reduce emissions from automotive engines, and are present in every conventional car, whether it be a gasoline or a diesel car. Platinum group metals are also used as catalysts in bulk chemical processes, such as petrochemical processes. The two most important platinum group metals are platinum and palladium.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUyXPYyPKmqwihNMOBudcWI5t1afxQ7V4CoAnBKTjihHK-JLlx8pZAmRrHr3rmvy2qg-KN7Q981OFy6ImP6MtZPFLKI_xd7z3WOOP1N58HQe074DYkUhzFQUrC47cok85-rW6e-ue_WZ6_gIsGl1FvOzyWs-vnBlgWbBY_HGFQYMqnlkwDM9iLhvGAFg/s605/fig163_Palladium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUyXPYyPKmqwihNMOBudcWI5t1afxQ7V4CoAnBKTjihHK-JLlx8pZAmRrHr3rmvy2qg-KN7Q981OFy6ImP6MtZPFLKI_xd7z3WOOP1N58HQe074DYkUhzFQUrC47cok85-rW6e-ue_WZ6_gIsGl1FvOzyWs-vnBlgWbBY_HGFQYMqnlkwDM9iLhvGAFg/w400-h225/fig163_Palladium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 214. Top World Producers of Palladium, 2021</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhptOYWIdnS9_JbJlw5InWWgCHDXdTb-Ln9HbVaZ8LK83X9D7w6lW_BD4zDtn-Nl7YiutzktHK1jmsZwdevdxJNwxXDZD_uKIHTi3zN2E12vtVQzDVm_42h01b62MdDpj-MsSN5QnzAwxvIyfqfnazwqCKD_-beBe1ZElDrevFJDssA94RoqJQPLMVAyA/s605/fig164_Platinum.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhptOYWIdnS9_JbJlw5InWWgCHDXdTb-Ln9HbVaZ8LK83X9D7w6lW_BD4zDtn-Nl7YiutzktHK1jmsZwdevdxJNwxXDZD_uKIHTi3zN2E12vtVQzDVm_42h01b62MdDpj-MsSN5QnzAwxvIyfqfnazwqCKD_-beBe1ZElDrevFJDssA94RoqJQPLMVAyA/w400-h225/fig164_Platinum.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 215. Top World Producers of Platinum, 2021</td></tr></tbody></table>
<p>
Russia also produces 10.5% of the world’s antimony, second after China at 71.5%; but it has 23.3% of total world reserves. Russia is the leading producer of asbestos in the world, producing 59% of the total asbestos; it also has the largest known reserves of asbestos in the world. Russia is also the top producer of natural diamonds in the world, contributing to 30% of total global production, and has 54% of total known reserves. It is fourth in the world in the production of arsenic, at 4.3%, and produces 4.6% of the world’s cadmium. Russia and Canada are the leading producers of gemstones, at 23% of total global production each. It has the third-largest reserves of peat in the world, at 8.3%, behind Finland at 50% and its close ally and neighbor, Belarus, at 21.7% — and thus, the Russia-Belarus total is 30% of world reserves. Russia also has the second-largest reserves of rhenium, a very important catalyst material in the chemical industry, at 12.9%, behind Chile, at 54%. These are not exhaustive lists, but give some idea of the mineral wealth in these regions.
</p>
<p><span id="fig216">Russia is also one of the leading exporters of industrial diamonds, as can be seen in the graph below</span>.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPOaYHK-ulF94ia33toqb5xpCrpgrETNEWme28Uvuc6mz6fW0K5jMnRNUlUNrk64SUJ3UUUxn8MiIl5VJt_H1FOZ7znc0ZL00bUsNAD4gbVwZWvisKR-EEVXdiYRZ1s-6HkQejxEODBMP4F9h3kwnB65ZV10Hb4u-o6XUCCGbwNskEQCvraUaMPqDJpA/s1212/IndustrialDiamondsExports_2018.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1212" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPOaYHK-ulF94ia33toqb5xpCrpgrETNEWme28Uvuc6mz6fW0K5jMnRNUlUNrk64SUJ3UUUxn8MiIl5VJt_H1FOZ7znc0ZL00bUsNAD4gbVwZWvisKR-EEVXdiYRZ1s-6HkQejxEODBMP4F9h3kwnB65ZV10Hb4u-o6XUCCGbwNskEQCvraUaMPqDJpA/w389-h400/IndustrialDiamondsExports_2018.png" width="389" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 216. Exporters of Industrial Diamonds, 2018</td></tr></tbody></table>
<p>
As can be seen, the minerals that Russia has in abundance, along with China, are extremely important. If this economic war ever gets more intense and Russia and China were to stop selling these minerals to the West, things could go really wrong for Western economies. This is why imposing an embargo on Russia is not practical.</p></div><br />
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section><br /></section><section>
<header>
<h3 id="TOC5f">
The Chinese Domination of the Commodity Market
</h3>
</header>
<div>
<p>We already saw several commodities in the previous section in which China was a dominant player, along with Russia. Let us look at a few more minerals, in which Russia is not significant, but China is dominant. As already discussed, this is very important in the context of the “no limits” partnership between Russia and China.
</p>
<p>
Alumina and Bauxite are the two main ores of aluminium. Earlier, we had seen the production of finished aluminium. But this is the production of aluminium ore. China is <span id="fig218">the world leader by far in the production of alumina</span> and <span id="fig217">second in the world in the production of bauxite</span>. This is particularly important in the context of the announcement on March 20, 2022, by the Australian government that it is banning all exports of alumina and bauxite to Russia. With its “no limits” friend ready to supply as much as it needs, Russia need not worry about Australia’s decision.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5W10J0NervwhJOpHdCsA8z4ozzaCIULGAMTwdDpQHczCdWvsrgAcUZrORKTplb8qQ6KZ4vpiE3kqCvYy-6YOLry8QcH7G3Qa9q3J2PRhPFXV6CplyXCArfK27ggVLixCuC1zeqT9yIo0-cdhWUBgWoosn6wOHskM3r_qIulog25X67uzFhyLLKaMlAA/s605/fig165_Bauxite.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg5W10J0NervwhJOpHdCsA8z4ozzaCIULGAMTwdDpQHczCdWvsrgAcUZrORKTplb8qQ6KZ4vpiE3kqCvYy-6YOLry8QcH7G3Qa9q3J2PRhPFXV6CplyXCArfK27ggVLixCuC1zeqT9yIo0-cdhWUBgWoosn6wOHskM3r_qIulog25X67uzFhyLLKaMlAA/w400-h225/fig165_Bauxite.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 217. Top World Producers of Bauxite, 2021</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3bjcF9BSCOhfLXb49WvLA7pSAKx66d_vMwZqiT5JJqXjuvO3MgIZPimUCOMlpGCf0u6ziPMAgQSCcehMbVUzzFHoXmOywGOjxW9ZMmdTo8M5DJd35GvIQXnQAcEXQPCdHHvjAVXw7vkJszp6rwLwucZgtg6giw0UcYv6kP5lxpa5bHdojBf53SfEhLA/s605/fig166_Alumina.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj3bjcF9BSCOhfLXb49WvLA7pSAKx66d_vMwZqiT5JJqXjuvO3MgIZPimUCOMlpGCf0u6ziPMAgQSCcehMbVUzzFHoXmOywGOjxW9ZMmdTo8M5DJd35GvIQXnQAcEXQPCdHHvjAVXw7vkJszp6rwLwucZgtg6giw0UcYv6kP5lxpa5bHdojBf53SfEhLA/w400-h225/fig166_Alumina.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 218. Top World Producers of Alumina, 2021</td></tr></tbody></table>
<p>I was not able to get data on alumina and bauxite exports.</p><p>Another extremely important metal in the world is lead, which is used in all lead-acid batteries in cars around the world. <span id="fig219">The graph below shows the leading producers of lead in the world.</span>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNsHXpOCub6EZcnxxpj2In4uS-kvXkkZ2r0FI6IIQKY4olt8VzZOV-7OygdTGhTbBOxjohYX4-bQvrVje18ddWefpxymaQWB2RTum0rUuuu20rMRGY9dVtqVmZyIG0cp8XYunIBYgoFgb113oQXJfiZ38w5vtXLPKUvdh4hk9ntmclsPozt7XqukNZOg/s605/fig167_Lead.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjNsHXpOCub6EZcnxxpj2In4uS-kvXkkZ2r0FI6IIQKY4olt8VzZOV-7OygdTGhTbBOxjohYX4-bQvrVje18ddWefpxymaQWB2RTum0rUuuu20rMRGY9dVtqVmZyIG0cp8XYunIBYgoFgb113oQXJfiZ38w5vtXLPKUvdh4hk9ntmclsPozt7XqukNZOg/w400-h225/fig167_Lead.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 219. Top World Producers of Lead, 2021</td></tr></tbody></table>
<p>
China produces nearly half the lead in the world. This means that the rest of the world is highly dependent on lead from China to run their cars.
</p>
<p>
China is also the world leader in the production of “rare earths,” an umbrella term covering 17 elements in the periodic table of elements, called the “lanthanides.” Despite the name, the “rare earths” are quite abundant; however, China has the majority of the world's deposits. The rare earths have a number of highly specialized properties. In particular, many of them, such as praseodymium and neodymium, are extremely useful as magnets. The most powerful magnets in the world are made of rare earth minerals. A quarter of all rare earth minerals are used as magnets. In this context, <span id="fig220">the exports of permanent magnets is significant, as can be seen from the graph below.</span> China dominates the export market for permanent magnets.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBlByy2EydO_g6-zSEqOBFaNjChx7TClz8OLdrRGZnum6KNqm3RR5kJ40njnOOKs4M6pZJHzV8SEeUC5p-VpzkiE2SNg6DfprxCPlE1f-moZoSoO6VRX1nuXndAG2Y41Titox_g_FG5m2EZQb-vXlx2hH9sxHROh5VT4tECkIWoK3XMnbSealz-qGnUA/s1208/PermanentMagnetsExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1208" data-original-width="1177" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiBlByy2EydO_g6-zSEqOBFaNjChx7TClz8OLdrRGZnum6KNqm3RR5kJ40njnOOKs4M6pZJHzV8SEeUC5p-VpzkiE2SNg6DfprxCPlE1f-moZoSoO6VRX1nuXndAG2Y41Titox_g_FG5m2EZQb-vXlx2hH9sxHROh5VT4tECkIWoK3XMnbSealz-qGnUA/w390-h400/PermanentMagnetsExports_2020.png" width="390" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 220. Exporters of Permanent Magnets, 2020</td></tr></tbody></table>
<p><span id="fig221">Most mobile phones have rare earth elements in them</span>. Another quarter of the total rare earths mined find use as catalysts in chemical processes – for example, in petroleum refining. These are extremely useful industrial minerals. Some are used in the production of nickel-metal-hydride batteries and in fuel cells. Others are used in making LCD displays, plasma screens, fibre optics, lasers, and medical imaging equipment. Thus, rare earths are extremely important for renewable energies, such as wind, solar, and batteries.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoOStYTNSstZQqWrmlUwNGzyPynl-A8032I1X1KVzQC4yQLx-hFP22qsFPWNyW23n5itInUK00TF3oinPF7oBYmgXg-6My6pdZF9Xn-JWJYqb8Y0T7qvT3XL1KWQBhLVWgwrMcTPgT2AmKWd417JIaAI2g3F7MtAABVhyu4JPTwdwDFDmEoVuEEWE8Rw/s605/fig168_RareEarths.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjoOStYTNSstZQqWrmlUwNGzyPynl-A8032I1X1KVzQC4yQLx-hFP22qsFPWNyW23n5itInUK00TF3oinPF7oBYmgXg-6My6pdZF9Xn-JWJYqb8Y0T7qvT3XL1KWQBhLVWgwrMcTPgT2AmKWd417JIaAI2g3F7MtAABVhyu4JPTwdwDFDmEoVuEEWE8Rw/w400-h225/fig168_RareEarths.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 221. Top World Producers of Rare Earths, 2021</td></tr></tbody></table>
<p>
<span id="fig222">China is also the world’s leading producer of <em>elemental</em> silicon by far</span>, producing 70.3% of global silicon production. It should be noted that silicon is abundant in the earth, because all sand is essentially silica, or silicon dioxide; but it is China that makes the most silicon from silica. Russia is second in silicon production, at 6.8%. About 80% of this elemental silicon is used as an alloy with iron, called ferrosilicon, because it improves the properties of iron. The remaining 20% is refined to 95-99% purity, and is called “metallurgical grade” silicon. The majority of metallurgical grade silicon is used in aluminium alloys (known as silumin alloys) for high-end automotive applications with cast aluminium parts. About 15% of metallurgical silicon is further purified to “nine-9” purity, or 99.9999999%, for semiconductor applications, since the majority of semiconductor chips are made of silicon.
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK5cXtXw9fJ0T4C4X4HxlQoru0_3vny10amClMFccwFFGHMsA6KU0YsALUbsBYUDgL5bKqw4M4VmB44EnVHyWt8_cEEW-V1kJ4_5TqYbM_H-1pvuyTsbkV9GKg2d5VPpq8mBGi5oqyQwZP9qxk_oKKcx0_0Pc6OFkhjOvS6epTtN08dWjEjDu-c981aA/s605/fig169_Silicon.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiK5cXtXw9fJ0T4C4X4HxlQoru0_3vny10amClMFccwFFGHMsA6KU0YsALUbsBYUDgL5bKqw4M4VmB44EnVHyWt8_cEEW-V1kJ4_5TqYbM_H-1pvuyTsbkV9GKg2d5VPpq8mBGi5oqyQwZP9qxk_oKKcx0_0Pc6OFkhjOvS6epTtN08dWjEjDu-c981aA/w400-h225/fig169_Silicon.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 222. Top World Producers of Silicon, 2021</td></tr></tbody></table>
<p><span id="fig223">This can also be seen in the exports of elemental silicon</span>. China exports 40% of the elemental silicon (not semiconductor grade) in the world. Other countries import this and further refine it to nine-9 purity for semiconductor applications.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaEzZjh6pQxCe8XH8jpi9eoBhWK0zRWGmGANjt3IKhY8hFCzJa9wDBVeCLU21EIWe-M2622vcOzKStp3VCsAhZ-YK9kRcdeQTFQD-gMX4JXnoxb0Hk9NNWc_RL2R6S-gLMlmOfYoig_sRRLXpnemdzTGewmfeJ3yYZ30b6q2nQI38T11N7ZyxNxcvzoA/s1177/SiliconExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaEzZjh6pQxCe8XH8jpi9eoBhWK0zRWGmGANjt3IKhY8hFCzJa9wDBVeCLU21EIWe-M2622vcOzKStp3VCsAhZ-YK9kRcdeQTFQD-gMX4JXnoxb0Hk9NNWc_RL2R6S-gLMlmOfYoig_sRRLXpnemdzTGewmfeJ3yYZ30b6q2nQI38T11N7ZyxNxcvzoA/w400-h384/SiliconExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 223. Exporters of Silicon, 2020</td></tr></tbody></table>
<p>
<span id="fig224">China is the world’s leading producer of fluorspar, or calcium fluoride, an incredibly important bulk chemical, producing 63% of world output.</span> Fluorspar is used to make hydrofluoric acid (HF), which is then used for a variety of uses, including making
</p>
<ul>
<li>
Refrigerants, such as Freon
</li>
<li>
Teflon, the basis for all nonstick pans
</li>
<li>
Etchants, to clean semiconductor chips. HF can etch glass, and is one of the most powerful acids.
</li>
<li>
In preparing strong acid catalysts by exposing resin beads to it. These strong acid resins are extremely useful in the petrochemical industry
</li>
<li>
Pharmaceuticals, such as Fluoxetine (Prozac)
</li>
<li>
Inorganic fluorides, such as sodium aluminium fluoride, or cryolite, used in the production of aluminium by electrolysis; and uranium hexaflouride.</li>
</ul>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoyY4jwiK02QDpzljv8cLLo7V-fHVOmXFXXuFg4ignytrUqAl1ZpGrmbloITYnLPTBslCvJb3S6zLG5zgk78UXTGRAfmRfZLiEUsBPzVJIW8KASNlpEEeNad8uz_qlu_ncp4qSRsgZy5bqaHqM2j0NHfALk44xY6bBhrxVyW2qxvEEU5nw6m2tBoPk7Q/s605/fig170_Fluorspar.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhoyY4jwiK02QDpzljv8cLLo7V-fHVOmXFXXuFg4ignytrUqAl1ZpGrmbloITYnLPTBslCvJb3S6zLG5zgk78UXTGRAfmRfZLiEUsBPzVJIW8KASNlpEEeNad8uz_qlu_ncp4qSRsgZy5bqaHqM2j0NHfALk44xY6bBhrxVyW2qxvEEU5nw6m2tBoPk7Q/w400-h225/fig170_Fluorspar.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 224. Top World Producers of Fluorspar, 2021</td></tr></tbody></table>
<p>
<span id="fig225">China produces 30% of the world output of tin, a huge bulk chemical.</span> About half of tin production is used in the manufacture of solder, a tin-lead mixture used for joining wires in electrical circuits. Another huge use of tin is the coating of steel by tin to prevent corrosion. Copper vessels are also coated with tin to prevent toxicity. A niobium-tin alloy is commonly used to make superconducting magnets. Tin oxides are used in optoelectronics such as LCD displays. Tin is also used in advanced Lithium-ion batteries as a negative electrode.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmM6mAMoRX7uA2g4A49-jC7lOCfcqDBvHdY07f2gd-K6Fi81aHk1d8AISAaeRH5ZKmdftOxV-NK4pO5GkcKtGKzQPTScTupwZEw2RnfLNpBWcVu98marzEvNVtJDi5d-tL6AdBbY0icgNQw_x24c5paf_olPH5l2BNtJyFER2kdRJs0IBdHbqmQ6pXAw/s605/fig171_Tin.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmM6mAMoRX7uA2g4A49-jC7lOCfcqDBvHdY07f2gd-K6Fi81aHk1d8AISAaeRH5ZKmdftOxV-NK4pO5GkcKtGKzQPTScTupwZEw2RnfLNpBWcVu98marzEvNVtJDi5d-tL6AdBbY0icgNQw_x24c5paf_olPH5l2BNtJyFER2kdRJs0IBdHbqmQ6pXAw/w400-h225/fig171_Tin.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 225. Top World Producers of Tin, 2021</td></tr></tbody></table>
<p>
<span id="fig226">China is one of the world leaders in the production of lithium, one of the most important minerals today.</span> Lithium is used to make batteries for electric cars, phones, laptops, and a variety of other electronics. Lithium oxide is also used as a flux for reducing the melting point of silica in glass manufacture. Lithium is also a very important drug in psychiatry, being the frontline drug to treat manic-depressive illness.
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgehU8wjHQ4y3sZ0wezcL2WjpJF5yrWLO5EO-KvnKn5fcErztssDnMM396DVxTT0Yg7_4L_7xOPNzOUhwUlQ2V5_ROMDZALo_NHKVGudJ4EE_5ssEn2XJE5w8r36b7YwLSKAydI7NynPR8DFpHAj9d618qGNJvfwuzKFOzAj0YwCRHKGTV0ZsaLvXID_Q/s605/fig172_Lithium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgehU8wjHQ4y3sZ0wezcL2WjpJF5yrWLO5EO-KvnKn5fcErztssDnMM396DVxTT0Yg7_4L_7xOPNzOUhwUlQ2V5_ROMDZALo_NHKVGudJ4EE_5ssEn2XJE5w8r36b7YwLSKAydI7NynPR8DFpHAj9d618qGNJvfwuzKFOzAj0YwCRHKGTV0ZsaLvXID_Q/w400-h225/fig172_Lithium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 226. Top World Producers of Lithium, 2021</td></tr></tbody></table>
<p><span id="fig227">This is also seen in the exports of lithium carbonate, the main ore of lithium.</span> The main application of lithium today is batteries, and <span id="fig228">it can be seen that China is the world leader in the production of lithium-based batteries.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRz_sHfbr-qtza8KHhsTuZiGGSxL1S7iT0MwETkborZLZhTedsTGeSRaeJxQTvVt96xEiU-gY8C_gHIhI6i0jK0ZBfRYem_fj-lzD9XosDurUFow_FRKMan5xx8EK1TeTWQ59BTfB_xV8nttQzaN2vKGpjMqHgLiawYST8x7A6d3jS0p-yjVm7A8fzJw/s1177/LithiumCarbonateExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRz_sHfbr-qtza8KHhsTuZiGGSxL1S7iT0MwETkborZLZhTedsTGeSRaeJxQTvVt96xEiU-gY8C_gHIhI6i0jK0ZBfRYem_fj-lzD9XosDurUFow_FRKMan5xx8EK1TeTWQ59BTfB_xV8nttQzaN2vKGpjMqHgLiawYST8x7A6d3jS0p-yjVm7A8fzJw/w400-h398/LithiumCarbonateExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 227. Exporters of Lithium Carbonate, 2020</td></tr></tbody></table><br />
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirr6b47KGTAl3PaGDREhuLi6e_dGhIYQb2MWVS0fDucx-mUU66aV9h7MKugpSq5NbTNNZ-tcNmpMbum4TVoH1oUS_EoyqOIY2ekMb--2XYGIwH4WUrgo4JT3V4iorN-B3xhdaWrP9H9LqSPnKcU35f6Mx-80cIYBidE2tp0K84L3wZzHe60tugyX2dcg/s1177/LithiumBatteryExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1169" data-original-width="1177" height="398" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEirr6b47KGTAl3PaGDREhuLi6e_dGhIYQb2MWVS0fDucx-mUU66aV9h7MKugpSq5NbTNNZ-tcNmpMbum4TVoH1oUS_EoyqOIY2ekMb--2XYGIwH4WUrgo4JT3V4iorN-B3xhdaWrP9H9LqSPnKcU35f6Mx-80cIYBidE2tp0K84L3wZzHe60tugyX2dcg/w400-h398/LithiumBatteryExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 228. Exporters of Lithium Cells and Batteries, 2020</td></tr></tbody></table>
<p>
<span id="fig229">China produces 72% of the world output of lime, one of the most important bulk inorganic chemicals.</span> Lime is used in steelmaking; in chemical processes such as the manufacture of fertilizer, glass, paper and pulp, calcium carbonate, and sugar refining; in flue gas desulfurization; and construction.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmbTjRLr8S4WYLw6-kJkuL4sYOQCQTE9VEBaSeBN-qqdqHyScqbsCHgBlX7yl8MfJBVvzW_M7yGJZArjs5Q80wqwcjZNTOHn6o-Wjl7U0qHcSnAISj7_SdVx1eLNbP14_USkHO5odD4fPdkfAzByF76Hb_CRyEVn_zkfvc9R52-YlXHTljIKzYbqbayg/s605/fig173_Lime.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmbTjRLr8S4WYLw6-kJkuL4sYOQCQTE9VEBaSeBN-qqdqHyScqbsCHgBlX7yl8MfJBVvzW_M7yGJZArjs5Q80wqwcjZNTOHn6o-Wjl7U0qHcSnAISj7_SdVx1eLNbP14_USkHO5odD4fPdkfAzByF76Hb_CRyEVn_zkfvc9R52-YlXHTljIKzYbqbayg/w400-h225/fig173_Lime.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 229. Top World Producers of Lime, 2021</td></tr></tbody></table>
<p>
<span id="fig230">Another extremely important bulk mineral is graphite. Graphite is used for a variety of uses, including producing refractory bricks for furnaces to insulate them – these are used in every part of a steel factory to hold molten metal, including the blast furnace itself. China produces 75% of the world’s refractories.</span> According to the USGS, in 2021, one million tons of natural graphite were mined, with 79% of them coming from China.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvFoczQzHSPtaIBn1XOVe1V-r1zggfjVzpfYvR-GV_pm_7qhsnNA9iQ6KRtyNYYXAPBL86qrH1xvxQ94deKt5nx3MfWzLHfO38LIfOrTE0vqV6fGw0Qt8N_UAkdz41zxzOLaWXRL4xwYjxUYslqkkVimgS3pcQJh8-pM_c6VzcxUD1XBYOp0ejufpw8g/s605/fig173a_NaturalGraphite.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjvFoczQzHSPtaIBn1XOVe1V-r1zggfjVzpfYvR-GV_pm_7qhsnNA9iQ6KRtyNYYXAPBL86qrH1xvxQ94deKt5nx3MfWzLHfO38LIfOrTE0vqV6fGw0Qt8N_UAkdz41zxzOLaWXRL4xwYjxUYslqkkVimgS3pcQJh8-pM_c6VzcxUD1XBYOp0ejufpw8g/w400-h225/fig173a_NaturalGraphite.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 230. Top World Producers of Natural Graphite, 2021</td></tr></tbody></table>
<p>
Graphite is also used as the anode in all rechargeable batteries such as Lithium-ion and Lithium-metal-hydride batteries. <a href="https://en.wikipedia.org/wiki/Graphite#Uses_of_natural_graphite">A single electric car might contain 40 kg of graphite in the battery.</a>
</p>
<p>
Graphite is also used in steelmaking to increase the carbon content of the steel. Graphite is also ubiquitous in all electrical motors, because they use carbon brushes which are made of graphite.
</p>
<p>
Another large-scale use of graphite is in automotive brake shoes. The use of graphite has zoomed since the banning of asbestos for brake linings.
</p>
<p>
Graphite is also widely used in the casting industry as a lubricant to line the mold and easily remove the cast part. It is also used widely in headphones and the ubiquitous pencils.
</p>
<p><span id="fig231">China's dominance of world production of graphite is also seen in the graph below, of world exports of graphite.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQRGk88xg2xj3YLQ3ytpDieQ0S-aedt6onHW3-fq5rnJXgAw1h0ZvBOdvNWx8Q7r8G5IB7mHN3-GC9q6L7Vg4lspZngMrz88p_OAeHUK4SW2e6d4CiRCGcijdi3kf3tC7ySwo4_A8R9ceuKNMWuPAyFxoH13NQZETDXAcUXd5pInTAlOPt4K-gpfRP9g/s1177/GraphiteExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjQRGk88xg2xj3YLQ3ytpDieQ0S-aedt6onHW3-fq5rnJXgAw1h0ZvBOdvNWx8Q7r8G5IB7mHN3-GC9q6L7Vg4lspZngMrz88p_OAeHUK4SW2e6d4CiRCGcijdi3kf3tC7ySwo4_A8R9ceuKNMWuPAyFxoH13NQZETDXAcUXd5pInTAlOPt4K-gpfRP9g/w400-h371/GraphiteExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 231. Exporters of Graphite, 2020</td></tr></tbody></table>
<p>
The US is 100% dependent on imports for its graphite needs.
</p>
<p>
Another important mineral that the world is crucially dependent on China for is gallium, which is one of the most important semiconductor materials. <span id="fig232">China produces more than 95% of the world’s supply of gallium.</span> The reason why China is such a dominant supplier of gallium is that gallium always occurs along with aluminium (they are part of the same family of elements in the periodic table). Since China has huge reserves of alumina and bauxite, it produces gallium as a byproduct of the aluminum industry.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5SJ00FGpXxQ1DdeWTBqE6Xl26QDM5uL7PGKp_d_ddNm1239xsJdtNgPR-WbOtkFYyCF0b1yatZ9pwehPhmZb8yRR07PlSwOOOoRc-cqI8w4sLX3gubDTCQLEYEFQfXLJF1et7WUuDkb3Q1kceqN8ghKqa_FW2NlkHshRqVzJtWBd4_5PtIdce2r53pg/s605/fig173b_Gallium.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5SJ00FGpXxQ1DdeWTBqE6Xl26QDM5uL7PGKp_d_ddNm1239xsJdtNgPR-WbOtkFYyCF0b1yatZ9pwehPhmZb8yRR07PlSwOOOoRc-cqI8w4sLX3gubDTCQLEYEFQfXLJF1et7WUuDkb3Q1kceqN8ghKqa_FW2NlkHshRqVzJtWBd4_5PtIdce2r53pg/w400-h225/fig173b_Gallium.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 232. Top World Producers of Gallium, 2021</td></tr></tbody></table>
<p>
Gallium is extremely important in electronics. 98% of all gallium produced is used to make semiconductors, mainly as gallium arsenide and gallium nitride. Around two-thirds of semiconductor gallium is used in creating high-tech integrated circuits, such as ultra-high-speed logic chips. All modern 3G and 4G smartphones use gallium arsenide chips. <a href="https://en.wikipedia.org/wiki/Gallium">Around 20% of gallium produced is used in the manufacture of optoelectronics devices, an $18.5 billion market in 2016.</a> The US is 100% reliant on imports for its gallium requirements.
</p>
<p>Another important metal that China is a significant producer of is manganese. <span id="fig233">China produces 6.5% of the total world output of manganese, as can be seen from the graph below.</span></p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtNJ_oMYZ_Ufw5W09Xx9eFk8Cn8Qav8NYVFtqbb6zGMrH-CFECy2-cKZVS44_j7pa2I0VT1u23wFnQe1l5zfm08GjA4Df_qlCmHyOr2e6PnfRQD8OUBFnVA48TEQxCVDBG9z2hjEW4hlurUj9ZKu9l77etgL26qtre8So9AAloROu-CaUSItCO69G78A/s605/ManganeseProduction.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtNJ_oMYZ_Ufw5W09Xx9eFk8Cn8Qav8NYVFtqbb6zGMrH-CFECy2-cKZVS44_j7pa2I0VT1u23wFnQe1l5zfm08GjA4Df_qlCmHyOr2e6PnfRQD8OUBFnVA48TEQxCVDBG9z2hjEW4hlurUj9ZKu9l77etgL26qtre8So9AAloROu-CaUSItCO69G78A/w400-h225/ManganeseProduction.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 233. Top World Producers of Manganese, 2021</td></tr></tbody></table>
<p>Manganese is an extremely important metal in metallurgy, especially in the production of steel, where it is added as a scavenging metal to remove excess sulfur, dissolved oxygen, and phosphorous, and to improve the malleability of steel. About 90% of global manganese output is used for this crucial role in steel production, and there is no other mineral that can substitute for manganese in this role. Steel containing between 8% and 15% manganese is known for its high tensile strength, and is used by the British and US military to make helmets for soldiers. Manganese is also an essential component of stainless steel.</p>
<p>Despite the fact that China is only the fourth largest producer of manganese, <span id="fig234">it is the world's largest exporter of manganese, as can be seen in the graph below</span>.</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd6MkHTQwIABJPtL2leMZ2CVGPGU9G2lmt_R-LgDyBJjF84H2tNJKQoJRBWWI2Cndm-Xwo164BA1BiLxGIB8J1oJ2Zp38GEDlRHclHzYnoBhz99XNNV0J36R1JHuQD9uX7YFvahkHO9VCrCgwMWeqlmiveVISQljV2foz30PcwCBNhnfK1B-76wrZ0Tg/s1177/ManganeseExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1092" data-original-width="1177" height="371" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd6MkHTQwIABJPtL2leMZ2CVGPGU9G2lmt_R-LgDyBJjF84H2tNJKQoJRBWWI2Cndm-Xwo164BA1BiLxGIB8J1oJ2Zp38GEDlRHclHzYnoBhz99XNNV0J36R1JHuQD9uX7YFvahkHO9VCrCgwMWeqlmiveVISQljV2foz30PcwCBNhnfK1B-76wrZ0Tg/w400-h371/ManganeseExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 234. Exporters of Manganese, 2020</td></tr></tbody></table>
<p>
I will close this section (which is <i>not exhaustive</i>) with molybdenum, a metal that is primarily used to make alloys. Molybdenum is an essential constituent of stainless steel, comprising anywhere from 0-4%, depending on the type of stainless steel. Molybdenum provides high strength and hardness in alloys, and is also highly temperature-resistant, making it an indispensable ingredient of high-performance alloys known as superalloys. These are used in extreme environments such as aircraft gas turbines, high-speed drill bits, and tools. It also increases corrosion resistance in alloys. <span id="fig235">China is the world's biggest producer of molybdenum, and produces 44% of the world’s annual supply.</span> <span id="fig236">The exports of molybdenum also show China to be the top exporter of this mineral, at 24% of world supply.</span>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXZ93xDi2aHh2cd1fAu7ERbEcyN87Upawy9OisMCmJ8Ac6HmDSrLTIIr0JMPGUpZfqoOBlsVL42yllsuYA2Ap41MOLVE-GhWTHHRA4P3RnoIHLhne306oBunDgtszKunm8oHvJT6tKLKAfZ-PyBjvcOJRicuhE7CHzBHegazpdlqkYiaNZ8m6a6w7S-w/s605/fig174_Molybdenum.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="340" data-original-width="605" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXZ93xDi2aHh2cd1fAu7ERbEcyN87Upawy9OisMCmJ8Ac6HmDSrLTIIr0JMPGUpZfqoOBlsVL42yllsuYA2Ap41MOLVE-GhWTHHRA4P3RnoIHLhne306oBunDgtszKunm8oHvJT6tKLKAfZ-PyBjvcOJRicuhE7CHzBHegazpdlqkYiaNZ8m6a6w7S-w/w400-h225/fig174_Molybdenum.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 235. Top World Producers of Molybdenum, 2021</td></tr></tbody></table>
<div class="separator" style="clear: both; text-align: center;"><br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRfIky-Cl4DKg6VUxpnzDQmmiOkJjzzgbAZJn4cwMOhKDkMdghtHNLl8pm7JcGVAiU7dx_1sp7RxfdEQAXAKLauGS5bSjgzHg1q3Cj69Sb2N8VGQiSJPyF5jONY6mfN_Lof97NTjSHLNeYxUyLJsW47rjI6Eq4xjlXHNvGDST2SHmLh2MCmdM8XKUp1A/s1177/MolybdenumExports_2020.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1131" data-original-width="1177" height="384" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRfIky-Cl4DKg6VUxpnzDQmmiOkJjzzgbAZJn4cwMOhKDkMdghtHNLl8pm7JcGVAiU7dx_1sp7RxfdEQAXAKLauGS5bSjgzHg1q3Cj69Sb2N8VGQiSJPyF5jONY6mfN_Lof97NTjSHLNeYxUyLJsW47rjI6Eq4xjlXHNvGDST2SHmLh2MCmdM8XKUp1A/w400-h384/MolybdenumExports_2020.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 236. Exporters of Molybdenum, 2020</td></tr></tbody></table><br />
<div><i><b><span style="color: red;">From all the above, it is clear that: Russia and China are dominant producers and exporters of several commodities. This means two things: they are self-sufficient, and economic sanctions on them will harm those who are imposing the sanctions on them far more than they will harm Russia and China themselves. Because of the close partnership between Russia and China, it is practically impossible to cause any economic hurt to either country through sanctions.</span></b></i><br />
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<section>
<header>
<h3 id="TOC5g">
The Infeasibility of Economic Sanctions Against Both Russia and China
</h3>
</header>
<div>
<p>
To recapitulate some of the problems facing the West: The current sanctions against Russia do not seem to be working, and China has not joined the sanctions against Russia, along with most Asian and African countries, which is making European sanctions on Russia toothless. Things could get a lot worse if Russia decides to flex its commodity muscles and stop supply of several key minerals to the West.
</p>
<p>
<a href="https://e360.yale.edu/features/russia-ukraine-war-metals-electric-vehicles-renewables?fbclid=IwAR3ucYHo_1Sy6pRx44xJDSuM26IDH5HnDXaeudFY6eRFuKBvIzqF8bEeEtg">As this article explains,</a>
</p>
<blockquote>
<p>
Europe, a raw materials pauper, imports more than $7 billion of metals, rubber, and minerals a year from Russia, including nickel, palladium, lithium, platinum, cobalt, neon gas, aluminum, and copper. These are all vitally important for the batteries, electric cars, solar panels, smart grids, and wind turbines needed to tackle climate change. For example, Norilsk Nickel — owned by Vladimir Potanin, a key Putin ally and one of Russia’s original oligarchs — is the world’s largest producer of high-grade nickel, mined in Siberia, and also trades in palladium, cobalt, and copper. Russia supplies Germany with 39 percent of its nickel — which is used in car batteries — and much of that comes from Norilsk Nickel.
</p>
<p>
“This degree of dependency on [Russia for] some materials is really quite alarming,” says Vasileios Rizos, head of sustainable resources circular economy at the Center for European Policy Studies, a think tank based in Brussels. “It has accelerated a search already underway to diversify and replace Europe’s sources for these raw materials. In no way is it sustainable in the long run, with Putin or without.”
</p>
</blockquote>
<p>
Another example of the dependence that the West has on Russia is manifested by the semiconductor tussle. Europe and the US have decided that they will not allow Russia to buy advanced semiconductors from Western companies, including Japanese, Korean, and Taiwanese companies. But this can cut both ways, because a vital ingredient that is needed to make semiconductors is neon gas. <a href="https://arstechnica.com/gadgets/2022/03/low-on-gas-ukraine-invasion-chokes-supply-of-neon-needed-for-chipmaking/">More than half the world’s neon supply is made by a collaborative Russian-Ukrainian venture that is now in shambles: the neon is produced as a byproduct of Russia’s steel industry and then purified in Ukraine.</a> If Russia decides to ban the export of its neon gas (something that will have minimal revenue implications for it), it can completely stall semiconductor manufacturing worldwide.
</p>
<p>
One of the things that should be clear from all this is the close connection between Russia and China. Russia can never be punished economically as long as China is a close economic ally for it. So the only way for the West to be able to punish Russia is to make China an ally. But the West has made China its enemy number one. Recently, the Biden administration put in place new restrictions that greatly hamper the Chinese semiconductor industry. Why would the Chinese cooperate with the West and act against Russia? One example highlights the dangers of fighting wars everywhere. In March, the West imposed sanctions on Russia’s ability to procure semiconductors anywhere in the world. One of their targets was China, because China is the largest exporter of semiconductors to Russia. <a href="https://www.argusmedia.com/en/news/2308450-chinas-response-key-to-russias-semiconductor-supply#:~:text=China%20supplies%20the%20majority%20of,semiconductors%20and%20consumer%20electronics%20devices.">As this article from March 2022 explains,</a>
</p>
<blockquote>
<p>
Russia imported $439.84mn worth of diodes, transistors and other semiconductor devices in 2020, along with $1.25bn of electronic integrated circuits (IC), customs data from the United Nations Comtrade database show. That was a fraction of the $440.4bn in global semiconductor sales in 2020, which rose to $555.9bn in 2021, according to the World Semiconductor Trade Statistics (WSTS) organisation.
</p>
<p>
Around a quarter of Russia's semiconductor imports are subject to the sanctions, equivalent to $470mn, the ministry of economic development said over the weekend of February 26-27, adding that the country would look to Asia-Pacific countries to fill the supply shortfall.
</p>
<p>
China supplies the majority of Russian imports of semiconductors and consumer electronics devices. Russia imported $248.57mn of the $439.84mn in components from China in 2020, as well as $246.34mn of the $1.25bn in ICs. The US was its second-largest supplier, accounting for a combined $64.6mn, the data show. Other suppliers include Japan, South Korea, Malaysia and the Philippines.
</p>
<p>
Chinese foreign ministry spokesperson Wang Wenbin said on March 1 that China remained opposed to the sanctions and would “continue to carry out normal trade co-operation” with Russia. But Chinese companies with a presence in Europe and the US could face large fines and other penalties. Under the US sanctions, any goods produced outside the US that use US equipment, software or blueprints are prohibited from being exported to Russia.
</p>
</blockquote>
<p>
But <a href="https://foreignpolicy.com/2022/10/28/biden-china-semiconductors-chips/#:~:text=New%20export%20controls%20announced%20by,residents%2C%20or%20green%20card%20holders.">Biden’s latest round of sanctions on China</a> means that China need not worry about being punished by the West for helping Russia any longer. China is going to be punished anyway, whether or not it helps Russia, so it might as well go full tilt in helping Russia to try to defeat the US. This is the kind of destructive, non-cooperative, “My Way or the Highway” thinking that is operative in Washington, where the establishment still is deluded and believes that the US is a superpower that can get away with anything, and this kind of thinking will be the cause of its eventual downfall. This is the same reason why the US is having so much trouble with North Korea. <a href="https://www.cfr.org/backgrounder/china-north-korea-relationship">China is the only country with any influence on North Korea,</a> and attempts to treat China as an enemy will only make the West and, particularly, South Korea, more insecure.
</p>
<p>
<span style="font-style: italic; font-weight: bold;">The problem with the US is that it is trying to fight wars everywhere. At a time when it needed the support of the Chinese with regard to Ukraine, the US allowed Nancy Pelosi to visit Taiwan, greatly annoying the Chinese. They can now be sure that the Chinese will do everything in their power to help Putin. The Americans want to fight Russia, China, Iran, Cuba, Venezuela, North Korea, Afghanistan, and even Saudi Arabia, which was once a close ally of the US, all at the same time. They cannot expect any cooperation from other countries if they are trying all the time to establish a Pax Americana. And it does not work anyway. The world has changed.
</span></p>
<p>
If the US continues to annoy China, China might make a clean break with the West, invade Taiwan to secure its semiconductor supply, and stop supplying so many of the critical minerals that it has been supplying to the West. This would completely cripple Western industry. So the US needs to be very careful with its sanctions regime as regards China and Russia. Things could get a whole lot worse.
</p>
<p>
We have seen the kinds of problems that Europe is facing and will continue to face as a result of the sanctions they chose to impose on Russia in retaliation for its invasion of Ukraine. While there are too many facets to consider here, given the breadth of Russia’s influence on Europe and the world, let us look at one narrow area, viz., energy, because that is the area where most of the media attention has gone. What are Europe’s options with regard to the giant energy deficiencies facing it as a result of its sanctions on Russia?
</p>
</div>
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</section>
<div id="floatclear"></div>
<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC5h">
Key Takeaways from Chapter V
</h3>
</header>
<div>
<ul>
<li>
Because of sustained high natural gas prices in Europe, several industries are on the brink of collapse in Europe because they use gas for heat
<ul>
<li>
Chemicals, Glass, Paper, Fertilizer, Cement, etc.
</li>
<li>
This may move production permanently to other global locations, like the US or China
</li>
</ul>
</li>
<li>
High gas prices did not start with the war in Ukraine
<ul>
<li>
They have been high for more than a year because of post-Covid demand
</li>
<li>
The gas crunch from the Ukraine war came on top of a pre-existing gas crisis
</li>
</ul>
</li>
<li>
The real gas crisis is not the high price of spot gas, but the loss of a low-price contract with Russia for gas
<ul>
<li>
Russian contract gas was priced at €15/MWh, whereas spot gas price was 6-7 times as high and went as high as 20 times during the peak
</li>
</ul>
</li>
<li>
Spot gas prices have recently gone down due to two reasons
<ul>
<li>
Low gas demand from China has mitigated the situation
</li>
<li>
Industry shutdown has caused demand in Europe to drop and lowered spot gas prices
</li>
<li>
But it is still much higher than the old contract rates
</li>
</ul>
</li>
<li>
Gas prices have domino effects because gas is also used as a feedstock
<ul>
<li>
Ammonia is made from gas
<ul>
<li>
70% of ammonia production is shut down
</li>
<li>
Carbon dioxide is a by-product of ammonia production
<ul>
<li>
Carbon dioxide shortage is causing problems for food preservation, beer and soft drink production, decaffeination of coffee, and humane killing of animals
</li>
</ul>
</li>
<li>
Fertilizer is made from ammonia
<ul>
<li>
Fertilizer production in Europe has plummeted
</li>
<li>
In addition, Russia and Ukraine are major global fertilizer producers, causing a supply crisis
</li>
<li>
China stopped export of fertilizer for domestic consumption
<ul>
<li>
Fertilizer shortage will cause a food crisis in Europe
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
Europe is planning an oil price cap on Russian oil to be implemented on December 5, 2022
<ul>
<li>
Russia has said it will stop supplying crude oil
<ul>
<li>
This will drastically affect transportation within Europe
<ul>
<li>
Prevent goods from reaching plants from ports
</li>
<li>
Prevent goods from reaching markets
</li>
<li>
Prevent people from commuting to factories
</li>
</ul>
</li>
<li>
This will affect the production of all plastic and polymer in Europe
<ul>
<li>
Affect production and cause shortages of containers, paints, adhesives, tapes, spectacles, clothes, jackets, automotive parts, applicances, toys, packaging, wire sheaths, food packaging, etc.
</li>
<li>
Can cause loss of $109 billion to Europe’s chemical companies
</li>
<li>
Force European governments to spend more on importing essential plastic items
</li>
</ul>
</li>
</ul>
</li>
</ul>
</li>
<li>
Commodity crisis and shortages in Europe because of commodities supplied by Russia
<ul>
<li>
Wheat (18.8% of global output)
</li>
<li>
Sunflower oil (20.5%)
</li>
<li>
Ammonia (23%)
</li>
<li>
Urea (14%)
</li>
<li>
Processed Phosphates (10%)
</li>
<li>
Potash Fertilizers (21%)
</li>
<li>
Potash Fertilizers (21%)
</li>
<li>
Aluminum for car and airplane bodies, appliances, machinery (5.4%)
</li>
<li>
Magnesium for automotive and aircraft alloys (6.3%)
</li>
<li>
Nickel for stainless steelmaking, rechargeable batteries, and chemical catalysts (9.1%)
</li>
<li>
Sulfur for sulfuric acid, used for chemical and fertilizer production (9.4%)
</li>
<li>
Titanium for aircraft body alloys (13%)
</li>
<li>
Vanadium for high-strength alloys and catalysts (17.6%)
</li>
<li>
Tellurium for solar cells (12.1%)
</li>
<li>
Cobalt for gas turbines , wear-resistant tools, and chemical catalysts (4.6%)
</li>
<li>
Germanium for semiconductors, solar cells, and fibre optics (3.6%)
</li>
<li>
Tungsten for wear-resistant hardware (3%)
</li>
<li>
Neon gas for semiconductor manufacture (50%-70%)
</li>
<li>
Platinum (10.6%) and palladium (36.9%) for catalytic converters
</li>
</ul>
</li>
<li>
US efforts to simultaneously treat China and Russia as adversaries is pushing China and Russia together and defeating American attempts to contain either of them
<ul>
<li>
China has even more influence on world commodity prices
</li>
<li>
Along with Russia, China can choke the supply of vital minerals to the West if the West goes too far in its sanctions on either
<ul>
<li>
Aluminium Metal (57.4% of world production)
</li>
<li>
Magnesium (84.5%)
</li>
<li>
Sulfur (21.3%)
</li>
<li>
Titanium (57.9%)
</li>
<li>
Vanadium (67.7%)
</li>
<li>
Tellurium (58.5%)
</li>
<li>
Germanium (67.9%)
</li>
<li>
Tungsten (83.3%)
</li>
<li>
Molybdenum (43.8%)
</li>
<li>
Rare Earths (60.6%)
</li>
<li>
Tin (30%)
</li>
<li>
Silicon (70.3%)
</li>
<li>
Lithium (13.4%)
</li>
<li>
Lime (72%)
</li>
<li>
Lead (46.6%)
</li>
<li>
Graphite (79%)
</li>
<li>
Fluorspar (63%)
</li>
<li>
Bauxite (22.1%)
</li>
<li>
Alumina (53.5%)
</li>
<li>
Gallium (95%)
</li>
</ul>
</li>
</ul>
</li>
<li>
The scarcity of oil and gas, combined with the scarcity of commodities, will lead to the <span style="color: red;">De-Industrialization of Europe</span> in short order
</li>
</ul>
</div>
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</section>
</section>
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<section>
<header style="padding: 2em;">
<h2 id="TOC6">
CHAPTER VI. EUROPE’S ENERGY OPTIONS
</h2>
</header>
<div>
<p>
</p>
</div>
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<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC6a">
Europe’s Gas Storage Tanks
</h3>
</header>
<div>
<p>
One of the common refrains regarding the crippling shortages of gas in Europe is that Europe is well-prepared for it, because their storage tanks for natural gas are now more than 90% full. But there is nothing for Europeans to feel happy about this, for the following reason.
</p>
<p>
Once a gas well is opened, it will keep releasing gas at a constant rate. The rate of extraction cannot be changed seasonally. Gas producing countries know this, and so, before they even drill a gas well, they make sure they have committed customers with long-term contracts who will buy the gas that starts flowing out at high pressure once the well is opened. This is because gas cannot be stored by gas-producing countries beyond a point, and if they cannot sell the gas, they have to burn (flare) it, which is a waste of a precious resource.
</p>
<p>
The countries that buy gas also know this. Cold countries need gas in the winter to heat their homes, in addition to needing gas year-round for industrial purposes. So they purchase a constant average quantity of gas every month. This amount is more than what is needed during the warm summer months and less than what is needed during the cold winter months. So the excess gas that they get in the summer is stored in tanks. In winter, the regular supply of gas (which is inadequate for winter conditions) is augmented by the stored gas in the tanks. <span style="font-style: italic; font-weight: bold;">So gas storage tanks are not an emergency supply or a reserve measure. They are needed for normal gas supply throughout the year.</span>
</p>
<p>
This is what has been done in Europe every year. For Europe to get through a normal winter with its industry running and its citizens warm, that 90% is the level the tanks should be now, <span style="font-style: italic; font-weight: bold;">along with a continuous resupply of gas from Nord Stream.</span>
</p>
<p>
The resupply was stopped by Russia some time back when it shut down Nord Stream, citing technical issues. Nord Stream 2 had never started pumping gas to Germany, but the pipeline was ready to start operation any day — until it was blown up. Now there is no chance of the supply resuming through Nord Stream any time soon, even if a peace agreement is reached soon, because of how extensive the damage has been.
</p>
<p>
<span id="fig237">The tweet below by Robin Brooks of the IIF</span> captures this point well. He tweeted this in July, when Russia was still supplying 20% of the capacity through the Nord Stream pipeline. Since then, things have become much more dire, because Brooks talked about things then assuming things would continue at 20%. Now they are at 0%.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh46_gqUSeeAKSojuV7yNo5cC4gqVqP5XM-9I5QVPFH09_xDTvN4yJLdWkrvSH5vqSgGiCr4hqDFAkEviZxY7xVuknBJCdzdnSdAd4KqGL_zf7UXOKAKZc2LPUmGSOuoT9NlZ_JfaE4Q7KHn5GLuGr0NzRiesCXKG6ION6zW53DdKcx03ks4xL9M8tUMw/s1290/fig175_GermanyGasStorageLevel.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1290" data-original-width="912" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh46_gqUSeeAKSojuV7yNo5cC4gqVqP5XM-9I5QVPFH09_xDTvN4yJLdWkrvSH5vqSgGiCr4hqDFAkEviZxY7xVuknBJCdzdnSdAd4KqGL_zf7UXOKAKZc2LPUmGSOuoT9NlZ_JfaE4Q7KHn5GLuGr0NzRiesCXKG6ION6zW53DdKcx03ks4xL9M8tUMw/w283-h400/fig175_GermanyGasStorageLevel.png" width="283" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 237. Why It is Not Enough to Have Full Gas Tanks Without Supply</td></tr></tbody></table>
<p><strong><em>
So the level of gas storage in Germany’s tanks is irrelevant.
</em></strong></p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC6b">
LNG to the Rescue?
</h3>
</header>
<div>
<p>
The big problem with gas has always been that to transport large quantities of it, you need a pipeline, and building a pipeline is expensive and takes years. Since Europe is getting no gas from Russian pipelines, their only option is to use liquefied natural gas, or LNG. This can be transported by transoceanic tankers. Potentially, then, one option for Europe is to get LNG from Qatar or the UAE or the US or Algeria or Nigeria. There is nothing fundamentally wrong with this idea — countries like Spain have been doing this for a long time because of their proximity to Africa and the big oil producers on the African continent (Algeria and Nigeria) as well as Qatar in the Persian Gulf.
</p>
<p>
There are two potential problems with this solution. One is, as has already been discussed, that to make up so much lost Russian gas through LNG would require gas producers to ramp up gas production very rapidly, and that has historically not been possible. The second is that receiving LNG tankers and transporting LNG requires infrastructure that Europe, by and large, does not have. Let us discuss the second problem first and then come back to the first.
</p>
<p>
Ever since the Nord Stream pipelines were commissioned in 2012, Europe has not needed to have a large LNG infrastructure. Some countries on the coasts, such as Spain and Lithuania, have built the infrastructure so that they can receive LNG from across the seas. For Spain, this was a no-brainer because of its proximity to Africa and the big oil producers of Africa, Algeria and Nigeria. For Lithuania, LNG terminals meant that they could get gas from Norway and from the UK. But Germany, notably, does not have the infrastructure for receiving LNG. <a href="https://www.cleanenergywire.org/factsheets/liquefied-gas-does-lng-have-place-germanys-energy-future"><span id="fig238">The figure below shows the existing LNG terminals in Europe as well as those that are planned and under construction.</span></a>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghHE2Zl-T1UbkTtEVJT0fKH0CMsaw9mNsNo31Hl0U9hWGC64QVOYvfEAxjayjd3iQecCRyv5mn199bj9SxyVtlI57mC11eLiIRI6oB_vKhDPZjazWdeRtsilkEH0lMtfHRBbfijrFbfQwtVa827p0LlWog68C8aWqpVUBBGVbW9CHcw_N3k9F9vUWtXA/s1293/fig176_EuropeanLNGTerminals.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1224" data-original-width="1293" height="379" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghHE2Zl-T1UbkTtEVJT0fKH0CMsaw9mNsNo31Hl0U9hWGC64QVOYvfEAxjayjd3iQecCRyv5mn199bj9SxyVtlI57mC11eLiIRI6oB_vKhDPZjazWdeRtsilkEH0lMtfHRBbfijrFbfQwtVa827p0LlWog68C8aWqpVUBBGVbW9CHcw_N3k9F9vUWtXA/w400-h379/fig176_EuropeanLNGTerminals.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 238. Existing LNG Terminals in Europe, New Proposed Ones, and Terminals Under Construction</td></tr></tbody></table>
<p>
Even Lithuania’s and Spain’s LNG terminal infrastructure is not adequate for their needs; they will probably need to build more to completely do away with their need for Russian gas. Although the figure above indicates that several LNG terminals are planned, it should be noted that it takes about five years for an LNG terminal to be constructed. These are highly complex engineering projects.
</p>
<p>
However, the good news is that there is some room for Europe’s terminals to accept more LNG. <a href="https://www.cleanenergywire.org/factsheets/liquefied-gas-does-lng-have-place-germanys-energy-future">Historically, <span id="fig239">the utilization of these terminals has been rather low, as can be seen in the following figure</span>, although it was close to 100% in 2022.</a>
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsMXiEMElmR3RMGEgIoRUVct5IK2q3CjhAskzPYhu7SVLgqirlfW7i-KtHeDLjRPnz8he7i2-HGQrHU9zz0BPXggSu_UcIZxIjbFz2LjcAx-aCx64iMYDSPJtPvqxVJoikyVj72RgMht0_VlEUj_BUwwSUJvjmot8EHlS9SFv_inPRBcc8ZCFJD0Z5zw/s1519/fig177_LNGTerminalUtilization.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="895" data-original-width="1519" height="236" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjsMXiEMElmR3RMGEgIoRUVct5IK2q3CjhAskzPYhu7SVLgqirlfW7i-KtHeDLjRPnz8he7i2-HGQrHU9zz0BPXggSu_UcIZxIjbFz2LjcAx-aCx64iMYDSPJtPvqxVJoikyVj72RgMht0_VlEUj_BUwwSUJvjmot8EHlS9SFv_inPRBcc8ZCFJD0Z5zw/w400-h236/fig177_LNGTerminalUtilization.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Fig. 239. Utilization Rate of LNG Terminals in Europe, Pre-War</td></tr></tbody></table>
<p>
Germany has announced the construction of an LNG terminal in Brunsbüttel in the north of Germany. However, this will only be operational in 2026 at the earliest, and is expected to have a capacity of 8-10 bcm.
</p>
<p>
For the short term, Germany is investing in what are known as FSRUs – for Floating Storage and Regasification Units. The German government plans to lease these units from manufacturers. But the bad news is that there are only 50 of these available worldwide, and so competition in these times is tough. Nevertheless, the German government has announced that it will lease and install five of these FSRUs, each with a capacity of about 5 bcm, in four locations on Germany’s coasts.
</p>
<p>
<a href="https://www.cleanenergywire.org/factsheets/liquefied-gas-does-lng-have-place-germanys-energy-future">One of them is in Brunsbüttel, and is expected to start operation in early 2023 with an initial capacity of 3.5 bcm, gradually ramping to 5 bcm as the pipeline infrastructure is fully built for the transport of the LNG.</a> Another FSRU will also be installed in the deepwater port of Wilhemshaven, again with the same final capacity of 5 bcm, <a href="https://www.uniper.energy/news/construction-of-wilhelmshaven-lng-terminal-can-start-quickly">although Uniper’s website states the capacity to be 7.5 bcm.</a> Wilhemshaven will also host another FSRU with a capacity of 5 bcm, and this will be operational by the third quarter of 2023. Two other FSRUs are planned at Stade and Lubmin, and both of these will be operational by the end of 2023 at the earliest. There are also plans for a private FSRU, owned by Deutsche ReGas, to be operational by the end of 2022 with a capacity of 4.5 bcm.
</p>
<p>
From these plans, it appears that Germany will have the capacity to import 17 bcm a year by the beginning of 2023, which is a third of what it was importing from Russia in 2020. Today’s demand may be higher than in the pandemic year of 2020, so these terminals might cover 25% of Germany’s annual demand. However, by the time these terminals are operational, half the winter of 2022-23 will already be over, and several industries would have completely shut down for good by then. Still, it would be a welcome addition to alleviate the human suffering in Germany, and perhaps be adequate to provide home heating for the people of Germany after two bitterly cold months.
</p>
<p>
But having the capacity to receive LNG is not enough. The world must have the capacity to supply the gas that Germany is short of. In September, <a href="https://markets.businessinsider.com/news/commodities/us-shale-producers-rescue-bail-out-europe-energy-crisis-2022-9">US shale oil and gas producers said in no uncertain terms that they do not have the ability to ramp up production to help out Europe.</a> German chancellor Olaf Scholz had visited Qatar and the UAE to ask for LNG supplies to Germany, but in October, <a href="https://atalayar.com/en/content/qatar-not-able-fully-compensate-russian-gas-europe">Qatar made it clear that it cannot compensate for the volumes of gas that Russia had been supplying to Europe.</a> Qatar also wants a long-term contract, of 20-25 years, to justify its investment in new wells to supply Germany, but Germany is committed to a green transition and is hesitant to sign such deals. Qatar has also made it clear that Germany cannot get short-term supplies by getting Qatar to ditch its existing Asian clients by outbidding them. <a href="https://www.chemanager-online.com/en/news/qatar-wont-divert-asian-gas-orders-europe">As the CEO of the National Gas Company of Qatar, Saad al-Kaabi, said, “Qatar is absolutely committed to sanctity of contracts, so when we sign with an Asian buyer or European buyers, we stick to that agreement.”</a>
</p>
<p>
<a href="https://oilprice.com/Latest-Energy-News/World-News/Qatar-Europe-Will-Struggle-To-Secure-Natural-Gas-For-Next-Winter.html">Opinion is also unanimous that if Europe somehow survives this winter, it will face, literally, a struggle for survival next winter,</a> if the war continues until then and if a peaceful resolution with Russia is not found on the issue of sanctions. The reason is that in 2022, Germany was able to use Russian gas via Nord Stream for a long time to fill its tanks before Russia first reduced supply to 20% of capacity and then 10%, and finally nothing at all. This allowed Germany to fill its storage tanks. Subsequently, Germany bought LNG on the spot market from China because China was experiencing weak demand due to Covid-related shutdowns. There will be no gas flowing from Russia in 2023, and it is unlikely that the downturn in China will last until next year. So Europe will likely go into the winter with zero storage next year.
</p>
<p>
<a href="https://www.turbomachinerymag.com/view/new-flow-measurement-device">An article in Turbomachinery magazine, a specialized trade magazine, explains why it is not so easy to increase production of gas in the US</a> (or, for that matter, Qatar or the UAE) to supply more gas to Europe. The problem, as the authors explain, is that production capacities must be increased across the entire value chain. It isn’t just, as the authors put it, just a matter of opening a faucet. Since the article is in a magazine devoted to turbomachinery aspects, the authors focus on what is needed from the turbomachinery side. As the authors put it,
</p>
<blockquote>
<p>
Unfortunately, the solution isn’t as simple as turning on a faucet and waiting for more LNG to come out. No gas production, transport, or LNG facilities exist with any meaningful excess capacity. Significant infrastructure investments are required in the very near future to increase LNG production in North America. That includes new plant facilities, as well as expansions and additions to existing facilities across the entire natural gas value stream, from wellhead to production plant.
</p>
<p>
On the receiving side, LNG terminals with regasification and compression must be constructed and tied into existing pipeline systems. Increased production requires not only additions to LNG production plants, but also increased natural gas production, gathering, treatment, transportation and regasification. Upping the amount of natural gas produced, most likely through fracking and new onshore/offshore drilling, calls for additional pipeline capacity, mostly through the addition of compression and pipe loops on existing lines. New gas liquefaction plants are another obvious need.
</p>
<p>
An increase of 20% in U.S.-exported LNG corresponds to an increase of 3% in U.S. natural gas production. That may not sound like much but becomes a staggering figure in the context of existing infrastructure and required new machinery. In the U.S. upstream sector — gas production and gathering — there are approximately 15,000 installed compressors, mostly smaller reciprocating compressors driven by engines or electric motors. In the midstream or gas transport sector, there are about 8,000 installed compressors, made up of a mix of older low-speed integral reciprocating, high-speed separable reciprocating, and gas turbine or electric motor-driven centrifugal compressors.
</p>
<p style="font-style: italic; font-weight: bold;">
Ignoring downstream and LNG plants for now, there is an estimated 25 million horsepower in the upstream sector and 40 million horsepower in the midstream. Upping this by 3% requires another 2 million horsepower of new compression in the U.S. alone. Based on current worldwide manufacturing capacities, it would take about 2-3 years to meet this new demand for gas compressors. This doesn’t include lead times for material, transport, installation and commissioning/startup in an already resource-constrained economy. Since current lead times for compressor trains, valves and all major transport and production equipment are around 18-24 months between order and startup, it’s fair to estimate it would take the U.S. at least 3-5 years to ramp up LNG production to meet new European demands.
</p>
<p>
Regardless of actual lead times and manufacturing details, increasing U.S. LNG export capacity requires more than just production plants. It demands consideration of the entire natural gas supply chain. New gas infrastructure, including significant new compression, will be required from well-head to gas consumer to meet rising worldwide demands for LNG.
</p>
</blockquote>
<p>
What these authors say about increasing LNG capacity could be said about every panacea that is being floated today as a solution to Europe’s energy woes. Whether it be solar or wind power or heat pumps or hydrogen, building the infrastructure all the way up the value chain takes time. If you are talking solar energy, it requires vast investment to produce as many solar panels as is required to replace the vast quantities of energy that are currently being provided by fossil fuels. There needs to be a sustained investment effort across all five stages of the value chain: polysilicon, ingot, wafer, cell, and module; as well as the electronics, the connectors, the inverters, the glass covers, the mechanical mounting, the solar tracking mechanism, and so on. It also requires a vast battery infrastructure and huge manufacturing and mining capacities for the minerals needed in those batteries, and being able to secure those value chains, such as the supply of silicon and lithium.
</p>
<p>
With wind energy, large investments are required in the composites needed to manufacture the turbine blades; the drivetrains in the nacelle, including the gearboxes, magnet generators, and electronics; the electric grid; and in energy storage.
</p>
<p>
It is possible to transition from fossil fuels to these alternatives; but it has to be a planned transition over several years because it takes time to build integrated capacities. It cannot be done overnight because of a sudden, unplanned crisis.
</p>
<p>
With cheap Russian gas, Europe was actually on the correct path towards a renewable future, because it takes years to build up capacity, and Europe was progressing very well on that front, as the gradual reduction of fossil fuel capacity and the increase in renewable energy generation over the past 20 years showed. But by suddenly trying to jettison Russian energy without a viable alternative in hand, Europe has embarked on a futile journey that risks complete economic ruin.
</p>
</div>
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</section>
<div id="floatclear"></div>
<section style="border-color: rgb(255, 0, 0); border-radius: 20px; border-style: solid; border-width: 7px; font-style: italic; font-weight: bold; padding: 1em;">
<header>
<h3 id="TOC6c">
Key Takeaways from Chapter VI
</h3>
</header>
<div>
<ul>
<li>
Europe’s gas storage tanks do not provide any insurance against gas shortages because they were always needed in addition to regular supply of pipeline gas
</li>
<li>
Europe does not have enough LNG receiving terminals to import sufficient LNG
<ul>
<li>
LNG terminals take a long time (about five years) to construct
</li>
<li>
Germany is leasing and installing mobile FSRUs to receive gas
</li>
<li>
Three of them are expected to be operational by early 2023
</li>
<li>
They could receive a maximum total of 17 bcm of gas, or roughly a third to a fourth of what Germany was getting from Russia
</li>
</ul>
</li>
<li>
But the world does not have enough LNG spare capacity to supply Europe
<ul>
<li>
US shale gas producers have said they cannot increase production to help Europe
</li>
<li>
Qatar has also said that it cannot compensate for Russian gas
</li>
<li>
Qatar wants Germany to sign a 20-year contract
</li>
</ul>
</li>
<li>
Ramping up production with any technology, whether LNG or solar or wind, takes time
<ul>
<li>
Supply chain needs to be built up for the whole value chain
</li>
<li>
This can take years
</li>
</ul>
</li>
<li style="color: red;">
There is no quick, short-term solution to Europe’s energy shortage
</li>
</ul>
</div>
<a href="#TOC">Back to TOC</a>
</section>
</section>
<div id="floatclear"></div>
<section>
<header style="padding: 2em;">
<h2 id="TOC7">
SUMMARY AND CONCLUSIONS
</h2>
</header>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC7a">
“Not One Step Backward!”
</h3>
</header>
<div>
<p>
On 22 June, 1941, Adolf Hitler, then at the height of his power, made a fateful decision by invading Russia. His decision was predicated on the belief that “one kick at the door and the whole rotten structure will come crumbling down,” referring to the Soviet State. Hitler was, of course, wrong about the weakness of the Soviet state, as history informs us. The USSR was far stronger, far more resourceful, and far more resilient than what not only Hitler, but the whole Western world believed.
</p>
<p>
By the beginning of December, 1941, Hitler’s generals knew that they had made a grievous error. They realized that while the Soviet army was giving up very easily in the early battles, leading to the loss of about 2 million troops killed or captured, their resolve had stiffened and they were now fighting hard. The German army realized that they were not adequately equipped to fight a war in the brutal Russian winter. The winter of 1941-42 resulted in the deaths of more than a million German soldiers in the frozen wastes of Russia outside Moscow.
</p>
<p>
The prudent thing to do then would have been to consolidate Germany’s gains and abandon any plans to move deeper into the Soviet Union. But, having failed in his big gamble to take the USSR in a single summer campaign, Hitler, like Napoleon before him, believed that if he persisted long enough, he would prevail over the Soviets and total victory would eventually be his. He failed to defeat the USSR, and instead, Germany was totally destroyed. When his initial attack, the Blitzkrieg in June 1941, failed, he did not reconsider his original plan to conquer the USSR. He doubled down on his efforts, and perished.
</p>
<p>
The West is making mistakes of a similar nature. In March 2022, they unleashed what they truly believed to be a “nuclear option” in financial terms. They froze Russia’s funds, seizing more than $300 billion of its money, and blocked it from SWIFT, preventing it from buying anything using dollars or euros. Just like Hitler believed his military blitzkrieg would bring the Soviet Union to its knees in short order, the West believed that its financial blitzkrieg would bring Russia to its knees and force it to abandon its special military operation. US President Joe Biden even bragged about that possibility in a public speech on March 26, 2022. But that did not happen. Russians hardly felt much pain due to the West’s actions. Instead of reconsidering their course of action and starting negotiations with Russia, the West got into an ideological trap, just like Hitler did in 1941. When Hitler’s generals radioed him that the Soviets were overrunning their frostbitten troops and requested permission to withdraw, they got the one-line response: “Not one step backward!”
</p>
<p>
Today’s Western nations are being equally obstinate, and are saying that they will not take one step backward on their strategy to financially choke Russia — a strategy that has clearly failed and will continue to fail. In their ideological blindness, they don't even seem to have done a basic sanity check to find out if the measures they took and are now contemplating (such as the impending oil price cap) will truly deal a death blow to Russia’s finances.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC7b">
The Sanity Check that Europe Should Have Done in March
</h3>
</header>
<div>
<p style="color: purple; font-style: italic; font-weight: bold;">
This article is precisely the kind of sanity check that Europe should have done back in March before they went ahead with their ill-considered sanctions policy.
</p>
<p>
It has established clearly that:
</p>
<ul>
<li>
Russia’s economic fundamentals are strong enough to help them withstand any economic sanctions
</li>
<li>
The countries of Asia and Africa will never support sanctions against Russia because of how dependent they are on Russia
</li>
<li>
China will never let Russia lose either the economic or the military war because of how valuable Russia is to China’s developmental plans
</li>
<li>
NATO will never enter the war directly
</li>
<li>
Russia was better prepared to fight a proxy war (both military and economic) than Ukraine or the West
</li>
<li>
Russia has a strong, technologically independent, modern, and advanced armaments industry that could continue to produce weapons to continue this war indefinitely, unlike the West
</li>
<li>
Russia had already made its economy sanctions-proof after enduring eight years of sanctions after 2014
</li>
<li>
Russia had been steadily dumping the dollar and US Treasury bonds since 2014, in order to free itself from Western financial control
</li>
<li>
Russia enjoyed a trade surplus with Europe, which meant that if Europe decided to boycott Russia, it would lose far more than Russia would
</li>
<li>
Russia held a crucial advantage relative to Europe in that it had oil and gas that Europe desperately needed
<ul>
<li>
Not having these fuels would cripple Europe</li>
</ul>
</li>
<li>
The countries of Asia can easily supply Russia with everything they were getting from Europe in exchange for oil
</li>
<li>
But nobody other than Russia can supply Europe with the oil and gas Russia was providing them (at least in the short run, for a couple of years)
</li>
<li>
The absence of Russian oil and gas will lead to the de-industrialization of Europe, because what Europe has is a supply problem of fuel, not a price problem
</li>
<li>
The West cannot afford this supply crisis, so soon after the Covid crisis that had almost finished Western economies
</li>
<li>
Oil- and gas-producing nations cannot increase production enough to save Europe from its energy crisis
</li>
<li>
Most European nations are too dependent on Russia for energy to be able to sanction Russia without destroying themselves in the process
</li>
<li>
The lack of oil and gas will lead to the de-industrialization of Europe by forcing the closures of industry and causing them to move operations wholesale to America or China
</li>
<li>
Sanctioning Russia has led to the loss of cheap gas and oil at long-term contract rates, which are much lower than spot gas rates, and created an existential crisis for European industry
</li>
<li>
Oil and gas shortages have domino effects on economies, because they are used as feedstocks in the chemical industry
<ul>
<li>
Gas is used to make ammonia, which is used to make fertilizer, which is needed to make foodgrains, vegetables, and fruits
</li>
<li>
The ammonia production process produces carbon dioxide, which is used in food preservation, beer and soft drink production, decaffeination of coffee, and humane killing of animals
</li>
<li>
Oil is used to make plastics and polymers - containers, paints, adhesives, tapes, spectacles, clothes, jackets, automotive parts, applicances, toys, packaging, wire sheaths, food packaging, pens, electronics housings, laminates, etc.
</li>
<li>
Without gas and oil, most consumer and industrial products in Europe cannot be manufactured
</li>
<li>
Lack of oil and gas will cause losses of hundreds of billions of dollars to European chemical companies and likely cause them to close
</li>
<li>
Lack of essential plastic items can further strain national budgets because they have to import them from outside the EU
</li>
</ul>
</li>
<li>
If Russia (and China) decide to withhold supplies of other commodities in order to retaliate for Europe’s sanctions against them, the situation will be dire for the entire Western world, because of how China and Russia dominate the supply of so many essential commodities
<ul>
<li>
Wheat, sunflower oil, diamonds, fertilizer, aluminium, magnesium, nickel, sulfur, titanium, vanadium, tellurium, cobalt, germanium, gallium, tungsten, neon, rare earth minerals, platinum, palladium, lime, lead, tin, molybdenum, silicon, lithium, graphite, fluorspar, alumina, and many more
</li>
</ul>
</li>
<li>
Europe’s storage tanks do not provide any insurance against gas shortages
</li>
<li>
Europe does not have enough LNG terminals to import LNG to make up for the gas shortage
<ul>
<li>
Germany’s attempts to install temporary FSRUs for LNG will at most provide a quarter to a third of their gas requirements, starting in 2023
</li>
</ul>
</li>
<li>
The world does not have sufficient spare gas or oil capacity to supply Europe for the missing Russian oil and gas
</li>
<li>
Renewables cannot be ramped up quickly enough to solve Europe’s energy crisis
</li>
<li>
The US and Europe have needlessly alienated China at the same time it is trying to sanction Russia, thereby ensuring that the sanctions will have no significant effect on Russia while making both Russia and China more independent of the West
</li>
<li>
The West’s unprecedented move to ban Russia from SWIFT and freeze its US dollar reserves will spark a global move in the non-Western world to de-dollarize
</li>
</ul>
</div>
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</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC7c">
Where Do We Go From Here?
</h3>
</header>
<div>
<p>
Things are extremely dire for Europe today. They have played their trump card (banning Russia from using SWIFT and seizing the assets of the Russian government and of Russian citizens worldwide) and failed to win the game. Things are just going from bad to worse. The winter is about to start, and Europe has giant shortages in oil and gas. Nord Stream has been blown up, and there is no way to start pumping gas through it tomorrow. Europe has banned coal imports from Russia (and they are 22% dependent on Russia for coal), they are not getting gas from Russia (they are 38% dependent on Russia for gas), and they are about to put in place a ban on December 5 that will result in no more oil flowing to Europe from Russia (and they are 28% dependent on Russia for their oil needs). There is no way in the short term (1-2 years) for Europe or even the medium term (5 years) to fill this giant hole in their energy requirements.
</p>
<p>
Europe is going to face an immediate catastrophe in a matter of weeks. Ukraine’s energy infrastructure has been destroyed by Russian missiles. Kiev says only 50% of the electricity grid is functioning. Much of Ukraine is dark. Without electricity, neither the water supply nor the sewage system will work. Most Ukrainians in cities live in high-rise apartments. With the bitter winter approaching, Ukrainians without heat, electricity, water, or sewage will start flooding Europe as refugees. Europe will be hit by a humanitarian catastrophe. No continent can handle tens of millions of refugees in a sudden wave. European economies, which are already on the brink, will be overwhelmed.
</p>
<p>
Europe continues to sanction Russia more and more, despite all evidence suggesting that these measures are not working. Russia’s response has been fairly measured so far. If it starts retaliating using its strength in commodities, things could get much worse for Europe.
</p>
<p>
Europe, the US, the UK, Canada and Oceania, along with Japan and South Korea (the “West”) have also been upset about China’s strong economic support for Europe. If the West feels that the only way to increase pressure on Russia would be to start sanctioning China, things will get much worse for the West because of China’s control of so many key commodities. Not only Europe, but the US, too, will come to a standstill without commodities from China. If the West decides to sanction China, it means that they have massively miscalculated on China, just as they have already miscalculated with Russia. Given the West’s track record, however, one should not rule it out, howsoever insane it sounds.
</p>
<p>
If Europe continues on their current path, they face widespread de-industrialization; mass unemployment; mass starvation; and deaths due to exposure from cold. This, in turn, could lead to mass emigration of the poorer Europeans from Europe, perhaps to North Africa. This article has shown how all this might happen by highlighting Europe’s enormous dependencies.
</p>
<p>
Europe has two choices. Either they understand that their gamble has failed, and that things are likely to get much worse unless they completely reverse direction on Russia, or they continue on the path to destruction.
</p>
<p>
How can Europe avoid the bleak future outlined above and go back to a path of prosperity?
</p>
<p>
The <span style="font-style: italic; font-weight: bold;">wise course of action</span> for Europe would be
</p>
<ul>
<li>
To push for a settlement with Russia
</li>
<li>
To agree to Russia’s terms regarding Ukraine
</li>
<li>
To drop all sanctions
</li>
<li>
To pay all outstanding dues to Moscow for past fuel purchases
</li>
<li>
To release back to Russia all Russian assets consfiscated by European governments
</li>
<li>
To return to Russian private citizens all assets (e.g., yachts) seized by European governments
</li>
<li>
To agree that Ukraine should cede territory and agree to become a neutral state with a new, Moscow-approved leadership
</li>
<li>
To ensure the removal of all NATO personnel and weapons from Ukraine, and allow Russian monitors and defence forces to remain in the country to ensure that the agreement is being adhered to
</li>
<li>
To agree to a joint investigation on the sabotage of the Nord Stream pipeline, involving the Russians in the investigating team, and agree to punish those involved
<ul>
<li>
If European entities, such as the UK, were involved in the sabotage, ensure that those countries pay reparations to Russia for the damage caused
</li>
<li>
If non-European entities, such as the US, were involved, demand accountability from them, cut them off from ties with Europe, and impose sanctions on them
</li>
</ul>
</li>
<li>
Disband NATO and instead create a new security alliance for Europe including Russia and limit membership only to Europeans
</li>
</ul>
<p>
Needless to say, this will involve a loss of face for Europe, but it might just save European economies from complete annihilation.
</p>
<p>
Of course, Europe doesn’t <strong>have</strong> to do this. I am merely saying that this would be the <span style="font-style: italic; font-weight: bold;">wise course of action.</span>
</p>
<p>
And why is that? Because if Europe does all this, then Russia will
</p>
<ul>
<li>
Start pumping gas through the one Nord Stream line that they say is still intact
</li>
<li>
Start working on repairs to the other Nord Stream lines, so that in a year or so, Europe will start to receive 110 bcm of gas from Russia via both Nord Stream lines
</li>
<li>
Resume pumping gas through the Yamal, Brotherhood, and Turkstream lines
</li>
<li>
Resume supplying oil to Europe in time for the coming winter
</li>
<li>
Resume coal shipments to Europe
</li>
<li>
Start shipping fertilizer, wheat, and sunflower oil to Europe
</li>
</ul>
<p>
People will point out that Europe cannot decide for Ukraine. They cannot decide that Ukraine should part with its territory or stop fighting Russia. This is certainly true. That is Ukraine’s decision to make. But Europe can stop supporting Ukraine, and that will go a long way in influencing Ukraine’s decision to continue fighting. As things stand, about half of Ukraine’s energy infrastructure has been destroyed. Without massive aid from Europe, Ukraine will freeze to death and starve this winter. It is hard to know how Europe can even help Ukraine, given that they themselves are reeling under giant energy shortages. The weapons flowing to Ukraine, even American ones, that help Ukraine continue fighting, have to flow through Europe. If Europe refuses to allow British or American weapons to transit through them, Ukraine will not get any more weapons from the US or the UK. That will shorten the war and end Europe’s suffering as well as the suffering of Ukrainians.
</p>
<p>
To be sure, if Europe decides to do this, it will be a giant loss of face for them. Ukraine will accuse them of betrayal and of selling them out. Europe’s problem has been made harder by the daily dose of propaganda, for the last nine months, with journalists hyperventilating on every Western channel about “Russia’s unprovoked war on Ukraine” and the nonstop propaganda references to “Russia’s terrorism,” “Russian human rights violations,” and the like. Europe has painted itself into a corner, and European leaders will have a hard time explaining an about-face position.
</p>
<p>
And so, the only way for things to change in Europe, as things rapidly get worse for their citizens, is social unrest and instability as citizens reel from energy and food shortages in the coming brutal winter. <span style="font-style: italic; font-weight: bold;">There will be rioting on the streets and coups that remove the current leaders from power, because the leaders in power today, such as Macron, Scholz, and Sunak, cannot credibly advocate for a about turn in their position on Russia. New leadership will be needed to change national policy.</span>
</p>
<p>
The other interested party in this conflict is the US. It has already committed to providing more than $54 billion to Ukraine. This is not a small amount, and the only reason for the US to commit to spending so much money on Ukraine is that it expects this to be a very long war. The US will not be happy at the prospect of Europe capitulating to Russia’s demands and making peace with them, even if new leadership rises in Europe to oust Scholz, Macron, and the Conservatives in the UK, demanding the end of hostilities with Russia. The US will do all it can to prevent a peace in Ukraine. It is fully committed to war. The US has huge leverage over Europe. <span style="font-style: italic; font-weight: bold;">This conflict has huge geopolitical implications for the projection of American military power beyond its shores, and the military-industrial establishment that runs the US cannot afford to give up its posture of power projection in Europe. Agreeing to a peace treaty on Russia’s terms will mean giving up the dream of American hegemony, which is completely unpalatable to the American establishment.</span>
</p>
<p style="font-style: italic; font-weight: bold;">
What this means, in effect, is that if there is huge social unrest that threatens to upend the current establishment ruling Europe, the US will step up and intervene militarily to prevent regime change in Europe. The war must go on. Russia must be defeated.
</p>
<p>
The US has already indicated that it will go to any lengths to achieve its goals. <span style="font-style: italic; font-weight: bold;">If things continue to worsen in Europe, there will be a trade war with China that will make Trump’s trade war with China look like child’s play.</span> China will also be banned from SWIFT, and its nearly $1 trillion in US Treasury bonds will be seized by the US. China will retaliate by seizing the assets of American companies in China, by invading Taiwan in order to secure their semiconductor supply (which will give China control of 75% of the global semiconductor supply, including the most advanced nodes, once it gets control of TSMC), and by completely banning the sale of Chinese commodities to the US, ranging from lime, lead, tin, aluminium, magnesium, titanium, vanadium, tellurium, germanium, tungsten, molybdenum, silicon, graphite, fluorspar, alumina, and bauxite, to rare earths. Russia will join the trade war and stop selling platinum group metals, gold, sulfur, titanium, and most importantly wheat and sunflower oil to the West. And since Russia controls a significant part of Ukraine, it will prevent Ukrainian wheat and oilseeds from reaching the West as well. A trade war at this scale will have the following significant effects:
</p>
<ul>
<li>
It will completely split the world into two camps: the American and non-American camps
</li>
<li>
The dollar will cease to be used outside the American camp
</li>
<li>
The rest of the world will move to a multipolar world order with a basket of non-dollar currencies
</li>
<li style="font-style: italic; font-weight: bold;">
Every country in the world will have to choose a side
</li>
<li>
Since China has deep connections with most countries in Asia and Africa, thanks to their decade-long Belt and Road Initiative, most of them will join the Chinese-Russian axis
</li>
<li>
India will have a choice to make. It has been trying to walk a tightrope between the two sides, but that will no longer be possible
</li>
<li>
Another region that will have to make tough choices is Oceania. Australia and New Zealand are ideologically allied with the US, but they are geographically isolated and surrounded by Asia, especially by China. Australia and New Zealand will find the going very tough if they continue to be in the Western camp
</li>
</ul>
<p>
Who will win this new Cold War? The answer is simple. <span style="font-style: italic; font-weight: bold;">The Eastern alliance has more natural resources and more people (for markets). The West relies on the people of the Global South to buy its products; otherwise it will collapse. A new Cold War will completely destroy Western industry. America may be the engine of innovation, but without people to buy its products, it cannot survive.</span>
</p>
<p style="color: red; font-style: italic; font-weight: bold;">
This is the choice for the West to make. End the war on Russia’s terms, or destroy the West.
</p>
<p>
I am not optimistic that the West will make the right choice.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
<div id="floatclear"></div>
<section>
<header>
<h3 id="TOC7d">
Overall Conclusions
</h3>
</header>
<div style="font-style: italic; font-weight: bold;">
<ul>
<li>
Europe and the US made a giant mistake in deciding to sanction Russia
</li>
<li>
The West mistakenly thought that their economic sanctions would cripple Russia
</li>
<li>
The West failed to understand Russia’s inherent economic resilience
</li>
<li>
The West failed to understand the extent to which Europe, in particular, depended on Russia
</li>
<li>
Europe is now at risk of de-industrialization and mass unemployment
</li>
<li style="color: red;">
The root cause of the West’s miscalculation has been the failure to understand that the monetary value of Russian fossil energy is not high and never was, but its practical utility to Europe was and is extremely high. This is why sanctions on Russian oil and gas are a huge mistake and have hurt only Europe and not Russia</li>
<li>
There are no short-term solutions for Europe
</li>
<li>
The only thing that can save Europe is for it to end the Ukraine conflict on Russia’s terms
</li>
<li>
Any efforts to further intensify sanctions will deepen Europe’s crisis
</li>
<li>
Attempts to expand the trade conflict by sanctioning China for its help to Russia will utterly ruin the West
</li>
<li style="border-color: red; border-radius: 20px; border-style: solid; border-width: 7px; color: red; font-style: italic; font-weight: bold; padding: 1em;"> In a nutshell: Europe needs what Russia has (and what China has). It cannot do without those things. But Russia (and China) can do without what Europe has. They are self-sufficient. The financial impact of European sanctions on Russia is minimal. Therefore, economic sanctions against Russia (or China) will never work. But, because of the overwhelming dependence of Europe on Russian (and Chinese) goods, sanctions on Russia (or China) will utterly destroy Europe. The only hope for Europe to prevent a total economic catastrophe is to achieve an agreement with Russia that ends the current destructive sanctions as soon as possible, and at whatever political cost, including the abandonment of Ukraine and cession of Ukrainian territory to Russia. The longer this is postponed, the more extensive the permanent economic damage to Europe will be.</li>
</ul>
<p>
History is replete with trends and tipping points. Great shifts in power take place gradually and often imperceptibly, only bursting upon the public consciousness when dramatic events occur.
</p>
<p>
The Ukraine war will go down in history as one of those dramatic events that exposed a fundamental shift of power — from West to East.
</p>
<p>
A New World Order is taking birth before our eyes. The countries of the West, which have dominated the world in one form or another for the past three centuries, are receding in power. The civilisations of the East are regaining their autonomy.
</p>
<p>
The economic war over Ukraine will be as consequential as the military one in demonstrating to the world how decisively geopolitical and geo-economic power have shifted.
</p>
<p>
The biggest loser looks to be Europe. As I have shown here with detailed economic data from no less than Western sources, it is obvious that Europe has written its own epitaph with its ill-considered actions against a more powerful adversary that it grossly underestimated.
</p>
<p>
The sanctions on Russia will be seen in hindsight as Europe’s Stalingrad as well as its Waterloo.
</p>
</div>
<a href="#TOC">Back to TOC</a>
</section>
</section>
<div id="floatclear"></div>
<section>
<header>
<h2 id="TOC8">
List of Figures
</h2>
</header>
<div>
<p>
Below is a list of links to the figures in this report, so that anyone who wishes to use this report as a resource can directly give the link to a particular figure from the report, without requiring someone to go through the entire report.
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig001">Fig. 001. The Russian Invasion of Ukraine</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig002">Fig. 002. The Renamed McDonald's in Moscow</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig003">Fig. 003. Russian Oil Revenues Since the Start of the War</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig004">Fig. 004. The Four Provinces Formally Annexed by Russia</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig005">Fig. 005. Ganesh Prasad's Representation of Europe's Sanctions Against Russia</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig006">Fig. 006. The Decline in US Strategic Petroleum Reserve Stocks</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig007">Fig. 007. The Evolution of the Korean War (1950-53) and China's Entry into the War</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig008">Fig. 008. How Sanctions Against Russia are a Western Enterprise</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig009">Fig. 009. The Fall and Rise of the Ruble After the Invasion of Ukraine, 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig010">Fig. 010. How Western Sanctions Affected Russia in 2014</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig011">Fig. 011. Manufacturing as % of GDP, Russia v/s Europe and USA</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig012">Fig. 012. Avg. GDP Growth Rate, 2000-2019, Russia v/s Europe and USA</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig013">Fig. 013. Annual % GDP Growth Rate, 2000-2018, Russia, UK, Germany</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig014">Fig. 014. GDP Per Capita, PPP, 2000-2021</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig015">Fig. 015. Average % annual growth, GDP per capita, PPP, 2000-2021</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig016">Fig. 016. Total Debt as a Percentage of GDP, for Russia and Various Advanced Countries</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig017">Fig. 017. The Rise in China and Japan's Ownership of US Treasury Bonds</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig018">Fig. 018. Annual GDP Growth Rate Due to High Debt</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig019">Fig. 019. Compounded GDP Growth Factor with Year 2000 as Base, Japan and UK</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig020">Fig. 020. Compounded GDP Growth Factor with Year 2000 as Base, USA</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig021">Fig. 021. Reduction in China's Ownership of US Treasury Bonds</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig022">Fig. 022. Drop in Russia's Ownership of US Treasury Bonds in 2017-18</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig023">Fig. 023. Recent Drop in Russian Ownership of US Treasury Bonds</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig024">Fig. 024. Growth in Russian Gold Reserves in Million USD</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig025">Fig. 025. Growth in Russian Gold Reserves in Tons of Gold</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig026">Fig. 026. World's Largest Arms Exporters, 2000-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig027">Fig. 027. Russian Arms Exports to Algeria, 1991-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig028">Fig. 028. Russian Arms Exports to China, 1991-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig029">Fig. 029. Russian Arms Exports to Egypt, 1991-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig030">Fig. 030. Russian Arms Exports to India, 1991-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig031">Fig. 031. Russia's Trade Surpluses with the entire World and the Eurozone, 2000-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig032">Fig. 032. Russia's EXIM Ratios with the entire World and with the Eurozone, 2000-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig033">Fig. 033. EXIM Ratios for Russia with Various European Countries in 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig034">Fig. 034. Breakup of Russia's Exports to Norway, 2020 ($1.1 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig035">Fig. 035. Proportion of Various Means of Energy Production in Europe, 1990-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig036">Fig. 036. Percentage Breakup of Norway's Energy Sources, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig037">Fig. 037. The Decline of Coal in Europe Over the Last 30 Years</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig038">Fig. 038. Fossil Fuel Dependence of Major European Nations, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig039">Fig. 039. Breakup of Russia's Exports by Destination Continent, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig040">Fig. 040. Breakup of Russia's Imports by Origin Continent, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig041">Fig. 041. Key Destinations for Russian Exports in Asia, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig042">Fig. 042. Key Destinations for Russian Exports in Europe, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig043">Fig. 043. Key Origins for Russian Imports in Asia, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig044">Fig. 044. Key Origins for Russian Imports in Europe, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig045">Fig. 045. Tree Map of Russia's Export Destinations in 2020 (Total $330 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig046">Fig. 046. Tree Map of Russia's Import Origins in 2020 (Total $220 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig047">Fig. 047. EXIM Ratios of Russia with Various Asian Countries, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig048">Fig. 048. EXIM Ratios of Russia with Various European Countries, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig049">Fig. 049. EXIM Ratios of Russia with Various African Countries, 2020 (1/3)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig050">Fig. 050. EXIM Ratios of Russia with Various African Countries, 2020 (2/3)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig051">Fig. 051. EXIM Ratios of Russia with Various African Countries, 2020 (3/3)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig052">Fig. 052. Breakup of Russia's 2020 Exports by Category (Total: $330 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig053">Fig. 053. Percentage Distribution of Non-Fuel and Non-Mineral Russian Exports by Category, 2020 (Total $127 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig054">Fig. 054. Breakup of Russia's 2000 Exports by Category (Total: $104 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig055">Fig. 055. CAGR of Russia's Exports, 2000-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig056">Fig. 056. Russia's Oil Exports by Destination, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig057">Fig. 057. Russia's Natural Gas Exports by Destination, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig058">Fig. 058. Category-wise Break-up of Russia's Exports to China (2020)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig059">Fig. 059. Category-wise Break-up of China's Exports to Russia in 2020 (Total: $50.7 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig060">Fig. 060. Break-up of Russian Exports to Saudi Arabia by Category, 2020 ($1.58 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig061">Fig. 061. Break-up of Exports from Saudi Arabia to Russia by Category, 2020 ($202 Mn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig062">Fig. 062. Break-up of Exports from Russia to the UAE by Category, 2020 ($2.59 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig063">Fig. 063. Break-up of Exports from the UAE to Russia by Category, 2020 ($561 Mn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig064">Fig. 064. Break-up of Russian Exports to Turkey by Category, 2020 ($13.1 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig065">Fig. 065. Break-up of Exports from Turkey to Russia by Category, 2020 ($4.5 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig066">Fig. 066. Break-up of Russian Exports to Kazakhstan by Category, 2020 ($13.8 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig067">Fig. 067. Break-up of Exports from Kazakhstan to Russia by Category, 2020 ($5.18 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig068">Fig. 068. Break-up of Russian Exports to Finland by Category, 2020 ($6.81 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig069">Fig. 069. Break-up of Exports from Finland to Russia by Category, 2020 ($3.46 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig070">Fig. 070. Break-up of Russian Exports to the Netherlands by Category, 2020 ($22.5 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig071">Fig. 071. Break-up of Exports from the Netherlands to Russia by Category, 2020 (6.46 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig072">Fig. 072. Break-up of Russian Exports to Poland by Category, 2020 ($8.66 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig073">Fig. 073. Break-up of Exports from Poland to Russia by Category, 2020 ($7.63 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig074">Fig. 074. Break-up of Russian Exports to Italy by Category, 2020 ($11.9 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig075">Fig. 075. Break-up of Exports from Italy to Russia by Category, 2020 ($7.71 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig076">Fig. 076. Break-up of Russian Exports to Germany by Category, 2020 ($14.2 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig077">Fig. 077. Break-up of Exports from Germany to Russia by Category, 2020 ($26.1 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig078">Fig. 078. Break-up of Russian Exports to France by Category, 2020 ($4.93 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig079">Fig. 079. Break-up of Exports from France to Russia by Category, 2020 ($5.97 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig080">Fig. 080. Break-up of Russian Exports to the UK by Category, 2020 ($25.3 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig081">Fig. 081. Break-up of UK Exports by Category, 2020 ($371 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig082">Fig. 082. Break-up of Russian Exports to the UK by Category, without Fossil Fuels, 2020 ($4.35 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig083">Fig. 083. Sale of Gold in International Gold Exchanges </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig084">Fig. 084. Break-up of Exports from the UK to Russia by Category, 2020 ($2.84 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig085">Fig. 085. Break-up of Malaysian Exports to Russia by Category, 2020 ($959 Mn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig086">Fig. 086. Break-up of Vietnamese Exports to Russia by Category, 2020 ($3.15 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig087">Fig. 087. Break-up of Indian Exports to Russia by Category, 2020 ($2.87 Bn) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig088">Fig. 088. Poland's Total Imports, by Country of Origin, 2020 (Total: $269 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig089">Fig. 089. Italy's Total Imports, by Country of Origin, 2020 ($429 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig090">Fig. 090. Germany's Total Imports, by Country of Origin, 2020 ($1.1 Tn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig091">Fig. 091. France's Total Imports, by Country of Origin, 2020 ($562 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig092">Fig. 092. The UK's Total Imports, by Country of Origin, 2020 ($610 Bn)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig093">Fig. 093. Break-up of Europe's Total Energy Use by Energy Source, 2019 (Petajoules)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig094">Fig. 094. Break-up of Europe's Total Energy Use by Energy Source, 2020 (Petajoules)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig095">Fig. 095. Break-up of Europe's Total Energy Use by Energy Source, 2020 (Percentages) </a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig096">Fig. 096. Break-up of Europe's Energy Production, by Energy Source, 2020 (Petajoules)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig097">Fig. 097. Europe's Energy Shortfall, 2020 (Petajoules)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig098">Fig. 098. Europe's Energy Shortfall in Percentage Terms by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig099">Fig. 099. Energy Import Dependency of Various European Countries, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig100">Fig. 100. Europe's Requirement for Energy Imports from Russia, by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig101">Fig. 101. Top Gas Exporters in the World</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig102">Fig. 102. The Gas Pipelines from Russia to Europe</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig103">Fig. 103. Top World Exporters of Crude Oil, Percentages of Total, 2018</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig104">Fig. 104. Top World Exporters of Crude Oil, Percentages, 2018</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig105">Fig. 105. Top World Exporters of Crude Oil, Million Tons Per Year, 2018</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig106">Fig. 106. Increase in Annual Global Exports of Crude Oil, 1980-2018</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig107">Fig. 107. Increase in Annual Global Production of Crude Oil, 1980-2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig108">Fig. 108. Emergency Stocks of Crude Oil in Different European Countries, July 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig109">Fig. 109. Top World Coal Exporters, Million Metric Tons, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig110">Fig. 110. Top World Coal Exporters, Percentages, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig111">Fig. 111. Break-up of Germany's Energy Usage by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig112">Fig. 112. Germany's Imports of Natural Gas by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig113">Fig. 113. Germany's Imports of Oil and Petroleum Products by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig114">Fig. 114. Germany's Exports of Oil and Petroleum Products by Destination Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig115">Fig. 115. Germany's Imports of Coal by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig116">Fig. 116. Break-up of Poland's Energy Usage by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig117">Fig. 117. Poland's Imports of Natural Gas by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig118">Fig. 118. Poland's Imports of Oil and Petroleum Products by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig119">Fig. 119. Poland's Exports of Oil and Petroleum Products by Destination Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig120">Fig. 120. Poland's Imports of Coal by Origin Country, 2019</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig121">Fig. 121. Break-up of the UK's Energy Usage by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig122">Fig. 122. The UK's Imports of Natural Gas by Origin Country, 2019</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig123">Fig. 123. The UK's Imports of Oil and Petroleum Products by Origin Country, 2019</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig124">Fig. 124. The UK's Exports of Oil and Petroleum Products by Destination Country, 2019</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig125">Fig. 125. The UK's Imports of Coal by Origin Country, 2019</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig126">Fig. 126. Break-up of Italy's Energy Usage by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig127">Fig. 127. Italy's Imports of Natural Gas by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig128">Fig. 128. Italy's Imports of Oil and Petroleum Products by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig129">Fig. 129. Italy's Imports of Coal by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig130">Fig. 130. Break-up of France's Energy Usage by Energy Source, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig131">Fig. 131. France's Imports of Natural Gas by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig132">Fig. 132. France's Imports of Oil and Petroleum Products by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig133">Fig. 133. France's Imports of Coal by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig134">Fig. 134. Percentage of Total Gas Imports Originating from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig135">Fig. 135. Percentage of Total Oil Imports Originating from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig136">Fig. 136. Percentage of Total Coal Imports Originating from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig137">Fig. 137. Percentage of National Gas Requirement Imported from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig138">Fig. 138. Percentage of National Oil Requirement Imported from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig139">Fig. 139. Percentage of National Coal Requirement Imported from Russia, 2020 (UK: 2019)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig139a">Fig. 139a. Energy Flow Chart Showing Russia's Gas Supply to Europe</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig139b">Fig. 139b. Energy Flow Chart Showing Russia's Oil Supply to Europe</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig139c">Fig. 139c. Energy Flow Chart Showing Russia's Coal Supply to Europe</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig139d">Fig. 139d. Energy Flow Chart Showing Europe's Fossil Fuel Dependency on Russia</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig140">Fig. 140. Overall Energy Shortfall and Fossil Energy Shortfall in European Countries Due to European Sanctions on Russia, Based on 2020 Data (UK: 2019 Data)</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig141">Fig. 141. Cost-Benefit Analysis of European Sanctions on Russia</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig142">Fig. 142. Idled Steel Plants in the EU as of September 6, 2022, Because of Energy Shortages</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig143">Fig. 143. Letter from Eurometaux to EU President Ursula Von Der Leyen, September 6, 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig144">Fig. 144. Joint Letter from European Industry Associations to EU President Ursula Von Der Leyen, 6 September 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig145">Fig. 145. Start of the Gas Price Crisis in February 2021 Due to Post-Covid Rise in Demand</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig146">Fig. 146. Drop in EU Gas Prices Since the September 2022 Peak After the Rise Due to the War</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig147">Fig. 147. Drop in EU Gas Demand, January to October 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig148">Fig. 148. Drop in EU Gas Demand, October 2022</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig149">Fig. 149. Components of Ammonia Cost in Different Geographies</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig150">Fig. 150. Top Ten Global Ammonia Producers, 2012</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig151">Fig. 151. Rise in Fertilizer Prices Since February 2021</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig152">Fig. 152. Market Share of Russia, Ukraine, and Belarus in Major Fertilizers</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig153">Fig. 153. Final Energy Consumption by Sector in the EU, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig154">Fig. 154. Top World Producers of Wheat, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig155">Fig. 155. Top World Producers of Sunflower Oil, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig156">Fig. 156. Top World Producers of Gold, 2021</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig157">Fig. 157. Exports of Wheat by Origin Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig158">Fig. 158. Importers of Wheat by Destination Country, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig159">Fig. 159. Importers of Russian Wheat, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig160">Fig. 160. Exporters of Sunflower Seeds, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig161">Fig. 161. Exporters of Sunflower seed and safflower oil, crude, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig162">Fig. 162. Importers of Sunflower seed and Safflower Oil, crude, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig163">Fig. 163. Exporters of Urea, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig164">Fig. 164. Exporters of Ammonia, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig165">Fig. 165. Top World Producers of Potash, 2021</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig166">Fig. 166. Exporters of Potassic Fertilizer, 2018</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig167">Fig. 167. Importers of Potassic Fertilizers from Russia, 2020</a>
</p>
<p>
<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig168">Fig. 168. Importers of Potassic Fertilizer from Belarus, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig169">Fig. 169. Top World Producers of Phosphate Rock, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig170">Fig. 170. Exporters of Phosphatic Fertilizer, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig171">Fig. 171. Exporters of Phosphoric Acid, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig172">Fig. 172. Top World Producers of Aluminium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig173">Fig. 173. Exporters of Aluminium, 2018</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig174">Fig. 174. Top World Producers of Iron Ore, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig175">Fig. 175. Exporters of Iron Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig176">Fig. 176. Top World Producers of Pig Iron, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig177">Fig. 177. Top World Producers of Raw Steel, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig178">Fig. 178. Importers of Iron Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig179">Fig. 179. Exporters of Pig Iron, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig180">Fig. 180. Exporters of Iron Ingots, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig181">Fig. 181. Importers of Pig Iron from Russia, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig182">Fig. 182. Exporters of Iron Wire, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig183">Fig. 183. Exporters of Iron Pipes, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig184">Fig. 184. Exporters of Iron Cloth, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig185">Fig. 185. Exporters of Iron Nails, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig186">Fig. 186. Exporters of Stainless Steel Wire, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig187">Fig. 187. Top World Producers of Copper Ore, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig188">Fig. 188. Exporters of Copper Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig189">Fig. 189. Importers of Copper Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig190">Fig. 190. Top World Producers of Metallic Copper, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig191">Fig. 191. Exporters of Copper, 2018</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig192">Fig. 192. Exporters of Copper Pipes, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig193">Fig. 193. Exporters of Copper Wire, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig194">Fig. 194. Top World Producers of Magnesium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig195">Fig. 195. Exporters of Magnesium, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig196">Fig. 196. Importers of Magnesium, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig197">Fig. 197. Top World Producers of Nickel, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig198">Fig. 198. Exporters of Nickel, 2018</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig199">Fig. 199. Exporters of Nickel Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig200">Fig. 200. Importers of Nickel Ore, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig201">Fig. 201. Exporters of Nickel Matte, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig202">Fig. 202. Importers of Nickel Matte, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig203">Fig. 203. Top World Producers of Sulfur, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig204">Fig. 204. Exporters of Sulfur, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig205">Fig. 205. Exporters of Ammonium Sulfate, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig206">Fig. 206. Top World Producers of Titanium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig207">Fig. 207. Exporters of Titanium, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig208">Fig. 208. Importers of Titanium from Russia, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig209">Fig. 209. Top World Producers of Vanadium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig210">Fig. 210. Top World Producers of Tellurium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig211">Fig. 211. Top World Producers of Cobalt, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig212">Fig. 212. Top World Producers of Germanium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig213">Fig. 213. Top World Producers of Tungsten, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig214">Fig. 214. Top World Producers of Palladium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig215">Fig. 215. Top World Producers of Platinum, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig216">Fig. 216. Exporters of Industrial Diamonds, 2018</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig217">Fig. 217. Top World Producers of Bauxite, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig218">Fig. 218. Top World Producers of Alumina, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig219">Fig. 219. Top World Producers of Lead, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig220">Fig. 220. Exporters of Permanent Magnets, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig221">Fig. 221. Top World Producers of Rare Earths, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig222">Fig. 222. Top World Producers of Silicon, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig223">Fig. 223. Exporters of Silicon, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig224">Fig. 224. Top World Producers of Fluorspar, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig225">Fig. 225. Top World Producers of Tin, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig226">Fig. 226. Top World Producers of Lithium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig227">Fig. 227. Exporters of Lithium Carbonate, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig228">Fig. 228. Exporters of Lithium Cells and Batteries, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig229">Fig. 229. Top World Producers of Lime, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig230">Fig. 230. Top World Producers of Natural Graphite, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig231">Fig. 231. Exporters of Graphite, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig232">Fig. 232. Top World Producers of Gallium, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig233">Fig. 233. Top World Producers of Manganese, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig234">Fig. 234. Exporters of Manganese, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig235">Fig. 235. Top World Producers of Molybdenum, 2021</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig236">Fig. 236. Exporters of Molybdenum, 2020</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig237">Fig. 237. Why It is Not Enough to Have Full Gas Tanks Without Supply</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig238">Fig. 238. Existing LNG Terminals in Europe, New Proposed Ones, and Terminals Under Construction</a>
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<a href="https://www.leftbrainwave.com/2022/11/the-coming-european-economic-apocalypse.html#fig239">Fig. 239. Utilization Rate of LNG Terminals in Europe, Pre-War</a>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article><div class="separator" style="clear: both; text-align: center;"><br /></div><br />Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com6Bengaluru, Karnataka, India12.9715987 77.5945627-15.338635136178846 42.4383127 41.281832536178847 112.7508127tag:blogger.com,1999:blog-2647581039313842967.post-6472974246140922092021-05-06T18:51:00.001+05:302021-05-06T18:51:31.333+05:30The West Bengal Assembly Election, 2021: Lessons for Opposition Unity <article> <!--Article Title-->
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The West Bengal Assembly Election, 2021: Lessons for Opposition Unity
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Written by Dr. Seshadri Kumar, 06 May, 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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An analysis of the results of the recently held assembly elections in West Bengal reveals that if secular parties had joined hands, the BJP would never have gotten as many seats as it did in the elections. This has significant implications for opposition unity in the rest of the country.
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Introduction
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In the recently held assembly elections in West Bengal, the <a href="https://results.eci.gov.in/Result2021/partywiseresult-S25.htm?st=S25">Trinamool Congress (TMC) impressively won a third term, winning 213 seats out of 292</a>. But the other big story of the election was the rise of the Bharatiya Janata Party (BJP), from 3 seats in the assembly in 2016 to 77 seats in 2021. The Indian National Congress (INC) and the Communist Party of India (Marxist) (CPIM), traditionally the two strong parties in West Bengal, both drew a blank. Essentially, the BJP supplanted both the INC and the CPM as the principal opposition party.
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Analysis
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But if the Congress and Left had not opposed the TMC, the BJP may not have even won as many seats as they did. The “Left” in West Bengal also includes, in addition to the CPM, the Revolutionary Socialist Party (RSP) and the All-India Forward Bloc (AIFB). From a philosophical/ideological standpoint, all five parties – the TMC, the INC, the CPM, the RSP, and the AIFB – are opposed to the BJP. But because they did not cooperate with each other and reach a pre-poll seat agreement, the BJP was able to rise as spectacularly in the assembly as they did, at the cost of the INC and the CPM.
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What the Left parties and the Congress achieved in the recent elections in West Bengal was to be “vote katuas” (i.e., spoilers) for the TMC and thereby helped the BJP. They even succeeded in ensuring the loss of Mamata Banerjee, the leader of the TMC, in the Nandigram constituency. The table below shows how this happened in West Bengal. In 42 of the 77 seats that the BJP won, the margin between the winning BJP and the losing TMC was less than the number of votes polled by the third place party, be it the CPM, the INC, the RSP, or the AIFB.
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Implications
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The implication is that the BJP can be defeated soundly anywhere in the country if the opposition parties come together. That this is the case was also made clear by Prashant Kishor, the election strategist of the Trinamool Congress, <a href="https://www.ndtv.com/india-news/west-bengal-assembly-election-result-2021-prashant-kishor-tells-ndtv-results-may-seem-one-sided-but-it-was-a-tough-fight-on-trinamool-congresss-show-i-2426363">who said in an interview to NDTV following the TMC’s win that in his view, there is a limit to religious polarization</a>. He said that in his analysis of elections in India over the last 70 years, what he has observed is that the most you can gain by religious polarization is 50%-55% of the votes of the community you are targeting, whatever community that may be – Hindus, Muslims, Sikhs, or any other. He said that this is what has happened in West Bengal as well. Bengal has around 70% Hindus, and the BJP won a vote share of 38%, which is 54% of the Hindu population. This is a very significant observation. It tells us that if the 45%-50% of the population who do not believe in religious polarization unite, they can always defeat the BJP.
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The BJP won 77 seats in West Bengal when the secular parties of West Bengal were not united. But in 42 of the seats in which they won, the margin of victory was less than the number of third-place votes. What this tells us is that if the TMC and the other parties had united before the polls, the BJP would only have won 35 seats out of 292, making them quite a minority. This would have been beneficial to all involved. The TMC would have been happier without a dominant opposition party, and the Left parties and the INC would all have representation in West Bengal politics and a share of power, in sharp contrast to their current plight, in which they have been made completely irrelevant.
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This observation has significant implications for opposition unity in the rest of the country. The BJP can be beaten, but opposition parties need to unite to ensure their own political relevance.
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<strong>If they do not unite to defeat the BJP, they will be annihilated.</strong>
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Data
</h2><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCxIuZ2CcP6q99ZAz0ys_a6EzkRU-OIDc-qApKKNaA9vLaXi3Eh_V3xen1qjxqj4jIu6o60Jq2c4Y_00OwK0Iegh8FIDFevDEobMQLhLiZPvgVyb3BgGL6sf_b4Gz4mpus35sQRX0JQCrR/s815/WBVoting2.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="815" data-original-width="452" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiCxIuZ2CcP6q99ZAz0ys_a6EzkRU-OIDc-qApKKNaA9vLaXi3Eh_V3xen1qjxqj4jIu6o60Jq2c4Y_00OwK0Iegh8FIDFevDEobMQLhLiZPvgVyb3BgGL6sf_b4Gz4mpus35sQRX0JQCrR/w354-h640/WBVoting2.png" width="354" /></a></div><br /><div><br /></div>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com1tag:blogger.com,1999:blog-2647581039313842967.post-26647844365261295422021-03-16T01:03:00.011+05:302021-03-16T17:37:02.495+05:30The New AICTE Rules: Modi’s Newest "Masterstroke" <article> <!--Article Title-->
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The New AICTE Rules: Modi’s Newest “Masterstroke”
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Written by Dr. Seshadri Kumar, 15 March, 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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The new AICTE (All-India Council for Technical Education) rules that have made good scores in physics and mathematics unnecessary for admission to engineering programs will likely lower the quality of the graduates from India’s second tier and third tier engineering colleges.
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However, looking at the big picture, one can see that this development is a blessing in disguise for the Indian economy and therefore represents a “masterstroke” by India’s beloved PM, Shri Narendra Modi. This article explains how this is so. It is rare that any nation has a leader with as much foresight, vision, and wisdom as Mr. Modi. Indians are truly blessed to have someone like Mr. Modi leading us.
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The New Recommendations of the AICTE
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A lot of people are upset about the <a href="https://www.hindustantimes.com/education/admissions/maths-physics-chemistry-not-compulsory-for-b-e-b-tech-degrees-aicte-101615532420012.html">AICTE’s new recommendation that proficiency in maths and physics no longer need be a qualification for engineering college admission</a>. The new guidelines have made it <strong>optional</strong> for any college to consider XII<sup>th</sup> standard scores in physics and mathematics for admission to engineering colleges. The AICTE has said that these recommendations are not binding on institutions, but that the new guidelines are “futuristic and in keeping with the vision of the <a href="https://www.hindustantimes.com/education/nep-2020-implementation-of-new-education-policy-in-our-education-system/story-bw4OiekFCamI7NPoNkgAoJ.html#:~:text=The%20Union%20cabinet%20in%20July,pre-school%20to%20secondary%20level.&text=55%20PM%20IST-,The%20Union%20cabinet%20in%20July%202020%20approved%20the%20New%20Education,pre-school%20to%20secondary%20level.">National Education Policy – 2020.</a>”
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The ostensible idea behind this is to “break down silos” between streams, so that students are not stopped from entering disciplines for which they do not have the background. But it does create concern as to whether students who do not have the aptitude for a discipline are admitted as students to this discipline. The rationale for the previous system was that students were screened at the high school level to see who among them has an aptitude for physics and mathematics, since these two subjects are the foundations for most engineering subjects, and only those who had a certain level of achievement in these subjects were admitted to engineering courses. The idea was to ensure that the student is able to succeed in the chosen discipline and does not drop out because he is unable to handle the rigour of the discipline. The new policy allows any student with any level of attainment in mathematics or physics to enter an engineering program. So someone who would previously only be eligible for an Arts program can now enrol in an engineering program.
</p>
<p>
There is nothing fundamentally wrong with this idea, but it can have some undesirable consequences, which I will get into in some detail below.
</p>
<p>
Since the new recommendations are not binding, this means that institutions with higher standards, such as the IITs and NITs, for example, can still insist on good scores in physics and mathematics in the XII<sup>th</sup> standard for prospective students. Chances are that they will.
</p>
<p>
The real problem is colleges at the bottom of the pyramid. There is already a huge problem of declining standards among private engineering colleges. The new rules make it very likely that the quality of graduates from these institutions will fall even lower. That means that graduates from these institutions, who are already largely unemployable, will be even more so.
</p>
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Low Academic Standards in Private Engineering Colleges
</h2>
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<div>
<p>
Having taught at a private engineering college in Bangalore (which shall remain unnamed in this post – and in any case the specific college is not important, as this is a systemic problem, and applies to most private colleges), I know for a fact how abysmal the current standards of education are in engineering in India today. Most of the students at these institutions get through 4 years by just memorizing theory the day before an exam and promptly forgetting it the day after. They are rarely asked to solve any quantitative problems in exams, as I have seen in the exam papers of VTU (Visveswaraya Technological University), the apex institution to which more than 200 engineering colleges in Karnataka are affiliated. As an example, fluid mechanics, a core subject for chemical engineering, mechanical engineering, civil engineering, and aerospace engineering, is a highly quantitative subject. In VTU, 25% of the student’s total marks comes from internal exams and assignments within the college that is affiliated to VTU and, hence comes from the faculty of that college. 75% of the total marks comes from the final exam which is is held by VTU. If you take a look at the final exam paper for undergraduate fluid mechanics in Chemical Engineering in VTU, you will find that a student can easily pass the exam without any quantitative knowledge at all. A student can get close to 100% marks in the final exam for fluid mechanics without knowing even how to calculate the pressure drop in a pipe in which fluid is flowing – the very basic qualification that a student of fluid mechanics needs. It is worth pointing out that the final exam question paper is set by faculty selected from the colleges affiliated to VTU, so this is not a paper set by an independent authority. Yet the question paper is trivially easy. This happens every year, no matter which college the paper-setters are from. This is because all the paper-setters are from colleges affiliated to VTU, and know the calibre of their students. They know that setting anything but the most trivial questions in the final exam would mean that most of the students from their own college will flunk the final exam.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfPXo0wAvmueqQjngcBeCU5eJjchj4XtuMkYGeMI7vZ8YGcQ5npf1edDRCjntwIvlUjnht0-7FqL9mRZVJK7r-MT2fUEarv0d7Ma4i2eN1KHylJzzwYu8SDAw118W-xQ1h1DOclWKt6BAT/s1920/VTU_QuestionPaperSample.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="193" data-original-width="1920" height="64" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgfPXo0wAvmueqQjngcBeCU5eJjchj4XtuMkYGeMI7vZ8YGcQ5npf1edDRCjntwIvlUjnht0-7FqL9mRZVJK7r-MT2fUEarv0d7Ma4i2eN1KHylJzzwYu8SDAw118W-xQ1h1DOclWKt6BAT/w640-h64/VTU_QuestionPaperSample.png" width="640" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Example Questions from VTU Final Exam in Fluid Mechanics. Notice the Absence of Quantitative Questions.</td></tr></tbody></table><p>Why is this the case? Because most of these colleges are driven not by the pursuit of education, but the pursuit of money. In most of these private engineering colleges, there is not a single person who cares about education. The students and the parents of the students who study there are only interested in obtaining a degree. And they are willing to pay for that, and handsomely, too. One semester fees can cost up to Rs. 2 lakhs (Rs. 2,00,000), which means that the cost of a 4-year degree is about Rs. 16 lakhs. All this is under what is known as the “management quota” – a euphemism for those students who could not get into the college purely on their merit. So a student who gets in on merit may pay Rs. 90,000 a semester, and a student who gets in the management quota may pay Rs. 2 lakhs a semester. The management only cares about getting the exorbitant fees from the students.</p>
<p>
And when students pay so much for an “education,” they are not students, they are “customers.” And would you take money from customers and not give them their “products” (their degrees)? Hell, no. So teachers are told to set very easy questions in internal exams in colleges, and to ensure that everyone gets the minimum marks necessary to be able to write the final exam. And when students do not attend enough classes to be able to attend the final exam (VTU demands a 75% attendance), teachers are asked to teach extra classes just for those students who have been truant all year long so they can say the student attended a minimum number of classes. After all, the customer is always right.
</p>
<p>
Very few students care about education in these classes. I had only one rule while teaching: students should not make noise and disturb other students. There might be one student in a class of 40 who is interested in what I am teaching, let him or her learn. Some would try to read comics, and I would let them, as long as they read the comics silently. Some would watch football clips on their mobile phones. I had no problem with that as long as they watched it on mute. The reason for my lenience is that you cannot force someone to learn, much as you can take a horse to a river but you cannot force him to drink. My philosophy was: “Your parents are paying for this, not me. I do not lose anything if you don’t want to pay attention. You do.” I have even told them this clearly in class. The only reason these kids even attended class was because 75% attendance was a compulsory requirement to write the final exam.
</p>
<p>
So the management does not care about education, the students do not care about education, their parents do not, so whom does that leave? The teachers. The teachers try very hard to teach, but because of the diktat of setting very easy exams, the whole point is defeated. No one will prepare hard for an exam if they know it is going to be easy. Eventually, even the most idealistic teacher gives in and becomes cynical. The teachers are the one segment of the whole establishment that I do not find fault with. Most of the teachers I interacted with were quite sincere. But they were hampered by the corrupt system. And they are treated most horribly by the colleges and their management, because there is an excess supply of teaching staff, and the management can afford to treat teachers badly. In the institution I taught, there was a revolving door — every semester, some teachers from each department would leave because they got sick of the treatment they received in the college, and new, hapless ones would come in.
</p>
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<h2 id="TOC3">
Consequences of the New Rules
</h2>
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<div>
<p>
What the new rules do is open the door to further deterioration of the already awful standards of graduating engineers in Tier 2 and Tier 3 engineering colleges, both government and private. The miserable standards of the students who exit these institutions is due to the fact that the students were hopeless and not interested in an education even when they entered the institution. Most of them joined the college only because their parents wanted them to get an engineering degree. Admit a student without sufficient mathematics and physics knowledge into an engineering course, and of course they will not be able to follow much of what the teachers in the engineering college teach. The parents will be very happy, because now there are more avenues for their worthless children to purchase engineering degrees. Their children will be even more indifferent than the students today are, and consequently will learn even less in four years than the current students do.
</p>
<p>
But the pressures in the for-profit private engineering colleges will not go away, because these colleges continue to be about buying degrees: teachers will be pressurized to give a student full marks even if, when asked about the process to make ethylene, a student talks about the glories of gaumutra (cow urine). After all, can you afford to offend or antagonize someone who is paying Rs. 16 lakhs for a degree?
</p>
<p>
It is clear that industry cannot afford to hire students who know so little. What do they do?
</p>
<p>
It is important to first reflect what these students were doing all these years. In spite of the pathetic quality of the students who are graduating from these colleges, what is amazing is that most of them were getting placed somewhere or the other. The reason for that (at least before 2017 – things have changed dramatically since then) was that India was a growing economy, and such an economy always has jobs. Most industry jobs in India do not require thinking. They have standard operating procedures (SOPs) that any XII<sup>th</sup> class graduate can follow. In most companies with automation, one does not need to do much because the process control systems take care of much of the work. So if you knew the basic terminology of the processes, could follow a clear set of instructions in the plant (an SOP), and could use Microsoft Word and Excel, you were pretty much set as long as you could add daily production figures to give monthly and yearly totals. Most of India’s traditional engineering (hard engineering) job market is not high-tech. Other companies, including IT majors, have lengthy onboarding processes for fresh hires, where they would themselves teach the graduates how to do their jobs to compensate for the fact that the students come into industry mostly unprepared.
</p>
<p>
Of course, a degree in chemical or mechanical engineering anyway does not equip you to work in IT. So what do you do? You take a 6-month “bridge course” to learn SQL, Java, C++, or python, so that you can get a job. That is what most kids do anyway at present. Once in this class, you study harder than you did in four years of engineering, because you know you cannot get a job without this skill. And then, hopefully, you land a job as a software coolie.
</p>
<p>
Seen from this prism, the new AICTE rules should not have such a huge effect on the quality of our workforce. <strong>Most of their education happens after they have graduated.</strong> After coasting through 4 years of college partying, students are finally forced to confront the real world, and now they start adapting and working. They take special courses to learn specific skills so they are finally marketable.
</p>
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<header>
<h2 id="TOC4">
The “Masterstroke”
</h2>
</header>
<div>
<p>
With all this background, one can now understand the majestic vision of Modiji.
</p>
<p>
Think for a minute from his point of view. India has suffered terribly because of the pandemic. <a href="https://www.hindustantimes.com/india-news/india-s-gdp-growth-rises-falls-by-23-9-per-cent-in-april-june-quarter/story-Yj1GGTR7fuHAQ6QNL0jpBL.html">Our quarterly growth rate in the April-June 2020 period slipped to -23.9%, the lowest in the world</a>. People have no money, they are starving. Something has to be done.The PM also faces a huge challenge of generating employment. Lots of people have lost jobs. And with the economy shrinking, the number of jobs available has also shrunk.
</p>
<p>
Educational institutions have been among the hardest hit by the pandemic. Most of them have had to close down because they were based on a face-to-face teaching paradigm. It has taken them time to move to an online education delivery system. But that mechanism is not perfect. In fact, it is decidedly inferior to a face-to-face system of teaching, because of the lack of feedback: you have to mute the microphones of all the students when you are teaching, otherwise the feedback would drown out what you are saying. Plus, you cannot conduct laboratories virtually. This has caused huge losses for academic institutions.
</p>
<p>
So Modi needed to do something that both provides jobs and revives educational institutions. The new AICTE rules do exactly that.
</p>
<p>
With the new rules in place, engineering colleges can take students with very poor entry qualifications and promise them degrees. Of course, since their qualifications are so bad, the colleges get to hike the fees for them. That is, if the students who come on merit used to pay Rs. 8 lakhs over 4 years, and the current “management quota” students who come in based on poorer but acceptable mathematics and physics scores used to pay Rs. 16 lakhs over 4 years, you can easily charge Rs. 25 lakhs or Rs. 30 lakhs for someone who knows nothing about mathematics and physics but wants an engineering degree! This should immediately make educational institutions profitable again, given the great demand for engineering degrees in the country.
</p>
<p>
But of course, a student with little affinity towards mathematics and physics is unlikely to absorb much in 4 years in engineering. So, if the current “management quota” graduates of engineering colleges have a tough time getting a job, these “super-management quota” students are probably only fit to do a “paanwalla” (betel-leaf seller) job after they graduate.
</p>
<p>
That’s where the second part of Modi’s masterstroke comes in. Since these students do not really know any engineering, they will need special coaching if they want to get jobs in engineering. So there will be a huge demand for post-engineering degree coaching classes in engineering subjects. In every branch of engineering, if the students wish to continue with their specialization, they can take classes specific to the skill that they will need in a job in industry. If they decide to move towards IT, they can take classes in python, image processing, embedded coding, computer vision, web development, data science, machine learning, blockchain, or any similar domain. To be sure, courses of the latter kind already exist, but the generation of huge numbers of incompetent engineering graduates will give a huge fillip to such coaching classes.
</p>
<p>
This will unleash a huge demand for good coaches all over the country. Competent engineers can teach engineering graduates the subjects they were supposed to have learned in 4 years but did not. Experienced professionals in IT and other lucrative domains, who are out of a job, can teach professional subjects like R, python, data science, web development, and the like.
</p>
<p>
It is quite a different question whether learning any of these subjects will actually help people get a real job. The current employment statistics in India are fairly dismal and unlikely to improve even in the medium term. But hope lives eternal in the human breast, as Alexander Pope said, and so people will sign up for any training that can improve their competitive edge. In fact, if the economic situation worsens, there will be even more demand for up-skilling, and so the coaching profession in India will be virtually recession-proof. When there are very few jobs, there is really no option for young people except to improve their skills to beat the competition.
</p>
<p>
One might ask what people who have all these skills can do in a job market that is pretty bleak. What do they do after gaining these skills, given that there are no jobs to apply these skills in? The answer: coaching! Given that the demand for coaching has to rise in a bad economy, those who have mastered skills can teach others. This will also lead to the grand success of one of PM Modi’s flagship initiatives, “Skill India.” We will slowly but surely have a nation full of skilled people who are constantly improving others’ skill levels! In short order, probably within a decade, all of India will be completely up-skilled!! What then, you might ask? Well, not everyone will be equally skilled in everything. So someone who is skilled in chemical engineering can teach chemical engineering to someone who is skilled in data science, and vice versa, until all 1.3 billion Indians will be skilled in everything. Most likely, this will lead to a mention in the Guiness Book of World Records as well a certificate from the UN certifying India to be the most skilled country in the world! There may be no jobs for them, but at least we will be more skilled than any nation at any time in history since the Indians of Vedic times, who were (and will always be) the most skilled people in all of history, anywhere in the world. And we all know that bragging rights are more important to Indians than jobs or livelihood.
</p>
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<h2 id="TOC5">
No, I Am Not Kidding!
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<div>
<p>
I know that there is a market for teaching in India because I signed up in 2019 on a website that connects teachers and students. I have not had the opportunity to connect with students yet, because shortly after I signed on the website, I got a real job and so obviously did not have time to teach anyone. In addition, I was struck down with Covid in August 2020, and only recovered recently. But in the intervening period (since July 2020, in fact), I have received 23 requests for coaching, which I have had to decline because I was too busy recovering from the illness (see chart below). The requests have increased in recent months, which might indicate a seasonal effect (students might start preparing for competitive exams next March or April now). I had advertised myself as being available to teach physics, mathematics, and chemistry for the IIT-JEE exam, as well as chemical engineering subjects which I am quite familiar with.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinD9zM2QYHzNKdYIC05feily2yEnjiLisYkXAYwhl4iZesuZZUAGgDRQyVFfpY7Lkuo1vMR4JKakxAH30PNYRuubcsTjyswV2h6NbdOOw9wuA-N3hiWckekKb0AixD8yQfeS5MTnQ19ir8/s487/TeachingRequests.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="274" data-original-width="487" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinD9zM2QYHzNKdYIC05feily2yEnjiLisYkXAYwhl4iZesuZZUAGgDRQyVFfpY7Lkuo1vMR4JKakxAH30PNYRuubcsTjyswV2h6NbdOOw9wuA-N3hiWckekKb0AixD8yQfeS5MTnQ19ir8/w400-h225/TeachingRequests.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Teaching Requests Received by Seshadri Kumar, July 2020 - March 2021</td></tr></tbody></table><p>Of these 23 requests, 11 were for Physics, 3 for Mathematics, 3 for Chemistry, and, most interestingly, 6 were for Chemical Engineering subjects, including one from a PhD scholar in Chemical Engineering from IIT Kharagpur who had come from a petrochemical background in a local college in Assam and so needed help in Chemical Engineering basics which she had not encountered in her undergraduate studies in that local college. Other chemical engineering-related enquiries were from students who needed routine course help in mechanical operations, chemical process technology, and fluid mechanics; help with online exams in thermodynamics, mass transfer, and heat transfer; help with answering an assignment in chemical reaction engineering which was due in 2 weeks; and help in process design for a final year design project. So the demand for coaching is definitely there.</p>
<p>
What I am essentially saying is: make lemonade if life gives you lemons. Right now, in India, we are reaping a bountiful harvest of lemons. Making a profit from the failure of the state to provide essential needs is a time-honoured hallmark of being business-savvy in India. For instance, the state cannot provide us with clean drinking water, so there is a big market for water purifiers. The state cannot provide us with reliable electricity, so there is a big market for diesel generators and inverters. The state cannot provide us with good public transport, so there is a big market for two-wheelers and cars.
</p>
<p>
And, therefore, since the state cannot provide us with enough jobs, let us all become teachers. Now, not everyone can be good teachers – many may lack the necessary communication skills or the necessary subject matter skills. No problem! Such people can take online classes in improving their communication and in the subjects they hope to teach – and this way, they can do their bit in improving the economy and giving jobs to others. When they have learned enough, they can earn back the money they spent in up-skilling themselves by teaching others. In fact, inspired by Modiji's world-famous acronyms, and keeping in mind the enormous transformational potential of my idea, I have decided to give my plan this name: it is the <strong>CHAI-OMLeTe</strong> scheme, which stands for <strong>C</strong>ommunity <strong>H</strong>elp to <strong>A</strong>dvance <strong>I</strong>ndia - <strong>O</strong>btaining <strong>M</strong>oney from <strong>Le</strong>arning and <strong>Te</strong>aching. Given that Modiji himself once was a “chai-wallah” (tea-seller), I am sure this plan will have his complete support. It goes without saying that the <strong>CHAI-OMLeTe</strong> scheme epitomizes Modiji's slogan of “Atmanirbharta” or self-reliance.</p>
<p>
You may wonder why I am “giving my secrets away.” After all, I could be making so much money learning and teaching without competition from all of you readers. The reason is that this is not a zero-sum game. The demand for good teachers is so high in India that anyone who wants to teach and is good at it will get students.
</p>
<p>
And, as I said, it is only going to get better as the economy gets worse in the next 10 years. So things are looking up for all us freelance teachers!!
</p>
<p>
So, in conclusion, let’s thank our dear, visionary PM for giving us this great opportunity for employment and up-skilling. I urge you to repeat after me:
</p>
<p>
Modi! Modi! Modi!
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com3tag:blogger.com,1999:blog-2647581039313842967.post-34950596319019146882021-03-11T19:06:00.004+05:302021-03-11T19:16:36.179+05:30Is the Freedom House Report on Freedoms in India Accurate? <article> <!--Article Title-->
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Is the Freedom House Foundation Report on Freedoms in India Accurate?
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Written by Dr. Seshadri Kumar, 11 March, 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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<p>
The report on the <a href="https://freedomhouse.org/country/india/freedom-world/2021">status of freedom in different countries in the world by the Freedom House Foundation (FH) caused an uproar in India because it downgraded India’s status from “free” to “partly free.”</a> While the government of India dismissed the report without giving any good reason, the report has caused many to question whether the report gives an accurate picture of freedom in India. The report causes consternation to many Indians who are worried about eroding freedoms in India.
</p>
<p>
To decide whether the report is based on fact, I have investigated every claim of FH and found that almost every one of them is based on fact. Further, I have also noticed that the FH has missed out many important events in India which, if taken into account, would give India an even lower rating than FH has given it. In such cases, I have given my own rating that takes such events into account.
</p>
<p>
In what follows, I have investigated every claim of FH and checked if there is a news article that justifies their concern. I have added the hyperlink to that article. I have also given hyperlinks to events which FH has missed and which I think have an impact on freedom in India.
</p>
<p>
Based on FH's points and my additional points, I believe FH has been very generous with their rating of 67. My own rating comes to only 50.
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<h2 id="TOC1">
Introduction
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<p>
On March 6, a <a href="https://freedomhouse.org/country/india/freedom-world/2021">report released by the Freedom House Foundation (FH) caused an uproar in India. The report said that, based on a number of metrics, India had slipped from a status of “free” to “partly free” over the last year</a>. India's rating, based on a total score of 100, fell from 71 the previous year to 67 this year.
</p>
<p>
When asked about the report, <a href="https://www.tribuneindia.com/news/nation/get-india-map-right-first-finance-minister-to-freedom-house-221160">India’s Finance Minister, Nirmala Sitharaman, dismissed it by saying that since the Freedom House report did not depict India’s maps accurately, she saw no reason to respond to the report.</a>
</p>
<p>
The only problem with India’s map in the report on India was that it showed the Indian state of Jammu and Kashmir and Pakistan-Occupied Kashmir (PoK) separately. India traditionally likes to show the whole of pre-Independence Jammu and Kashmir, which includes what is currently PoK, as well as Chinese-occupied Kashmir (Aksai Chin), as part of India. Unfortunately for India, India’s stance is not accepted globally.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNG1-dh1Swdc17Je1U3iebaytppwY66mEkC6IhkaZyT0mJM6z9XSDX5xkMvv_fxhvWM7U6FqFSOMZ33_8IeXuDbcuoaSLbsyXLkN5rG6s1jGPRjP171SZr-YF_iiPFZTi-8pOqp_TDFcZo/s343/FreedomHouseIndiaMap.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="296" data-original-width="343" height="345" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNG1-dh1Swdc17Je1U3iebaytppwY66mEkC6IhkaZyT0mJM6z9XSDX5xkMvv_fxhvWM7U6FqFSOMZ33_8IeXuDbcuoaSLbsyXLkN5rG6s1jGPRjP171SZr-YF_iiPFZTi-8pOqp_TDFcZo/w400-h345/FreedomHouseIndiaMap.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Freedom House's Map of India, Which Gave Separate Ratings to Kashmir and to the Rest of India</td></tr></tbody></table>
<p><br />
If India were to object to everyone who showed maps that do not reflect the Indian government’s official position, then India would be unable to work with even the US State Department, which also uses a similar map.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzlf7g3zxHM1UHfs5K8_qcjrGzaoHeCHVuR-AZz1Sn9Wu2KH5tDaydNpFlN_pVyZLvk-KL5zrDemj3OlzEr04Ro4RsgnrgSpB3pQCJsBB37XEDUPQU26uUeyuMo0kVwzeOTO14dV9wtD6r/s812/CIA_IndiaMap.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="812" data-original-width="685" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzlf7g3zxHM1UHfs5K8_qcjrGzaoHeCHVuR-AZz1Sn9Wu2KH5tDaydNpFlN_pVyZLvk-KL5zrDemj3OlzEr04Ro4RsgnrgSpB3pQCJsBB37XEDUPQU26uUeyuMo0kVwzeOTO14dV9wtD6r/w338-h400/CIA_IndiaMap.jpg" width="338" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The CIA Map of India</td></tr></tbody></table><p>A lot of people in India are wondering if the FH report is accurate in terms of characterizing freedom in India or if the report exaggerates the reduction in freedom in India in the last several years.</p>
<p>
I have examined the FH report on Freedom in India and looked at the various criteria on which the rating had been given, in order to understand for myself whether or not the ratings of the agency on India are reasonable. I have checked to see if their claims are evidence-based and have searched the news for articles that would corroborate their claims. When I do find corroboration, I have included hyperlinks to those events.
</p>
<p>
Further, as a resident and citizen of India, I read about events in the news every day. I noticed that some important events that happen in India have been missed by FH. I have added links to those as well.
</p>
<p>
Below, I give the various questions posed by Freedom House, verbatim, and give FH’s ratings for each question. They have 25 questions, each of which has a 0-4 score, for a total of 100 points. When they have given 4/4, I have agreed with them, and do not give their reasons. (Some may question why I am willing to accept that the country is perfect in the areas that Freedom House thinks it is, but I wish to be charitable.)
</p>
<p>
But when their rating is less than 4/4, I mention their reasons and investigate their reasons for the same. If I know of other instances which should lead to an even lower rating, I include those as well. Nothing here is my own construction. I have only mentioned what is available in the public media.
</p>
<p>
I should also point out that my rating is based on the current situation. FH gave its rating based on what it observed in 2020. I am including what I am seeing in 2021. Below is the full list of 25 categories of ratings, for a maximum possible of 100 points.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
Political Rights
</h2>
</header>
<div>
<ol type="A">
<li>
Electoral Process
<ol>
<li>
<strong>Was the current head of government or other chief national authority elected through free and fair elections? (4/4)</strong>
</li>
<li>
<strong>Were the current national legislative representatives elected through free and fair elections? (4/4)</strong>
</li>
<li>
<strong>Are the electoral laws and framework fair, and are they implemented impartially by the relevant election management bodies? (4/4)</strong>
</li>
</ol>
</li>
<li>
Political Pluralism and Participation
<ol start="4">
<li>
<strong>Do the people have the right to organize in different political parties or other competitive political groupings of their choice, and is the system free of undue obstacles to the rise and fall of these competing parties or groupings? (4/4)</strong>
</li>
<li>
<strong>Is there a realistic opportunity for the opposition to increase its support or gain power through elections? (4/4)</strong>
</li>
<li>
<strong>Are the people’s political choices free from domination by forces that are external to the political sphere, or by political forces that employ extrapolitical means? (3/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://acleddata.com/2019/04/12/securing-democracy-electoral-violence-in-india/">Insurgent violence in certain areas hampers political participation</a>
</li>
<li>
<a href="https://www.indiatoday.in/elections/highlights/story/amit-shah-booked-muzaffarnagar-riots-mulayam-singh-yadav-narendra-modi-187896-2014-04-06">Political actors inflame communal tensions to intimidate opponents</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Do various segments of the population (including ethnic, racial, religious, gender, LGBT+, and other relevant groups) have full political rights and electoral opportunities? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.newsclick.in/muslim-under-representation-17th-Lok-Sabha">Muslims only have 26/545 of Lok Sabha seats (5%) despite being 14% of the population</a>
</li>
<li>
The government passed the <a href="https://www.prsindia.org/theprsblog/explainer-citizenship-amendment-bill-2019">Citizenship Amendment Act (CAA), which gives citizenship to non-Muslim immigrants from neighboring countries</a>, while going ahead with the creation of a <a href="https://www.indiatoday.in/india/story/what-is-nrc-all-you-need-to-know-about-national-register-of-citizens-1629195-2019-12-18">National Register of Citizens, which many people feel is a tool to disenfranchise Indian Muslims by calling them illegal immigrants, especially in Assam</a>.
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
The ruling <a href="https://www.newindianexpress.com/nation/2019/may/24/yet-again-no-muslim-face-in-bjps-bandwagon-headed-to-parliament-1981129.html">BJP does not have a single Muslim MP in the lower house (Lok Sabha)</a>, which means Muslims have no real say in lawmaking.
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
<li>
Functioning of Government
<ol start="8">
<li>
<strong>Do the freely elected head of government and national legislative representatives determine the policies of the government? (4/4)</strong>
</li>
<li>
<strong>Are safeguards against official corruption strong and effective? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
Authorities have been accused of <a href="https://theprint.in/opinion/7-politicians-with-corruption-charges-cbi-and-ed-wont-raid/280173/">selective, partisan enforcement of anti-corruption drives.</a>
</li>
<li>
<a href="https://thewire.in/government/for-all-its-anti-corruption-rhetoric-modi-govt-has-been-dragging-its-feet-on-lokpal">Slow implementation of Lokpal and Lokayuktas to investigate corruption against public servants and politicians.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>0/4</strong></span>):
<ul>
<li>
The <a href="https://www.thehindu.com/opinion/op-ed/ensuring-trust-in-the-electoral-process/article34022063.ece">introduction of electoral bonds by the Modi government allows anyone to contribute to the BJP (the party in power) with zero transparency</a>. This potentially allows corporations to buy unfettered access to power and influence with the ruling party.
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Does the government operate with openness and transparency? (3/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
The <a href="https://prsindia.org/billtrack/the-whistle-blowers-protection-amendment-bill-2015">2014 Whistleblowers Act was limited in scope</a>.
</li>
<li>
The Modi government has <a href="https://scroll.in/article/908524/the-steady-dilution-of-the-rti-act-is-one-of-the-legacies-of-the-modi-governments-term">weakened the Right to Information Act (RTI)</a>, partly by <a href="https://thewire.in/government/centre-rti-act-information-commissioners-tenure-salary-retirement-benefits">placing the salaries and tenures of the central and state information commissioners under the control of the Central Government</a>, a move that could undermine their independence. <a href="https://thewire.in/government/cic-appointments-bjp-uday-mahurkar">Many of the positions have been filled by ruling party loyalists.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
In 7 years, <a href="https://www.indiatoday.in/india/story/rti-pmo-pm-narendra-modi-media-interviews-press-conference-details-1637134-2020-01-15">the PM has not given a single press conference</a>, unlike any other head of government in a democracy. The PM does not allow anyone to ask him hard questions. <a href="https://www.youtube.com/watch?v=s1bqJIPPeYE">The last time anyone was allowed to ask Narendra Modi a hard question was in 2007, when he walked out of an interview with Karan Thapar.</a> The only questions that people are allowed to ask him are <a href="https://theprint.in/opinion/telescope/the-apolitical-interview-between-pm-modi-akshay-kumar-was-more-than-just-about-mangoes/226847/">whether he likes to eat mangoes, and how, how he works so hard, and other questions of that ilk.</a>
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
</ol>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC3">
Civil Liberties
</h2>
</header>
<div>
<ol start="4" type="A">
<li>
Freedom of Expression and Belief
<ol start="11">
<li>
<strong>Are there free and independent media? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
Government authorities have used <a href="https://en.wikipedia.org/wiki/Jawaharlal_Nehru_University_sedition_row">national security</a>, <a href="https://www.dnaindia.com/india/report-human-rights-report-accuses-modi-govt-of-silencing-dissent-by-using-sedition-criminal-defamation-tools-221615,4">defamation</a>, <a href="https://thediplomat.com/2020/03/critics-of-indias-modi-government-face-sedition-charges/">sedition</a>, and <a href="https://thewire.in/media/delhi-journalists-body-condemns-relentless-trolling-of-rana-ayyub">hate speech laws</a>, as well as <a href="https://www.livelaw.in/top-stories/supreme-court-to-consider-contempt-cases-against-comedian-kunal-kamra-after-4-weeks-170210">contempt-of-court charges</a>, to <a href="https://www.business-standard.com/article/pti-stories/rahul-gets-bail-in-another-defamation-case-accuses-modi-govt-of-hounding-dissenters-119070600479_1.html">quiet critical voices</a>.
</li>
<li>
Hindu nationalist campaigns aimed at discouraging <a href="https://thewire.in/rights/india-modi-anti-national-protest-arrest-sedition-authoritarianism">forms of expression deemed “anti-national”</a> <a href="https://scroll.in/article/929461/greater-self-censorship-dogged-digital-resistance-how-indias-news-media-have-changed-since-2014">have exacerbated self-censorship.</a>
</li>
<li>
Revelations of <a href="https://caravanmagazine.in/vantage/the-big-five-the-media-companies-that-the-modi-government-must-scrutinise-to-fulfill-its-promise-of-ending-crony-capitalism">close relationships between politicians, business executives, and lobbyists, on the one hand, an leading media personalities and owners of media outlets, on the other</a>, have dented public confidence in the press.
</li>
<li>
<a href="https://www.theguardian.com/global-development/2020/jul/31/india-arrests-50-journalists-in-clampdown-on-critics-of-covid-19-response">Journalists critical of the government’s handling of Covid-19 were arrested.</a>
</li>
<li>
<a href="https://caravanmagazine.in/media/hours-before-lockdown-modi-asked-print-media-owners-editors-refrain-negative-covid-coverage">Media outlets faced pressure to praise the government’s response.</a>
</li>
<li>
PM Modi, in a <a href="https://economictimes.indiatimes.com/news/politics-and-nation/pm-modi-says-newspapers-carry-tremendous-credibility-appreciates-medias-contribution-in-tackling-covid-19/articleshow/74791514.cms">video conference with the heads of India’s largest newspapers, called on media not to criticize the government over the pandemic</a>, which was viewed as a warning.
</li>
<li>
<a href="https://www.thenewsminute.com/article/40-journalists-killed-india-198-serious-attacks-last-five-years-finds-study-114646">Journalists are routinely attacked in the performance of their work, and those who are guilty are rarely punished.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
FH is seriously mistaken on the independence of private media in India. <a href="https://www.newindianexpress.com/prabhu-chawla/column/2020/jan/05/media-must-rediscover-dignity-with-independence-2085134.html">There is not a single truly independent TV channel in India. Most media outlets are terrified of contradicting the government or asking tough questions.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Are individuals free to practice and express their religious faith or nonbelief in public and private? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://theprint.in/opinion/indian-media-waging-holy-war-against-muslims-hyenas/400407/">Promotion of anti-Muslim views by media organizations</a> and <a href="https://theprint.in/opinion/india-anti-muslim-fake-news-factories-anti-semitic-playbook/430332/">Hindu nationalist organizations</a>, tacitly supported by the government.
</li>
<li>
<a href="https://www.leftbrainwave.com/2015/10/learning-about-modi-from-dadri.html">Attacks against Muslims</a> and others <a href="https://www.hindustantimes.com/india-news/pehlu-khan-lynching-a-look-at-the-case-so-far/story-voliEmedAAa5db2vGMwXSL.html">in connection with the alleged illegal slaughter of cows, often encouraged by the Modi government.</a>
</li>
<li>
<a href="https://theprint.in/opinion/lets-talk-about-how-tablighi-jamaat-turned-covid-hate-against-muslims-around/458728/">Specious blaming of Muslims for the Covid-19 pandemic</a>, including by ruling party officials.
</li>
<li>
<a href="https://www.hindustantimes.com/india-news/babri-masjid-demolition-verdict-all-32-accused-acquitted/story-pEH3vJXWUCxhkfZ44kCnaI.html">32 individuals, including several high-profile BJP members, who were charged with the illegal destruction of the Babri masjid in 1992 were acquitted, despite substantial evidence of their culpability</a>. <a href="https://www.hindustantimes.com/india-news/pm-modi-lays-foundation-stone-for-ram-temple-in-ayodhya/story-6PtybMaVg4pvL92ufuBBbO.html">Modi himself laid the foundation stone for a new temple that was to come up on the ruins of the mosque.</a>
</li>
<li>
<a href="https://www.indiatoday.in/news-analysis/story/anti-conversion-laws-in-india-states-religious-conversion-1752402-2020-12-23">Legislation in several states to criminalize religious conversion.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
<a href="https://indianexpress.com/article/explained/religion-conversion-bill-bjp-7129285/">Restrictions on inter-religious marriage that have come up all over India under the guise of stopping “love-jihad.”</a> (essentially, measures to prevent Muslims from marrying Hindus.) <a href="https://theprint.in/india/up-muslim-man-elopes-with-a-hindu-girl-police-put-13-of-his-family-in-jail-for-conspiracy/575875/">Muslims who marry Hindus are routinely put in jail in some Indian states.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Is there academic freedom, and is the educational system free from extensive political indoctrination? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://indianexpress.com/article/india/fir-against-goa-professor-for-outraging-religious-feelings-7036950/">Intimidation of professors</a>, <a href="https://en.wikipedia.org/wiki/2020_Jawaharlal_Nehru_University_attack">students, and institutions</a> over <a href="https://en.wikipedia.org/wiki/2019_Jamia_Millia_Islamia_attack">political and religious issues has increased</a>. <a href="https://www.indiatoday.in/india/story/jawaharlal-nehru-university-sabarmati-hostel-abvp-jnusu-1634173-2020-01-05#:~:text=Students%20at%20the%20Sabarmati%20Hostel,JNU)%20have%20allegedly%20been%20attacked.&text=The%20students%27%20union%20claimed%20that,stone-pelting%20by%20ABVP%20members.">Members of the student wing of the RSS have engaged in violence on campuses across the country, including attacks on students and professors.</a>
</li>
<li>
<a href="https://thewire.in/education/mea-guidelines-approval-international-conferences-academic-censorship">Pressure on academics not to discuss topics deemed sensitive by the BJP government, particularly India-Pakistan relations and conditions in the Kashmir valley.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
<a href="https://www.aljazeera.com/features/2014/11/4/hindu-right-rewriting-indian-textbooks">Textbooks in several states ruled by the BJP have been changed to include flat-out lies</a>, such as <a href="https://newrepublic.com/article/121792/those-mythological-men-and-their-sacred-supersonic-flying-temples">alleging that flying airplanes were known 5000 years ago to Indians</a>, that Indians possessed atomic bombs in antiquity, and that modern medical advances were known to ancient Hindus, with no evidence, only because Hindu texts seem to have mentioned such things. They also <a href="https://carnegieendowment.org/2019/11/16/bjp-has-been-effective-in-transmitting-its-version-of-indian-history-to-next-generation-of-learners-pub-80373">falsify known events in Indian history, such as the loss by Rana Pratap to the Mughal Emperor Akbar at the battle of Haldighati, by asserting that the reverse happened</a>; and try to claim <a href="https://www.outlookindia.com/website/story/teach-iit-students-about-pushpak-viman-tell-them-about-indian-who-invented-plane/301966">that the Wright Brothers did not invent the airplane, but that it was invented by an Indian.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Are individuals free to express their personal views on political or other sensitive topics without fear of surveillance or retribution? (3/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://thefederal.com/opinion/sedition-states-weapon-to-suppress-legitimate-expression/">Routine use of Colonial-era sedition laws to curb free speech, including in anti-CAA protests and free-Kashmir protests.</a>
</li>
<li>
<a href="https://www.hindustantimes.com/india-news/about-500-cases-lodged-in-india-for-social-media-posts-on-covid-19/story-PBaxt7oNs9IdPNUCVRiUUM.html">Critical discussion of the Covid-19 pandemic was sought to be suppressed by invoking sections of the IT act.</a>
</li>
<li>
<a href="https://www.hindustantimes.com/india-news/woman-arrested-in-kolkata-for-spreading-rumours-on-coronavirus-on-social-media/story-Oo9qJYBQhOwcAfN9HwUjTN.html">A woman was arrested in Kolkata for saying that a doctor had contracted the virus.</a>
</li>
<li>
<a href="https://thewire.in/media/covid-19-journalists-arrested-booked-report">Similar arrests under the IT act in response to discussion of Covid-19 were reported in UP, Karnataka, Mizoram, and Rajasthan.</a>
</li>
<li>
The <a href="https://www.huffpost.com/archive/in/entry/aarogya-setu-app-privacy-issues_in_5eb26c9fc5b66d3bfcddd82f">“Aarogya Setu” app designed by the government to control the pandemic was viewed by many as invasive of privacy</a>. Private information about individuals’ health status was released without their consent.
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
The Supreme Court has become very touchy about criticism of its rulings that have been favorable towards the government. <a href="https://scroll.in/latest/985407/full-text-jokes-not-reality-dont-claim-to-be-so-says-kunal-kamra-in-reply-to-contempt-notice">The Supreme Court initiated contempt of court proceedings against a comedian, Kunal Kamra, just because he had criticized them.</a>
</li>
<li>
A comedian, <a href="https://www.newslaundry.com/2021/02/10/arrested-before-he-could-perform-how-munawar-faruqui-spent-a-month-in-jail">Munawar Faruqui, was arrested and detained for a month for a joke he did not even make.</a>
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
<li>
Association and Organizational Rights
<ol start="15">
<li>
<strong>Is there freedom of assembly? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.outlookindia.com/website/story/opinion-section-144-is-colonial-tool-for-nationalist-oppression/345797">Section 144 of the Criminal Procedure Code (CPC)</a> <a href="https://mumbaimirror.indiatimes.com/news/india/gross-misuse-of-sec-144-in-recent-times/articleshow/72891199.cms">allows the government to restrict public gatherings and impose curfews whenever they please.</a>
</li>
<li>
<a href="https://internetshutdowns.in">Mobile and internet services have been suspended</a> <a href="https://www.businesstoday.in/opinion/india-internet-freedom--access-at-stake-facebook-amazon-apple-netflix-google/story/426370.html">regularly by central and state governments to curb protests.</a>
</li>
<li>
<a href="https://theprint.in/india/caa-protesters-arrest-designed-to-send-chilling-message-un-asks-india-to-free-activists/449401/">Protesters against the CAA were detained, denied access to legal representation</a>, and <a href="https://www.newindianexpress.com/nation/2019/dec/26/reign-of-terror-in-up-police-framing-false-charges-to-crack-down-on-anti-caa-protests-activists-2081182.html">subjected to harsh treatment.</a>
</li>
<li>
In February, <a href="https://scroll.in/article/955251/explainer-what-do-we-know-about-the-communal-violence-that-left-47-dead-in-delhi-in-february-2020">more than 50 people were killed in protest-related violence in Delhi.</a> <a href="https://www.npr.org/2020/03/07/812193930/delhi-riots-aftermath-how-do-you-explain-such-violence">Indiscriminate attacks against Muslims were reported, with police failing to respond.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Is there freedom for nongovernmental organizations, particularly those that are engaged in human rights– and governance-related work? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.hindustantimes.com/india/narendra-modi-govt-cracks-down-on-ngos-prepares-hitlist/story-Q9IGg6i2YimcSehgA7W4lN.html">Many NGOs, particularly those investigating human rights abuses</a>, <a href="https://www.rediff.com/news/report/why-ngos-fear-the-modi-govt/20201008.htm">face threats, legal harassment, excessive police force, and occasionally lethal violence.</a>
</li>
<li>
<a href="https://foreignpolicy.com/2020/10/02/the-death-of-human-rights-in-india/">The Foreign Contributions Regulations Act (FCRA) has been used by the central government to target perceived political opponents, especially Amnesty International, which was thought to be punished by the government for criticizing New Delhi’s human rights record, for its criticism of the government’s complicity in the February violence in Delhi, and for its expose of a spyware campaign targeting human rights activists</a>. <a href="https://www.firstpost.com/india/fcra-licences-of-20000-ngos-cancelled-act-being-used-as-weapon-to-silence-organisations-3181560.html">Nearly 15,000 associations have been deregistered under the FCRA.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Is there freedom for trade unions and similar professional or labor organizations? (3/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.oneindia.com/india/up-government-invokes-essential-services-maintenance-act-bans-strikes-for-six-months-3181509.html">Laws such as the Essential Services Maintenance Act have enabled the government to ban certain strikes.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
After the lockdown, the <a href="https://www.bloombergquint.com/economy-finance/indian-states-ease-labor-laws-as-economy-reels-from-lockdown">government decided that for the economy to recover, labor laws were a pesky annoyance. Most protections for India's labor force were suspended for 2-3 years in most states ruled by the BJP.</a>
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
<li>
Rule of Law
<ol start="18">
<li>
<strong>Is there an independent judiciary? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
Judges in lower courts have shown signs of increasing politicization.
</li>
<li>
<a href="https://thewire.in/law/supreme-court-rights-uapa-bjp-nda-master-of-roster">Several key SC rulings in recent years have been favorable to the BJP</a>, including the <a href="https://theprint.in/opinion/ayodhya-verdict-babri-demolition-confirmed-muslims-as-second-class-citizens/318988/">2019 decision allowing the construction of a Hindu Temple on the site of a demolished mosque</a>, and the court’s <a href="https://www.outlookindia.com/newsscroll/bhima-koregaon-case-sc-refuses-anticipatory-bail-to-navlakha-teltumbde-gives-3-weeks-to-surrender/1763389">March 2020 decision to deny bail to a scholar and prominent critic of Modi who was charged with supporting a banned Maoist group</a>.
</li>
<li>
<a href="https://www.ndtv.com/india-news/former-chief-justice-ranjan-gogoi-nominated-to-rajya-sabha-by-president-kovind-2195802">The government appointed a recently-retired Chief Justice (Ranjan Gogoi) to the Rajya Sabha, violating the separation of powers.</a>
</li>
<li>
<a href="https://www.businesstoday.in/current/economy-politics/delhi-violence-justice-muralidhar-who-slammed-delhi-police-transferred/story/397010.html#:~:text=Justice%20S%20Muralidhar%2C%20who%20heard,recommendation%20by%20the%20Supreme%20Court.">A judge was transferred in 2020 after he issued rulings that criticized the Delhi police for their failure to address communal violence and related hate speech by BJP politicians.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
I do not dare state my additional reasons. Criticizing the Indian SC is a very risky affair. Of late, the <a href="https://scroll.in/latest/981599/sc-issues-notice-to-kunal-kamra-and-rachita-taneja-in-contempt-case-asks-to-respond-in-six-weeks">SC has become very sensitive to criticism and has begun to use the contempt power quite freely</a>, and I do not wish to go to jail.
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Does due process prevail in civil and criminal matters? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
Citizens face substantial obstacles in the pursuit of justice, including <a href="https://timesofindia.indiatimes.com/city/mumbai/want-to-file-fir-bribe-on-duty-officer-first/articleshow/50710471.cms">demands for bribes for filing a First Information Report (FIR).</a>
</li>
<li>
<a href="https://edition.cnn.com/2019/11/27/asia/india-corruption-bribe-intl-hnk-scli/index.html">Police force is corrupt.</a>
</li>
<li>
<a href="https://www.newindianexpress.com/nation/2019/jul/05/over-8000-new-judges-needed-to-clear-backlog-of-court-cases-1999750.html">The justice system is severely backlogged and understaffed.</a>
</li>
<li>
<a href="https://www.amnesty.nl/content/uploads/2017/07/UT_Final.pdf?x79902">There is lengthy pre-trial detention for suspects</a>, often more than the sentence they might have received if convicted.
</li>
<li>
<a href="https://www.theleaflet.in/the-dangers-of-uapa-were-sown-in-earlier-preventive-detention-laws-in-india/#">Many security laws allow detention without charge or based on vaguely-defined offenses.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
Three names: <a href="https://timesofindia.indiatimes.com/blogs/foreign-media/activist-disha-ravis-arrest-spotlights-crackdown-on-dissent-in-india-ap/">Disha Ravi</a>, <a href="https://time.com/5938047/munawar-iqbal-faruqui-comedian-india/">Munawar Faruqui</a>, <a href="https://www.bbc.com/news/world-asia-india-56178997">Nodeep Kaur</a>.
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Is there protection from the illegitimate use of physical force and freedom from war and insurgencies? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://thewire.in/culture/rape-security-forces-afspa">Torture, abuse, and rape</a> by <a href="https://www.hindustantimes.com/india-news/assam-records-highest-cases-of-sexual-violence-by-armed-forces-in-20-years-ngo/story-1xgc3y8MIIgHDh7SDIwhiN.html">law enforcement and security officials is rampant.</a>
</li>
<li>
A <a href="https://www.epw.in/journal/2010/25/commentary/prevention-torture-bill-feeble-attempt.html">bill intended to prevent torture remains pending.</a>
</li>
<li>
<a href="https://www.hrw.org/sites/default/files/reports/INDIA914.pdf">Abuses by prison staff against prisoners, especially belonging to marginalized groups, is common.</a>
</li>
<li>
<a areas="" disturbed="" href="https://en.wikipedia.org/wiki/Armed_Forces_(Special_Powers)_Act#:~:text=Armed%20Forces%20Special%20Powers%20Act,order%20in%20">Security forces who commit atrocities are rarely prosecuted.</a>
</li>
<li>
The <a href="https://en.wikipedia.org/wiki/Naxalite–Maoist_insurgency">Maoist insurgency in Chattisgarh, AP, and Odisha</a>, continues, and rebels have imposed illegal taxes, seized food and places of shelted, engaged in abduction, and forced recruitment of children and adults. Local civilians and journalists who are seen to be pro-government are attacked. Tens of thousands of civilians have been displaced by the violence.
</li>
<li>
<a href="https://en.wikipedia.org/wiki/Insurgency_in_Northeast_India">More than 40 insurgent factions in the Northeast continue to attack security forces and engage in inter-tribal violence. They have been implicated in bombings, killings, abductions, and rapes of civilians.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Do laws, policies, and practices guarantee equal treatment of various segments of the population? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://en.wikipedia.org/wiki/2016_Una_flogging_incident">Dalits routinely face discrimination and violence</a>, and the <a href="https://thewire.in/caste/tamil-nadu-dalit-tribal-violence-atrocities-covid-19-lockdown-silence">criminal justice system fails to provide equal protection to marginalized groups.</a>
</li>
<li>
<a href="https://www.scoopwhoop.com/regressive-rulings-by-khap-panchayats/">Informal community councils (Khap panchayats) issue edicts concerning social customs, resulting in violence and/or persecution at women and Dalits.</a>
</li>
<li>
<a href="https://www.business-humanrights.org/en/latest-news/india-various-reports-highlight-prevalence-of-gender-gap-in-workplace/#:~:text=Story-,India%3A%20Various%20reports%20highlight%20prevalence%20of%20gender%20gap%20in%20workplace,is%20still%20prevalent%20at%20workplace.">Women face workplace bias and sexual harassment.</a>
</li>
<li>
Women have <a href="https://www.hindustantimes.com/india-news/priya-ramani-acquitted-in-mj-akbar-defamation-case-what-court-said-101613558090013.html">faced reprisals after reporting cases of sexual harassment.</a>
</li>
<li>
<a href="https://www.hrw.org/news/2019/06/24/section-377-history-young-lgbt-indians-need-concrete-policies-protect-them-bullying">Discrimination continues against LGBT+ people</a>, including <a href="https://outrightinternational.org/sites/default/files/386-1_0.pdf">violence and harassment in some cases.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>0/4</strong></span>):
<ul>
<li>
<a href="https://www.cnbctv18.com/views/muslims-not-allowed-the-stereotypes-of-mumbais-rental-property-market-6970051.htm">Muslims are routinely not allowed to stay in the same housing complexes as Hindus</a>. <a href="https://www.livemint.com/Opinion/7mJMg1yIwrWfYuT6B7IukJ/The-making-of-a-ghetto.html">This forces them to ghettoize.</a>
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
<li>
Personal Autonomy and Individual Rights
<ol start="22">
<li>
<strong>Do individuals enjoy freedom of movement, including the ability to change their place of residence, employment, or education? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.business-standard.com/article/economy-policy/andhra-pradesh-passes-law-to-reserve-75-jobs-for-locals-in-industries-119072401199_1.html">Several states</a> have recently <a href="https://indianexpress.com/article/explained/explained-what-haryanas-move-to-reserve-75-private-jobs-means-for-companies-6995688/">enacted legislation requiring companies to reserve jobs for locals.</a>
</li>
<li>
<a href="https://www.prsindia.org/theprsblog/migration-india-and-impact-lockdown-migrants">Migrant population suffered tremendously during the harsh lockdown of March 2020</a>. <a href="https://www.businesstoday.in/current/economy-politics/23-percent-migrant-workers-returned-home-walking-during-coronavirus-lockdown/story/412585.html">They were offered no assistance or security as they were compelled to travel from cities to their native villages. They were provided no transportation and had to walk hundreds of kilometers home.</a>
</li>
<li>
The <a href="https://en.wikipedia.org/wiki/COVID-19_lockdown_in_India">harsh lockdown of March 2020</a> was <a href="https://timesofindia.indiatimes.com/city/noida/vigilantes-try-to-enforce-curbs-booked/articleshow/74801071.cms">often enforced violently by vigilante groups</a>, with <a href="https://www.npr.org/2020/04/23/839980029/blamed-for-coronavirus-outbreak-muslims-in-india-come-under-attack">Muslims singled out for abuse.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Are individuals able to exercise the right to own property and establish private businesses without undue interference from state or nonstate actors? (3/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.epw.in/engage/article/forest-rights-act-state-appropriation-land-rights">Property rights are somewhat tenuous for tribal groups and other marginalized communities. Members of these groups are often denied adequate resettlement opportunities and compensation when their lands are forcibly seized for development projects.</a>
</li>
<li>
<a href="https://blog.ipleaders.in/discriminatory-muslim-laws-women/">Muslim personal laws</a> and <a href="https://blog.ipleaders.in/plight-struggles-hindu-women-field-property-rights-historical-study/">traditional Hindu practices</a> discriminate against women in terms of property rights and inheritance.
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Do individuals enjoy personal social freedoms, including choice of marriage partner and size of family, protection from domestic violence, and control over appearance? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.indiatoday.in/diu/story/no-country-for-women-india-reported-88-rape-cases-every-day-in-2019-1727078-2020-09-30">Rape is a serious problem in India.</a>
</li>
<li>
<a href="https://www.shethepeople.tv/top-stories/opinion/dowry-deaths-reality-in-india-but-until-when/">Dowry demands for marriage persist, sometimes resulting in violence, despite laws designed to protect victims, because enforcement is poor.</a>
</li>
<li>
<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4052431/">Pre-natal sex-determination continues despite laws.</a>
</li>
</ul>
</li>
<li>
My additional reasons and rating (<span style="color: red;"><strong>1/4</strong></span>):
<ul>
<li>
<a href="https://www.livemint.com/news/india/up-governor-anandiben-patel-gives-assent-to-ordinance-on-unlawful-conversion-11606545320071.html">The new love jihad laws</a> <a href="https://www.deccanherald.com/national/north-and-central/madhya-pradesh-to-take-ordinance-route-to-enforce-anti-conversion-law-932653.html">prevent Hindus from marrying Muslims, period.</a>
</li>
</ul>
</li>
</ul>
</li>
<li>
<strong>Do individuals enjoy equality of opportunity and freedom from economic exploitation? (2/4)</strong>
<ul>
<li>
FH Reasons for Low Rating:
<ul>
<li>
<a href="https://www.unicef.org/india/what-we-do/child-labour-exploitation">Child labor and exploitation is still rampant.</a>
</li>
<li>
<a href="https://www.reuters.com/article/us-india-government-workers-idUSKCN1R90Z8">Bonded labor in India still exists.</a>
</li>
</ul>
</li>
</ul>
</li>
</ol>
</li>
</ol>
</div>
</section>
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<section>
<header>
<h2 id="TOC4">
Summary and Conclusions
</h2>
</header>
<div>
<p>
When one looks at the 62 different points of criticism mentioned by FH, one can see that there are only two points where Freedom House has got its conclusions wrong:
</p>
<ul>
<li>
The criticism under question 14, “Are individuals free to express their personal views on political or other sensitive topics without fear of surveillance or retribution?” that “A woman was arrested in Kolkata for saying that a doctor had contracted the virus ” is not justifiable, because the said woman was lying and was arrested for making false statements about the said doctor.
</li>
<li>
I was unable to find any media or research links for the first point under question 18, “Judges in lower courts have shown signs of increasing politicization.” Quite to the contrary, I found a <a href="https://theprint.in/opinion/from-caa-to-nrc-indias-high-courts-are-setting-higher-benchmarks-than-the-supreme-court/382138/">media link suggesting that lower courts in India are upholding fundamental rights better than the Supreme Court</a>; and a carefully researched study showing that, <a href="https://www.hindustantimes.com/opinion/in-india-s-lower-judiciary-the-absence-of-in-group-bias-101610378365396.html">compared to other countries, lower courts in India show no evidence of in-group bias by gender or religion towards co-gender and co-religion defendants.</a>
</li>
</ul>
<p>
It is still <strong>remarkable and exceptional</strong> that FH got 60 out of 62 criticisms of the absence of freedom in India correct – I was able to find reliable news links or links to research articles for the remaining 60 points, often finding multiple links to justify each point. In addition, as stated in the beginning, I had my own observations about the erosion of freedoms in India which FH had failed to register.
</p>
<p>
When I accounted for the erosions of freedom not accounted for in FH's list, my overall rating is a score of 50, as opposed to FH’s 67. My political rights score for India comes out to be 29/40 (FH: 34) and my civil liberties score for India comes out to be 21/60 (FH: 33), for a total of 50/100, which is still a partly-free country, but far less free than what Freedom House had estimated. Part of the reason for this discrepancy is that FH had missed some key changes in India, and part of the reason is that they would have used data only for 2020, whereas the situation in India has continued to deteriorate in 2021.
</p>
<p>
It is important for the government to realize that these ratings are not to be scoffed at. The Indian government may dismiss these ratings, but foreign agencies and companies that are evaluating India as an investment decision take these ratings very seriously. It is also important for Indians not to get defensive. These are real problems with our country, as the data show, and we cannot solve problems which we are unwilling to acknowledge. People should also stop looking at this through a political prism. Many of the problems mentioned (for example, dowry or bonded labor) are legacy problems that India has been trying to address for decades. It is in everyone's interest that these problems are solved.
</p>
<p>
Therefore, the Indian government should take reports such as these very seriously and work on fixing the lacunae that these reports have identified. It would be ideal if a task force was set up to correct these lacunae and give recommendations to the government, which would then be promptly acted upon, leading to greater freedom for all Indians.
</p>
</div>
</section>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com4tag:blogger.com,1999:blog-2647581039313842967.post-80978970308452280032021-03-04T19:53:00.005+05:302021-03-05T13:14:06.865+05:30Understanding Modi's U-Turn on China <article> <!-- Article Title -->
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Understanding Modi's U-Turn on China
<br>
<br>
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Written by Dr. Seshadri Kumar, 04 March 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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<p>
The Modi government’s sudden U-turn on China is a long overdue correction in India’s foreign policy. India has finally realized that it lives in a Pax Sinica, and that it has engaged in a foolish and destructive policy for the last nearly 7 years since Narendra Modi took over as PM, with his pro-US tilt. The skirmish in Ladakh in the summer of 2020 that resulted in the irreversible loss of Indian land to the Chinese, the death of 20 soldiers, and the aftermath of the incident seem to have finally made the Modi government realize the futility of a confrontational policy with China. Unfortunately, we have wasted more than six years of a possible peace that could have helped India develop faster, and lost valuable real estate and the lives of our soldiers in the process.
</p>
</div>
</section>
<hr>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC1">
The U-Turn
</h2>
</header>
<div>
<p>
Now this is what you call a U-Turn Sarkar (Government).
</p>
<p>
<strong>After whipping up hysteria for years against China</strong>, foolishly joining the US-led Quad, even having the Home Minister, Amit Shah, say arrogantly and pompously in Parliament that all of Aksai Chin (which is not even under Indian control today) belongs to India, <strong>provoking the Chinese to show India its place and taking whatever it wants</strong> (<a href="https://www.freepressjournal.in/india/govt-owes-explanation-as-report-indicates-chinese-buildup-in-depsang-subramanian-swamy-strikes-cautionary-note">Chinese troops are still in possession of Indian territory even now, in Depsang and Gogra</a>), now <strong>the Modi government has finally extricated its head out of the sand</strong> and realized that you cannot adopt a confrontational policy with the superpower next door. <a href="https://theprint.in/opinion/global-print/india-is-re-engaging-with-china-and-pakistan-its-another-pre-emptive-modi-strike/614288/">According to a news report,</a>
</p>
<blockquote>
<p>
Sanjeev Sanyal, principal economic adviser, told journalists last week that if someone wants to set up a button factory in India, it doesn’t matter if that somebody is an American, Indonesian or Chinese. “Except for strategically sensitive sectors,” he added, “we have sped up clearances from China and we plan to clear them quite fast.”
</p>
<p>
<strong>So India is planning to soon clear 45 investment proposals worth millions including from auto companies like Great Wall Motors and SAIC Motor Corp, which were put on hold when the large-scale Chinese intrusion across the Line of Actual Control came to light last May.</strong>
</p>
<p>
<strong>This also means that India has given in to the Chinese demand that the border troubles be segregated from the rest of the India-China relationship</strong> – notwithstanding demurrals by external affairs minister S. Jaishankar to his Chinese counterpart Wang Yi last week that it cannot be business as usual.
</p>
</blockquote>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
The Pangong Withdrawal
</h2>
</header>
<div>
<p>
The precursor to the normalization of trade between India and China, announced by the Indian Government, was <a href="https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=1699803">a joint press statement released by India and China on 21st February</a> that read,
</p>
<blockquote>
On February 20, the 10th round of China-India Corps Commander Level Meeting was held on the Chinese side of the Moldo/Chushul border meeting point. The two sides positively appraised <strong>the smooth completion of disengagement of frontline troops in the Pangong Lake area, noting that it was a significant step forward that provided a good basis for resolution of other remaining issues along the LAC in Western Sector</strong>. They had candid and in-depth exchange of views on other issues along the LAC in the Western Sector. The two sides agreed to follow the important consensus of their state leaders, continue their communication and dialogue, stabilize and control the situation on the ground, push for a mutually acceptable resolution of the remaining issues in a steady and orderly manner, so as to jointly maintain peace and tranquillity in the border areas.
</blockquote>
<p>
The Indian government has been trying to portray this disengagement on the Pangong Tso sector as proof that peace has been achieved on the border confrontation with China with honor. But this press release talks only about Pangong Tso. <strong>It does not talk about Depsang or Gogra Hot Springs, where the Chinese are very much present, and in an advantageous position.</strong> <a href="https://www.ajaishukla.com/2021/02/my-interview-today-with-karan-thapar-on.html">According to Col. Ajai Shukla, there is no incentive for the Chinese to back off in those regions, and the only way for India to achieve a peace in those sectors is for them to <em>create a buffer, demilitarized zone within Indian territory.</em></a> In other words, the Chinese will withdraw from Indian territory, and the Indians, too, will withdraw from Indian territory.
</p>
<p>
One could fairly argue that this is the first step of a multi-step withdrawal – that withdrawals in Depsang, Gogra, will follow in due course. But then, <strong>should relations with China have been normalized when the Chinese are still illegally in possession of Indian territory? Can one normalize relations with a country that has annexed parts of your country?</strong> The only conclusion seems to be that the Indian government has realized that they will never get those regions back and have agreed to a peace with the Chinese while quietly accepting Chinese conquest of parts of India.
</p>
<p>
<strong>Make no mistake, this is not peace with honor. It is a humiliating comedown for India.</strong>
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC3">
Understanding Realpolitik
</h2>
</header>
<div>
<p>
But India had no choice. <strong>The Chinese had made it clear in the summer of 2020 that they could invade and take Indian territory at will, and would do so if India did not behave itself and drop its confrontational tone against Beijing</strong>, instances of which were <a href="https://m.economictimes.com/news/politics-and-nation/pok-aksai-chin-part-of-jammu-and-kashmir-will-sacrifice-our-lives-for-it-amit-shah-in-lok-sabha/videoshow/70550153.cms">Amit Shah claiming that Aksai Chin belonged to India</a>; <a href="https://www.republicworld.com/world-news/rest-of-the-world-news/bjp-mps-attend-taiwan-presidents-swearing-in-ceremony.html">BJP MP Meenakshi Lekhi joining the inauguration of the Taiwanese president by weblink and posting about it</a>; <a href="https://asia.nikkei.com/Politics/International-relations/Quad-drills-Australia-to-join-India-US-and-Japan-at-Malabar">India joining the anti-China Quad</a>; <a href="https://timesofindia.indiatimes.com/india/in-a-first-india-speaks-up-on-hong-kong/articleshow/76737816.cms">India making statements about Hong Kong</a>; and <a href="https://www.hindustantimes.com/world-news/dalai-lama-visits-arunachal-pradesh-china-sees-red-who-said-what/story-YoCMn4gjcpaOZrBaFLVPeK.html">India allowing the Dalai Lama to visit Arunachal Pradesh.</a>
</p>
<p>
<strong>The territory we have lost in Arunachal and Ladakh is gone, it won't come back.</strong> But at least, having bowed down to China, we will not lose more. Modi finally understood that if he continued on the ill-advised path he was on, China would take over at least half of Arunachal Pradesh, including the very important Tawang, while we could only watch. They had already demonstrated intent by building a village in Arunachal Pradesh under our very noses.
</p>
<p>
<strong>It is not a mistake to bow down to China – that's realpolitik. We have no choice. What was a stupid mistake was to fire up nationalism and attack China for so long</strong> in the media and in international fora for years and cozy up to the US, when you have a superpower in your backyard, and that too, a country that is going to be the number one superpower in the world very soon. As <a href="https://theprint.in/opinion/global-print/india-is-re-engaging-with-china-and-pakistan-its-another-pre-emptive-modi-strike/614288/">this article says</a>,
</p>
<blockquote>
There are two reasons for this shift in strategy. The first is that China is bouncing back from the coronavirus pandemic like no other country and is expected to overtake the US to become the world’s biggest economic power by 2028.
</blockquote>
<p>
<strong>Of course this is true, but any blinking idiot could have figured this out 6 years ago – that China was going to be the world's biggest economy in short order. Are Modi and his team so dense that it took them six years to figure this out?</strong> Maybe it took a limited war and the loss of territory for these dilettantes in foreign policy to understand reality. Until then, they were pumping the news and social media with stupid anti-China sentiment.
</p>
<p>
I am reminded of <a href="https://www.tribuneindia.com/news/comment/the-20-brave-men-and-the-tv-breaking-patriots-101969">that mindless idiot in Gujarat who destroyed his Chinese-made big-screen LCD TV by throwing it from the balcony of his home because he didn't want to buy Chinese goods</a>. How this helped his cause at all is not clear because he had already bought the TV and paid the money that went to the Chinese company. His actions hurt no one but himself.
</p>
<p>
The Indian government should have learned from its misadventure in Doklam. In 2017, the Indian government stood up to Chinese attempts to encroach on Bhutanese territory. That standoff ended with the Chinese backing down, but it quickly became clear that the stand-down was only temporary. <strong>More recent satellite pictures from 2018 and 2020 have shown that <a href="https://www.ndtv.com/india-news/exclusive-satellite-images-hint-at-renewed-china-threat-in-doklam-2328660">the Chinese are back inside Bhutan, building a village 2 km inside the border and building a road that stretches 9 km inside Bhutanese territory.</a></strong>
</p>
<p>
<strong>We cannot ignore China's wishes. We live in a Pax Sinica - a peace on Chinese terms. Play nice with them and you can progress. Fight them and you will be destroyed.</strong>
</p>
<p>
This has been the case whenever there has been a superpower in the world. In Roman times, there was a <a href="https://en.wikipedia.org/wiki/Pax_Romana">Pax Romana.</a> When <a href="https://en.wikipedia.org/wiki/British_Empire">Britannia ruled the waves</a>, countries had to make adjustments so that Great Britain was not offended. And <a href="https://en.wikipedia.org/wiki/Cold_War">from 1945 until 1991</a>, the world was divided into those who toed the line with America or the USSR.
</p>
<p>
Despite the <a href="https://en.wikipedia.org/wiki/Non-Aligned_Movement">“non-aligned” tag that India gave itself</a>, it aligned itself with the USSR. That's because you have to pick a side. <strong>Nehru and Indira understood (apart from their own socialist persuasions) that you have to have peace with the big Russian bear next door, not worry about the Yankee who is 10,000 miles away.</strong>
</p>
<p>
<strong>That's what mature leaders do in foreign policy, and that is what Nehru and Indira were. It is a philosophy known as realpolitik.</strong> But our present government and its narcissistic leader are so dense, it has taken them 6 years, the lives of 20 soldiers, and the significant loss of territory to realize this. And they have hoodwinked the Indian public for all this time and denied them the benefits of peace with China which could have led to much greater prosperity for India.
</p>
<p>
It is not about good or bad, right or wrong. <strong>Might is right.</strong> The Chinese are superior to India in every way: economically, militarily, and technologically. Our future lies in cooperation with the Chinese, even on their terms – and so I am happy that <em>wisdom has finally dawned on Modi.</em>
</p>
<p>
<a href="https://www.leftbrainwave.com/2021/01/the-consequences-of-hubris-modis.html">As I had written in my recent analysis</a>, <strong>India's historic confrontational attitude towards China was a mistake. China has no fundamental quarrel with India, unlike Pakistan.</strong> Peace with China will help us have peace with Pakistan, because China has huge investments in PoK that it does not want to jeopardize, and so they can keep the Pakistanis under check – for their own benefit.
</p>
<p>
Peace is the first prerequisite of progress.
</p>
<p>
Of course, now all the slavish panjandrums of the government who were saying exactly the opposite thing until yesterday will come out in droves and praise this government for its U-turn, and call it a “master-stroke.” No one will talk about the six years of failed foreign policy.
</p>
<p>
That shouldn't surprise us. As the Hindi piece of doggerel goes,
</p>
<blockquote>
Raja ne kaha raat hai<br>
Rani ne kaha raat hai<br>
Mantri ne kaha raat hai<br>
Santri ne kaha raat hai<br>
Ye subah subah ki baat hai.
</blockquote>
<p>
Which can be translated as
</p>
<blockquote>
The King said, ‘it is night.’<br>
The Queen said, ‘it is night.’<br>
The Minister said, ‘it is night.’<br>
The Soldier said, ‘it is night.’<br>
But, in fact, it was early morn.
</blockquote>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com1tag:blogger.com,1999:blog-2647581039313842967.post-62895236627480225952021-02-19T13:16:00.009+05:302021-02-19T13:26:35.761+05:30Memo to Modi Supporters: The Election is Over <article> <!-- Article Title -->
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Memo to Modi Supporters: The Election is Over
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Written by Dr. Seshadri Kumar, 19 February, 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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Supporters of Mr. Modi should understand that criticism of Mr. Modi does not weaken him or the government. A democracy can remain robust and be responsive to the needs of its citizens only if citizens openly criticize the government. Modi’s followers and supporters should stop perennially being in campaign mode. The election is over. Being so defensive about Modi only hurts their own interests.
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***
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<p>
The 2014 election is over, as is the 2019 election. Narendra Modi and the Bharatiya Janata Party (BJP) won both times with absolute majorities. You don’t need to defend Mr. Modi every day against criticism.
</p>
<p>
Is that clear enough? I say this because I am amazed to see Modi supporters still get furious or excited at any criticism of their leader and jump to defend him.
</p>
<p>
Let us take a look at some of the criticisms levelled at the Modi government today: the tanking economy; rising petrol prices; rising prices of vegetables and fruits; lack of scientific temper (example: “Cow Science” to be taught in Universities); dictatorial tendencies of the government; comedians being arrested for jokes they did not even make; journalists arrested for months without due process; rowdy gangs (“gaurakshaks” or “cow protectors”) roaming the countryside to beat up anyone they suspect of being involving in cow slaughter, with no due process, and without having to fear prosecution by the local police; lynching of Muslims by vigilante Hindu groups with no justice for the victims; injustices against Dalits; the Supreme Court toeing the government line; and many others.
</p>
<p>
These are the standard lines trotted out by the “defenders” of the Modi government when confronted with any of the aforementioned criticisms:
</p>
<ol>
<li>
What about when Nehru did this …? (i.e., weren’t things as bad as or worse then?) This is an appeal to hypocrisy.
</li>
<li>
What about when Congress did this … (another appeal to hypocrisy)
</li>
<li>
What about the Emergency? (How bad were things <strong>then</strong>?) (used whenever an accusation of authoritarianism is levelled against the government)
</li>
<li>
See what is happening in Kerala, Punjab, West Bengal, etc. (non-BJP ruled states). Why are you selectively targeting Modi? Why don’t you criticize what happens in those states?
</li>
<li>
Why has Rahul Gandhi gone to Italy? Why is Rahul Gandhi not in India on this important occasion? Why did Rahul Gandhi wear this color shirt yesterday? Why did Rahul Gandhi resign the Presidentship of the Congress Party? Why isn't Rahul Gandhi married? Why did Rahul Gandhi …
</li>
<li>
Jawaharlal Nehru, who died in 1964, ruined India so much that Modi is still trying to salvage things. How can he show progress? <strong>Nothing</strong> has been done in India in the 70+ years since Independence, and you want everything in 6.5 years?
</li>
<li>
What can Modi do? These are difficult circumstances …
<ol type="i">
<li>
Global downturn
</li>
<li>
Covid-19
</li>
<li>
People under him are incompetent or do not work hard enough. What can one man do alone? “Modi akela kya kar sakta hai?”
</li>
<li>
Entrenched bureaucracy, Lutyens elite, Khan market gang, Urban Naxals, anti-Nationals, Sickulars, Khangressis, pasta-loving Italian bootlickers, Macaulayputras, and other malcontents preventing Modiji from executing his masterstrokes because they do not believe in P2G2, 3S, “Acche Din”, and “New India” …
</li>
<li>
Powerful people do not like a “chaiwallah” (tea-seller) becoming the PM …
</li>
<li>
Unpatriotic, Khalistani- and Pakistani-funded terrorist farmers, backed by Greta Thunberg, Rihanna, Mia Khalifa, Meena Harris, Justin Trudeau, Ilhan Omar, Jon Cusack, and others …
</li>
<li>
Assorted groups who are trying to “Break India”, including the “tukde-tukde gang”; all past and present faculty and students of Jawaharlal Nehru University including Kanhaiya Kumar and Umar Khalid; Jamia Millia Islamia; Aligarh Muslim University; …
</li>
<li>
Did I mention Pakistan and China? Modi is fighting them all alone, can't you leave the poor guy alone? How much can he take without your criticism on top of it?
</li>
<li>
Too much rain, too little rain, cyclone Amphan, cyclone Phani, locust attack …
</li>
<li>
Brexit, Donald Trump, American election, Climate change, Global warming, El Nino, La Nina, …
</li>
<li>
Solar eclipse, lunar eclipse, Shani in Rahu's house, Jupiter in Mars' house, Jupiter-Saturn conjunction …
</li>
<li>
Any other excuse you can think of …
</li>
</ol>
</li>
<li>
Why do you hate Modi so much?
</li>
<li>
Foreigners are jealous of Modi and India's ascendancy to superpower status and Indians living in “New India.” That’s why Fitch, Moody’s, and S&P trash India. That’s why the New York Times, Washington Post, Wall Street Journal, and Guardian write articles critical of Modi and India.
</li>
<li>
Indians are capable of dealing with their issues. We don’t need foreigners jumping into Indian issues. #IndiaAgainstPropaganda
</li>
<li>
Say you are right about Modi’s failings, but what is your alternative? Congress? Rahul Gandhi? That “Pappu?” “Bua-Bhatija?” Don’t you understand? TINA!! (There Is No Alternative!)
</li>
<li>
“You are an anti-national sickular libtard! Go to Pakistan!”
</li>
</ol>
<p>
There are many more, but that’s enough for a sampler.
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***
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<p>
I don’t get it. <strong>The whole thing is so childish and silly.</strong> This is not what a responsible citizen of a democracy should do.
</p>
<p>
Sure, you have your favorite politicians and political parties. In the US, you may be a Republican or a Democratic supporter. In India, the choices are many more. You could be a supporter of the BJP, the Congress, AAP, JDU, JDS, Shiv Sena, RJD, DMK, TMC, BJD, CPM, TRS, YSRCP, AGP, SAD, SP, BSP, or any of the many other parties that dot the Indian landscape.
</p>
<p>
<strong>It is perfectly fine to be a huge fan of the BJP and of Narendra Damodardas Modi</strong>. There is no problem at all if you think he is God’s gift to India, that he is the greatest Indian ever, better than Ashoka, Vikramaditya, CV Raman, Homi Bhabha, Bhimsen Joshi, or all of them put together. I am not here to tell you not to love Modi. Please continue loving him as you always did. <strong>I will not stand in your way.</strong>
</p>
<p>
But at the end of the day, you are an Indian citizen. And a human being. You have certain needs. And the job of the government is to ensure that your needs are met – to the extent possible. That’s why <strong>you elected them.</strong>
</p>
<p>
You may love Modi, you may adore Modi, you may even worship Modi. But at the end of the day, it is your life, and you have to live it. Modi cannot live it for you. Worshipping Modi is not going to give you a good job, provide for your child’s education or marriage, or take care of your retirement. It is not going to ensure 24x7 electricity, drinking water availability, good roads, or a good public transportation system. It is not going to ensure justice if you have been wronged by someone with links to the ruling party.
</p>
<p>
The performance (whatever that may be – good or bad) of his government and the systems he puts in place is going to do all that. Remember that you will have to deal with a life after Mr. Modi is gone. He is 70 years old, mortal, and will have a finite stay in power and on this world (and the former will likely end earlier than the latter). And even if you believe that Mr. Modi is incorruptible and only has the best interests of all Indians at heart, there is no guarantee that those who follow him will be. That is why systems are important. That is why the rule of law is important and why civil liberties advocates are so concerned about the erosion of civil liberties today.
</p>
<p>
And so, it is imperative that, as a responsible citizen, you should question all that he does do (or does not do) for you in his capacity as the PM and as the leader of the most dominant party in India’s democratic history, ever. Modi’s party, the BJP, dominates the Lok Sabha, the lower house, and has enough clout to ram bills through the Rajya Sabha, the upper house, even without a majority in the Rajya Sabha. The BJP is in power in most of the states in India.
</p>
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***
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<p>
So why are you worried when someone questions the government or Mr. Modi? I assure you, your criticism will not cause Modiji to lose his majority in Parliament. He won the election in 2014 to rule for 5 years. Even if the whole of India had criticized him continuously for 5 years, he could not have been unseated. He won a second term in office in May 2019, with an even bigger majority, so your object of adoration, your God, is assured to be the PM until 2024. Let me tell you, I am a fierce critic of Modi, and even I say that as long as Modi is alive, he cannot be defeated – such is his hold on the people of India. I also think that, sooner or later, <strong>all the states of India will be under the BJP</strong>. Most importantly, there is not an election today or tomorrow. You don’t have to defend Modi against all charges to improve his chances of re-election, since the next election is 4 years away. So what are you worried about? <strong>Why this tremendous insecurity?</strong>
</p>
<p>
I hate to break it you all, but your dear Modiji is not God. He is human. So he can fail.
</p>
<p>
Which means that your lives may not improve just because he is the PM — unless you raise your voice and make yourself heard. <strong>Raising your voice to make yourself heard does not mean you are being disloyal to Modi.</strong>
</p>
<p>
Think about it. Say you are a guy and you married a nice girl and have a family now. And say your wife complains to you and says that you are not helping her with housework or in taking care of your child. Are you going to say, “Why are you criticizing me? What’s your alternative? Rahul Gandhi?” Or are you going to say, “Why do you have so much hatred for me?” Or are you going to tell her, “Why don’t you go to Pakistan?” Or, if you have neighbors called Rahul, Jawahar, Indira, and Manmohan, are you going to say, “But I am doing better than Rahul, Jawahar, Manmohan, and Indira do for their families!” (Tip: Your wife won’t care.) <strong>If you keep saying “What’s your alternative? TINA!” then one day she might just leave you and find an alternative. Or she might just leave you and hook up with Rahul next door.</strong>
</p>
<p>
This is not how you talk to people in the real world when dealing with real issues in your life. Sure, your wife chose (elected) you. But she has a right to question you about whether or not you are living up to your part of the bargain. That doesn’t mean that she hates you. And in the same way, people who criticize Modi do not necessarily hate him. And just as your wife is not going to leave you just because she criticizes you, supporters of Modi can criticize him when his performance has been sub-par and still vote for him in the next election.
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***
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<p>
I just had an exchange yesterday with some old friends where I brought up the fact that petrol has gone up to Rs. 100 per litre. During the Manmohan Singh days, the opposition held marches to protest the hike in petrol prices to Rs. 70 a litre, even though that hike was created not by the government’s actions but by the global price of crude oil going up. The opposition then demanded that come what may, the government should have protected the people of India from any price hike.
</p>
<p>
But today, the price of crude is much lower than what it was during the time of the UPA II government ($60 a barrel today compared to $110 a barrel in May 2014), and yet the Modi government has raised taxes on petrol and diesel to make these essentials so much more expensive. There may be good or bad reasons for this, but the public can and should ask tough questions. <strong>Otherwise the only loser is the public – including Modi’s supporters, i.e., you.</strong> Mr. Modi has been supported by powerful industrialists like Mr. Ambani and Mr. Adani, and they have demanded concessions in return, and they have gotten it. What have you got, other than a temple in Ayodhya, the demotion of statehood in Jammu and Kashmir and the repeal of article 370, and the abrogation of Triple Talaq? <strong>How much have these moves affected you personally?</strong> Don't try to answer or rebut me; just reflect on this. I am not suggesting that Modiji has done nothing for the common people. I am just saying that in a democracy, every person has to look out for their personal benefit, otherwise his or her lot will never improve. And the road to that improvement is by asking tough questions. I am aware of all the schemes floated by the government for the benefit of the people. All I am saying is that <strong>asking hard questions about how well they work or whether they are working at all is not “anti-national.”</strong> It is essential to ensure that those schemes are not simply window-dressing. Consider, for example, the much-touted “Namami Gange” plan to clean the Ganges. Has anything substantial happened there? The Supreme Court itself has upbraided the government repeatedly for not doing enough. Again, do not try to rebut what I am saying. That is not the point. What I am saying that is that if you do not put the government in the dock to answer for their failings in the schemes they have floated, you will not get anything. The Ganga will remain dirty as ever. Who is the loser then? So do not fear criticism of the government, even if you like the leader. <strong>Criticism of the government only benefits you.</strong>
</p>
<p>
These are only some of the many concerns that have been raised about this government. There are many, many more, including the diminishing independence of the judiciary, the reduced commitment to the environment, crony capitalism, the treatment of minorities, the lack of scientific temper and the increased emphasis of unscientific products like gomutra (cow urine), etc.
</p>
<p>
Citizens should question these decisions, because if a government is not questioned, bad things will happen. There is a reason that checks and balances are inbuilt in a democracy – because even the best-meaning of leaders will commit mistakes, if not downright criminal deeds (I know you do not think Modiji will ever commit criminal deeds, but being human, at least he can make mistakes.) And even if you believe completely in Mr. Modi, he cannot possibly ensure that everyone in the BJP will be perfectly honest. And so whenever an attempt is made to dilute those checks and balances – even by the government you voted for – you should oppose it.
</p>
<p>
Now, I know that supporters of Mr. Modi agree mostly with his decisions. But when it comes to your personal hardship, there is no need to avoid tough questions. Modi’s government will not collapse tomorrow if you question him on things that affect you.
</p>
<p>
In my view, it is the duty of the alert citizen to constantly question and criticize the government, whichever party the government may be formed of. When elections come, you can always say that, despite all their flaws and mistakes, I like this leader, so I am going to vote for him or her. If you want to influence public opinion to convince people to vote for your favourite leader, nothing wrong with doing it <em>at that time</em>. <strong>But getting all riled up about someone criticizing your beloved leader, 4 years before the next elections, is foolish and unnecessary, especially in light of Mr. Modi’s commanding choke-hold on power at all levels in the country.</strong>
</p>
<p>
One of the things that critics of the Modi administration complain about is the erosion of rights, such as the imprisonment of a comedian for 30 days for a joke that he did not even make. Now you may not care about this particular case as the comedian is Muslim and you believe that he was about to outrage Hindu sensitivities. But remember, when not following due process becomes a precedent, it could affect even Hindus. Tomorrow, if a politically connected person with ties to the ruling dispensation gets into an altercation with you for some minor thing (say, a land or a money dispute) and puts you in jail, you will personally feel the pain of not having due process in the country. Just as the Muslim comedian could not get bail because a case was filed against him by the son of an MLA, so too, you might not be able to avail justice if you cross the powerful, even inadvertently. So these are things to be concerned about and protest. Even if you have absolute faith in Mr. Modi, surely you cannot have absolute faith in all Hindus in India or all leaders of the BJP or the RSS? <strong>So not everyone who is concerned and criticizes the government is doing it out of personal dislike of Mr. Modi. There are concerns that go far above a single individual.</strong>
</p>
<p>
Even in a loving family, only partners who speak out about what is bothering them or children who demand things get what they want. From the time our children are babies, they know that we love them; yet they cry (complain) because otherwise their needs will not be addressed. Complaining is not evidence of loss of affection or disloyalty. It is necessary to demand your rights. <strong>Those who do not demand their rights end up as losers.</strong>
</p>
<p style="color:purple">
<strong>Don’t be a loser. Be a winner. Accept criticism of your beloved leader. Reflect on it. It’s good for you and good for the country – and good for your leader, too.</strong>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com1tag:blogger.com,1999:blog-2647581039313842967.post-24693666634443796532021-01-25T11:54:00.005+05:302021-01-25T12:50:01.768+05:30The Consequences of Hubris: Modi’s Disastrous China Policy <article> <!--Article Title-->
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The Consequences of Hubris: Modi’s Disastrous China Policy
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Written by Dr. Seshadri Kumar, 24 January, 2021
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Copyright © 2021 Dr. Seshadri Kumar. All Rights Reserved.
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India, under Narendra Modi, has made a huge strategic blunder over the last six years by adopting a confrontational policy towards China and a pro-US tilt in its foreign policy. China is far too powerful for India to contend with, and the Modi Sarkar has simply bitten off more than it can chew. The net effect of Modi’s policy towards China is that China today openly takes Indian land without opposition and without even a declaration of war, and India is too weak to evict Chinese forces from its territory or even, for that matter, oppose China. In light of India’s weakness and inability to stop the Chinese from taking whatever they wish, it is clear that India should have pursued friendly relations with China and perhaps even agreed to a land swap and closer alignment of its policies with Beijing in return for a permanent peace on its borders with China (and Pakistan).
</p>
<p>
India needs to reverse course and pursue friendly relations with China on terms acceptable to the Chinese. Failure to do so will mean ever-increasing losses of territory to China (and perhaps Pakistan) without any compensating advantages such as peace, and continuing erosion of India’s international stature.
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<p>
It is better to swap land for peace with the Chinese than have them take Indian territory anyway without India getting anything for it.
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Background: 2014 to 2020
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The Indian government, under Prime Minister Narendra Modi, has pursued a close partnership with the USA and a confrontational policy against China since 2014, both of which are marked departures from previous governments. Examples of the former are the <a href="https://scroll.in/global/976926/what-you-need-to-know-about-the-india-us-2-2-dialogue-and-their-efforts-to-deal-with-china">2+2 dialogues with the USA</a>, which pull India into a closer and closer strategic embrace with the USA, and India joining the <a href="https://www.aljazeera.com/news/2020/11/25/what-is-the-quad-can-us-india-japan-and-australia-deter-china">military alliance known as the “Quad,”</a> the other members of which are the USA, Australia, and Japan. Examples of the latter are the <a href="https://en.wikipedia.org/wiki/2017_China–India_border_standoff">2017 standoff in Doklam</a> on the India-Bhutan-China conjunction; <a href="https://timesofindia.indiatimes.com/india/bjp-mps-attend-taiwan-event-irk-china/articleshow/75986912.cms">Indian MPs’ support for Taiwan</a>; the <a href="https://www.thehindu.com/news/national/pok-aksai-chin-part-of-kashmir-says-amit-shah-in-lok-sabha/article28832927.ece">Indian Home Minister making statements about Aksai Chin (which is under Chinese occupation) being part of India</a> and <a href="https://www.reuters.com/article/us-southchinasea-vietnam-idUSKBN19R25P">India working with Vietnam to explore the South China Sea for oil</a>. </p><p><br /></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixADij-pK9PKd-ohiVDX_ETz96P6pB5niM1RUmp6951neC9Qr3OBQcfdE43agUZJNUSj3-uqJ4Etqo5NSQP4vmxnU2i6h28_ZJuRogrFLVcRAnnPtn6Dje8djogpRkOU_qTcndONXFSXt6/s1200/base-map-bhutan-1.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="675" data-original-width="1200" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixADij-pK9PKd-ohiVDX_ETz96P6pB5niM1RUmp6951neC9Qr3OBQcfdE43agUZJNUSj3-uqJ4Etqo5NSQP4vmxnU2i6h28_ZJuRogrFLVcRAnnPtn6Dje8djogpRkOU_qTcndONXFSXt6/w400-h225/base-map-bhutan-1.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Location of Doklam, the Tri-State Junction of India, China, and Bhutan. <a href="https://theprint.in/defence/near-doklam-china-is-again-increasing-forces-building-roads-even-a-possible-heliport/215512/">Source to Photo</a>.</td></tr></tbody></table><p>China considers the South China Sea its backyard and <a href="https://www.indiatoday.in/world/neighbours/story/china-warns-india-to-keep-off-disputed-south-china-sea-146453-2011-11-22">is extremely annoyed by India’s attempts</a> to undermine its supremacy in the region. <a href="https://www.forbes.com/sites/robasghar/2020/04/20/what-china-wants-china-gets-how-it-became-the-rival-to-america-that-the-ussr-couldnt-be/?sh=25e379846c37">China also considers the USA its primary rival</a> and interprets India’s growing closeness to the USA as a hostile action. It would be natural for any rational person to expect China to retaliate against what it clearly sees as hostile actions on India’s part.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM8O6D0EBCTx68NFV7UrVCRXndA-OnyY8RIg0O_pDQJexXSz7rUxaggOw_Bmub-F07vMIDo8fwGLsipO0HVCvlU9Ootgu-F4aeTa84tr4ajej4QMfUMWRD2UYrRdFmR7H-dvs9qMmGk5ny/s770/AksaiChin.jpeg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="433" data-original-width="770" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhM8O6D0EBCTx68NFV7UrVCRXndA-OnyY8RIg0O_pDQJexXSz7rUxaggOw_Bmub-F07vMIDo8fwGLsipO0HVCvlU9Ootgu-F4aeTa84tr4ajej4QMfUMWRD2UYrRdFmR7H-dvs9qMmGk5ny/w400-h225/AksaiChin.jpeg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Map of Kashmir Area Showing Aksai Chin, Which the Chinese Wrested from India in 1962. <a href="https://www.indiatoday.in/india/story/how-china-captured-aksai-chin-1691562-2020-06-22">Source to Photo.</a></td></tr></tbody></table><p>China was taken by surprise by India’s response in 2017 at Doklam, where Indian forces tried to stop the Chinese army’s attempt to build a road inside Bhutan near the site of the India-Bhutan-China tri-junction, and the matter ended in a stalemate. But the Chinese were not put off. Their failure to achieve their objectives in Doklam only strengthened their resolve to forge ahead. Immediately after the ceasefire was announced, <a href="https://www.ndtv.com/india-news/exclusive-satellite-images-hint-at-renewed-china-threat-in-doklam-2328660">China resumed their construction of a road in the same area</a>, as satellite photographs revealed, and <a href="https://theprint.in/defence/near-doklam-china-is-again-increasing-forces-building-roads-even-a-possible-heliport/215512/">even built a village 2 km inside Bhutanese territory</a>. The Indian response was to <a href="https://www.mea.gov.in/media-briefings.htm?dtl/29363/Official+Spokespersons+response+to+queries+regarding+the+situation+in+Doklam">pretend that nothing was happening</a> and that the problem would go away if only they closed their eyes. Unfortunately for India, that did not happen.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi__8G90EQ1UB0oglAHNpJms0mFIRD6ekxlV-gacSTkTxuXOgth-EIktm7CevhRFvayj1xbJYJYlBpR6Ls2WPgzXpiAH39VqoYlncgqoK_-RGj3zyCAgV11eVvsEaItxyVpwhHfeDBMcpUS/s650/doklam_2020_11_22.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="319" data-original-width="650" height="196" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi__8G90EQ1UB0oglAHNpJms0mFIRD6ekxlV-gacSTkTxuXOgth-EIktm7CevhRFvayj1xbJYJYlBpR6Ls2WPgzXpiAH39VqoYlncgqoK_-RGj3zyCAgV11eVvsEaItxyVpwhHfeDBMcpUS/w400-h196/doklam_2020_11_22.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Satellite Photos Showing the Construction of a Full Chinese Village 2 km Inside Bhutanese Territory Near Doklam. <a href="https://www.ndtv.com/india-news/exclusive-satellite-images-hint-at-renewed-china-threat-in-doklam-2328660">Source to Photo.</a></td></tr></tbody></table><p>Things came to a head in May 2020, when <a href="https://en.wikipedia.org/wiki/2020_China–India_skirmishes">Chinese forces crossed the Line of Actual Control (LAC)</a> – the de- facto border between India and China, but one that has never been ratified by either country – at several places in Ladakh, including Galwan. Despite several skirmishes, <a href="https://www.thehindu.com/news/national/china-controls-1000-sq-km-of-area-in-ladakh-say-intelligence-inputs/article32490453.ece">Chinese forces have made a significant gain in territory in Ladakh, of the order of 1000 square kilometres</a> and, <a href="https://www.thestatesman.com/india/india-snubs-china-refuses-pull-back-troops-pangong-tso-ladakh-1502914776.html">despite several talks between Indian and Chinese commanders to defuse the issue, the Chinese have not backed off</a>. According to <a href="https://thewire.in/security/government-misleading-media-on-chinese-disengagement-along-lac">Indian defence analyst Col. Ajai Shukla, Indian forces have pulled back 12-15 km westwards into Indian territory in Depsang, 1 km in Galwan, 2-4 kms in Gogra and 8 kms in Pangong Lake</a>. Col. Shukla called this the “largest loss of territory to China since the 1962 war.”</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYWSbUsExzIsvg4dgU58Mx0F3Km8JS4slX2HQepp4AruQsDSjRPqyZTOuBYSeqrzXJA1bCMgoApV5mMQWs-ngWfs8zyQhiEe41u_F_kQ7ykqTlknRvi5GfW92IaJFbWHJtQ3AjwE8pYlML/s976/galwanvalleyreconstructionchina.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="549" data-original-width="976" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjYWSbUsExzIsvg4dgU58Mx0F3Km8JS4slX2HQepp4AruQsDSjRPqyZTOuBYSeqrzXJA1bCMgoApV5mMQWs-ngWfs8zyQhiEe41u_F_kQ7ykqTlknRvi5GfW92IaJFbWHJtQ3AjwE8pYlML/w400-h225/galwanvalleyreconstructionchina.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Satellite Photographs Showing Chinese Construction in the Galwan Valley in Indian Territory. <a href="https://www.bbc.com/news/world-asia-53174887">Source to Photo.</a></td></tr></tbody></table><p>This Chinese intrusion in 2020 has clearly terrorized Modi, to the extent that <a href="https://www.hindustantimes.com/india-news/why-are-our-rulers-scared-of-naming-china-asks-congress/story-UVBTCDTBVFkg87HYF36bRI.html">he has been wary of naming China as the aggressor</a> in even a single speech since the Ladakh incursions. It is clear that Modi fears that China may encroach further into India, so he is being careful <a href="https://thewire.in/security/modis-no-intrusion-by-china-claim-contradicts-indias-stand-raises-multiple-questions">not to utter a word of criticism against China</a>. What is also abundantly clear is that China can take what it wants at will and India can do nothing about it. After all, if India could, India would have already thrown the Chinese out of Ladakh.</p>
<p>
Modi had been trying to run with the hares and hunt with the hounds as far as China is concerned – before the Chinese incursions in May 2020. On the one hand, he held <a href="https://www.indiatoday.in/india/story/narendra-modi-xi-jingping-ahmedabad-chinese-293019-2014-09-17">lavish receptions for President Xi in India</a> and took every opportunity to visit him, even <a href="https://www.news18.com/news/buzz/ladakh-fallout-pm-modi-skips-wishing-chinas-xi-jinping-on-birthday-after-four-years-2674137.html">wishing him on his birthday every year since 2016, a tradition that only stopped in 2020 after the Chinese incursion in Ladakh</a>. It should be noted that Mr. Xi has never wished Modi in return. Modi has met Xi a total of 18 times, the most interactions by an Indian PM and a Chinese President, in India (Ahmedabad, Mahabalipuram, Goa), China (Xian, Xiamen, Wuhan, Hangzhou, Qingdao), as well as neutral venues (Brasilia, Ufa, Tashkent, Astana, Johannesburg, Buenos Aires, Bishkek, Osaka). </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2g0ebC0S-73Lg1Hgy7_wpZz-xacQqWPdeC5Oyl-XKOm8kjRYQKKbz2VY3WZJCjcpr0gTlH0wZjApqSx3xMD-wq9DoUpBXJqj9FjqTLrE3lgAq44tjeTa_DeESSSYfmqHUXcdwP9FC4F_e/s670/ModiXiAhmedabad.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="498" data-original-width="670" height="297" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2g0ebC0S-73Lg1Hgy7_wpZz-xacQqWPdeC5Oyl-XKOm8kjRYQKKbz2VY3WZJCjcpr0gTlH0wZjApqSx3xMD-wq9DoUpBXJqj9FjqTLrE3lgAq44tjeTa_DeESSSYfmqHUXcdwP9FC4F_e/w400-h297/ModiXiAhmedabad.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Modi with Xi in Ahmedabad, India, in 2017. <a href="https://www.rediff.com/news/special/what-modi-told-xi-in-ahmedabad/20170707.htm">Source to Photo.</a></td></tr></tbody></table><p>Yet at the same time, Modi has also angered Xi by trying to act as a big power in the South China sea, by agreeing to joint oil exploration in that sea with Vietnam. He has also pushed India into a close military partnership with the USA, which China regards as its natural rival. This alliance has turned more worrisome for Beijing with the Quad military alliance with Australia, Japan, and the United States. In addition, Modi has been silent as his own Home Minister, Amit Shah, has said in the Indian Parliament that Aksai Chin is an integral part of India, and as prominent Bharatiya Janata Party (BJP) MPs, such as Meenakshi Lekhi, attended the swearing-in of the President of Taiwan. The net effect of this flip-flopping – between appeasement and provocation – seems to be that Modi’s peace overtures were seen by the Chinese just as a front for more nefarious designs.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOYrRJlwAWoZjRflDiRGl6_wqKlsIJRLe442TrF6DNBswsbHgfivK6ek4E5z7I_G_ktidCu78cuirF78MjIg9PnJJLyYCi7MuLNIxYmasEp8KS9Xxh-TxycCZqYOhHKubXMucF-lItQfAT/s1200/AmitShahAksaiChin.jpeg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="749" data-original-width="1200" height="250" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhOYrRJlwAWoZjRflDiRGl6_wqKlsIJRLe442TrF6DNBswsbHgfivK6ek4E5z7I_G_ktidCu78cuirF78MjIg9PnJJLyYCi7MuLNIxYmasEp8KS9Xxh-TxycCZqYOhHKubXMucF-lItQfAT/w400-h250/AmitShahAksaiChin.jpeg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Indian Home Minister Amit Shah Proclaiming in the Indian Parliament in August 2019 that Aksai Chin is Part of India. <a href="https://www.thehindu.com/news/national/pok-aksai-chin-part-of-kashmir-says-amit-shah-in-lok-sabha/article28832927.ece">Source to Photo.</a></td></tr></tbody></table><p>The Chinese incursions in May 2020 seem to have brought home the realization to Modi that the Chinese can occupy Indian land at will and that India can do nothing to reclaim that land. Hence the radio silence on all Chinese actions since then, <a href="https://www.thehindu.com/news/national/india-wants-an-end-to-border-tension-but-not-at-the-cost-of-ceding-land-says-rajnath-singh/article32940152.ece">while stoutly claiming that China has not occupied an inch of Indian land</a>. Such a narrative, of course, suits the Chinese, since if they are said to have not occupied any Indian land, they cannot be accused of being aggressors.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGvxg-IY1vCWWH4a7m5ajog6_K-ogO_kcgHTYvbBULwz3rj2JDYeaeFrZVKX9e4mBPmn9zqfqyQqE64T8GR4WBik8FD8V5CI0adwtQyec2ktT22FVou9RuG3Abzzb_rk9SeDpQ-Fhm-CUE/s640/RajnathSInghNotanInch.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="480" data-original-width="640" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGvxg-IY1vCWWH4a7m5ajog6_K-ogO_kcgHTYvbBULwz3rj2JDYeaeFrZVKX9e4mBPmn9zqfqyQqE64T8GR4WBik8FD8V5CI0adwtQyec2ktT22FVou9RuG3Abzzb_rk9SeDpQ-Fhm-CUE/w400-h300/RajnathSInghNotanInch.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Indian Defence Minister Rajnath Singh Claiming in Ladakh in July 2017 That "Not an Inch of Indian Land Can Be Taken." <a href="https://www.ndtv.com/video/news/news/not-an-inch-of-our-land-can-be-taken-rajnath-singh-in-ladakh-554790">Source to Photo.</a></td></tr></tbody></table>
</div>
</section>
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<section>
<header>
<h2 id="TOC2">
The Chinese Village in Arunachal Pradesh
</h2>
</header>
<div>
<p>
The latest development in the saga of deteriorating relations between China and India is the <a href="https://www.timesnownews.com/india/article/china-builds-village-in-arunachal-pradesh-mea-says-india-takes-necessary-measures-to-safeguard-sovereignty/708946">recent news that China has built a village in Arunachal Pradesh, on India’s side of the LAC</a>.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizUab0tyiYhQXJA6-2ZlTogpMf2uj7plqHxxi49OPwf0ctphzgLAkq3wH3zLaw1YT_y5aNxq1XAr20xaAPXrtEAFyEHHwyrYS8GhdbRCpwzpFJ0t37r8zdFSQt-oqvE7dvkFzgdo3yOv6Q/s600/chinesevillagearunachal.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="450" data-original-width="600" height="300" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizUab0tyiYhQXJA6-2ZlTogpMf2uj7plqHxxi49OPwf0ctphzgLAkq3wH3zLaw1YT_y5aNxq1XAr20xaAPXrtEAFyEHHwyrYS8GhdbRCpwzpFJ0t37r8zdFSQt-oqvE7dvkFzgdo3yOv6Q/w400-h300/chinesevillagearunachal.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Photograph of Chinese-Built Village in the Indian State of Arunachal Pradesh. <a href="https://www.timesnownews.com/india/article/china-builds-village-in-arunachal-pradesh-mea-says-india-takes-necessary-measures-to-safeguard-sovereignty/708946">Source to Photo.</a></td></tr></tbody></table><p>The Indian government denied this fact, saying that the village the Chinese built was on their own land, on their side of the LAC. But in an absolute news shocker that was reported in the papers on 22 January, 2021, the <a href="https://www.thehindu.com/news/international/china-defends-new-village-in-arunachal-amid-border-construction-push/article33627391.ece">Chinese spokesperson confirmed that indeed, China has built a village on the Indian side of the LAC</a>. The Chinese admission punctures the lies of the Modi government to the people of India, many of whom still believe the previous lies of the government that “<a href="https://www.thehindu.com/news/national/india-wants-an-end-to-border-tension-but-not-at-the-cost-of-ceding-land-says-rajnath-singh/article32940152.ece">not an inch of India is under Chinese control,” as Defence Minister Rajnath Singh said</a>.</p>
<p>
According to a <a href="https://www.thehindu.com/news/international/china-defends-new-village-in-arunachal-amid-border-construction-push/article33627391.ece">report in the Hindu on January 21, 2021</a>,
</p>
<blockquote>
<p>
The Chinese Foreign Ministry on Thursday said at a press briefing, to a question about the construction, that China’s “position on Zangnan [or South Tibet, as China refers to Arunachal] region is consistent and clear.” “We never recognized the so-called Arunachal Pradesh,” spokesperson Hua Chunying said. “China’s development and construction activities within our own territory is normal. This is beyond reproach as it is in our territory.”
</p>
<p>
The Communist Party-run Global Times newspaper, in a report earlier this week, said the area “has never been recognized by the Chinese government.” “China and India haven’t demarcated the border line of this area yet. So they cannot accuse China of building a village on the Indian side,” Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, was quoted as saying.
</p>
</blockquote>
<p>
So the lies of the Indian Government have been exposed. The Chinese have openly encroached on what India considers its territory, by their own admission, and there is nothing India can do.
</p>
<p>
The Chinese are quietly moving into India and taking what they want, when they wish. Our Prime Minister, despite his vaunted boasts of having a 56 inch chest, is watching powerlessly.
</p>
<p>
The Chinese have made their intentions very clear. They have said that they do not recognize the Indian state of Arunachal Pradesh. They call it “South Tibet.” It is, therefore, not inconceivable that China's People's Liberation Army (PLA) will simply march down into Arunachal, first taking places like Tawang, which is very important to them because it is a centre for Lamaist Buddhism, the leader of which is the Dalai Lama, who lives in exile in India; but within probably a year or two, all of Arunachal Pradesh. And all of Ladakh will also likely be gone. Because the Chinese believe that these regions always belonged to them. The question for Indians is, what can India do about this?
</p>
<p>
The American alliance or the Quad will not be of much help to India in that event (they are of no use today either). Part of the reason for this is political, on Mr. Modi’s part. To even ask for help from America is to admit that India has lost territory in Ladakh and Arunachal Pradesh. Modi is very wary of admitting this, because he has created a “strongman” image among his fans in India, which would come crashing down if it were widely realized and accepted that he actually gave up territory without a fight. This is why members of the ruling BJP party have vehemently been denying that Indian territory has been lost.
</p>
<p>
Second, even if India did ask the US for help, it is highly doubtful that the US would go to war with China over a few border villages of India. It will probably ask India and China to work it out among themselves. If India had continued to maintain their friendship with their previous all-weather ally, Russia, the Russians might have used their good offices with the Chinese to help India, but that boat sailed a long time ago <a href="https://thediplomat.com/2015/06/russia-and-india-a-21st-century-decline/">when India dumped the Russians like a hot potato</a>.
</p>
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</section>
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<section>
<header>
<h2 id="TOC3">
How to Win Territory Without Bloodshed
</h2>
</header>
<div>
<p>
Xi Jinping prefers dealing with a leader like Narendra Modi. And there is a reason for that. Wars are messy. They cause bloodshed and ill-feeling and can cause your own people to throw you out. There was a time when China could afford to lose a million soldiers in a war (the Korean War of 1950-53), but today’s China is a far more prosperous country than the China of 1951. Today’s China is a country where human lives have some value. Perhaps not as much value as in the United States, but certainly more than in India. Modi is very convenient for Xi in this regard. He lets Xi take whatever he wishes without a fight, without spilling valuable Chinese blood.
</p>
<p>
That is because Modi has not lost anything personally. His popularity is intact. After all, Chinese troops did not walk into Modi's house. Some remote parts of Ladakh and Arunachal Pradesh are what we are talking about. Most Indians have no idea where these places are, and nobody is even going to talk about it – the media, which is completely in the grip of the ruling BJP, will ignore it even when China is in control of all of Ladakh and Arunachal. There is little political capital to be lost with the loss of Arunachal or Ladakh (well, one Parliamentary seat for the former and two for the latter, but these are in the noise as far as numbers go.) In fact, the entire Northeast is irrelevant to Modi’s plans for India, so it is likely that nobody from the BJP will mention it even if India loses that whole area to the Chinese. Modi and the BJP will pretend that it never happened, as they are doing now. India's Defence Minister will continue to claim that “not an inch of Indian territory has been occupied” even when Chinese troops are on the borders of Assam, as he did after the Chinese incursions in May 2020.
</p>
<p>
According to Hindu texts, the <a href="https://en.wikipedia.org/wiki/Upayas_(diplomacy)">four ways of dealing with an enemy and resolving conflicts</a> are <em>saama</em> (conciliation), <em>daana</em> (bribery), <em>bheda</em> (deception), and <em>danda</em> (punishment). But there is one more way of defeating an enemy: <em>bhaya</em>, or fear. This method is useful against leaders who are cowards and braggarts and whose populations are gullible. These are people who are so afraid of danda (punishment) that they give you whatever you want without a fight without the need for negotiation, bribery, deception, or violence. Modi is among those.
</p>
<p>
While the Chinese might take all of Ladakh and Arunachal Pradesh, they will also leave a threat of invasion elsewhere if India does not behave itself. They know that <a href="https://warontherocks.com/2020/09/can-india-transcend-its-two-front-challenge/">India cannot defend itself against a two-pronged attack</a>, and there is the constant latent threat that with Chinese help, Pakistan can annex Kashmir. This gives the Chinese leverage to extract trade concessions from India – namely, that Chinese products will not be subjected to any tariffs at all in India, and the giant Indian market will become an exclusive market for the Chinese. India, in effect, will be subject to Chinese economic slavery.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC4">
The Baggage of 1962
</h2>
</header>
<div>
<p>
It is ironic that, for a man who made his career criticizing Jawaharlal Nehru on his <a href="https://en.wikipedia.org/wiki/Sino-Indian_War">Chinese debacle of 1962</a>, Modi has made exactly the same mistake that Nehru made, viz., of underestimating the Chinese and their resolve. It was folly on Nehru’s part to take on the Chinese in 1962 after they had demonstrated the extent of their resolve in the <a href="https://en.wikipedia.org/wiki/Korean_War">Korean War</a> against the Americans. The Chinese did not even have a nuclear weapon in 1951, and yet Mao Zedong decided that he would not allow American forces to be on the Korean-Chinese border during the Korean war. When General Douglas MacArthur continued to push American forces up to the Yalu river, the border between China and North Korea, after his successful counter-attack at Inchon (see map below), the Chinese attacked with overwhelming force, massacring the Americans. Even though the Americans eventually stabilized the front at near the 38<sup>th</sup> parallel (see the Truce Line in the figure), the boundary between North and South Korea, they had learned the lesson of not taking the Chinese dragon lightly.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcNU6atmCMfu5XjzjLU3BStGrm6id6vXhYT_eJ0Px38JQO6b-RcCWyNy-ml6UFvW_HFdQPg1tPYKqGPPIbrEOa1QVCFrb6MWqg-9ziUkuObmut9sm_uJYdzDNm2ByKwD6jKvCOeQJ7vNQx/s392/KoreanWar.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="392" data-original-width="317" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcNU6atmCMfu5XjzjLU3BStGrm6id6vXhYT_eJ0Px38JQO6b-RcCWyNy-ml6UFvW_HFdQPg1tPYKqGPPIbrEOa1QVCFrb6MWqg-9ziUkuObmut9sm_uJYdzDNm2ByKwD6jKvCOeQJ7vNQx/w518-h640/KoreanWar.png" width="518" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Map of the Korean War, 1950-53. The Blue Solid and Dotted Lines Show the Furthest Extent of US/UN Troops in North Korea, Close to the Yalu River. <a href="https://winteryknight.com/2017/11/11/marine-captain-earned-medal-of-honor-fighting-communists-in-north-korea/">Source to Photo.</a></td></tr></tbody></table><p>As a highly respected world statesman, Nehru should have taken this very seriously. Yet, in the lead-up to the 1962 war, he <a href="https://www.deccanherald.com/content/392828/forward-policy-nehru-govt-blamed.html">pursued a “forward policy” whereby Indian soldiers established positions ahead of the Indian border, into Chinese territory</a>. The reason for the policy was that the <a href="https://en.wikipedia.org/wiki/McMahon_Line">McMahon Line</a>, which was considered (by India at least – China never accepted it) as the international border between India and China in Arunachal Pradesh, was a few kilometres south of the high ridges that would provide for adequate defence. Nehru therefore <a href="https://en.wikipedia.org/wiki/Henderson_Brooks–Bhagat_Report">told the army to establish positions on the high ridges</a>. He justified this move by saying that this was the real “intent” of the McMahon Line – to give the high ridges to India for its defence. This was part of the Indian forward policy. While Nehru's interpretation was reasonable, this was technically a violation of the international border that India had itself subscribed to. China, on the other hand, never accepted even the McMahon line because it was negotiated between the British Empire and Tibet, and because, in China's view, Tibet was not authorized to determine the boundaries of China. China claimed a boundary further south, into what is considered Arunachal Pradesh today. Nehru authorized the aggressive forward policy because he never thought the Chinese would react militarily, and that was his folly. Contrary to what many Indians think today, Nehru was not a coward or afraid of China. Quite to the contrary, he was too aggressive and just exceeded his grasp. And, despite the “Hindi-Chini-bhai-bhai” (“Indians and Chinese are brothers”) slogan, <a href="https://timesofindia.indiatimes.com/india/nehru-did-not-trust-the-chinese-one-bit-reveals-new-book/articleshow/63348548.cms">Nehru was under no illusions and did not trust the Chinese one bit</a>. He just never thought it would come to war.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmvn6ClWteFJd7W7LSRHX6lkzkdntugLwcRpUCDvdhhtiRgoMs1YHNiNZjLHojByJdcQOy7Qn4Ay2OJs8JEag-yFs_3-M1DXLT8d1IPUVycCAh874SQEfibM_rkTnFgx0OydRMC_LR_x3z/s700/McMahonLine.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="363" data-original-width="700" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhmvn6ClWteFJd7W7LSRHX6lkzkdntugLwcRpUCDvdhhtiRgoMs1YHNiNZjLHojByJdcQOy7Qn4Ay2OJs8JEag-yFs_3-M1DXLT8d1IPUVycCAh874SQEfibM_rkTnFgx0OydRMC_LR_x3z/w400-h208/McMahonLine.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The McMahon Line. <a href="https://www.indiatimes.com/news/india/from-durand-to-radcliffe-and-macmohan-these-are-the-lines-that-divided-indian-subcontinent-and-carved-new-territories-263467.html">Source to Photo.</a></td></tr></tbody></table><p>The result of Nehru’s overconfidence is now history. India suffered a humiliating defeat in the 1962 war with China. The Chinese took Aksai Chin and created a new LAC in Ladakh. But they moved back to behind the McMahon line in Arunachal Pradesh as before, even as they called it an illegal boundary.</p>
<p>
In 1962, India and China were roughly equal powers, and yet India lost the war because India was not as prepared for a war and simply did not expect war. Fifty eight years later, the Indian army is in full readiness for a war; however, China is a superpower both economically and militarily. Even if Indian soldiers were to bravely fight in a war, the <a href="http://statisticstimes.com/economy/china-vs-india-economy.php">superior economic might of the Chinese</a> means that they can easily outlast India in a war of attrition, which will lead to another humiliating defeat for India. In addition, today Pakistan is an all-weather ally of China, and so they could use our preoccupation in any war with China to grab Kashmir.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZwzloqSbDD_uCpPwyOzNGR1CkQ6SY2BKuqLPjJz8z7-GQLasjSoDIN91iRMco2TeTII2TFkqegr-bQao8znldNg4ZdMzCcfjU2Z_p0f4Yt8CxieB5fn1z4jrOnWTlB-r0Zt_RUIFPhUVT/s960/GDPComparisonPerCapitaIndiaChina.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="530" data-original-width="960" height="221" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZwzloqSbDD_uCpPwyOzNGR1CkQ6SY2BKuqLPjJz8z7-GQLasjSoDIN91iRMco2TeTII2TFkqegr-bQao8znldNg4ZdMzCcfjU2Z_p0f4Yt8CxieB5fn1z4jrOnWTlB-r0Zt_RUIFPhUVT/w400-h221/GDPComparisonPerCapitaIndiaChina.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">GDP Per Capita of India and China Compared (USD), 1985-2017. <a href="https://www.forbes.com/sites/garthfriesen/2019/03/21/politics-productivity-population-why-the-chinese-economy-flew-and-indias-just-grew/?sh=76fb2beb2e7d">Source to Photo.</a></td></tr></tbody></table><p>Unlike in 1962, China today is a global superpower which is capable of challenging the USA for world supremacy. When your next door neighbor is the 800 pound gorilla, you do not try to annoy him. You do not try to irritate him. You try to keep him happy.</p>
<p>
And that is what Modi should have done with China. The entire effort to make the US our prime strategic ally was one of the most foolish mistakes any Indian PM could have committed. The US is 10,000 miles away, and it cannot help in any meaningful way in an India-China war. Furthermore, the US is not interested in an actual war with the Chinese, notwithstanding all the noises emanating from Washington about Chinese aggression. It has its hands full with low intensity wars like the war against the Taliban, the war in Syria, and the war in Iraq. <a href="https://www.theatlantic.com/politics/archive/2019/07/china-us-war/594793/">The last thing it wants is a major confrontation with China</a>. And the Chinese know it.
</p>
<p>
What India should have done is the very opposite of what India did under Modi. One of the big problems in India’s China policy over the years is that it has been coloured by the 1962 war. <a href="https://www.rediff.com/news/slide-show/slide-show-1-a-stab-from-the-front/20090825.htm">To protect Nehru’s reputation in history, the Congress-ruled central government kept painting the 1962 war as an example of “China stabbing India in the back”</a> over the years, whereas, in fact, it was a war that India had fully provoked and should have expected.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhME2DC293zgT8gHLNI3_QcUBYqifu9WE6MyieKirwCJHgHBBD5DyGWUOiFyKSQTagHJOOdGkXAyrCdVMpKNbD_v9xAKQ_leffNijnWfoIqBxQcE1EfXQSJ68N7boTlArTtbwM8k8gDgSP-/s1058/ChinaTreachery1962TOI.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="605" data-original-width="1058" height="229" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhME2DC293zgT8gHLNI3_QcUBYqifu9WE6MyieKirwCJHgHBBD5DyGWUOiFyKSQTagHJOOdGkXAyrCdVMpKNbD_v9xAKQ_leffNijnWfoIqBxQcE1EfXQSJ68N7boTlArTtbwM8k8gDgSP-/w400-h229/ChinaTreachery1962TOI.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Times of India Headline on November 4, 1962, Alleging Treachery by the Chinese. <a href="https://timesofindia.indiatimes.com/india/how-toi-chronicled-indias-resistance-to-1962-china-intrusion/articleshow/76656909.cms">Source to Photo.</a></td></tr></tbody></table><p>Because of this legacy, India has avoided patching up the Indo-China relationship for decades. This has led to India having to prepare for wars along both its western and eastern borders for decades. This line of thinking misses something quite fundamental about the Indo-Chinese relationship.</p>
<p>
India and China have not historically had any quarrel. There is no cultural hangover between the two countries in the same way that, say, China and Japan have, or indeed, as India and Pakistan have. That is the key difference between Indo-China and Indo-Pakistan relations. Pakistan is a sworn enemy of India because of the crucible of partition that was responsible for the genesis of both nations, and the Hindu-Muslim enmity that was the cause of that partition, and that has been growing in India with renewed intensity in recent years with the <a href="https://www.theguardian.com/world/2020/feb/20/hindu-supremacists-nationalism-tearing-india-apart-modi-bjp-rss-jnu-attacks">rise of a Hindu supremacist party, the BJP</a>, in power at the centre and most of the states. This enmity has grown even more over the decades because of the Kashmir conflict and the associated cross-border terrorism since 1988, and the <a href="https://en.wikipedia.org/wiki/Indo-Pakistani_War_of_1971">Bangladesh War of Independence</a> in 1971. It might be fair to say that the India-Pakistan relationship will never normalize.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyj2H6vPhQMTBdUS3Dz1IuqhkKQrx0l0m2v-O5hHqWdkzjEAKR4WSUDMKbP4HwZVE8754-wbWKou7nX0aE81vxqYqp3ZTtI4V2T6pjIjuKOs9WbpxVC42bZw0kdoWOZzD5TORU1nn8anOy/s936/1971_Instrument_of_Surrender.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="666" data-original-width="936" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjyj2H6vPhQMTBdUS3Dz1IuqhkKQrx0l0m2v-O5hHqWdkzjEAKR4WSUDMKbP4HwZVE8754-wbWKou7nX0aE81vxqYqp3ZTtI4V2T6pjIjuKOs9WbpxVC42bZw0kdoWOZzD5TORU1nn8anOy/w400-h285/1971_Instrument_of_Surrender.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Pakistani General AAK Niazi Signing the Instrument of Surrender in Dhaka on December 16, 1971, with Indian General JS Aurora Watching. <a href="https://en.wikipedia.org/wiki/A._A._K._Niazi">Source to Photo.</a></td></tr></tbody></table><p>There is no similar fundamental difference between India and China. 1962 was an unfortunate war that should never have happened and was caused by many misunderstandings and missteps. The only reason this relationship was not patched up for decades is that for a significant portion of that time since 1962, India was ruled by Congress governments, who wanted to protect the memory of Nehru. A rapprochement with China might have meant (to them) making peace with the country that was the cause of their leader’s disgrace.</p>
<p>
One would have expected things to change with the arrival of Modi; one would have expected that he would take a more pragmatic view of China, since he was not weighed down by the Congress baggage of 1962 that had weighed down all the Congress governments at the Centre ever since. Unfortunately, Modi and the BJP seem to have bought the Congress propaganda on 1962 hook, line, and sinker. This is not surprising since all history textbooks for schoolchildren since 1962 have been written to exonerate Nehru and claim that the Chinese engaged in an unprovoked war in 1962, essentially back-stabbing India after agreeing to the <a href="https://en.wikipedia.org/wiki/Five_Principles_of_Peaceful_Coexistence">Panchsheel principles of mutual coexistence</a>.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwlZh4jh0nOLKnj8booecX5d3UBWgsK1oMTBxDzmaKZneRQ0fxrvsv1JO7hnRo-CqosQDnjeZ6RyFpDhaAkp_EhhV3qTzgeY0Czk7daIFDha7ZyzwwHBleVAdHQX0M2ou6fN6iinE-43ZY/s400/Panchsheel.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="301" data-original-width="400" height="301" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwlZh4jh0nOLKnj8booecX5d3UBWgsK1oMTBxDzmaKZneRQ0fxrvsv1JO7hnRo-CqosQDnjeZ6RyFpDhaAkp_EhhV3qTzgeY0Czk7daIFDha7ZyzwwHBleVAdHQX0M2ou6fN6iinE-43ZY/w400-h301/Panchsheel.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The Panchsheel Principles of Mutual Co-Existence. <a href="https://timesofindia.indiatimes.com/5-sorry-nehru-modi-has-his-own-panchsheel/articleshow/63950592.cms">Source to Photo.</a></td></tr></tbody></table><p>Furthermore, in light of China’s superpower status, Modi should have realized that India and Indians live today in a Pax Sinica. India has to be more accommodating of China today than at any other time in history. In the 1960s, Chinese products were known for their poor quality; today that nation is <a href="https://www.hindustantimes.com/world-news/chinas-chang-e-5-lunar-probe-retrieved-samples-weighing-lesser-than-2kg-target-101610966177855.html">sending missions to the moon</a> and is a <a href="https://edition.cnn.com/2020/12/03/tech/autox-robotaxi-china-intl-hnk/index.html">pioneer in developing self-driving cars</a>, to name just a couple of examples of worldwide technological leadership. It is an economic, military, and <a href="https://www.wipo.int/pressroom/en/articles/2020/article_0005.html">technological superpower</a>.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGFYdoH5-WxZzAWt-WOQ350a3cH2z_9gEs3dK5EaTCMpaIc_RwvzyVKa6IdSSMZKDq4nrXK11QhZsLoigU-6gYcJFvWLV7N6zlfO0FE8CdMrqZpI8hfIxOk3a6-rB8Yyjula00uN2gTwbg/s730/didi-autonomous.jpeg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="486" data-original-width="730" height="266" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGFYdoH5-WxZzAWt-WOQ350a3cH2z_9gEs3dK5EaTCMpaIc_RwvzyVKa6IdSSMZKDq4nrXK11QhZsLoigU-6gYcJFvWLV7N6zlfO0FE8CdMrqZpI8hfIxOk3a6-rB8Yyjula00uN2gTwbg/w400-h266/didi-autonomous.jpeg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Self-Driving Car in China. <a href="https://techcrunch.com/2019/08/30/didi-chuxing-to-launch-self-driving-rides-in-shanghai-and-expand-them-beyond-china-by-2021/">Source to Photo.</a></td></tr></tbody></table><p>Taking all this into account, India under Modi should have pushed hard for a permanent peace on the borders. They should have conceded some territory in the same way that <a href="https://en.wikipedia.org/wiki/Sino-Pakistan_Agreement">Pakistan traded the Shaksgam valley for peace in the 1960s</a>. In fact, before the 1962 war, <a href="https://indianexpress.com/article/opinion/columns/india-china-stand-off-line-of-actual-control-galwan-valley-sudheendra-kulkarni-6465585/">Zhou Enlai, China’s Premier, suggested to Nehru in 1960 that he accept China’s claims in Aksai Chin in return for China dropping all claims on Arunachal Pradesh, but Nehru arrogantly refused.</a></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkLuPDQgFjQ1maQxRk8z3vlUELTsbw56VLYSGPiz4Rt5dS3naXSmIPOl8asnKMoEFClHL5GtF-dlUeOPYEWc_T79T6f3NCI8rhqETZJQcpGhfi_alYJfWOpJm6WbngYGdb5XEWOeqij827/s500/Nehru_Zhou-1960.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="355" data-original-width="500" height="284" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhkLuPDQgFjQ1maQxRk8z3vlUELTsbw56VLYSGPiz4Rt5dS3naXSmIPOl8asnKMoEFClHL5GtF-dlUeOPYEWc_T79T6f3NCI8rhqETZJQcpGhfi_alYJfWOpJm6WbngYGdb5XEWOeqij827/w400-h284/Nehru_Zhou-1960.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Pandit Nehru, India's PM, with Dr. Sarvepalli Radhakrishnan, Indian Vice-President, Zhou Enlai, Vice-Premier of China, and Dr. Rajendra Prasad, Indian President, during Zhou Enlai's Visit to India in 1960. <a href="http://www.indiandefencereview.com/spotlights/the-years-of-hindi-chini-bhai-bhai/">Source to Photo.</a></td></tr></tbody></table><p>Even without a peaceful relationship with India, <a href="https://www.thehindubusinessline.com/opinion/chinese-invasion-of-indian-industry/article26439893.ece">China is dominating India economically.</a> <a href="https://timesofindia.indiatimes.com/business/india-business/indias-trade-deficit-with-china-at-5-year-low/articleshow/76521335.cms">India exports less than $17 billion worth of goods to China today, while importing more than $65 billion from China.</a> Chinese goods are seen everywhere in India and have already displaced Indian products in many sectors, including electronics, fireworks, and manufacturing. <a href="https://www.financialexpress.com/industry/technology/boycott-effect-chinese-smartphone-brands-xiaomi-oppo-vivo-realme-market-share-in-india-slips-to-72/2034412/">72% of all cellphones sold in India are Chinese-made, even after the aggression by the Chinese in May 2020.</a></p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinfii7Upy2PdUIZwwUYMrXLoGuO7G9pDGAHb4xJnoNo6JMAecmm6xcPCDl7FLX2wmTxew30VKO846dWHVIVUas6JYbPnGmAD0EKtGe_3fxdt-GO6yURSGKoKpfOkpWx8kHlBIb4jFX-BSB/s816/25smartphone.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="382" data-original-width="816" height="188" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinfii7Upy2PdUIZwwUYMrXLoGuO7G9pDGAHb4xJnoNo6JMAecmm6xcPCDl7FLX2wmTxew30VKO846dWHVIVUas6JYbPnGmAD0EKtGe_3fxdt-GO6yURSGKoKpfOkpWx8kHlBIb4jFX-BSB/w400-h188/25smartphone.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Market Share of Chinese Smartphones in India. <a href="https://www.financialexpress.com/industry/technology/boycott-effect-chinese-smartphone-brands-xiaomi-oppo-vivo-realme-market-share-in-india-slips-to-72/2034412/">Source to Photo.</a></td></tr></tbody></table><p>Taking all this into account, India should have permanently buried the hatchet by offering land for peace and forging strong economic links with the Chinese. Indian foreign policy, barring the one disastrous mistake with China, has historically been very pragmatic. For decades, the Soviet Union was India’s strongest ally. While a large part of this affiliation was motivated by shared philosophies – India, being a socialist country, found the communist USSR closer to itself than the capitalist USA – geography also played an important part. It is foolish to align yourself with the Yankee eagle sitting 10,000 miles away while the Russian bear is right next door, and so, Indian governments in the past, very sensibly, did not make this mistake.</p>
<p>
But the BJP has abandoned socialism completely. This is fine, but there was no need to abandon our relationship with Russia. After all, Russia herself is no longer a communist country but a totalitarian capitalistic country. There is no philosophical barrier that would have stopped the Modi government from continuing with the close relations with Russia that India had historically forged with the USSR. Instead, India dumped the Russians like a hot potato. The result of that foolish decision is that India today has nobody to lean on when things get rough in their neighbourhood. In the past, whenever things got hot with China, India could always rely on the good offices of the Russians to help them out with the Chinese. No longer.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC5">
The Way Forward
</h2>
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It is not yet too late. India should drop its belligerent attitude towards the Chinese and realize that this is a much bigger adversary than it can handle; that India exists in a Pax Sinica; and therefore India needs to offer their obeisance to their mighty neighbour. India needs to get down from their high horse and settle the border dispute in a way that China can accept. Otherwise India is needlessly and fruitlessly going to lose more territory.
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However, things have changed a lot since 1962. In 1960, Zhou Enlai was willing to accept Aksai Chin in return for dropping claims to Arunachal Pradesh – but that will not be enough for China today, mainly because Aksai Chin is already in their control. What they will want from India today is allegiance and fealty – a stop to the westward tilt that has been the norm since Modi took over, and an acknowledgement of China’s great power status. India lives in China’s shadow today – militarily and economically. The Chinese will want to see India show deference to China in its actions. No more cosying up to Vietnam in the South China sea or friendly ties with the USA. They may allow India to keep the Dalai Lama in India and let him live out the last years of his life in peace, as long as India does not let him step out of his ashram in Dharamsala and does not let him make any provocative speeches, including <a href="https://www.thehindu.com/news/national/china-vows-necessary-measure-after-dalai-lama-visits-arunachal-pradesh/article17824312.ece">visits to Arunachal Pradesh, as he did in 2017</a>. There are consequences to being a neighbour of a great power. Indian commentators need to stop the hyphenation of India and China. India is not even in China’s league, and it is best that India recognizes this truth as soon as possible. Most of all, India is still a major power in the world and the biggest democracy in the world, and so, India acknowledging China to be a superpower is a big publicity coup for China. If India does all this, China might agree to settling the border question.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg23nng45RCx8-ZRvluQOBcDZvRXDNDI7Y77YcaypqysaquW4NKOfZkr8HVhP0jgktJfmbzMzCnbBUlzGog_LFIUSIj2TCgAhI5VD81NGBGBKcpG1WcSBP9cfSUi2I9IVRq0ub3Q3YMNhVh/s650/dalai-lama-650_650x400_71491402644.jpg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="400" data-original-width="650" height="246" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg23nng45RCx8-ZRvluQOBcDZvRXDNDI7Y77YcaypqysaquW4NKOfZkr8HVhP0jgktJfmbzMzCnbBUlzGog_LFIUSIj2TCgAhI5VD81NGBGBKcpG1WcSBP9cfSUi2I9IVRq0ub3Q3YMNhVh/w400-h246/dalai-lama-650_650x400_71491402644.jpg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The Dalai Lama on his Visit to Arunachal Pradesh, 2017. <a href="https://www.ndtv.com/india-news/dalai-lamas-visit-to-arunachal-pradesh-has-had-negative-impact-on-ties-china-1682346">Source to Photo.</a></td></tr></tbody></table><p>And this is where it helps that there are no lingering hatreds between India and China, the way they exist between India and Pakistan. Because there is no such bitterness in the India-China relationship, things can be repaired. The Chinese may drive a hard bargain, but they do want peace. This is quite unlike Pakistan, who would like India to be completely destroyed. This is why, against all obstacles, India should push for a peace with China, even on unfavourable terms.</p>
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Modi needs to decide what is better – losing more territory and eventually losing face with the Indian public (as the truth must eventually come out), or reach an agreement with China that makes them happy – which might involve ceding some territory and offering obeisance and also stopping the antagonistic behavior. There are very serious consequences to not seeing this reality.
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It is important to see how significantly things have changed in India’s own neighbourhood. India is losing friends to the Chinese as they have encircled India with <a href="https://en.wikipedia.org/wiki/String_of_Pearls_(Indian_Ocean)">their “string of pearls” strategy</a>. Nepal, once one of India’s closest friends (and a Hindu country to boot) is now firmly in China’s orbit. <a href="https://www.nepalitimes.com/latest/new-china-nepal-rail-corridor/">China is building a railway from Xigatse in Tibet to Kerung on the Nepal-Tibet border to Kathmandu</a> and continuation of the railway within Nepal. Such a railway would relieve Nepal of its dependence on India, which <a href="https://thewire.in/diplomacy/indias-blockade-has-opened-the-door-for-china-in-nepal">allowed India to bully Nepal in 2015 by imposing a blockade on it</a>. India might soon be staring at Chinese troops on the India-Nepal border when Nepal is unable to repay its loans to China for the railway (<a href="https://chinadialogue.net/en/business/11336-the-china-nepal-railway-high-cost-and-hidden/">worth about $5.5 billion</a>) under the <a href="https://en.wikipedia.org/wiki/Belt_and_Road_Initiative">Belt and Road Initiative</a>. </p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5vnC8TmRL4rdjSU3qnJElqx_hEhr18It-5_ERypivARwkpUEKNfTVxXJkDlm1I8r65vGF53xef2HUyQheMSzZUatVfeWakX6JVH9aHTc871MtwpTA49sp_ctRymAhnOH8SbvHWYf7l8aI/s1196/chinaNepalrailline.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="652" data-original-width="1196" height="217" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh5vnC8TmRL4rdjSU3qnJElqx_hEhr18It-5_ERypivARwkpUEKNfTVxXJkDlm1I8r65vGF53xef2HUyQheMSzZUatVfeWakX6JVH9aHTc871MtwpTA49sp_ctRymAhnOH8SbvHWYf7l8aI/w400-h217/chinaNepalrailline.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The China-Nepal Railway Line. <a href="https://www.thethirdpole.net/2019/06/18/nepal-china-railway/">Source to Photo.</a></td></tr></tbody></table><p>Sri Lanka is already deep in debt to China and China is in the process of making that country a dependent, as it already has done with Pakistan. <a href="https://edition.cnn.com/2018/02/03/asia/china-sri-lanka-string-of-pearls-intl/index.html">Sri Lanka has ceded the Hambantota port to China for 100 years</a> because it cannot afford to pay them for the cost of the building of the port. China is also building the <a href="https://en.wikipedia.org/wiki/Port_City_Colombo">Port City near Colombo</a> at a huge cost of $15 billion – again, an amount that Sri Lanka cannot pay back, which means that China will own some more real estate in Sri Lanka. <a href="https://theprint.in/diplomacy/china-takes-bangladesh-into-its-embrace-now-as-delhi-dhaka-ties-go-downhill/471769/">Bangladesh recently signed a number of agreements with China that extensively deepened their dependence on the Chinese</a>, with <a href="https://time.com/4530974/bangladesh-xi-jinping-visit-china/">$24 billion in loans from the Chinese to Bangladesh and a total of $40 billion in Chinese investment in Bangladesh</a>. It is just a matter of time before Bangladesh becomes an economic vassal of China and allows the Chinese to establish a military base in Bangladesh. What is clear from all this is that all of India’s main neighbours – Pakistan, Bangladesh, Sri Lanka, and Nepal – are all firmly in the Chinese zone of influence. India can never hope to compete economically or militarily with China for influence in South Asia.</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhETYyew2Mho92GRbwn_6gpDxIrPSICX3dHvh8pSK6cH1ZSXOZtPkmijUFEUQsp-pm7qS8ZdEpKyLfIulZFNNKw3wut6dgDyLUsS-Mdra5Hk9AwShMsTqkbtb6NyueRkLgf5-zDQ4aeRQt9/s2048/ColomboPortCity.jpeg" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="1137" data-original-width="2048" height="223" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhETYyew2Mho92GRbwn_6gpDxIrPSICX3dHvh8pSK6cH1ZSXOZtPkmijUFEUQsp-pm7qS8ZdEpKyLfIulZFNNKw3wut6dgDyLUsS-Mdra5Hk9AwShMsTqkbtb6NyueRkLgf5-zDQ4aeRQt9/w400-h223/ColomboPortCity.jpeg" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">Aerial rendering of Proposed Port City in Colombo. <a href="https://www.businessinsider.in/science/sri-lanka-is-building-a-15-billion-metropolis-to-rival-cities-like-hong-kong-and-dubai/articleshow/65785690.cms">Source to Photo.</a></td></tr></tbody></table><p>On the other hand, being deferential to China has many advantages, chief of which will be that they will guarantee the peace on our borders. China already has invested in the <a href="https://en.wikipedia.org/wiki/China–Pakistan_Economic_Corridor">China-Pakistan Economic Corridor (CPEC) in Pakistan, worth $62 billion today</a>. It is not interested in a war between India and Pakistan, because such a war would threaten its investments in the CPEC. If India were to become friendly with China (even with a power relationship acknowledging China as the senior partner), China would put sufficient pressure on Pakistan to curb their terrorist activities. If India can ensure peace on both her western and eastern borders, it would be a huge fillip to economic growth in India.
</p><table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto;"><tbody><tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJkijmoyVbzG6_kiCAegMT7DzvMF814d5lZ5P6iSDJPk_7ZC9SLmfRfqVJo85iIZ5q3g76r9f53OoQl8hHSUyRMmVcqSEzmPD8dsBNzcVRLdFoLe3jk4PkPd4P2E7vjRYOOkYrPh7tkHHE/s850/Major-Projects-of-CPEC-9.png" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="517" data-original-width="850" height="244" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiJkijmoyVbzG6_kiCAegMT7DzvMF814d5lZ5P6iSDJPk_7ZC9SLmfRfqVJo85iIZ5q3g76r9f53OoQl8hHSUyRMmVcqSEzmPD8dsBNzcVRLdFoLe3jk4PkPd4P2E7vjRYOOkYrPh7tkHHE/w400-h244/Major-Projects-of-CPEC-9.png" width="400" /></a></td></tr><tr><td class="tr-caption" style="text-align: center;">The CPEC Projects. <a href="https://www.researchgate.net/figure/Major-Projects-of-CPEC-9_fig1_331224760">Source to Photo.</a></td></tr></tbody></table><p>The choice is between China taking Indian territory without a fight and without giving anything in compensation and India striking a “land for peace” deal with China. India will lose territory either way, but with the latter option India can at least ensure peace.
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The age of the American empire is ending. The age of the Chinese empire is beginning. It is important to decide which side of history India will be on.
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Some may say that what I am proposing is a capitulation, a surrender to the Chinese. But the history of the world has shown that very few countries have been truly independent – a few countries have always dominated the world. Only those at the top of the food chain can afford to be independent in their actions. The rest have to make compromises to survive. The world has always been dominated by a few superpowers over the years – for example, the Roman Empire, the Mongol Empire, the British Empire, and most recently, the Soviet and American Empires. Could any country afford to be truly independent in its actions during the Cold War? Even India has been guilty of duplicity, many times. Nehru famously claimed to be non-aligned, <a href="https://www.history.com/topics/india/jawaharlal-nehru">but he would not openly criticize the Soviet Union’s actions in Hungary in 1956</a>. And the Indian government under Indira Gandhi, while unwilling to criticize the Soviet invasion of Afghanistan, was quick to criticize the Americans for building a military base in Diego Garcia, saying that they were opposed to militarizing the Indian Ocean.
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Some friends of mine have also told me that they fear that the Chinese cannot be trusted, that they will enter into an agreement but later will demand more concessions. If that does happen, India will have to deal with it. India is in a disadvantageous situation with China. It has been 8 months since the incursions in Ladakh when China occupied about 1000 sq. km. of Indian territory, and India has still been unable to retake the territory that China illegally occupied. India is not in a position to hurt China economically either. Despite all the bluster about boycotting Chinese products, China’s share in India’s mobile phone market has not diminished. Indians clearly value their pocketbooks more than their patriotism. So India really has no choice but to sign a peace deal with China on unfavourable terms.
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Such things are normal in international relations. It is just like planets being forced to orbit a massive star because of its gravitational attraction. Einstein said that a massive star distorts the fabric of spacetime and forces nearby objects to move around it in orbits, bending even light. Similarly, the presence of a massive country (economically and militarily) like China forces other countries to orbit that country in deference to its size and follow its lead. It is meaningless then to talk about absolute independence.
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To take a different metaphor, we can think of <a href="http://read.gov/aesop/011.html">Aesop’s fable about the oak tree and the reeds</a>. The oak tree stood proudly when the mighty winds blew, whereas the reeds bent low and sang a mournful song. The oak tree arrogantly told the reeds that he did not need to bow down before the winds because he was strong. The reeds replied, “do not worry about us. The winds do not harm us. We bow before them and so we do not break. You, in all your pride and strength, have so far resisted their blows. But the end is coming.” When the storm ended, the oak tree had been uprooted and lay dying, but the reeds were still alive.
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What will India do under Modi? Will she be pragmatic like the reeds? Or will she die like the oak tree by refusing to bend before China?
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com0tag:blogger.com,1999:blog-2647581039313842967.post-15482131151850713352020-11-17T13:34:00.051+05:302021-02-25T20:33:55.204+05:30A Foreigner’s Guide to Understanding India’s Social, Political, and Cultural Issues
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A Foreigner’s Guide to Understanding India’s Social, Political, and Cultural Issues
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Written by Dr. Seshadri Kumar, 15 November, 2020
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Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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This India explainer contains essential information for the non-Indian to understand several key issues about India, including the Hindu-Muslim problem; the two-nation theory of Jinnah that still plagues India today; the problem of caste-based discrimination in Hinduism; the influence of British rule in India; the Westernization of India and its post-Independence leaders; the role of English in India; the state of women in India and the problems that India inherited from the past; the progress in the rise of the status of women in India; the science and technology deficits in India that allowed foreign cultures to dominate India for centuries; the defects in the Indian educational system that were remedied by the introduction of secular education in English; and the reactionary response to the progress achieved by a liberal democracy for 70 years from those who had benefited the most from that liberal democracy. The article explains the rise of the BJP and its leader, Narendra Modi, as a consequence of these reactionary responses, charts the recidivism that is characteristic of India today, and concludes with an assessment of where India is headed as a nation.
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An epilogue also addresses the broader implications of what is happening in India, and relates it to what is happening in the rest of the world – the rise of racism, discrimination, violence, and tribalism the world over.
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Introduction
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I was recently corresponding with a good friend in the US, a White American whom I knew from graduate school. Whereas usually we do not discuss India, I did share with him one of my recent posts on Facebook about the economic policies of the current government and the debate between supply-side and demand-side economics – something of relevance to the US as well. Since this was a post about India, it contained some specific India-related context.
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In response, my friend shared with me a couple of articles from the Washington Post about India with his reactions to them. It became immediately obvious that
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The current situation in India is of significant interest in the West, and
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My friend could not relate to even the most elementary concepts about India such as caste, and did not really understand the Hindu-Muslim problem.
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I realized then that while we Indians take the background of these issues as obvious, they are not at all obvious to most outsiders due to the sheer complexity and historicity of the issues involved. This should not be a surprise to those of us in India — we would be equally illiterate about the scope of the problems facing other countries.
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That is why I thought of writing this explainer on current Indian issues for non-Indians: a concise summary of the principal social, political, and cultural issues of India, and their historical causes (Although, at nearly 8000 words, some may contest the adjective “concise,” given the scale of the problems involved in India, I would argue that 8000 words is indeed concise. You could write an entire book about this subject.)
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Understanding these issues is crucial to understanding the future trajectory of India, and given India’s importance in the modern world, the future trajectory of the world.
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Muslim Rule in India
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India was a largely Hindu country until the end of the 10<sup>th</sup> century CE. There were other religions such as Buddhism and Jainism, but they had been relegated to the status of minority religions by the 10<sup>th</sup> century, and Hinduism reigned supreme throughout the land. It was then that the large-scale Muslim invasions started.
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The early invaders, such as <a href="https://en.wikipedia.org/wiki/Mahmud_of_Ghazni">Mahmud of Ghazni</a>, were plunderers who looted and went back to their countries outside what is considered the Indian subcontinent (including Pakistan and Afghanistan), but the first Muslim empire was established in India at the end of the 12th century by <a href="https://en.wikipedia.org/wiki/Muhammad_of_Ghor">Muhammad of Ghor</a> after defeating the ruler of Delhi, <a href="https://en.wikipedia.org/wiki/Prithviraj_Chauhan">Prithviraj Chauhan</a>. For the next five centuries, Muslims dominated power in India. These Muslims came from foreign countries, but settled in India. They spread their religion, Islam, mostly through vigorous proselytization and through differential treatment of Muslims. Even though Muslims were a minority in India, you could get ahead in life if you were a Muslim, maybe get a position in the administration, so they were able to convert a lot of people to Islam. This changed the demographics of the Indian subcontinent. Today's India has about 14% Muslims.
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The last Muslim dynasty to rule India also ruled India the longest, for about 200 years. These were the <a href="https://en.wikipedia.org/wiki/Mughal_Empire">Mughals</a>, whose dynasty started with the invasion of <a href="https://en.wikipedia.org/wiki/Babur">Babur</a>, who defeated the ruling Muslim king of Delhi in the <a href="https://en.wikipedia.org/wiki/First_Battle_of_Panipat">First Battle of Panipat</a> in 1526. The Mughal empire was strong under his successors – <a href="https://en.wikipedia.org/wiki/Humayun">Humayun</a>, <a href="https://en.wikipedia.org/wiki/Akbar">Akbar</a>, <a href="https://en.wikipedia.org/wiki/Jahangir">Jahangir</a>, <a href="https://en.wikipedia.org/wiki/Shah_Jahan">Shahjahan</a>, and <a href="https://en.wikipedia.org/wiki/Aurangzeb">Aurangzeb</a> – collectively known as the “Great Mughals” - with the empire starting to crumble after the death of Aurangzeb in 1707.
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Thus, for centuries, Hindus were under the yoke of Muslim rulers. Now, in Islam, Muslims are considered first-class citizens; Christians and Jews, who are considered “people of the Book,” (the “Book” refers to the Old Testament, which is common to Judaism, Christianity, and Islam) are considered second-class citizens, and those who do not believe in either the Old Testament or the Quran are considered infidels or “kaffirs.” These are third-class citizens. And so, to Muslim rulers, Hindus are kaffirs.
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In Islam, kaffirs exist at the mercy of the state. Technically, they have to pay something called a “jiziya,” or a “religious tax” to guarantee their survival. Essentially, this is protection money. Any nonbeliever has to pay this tax, and Hindus had to pay this tax for centuries under Muslim rule, whereas Muslims did not have to.
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Not all Muslim rulers enforced these strict rules, but some Muslim kings were highly bigoted and imposed severe rules on Hindus, such as jiziya. In particular, the Emperor Aurangzeb demolished many Hindu temples and built mosques on top of them. He also forcibly converted many people to Islam at the point of a sword. Other Muslim kings, but not all, have also been guilty of these excesses. In particular, Mahmud of Ghazni, in his sack of the Somnath temple in the modern Indian state of Gujarat, famed for its riches, is said to have broken the “shivling” (stone symbol of the Hindu God Shiva) and incorporated the stone pieces in the steps of the Jama Masjid (the Grand Friday Mosque) that he built in Ghazni in modern-day Afghanistan with the looted wealth from India.
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Because of all this history, there has been bad blood between Hindus and Muslims for centuries. This is not to say that Hindus and Muslims did not live in peace at all – indeed, there are several unifying forces between Hindus and Muslims. Many of these come from art. The Mughal rulers, in particular, were great patrons of art. The <a href="https://en.wikipedia.org/wiki/Taj_Mahal">Taj Mahal</a>, the emperor Shah Jahan's monument of love to his wife, Mumtaz Mahal, was built using the labor of thousands of Hindu craftsmen. Most Mughal art and architecture is a fusion of Hindu and Muslim art forms. A second syncretic art form is that of the <a href="https://www.artsy.net/article/artsy-editorial-astounding-miniature-paintings-indias-mughal-empire">Mughal miniature</a>, which is a fusion of Hindu, Persian, and European styles. Music is another important bridge between the two communities. Indian classical music took a completely new form after it acquired patronage under the Muslim empires of India, starting with the <a href="https://en.wikipedia.org/wiki/Delhi_Sultanate">Delhi Sultanate</a> and continuing with the Mughals. The music acquired influences from Persia, and new musical forms were created, which survive and thrive to this day in what is known as <a href="https://en.wikipedia.org/wiki/Hindustani_classical_music">Hindustani music.</a> Other syncretic musical forms which survive in India to this day are <a href="https://en.wikipedia.org/wiki/Ghazal">Ghazal</a> and <a href="https://en.wikipedia.org/wiki/Qawwali">Qawwali</a>, both of which derive from a branch of Islam known as <a href="https://en.wikipedia.org/wiki/Sufism">Sufism</a>. These art forms are enjoyed by Hindus and Muslims alike. The influence of Sufism in India goes beyond music. Sufi saints in north India are venerated by both Hindus and Muslims, and people from both communities visit these shrines to pray for their desires to come true.
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However, of late, the negative aspects of the shared history between India's Hindus and Muslims appear to have taken centrestage and have tended to overshadow the positive aspects of the relationship.
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British Rule and Introduction of Western Ideas
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In 1612, the first British traders approached the Mughal Emperor, Jahangir, to ask permission to trade in India. Their trading company, called the East India Company, gradually transformed from a trading company to the company that ruled India by taking advantage of the constant warfare between Indian kings. In 1757, they achieved their first significant military victory in the east of India to gain their first territory in India, Bengal. From here, within a century, the British had completely conquered India, and the Indian subcontinent (including Pakistan, Bangladesh, and Afghanistan) became part of the British colonial empire.
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The British stripped India to the bone for their greed and impoverished it, but they did two things that were beneficial to us Indians. One is that they welded the various diverse kingdoms and provinces into a united “British India.” The other is that they brought western ideas to India – science, technology, the ideas of liberal democracy, and all the combined knowledge and wisdom of western civilization from Plato up to the modern age. One aspect of this, which has benefited India a lot, is the knowledge of English, which today is the lingua franca of the world.
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Unlike the Muslim rulers, the British did not settle in India. To them, India was only a colony to be exploited. They allowed Christian missionaries to convert people, but in most of India, Christians, even today, are a minority, except in the north-east states, where some states are almost 100% Christian.
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The British needed people to govern a huge country like India. They could not import officers from Britain to man the entire government. So they started setting up Universities in India where they could teach upper-crust Indians the ideas of the west so that they would have an officer class that would understand how to govern India according to the vision of their British superiors and with whom they could communicate in English. The amazing thing about British rule in India is that most of the junior officers in the administrative service were Indians, and the entire army was composed of Indians; and yet, the British ruled India for 200 years.
</p>
<p>
British rule allowed many of the better off Indians from wealthy families to study in London. Many of independent India's future leaders studied law in the elite law colleges of London and became successful and wealthy barristers in India. Some of these elites realized that something was very wrong in the colonial slavery that bound India to England, and started the freedom movement. Mohandas K. Gandhi, aka <a href="https://en.wikipedia.org/wiki/Mahatma_Gandhi">Mahatma Gandhi</a>, who is considered the “Father of India,” was a barrister at law in London before he first moved to South Africa to practice law. While in South Africa, he began to understand the injustice perpetrated by the White government against people of color, and started to preach nonviolent struggle. Gandhi later brought the same ideas to India when he moved from South Africa. India’s first Prime Minister, <a href="https://en.wikipedia.org/wiki/Jawaharlal_Nehru">Pandit Jawaharlal Nehru</a>, was also a lawyer educated in Cambridge, who had a successful practice in India before he took up the leadership of the freedom movement, guided by Gandhi.
</p>
<p>
When India became independent in 1947, it was leaders like Nehru – western-educated, liberal, scientifically inclined, believers in equality – who took power. They wrote the Constitution of India, which was modeled on the liberal Constitutions of the US and Britain.
</p>
<p>
But they were very different from the masses of India whom they ruled. Most of the Indian population was illiterate and stuck in the dark ages. Many still are. And therein lies the existential problem of India.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC4">
The Two-Nation Theory
</h2>
</header>
<div>
<p>
When the time came for the British to leave India, the Muslims of India, led by a man called <a href="https://en.wikipedia.org/wiki/Muhammad_Ali_Jinnah">Mohammed Ali Jinnah</a>, said that the Muslims, who were at the time about 30% of British India, would not feel safe in a Hindu-majority India, now that the British were not around to keep the peace between the two communities. They claimed that Hindus would revenge themselves on the Muslims for centuries of Muslim rule, and the only way to prevent this was the partition of India into Hindu-majority and Muslim-majority countries. In two regions of British India, the far west and the east, the percentage of Muslims was high enough to convert these provinces into the Muslim nation that Jinnah wanted – and these two regions together became Pakistan in 1947.
</p>
<p>
In 1947, before the partition of British India, Nehru and Jinnah held out two visions of a post-Independent future of the subcontinent. Jinnah propounded the “two-nation” theory, which essentially postulated that Hindus were one nation and Muslims another, and these two nations should go their separate ways. Nehru, inspired by the pluralistic values that he absorbed in Europe, pitched for a secular India, where people of all religions would be equal under the law. Jinnah wanted an Islamic Pakistan. Nehru and other Indians tried hard to convince Jinnah to buy into the pluralistic vision of a united India, but Jinnah stuck to his guns and partition happened. Partition resulted in a pluralistic and secular India, and an Islamic and theocratic Pakistan.
</p>
<p>
But Nehru and his party, the Congress, did not necessarily speak for all of India. There were many in the India that remained who believed in Jinnah's “two-nation” theory and said that if Pakistan should be the home for Muslims alone, then India should be a home for Hindus alone, a “Hindu” nation where Hindus would be the first-class citizens and others would be second-class citizens. This feeling has grown in the 70 years since Independence, and today I would say a majority of Hindus in India today feel that Nehru and the other Congress leaders made a historic mistake in 1947 by not making India a Hindu nation when they had the chance. This is one key issue driving Indian politics today.
</p>
<p>
Later, in 1971, Pakistan was further split on linguistic lines to form Bangladesh in the east. Pakistanis from the west spoke the Urdu language and those from the east spoke the Bengali language, and the Urdu speakers of West Pakistan had started to discriminate against the Bengali speakers of East Pakistan. East Pakistan became Bangladesh in 1971, in a war in which India helped the Bangladeshis. The 1971 war, in effect, was proof that Jinnah's Two-Nation Theory was wrong, because it proved that the Muslims of British India could not remain united as a nation on the strength of their religion alone.
</p>
<p>
Pakistan has also been engaged in conflict with India to wrest the Kashmir valley from India. In 1947, “Jammu and Kashmir” was an independent princely state ruled by a Hindu king, even though most of his subjects in the Kashmir valley were Muslim. There were many princely states in British India at the time of independence, and they were given the choice to either join India or Pakistan or remain independent. The king of Jammu and Kashmir chose independence, but almost immediately Kashmir was attacked by Pakistan. The panicked king then asked for military assistance from India to defend his country, and was given it to repel the invaders in return for accession to India. Kashmir acceded to India and the Indian army was able to keep the Pakistanis at bay; but a significant portion of Kashmir had been lost to the Pakistanis. This has been a sore point between India and Pakistan, because both countries claim the Kashmir valley – India due to the king’s official accession to India and Pakistan due to the region’s Muslim majority. India and Pakistan have fought four wars over Kashmir, and Pakistan has been funding and arming an insurgency in Kashmir for over 30 years now.
</p>
<p>
Since the conflict has its roots in the religious composition of Kashmir, this too adds to the already inflamed state of relations between Hindus and Muslims in India.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC5">
Hinduism and Caste Discrimination
</h2>
</header>
<div>
<p>
Most people who have not lived in India do not really understand caste. Caste is very different from class. You can be born rich or poor. That does not decide whether you will be rich or poor in your entire life. President Bill Clinton was born into fairly humble circumstances and rose to become President of the United States. Others, like President Donald Trump, have inherited huge fortunes and squandered it away.
</p>
<p>
But caste is a unique feature of Hinduism. Caste is a marker of social status, and is earned only by birth. You cannot gain or lose it. Once you are born into a particular caste, that remains your caste all your life.
</p>
<p>
A higher caste person will not marry a lower caste person, and the two may not even eat together in traditional Hindu society. Lower caste Hindus will not even sit at the same level as higher caste Hindus. Often, if the higher caste Hindu is seated on a chair, lower caste Hindus will sit on the ground in front of them. Even today, there are frequent instances where lower caste Hindus are killed merely for walking through higher caste neighborhoods or for riding a ceremonial horse on their wedding – they are expected to “know their place” in society. Higher caste people get to do more interesting, enjoyable, and lucrative things; lower caste people are doomed to miserable occupations, generation after generation. For example, Brahmins, the highest caste, are supposed to spend their time in learning, become teachers, etc. Kshatriyas, or warriors, the next highest caste, are supposed to fight as soldiers and generals or rule as kings. Vaishyas are the merchant or peasant class, and come third in the pecking order after Brahmins and Kshatriyas. At the bottom of the ladder are the Shudras, or manual laborers, who will do the carpentry, fishing, and other trades. Even below these are the untouchables, also known today as the “<em>Dalits</em>,” who have to work in the leather trade, cremate dead bodies, and do manual scavenging of human excreta. The jobs for each caste are decided in advance, and someone born into one caste cannot change to another in his life. The untouchables are termed so because it is considered polluting for an upper caste person to even be touched by an untouchable. Some upper-caste Hindus consider even the shadows of the untouchables inauspicious and go for a purificatory bath if the shadow of an untouchable falls on them. Within each category – Brahmins, Kshatriyas, Vaishyas, Shudras, or Dalits, there are hundreds of sub-castes.
</p>
<p>
Hindus believe in reincarnation - that the body dies but the soul is reborn in a new body. Hindus believe that higher caste people have “purer” souls, and lower caste people have progressively more impure souls as you go down the caste hierarchy. The purity or impurity of their souls are determined by their actions in previous births – if a person does good deeds in this life, his soul is purified, and he may be born in a higher status in his next life, and if he does bad deeds in this life, his soul is degraded, and he may be born in a lower status in his next life. Therefore, if someone is born into a low and degrading caste, it is believed that he has himself to blame for his actions in a previous life that have brought him to this pass. Hence, he cannot complain about the degrading duties imposed on him by virtue of his caste. This is known as the theory of karma. Needless to say, the theory of karmic reincarnation cannot be practically tested, as nobody has verifiable knowledge of their previous lives, if at all rebirth of souls is a fact.
</p>
<p>
Caste has been the basis of social injustice in Hinduism for thousands of years. On the basis of this theory, people belonging to certain castes were denied even basic education because their souls were believed to be so evil that any education would only be utilized for evil. They were therefore effectively prevented from doing anything except the most menial and degrading occupations. People from lower castes who tried to get educated were often punished by death or mutilation.
</p>
<p>
In 1891 CE, a remarkable man was born into a family of untouchables. Despite suffering countless indignities in his life because of his low caste, this man, <a href="https://en.wikipedia.org/wiki/B._R._Ambedkar">Bhimrao Ramji Ambedkar</a>, managed to get a Masters degree from Columbia University and a doctoral degree from the University of London in Economics, as well as a law degree from Gray's Inn in London on the basis of his prodigious intelligence and his perseverance. In my estimation, Dr. B.R. Ambedkar (or Babasaheb Ambedkar as he is often respectfully called) was the greatest Indian public intellectual of the 20th century. And he was a Dalit.
</p>
<p>
Ambedkar returned to India in 1917 and became the leader of the Dalits, demanding the ban on untouchability in Hinduism and demanding equal rights for them. His tireless efforts made it impossible for Indians to ignore him, and he became the Chairman of the Drafting Council for the Constitution of India and the first Law Minister of independent India. Under his leadership, India drafted a Constitution that banned any form of discrimination against Dalits.
</p>
<p>
But the mass of Hindus has never been convinced. Hindus, by and large, continue to observe caste discrimination whenever possible. Most Hindus choose their life partners only after first verifying caste compatibility. Atrocities against lower castes continue. People are even today routinely murdered – often by their own parents – because they dared to love someone of a different caste.
</p>
<p>
One of the signature measures implemented at Ambedkar's instance was the <a href="https://en.wikipedia.org/wiki/Reservation_in_India">reservation of jobs (Affirmative Action) for Dalits</a> in schools, colleges and government jobs. Upper castes in India have been trying to undo this for decades. Such is the opposition to the upliftment of Dalits among non-Dalit Hindus that every measure taken by the government to improve their lives is sabotaged by non-cooperation and obstruction by the people who are supposed to implement them. The result is that even after 70 years of reservation, Dalits have not progressed as much as they should have.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC6">
The Status of Women in Hinduism
</h2>
</header>
<div>
<p>
To a newcomer to Hinduism, the presence of female Goddesses in the Hindu pantheon might seem like an enlightenment. After all, the Abrahamic religions only have a male God. Christianity talks of His Son Jesus, not of His Daughters. Women are never at the top of the religious hierarchy.
</p>
<p>
But in India, Goddesses are widely worshipped, and in many forms. There are temples to Goddesses across the length and breadth of the country. They occupy an equal status with male Gods in the temples.
</p>
<p>
Yet, the life of the real woman in Hinduism is not exalted. For centuries, it was the custom to burn a widow alive on the funeral pyre of her dead husband. This cruel and evil practice was called <a href="https://en.wikipedia.org/wiki/Sati_(practice)"><em>Sati.</em></a> If the woman was not burned alive along with her husband, then she was made to wear white robes with no colour at all, was not allowed to wear any ornaments or decorations, and her hair was shorn off. She was not allowed to eat anything tasty, was not allowed to go out of the home, was considered inauspicious, and was asked to spend the rest of her life in a corner in the home, invisible. The reason for both burning the widow and making her life hell is that people were afraid that a single, unattached woman would attract married men and cause them to become unfaithful. So, in the same way that the Taliban today forces women to cover up from head to toe to stop the men from committing sin, Hindu widows were also made utterly unattractive in order that they would not tempt men. To compound the problem, not too long ago, the practice of child marriage existed in India, in which small girls were married to men much older than they were. Needless to say, this meant that a teenage girl might find herself a widow when her 60 year old husband died, and had to spend the rest of her life in this living hell. <a href="https://en.wikipedia.org/wiki/Ishwar_Chandra_Vidyasagar#Widow_remarriage">Many widows ran away from their homes and went to cities to live as prostitutes</a> rather than endure this horrific state of affairs.
</p>
<p>
Hindus were content with this state of affairs for centuries. The decisive step to end part of the horrid state of affairs was made by the British Governor-General of India, <a href="https://en.wikipedia.org/wiki/Lord_William_Bentinck">Lord William Bentinck</a>, when he passed the law in 1830 declaring the practice of Sati illegal. He was opposed by a petition signed by thousands of well-to-do Hindus in India, and the matter went to the Privy Council in London, which upheld Bentinck’s law.
</p>
<p>
Similarly, the right of widows to remarry and actually enjoy their lives instead of being condemned to a living hell was drafted by <a href="https://en.wikipedia.org/wiki/James_Broun-Ramsay,_1st_Marquess_of_Dalhousie">Lord Dalhousie</a>, another British Governor-General of India, and passed by <a href="https://en.wikipedia.org/wiki/Charles_Canning,_1st_Earl_Canning">Lord Canning</a>, yet another British Governor-General of India.
</p>
<p>
Hinduism is patriarchal, and what this means in practice is that only sons can perform the funeral rites for parents in order that the souls of the parents go to a better place after death. Needless to say, this means that daughters are less valued than sons, because they cannot do this most important duty for their parents. Consequently, daughters did not receive a share of the paternal inheritance.
</p>
<p>
One consequence of this hankering for male children is that many couples keep giving birth to girls until they have a son. This leads to large, unaffordable families. In addition, the practice of dowry is widespread in India, and so girls are seen as a burden, especially in poor families, which often leads parents to not invest at all in their education or skills. Another consequence is that women are forced to abort fetuses if pre-natal scans reveal the gender of the unborn baby to be female. This has led to <a href="https://en.wikipedia.org/wiki/List_of_states_and_union_territories_of_India_by_sex_ratio">relatively high sex ratios in some parts of India, such as 890 females for 1000 males.</a> To stop this, the government <a href="https://en.wikipedia.org/wiki/Pre-Conception_and_Pre-Natal_Diagnostic_Techniques_Act,_1994">passed a law banning pre-natal sex determination in 1994</a>, but the procedure continues to be performed illegally because of huge demand from the Indian public. High sex ratios mean that <a href="https://www.detroitnews.com/story/news/world/2015/09/10/india-bride-shortage/71993086/">men in north Indian states, where female foeticide is most widespread, have problems finding women to marry.</a>
</p>
<p>
Since Independence, under the aegis of government policies enacted by liberal, pro-women governments, more and more women have been able to get an education. A lot of this has not gone down well with traditionalists in India. In particular, educated women are more assertive, and are not likely to be bulldozed into decisions regarding whom they will marry and how many children they will have. Financial independence also means that women will not continue to rot in abusive marriages. Women who work challenge concepts of male superiority, especially <a href="https://scroll.in/article/956452/indian-women-tend-to-be-more-educated-than-their-spouses-why-are-they-settling-for-less">because they take their education more seriously than men</a> and, as a result, may earn more, because they are more qualified than their husbands.
</p>
<p>
In villages in north India, even today, the local laws are decided by what are known as “khap panchayats” or village councils. Many of these <em>khap panchayats</em> have ruled that girls should not wear modern dresses, that they should not use mobile phones as it allows them to socialize with boys and perhaps enter into marriages that are not sanctioned by the elders. These instances illustrate the conflict that Indian women are experiencing even as they have enjoyed greater freedom since Independence, mostly under the watch of progressive, liberal governments.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC7">
Technology
</h2>
</header>
<div>
<p>
Until the 10<sup>th</sup> century CE, Indian science and technology was at the forefront of the world. Indian mathematics was world-famous and gave the world the decimal system of numbers. What are today known as Arabic numerals were, in fact, Indian numerals that Arab mathematicians had learned from India and published in books in their countries. These were, in turn, translated in the west. Indian mathematics was world-famous, and their exponents, such as <a href="https://en.wikipedia.org/wiki/Bhāskara_I">Bhaskara</a>, <a href="https://en.wikipedia.org/wiki/Aryabhata">Aryabhatta</a>, <a href="https://en.wikipedia.org/wiki/Varāhamihira">Varahamihira</a>, and <a href="https://en.wikipedia.org/wiki/Brahmagupta">Brahmagupta</a> were centuries ahead of their counterparts in the rest of the world.
</p>
<p>
Unfortunately, this mathematics was primarily not used to service the physical sciences but used to predict the motion of planets. The motion of planets was only needed to aid in the pseudo-science of astrology. Kings as well as commoners used to believe in astrological predictions, and these in turn depended on the positions of planets and constellations, and so anyone who could predict these with great accuracy could, in theory, predict the future better. Physical sciences were not studied in India; and due to general ignorance in India about the West, the scientific advances of the West in physics and chemistry were not known in India until the advent of British rule.
</p>
<p>
The failings of Indian technology were made painfully clear when India was repeatedly defeated by Muslim invaders. To take an example, the first Great Mughal, Babur, was the first person to introduce cannon to India. Babur, in turn, had learned about artillery from the <a href="https://en.wikipedia.org/wiki/Ottoman_Empire">Ottomans</a>, and his artillery general was an Ottoman veteran. Indian kings did not know what to make of it, and had no answer to it. The Mughals were one of the three so-called <a href="https://en.wikipedia.org/wiki/Gunpowder_empires">“gunpowder empires,”</a> the other two being the Ottoman empire and the <a href="https://en.wikipedia.org/wiki/Persian_Empire">Persian empire</a>. The Indian kings only had elephants, and the elephants were terrified by cannon fire, thus nullifying the one major advantage that Indian kings had possessed in warfare for centuries.
</p>
<p>
However, Mughal cannon did not keep pace with the development of cannon technology in Europe. Other local powers in India copied Mughal technology, but it had fast become outdated relative to European artillery. As a result, when the British arrived in India, their technology was far superior to that of any of the local kings, including the Mughals. Indian kingdoms always had to beg Europeans for artillery. The <a href="https://en.wikipedia.org/wiki/Shivaji">Maratha king Shivaji</a> tried several times, unsuccessfully, to persuade the British to sell him cannon because he knew how significant their technology was; but the British demurred every time, saying that they were traders and did not want to take sides – the cannons they had, they said, were for their self-defence. Other Indian kings tried to make alliances with the French to get artillery. <a href="https://en.wikipedia.org/wiki/Ranjit_Singh">Maharaja Ranjit Singh</a>, the great Sikh king of the Punjab, for example, had French artillery generals commanding his artillery. But Indians did not have the capability to make their own artillery or to even understand how to use them effectively, because they did not understand the science of ballistics behind it, as the physics of projectiles was a western discovery. They did not even know of Isaac Newton and his laws. Whatever they understood of cannon operation was by watching their foreign generals; but not knowing the science, they could not improve on the weapons or even optimize their use.
</p>
<p>
The <a href="en.wikipedia.org/wiki/Industrial_Revolution">industrial revolution</a> happened in Europe, and Indian kingdoms were not acquainted with the language of western science to even hope to keep up with Europe. Steam power was a western invention, and Indians did not even know how to utilize it effectively. Indians lacked the workshops needed to produce the precision metal parts that were needed for the interlocking gears that were used in these machines. This meant that the Indian textile industry was at a disadvantage relative to that of Great Britain. <a href="https://en.wikipedia.org/wiki/Power_loom">Powerloom technology</a>, which relied on steam, was capable of much higher productivity than Indian handlooms. This, in turn, doomed the Indian handloom industry.
</p>
<p>
What happened to the textile industry was a microcosm of what happened to the Indian economy as a whole. By 1700 CE, close to the death of the last great Mughal emperor, Aurangzeb, the Mughal economy made up roughly 27% of the world GDP, larger than that of China or Europe at the time. At the close of British rule in India in 1947, that percentage had gone down to 3%. While authors like <a href="https://en.wikipedia.org/wiki/Shashi_Tharoor">Shashi Tharoor</a> blame colonial exploitation for this decline, and while there is definitely truth in such assertions, and while it appeals emotionally to the grievance industry in India, what is probably a more likely cause for this decline is that Indian industry simply could not compete with British industry because the industrial revolution happened in Britain and not in India, resulting in widespread adoption of steam power and automation, whereas most Indian industrial processes were manual. Indian industry simply could not compete with the West in terms of productivity, even though it had niche products such as <a href="https://en.wikipedia.org/wiki/Muslin">Dhaka muslin</a> which relied on a very high level of manual skill.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC8">
The Indian Educational System
</h2>
</header>
<div>
<p>
The deficit in technology that led to the decline of India as a world power was indicative of a fundamental weakness in the educational system in India at the time of the arrival of European powers. For centuries, India had fallen behind in science. Physical sciences were not even studied in India, because of a general arrogance about Indian superiority – the idea that Indians knew all there was to know.
</p>
<p>
Nothing illustrates this better than the educational system that existed at the time the British took over, in the early 1800s. An educated Hindu would end up studying Sanskrit, master the Vedas and other texts of Hinduism, and maybe a little elementary arithmetic. Only the Brahmins really went to school.
</p>
<p>
There were two dominant court languages that one had to master in the pre-British era: Sanskrit and Persian. Just as knowledge of Sanskrit was closely tied in with knowledge of Hindu scriptures, knowledge of Persian was associated with the <a href="https://en.wikipedia.org/wiki/Quran">Quran</a>. Neither system provided a good secular education, with the exception of some mathematics. After all, the main purpose of an education was perhaps to get an administrative position in the government or the Court, concerned perhaps with the administration of revenue, the collection of taxes, or otherwise issuing general public notices in the official language.
</p>
<p>
This state of things was changed by the Governor-General of India, Lord William Bentinck, in 1835, on the advice of <a href="https://en.wikipedia.org/wiki/Thomas_Babington_Macaulay">Lord Thomas Babington Macaulay</a>, part of the Governor-General’s Council, when the official language was changed from Persian or Sanskrit to English.
</p>
<p>
The move to teach English in India paved the way for the building of great public Universities, and this brought the entire literature of the western world to India, including all the rapid advances in science and technology that had been made in Europe that Indians were completely unaware of. This made Indians realize just how backward their land was.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC9">
The Reckoning
</h2>
</header>
<div>
<p>
Once the British had complete control of India, which was achieved after they quelled the last pocket of resistance in India from the few kings who tried to put up a final resistance in the <a href="https://en.wikipedia.org/wiki/Indian_Rebellion_of_1857">1857 Sepoy Rebellion</a>, and once English was the language of education for all Indians, a new generation of Indians grew up under this new, unified system.
</p>
<p>
This was the reality they had to face. The military of India had proved to be inadequate against the military of first, the Islamic invaders, and later, the British. The science of India was very backward compared to the science of the West – Indians were unaware even of the basics of physics. Due to western education, Indian students studying in school learned that practices like Sati and the treatment of widows were wrong – ideas that their parents and grandparents did not necessarily agree with. Indian technology was behind the technology of Europe, because we had been left out of the industrial revolution. The western medical system proved capable of treating and curing many diseases that usually had meant a death sentence in pre-British India. All the modern developments in the world were recorded in European languages like English, and so adoption of English was the fastest way to catch up and fill the yawning gap in knowledge between India and the West.
</p>
<p>
A few Indians understood the state of things and embraced the new system with enthusiasm. These became the doctors, lawyers, teachers, and engineers of the new British India. Some of them also became the assistants to the British administrators of India after passing the <a href="https://en.wikipedia.org/wiki/Indian_Civil_Service">Indian Civil Services</a> exam, and became the new elite.
</p>
<p>
But not all were happy with these developments. One of the people credited with the revival of Indian values in India, <a href="https://en.wikipedia.org/wiki/Swami_Vivekananda">Swami Vivekananda</a>, wrote about <a href="https://en.wikisource.org/wiki/The_Complete_Works_of_Swami_Vivekananda/Volume_3/Lectures_from_Colombo_to_Almora/The_Future_of_India#:~:text=The%20child%20is%20taken%20to,of%20negation%2C%20lifeless%20and%20boneless.">the state of things as they existed in the late 1800s</a>:
</p>
<blockquote>
The child is taken to school, and the first thing he learns is that his father is a fool, the second thing that his grandfather is a lunatic, the third thing that all his teachers are hypocrites, the fourth that all the sacred books are lies! By the time he is sixteen he is a mass of negation, lifeless and boneless.
</blockquote>
<p>
Many Indian intellectuals like Swami Vivekananda were unhappy and unwilling to come to terms with the reality that there were flaws and gaps in the traditional Hindu knowledge base. They would have liked Indians to believe that the Hindu system was perfect. For this reason, Vivekananda, in his teachings, emphasized whatever positive content was in Hindu scriptures and did not dwell on the many negative things in Hinduism. He wanted Indians to have pride in their culture, and created an illusion that their culture only had good things by sweeping the nasty parts under the rug.
</p>
<p>
But reality taught another group of Indian leaders quite the opposite. These, led by Pandit Jawaharlal Nehru, embraced the path of Westernization and modernization to fix the gaps in our understanding of the world in the years after Independence. Our schools and colleges were based on the model the British had left us. The measure of the success of the British system can be seen from the fact that even in British India, a Nobel Prize in Physics was awarded to an Indian, <a href="https://en.wikipedia.org/wiki/C._V._Raman">Professor CV Raman</a>, in 1930. Another great scientist, <a href="https://en.wikipedia.org/wiki/Har_Gobind_Khorana">Har Gobind Khorana</a>, got his Bachelors and Masters degrees in the <a href="https://en.wikipedia.org/wiki/Government_College_University,_Lahore">Government College in Lahore</a> before moving to England for higher studies in 1945, two years before Independence. Khorana got the Nobel Prize for Medicine in 1968.
</p>
<p>
Nehru, who ruled India as its first Prime Minister, worked very hard to bridge the gaps that had been revealed to Indians by its historic failures. He built great Universities such as the <a href="https://en.wikipedia.org/wiki/Indian_Institutes_of_Technology">Indian Institutes of Technology (IIT)</a>, the <a href="https://en.wikipedia.org/wiki/Indian_Institutes_of_Management">Indian Institutes of Management (IIM)</a>, the <a href="https://www.drdo.gov.in/home">Defence Research and Development Organization (DRDO)</a>; built a network of coal and steel plants to hasten the industrialization of India; built a network of dams to harness hydroelectricity; and started the <a href="https://www.isro.gov.in">Indian Space Research Organization (ISRO)</a>. Nehru surrounded himself with scientists and rationalists, and was committed to a scientific vision for India. Nehru was also a staunch believer in democracy and secularism, both ideals he had imbibed from the West. His 17-year reign was a very important reason for India’s political stability after Independence.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC10">
A Clash of Civilizations
</h2>
</header>
<div>
<p>
While Nehru did the right thing in continuing with the British model of education, he and his allies in government were unable to make this model penetrate deep enough into India. The result was that Westernized education, which was the ticket to prosperity and a good life, was restricted to a small, well-off segment of the population. The great mass of the population was unlettered.
</p>
<p>
Nehru’s economic policies and those of his daughter <a href="https://en.wikipedia.org/wiki/Indira_Gandhi">Indira Gandhi,</a> who succeeded him as Prime Minister, did not help. These policies instituted state socialism as the official economic policy and shackled the natural creativity of Indians. As a result, the students who graduated from the IITs that he built did not find a market for their skills, and this led to most of them leaving India and going to places where these skills were more valued, like the USA.
</p>
<p>
Indira Gandhi’s policies impoverished India and led it to the verge of bankruptcy. In 1991, faced with a <a href="https://en.wikipedia.org/wiki/1991_Indian_economic_crisis">balance-of-payments crisis</a>, and in danger of defaulting on its debts, India approached the International Monetary Fund for assistance, and was told that it would get assistance only if it instituted free market reforms.
</p>
<p>
With no choice, the Indian government of the day complied, and the ensuing economic reforms resulted in an explosion of economic growth. In the next 25 years, it is estimated that continuous economic reforms have led to about 140 million Indians being pulled out of wretched poverty. The party that was mostly in power when this transformation was achieved was the Congress Party. It was the ideological successor of the party of Nehru and Indira, but had made a 180 degree turn in economic policy.
</p>
<p>
The resulting economic prosperity led to a newly rich middle class in India. India benefited from the Information Technology (IT) boom, which made huge metropolises out of towns like Bangalore, Hyderabad, and Pune. Riding on the coattails of the newly minted middle class was a lower class whose condition was rapidly improving. What was happening was trickle-down economics in a very real way. As the middle class burgeoned, an attendant service class also boomed – a class of car and bus drivers, clothes launderers, maids, au pairs, watchmen and security personnel, food and goods delivery personnel, waiters in the booming restaurant industry, and the like. The prosperity in the cities led to lower unemployment both in the city slums and in the villages from which people were moving to the slums, <a href="https://en.wikipedia.org/wiki/Urbanisation_in_India">leading to a growing urbanization in the country.</a> This was <a href="https://www.yourarticlelibrary.com/india-2/private-sector/private-sector-in-india/62913">driven largely by a rapidly growing private sector.</a>
</p>
<p>
Having solved their problem of making a living, this newly rich middle class and the classes they were helping up through their lifestyles finally had time to think of India’s place in the world. And when the Hindus among them reflected on India’s journey in the last several hundred years, they were not happy.
</p>
<ol>
<li>
They had been humiliated and made to feel powerless, first by Muslim Invaders first and then the British.
</li>
<li>
They had learned that their science and technology were backward – that even their current prosperity was only possible because of western advances in science and engineering.
</li>
<li>
They had learned that their religious texts were considered backward in the world because of evils such as the caste system.
</li>
<li>
They had understood that their ticket to prosperity was a knowledge of English, not the myriad languages of their country. Many of them felt uncomfortable in and inadequate with English, and this inadequacy greatly troubled them.
</li>
<li>
They had seen that their ancient medical system was inadequate against most maladies – and that their own lives could not be guaranteed without western medicine.
</li>
<li>
They were troubled by the equality of women that the policies of liberal democracy had achieved. Even though women occupy a lower status in Hinduism, women in modern India have become more and more empowered. They can divorce their husbands and bring up their children themselves because of their education, something that was unthinkable 100 years ago.
</li>
</ol>
<p>
It is against this backdrop that we need to understand who Narendra Modi is and what he represents.
</p>
<p>
The BJP, the party that Modi leads, and other right-wing Hindu organizations offer the perfect antidote to the conflicts plaguing the modern middle-class Indian.
</p>
<ol>
<li>
They say that all of India’s problems today are because of Muslim invaders, the Hindus who collaborated with them and converted to Islam, and the British colonizers. Thus Hindus today can exorcise their humiliation of centuries by revenging themselves on the Muslims of today and making them second-class citizens. (There are no British descendants of any significant number living in India today for Indians to revenge themselves on.) This is best done by making India a Hindu country, where adherents of other religions have no rights.
</li>
<li>
They say that although the West appears to be far more advanced than India, ancient Hindus were far more advanced than even this; that the ancient Hindus possessed atom bombs thousands of years ago; that, even though the archaeological evidence does not suggest this, the Hindu civilization is actually 5000 or 7000 years old (or even older, depending on your fancy); that they possessed airplanes 5000 years ago, far before Orville and Wilbur Wright discovered flight; that Indians knew all about astrophysics and quantum mechanics long before even physics as a science was discovered in the west; and so on.
</li>
<li>
They assert that the caste system is not the evil subjugation of some humans by other humans but a “division of labor,” as though someone freely chooses to perform the job of cleaning toilets when he has a choice of being a CEO. Thus Hindus today can close their eyes to the persecution of low caste people and convince themselves that the evil is not in Hinduism but in some perverted individuals.
</li>
<li>
They claim that Indians should not be educated in English but that they should be taught in their own languages, if necessary by translating all the works of science and technology into Indian languages – even though they themselves have risen up by their limited knowledge of English.
</li>
<li>
They claim that ancient Hindu medical texts had the remedies for all illnesses – some have even claimed that Covid is treatable by ancient Hindu medicine. These remedies just need to be rediscovered.
</li>
<li>
They view the emancipation of women resulting from the liberal policies of the Congress as a wrong, and believe that women should be confined to the home to raise children and cook for the men.
</li>
</ol>
<p>
So today, there is a conflict in India between two Indias:
</p>
<ul>
<li>
One, a liberal, pluralistic, scientific, and rational India that does not see its minorities as enemies; that believes the evil of caste should be rooted out; that believes that knowledge of English is a liberating influence because it gives a person access to the world of technology and progress; that believes in freedom of speech and expression, and the freedom to criticize tradition and religion;
</li>
<li>
And another, a backward-looking, hidebound, superstitious, and ritualistic India that seeks refuge in the myth of a great past civilization; that believes in caste hierarchies; that believes in the Muslim as an enemy; that sees English not as the international language of technology but as the language of a colonial oppressor; and that reacts violently to any criticism of its traditions, however justified they may be.
</li>
</ul>
<p>
The overwhelming majority of upper caste (i.e., non-Dalit) Hindus (who form roughly 66% of the population) today subscribe to the latter worldview. They are the power behind Modi.
</p>
<p>
Since 2014, Modi and his party have led a frontal assault on the secular framework of India. The Constitution has still survived, but barely. I am among those who believe that it is only a matter of time before the Indian Constitution is amended to make India a Hindu state. The BJP, Modi’s party, has already been modifying textbooks in many states where it is in power to spread the BJP’s ideas on how ancient Hindus already had all the knowledge that the modern world is only now rediscovering, that Hindus of ancient Indias had flying craft, that Hindus of ancient India possessed the techniques to revive the dead, and so on. The same textbooks claim that the caste system is a marvellous organizing principle of society.
</p>
<p>
All this is happening even while India is nominally a secular state and before the official conversion of India into a Hindu state.
</p>
<p>
But even without that formal structure, you can easily mete out injustice to groups you do not like. Muslims do not get a fair shake in Modi's India today because they have to deal with Hindu police, Hindu lawyers, and Hindu judges. The same goes for Dalits. It is not very different from the systemic injustice that Blacks face in the USA.
</p>
<p>
For nearly seven decades, India had been a bright shining light in the world – a successful Third World country that was the envy of most of the Third World for its liberal democracy and for its scientific achievements. India has been praised for its ability to maintain unity and tolerance in spite of its staggering diversity in religion, language, and culture. While many other Third World countries, many of which became independent at the same time as India or in the next decade or two, descended into chaos, India was the rock of stability that the entire world looked up to. While socialism slowed India’s economic growth considerably for the first 45 years of its independent history, the economic progress achieved in the last 30 years as a result of free market reforms seemed to indicate that the one gap in India’s journey as a young nation, viz., its lack of economic development, had finally begun to be bridged.
</p>
<p>
But the events of the last 6 years have seen India take a giant step back. We have seen this country turn its back on 70 years of religious and cultural tolerance, and majoritarianism is now ruling the roost. A country that used to be a model of openness and rationality has gone into a shell and is living in the past and in superstition. A country that made giant strides in the emancipation of women is now harking back to conservatism, much as Iran did in 1979. A country that bravely implemented social reform legislation designed to remove the blot of caste discrimination that has scarred India for millennia is now turning its back on the same.
</p>
<p>
Values like liberalism, freedom of speech, scientific thinking, openness - all of these are at risk of being completely wiped out in India. India today is very close to becoming a Hindu version of Iran.
</p>
<p>
My guess is that it will happen in the next five years.
</p>
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Epilogue: Implications and Future Outlook for India and the World
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<p>
A foreigner who is trying to understand India and who has made it to this point might wonder, “What happened?”
</p>
<p>
Because, after all, what I have chronicled in the preceding nearly 8000 words could also be titled, “The Decline and Fall of the Secular Liberal Indian Republic.” The alert reader would be wondering, “Why did the wonderful liberal values that Nehru try to inculcate among Indians – tolerance, a scientific outlook, openness, a world free of prejudice, whether religion-based or caste-based – why did these values not take root among the people of India? Why has the India of 2020 essentially rejected the values that Nehru and his comrades in the freedom movement, such as <a href="https://en.wikipedia.org/wiki/Vallabhbhai_Patel">Patel</a>, <a href="https://en.wikipedia.org/wiki/C._Rajagopalachari">Rajaji</a>, and <a href="https://en.wikipedia.org/wiki/Abul_Kalam_Azad">Azad</a>, as well as Ambedkar, the architect of India’s Constitution, adopted as the values of independent India?”
</p>
<p>
Maybe because liberalism and a scientific outlook cannot be imposed on a people. These values have to be lived by a people and adopted by those people. Nehru and his colleagues were inspired by these values by the examples of America and Britain, and they had great admiration for the egalitarian values that were enshrined in the foundations of these democracies. They hoped that India, too would be able to enshrine these values in our democracy.
</p>
<p>
But it was only the leaders of independent India who had been exposed to the idea of these freedoms and the benefits they bring. The mass of the Indian public had lived a very different reality for millenia – a reality in which inequality, caste discrimination, class discrimination, religious intolerance, misogyny, and tribalism were the norm. And you cannot erase these long-standing, deeply held beliefs by a Constitution or by laws.
</p>
<p>
Perhaps a couple of examples will help understand how deep-rooted these prejudices are. One of these is from the public domain and the other is a personal example.
</p>
<p>
The first example is that of the great musician of the Hindustani Classical music sphere, <a href="https://en.wikipedia.org/wiki/Amir_Khan_(singer)">Ustad Amir Khan (1912-1974)</a>, widely considered one of the greatest vocalists of that tradition. A younger contemporary of his is the much lesser-known <a href="http://goswamigokulutsavji.com/mainpage.php?pageid=1">Gokulotsavji Maharaj</a>, who is the head of a religious Hindu institution, who modeled his singing style very closely on that of Ustad Amir Khan, by listening to his recordings. The interesting thing, though, is that Gokulotsavji Maharaj never met his musical idol, Amir Khan, because Gokulotsavji Maharaj is the head of a very orthodox Hindu sect and Amir Khan was a Muslim. So deep are the divides in Indian society.
</p>
<p>
The second example is that of my late aunt, who used to type movie scripts in Tamil for a fee decades ago. In those days, the late <a href="https://en.wikipedia.org/wiki/M._Karunanidhi">M. Karunanidhi</a>, who would later become the Chief Minister of the state of Tamil Nadu, was a very popular story and script writer for Tamil movies. He would hand write the script and my aunt would go to his home and type the script in Tamil. My mother tells me that in those sessions, Mr. Karunanidhi would tell my aunt, “I know you Brahmins will not eat anything at our home, so can I get you a bottled cold drink from the nearby store as a refreshment while you do your job?” (Karunanidhi belonged to a low caste in Hinduism and was one of the leaders of the <a href="https://en.wikipedia.org/wiki/Dravida_Munnetra_Kazhagam">DMK party</a>, which was founded to fight caste discrimination.) While this was from a time soon after Indian independence in 1947, it still illustrates how deep-seated caste discrimination is.
</p>
<p>
That this kind of discrimination continues to this day is illustrated by <a href="https://timesofindia.indiatimes.com/city/chennai/tamil-nadu-dalit-woman-president-made-to-sit-on-floor-during-panchayat-meeting/articleshow/78593896.cms">a news story from last month</a>, in which an elected village chief was made to sit on the floor while her subordinates sat in chairs at a meeting because the village chief is a Dalit.
</p>
<p>
This is why Nehru’s attempt at transplanting the values of the <a href="https://en.wikipedia.org/wiki/Age_of_Enlightenment">Enlightenment</a> to India did not succeed, and are not likely to succeed in the future. India has taken an irreversible turn towards illiberalism and rejected the values of the Enlightenment, because India’s divides are too deep to be bridged by intellectualism.
</p>
<p>
But what of the countries from which the values of the Englightenment originated? The whole world is seeing a rise in intolerance. Four years ago, the USA elected Donald Trump as its President, and with Trump’s rise, <a href="https://time.com/5907318/polarization-2020-election/">America has been polarized as never before.</a> <a href="https://www.leftbrainwave.com/2016/09/why-donald-trump-will-win.html">Economic factors definitely played a major role in Trump’s rise in 2014</a>, but equally important is the rise in racism, which has intensified as America has changed from a white-dominated society to one which is much more multiracial and multiethnic.
</p>
<p>
Four years later, Americans are not much better off economically, and yet, in the election that has just concluded, Donald Trump almost won again. Almost 50% of America voted for a racist, misogynist, foul-mouthed believer in White Supremacy. The apparent defeat (it has not been officially confirmed yet as of the date of this post) of Donald Trump, if confirmed, is no relief for those who do believe in the values of the Enlightenment. That Joe Biden had to win such a close victory despite <a href="https://www.vox.com/future-perfect/21366624/trump-covid-coronavirus-pandemic-failure">Trump’s monumental mismanagement of the Coronavirus pandemic</a> tells us that the US was extremely close to electing Trump for a second term. And there is no guarantee that they will not elect Trump in 2024, if indeed he stands for re-election. More than 70 million Americans voted for Donald Trump in 2020. The divisions in America do not look like they are going down; instead, things are only getting worse from the point of view of liberal values.
</p>
<p>
Let us look at the United Kingdom. The UK stunned the world four years ago when it decided to break away from the European Union that it had joined in 1973. What happened to make the UK leave the EU? <a href="https://www.washingtonpost.com/news/worldviews/wp/2016/06/25/the-uncomfortable-question-was-the-brexit-vote-based-on-racism/">Many observers have concluded</a> that the real reason for the UK to leave the EU was racism. Being in the EU meant that people who might have immigrated into Europe from the Middle East and Africa and become citizens of European countries could now settle down in the UK, thus changing the demographics of the UK, and many people simply did not like this. People in the UK already had a foretaste of this in that <a href="https://www.res.org.uk/resources-page/on-the-causes-of-brexit--how-migration-from-eastern-europe-contributed-to-the-rise-of-uk-euroscepticism.html">immigration from Eastern European countries into the UK had dramatically increased in recent years, and many residents of the UK did not like this change.</a>
</p>
<p>
So, in both the US and in the UK, the reason for illiberalism seems to be a rather homogeneous population gradually being replaced by a multicultural one over several decades. One might then ask, were the principles of the Enlightenment, which are supposedly the ethical and moral basis of several western countries, including the US, the UK, France, written in a day and age when these countries were fairly homogeneous, when these countries could faithfully follow the principles of the Enlightenment without any conflicts, and so were never tested until now? Is that why, when put under the kind of pressure they have been subjected to lately because of immigration and globalization, these principles have been found unpalatable by the residents of these countries? Did these countries adopt these principles as the bedrock of their civilizations without understanding their full import and without an understanding of what might happen if their demographics were to significantly change?
</p>
<p>
This is a seductive theory – that Western nations have always believed in the principles of the Enlightenment but are now at a crossroads – but collapses on further interrogation. To understand why, let us understand what the Enlightenment was and what its timelines were.
</p>
<p>
The Enlightenment was a movement that started in the 16<sup>th</sup> century and continued until the end of the 18<sup>th</sup> century. Some of the key ideas of the Englightenment were the ideas of the right to life, the right to liberty, the right to ownership of property, the primacy of reason, the idea of evidence-based reasoning, scientific thinking, religious and cultural tolerance, fraternity, the separation of Church and State, the idea of a Constitution enshrining principles of behavior, and the limitations of kingly authority. This is why we find in the <a href="https://en.wikipedia.org/wiki/United_States_Declaration_of_Independence">American Declaration of Independence</a>, written in 1776, the following sentence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.“ This is why <a href="https://en.wikipedia.org/wiki/Liberté,_égalité,_fraternité">the motto of France is “Liberte, Egalite, Fraternite” (Liberty, Equality, Fraternity).</a>
</p>
<p>
One of the chief thinkers of the Age of Enlightenment was <a href="https://en.wikipedia.org/wiki/John_Locke">John Locke (1632-1704)</a>, an English philosopher. Locke is considered the Father of the Enlightenment. In 1689, Locke wrote his famous “<a href="https://en.wikipedia.org/wiki/Two_Treatises_of_Government">The Two Treatises of Government.</a>” This seminal work argued that all men are created free and equal; that the only legitimate governments are those that have the consent of the people; that no country has the right to seize the property of another through war and conquest. Locke argued that inalienable and natural rights of human beings were life, liberty, and the right to property. In 1692, Locke wrote his seminal “<a href="https://en.wikipedia.org/wiki/A_Letter_Concerning_Toleration">A Letter Concerning Toleration</a>,” in which he argued that the State and its Courts could not determine the truth of religious beliefs and hence advocated both a separation of Church and State and religious tolerance.
</p>
<p>
With this understanding, let us now look at the histories of the UK and the USA and ask if they have, in truth, believed in these principles that they profess to hold dear. The USA became an independent country in 1776, following the War of Independence with the British. At that time, America was a fairly small country, containing only the original 13 states. The majority of the country was in the hands of various Native American tribes. Pursuing a policy of imperialist expansion, <a href="https://en.wikipedia.org/wiki/Genocide_of_indigenous_peoples#United_States_colonization_of_indigenous_territories">Americans both deprived Native American tribes of their territory as well as indulged in a genocide of Native Americans</a>. By the middle of the 19th century, the Native American tribes were almost completely annihilated as a consequence of the combination of imperialist warfare and genocide. How does this square with the principles of the Englightenment, and in particular, with Locke’s principle that a war does not entitle the conqueror to the conquered’s property or territory? How does it square with Locke’s principle that the life of every human is a fundamental, natural right?
</p>
<p>
Likewise, the US is a country that actually practiced slavery until its abolition during the Civil War in the 1860s. Even after this, until the Civil Rights movement in the 1960s, Blacks did not have the same rights as Whites. How do these actions follow principles of the Enlightenment? Locke said that liberty was one of the unalterable and natural rights of every person, yet slavery made a mockery of that right. Likewise, the discrimination that blacks have endured for centuries shows that in truth, Americans did not believe that all men were created equal.
</p>
<p>
Let us look at the British. Locke, the Father of the Enlightenment, was an English philosopher who died in 1704, but the British Empire, that giant vehicle of enslavement of nations around the globe, took off in earnest only after that. The East India company won its first battle in India in 1757, and by 1857, Great Britain was in control of all of India. The colonization of Africa started in earnest in the second half of the 19th century, and all European powers were involved in what is called the “<a href="https://en.wikipedia.org/wiki/Scramble_for_Africa">Scramble for Africa</a>” – a race to enslave the African continent. All of these “liberal” countries are said to have been influenced by the Enlightenment. There was even <a href="https://en.wikipedia.org/wiki/Berlin_Conference">a conference in Berlin from November 1884 to February 1885</a> where 14 countries – Germany, Austria-Hungary, Belgium, Denmark, Spain, the US, France, the UK, Italy, Netherlands, Portugal, Russia, Sweden, and the Ottoman Empire – sat together to decide how to carve up Africa for the purpose of exploitation and enslavement. “Life, liberty, and the right to property” went out the window right there.
</p>
<p>
One would have to conclude that when push came to shove, no country has actually believed in the ideals of the Enlightenment, especially those that relate to the rights of the individual and the rights of sovereign nations to take over the property of other nations and other peoples. These individual rights are the basis of jurisprudence in each of these western countries, and they are the basis on which justice is delivered to their own citizens; but these countries did not think that other countries and peoples were deserving of these same rights. Locke said that all men were created equal, and all men had the right to life and liberty. He did not say that only citizens of western countries had these rights. The American Declaration of Independence says that “all men are created equal,” not “all Americans are created equal.” Yet the Native American and the Black were not considered equal to the White Settlers when the goal was their exploitation. And certainly the British have never believed that all men are created equal.
</p>
<p>
This is why I believe that, on being threatened by the “<a href="https://www.npr.org/2016/10/12/497529936/how-the-browning-of-america-is-upending-both-political-parties">browning of America</a>”, Americans will go back to the behaviors they exhibited when they felt threatened hundreds of years ago, by the Native Americans – when their greed for land overcame whatever principles they might have held dear. Just as it was necessary to dehumanize the Native Americans then in order to grab their land, today Mexican immigrants are being dehumanized by calling them drug addicts and murderers, and Black men are shot at the slightest pretext by racist White police officers.
</p>
<p>
The West has never believed in the Enlightenment. The Enlightenment has only served as a basis for the internal justice systems for its own citizens, but the West has always completely disregarded it when it came to those it did not consider as their own. I am, of course, talking here mainly about the aspects of the Englightenment related to the rights of individuals and countries. But the Enlightenment is failing in the West even on other grounds, such as the separation of Church and State and the role of scientific thinking and reason. <a href="https://www.independent.co.uk/news/world/americas/us-states-texas-creationism-science-teacher-state-law-evolution-religion-a7632931.html">Many American states are considering passing laws that allow teaching of creationism</a> as an equally alternative “theory” theory to evolution. Americans' belief in science has also significantly waned, as evidenced by denial of climate change, questions on whether Americans actually landed on the moon, and several of President Trump's outrageous claims, especially in the fight against Covid, where he was only too happy to embrace any quackery claims in preference to real science – claims that were enthusiastically embraced by his more than 72 million followers.
</p>
<p>
If the Enlightenment could not succeed in the countries where it originated, what hope then of it succeeding in a country like India to which it was transplanted by a bunch of western-educated Indian idealists?
</p>
<p>
What we are seeing around the world is that civilization is simply a veneer, and humans will revert to their venal and tribal selves whenever the going gets tough. This is why racism, discrimination, violence, and tribalism are increasing the world over, from Trump in the USA to Johnson in the UK to Erdogan in Turkey to Bolsonaro in Brazil to Orban in Hungary to Modi in India.
</p>
<p>
And things are only going to get worse.
</p>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com3tag:blogger.com,1999:blog-2647581039313842967.post-12277478748520812322020-10-25T20:00:00.003+05:302020-10-25T20:00:57.024+05:30How Religious Intolerance in Hinduism is Different from Religious Intolerance in Christianity and Islam <article> <!-- Article Title -->
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How Religious Intolerance in Hinduism is Different from Religious Intolerance in Christianity and Islam
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Written by Dr. Seshadri Kumar, 25 October, 2020
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Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
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Islam and Christianity have fought and oppressed other religions and their followers, including each other, for millenia, because of a religious imperative to do so. However, Hindu scriptures have no exhortation for the faithful to oppress other religions and their followers. The current anti-Muslim feeling in India has its roots in history, not in scripture. It is therefore easier to remove this feeling — if only Indians show a willingness to look at the present and the future, and stop living in the past.
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Internal and External Enemies
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All religions have nasty teachings in their scriptures in addition to anything that may be good in them.
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The main difference between Hinduism and either Christianity or Islam is that Hinduism is a very old religion. So when the majority of Hindu holy books were written, there were no competing religions in the same geography. The only exception seems to be Zoroastrianism, because their holy book, the <em>Avesta,</em> talks about the “devas” as antagonists and even specifically names <em>Indra</em> and <em>Sarva</em> (<em>Rudra</em>). Likewise, the Vedic “Asura,” or demon, is considered to be an equivalence of the Avestan “Ahura” – the Zoroastrian God is <em>Ahura Mazda.</em>
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<p>
But in the subcontinental mass of India, there really was no competition to the Vedic religion except ancient Dravidian gods, and all these deities seem to have been assimilated into “Hinduism” and their followers made “Hindu” in the course of time. By the time Islam and Christianity came to India, the majority of Hindu texts had already been cast in stone for centuries, although you can find exceptions like the <em>Bhavishya Purana</em> which makes references to Queen Victoria's London.
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<p>
The more recent hatred of Muslims in Hindu-dominated India, which is a standard feature of Hindu social behavior in the middle and upper-middle classes today, does not come from scripture, but from a desire for vengeance against centuries of Muslim rule and oppression in the distant past.
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<p>
But what Hinduism lacked in external enemies to hate and discriminate against in its scripture, it made up for by hating internal enemies. Thus, Hinduism invented the caste system, which discriminated against the lower caste <em>Shudras</em> and the still lower outcasts, today called <em>Dalits.</em> That Hindus of the past were exceptionally creative can be seen from the fact that no other civilization in the world was able to create such an ingeniously evil system to control people in perpetuity as the caste system of the Hindus.
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Judaism
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<p>
Islam and Christianity both came up in the backdrop of an already existing and dominant religion, Judaism. The Old Testament is taken from the Hebrew Bible, the Tanakh, the holy book of the Jews. It contains as explicit an intolerance as one will ever see in a religious book. The God of the Jews does not hesitate to kill or brutally punish those who do not believe in Him. To help His favorites, the Israelites, He kills the firstborn of every family in Egypt. And no mention of intolerance in the Old Testament would be complete without citing the First and Second Commandments:
</p>
<blockquote>
I am the Lord thy God. Thou shalt have no other Gods before me.
</blockquote>
<p>
And we should also point out that the seed of religious intolerance was certainly laid by the Old Testament when God says in Deuteronomy, 12:3:
</p>
<blockquote>
And ye shall overthrow their altars, and break their pillars, and burn their groves with fire; and ye shall hew down the graven images of their gods, and destroy the names of them out of that place.
</blockquote>
<p>
Christianity and Islam both took inspiration from this directive.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC3">
Christianity
</h2>
</header>
<div>
<p>
It is pertinent to point out that all three religions of the Middle East: Judaism, Christianity, and Islam, share the Old Testament. Therefore, Christianity had to fight for adherents with Judaism to convert Jews and prove that Christianity was the superior religion. The hatred of Christians for the Jews also comes from the fact that Jesus himself was a Jew who claimed something that was considered heretical to Jews — that he, Jesus, was the son of God — and so was crucified by the other Jews for his heresy.
</p>
<p>
Christianity accepts the Old Testament, but adds a new Testament based on the life and teachings of Jesus. Christianity claims that only those who believe in Jesus as the son of God will be saved in the afterlife. Therefore, to “save” others' souls, Christians regularly used to convert people at the point of a sword and kill those who refused. Both the Old Testament of the Jews and the New Testament of Jesus contain plenty of highly intolerant verses. For instance, in the Gospel according to Matthew (12:30), we read that
</p>
<blockquote>
Whoever is not with me is against me, and whoever does not gather with me scatters.
</blockquote>
<p>
And in the Gospel according to Mark (16:16), we read that
</p>
<blockquote>
Whoever believes and is baptized will be saved, but whoever does not believe will be condemned.
</blockquote>
<p>
Again, in the Gospel according to John (3:36), we read that
</p>
<blockquote>
He that believeth on the Son hath everlasting life: and he that believeth not the Son shall not see life; but the wrath of God abideth on him.
</blockquote>
<p>
One can see the effect of verses like these on a true believer. If, for example, one believes that “whoever is not with me is against me,” then which true Christian would allow anti-Christian forces to live? They must convert to Christianity or die. A verse like John 3:36 is almost an inducement to kill:
</p>
<blockquote>
He that believeth not the Son shall not see life.
</blockquote>
<p>
The practical realization of this intolerance probably reached its zenith with the establishment of the Inquisition by the Catholic Church.
</p>
<p>
Fortunately, in the last five hundred years, Christians have become civilized and tolerant. They no longer try to convert people by force, and do not act on all the intolerant passages in their Bible. Most modern western Christian states have accepted religious tolerance and the separation of Church and State as foundational principles.
</p>
<p>
Christian states are becoming more and more tolerant with time. While blasphemy is still actually a crime on the books of many Christian-majority countries, not many have actually been charged with the crime, and many countries have actually removed these obsolete laws recently — for instance Australia (at the Federal level, 1995), Canada (2018), Denmark (2017), the Netherlands (2014), Malta (2016), New Zealand (2019), and Norway (2015).
</p>
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<h2 id="TOC4">
Islam
</h2>
</header>
<div>
<p>
Islam came 600 years after Christianity, and therefore it had to compete against both Judaism and Christianity for followers. Therefore, as Judaism and Christianity before it had done, Islam also asserted that “its” God was the only true God:
</p>
<blockquote>
Ya ilaha il-Allah, Mohammadur rasoolullah
</blockquote>
<blockquote>
There is no God but Allah, and Muhammad is the messenger of God.
</blockquote>
<p>
This is the shahada, or testimony, that every Muslim is required to accept. Like Christianity before it, Islam’s scriptures have plenty of intolerance towards those who do not accept the God of Muhammad, including outright murder. As an example, Surah al-Anfal, 8:12 and 8:13, say:
</p>
<blockquote>
Remember, O Prophet, when your Lord revealed to the angels, “I am with you. So make the believers stand firm. I will cast horror into the hearts of the disbelievers. So strike their necks and strike their fingertips.”
</blockquote>
<blockquote>
This is because they defied Allah and His Messenger. And whoever defies Allah and His Messenger, then know that Allah is surely severe in punishment.
</blockquote>
<p>
But, unlike Christianity, Islam has never gone through a phase of separating Church from State. This is because Islam is not just a way of praying to God or conceptualizing the creation of the Universe. Islam is also a way of life. Muslims considers two things to be sacred to them: the Quran, which they consider the direct, revealed word of God to the Prophet Muhammad, and the Hadith, which are recorded testimonies of Muhammad during his lifetime. The Quran is considered to be absolute and unchallenged; the Hadith is sacred but subject to interpretation. The distinction is something like the Hindu distinction between <em>shruti</em> (directly revealed wisdom from God) and <em>smriti</em> (that which is remembered). The Hadith is the reason why there are many schools of Islam. Based on the Quran and the Hadith, Muslims have a “divine law,” or Sharia, that encompasses every aspect of a person’s life. The Sharia covers what kind of clothes people should wear (hence the <em>hijab</em> and <em>burka</em>); how people should deal in finances, contracts, agriculture, witnesses, marriage, and divorce; permissible food and drink; inheritance, medicines, and apostasy; to name just a few.
</p>
<p>
A true Muslim must follow the Sharia. This is what makes it almost impossible to achieve separation of Church and State in Islamic-majority countries. Many laws of the Sharia are incompatible with modern views of justice. For example, the punishment for stealing in the Sharia is cutting off the criminal’s hands, and for adultery it is stoning the adulterers to death. The penalty for apostasy (leaving the faith) and blasphemy (disrespecting the faith) in the Sharia is death, and indeed there are a few Islamic countries such as Pakistan, Iran, Saudi Arabia, and Brunei which actually enforce the death penalty for blasphemy.
</p>
<p>
Because Islamic law covers the sacred as well as the profane, it is impossible to be a devout Muslim and also achieve official separation of Church and State. So what has happened with Christianity over the past 500 years seems almost impossible in Islam. This makes the eradication of religious intolerance very difficult.
</p>
<p>
This does not mean that all Muslim-majority states, or all Muslims, are intolerant. Indonesia is an example of a state with more than 200 million people, with more than 86% Muslims, that is quite tolerant. In fact, the Hindu epic Ramayana is one of the national epics of Indonesia. And yet, one could go to jail in Indonesia for 5 years for “deliberately, in public, expressing feelings of hostility, hatred, or contempt against religions with the purpose of preventing others from adhering to any religion,” or “disgracing a religion.”
</p>
<p>
So Islam has a problem with tolerance. That explains why, despite the large number of peaceful Muslims, we find, once in a while, somebody who cannot handle criticism or mocking of Islam, and responds violently, as happened with the Chechen Muslim who killed Samuel Paty, the French teacher, for discussing cartoons disrespectful of the Prophet. Such violence has to be punished with utmost severity, and nobody should justify such violence.
</p>
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<header>
<h2 id="TOC5">
Hinduism
</h2>
</header>
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<p>
Hindus are not handicapped by their religion in this aspect. Hindu holy texts have nothing about Muslims or Christians, mainly because Hindu texts were written so long ago that there were no Muslims or Christians then. So there are no words in any sacred texts telling Hindus to go and kill “disbelievers,” as the Quran does.
</p>
<p>
So why do Hindus commit hate crimes against Muslims in India? Clearly, there is no religious sanction for this violence. This violence has its roots in Indian history. Hindus kill Muslims and try to disenfranchise them because of the treatment Hindus received at the hands of Muslim emperors such as Aurangzeb, 400 years ago, and earlier. <span id="emphasizedCommentary">There is no reason why Hindus must kill Muslims</span> in revenge for actions done 400 years ago, at least if religious scripture were to be the guide.
</p>
<p>
In other words, <span id="emphasizedCommentary">a Hindu is</span>, unlike a Muslim who kills for religious reasons in accordance with his holy book, <span id="emphasizedCommentary">not killing for scriptural reasons.</span> He or she is killing to fulfil a vendetta.
</p>
<p>
And so it is easier to stop this.
</p>
<p>
And this is exactly what the founding fathers of India, such as Gandhi, Nehru, Patel, and Ambedkar, tried to do. They created a secular country that would be governed by the rule of secular, not religious law. They thought that since Hindu holy books did not teach hate against any religion, they could start with a clean slate and create a secular republic. That with Hinduism as the dominant religion, it is possible to achieve a separation of Church and State.
</p>
<p>
<strong>Of course, the Hindu holy books did actively talk about discriminating against the Shudras and Dalits, and also discriminated against women, and so the Constitution was written to safeguard the separation of Church and State and offer explicit protections for women and lower castes.</strong>
</p>
<p>
For about 40 years after Independence, this secular system worked quite well. Then, beginning in the late 1980s, Hindus started imitating the intolerance of Islam and Christian scripture, with the Rath Yatras of LK Advani, calling for the demolition of a 16th century mosque in Ayodhya. This movement had its culmination in November 2019, when the Supreme Court of India awarded the land on which the mosque had stood (it had been demolished by Hindu right-wing thugs in 1992) to Hindus to build a temple instead.
</p>
<p>
Hindus have also started converting people of other faiths to Hinduism. Such conversion does not exist in Hindu scriptures because, again, when these texts were written, there were no other religions. You had to be born Hindu to be a Hindu. There was no other way.
</p>
<p>
And finally, Hindus have been demanding for some time that the Indian Constitution should be changed from its current description of India as a secular country to that of a Hindu republic. This looks increasingly likely to happen.
</p>
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</section>
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<h2 id="TOC6">
Concluding Thoughts
</h2>
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<p>
Christianity and Islam are monotheistic religions that have religious intolerance built into them in their very scriptures.
</p>
<p>
Christian-majority countries have gradually been becoming more and more liberal in the last 500 years, and not taking the intolerance in their scripture as literally as they used to.
</p>
<p>
Muslim-majority countries have not, in general, been able to rid themselves of the intolerance that flows from their religion, because their social law is so closely tied to their religious texts. This makes it difficult for a Muslim-majority state to be secular.
</p>
<p>
Hindus in India have a choice to make. They can imitate Muslim-majority countries and tie their laws closer to religion, or they can follow the example of Christian-majority countries and become more and more liberal.
</p>
<p>
In this context, it is important to remind ourselves that Hinduism has no religious discrimination written into its scriptures, but has been developing a social religious intolerance for the past 30 years, which appears to be peaking now. The roots of this intolerance are not religious; they are historical.
</p>
<p>
And because these roots are historical, it is easier to uproot this intolerance, because this intolerance is not the word of God. <strong>The reason this intolerance continues in India is that many Hindus continue to live in the past instead of living in the present and looking at the future.</strong> It is my hope that some day, the Hindus of India will stop living in the past and start living harmoniously in the present, with a view to a bright future.
</p>
<p id="emphasizedCommentary">
All it requires is the will of humans - not the sanction of God.
</p>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com6tag:blogger.com,1999:blog-2647581039313842967.post-10421960323014828342020-07-31T16:44:00.000+05:302020-08-01T12:07:19.926+05:30Why Emphasizing Local Languages in the NEP is a Mistake <article> <!-- Article Title -->
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Why Emphasizing Local Languages in the NEP is a Mistake
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Written by Dr. Seshadri Kumar, 31 July, 2020
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Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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The <a href="https://imgk.timesnownews.com/media/NEP_final_for_circulation.pdf">New Education Policy (NEP) that was unveiled by the Modi Sarkar a couple of days ago</a> has a disastrous, retrograde step that is bound to fail miserably. This misstep is the recommendation that all primary and some secondary education for all students in India be done in the local language rather than English. This is a problem because it puts migrants at a serious disadvantage because they do not know the local language. It is also a mistake because the world is moving towards greater adoption of English, and primary education in a different language forces a person to constantly translate between that language and English, thereby making him or her inefficient. The NEP threatens to create a nation of English “haves” and “have-nots.” English is the language of science, technology, and finance, among many things, and poor proficiency in English dooms a person in India to a low standard of living. The government should have left the adoption of English or of vernacular languages to market forces and not tampered with it for ideological reasons.
</p>
<p>
India needs a common language to communicate, and that common language should and eventually will be English. The present attempt by the government is a pathetic effort to stem the advance of the inevitable, and is doomed to fail because people at the grassroots see English as their ticket to a better life, regardless of what RSS and BJP politicians believe.
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The Modi Sarkar’s New Education Policy (NEP)
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<p>
The Modi government has come out with <a href="https://timesofindia.indiatimes.com/home/education/news/national-education-policy-2020-all-you-need-to-know/articleshow/77239854.cms">a “New Education Policy.”</a> One of the key features of this policy is that it recommends that all children should be taught in their mother tongue for the first five years of schooling, and preferably the first eight. This contrasts with the current setup in which many parents opt to educate their children in the English medium. Mr. K. Kasturirangan, the chairman of the committee that created the NEP, <a href="https://www.hindustantimes.com/education/nep-2020-no-language-is-being-imposed-in-the-new-national-education-policy-k-kasturirangan/story-1xkf22s7dDSW5g3fwcMtDM.html">has said that there is no imposition of the language policy</a>. But one cannot help but worry about the pressure that will be exerted on schools by the government to comply with these guidelines. Since there is no explicit mandate to change the education system completely, English medium schools will still exist as they do now, especially in the private sector. But there will be pressure on publicly funded or partially funded schools to comply with the “recommendations” of the NEP. This is the main cause of worry.
</p>
<p>
What exactly does the NEP say about languages?
</p>
<blockquote>
Wherever possible, the medium of instruction, until at least Grade 5, but preferably till Grade 8 and beyond, will be the home language/mother-tongue/local language. Thereafter, the home/local language shall continue to be taught as a language wherever possible. This will be followed by both public and private schools.
</blockquote>
<p>
The logic that has been explained for this change is that children learn most naturally and effortlessly in their “mother tongue,” especially when what is being taught them is the description of the immediate world around them, which they can communicate with their parents in the language which the parents are most comfortable in and in topics that the parents know very well, since these are not specialized subjects — animals, birds, places, customs, human relations, and the like. It is thus argued that basic concepts are most easily understood when communicated in the “mother tongue” that both the parents and the child are most familiar with.
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<h2 id="TOC2">
Why This is a Problem
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<p>
This is good logic if we are indeed talking about the mother tongue. But what happens when a child from a Tamil-speaking family has settled in Maharashtra or Karnataka, where the local language is not Tamil but Marathi or Kannada? The central assumption in this policy is that all people who live in a particular state will have the same mother tongue. The NEP glibly uses the phrasing “home language/mother tongue/local language.” But these three things are not equivalent. The local language need not be the mother tongue of the child. And that is where the problem arises.
</p>
<p>
Given that there are unlikely to be Tamil medium schools in, say, a Maharashtra or a West Bengal or Odisha, what will a Tamil speaking child have to undergo? They will teach all the basic knowledge of the world in Marathi to a child who does not speak the language at home. As a result, this child will fall behind in his or her acquisition of knowledge.
</p>
<p>
And this is hardly an unlikely scenario. Our country has plenty of migrant workers, both at the lower end (e.g., construction workers) as well as the higher end (e.g., software engineers). People move across the length and breadth of this country in search of job opportunities. What is worse, people move a lot between jobs. So one year, I might be working in Karnataka, and the next year, I might be working in Maharashtra. So now my child will have to change her learning from Kannada to Marathi — and neither is her mother tongue. I cannot keep learning new languages as I change jobs and move cities to try to help my child in school.
</p>
<p>
Is the intent of the NEP to restrict job mobility?
</p>
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<header>
<h2 id="TOC3">
My Personal Experience
</h2>
</header>
<div>
<p>
I grew up in Mumbai, even though my mother tongue is Tamil. My father was a highly educated University Professor. Hence, at home the languages for communication were mostly Tamil (with my mother) and English (with my father). Mumbai is very cosmopolitan, and so the influence of the state language, Marathi, is not (at least was not) as strong in Mumbai as it is in the rest of Maharashtra. Most people in Mumbai speak what is known as Bambaiyya, a dialect of Hindi with lots of Marathi influence (such as “apuN” for “I”, inspired by “aapaN” from Marathi). As a child, I mostly learned to speak Bambaiyya.
</p>
<p>
Nobody among my schoolmates spoke Marathi. The school was an English medium school, and we studied English as the first language, Hindi as the second language, and Marathi as the third language. This was a consequence of the three-language formula that was introduced in the 1960s: English, Hindi, and the local language of the state for any English medium school.
</p>
<p>
I learned Hindi reasonably well because there was so much reinforcement. When I used to go to the market to buy anything, inevitably I would talk in Bambaiyya. I used to watch Hindi movies and listen to Hindi songs. But given that no one around me actually spoke Marathi — a situation made worse by local demographics of the suburb in Mumbai I was living in, known as Matunga, in which 80% of the population were actually Tamil-speakers, the rest being Gujarati (the situation has been reversed today) — with no Marathi speakers except the maids who cleaned our homes, it was actually very difficult to absorb the Marathi I was learning in school. I had no parent to help me with my Marathi homework, no friends to chat in Marathi. Because of my resulting incompetence in the language, I gradually grew to detest it as an imposition.
</p>
<p>
As a result, I did quite poorly in Marathi, even though I learned it for 4 years – from Vth standard to VIIIth. In our IXth standard, the school gave us the option of Sanskrit for the third language as an alternative to Marathi. Sanskrit, unlike Marathi, was also a high scoring subject in the Xth board exams. I jumped at the chance to ditch Marathi, given how miserable I was with that subject. It also helped that the teacher who taught us Sanskrit was a great teacher. I still have a love of Sanskrit from those two years learning it in school.
</p>
<p>
Because my father was well-educated in English, I did very well in school, where the medium of education was English. I shudder to think how I would have done if Marathi had been the medium of instruction. I would probably have dropped out and become a criminal selling drugs for D company in Mumbai instead of having this wonderful educated professional life I am leading today. Such are the dramatic consequences of the choices we make as a nation.
</p>
</div>
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<h2 id="TOC4">
Why English Medium Education is of Paramount Importance
</h2>
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<div>
<p>
Some will argue with me that exactly the reverse problem is true for a native Marathi speaker in Maharashtra if she goes to an English medium school. This is certainly true. If the child has no one at home to help her with her English-based homework, she will fall behind and not learn the concepts that the school is trying to teach her.
</p>
<p>
So what is the solution here? One has to think of what the final goals of a school education are: self-awareness, community awareness, awareness about health, science, society, the nation, its history, and the world. In addition, school is the stepping stone to college and a professional life. The most lucrative jobs in the world today are in the technological space. Of course, not everyone is going to make it to those jobs. Many will drop out of schools even before what we know today as the Xth standard (I am using these terms even though the NEP has changed them, for the sake of discussion.) If you are going to end up doing manual labour as a class D employee in the government, you may not benefit by learning to communicate in English. But if you even want a peon’s job in today’s India, a good working knowledge of English is a huge advantage.
</p>
<p>
Most of science and technology, and even most of the financial system, is based on English. You not only need English to understand how to connect your router to the network or to assemble that car; you also need it to understand what are stocks, bonds, debentures, derivatives, and the like. The entire world of finance is a western invention, as are the entire worlds of science and technology.
</p>
<p>
The only thing that a local language education will give you is an ability to appreciate literature in your mother tongue. Given that most people simply do not read anything in today’s world, whether in English or in any Indian language, this benefit is dubious at best. And there are negligibly few jobs in classical Tamil or Hindi poetry.
</p>
<p>
I am not downplaying the humanities. I love the humanities, and I love languages (today). But we must focus on what will benefit children in their future. There are only 24 hours in a day, and children have to prioritize their time. They can certainly learn languages, including their mother tongue, as a hobby. Knowledge of culture does not need to be school-fed. I am a connoisseur of Indian classical music — I even sing and play it to a degree — but I am not classically trained. I have learned classical music out of sheer interest. Children of tomorrow can learn their mother tongues in detail out of interest. And anyway, they will learn that language as a second or a third language. That's more exposure than I ever got to Indian classical music — and I still learned it.
</p>
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<h2 id="TOC5">
Lost in Translation
</h2>
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<p>
There is an important handicap that students who are primarily schooled in their mother tongue face when they finally get to the workforce and have to communicate in English in their professions: <strong>they are constantly translating.</strong>
</p>
<p>
So, when they have to say something in English, first they compose the sentence in their native tongue, and then they translate it to English. The result of this is sentences like “Today office is there?” — which is wrong construction, but this happens because the speaker directly translated from an Indian language like Hindi, in which you would say, “Aaj office hai kya?” The correct construction would be “Is the office working today?” But because our speaker is translating from a construction first made in Hindi, the result is incorrect English. This has consequences for the person in their professional lives. Like it or not, the world runs on English knowledge, not any of the local languages of India, and it is only going to get worse for those stuck in the vernacular groove.
</p>
<p>
Similarly, when a person educated in a language other than English during their primary years reads something, they first translate what they read into their local language and then understand what it means. The result is that whenever they have to read anything written in English, it takes them twice as long to understand what they read, and this makes them inefficient.
</p>
<p>
Someone whose medium of education was English all along will have a competitive advantage over someone who was educated in a vernacular medium during their primary years because of this.
</p>
<p>
Some friends of mine will counter this claim of mine. They will tell me that they did study in a vernacular medium in the early years of their lives but switched to English medium later, and have done well in their lives. But they discount the effect of privilege. These are people born into upper middle-class homes, where there is a very nice support structure. You have educated parents who can help you when you get stuck in the transition from Hindi or Marathi or Tamil to English. Most lower class children in India have no support structure — they are completely dependent on the school system for their education.
</p>
<p>
My proficiency in English has helped me tremendously in my career. I would not wish anything else for my child. It is true that I cannot read the <em>Tirukkural</em>, a classic in my native tongue, Tamil — but I anyway would not have been able to do that even under the NEP, given that I grew up in Maharashtra. I cannot even read Hindi very comfortably. I can read a Hindi newspaper with some difficulty, because it takes me time to process the words and translate them into my true “mother tongue,” which is now English. Whenever I read something in Hindi, I experience what students who have studied only in Hindi or Marathi will experience when they read something in English. It is painful.
</p>
<p>
But I rarely have to read Hindi unless I want to. In contrast, those in professions in today’s world have to constantly read English everywhere. Want to fix a machine? The instructions are all in English. Want to assemble a circuit? English. Want to read a scientific paper? English. You cannot get away from it.
</p>
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</section>
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<section>
<header>
<h2 id="TOC6">
The Advantage of Privilege
</h2>
</header>
<div>
<p>
In my case, for the sake of my child, I will ensure she is educated in English, so she will have a competitive advantage. Thankfully, the NEP is not yet mandatory, and so the government will not force private schools to abandon English medium education. They will not do that for a very practical reason — the children and grandchildren of most politicians, including those who have introduced this NEP, go to English medium schools.
</p>
<p>
So I am safe. But what about the poor, who have to go to government schools in which the new NEP will be implemented?
</p>
<p>
They will grow up as English illiterates. They will struggle to read a newspaper in English, struggle to read a manual at their workplace written in English. One of the problems I have seen time and time again is how many of my colleagues in India will happily do good work in engineering, but shudder in fear when it comes time to document that work and write a report. It is like Chinese water torture for many, and so they keep procrastinating until the boss orders them to finish the report. And then they write a shoddy report of some excellent work. That does not impress.
</p>
<p>
So what the NEP will end up doing is create a world of English “haves” and “have-nots.” Those with the means to send their children to expensive private schools will reap the benefits of an English education. The vast majority of Indians will end up learning Marathi, Odia, Hindi, Tamil, Telugu, Bengali, etc., etc., and will be at a huge disadvantage when it comes to competing in the global marketplace. When they go to interview for a job at even a call centre, they will be rejected because of their halting English.
</p>
<p>
This will simply widen the gap between the rich and the poor in India, and increase the income inequality. But that may not be such a bad thing, given that there are very few jobs for people anyway, thanks to economic mismanagement by the Modi Sarkar. If you cut down the pool of qualified candidates, there might be better balance between supply and demand, and that will increase the salary for the “haves.”
</p>
<p>
The rest can go flip pakodas for a living or sing in suburban trains with a plate for the coins. And continue to sing Modi’s praises for bringing “Acche Din” to them.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC7">
What About Other Countries?
</h2>
</header>
<div>
<p>
One of the common responses from RSS and BJP sympathizers is to point to developed countries whose native tongues are not English. They say, for example, that “In Germany, doesn’t everyone speak German? In France, doesn’t everyone speak French? In Japan, doesn’t everyone speak Japanese? Why should we speak English in India? They even write scientific articles in those countries in German/French/etc. So why should we not communicate in Indian languages in India?”
</p>
<p>
That was definitely true in the past. But over the past 30-40 years, English has gradually become the lingua franca of the entire world. A <a href="https://www.britishcouncil.org/sites/default/files/e484_emi_-_cover_option_3_final_web.pdf">recent survey conducted on 55 countries on the use of English as a Medium of Instruction (EMI)</a> revealed the following, on average, across these countries:
</p>
<ul>
<li>
Nearly 53% of all public primary schools used EMI
</li>
<li>
Nearly 71% of all public secondary schools used EMI
</li>
<li>
Over 87% of all private primary schools used EMI
</li>
<li>
Over 87% of all private secondary schools used EMI
</li>
<li>
Over 78% of all public universities used EMI
</li>
<li>
Nearly 91% of all private universities used EMI
</li>
</ul>
<p>
The list of countries in this survey included Germany, China, Japan, India, Italy, Spain, Portugal, Saudi Arabia, Turkey, and Venezuela. Note that apart from India, every one of the aforementioned countries have a single dominant language — and yet, these countries teach the majority of their children in English.
</p>
<p>
In <a href="https://www.cambridge.org/core/journals/language-teaching/article/systematic-review-of-english-medium-instruction-in-higher-education/E802DA0854E0726F3DE213548B7B7EC7/core-reader#">another study of EMI in higher education published by researchers from Oxford University in 2018</a>, the following findings were listed:
</p>
<ul>
<li>
The percentage of English-Taught Programs (ETPs) in higher education programs in Europe grew from 725 in 2002 to 2389 in 2007 to 8089 in 2014. That’s more than a 1000% increase in 12 years.
</li>
<li>
At the Masters’ level in Europe, the number of ETPs grew from 560 in 2002 to 1500 in 2008 to 3543 in 2010 and to 3701 in October 2011. That’s more than a 500% increase in 9 years.
</li>
<li>
In 2001, China instituted a policy that mandated that, within 3 years, EMI should be used for 5-10% of undergraduate education in top-tier universities.
</li>
<li>
In 2006, the President of South Korea’s Korea Advanced Institute of Science and Technology (KAIST) announced his globalization project, according to which EMI programmes were to be increased by 10% every year until all classes at all levels (Bachelors, Masters, Doctoral) were taught entirely through English. This was followed by a wider adoption of English across all South Korean higher education institutions.
</li>
<p>
It is clear that the rest of the world is rapidly moving towards greater adoption of English as a medium of instruction. The Indian government’s step, therefore, is clearly retrograde.
</p>
</ul>
</div>
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<h2 id="TOC8">
What is the Solution?
</h2>
</header>
<div>
<p>
I have identified the problems. Some would demand, and fairly so, that I provide a solution as well. So here goes.
</p>
<p>
The current English education system is a disaster in India. People are desperate to get their children educated in English, because they know this is the only way up in life. And “schools” have mushroomed to teach them in English, to take advantage of this growing trend.
</p>
<p>
However, most of the teachers who are teaching English have very poor knowledge of English themselves. And hence, most kids who go to these schools are none the wiser in their command of English. Worse, they do not even grasp the basic concepts that they are supposed to learn in their formative years.
</p>
<p>
The reason, of course, is that most of the English teachers have themselves studied in vernacular media, and themselves translate to and from their native tongue. How can they effectively teach English?
</p>
<p>
But these are growing pains. There is a massive movement all over India by parents who want English medium education for their children. This is the first generation of new English teachers, and that is why the results are so poor.
</p>
<p>
As the movement grows, there will be more and more private schools (often with low budgets) that parents can afford and where their children will learn English from progressively better English speakers.
</p>
<p>
Over a few decades, the quality of English education will improve, whether or not the state intervenes. The market will take care of the problems. When there is an urgent imperative, solutions will arise in a market economy. Already there are huge numbers of English speaking schools all over north India.
</p>
<p>
In fact, the puzzling thing about the NEP is that the drive to a vernacular medium of instruction has not arisen from the grassroots. It has its roots in the RSS and BJP ideologies. These parties are fundamentally opposed to an English education for the mass of Indians (but they will send their own children to English medium schools, in a stunning display of hypocrisy). There is no clamour from the grassroots of India to get a vernacular medium education.
</p>
<p>
<span id="emphasizedBoxCommentary">And therefore, the push towards local languages in the NEP will be a failure.</span> It will result in massive dropouts from public schools. There will be a huge rise in private schools that teach in English. The number of schools that teach in local languages will fall as they close down because of lack of enrollment. For ideological reasons, these schools will be kept open by the government, but fewer and fewer students will patronize them. Poor students and their families will prefer to pay money to get an English-medium education than to study in the vernacular for free. And if the government tries to make the move to a vernacular education mandatory, they will have a national revolt on their hands.
</p>
<p>
A policy that is rooted in an unpopular ideology and not in practicality is bound to fail. Indians will not be denied their right to progress.
</p>
<p>
In 2014, a certain Chief Minister Narendra Damodardas Modi said in an election speech that “The government has no business to be in business.” Well, PM Modi should listen to CM Modi and not get into the business of education. Let the market sort out what people want. Let people decide the education they wish to give their children based on what they think the opportunities are, not based on some archaic RSS ideology.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC9">
English as India’s National Language
</h2>
</header>
<div>
<p>
India’s greatest weakness is its multiplicity of languages. It creates inefficiency in communication. Therefore, we need a national language. But that language cannot be imposed. It must evolve of its own accord. <span id="emphasizedBoxCommentary">The only language that can evolve to be the national language is the one that is in sync with the rest of the world: English.</span>
</p>
<p>
Hindi is a worthless language for practical purposes, and so are all other Indian languages. It is already clear which language is going to rule the world, and most other countries have seen the light. Those who prefer to live in the darkness will be consumed by it.
</p>
<p>
We can and should study Indian languages to preserve our culture and understand our roots. But our language for all practical communication, including for communicating within Parliament, should and one day will be English. Once the current generation of illiterate politicians dies out, that change will become much easier. As Max Planck once said about science, change, here too, will happen one funeral at a time.
</p>
<p>
Politicians can either try to enable this evolution of English as the national language, or they will be swept away by the desire for this change that comes from the grassroots. Anybody who tries to impede the progress of the common people will get their just desserts in the hustings.
</p>
<p>
The present move by the government to institute the NEP is yet another pathetic attempt to try to stem the inevitable tide of English. Other countries have already seen the light. It is unfortunate, but not at all surprising, that this government is trying to swim against the global tide and is taking a retrograde step. After all, it was this very PM who stood up in front of an August assembly of internationally-renowned scientists a few years ago and talked about how India had discovered plastic surgery and stem cell therapy thousands of years ago, thereby making India the laughingstock of the world. And it is MPs from the same party who are claiming that the cure to the coronavirus pandemic is the consumption of cow urine. Yet another retrograde step is but to be expected.
</p>
</div>
</section>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
</footer>
</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com6tag:blogger.com,1999:blog-2647581039313842967.post-41354493492347856572020-06-14T15:19:00.000+05:302020-06-14T16:29:17.114+05:30Narendra Modi, The Anti-National <article> <!-- Article Title -->
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Narendra Modi, The Anti-National
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Written by Dr. Seshadri Kumar, 14 June 2020
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Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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<p>
Yesterday, June 13, 2020, the government of Nepal passed a resolution declaring areas which India considers part of its territory to be the territory of Nepal. The resolution was passed unanimously in Nepal's Parliament.
</p>
<p>
This action by Nepal is unprecedented and indicates that India today has zero influence in Nepal. It also shows that Nepal has firmly gone over to the Chinese camp. This has very dangerous consequences for India in the years ahead.
</p>
<p>
The root cause of this disastrous deterioration in Indo-Nepal ties is a selfish decision by the Indian Prime Minister, Narendra Modi, in 2015, where he put his own interests and the interests of his party, the BJP, above the interests of the nation in an abortive bid to win a state election in Bihar.
</p>
<p>
Given the harm that these selfish actions of Mr. Modi have already caused the nation, and the harm that they are virtually guaranteed to cause in the future, it would be fair to call Mr. Modi an anti-national.
</p>
</div>
</section>
<hr>
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<header>
<h2 id="TOC1">
Hitting Rock Bottom
</h2>
</header>
<div>
<p>
The Modi Sarkar's greatest “achievement” (thus far) in foreign affairs is the headline of all newspapers in India today: <a href="https://www.thehindu.com/news/international/nepal-parliaments-lower-house-unanimously-passes-bill-to-redraw-political-map/article31821242.ece#:~:text=The%20Lower%20House%20of%20Nepal%27s,territories%20in%20Uttarakhand%27s%20Pithoragarh%20district.">Nepal has officially released a new map of Nepal that includes areas that India claims as its own.</a>
</p>
<p>
Nepal has, for decades, from the time Nehru was our first PM, been India's closest ally. The fact that it is largely a Hindu country also worked in favor of this relationship.
</p>
<p>
From time to time, New Delhi has arm-twisted Kathmandu over the decades since Independence, due to it being the big brother in this relationship, but the relationship continued to be strong despite these small irritants.
</p>
<p>
But the Modi government has succeeded in completely alienating our closest neighbor and pushing them into China's arms. This is a bonus the Chinese would never have dreamt of — one that popped into its lap without even trying.
</p>
<p>
Yesterday's Nepalese Parliament vote — which is the strongest signal Nepal can send India — was <strong>unanimous.</strong>
</p>
<p>
And that means only one thing.
</p>
<p id="emphasizedBoxCommentary">
<strong>India does not have a friend left in Nepal.</strong>
</p>
<p>
Congratulations, Mr. Modi.
</p>
<p>
For this deterioration in relations is directly the result of this incompetent and irresponsible PM's attempt to use foreign relations as a tool to win domestic elections, without any concern for the long-term ramifications of one's actions on the country.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
The Nepal Blockade and the Bihar State Election of 2015
</h2>
</header>
<div>
<p>
What happened, you ask? You may not recall, so let me tell you a five-year old, true story.
</p>
<p>
There is an ethnic minority group called the Madhesis who live in the region straddling the Nepal-Bihar border. In September 2015, after years of political turmoil, Nepal drew up a new Constitution. This was a secular (Nepal was previously a Hindu nation) Constitution and a Federal one. The Constitution also reframed the borders of the provinces. One of the controversial rules of the new Constitution was the rule regarding citizenship. If a Nepali man married a non-Nepali, his children would automatically get Nepalese citizenship. But if a Nepalese woman were to marry a non-Nepalese, her children would not get Nepalese citizenship until the husband first became a Nepalese citizen. These rules mattered to the Madhesis because there would be intermarriage from both sides of the border among the community.
</p>
<p>
Concerns over issues like these, plus over the definition of the Nepali Madhesi state in the Eastern Terai (plains) region, which the Madhesis felt was unfair to them, caused a lot of anger among the Madhesis over the new Constitution. There was concern that the Madhesis did not have adequate representation in the new Constitution.
</p>
<p>
Many of these were also unhappy with the move to make Nepal a secular country and wanted it to go back to being a Hindu state. There were protests and violence by the Madhesis in response to the new Constitution. There were also other ethnic groups that were unhappy with the new Constitution.
</p>
<p>
Many of these concerns were valid. But what must be remembered is that this was an internal matter of Nepal.
</p>
<p>
In December 2015, there was also a state election in Bihar, which the BJP was very keen to win. The same Madhesi community exists in Bihar too, and the Modi government was keen to get its votes.
</p>
<p>
After the new Constitution was promulgated, the Madhesis decided to block the border in protest, and in this it was backed by the Indian government. The anxiousness of the Modi government to support the Madhesis was prompted by anxiety over comments by Lalu Prasad of the RJD in an election rally, in which he criticized the government of Nepal for its policies and vowed to defend the Madhesis of Bihar, with whom the people of Bihar had “roti-beti” relations (i.e., intermarriage). The BJP did not want to be seen as any less fervent in support for the Madhesis, so <strong><a href="https://thewire.in/diplomacy/indias-blockade-has-opened-the-door-for-china-in-nepal">allegedly, they used the instruments of international trade and policy</a></strong> to try to influence a state election and <a href="https://blogs.wsj.com/indiarealtime/2015/11/26/the-two-month-blockade-of-nepal-explained/">supported the blockade</a> by <a href="http://nepalforeignaffairs.com/a-controlled-indian-blockade-on-nepal-bbc-report/">not allowing trucks carrying fuel and food to a landlocked country.</a>
</p>
<p>
The blockade started in September 2015 and ended only in February 2016. <a href="https://www.bbc.com/news/world-asia-35041366">The Nepalese had to withstand the harsh and cold winter of 2015-2016 without fuel and food.</a>
</p>
<p>
As can be imagined after an experience like that, <a href="https://www.thehindu.com/news/national/anger-against-india-over-blockade-snowballs-in-nepal/article8032072.ece">India does not have a single friend left in Nepal</a>. Imagine if the 8-week COVID-19 shutdown in India was not imposed by an Indian government but forced on Indians by a foreign government. The Indian government, of course, not surprisingly, <a href="https://time.com/4115801/nepal-india-border-blockade-madhesh/">claims it never imposed any blockade on Nepal</a>, that Indian trucks were voluntarily refusing to enter Nepal because of fear of violence, but <a href="http://archive.nepalitimes.com/blogs/kundadixit/2015/11/03/flag-waving/">Nepalese media have countered this narrative</a> by saying that <a href="http://www.southasianrights.org/wp-content/uploads/2016/01/Nepal-Calls-for-UN-Special-Rapportuer-on-Unilateral-Cooercive-Measures-to-act-on-Nepal-to-prevent-the-humanitarian-crisis-imposed-by-the-blockade.pdf">there was violence even before September 2015 and that did not stop the trucks from coming in.</a>
</p>
<p>
In late January 2016, the Nepalese government amended the Constitution to make some concessions to the Madhesis. Even though the Madhesis said that these didn't go far enough, the blockade miraculously went away and trucks started rolling into Nepal in February.
</p>
<p>
A relevant detail is that, by this time, the elections in Bihar were over, with the BJP getting badly drubbed at the polls. The government was aware of how unpopular India had become in Nepal and how China had tried to airlift fuel to Kathmandu.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC3">
Enter the Dragon
</h2>
</header>
<div>
<p>
The blockade had zero effect on the BJP's prospects in the election in Bihar. They came third, behind the RJD and the JDU.
</p>
<p>
But it had huge ramifications in Nepal. In the last four years, Nepal has signed several agreements with China, including fuel and food supply agreements, <a href="https://www.reuters.com/article/us-nepal-china-xi/nepal-pushes-to-end-dependency-on-india-with-china-rail-tunnel-deals-idUSKBN1WS0CA">agreements for creating a railway system in Nepal, and a plan to connect China with Nepal by rail by 2022.</a>
</p>
<p>
And today's news is the last nail in the coffin of the “special relationship” between India and Nepal.
</p>
<p>
Once the rail link with China is complete in 2022, Nepal will be firmly in China's orbit. <a href="https://www.dw.com/en/china-aims-to-up-nepal-partnership-with-belt-and-road-initiative/a-50810381">In 2017, Nepal signed up to become part of China's Belt Road Initiative.</a> The railways within Nepal will be built as part of the BRI.
</p>
<p>
By now, we all know the endgame of the BRI. We have seen it in <a href="https://www.nytimes.com/2018/06/25/world/asia/china-sri-lanka-port.html">Sri Lanka</a>, <a href="https://www.bloomberg.com/news/features/2019-07-19/china-s-belt-and-road-leaves-kenya-with-a-railroad-to-nowhere">Kenya</a>, and many other countries. Nepal is a poor country and has no way to pay back the Chinese for their generosity in building all this infrastructure.
</p>
<p>
So how can they pay the Chinese back? Maybe give them some land in return.
</p>
<p id="emphasizedBoxCommentary">
Maybe a few military bases within Nepal.
</p>
<p>
Welcome to India's new nightmare. India is already living in daily fear of China grabbing our territory at their will — as they just did in Ladakh, with the Modi government just watching helplessly. We are already worried about <a href="https://thewire.in/security/in-talks-china-takes-hard-line-claims-all-of-galwan-valley-chunk-of-pangong-tso">Chinese incursions in Ladakh</a> and <a href="https://thewire.in/diplomacy/new-official-chinese-digital-map-claims-parts-of-arunachal-pradesh">Arunachal Pradesh</a>. Now add the entire, long, Indo-Nepal border to this — facing Bihar, Uttar Pradesh, and Uttarakhand. This is no longer some forgettable north-east state (for most Indians). This is the Hindi heartland.
</p>
<p id="emphasizedBoxCommentary">
Welcome (again!) to RSS incompetence.
</p>
<p>
From Nehru's time until even recently, the Nepalese government would never take any major decisions without consulting New Delhi. But yesterday, Nepal demonstrated that India has zero influence in Nepal today.
</p>
<p>
If incompetence were the only reason for the mess we are in today, it would perhaps be forgivable. But the main reason for this decline in our relations with Nepal is that Modi put his personal interest above the interest of India and took an action in September 2015 that he would have known would cause incalculable harm to the country even though he himself hoped to benefit from that action politically. Some may correctly point out that this is not the first time that India has blockaded Nepal. <a href="http://archive.nepalitimes.com/article/from-nepali-press/Remembering-the-1989-blockade,2651#:~:text=In%201989%2C%20the%20Rajiv%20Gandhi,Nepal%27s%20growing%20closeness%20with%20China.&text=“The%20government%20decided%20to%20import,official%20blockade%2C”%20he%20said."> India did so in 1989, causing immense harm to the Nepalese and their economy</a>. But China was not yet a superpower in 1989, and so India could get away with it.
</p>
<p>
Had the PM consulted the veteran bureaucrats in the Ministry of External Affairs, they would have undoubtedly counseled against such an action in the changed circumstances of 2015. But it is unrealistic to expect this PM to ever consult any experts. Also, the bureaucrats in the MEA are sworn to protect the interests of the country. In this case, however, the PM’s motive was not the well-being of the country. It was the well-being of his party. And himself.
</p>
<p id="emphasizedKumarCommentary">
What do you call a person who prioritizes his interests above those of the nation and who acts in such a way that he benefits personally and the nation loses as a result of his actions?
</p>
<p id="emphasizedBoxCommentary">
<strong>An Anti-National.</strong>
</p>
</div>
</section>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
</footer>
</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com4tag:blogger.com,1999:blog-2647581039313842967.post-62015738928558783072020-03-29T00:13:00.001+05:302020-03-30T12:45:18.449+05:30Asleep at the Wheel – The Looming Coronavirus Catastrophe in India <article> <!-- Article Title -->
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Asleep at the Wheel – The Looming Coronavirus Catastrophe in India
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Written by Dr. Seshadri Kumar, 28 March, 2020
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Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
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<p>
India, under a lockdown since March 25, is finally facing the reality of the Covid-19 pandemic. Unfortunately, over the last four months, the Modi government, preoccupied with political priorities, has let valuable time slip out of its hands. Instead of carefully preparing for a disaster as the country has never before seen, by stocking up on face masks, gloves, sanitizers, ventilators, and the like, in the long available time from November 2019 to March 2020, the government has belatedly woken up from its slumber and is frantically trying to acquire these essential items at the eleventh hour, when it is practically impossible to get them at short notice. The government also did not open up the supply of Covid-19 tests beyond a single Gujarat-based vendor for the longest time, and has rejected the applications of several Indian test manufacturers, with the net result that the medical establishment in India is woefully short of Covid-19 tests.
</p>
<p>
The PM’s knee-jerk lockdown of the country, a last-minute, desperate move to stem the spread of the virus, without adequate preparation of the public, has also caused untold hardship for the tens of millions of migrant workers on the strength of whom the economy runs, as they have been forced to trek it home for hundreds of miles without food, water, or transportation. To cap it all, a woefully inadequate and poorly thought-out financial package will do little to compensate those who are living on the edge, who will be without any money for the duration of the lockdown, and who will probably be reduced to penury or death by starvation.
</p>
<p>
And, despite all this suffering, it is unclear, given India’s huge population density, how much the lockdown will actually help in slowing down the spread of the virus, even if a lockdown is the only option at this late stage, given the presence of extremely high-density clusters like slums in India.
</p>
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<h2 id="TOC1">
Nero Fiddling While Rome Was Burning
</h2>
</header>
<div>
<p>
The <a href="https://www.washingtonpost.com/world/asia_pacific/india-coronavirus-lockdown-migrant-workers/2020/03/27/a62df166-6f7d-11ea-a156-0048b62cdb51_story.html">ongoing tragedy of migrant workers in India</a>, where tens of crores (100s of millions) of people are walking hundreds of kilometers to get from urban centres, where they have no work and no food, to their villages in states far away, is a prime example of how this government has mismanaged the Covid-19 pandemic in India.
</p>
<p>
The situation is analogous to that other great tragedy of recent years, <a href="https://frontline.thehindu.com/cover-story/deadly-disruption/article9374278.ece">Demonetization</a>, where another draconian measure was imposed on the people with no warning and no consultation with experts, causing incalculable suffering.
</p>
<p>
The same incompetence and indifference to human suffering is on display again in this government.
</p>
<p>
Many people had been urging the government to take the Coronavirus pandemic more seriously and <a href="https://timesofindia.indiatimes.com/india/coronavirus-chidambaram-calls-for-immediate-lockdown-of-all-towns-cities-for-2-4-weeks/articleshow/74708204.cms?utm_source=twitter.com&utm_medium=social&utm_campaign=TOIIndiaNews">many had asked for a complete lockdown</a> well before Modi first imposed his one-day lockdown, on 22<sup>nd</sup> March and, finally, the 3 week lockdown, on 25<sup>th</sup>. Prominent among these was the opposition leader Rahul Gandhi, who had been arguing for stronger measures as far back as 12<sup>th</sup>February <a href="https://twitter.com/RahulGandhi/status/1227536939479228417?s=20">in a now widely-shared post on Twitter</a>. The counter-point to that was a post from the PM on 19<sup>th</sup> February, talking about how he loved eating “litti-chokha,” a popular dish from Bihar.
</p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfl1skgIi_dTqOiXEDv4XZOxqUZeEL88GWzLGKs3FYIW0-Fvd4TM7vQcynrrgnPegmZsLqY-v5WFRa5FHtHwCugKZbJXwepEukdEYl0aNiqJWIDBzRk3zY02L2Mmr7X62iyVMzN_LWCSZl/s1600/LittiChokha.jpeg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfl1skgIi_dTqOiXEDv4XZOxqUZeEL88GWzLGKs3FYIW0-Fvd4TM7vQcynrrgnPegmZsLqY-v5WFRa5FHtHwCugKZbJXwepEukdEYl0aNiqJWIDBzRk3zY02L2Mmr7X62iyVMzN_LWCSZl/s400/LittiChokha.jpeg" width="320" height="400" data-original-width="693" data-original-height="866" /></a></div>
<p>
Mr. Modi was sleeping on the pandemic. He had higher priorities to deal with, such as continuing the months-long curfew in Jammu and Kashmir, rebuilding the Ayodhya temple, creating the Citizenship Amendment Act (CAA), toppling state governments ruled by opposition parties, preparing for the introduction of the Uniform Civil Code, demonizing the Shaheen Bagh anti-CAA protest, and other political moves much closer to the heart of the ruling BJP party and its parent RSS. Health issues were not a priority.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
Exodus
</h2>
</header>
<div>
<p>
When the PM finally woke up, it was a bit late. Experts had told him that the virus was about to hit stage 3, the stage of community transmission, unless he did something fast. So, in what appears to have become a pattern with him, without much warning, <a href="https://economictimes.indiatimes.com/news/politics-and-nation/india-will-be-under-complete-lockdown-starting-midnight-narendra-modi/articleshow/74796908.cms">he locked down the nation.</a>
</p>
<p>
The result? Daily wage workers who could not support themselves in big urban clusters with no daily pay had no choice but to go back home. All transport has been shut down – buses, taxis, autos, trains. So what do these millions of day labourers do? <strong>They walk. <a href="https://timesofindia.indiatimes.com/india/coronavirus-exodus-of-migrant-workers-chokes-delhi-up-border/articleshow/74853288.cms">With their wives and children. For hundreds of kilometers, without food or water.</a></strong> Many migrant workers, at the time of writing, are still desperately trying to go back home, with no transport option, waiting for promised buses to take them home. See <a href="https://twitter.com/free_thinker/status/1243936632018833408?s=19">here</a>, <a href="https://twitter.com/hussian_6456/status/1243825619206574080?s=19">here</a>, <a href="https://twitter.com/ShivAroor/status/1243803704530055168?s=19">here</a>, <a href="https://twitter.com/RanaAyyub/status/1243952003954294786?s=19">here</a>, <a href="https://twitter.com/dhruv_rathee/status/1243965110412029954?s=19">here</a>, <a href="https://twitter.com/ANI/status/1243910472023199746?s=19">here</a>, <a href="https://twitter.com/TheDeshBhakt/status/1243981783764516865?s=19">here</a>, and <a href="https://twitter.com/furquansid/status/1243880529729957893?s=19">here</a> for images and videos. State governments are doing their best to cope with the crisis, but no state government can provide emergency transportation to tens of millions of workers all wanting to go home at the same time after they have been blindsided by the Central government.
</p>
<p>
The migrant workers who were desperately trying to go home were <a href="https://www.newindianexpress.com/nation/2020/mar/26/uttar-pradesh-cop-punishes-migrant-workers-returning-home-makes-them-hop-like-frogs-2121946.html">even accosted by policemen who made them crawl on their knees, made them do sit-ups, and inflicted other illegal punishments</a> as per their whim — for not obeying the lockdown — without a shred of empathy for their situation. The Indian police has a well-deserved reputation for sadism, and they again proved their character in this time of need for poor people.
</p>
<p>
Even before all this, as soon as wind of the impending lockdown came, people <a href="https://www.livemint.com/news/india/coronavirus-pm-modi-urges-people-not-to-rush-to-villages-avoid-crowding-trains-11584807231342.html">scrambled into buses and trains</a> to take the next possible trip back to their hometowns. There was mass panic. If social distancing was the goal, then the sight of <a href="https://timesofindia.indiatimes.com/city/bengaluru/coronavirus-lockdown-private-operators-cash-in-on-bus-rush-in-bengaluru/articleshow/74798006.cms">buses and trains packed like sardines</a> was the very antithesis of this. But of course, one could argue that this was inevitable whenever a lockdown was announced. People will leave urban centres and go home. So we can consider that the lockdown did not begin on the 25<sup>th</sup> of March in India, but on the 27<sup>th</sup> or 28<sup>th</sup>. Given the progress of the epidemic so far, this was extremely unfortunate, and will undoubtedly result in a huge spike in cases in a couple of weeks.
</p>
<p>
The exodus started even before the full lockdown of the country on March 25<sup>th</sup>. There was first the one-day lockdown on March 22<sup>nd</sup>, which people correctly guessed was a harbinger of the full-fledged lockdown. In addition, several states, <a href="https://www.indiatoday.in/india/story/coronavirus-in-india-karnataka-announces-lockdown-from-march-24-till-march-31-1658875-2020-03-23">such as Karnataka, had their own lockdowns</a> which had come into force before the national lockdown. And there were measures taken even before those lockdowns, such as <a href="https://www.thehindubusinessline.com/news/national/bbmp-issues-advisory-for-markets-malls-pg-homes-parks-and-rwas/article31092819.ece">the notice sent by the Bangalore Municipal Corporation</a> saying that it was not safe for people to stay in PG (Paying Guest) accommodations unless the PGs were following strict hygiene rules — which everyone knew they were not. All these actions, while necessary to contain the epidemic, also increased panic
</p>
<p>
Assume 50 long distance trains in those last few panic-filled days, each jam-packed with about 1500 passengers (that's a total of 75,000 people, which might be a gross under-estimate), spending 30 hours in close proximity to each other, and you have the perfect recipe for multiplication of cases for a highly contagious infection. For context, it is useful to know that the replication number, <a href="http://theconversation.com/coronavirus-what-the-2009-swine-flu-pandemic-can-tell-us-about-the-weeks-to-come-134076">R0, which is a measure of how many people one infected person will infect in turn, is 2.38-3.28 for Covid-19, as opposed to 1.5 for Swine Flu</a>. Add to this the hundreds of packed buses. So maybe a total of one lakh (100,000) travellers, traveling anywhere between 10 and 40 hours with others in cramped quarters and zero social distancing.
</p>
<p>
Now these people have gone back to their towns and villages and infected everyone around them, both during their journey home and after their return to their villages and towns.
</p>
<p>
We are staring at a human catastrophe in India. China, Italy, Spain, France, and the USA will soon be forgotten. We might just lose the older generation in India, given that the mortality rate of the virus for older people is nearly 15%.
</p>
<p>
For comparison, think of the event said to be responsible for the explosion of the virus in Italy and Spain - <a href="https://time.com/5809848/game-zero-soccer-game-italy/">a football match between an Italian and a Spanish side on February 19, attended by about 40,000 spectators</a>. At least all of them were in one place. Our carriers are now spread all over the country.
</p>
</div>
</section>
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<section>
<header>
<h2 id="TOC3">
Inadequate Guidance About the Nature of the Lockdown
</h2>
</header>
<div>
<p>
In his speech on the 25<sup>th</sup> of March, Modi assured Indians that essential services would not be interrupted by the lockdown. But it was not clear from his speech how that would be possible, because he emphasized multiple times in the speech that no one was, under any circumstances, to leave the home. He left no room for exceptions in his speech. And people take what he says very seriously. His <a href="https://www.narendramodi.in/text-of-prime-minister-narendra-modi-s-address-to-the-nation-on-vital-aspects-relating-to-the-menace-of-covid-19-548941">repeated exhortations</a> to <strong>all Indians</strong> not to cross the invisible “Laxman rekha” (<em>trans.</em>“a line that must not be crossed”) drawn around their homes scared everyone and gave people the implicit message that no one should leave their homes, no matter what.
</p>
<p>
While Mr. Modi did say that essential services would not be disrupted, the strong emphasis on not leaving the home confused local law and order people, who were not sure whether citizens were allowed to walk on the streets or travel in their vehicles to go to grocery or medical stores and whether people should be allowed to deliver milk, vegetables, medicines, or groceries.
</p>
<p>
The result was that <a href="https://www.bbc.com/news/world-asia-india-52063286">policemen started beating up people who even had legitimate reasons to be on the road</a>. <a href="https://www.ndtv.com/india-news/coronavirus-india-lockdown-e-tailers-complain-police-beating-up-delivery-agents-2200587">People who moved around to deliver milk, groceries, or medicines were beaten up by cops</a>. Even today, on the 28<sup>th</sup>, supply of essentials to the public is not properly in place. Even middle-class families are scared of going to shops to buy essentials, worrying about cops stopping them. <a href="https://theprint.in/india/big-basket-unsure-of-service-in-delhi-even-after-police-assurance-but-grofers-to-resume-ops/388699/">Apps like BigBasket have stopped delivering food.</a>
</p>
<p>
The situation is even more dire for poor families, who do not have any means of transport, and who will have to walk to get food and milk. Worse, they do not have money and cannot get it.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC4">
Inadequate Financial Help to Affected People
</h2>
</header>
<div>
<p>
The <a href="https://www.indiatoday.in/business/story/finance-minister-nirmala-sitharaman-live-updates-economic-relief-package-india-coronavirus-1659912-2020-03-26">government came out with what it called a Rs. 1.7 lakh crore (US $22 billion) relief package for the poor</a>. What did it involve? Among other things, 5 kg of rice or wheat free to each person below the poverty line. But there are two problems with this scheme. One is the difficulty for poor people to go to the nearest ration shop, in the absence of any transport whatsoever. The other is the need for Aadhar (national ID) verification. This is a freebie, so shops have to ensure that nobody uses the benefit more than once. And so they will demand that people verify their identity using their fingerprints. Now we all know the problems with Aadhar. Often the fingerprints do not match (especially for older people), and often, in rural areas, internet connectivity is not very good. So if either of this is a problem for you, then you will not get your extra 5 kg, even if you somehow made it to the ration shop. The side-effect of all this is that the ration shops will have huge stocks of free grain which they will then divert and sell at full price. This is corruption enhancement at taxpayer expense.
</p>
<p>
The finance minister made the ludicrous statement that to help the poor, the government will give Rs. 500 (about $7) per month to each of 200 million women through their Jan Dhan bank accounts. How bad can tokenism be? You are trying to compensate a person for the lack of livelihood. <a href="https://tradingeconomics.com/india/wages">Many of these daily-wage labourers earn around Rs. 300 <strong>a day</strong></a>. And you want to compensate them for the loss of employment for <strong>a month</strong> by paying them <strong>Rs. 500 a month</strong>? All this just to be able to tell the world that you have done something? This is, frankly, insulting to the poor. Another similar offering was a one-time, ex-gratia payment of Rs. 1000 to 30 million poor senior citizens, widows, and disabled people. It is too little to mean anything to anyone. And probably the amount of paperwork needed to collect it, along with the ban on transport, will mean very few actually take advantage of even this meagre payout.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC5">
Mismanagement of the Medical Aspects
</h2>
</header>
<div>
<p>
With movement completely prohibited and no way for people without private transport to get anywhere, the numbers of new victims of the virus will not be known properly in the future. Even in normal times, Indians were reluctant to go to the hospital for any flu-like illness. With no way to go to the hospital, and fear of being beaten up, many will simply not report cases until it is too late. We may know about the progress of the Coronavirus epidemic in the future in India only from the deaths because of the lockdown.
</p>
<p>
<a href="https://www.washingtonpost.com/business/2020/03/24/scramble-medical-equipment-descends-into-chaos-us-states-hospitals-compete-rare-supplies/">The US, the most prosperous country in the world, with a highly developed healthcare system, is already breaking down with inadequate masks even for its doctors and inadequate ventilators for its patients</a>. <a href="https://www.timesofisrael.com/northern-italy-warns-of-hospital-bed-shortage/">In Italy, hospitals have run out of room for their patients and temporary shelters are being set up outside hospitals.</a>
</p>
<p>
With India's extremely poor health infrastructure, what horrors await us?
</p>
<p>
It might be instructive to look at what the government has done insofar as preparing for this pandemic is concerned, inasmuch as any preparation has been done. Let us first understand what we actually know about this virus from the experience of other countries.
</p>
<p>
How does this virus kill? It attacks the respiratory system. The patient finds it difficult to breathe. Thick mucus is secreted in the airways and collects in the lungs. This makes it harder and harder for the patient to breathe. The patient tries to cough to remove the fluid in his or her lungs. Because the patient’s lungs are filling with fluid rather than air, there is severe shortness of breath. The patient literally suffocates to death. What happens is that the virus leads to pneumonia that triggers <a href="https://www.mayoclinic.org/diseases-conditions/ards/symptoms-causes/syc-20355576">acute respiratory distress syndrome (ARDS)</a>, which leads to death.
</p>
<p>
This is why the virus spreads through throat and nasal secretions. Those in close proximity to a patient or a passive carrier (one who has the virus but exhibits no symptoms) can get it from their nose and throat secretions, as when they cough or sneeze. If these nasal or throat secretions are left on surfaces, as might happen when a person covers their mouth while sneezing and then touches a railing, then anyone who touches the same railing and then touches their mouth or nose might get infected.
</p>
<p>
These facts tell us how to address the problems of transmission and treatment. Transmission is through aerial droplets from infected people. Therefore, the first line of defence for any medical professional who deals with Covid-19 patients is a face mask that can prevent the virus from reaching his or her nose or mouth. Similarly, so that a healthcare worker does not touch an infected droplet, he or she needs to use gloves while handling a patient.
</p>
<p>
Secondly, once a patient does get the virus, the key to the patient’s survival is to prevent pneumonia and ARDS. When a patient’s airways are blocked with fluid, he or she has difficulty getting enough oxygen, and so the solution is to have ventilators so that the patient can be given oxygen to survive.
</p>
<p>
What is India’s supply of face masks, gloves and ventilators, especially for medical professionals? Has the government secured enough of these items and prioritized them for the safety of medical professionals? <a href="https://www.businesstoday.in/latest/trends/coronavirus-scare-in-india-huge-capacity-to-manufacture-masks-gloves-but-govt-yet-to-place-orders/story/395646.html">There is no evidence to indicate that it has.</a> In fact, <a href="https://timesofindia.indiatimes.com/india/coronavirus-govt-bans-export-of-face-masks-ventilators/articleshow/74721306.cms">it was only on March 20<sup>th</sup> that the government even banned the export of face masks</a>. There has been no attempt to secure face masks for the medical establishment in India in the likely scenario that the number of cases could exponentially rise. In fact, when the epidemic was raging in China, <a href="https://www.scmp.com/economy/china-economy/article/3075116/coronavirus-indian-firms-set-windfall-china-desperately-seeks">Indian manufacturers were eyeing a bonanza in exports to China</a>, and the government seemed unconcerned that masks that might one day be vitally necessary were being exported to China. This is where alertness in a government is necessary, especially towards an impending national disaster.
</p>
<p>
What about ventilators? <a href="https://theprint.in/health/india-has-40000-ventilators-but-could-need-many-many-more-in-worst-case-scenario/388874/">According to an article in The Print</a>, India has about 40,000 ventilators, but this is expected to be woefully inadequate – when the infection goes through the roof, we may need about 100 times as many ventilators. What has the government done about this? Until very recently, nothing. As with everything else concerning Corona virus, the government woke up to the threat only now. <a href="https://www.deccanherald.com/business/economy-business/bharat-electronics-limited-to-help-with-ventilators-but-no-concrete-plans-yet-officials-say-818231.html">On 27<sup>th</sup> March, there was an announcement that Bharat Electronics (BEL) will be producing 30,000 ventilators.</a> The company was only approached by the government on March 26th. <a href="https://www.thehindubusinessline.com/news/central-government-moves-to-ramp-up-ventilator-count/article31184823.ece#">The government also announced that it will be procuring another 10,000 ventilators from another (unspecified) PSU</a>. Keep in mind that nothing has started; the production line has to be set up and manufacturing started, and all this could take a few months.
</p>
<p>
<a href="https://www.livemint.com/news/india/local-ventilators-need-of-the-hour-to-prepare-for-covid-19-11585332113169.html">A private company, Skanray, has said that it will ramp up production and manufacture 100,000 ventilators in two months.</a> This announcement was made just a few days ago. The problem is compounded by the fact that ventilator manufacturers import many of their parts, and most parts are not available today because other countries have imposed export restrictions on these components as they are battling with the virus themselves. This was, therefore, something that BEL should have been tasked with developing a month ago so that the indigenous technology was already available by the time the number of cases started rising. <a href="https://www.businesstoday.in/top-story/coronavirus-update-noida-startup-to-supply-5000-ventilators-by-april-15/story/399076.html">Another company, AgVa, a startup, has been approached by the government, again recently, and the company has said it will be able to provide 5000 ventilators by April 15.</a> Looking at these numbers, it is clear that we are going to be woefully short of our needs when the situation escalates.
</p>
<p>
Let us look at gloves. As in the case of masks, <a href="https://www.thehindubusinessline.com/economy/policy/govt-removes-surgical-masks-gloves-from-export-ban-list/article30775570.ece">Indian companies were happily exporting gloves to China in February, and the government was not concerned in the least</a>. <a href="https://www.businesstoday.in/latest/trends/coronavirus-scare-in-india-huge-capacity-to-manufacture-masks-gloves-but-govt-yet-to-place-orders/story/395646.html">A Business Today report dated February 6</a> mentioned that although the <a href="https://www.business-standard.com/article/companies/coronavirus-nppa-seeks-data-from-mask-glove-makers-amid-supply-shortage-120031800023_1.html">government had enquired about the production capacity of Indian glove manufacturers</a>, it had not asked them to ramp up production. <a href="https://economictimes.indiatimes.com/news/politics-and-nation/india-provided-15-tonnes-of-medical-supplies-worth-rs-2-11-crore-to-coronavirus-hit-china-government/articleshow/74693578.cms?from=mdr">On March 18, in a reply in the Lok Sabha, the government said that it had provided 15 tonnes of medical supplies to China worth Rs. 2.11 crores</a>. As the report said, “Minister of State for External Affairs V Muraleedharan said the medical supplies included one lakh surgical masks, five lakh pairs of surgical gloves, 75 pieces of infusion pumps, 30 pieces of enteral feeding pumps, 21 pieces of defibrillator and 4,000 pieces of N-95 masks.” Even on March 18, the government had not realized the seriousness of the situation. The government was trying to express solidarity with China, without realizing that within a month, India itself would desperately be needing those same supplies. And now, <a href="https://in.reuters.com/article/health-coronavirus-malaysia-packaging-fo/virus-fight-at-risk-as-worlds-medical-glove-capital-struggles-with-lockdown-idINKBN21C11S">gloves are in extremely short supply all over the world as Malaysia, which manufactures 60% of the world supply of gloves, is under a shutdown.</a>
</p>
<p>
All in all, this is a very sad and dangerous state of affairs. The central government seems to have woken up to the reality of the virus only a few days before <a href="https://caravanmagazine.in/health/high-on-talk-low-on-substance-modi-speech-showed-india-ill-prepared-covid">PM Modi’s “Janata Curfew” call</a> on March 22<sup>nd</sup>, and seems to have started consulting experts and thinking about the problem only after that. Even <a href="https://economictimes.indiatimes.com/news/politics-and-nation/government-puts-masks-and-hand-sanitisers-under-essential-commodities-act/articleshow/74616781.cms">an order on March 13<sup>th</sup> including masks and sanitizers in the Essential Commodities Act</a> was done thinking not about how we might need it for the fight in the hospitals and clinics against the Coronavirus epidemic, but rather to reduce prices for consumers who might want to buy these goods.
</p>
<p>
And this was despite the fact that on March 3<sup>rd</sup>, the <a href="https://www.reuters.com/article/us-health-coronavirus/who-warns-of-global-shortage-of-medical-equipment-to-fight-coronavirus-idUSKBN20Q14O">World Health Organization gave a warning to all countries</a> that there was a looming shortage of medical equipment, and advised governments all over the world to increase production of such equipment by 40%. Modi obviously did not get the memo, even though it was reported in all the papers. Even before this, on January 30<sup>th</sup>, the <a href="https://www.bbc.com/news/world-51318246">WHO declared the Coronavirus pandemic a global health emergency.</a> But at the time, the PM and his government were not concerned about anything other than winning the 2020 Delhi assembly elections, which they lost nevertheless. A government's outcomes are directly proportional to its efforts.
</p>
<p>
What about tests? The government had, until recently, only permitted one company to provide it with tests for Covid-19. Which is this company? It is an Gujarat-based company called CoSara Diagnostics Private Limited, a US-India collaboration of US-based Co-Diagnostics, Inc. (CODX) and Synbiotics, Ltd., a division of the Ambalal Sarabhai group. <a href="https://www.huffingtonpost.in/entry/india-coronavirus-testing-kit-controversy-us-start-up_in_5e7aef1ec5b620022ab34cc6">A report in the Huffington Post</a> said in this regard,
</p>
<blockquote>
<p>
Earlier this month, at a public event in Utah, Co-Diagnostics Inc.’s head of business development, Joe Featherstone, said the company had devised the test in just seven days using advanced computer algorithms rather than the standard process of trial and error, which takes several weeks. Its India manufacturing partner, Synbiotics Ltd, has a track record of manufacturing anti-fungal medication, but no previous experience in making diagnostic kits.
</p>
<p>
An inspection of the company financials of CoSara and its American parent, CODX, suggests that the COVID-19 test would be CODX’s first ever commercially scaled diagnostic product and India, most likely, its first major market.
</p>
</blockquote>
<p>
While the government has <a href="https://www.businesstoday.in/sectors/pharma/coronavirus-green-light-for-16-companies-to-sell-covid-19-test-kits-in-india/story/399455.html">very recently (report dated March 27<sup>th</sup>) allowed more companies to sell Covid-19 tests, most of them are from China, USA, Poland, and Germany</a>. Only one Indian company, MyLab, was allowed to sell its kits in India. Kits made by thirteen other Indian companies were rejected by the Indian Council for Medical Research (ICMR). This at a time when most countries, such as the US, recognize that one of the major problems is the lack of availability of test kits.
</p>
<p>
There is a reason why it is important to focus on masks, gloves, ventilators, and the like in terms of the needs of healthcare professionals rather than the common people. This is because when the cases start shooting up and patients start filling up hospital wards, the pressure will be on doctors, nurses, and other medical staff. They will need masks and gloves in abundance to treat the patients. These will run out very fast. They will need test kits to determine who has the virus and who has recovered. They will need ventilators to keep critically-ill patients alive. And if doctors and nurses do not have adequate personal protection equipment (PPE) such as masks and gloves, they will be exposing themselves to the virus. If that happens, many of them may simply not report for work rather than risk their lives. As it is, even with masks and gloves, <a href="https://www.businessinsider.in/science/news/more-than-500-healthcare-workers-in-wuhan-have-gotten-the-coronavirus-one-study-found-that-29-of-infections-were-in-medical-staff-/articleshow/74108681.cms">the virus is infecting many medical professionals worldwide</a>. To treat Coronavirus patients without PPE is to commit suicide.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC6">
How Bad is the Situation?
</h2>
</header>
<div>
<p>
To understand how dangerous the spread of the virus in India was, I plotted the data of the number of cases in India versus the number of days on March 24, 2020, using data from <a href="https://www.covid19india.org">covid19india.org</a>, a crowdfunded initiative. The data was current until March 24. I have not updated this data since then, because once the lockdown is in force, it is my belief that reporting of illnesses will go down because of the inhibitory effect of the lockdown – no autos, buses, or taxis for a person to go visit his or her doctor if he is unwell. I expect a temporary reduction in the number of cases reported, and so I believe the data is only accurate up to March 24.
</p>
<p>
By plotting the data on a logarithmic scale, it can be seen that the relationship between the number of cases and time is exponential. What this means is that the infection has entered its exponential phase. From the data, it can be seen that the number of cases doubles in roughly 3.5 days. A simple extrapolation tells us that if the number of cases continues to multiply at this rate, we might be looking at more than 50,000 cases by 15<sup>th</sup> April. The lockdown that is in place now should have a mitigating effect but, as has been seen in other countries, the effects of the transmission that has already taken place (as in the long bus and train journeys prior to the shutdown in India) will have a huge effect, and so cases will continue to rise for a significant period of time. A prime example of this is <a href="https://en.as.com/en/2020/03/26/other_sports/1585233133_070352.html">Spain, which imposed a complete lockdown on March 14<sup>th</sup></a>; however, as of the date of writing (28<sup>th</sup> March), <a href="https://www.businesstoday.in/current/world/coronavirus-in-spain-lockdown-period-extended-as-death-toll-skyorckets-to-655-in-one-day/story/399476.html">deaths in Spain continue to skyrocket</a>. It is, therefore, reasonable to expect that the number of cases and deaths in India, too, will keep rising even though a lockdown is in place.
</p>
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhb8FA6cjwasdKM7wTgTFkVSu5-rSJ1pPC6O84W6xSZkvNXV_XJD7JKoLl2n3gdospZqBjLWsnvXfpvB1SeF4n9InD-wwbevWE3y3LuLV8RgVabu8MDYnpm3E5-Tj4BnBLZ_bRHWAVc7p7A/s1600/CovidIndiaEpidemiology_SeshadriKumar.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhb8FA6cjwasdKM7wTgTFkVSu5-rSJ1pPC6O84W6xSZkvNXV_XJD7JKoLl2n3gdospZqBjLWsnvXfpvB1SeF4n9InD-wwbevWE3y3LuLV8RgVabu8MDYnpm3E5-Tj4BnBLZ_bRHWAVc7p7A/s640/CovidIndiaEpidemiology_SeshadriKumar.png" width="640" height="360" data-original-width="1366" data-original-height="768" /></a></div>
<p>
Whether it will reach the 22 million cases by 15<sup>th</sup> May that the chart shows depends partly on the discipline of Indians to maintain lockdown conditions for an extended period of time — again, given Spain’s experience, it is doubtful that the situation will resolve itself in 3 weeks of lockdown. One would expect the number of cases and deaths to continue rising even after April 15, but hopefully they will not reach the numbers that the extrapolation in the graph, which is based on no mitigation efforts such as social distancing, suggests.
</p>
<p>
Having said that, an important difference between India and Italy or Spain is the population density. While middle- and upper-class Indians live in comfortable homes that are well-separated and can therefore be socially distanced, most of India’s urban poor live in staggeringly crowded places, such as the famous Dharavi slum in Mumbai. People here have no option to socially distance. Often ten people live together in a 10 ft x 10 ft dwelling, and these dwellings are right next to each other, with just 6 feet distance between two rows of homes. <a href="https://timesofindia.indiatimes.com/city/mumbai/dharavi-man-may-face-arrest-for-defying-home-quarantine/articleshow/74739198.cms">If a single person gets infected in a slum like Dharavi</a>, <a href="https://www.newindianexpress.com/nation/2020/mar/20/asias-largest-slum-dharavi-is-sitting-on-time-bomb--doctor-2119164.html">it is hard to see how the entire slum will not be infected. With so many infected people, and without room for them in hospitals, how long before the entire population is infected?</a> Therefore, whether social distancing can be truly effective in slowing down the exponential rate of growth in a country with such densely populated clusters remains to be seen.
</p>
<p>
<strong>Was all this unavoidable? NO.</strong>
</p>
<p>
<strong>What would a more prepared and competent leader do?</strong>
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC7">
What Could Have Been Done
</h2>
</header>
<div>
<p>
The Coronavirus epidemic started in November 2019. That is why it is known as Covid-19, not Covid-20. The Indian government had a head start of four months before things became critical, as they did after March 15<sup>th</sup>. But the current government and its leader were too busy dividing the country to think of saving it.
</p>
<p>
One criticism I often encounter when criticizing the government is, “all this is fine, but what else could they have done? Why don’t you tell us what you would have done better?” So, let us look at some of the things the government could have done, well before mid-March, that would have left our country a lot safer and with a lot less pain:
</p>
<ul>
<li>
Place a restriction on the export of medical supplies, such as gloves, masks, and sanitizers.
</li>
<li>
Ask the major players in India's textile industry to start manufacturing masks.
</li>
<li>
Ask manufacturers to ramp up production of gloves.
</li>
<li>
Ask major Indian manufacturing establishments to start producing ventilators.
</li>
<li>
Arrange for more testing kits and approve more Indian companies that could manufacture Covid-19 test kits.
</li>
<li>
Impose a lockdown a month before it was actually imposed.
</li>
<li>
Inform the country two weeks in advance that the country is headed towards a lockdown, and assure them that there is no immediate danger, but that if there were no lockdown, it would get dangerous. This would allow migrant workers to take transport to their native places in an orderly way, and all this would have been done a long time before the virus had spread so much. This would have avoided any suffering.
</li>
<li>
Make it clear down the chain, from centre to state to city to town to village, that essential services are exempt from the lockdown; that no one is to harass delivery folks of medicines, groceries, milk, and the like.
</li>
<li>
Ensure that home delivery of all essentials would be fully operational at the time of the lockdown, by talking to the heads of various organizations that do home delivery, well before announcing the lockdown.
</li>
<li>
Two weeks before the lockdown, ask all daily wage labourers and other vulnerable groups to go to government offices and get a Rs. 5000 handout to sustain them for the next two months. Tell them also to pick up their 5 kg of free rice or wheat from the ration shops before it is officially unsafe to do so because of social distancing concerns.
</li>
</ul>
<p>
Now that would have been a meaningful, well-thought-out response rather than the harebrained, knee-jerk, last-minute response from the government. But that would have required the government to fully think through all these possibilities well in advance of the crisis. With this government, that is like asking for the moon.
</p>
<p>
What we got instead was five minutes of cacophony at 5 pm on March 22<sup>nd</sup> by a middle class that was delighted that they could feel good about themselves with just five minutes of empty symbolism. If Mr. Modi really did care about the medical fraternity, he should have provided the tools they are now going to need to fight this disease, not organize a silly and immature spectacle. As things stand, our poor doctors, nurses, interns, wardboys, and other medical professionals are woefully ill-equipped to handle a killer disease, and will be putting their own lives at risk, thanks to a government that has been asleep at the wheel.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<hr>
<footer> <!-- Disclaimers -->
<br>
<p>
Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
</footer>
</article>
Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com3tag:blogger.com,1999:blog-2647581039313842967.post-76861876011123193122020-03-01T21:09:00.000+05:302020-03-01T21:09:13.063+05:302024 (With Apologies to George Orwell's "1984") <article> <!-- Article Title -->
<header> <!-- Article Title -->
<h1>
<br>
2024 (With Apologies to George Orwell's “1984”)
<br>
<br>
</h1>
</header>
<footer> <!-- Authorship, Copyright, Date -->
<h3 class="specialHeaderIndent">
Written by Dr. Seshadri Kumar, 01 March, 2020
</h3>
<h5 class="copyright">
Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
</h5>
</footer>
<hr>
<section> <!-- Section on Series Abstract -->
<header> <!-- Header for Series Abstract -->
<h2 class="SeriesAbstractTitle">
Abstract
</h2>
</header>
<div id="SeriesAbstract"> <!-- Content for Abstract -->
<p>
The following passage is taken almost verbatim from George Orwell’s “1984,” pages 12-17, with just a few details edited to make it relevant to India in the 21st century. It is scary how well Orwell’s template fits India in 2020. I have deliberately kept my changes to a minimum, mostly involving changing of names and adding small details to give the passage a 21st century Indian context. Otherwise the words are exactly as George Orwell wrote them 71 years ago.
</p>
<p>
It should be noted that 1984 was a political satire of its times; and so is this recasting of this passage into 2020s India. It is what I think can happen in a few years time, and therefore is a projection of the future. But I think any reasonable person who sees the news headlines realizes that this projection is not far from the truth. Many of our friends and relatives already think like the protagonist below and, as the Delhi violence and its aftermath are showing, many more are daily getting brainwashed and converted to hate. Ministers spew hate in public; ministers garland murder convicts; and there is little outcry and little action, legal or otherwise, taken against such offenders. So I do not think what you will read below is far from what can happen in a few years.
</p>
</div>
</section>
<hr>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC1">
The Two-Minutes Hate
</h2>
</header>
<div>
<p>
It was nearly eleven hundred, and in the Records Department, where Onkar Singh worked, they were dragging the chairs out of the cubicles and grouping them in the center of the hall, opposite the big telescreen, in preparation for the Two Minutes Hate…
</p>
<p>
The next moment, a hideous, grinding speech, as of some monstrous machine running without oil, burst from the big telescreen at the end of the room. It was a noise that set one’s teeth on edge and bristled the hair at the back of one’s neck. The Hate had started.
</p>
<p>
As usual, the face of Nehru, the Enemy of the People, had flashed onto the screen. There were hisses here and there among the audience. The little saffron-clad woman gave a squeak of mingled fear and disgust. Nehru was the renegade and backslider who once, long ago (how long ago, nobody quite remembered), had been one of the leading figures of the evil Congress, almost on the same level as Bade Bapu (Big Daddy) today, and then had engaged in anti-national and counter-Hindu activities for all the 17 years that he ruled Bharat. This was before the birth of Bade Bapu, who would never have allowed a traitor like Nehru to become PM of Bharat one day.
</p>
<p>
The program of the Two Minutes Hate varied from day to day, but there was none in which Nehru was not the principal figure. He was the primal traitor, the earliest defiler of Bharat’s purity. All subsequent crimes against the country, all treacheries, acts of sabotage, heresies, deviations, sprang directly out of his teaching. Somewhere or other, his descendants and followers were hatching conspiracies; perhaps somewhere beyond the sea, under the protection of foreign paymasters; perhaps even — so it was occasionally rumoured — in some hiding place in Bharat itself.
</p>
<p>
Onkar’s diaphragm was constricted. He could never see the face of Nehru without a painful mixture of emotions. It was the handsome face of a Kashmiri Pandit, with the traditional white cap of the Congress — a clever face, and yet somehow inherently despicable …
</p>
<p>
The telescreen changed from Nehru’s face to that of his great-grandson, Rahul Gandhi, who was delivering his usual venomous attack on the doctrines of the Bharatiya Janata Party (or, as it was known in 2024, just “The Party,” as all other parties had been outlawed) — an attack so exaggerated and perverse that a child should have been able to see through it, and yet plausible enough to fill one with an alarmed feeling that other people, perhaps less level-headed than oneself, might be taken in by it. He was abusing Bade Bapu, he was denouncing the dictatorship of the Party, he was demanding the immediate conclusion of peace with Pakistan, he was advocating freedom of speech, freedom of the press, freedom of assembly, freedom of thought, he was crying hysterically that the idea of India had been betrayed — and all this in rapid polysyllabic speech which was a sort of parody of the habitual style of the orators of the Party, and even contained shuddh Hindi words; more shuddh Hindi words, indeed, than any Party member would normally use in real life.
</p>
<p>
And all the while, lest one should be in any doubt as to the reality which Rahul’s specious claptrap covered, behind his head on the telescreen there marched the endless columns of the Pakistani and Chinese armies — row after row of solid-looking men with expressionless faces, who swam up to the surface of the screen and vanished, to be replaced by others exactly similar. The dull, rhythmic tramp of the soldiers’ boots formed the background to Rahul’s bleating voice.
</p>
<p>
From time to time, other hated critics of the regime, such as Kanhaiya Kumar and Arvind Kejriwal, had their faces projected on screen, and a harsh voiceover shouted, “Bharat tere tukde honge, insha Allah, insha Allah!” (“India, you will be torn to bits, Allah willing.”) At another point, faces of familiar opponents of the party and enemies of Hinduism, such as Shashi Tharoor and Mamata Banerjee, and intellectuals such as Amartya Sen, Raghuram Rajan, and Romila Thapar were flashed with a loud shout from the telescreen background, “Desh ke gaddaaron ko, goli maaro saalon ko.” (“Shoot the traitors to the country.”)
</p>
<p>
Before the Hate had proceeded for thirty seconds, uncontrollable exclamations of rage were breaking out from half the people in the room. The self-satisfied sheeplike face on the screen and the terrifying power of the Pakistani and Chinese armies behind it were too much to be borne; besides, the sight or even the thought of the Nehru-Gandhi family, to which both Nehru and Rahul belonged, produced fear and anger automatically. They were objects of hatred more constant than China or Pakistan.
</p>
<p>
But what was strange was that, although Nehru and his followers were hated and despised by everybody; although, every day, and a thousand times a day, on platforms, on the telescreens, in newspapers, in books, his theories were refuted, smashed, ridiculed, held up to the general gaze for the pitiful rubbish that they were; in spite of all this, his influence never seemed to grow less. Always there were fresh dupes waiting to be seduced by him and his philosophy. A day never passed when spies and saboteurs acting under the directions of the Congress were not unmasked by the Thought Police. The Congress commanded a vast shadowy army, an underground network of conspirators dedicated to the overthrow of the State. The Brotherhood, its name was supposed to be. There were also whispered stories of a terrible book, a compendium of all the heresies, of which Congress leaders and others like Kanhaiya Kumar were the authors and which circulated clandestinely here and there. It was a book without a title. People referred to it, if at all, simply as <em>the book.</em> Neither The Brotherhood nor <em>the book</em> was a subject that any ordinary Party member would mention if there was a way of avoiding it.
</p>
<p>
In its second minute the Hate rose to a frenzy. People were leaping up and down in their places and shouting at the tops of their voices in an effort to drown the maddeningly bleating voice that came from the screen. The little saffron-clad woman had turned red, and her mouth was opening and shutting like that of a landed fish. The dark-complexioned girl behind Onkar had begun crying out “Swine! Swine! Swine” and suddenly she picked up a heavy Shuddh Hindi dictionary and flung it at the screen. It struck Rahul’s nose and bounced off; the voice continued inexorably. In a lucid moment, Onkar found that he was shouting with the others and kicking his heel violently against the rung of his chair. The horrible thing about the Two Minutes Hate was not that one was obliged to act a part, but that it was impossible to avoid joining in. Within thirty seconds, any pretense was unnecessary. A hideous ecstasy of fear and vindictiveness, a desire to kill, to torture, to smash faces in with a sledge hammer, seemed to flow through the whole group of people like an electric current, turning one even against one’s will into a grimacing, screaming lunatic.
</p>
<p>
…
</p>
<p>
The Hate rose to its climax. The voice of Rahul had become an actual sheep’s bleat, and for an instant the face changed into that of a sheep. Then the sheep-face melted into the figure of the Chinese soldier who seemed to be advancing, huge and terrible, his submachine gun roaring and seeming to spring out of the surface of the screen, so that some of the people in the front row actually flinched backwards in their seats. But in the same moment, drawing a deep sigh of relief from everybody, the hostile figure melted into the smiling face of Bade Bapu, be-spectacled, white-bearded, full of power and mysterious calm, and so vast that it almost filled up the screen. Nobody heard what Bade Bapu was saying. It was merely a few words of encouragement, the sort of words that are uttered in the din of battle, not distinguishable individually but restoring confidence by the fact of being spoken. Then the face of Bade Bapu faded away again, and instead the slogans of the Party stood out in bold capitals:
</p>
<p align="center">
<strong>GARV SE KAHO HUM HINDU HAIN!</strong>
</p>
<p align="center">
<strong>(“Say proudly that you are a Hindu”)</strong>
</p>
<p align="center">
<strong>ACCHE DIN AA GAYE HAIN!</strong>
</p>
<p align="center">
<strong>(“Good days have arrived!”)</strong>
</p>
<p align="center">
<strong>DESH KE GADDAARON KO, GOLI MAARO SAALON KO!</strong>
</p>
<p align="center">
<strong>(“Shoot the traitors to the country”)</strong>
</p>
<p align="center">
<strong>HINDI HINDU HINDUSTAN, MULLAH BHAAGO PAKISTAN!</strong>
</p>
<p align="center">
<strong>(“Hindustan (India) is for Hindi-speaking Hindus! Muslims, go to Pakistan!”)</strong>
</p>
<p>
But the face of Bade Bapu seemed to persist for several seconds on the screen, as though the impact that it had made on everyone’s eyeballs was too vivid to wear off immediately. The little saffron-clad woman had flung herself forward over the back of the chair in front of her. With a tremulous murmur that sounded like “My Saviour!” she extended her arms toward the screen. Then she buried her face in her hands. It was apparent that she was uttering a prayer.
</p>
<p>
At this moment, the entire group of people broke into a deep, slow, rhythmic chant of “Mo-di!… Mo-di!… Mo-di!” over and over again, very slowly, with a long pause between the “Mo” and “di” — a heavy, murmorous sound, somehow curiously savage, in the background of which one seemed to hear the stamp of naked feet and the throbbing of tom-toms. For as much as thirty seconds they kept it up. It was a refrain that was often heard in moments of overwhelming emotion. Partly it was a sort of hymn to the wisdom and majesty of Bade Bapu, but still more it was an act of self-hypnosis, a deliberate drowning of consciousness by means of rhythmic noise.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<hr>
<footer> <!-- Disclaimers -->
<br>
<p>
Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
</footer>
</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com4tag:blogger.com,1999:blog-2647581039313842967.post-73522990877222737742020-02-02T19:49:00.001+05:302020-02-04T06:24:04.230+05:30The New Direct Tax Regime (2020): Relief or Burden? <article> <!-- Article Title -->
<header> <!-- Article Title -->
<h1>
<br>
The New Direct Tax Regime (2020): Relief or Burden?
<br>
<br>
</h1>
</header>
<footer> <!-- Authorship, Copyright, Date -->
<h3 class="specialHeaderIndent">
Written by Dr. Seshadri Kumar, 02 February, 2020
</h3>
<h5 class="copyright">
Copyright © 2020 Dr. Seshadri Kumar. All Rights Reserved.
</h5>
</footer>
<hr>
<section> <!-- Section on Series Abstract -->
<header> <!-- Header for Series Abstract -->
<h2 class="SeriesAbstractTitle">
Abstract
</h2>
</header>
<div id="SeriesAbstract"> <!-- Content for Abstract -->
<p>
This article analyzes the effect of the “massive tax cuts” of the 2020 Indian Union Budget direct tax rates. <strong>It is seen that the new direct tax rate scheme benefits very few people, and most people would be better off choosing the old scheme in their tax computation for the next year. The new direct tax regime is simpler than the old scheme, but it costs taxpayers more.</strong>
</p>
<p>
Several analyses comparing the old and new schemes have come out in social media. But most of them have ignored a key proviso in the new tax scheme, which is that no exemption or deduction is allowed. Most analyses have only looked at the effect of section 80C, but overlooked the more important Housing Rent Allowance (HRA) exemption and the Housing Loan exemption, both of which are substantially more than the 80C deduction and the standard deduction. There are many more deductions available, such as section 80D, section 80CCC, section 80CCD, section 80TTA, section 80GG, section 80E, section 80EE, section 80CCG, section 80DD, section 80DDB, section 80U, section 80G, section 80GGB, section 80GGC, section 80RRB, section 80TTB … <strong>all of which will not be available under the new direct tax scheme.</strong>
</p>
<p>
This work considers four of the main deductions/exemptions: HRA, Section 80C, Section 80D (mediclaim), and the Standard Deduction, in comparing the old and new direct tax schemes.
</p>
</div>
</section>
<hr>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC1">
Summary of Old and New Direct Tax Schemes
</h2>
</header>
<div>
<p>
The direct tax scheme of 2019-2020 was as follows:
</p>
<ol>
<li>
The taxable income was calculated by subtracting several exemptions and deductions from the gross income, some of which are listed below:
<ol type="a">
<li>
Section 80C, which is a deduction allowed for investment in LIC, PPF, or mutual funds, up to 1.5 lakhs.
</li>
<li>
The standard deduction, which is Rs. 50,000, and is meant to subsume many other deductions, such as the deduction for medical expenses, which used to be allowed in previous years.
</li>
<li>
Section 80D, which is for mediclaim, allowable up to a maximum of Rs. 25,000.
</li>
<li>
The housing exemption, which applied to a House Rent Allowance (HRA) or a Housing Loan (HL) payment.
</li>
</ol>
</li>
<li>
On this taxable income, tax was assessed as follows:
<ol type="a">
<li>
Taxable income of Rs. 0-5 lakhs: zero tax if the total taxable income was less than or equal to Rs. 5 lakhs.
</li>
<li>
If the taxable income is over Rs. 5 lakhs, then the following tax slabs are operational:
<ol type="i">
<li>
Rs. 0 – Rs. 2.5 lakhs: no tax.
</li>
<li>
Rs. 2.5 – Rs. 5 lakhs: 5% of income above Rs. 2.5 lakhs.
</li>
<li>
Rs. 5 – Rs. 10 lakhs: 20% of income above Rs. 5 lakhs.
</li>
<li>
Above Rs. 10 lakhs: 30% of income above Rs. 10 lakhs.
</li>
<li>
The above slabs are cumulative – hence, if someone makes Rs. 9 lakhs, they would have to pay 5% of Rs. 2.5 lakhs + 20% of Rs. (9-5) lakhs.
</li>
</ol>
</li>
</ol>
</li>
</ol>
<p>
The new direct tax scheme of 2020-21 is as follows:
</p>
<ol>
<li>
No exemptions or deductions are allowed. The idea behind this is to make the tax code simpler. To make up for this, the tax rates have been marginally reduced at the lower end, as discussed below. Hence, the gross income ends up being the total taxable income.
</li>
<li>
On this taxable income, the tax payable is again calculated according to the following slabs:
<ol type="a">
<li>
Taxable income of Rs. 0-5 lakhs: zero tax if the total taxable income is less than or equal to Rs. 5 lakhs (as before).
</li>
<li>
If the taxable income is over Rs. 5 lakhs, then the following tax slabs are operational:
<ol type="i">
<li>
Rs. 0 – Rs. 2.5 lakhs: no tax (as before).
</li>
<li>
Rs. 2.5 – Rs. 5 lakhs: 5% of income above Rs. 2.5 lakhs.
</li>
<li>
Rs. 5 – Rs. 7.5 lakhs: 10% of income above Rs. 5 lakhs.
</li>
<li>
Rs. 7.5 lakhs – Rs. 10 lakhs: 15% of income above Rs. 7.5 lakhs.
</li>
<li>
Rs. 10 lakhs – Rs. 12.5 lakhs: 20% of income above Rs. 10 lakhs.
</li>
<li>
Above Rs. 15 lakhs: 30% of income above Rs. 15 lakhs.
</li>
<li>
As before, the above slabs are cumulative – hence, if someone makes Rs. 9 lakhs, they would have to pay 5% of Rs. 2.5 lakhs (5-2.5) + 10% of Rs. 2.5 lakhs (7.5-5) + 15% of Rs. 1.5 lakhs (9-7.5).
</li>
</ol>
</li>
</ol>
</li>
</ol>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
Which Scheme Is Better For You?
</h2>
</header>
<div>
<p>
From an examination of the rules above, it is clear that the old scheme allowed many exemptions and deductions, but had higher slab rates, whereas the new scheme does not allow any exemptions or deductions, but has lower slab rates.
</p>
<p>
The elimination of deductions and exemptions simplifies the tax code and makes the reporting requirements easier. For example, if one wishes to avail of the HRA deduction, one must show rent receipts for the entire year to their employer. If one wishes to claim a PPF deduction, one must show the passbook of the PPF account to prove that one had actually invested the declared amount of money in PPF.
</p>
<p>
However, people will not mind more paperwork if it means saving some money. The elimination of extra paperwork should not result in the payment of more taxes. Indians are very cost-conscious, and place more value on money than time.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC3">
Case 1: IT Employee in Bangalore with a Salary of Rs. 9 Lakhs/Year
</h2>
</header>
<div>
<p>
Assume that the HRA exemption that this employee can avail of is Rs. 12,000 per month. The current rules state that the allowable HRA exemption is the minimum of:
</p>
<ol>
<li>
The actual HRA paid by the company.
</li>
<li>
Rent in excess of 10% of basic salary
</li>
<li>
40% of basic salary (50% if you live in Mumbai, Delhi, Chennai, or Kolkata)
</li>
</ol>
<p>
Let us make some reasonable assumptions. Let us say that the rent paid by the employee is Rs. 15000 per month, and that his basic salary is 40% of his total salary. Thus his basic salary is 0.4 x Rs. 9,00,000 = Rs. 3,60,000, or Rs. 30,000 per month. Then the three numbers are:
</p>
<ol>
<li>
Actual HRA paid = Rs. 12,000
</li>
<li>
Rent in excess of 10% of basic salary = Rs. 15,000 – 0.1 x Rs. 30,000 = Rs. 15,000 – Rs. 3000 = Rs. 12,000
</li>
<li>
40% of basic salary = 0.4 x Rs. 30,000 = Rs. 12,000
</li>
</ol>
<p>
In this case, the three numbers end up being the same thing, and so the HRA exemption is Rs. 12,000 per month, or Rs. 1,44,000 for the whole year.
</p>
<p>
Let us also assume that the employee invests the maximum allowable of Rs. 1.5 lakhs in Section 80C – related investments for the year and Rs. 25,000 for medical insurance under section 80D.
</p>
<p>
There is also the standard deduction of Rs. 50,000 that he can avail of. Thus, under the old scheme with deductions and exemptions, the total taxable income is: Rs. 9,00,000 – Rs. 1,44,000 – Rs. 1,50,000 – Rs. 50,000 – Rs. 25,000 = Rs. 5,31,000. Under the new scheme, there are no deductions or exemptions, so the total taxable income is the full Rs. 9,00,000.
</p>
Tax under old scheme:
<p>
<ul>
<li>
Total taxable income: Rs. 5,31,000.
</li>
<li>
The first 2.5 lakhs are tax-free.
</li>
<li>
Since this is above Rs. 5 lakhs, tax payable for 2.5-5 lakhs = 5% of 2.5 lakhs = Rs. 12,500.
</li>
<li>
Tax for Rs. 5 lakhs to Rs. 5.31 lakhs: 20% of Rs. 0.31 lakhs = Rs. 6,200.
</li>
</ul>
<p>
<strong>
Total tax to be paid under old scheme: Rs. 12,500 + Rs. 6,200 = Rs. 18,700
</strong>
</p>
<p>
Tax under new scheme:
</p>
<ul>
<li>
Taxable income: Rs. 9 lakhs
</li>
<li>
0-2.5 lakhs: 0
</li>
<li>
2.5-5 lakhs: 5% of 2.5 lakhs = Rs. 12,500
</li>
<li>
5-7.5 lakhs: 10% of 2.5 lakhs = Rs. 25,000
</li>
<li>
7.5-9 lakhs: 15% of 1.5 lakhs = Rs. 22,500
</li>
</ul>
<p>
<strong>
Total tax to be paid under new scheme: Rs. 12,500 + Rs. 25,000 + Rs. 22,500 = Rs. 60,000
</strong>
</p>
<p>
<strong>
The tax under the new scheme is more than triple what the employee needed to pay under the old scheme.
</strong>
</p>
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Case 2: Employee with a Salary of Rs. 15 Lakhs/Year
</h2>
</header>
<div>
<p>
Assume that the HRA exemption or housing loan exemption the employee is eligible for is Rs. 25,000/month (a reasonable number – detailed calculations not shown).
</p>
<p>
Assume also that the employee has availed fully of the Rs. 1.5 lakh deduction under section 80C, the Rs. 25,000 deduction under section 80D, and the Rs. 50,000 standard deduction.
</p>
<p>
So, the total deductions and exemptions available under the old scheme are:
</p>
<ol>
<li>
Section 80C: Rs. 1.5 lakhs
</li>
<li>
HRA: Rs. 25,000 x 12 = Rs. 3 lakhs
</li>
<li>
Standard deduction: Rs. 50,000
</li>
<li>
Section 80D: Rs. 25,000
</li>
</ol>
<p>
Taxable income under old scheme: Rs. 15 lakhs – Rs. 1.5 lakhs – Rs. 3 lakhs – Rs. 50,000 – Rs. 25,000 = Rs. 9.75 lakhs
</p>
<p>
Tax payable under old scheme:
</p>
<ul>
<li>
0-2.5 lakhs: 0
</li>
<li>
2.5-5 lakhs: 5% of 2.5 lakhs = Rs. 12,500
</li>
<li>
5-9.75 lakhs: 20% of 4.75 lakhs = Rs. 95,000
</li>
</ul>
<p>
<strong>
Total tax payable under old scheme: Rs. 12,500 + Rs. 95,000 = Rs. 107,500
</strong>
</p>
<p>
Taxable income under new scheme: Rs. 15 lakhs (no exemptions or deductions)
</p>
<p>
Tax payable under new scheme:
</p>
<ul>
<li>
0-2.5 lakhs: 0
</li>
<li>
2.5-5 lakhs: 5% of 2.5 lakhs = Rs. 12,500
</li>
<li>
5-7.5 lakhs: 10% of 2.5 lakhs = Rs. 25,000
</li>
<li>
7.5-10 lakhs: 15% of 2.5 lakhs = Rs. 37,500
</li>
<li>
10-12.5 lakhs: 20% of 2.5 lakhs = Rs. 50,000
</li>
<li>
12.5-15 lakhs: 25% of 2.5 lakhs = Rs. 62,500
</li>
</ul>
<p>
<strong>
Total tax payable under new scheme: Rs. 12,500 + Rs. 25,000 + Rs. 37,500 + Rs. 50,000 + Rs. 62,500 = Rs. 1,87,500
</strong>
</p>
<p>
<strong>
Again, the tax payable under the new scheme is substantially (74%) higher.
</strong>
</p>
</div>
</section>
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<header>
<h2 id="TOC5">
Effect of Deductions and Exemptions
</h2>
</header>
<div>
<p>
It can be seen from the previous examples that even though the tax rates for incomes below 15 lakhs have been reduced, with more tax slabs, the tax payable has actually increased. Of the deductions and exemptions considered here, three have a fixed maximum: section 80C (1.5 lakhs), standard deduction (Rs. 50,000) and section 80D (Rs. 25,000). The total from these three comes to Rs. 2.15 lakhs. The bigger contribution to reducing the taxable income is the HRA in case of rent or the Housing Allowance in case of home ownership for which one has to pay off a loan. In our first example, this was Rs. 1.44 lakhs, and in the second example, it was Rs. 3 lakhs. When this is deducted from the tax payable, the tax payable reduces dramatically.
</p>
<p>
This can be seen in Figures 1-3, which show the tax payable at different gross incomes for different total deduction/exemption amounts. It can be seen (Figure 1) that when the total deduction/exemptions are less than Rs. 2.5 lakhs, the tax payable is lower for the older scheme at low incomes but higher for the older scheme at higher incomes. For a total deduction/exemption amount of Rs. 2 lakhs, the point at which the new scheme tax becomes lower than the old scheme tax is about Rs. 12.25 lakhs/year.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmWTtlWmir8ijuZIlbuzfdd_7M_DkVnkmqABx_90W-ooF7dMSVsaFxndAqH0_TetDRir3UfNr1RbJZ_H-D-cNJIjEhC4nNiXmGRTIZ0qaso8ozJgq7ah2h6ek5-aZp9EUIdEnfbYfgtwgq/s1600/Tax_2L.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="895" data-original-width="1600" height="358" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgmWTtlWmir8ijuZIlbuzfdd_7M_DkVnkmqABx_90W-ooF7dMSVsaFxndAqH0_TetDRir3UfNr1RbJZ_H-D-cNJIjEhC4nNiXmGRTIZ0qaso8ozJgq7ah2h6ek5-aZp9EUIdEnfbYfgtwgq/s640/Tax_2L.png" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 1. Tax Calculation at Total Exemptions/Deductions of Rs. 2 Lakhs/Year</td></tr>
</tbody></table>
<p>
At a total deduction/exemption amount of Rs. 2.5 lakhs, the tax from the new scheme is higher than the tax from the old scheme until the gross income reaches Rs. 15 lakhs/year, as can be seen in Figure 2. After this, the tax payable from both schemes is the same as the income rises.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHlufWi_C2jr7L3NEPR-9oZ7lrNL7OqyXwGgkDWRIWd2_rGQmbOYMLinNRNIOv7Gj3lmrQhssNwce6DXII2-hEaaLf140kS922Kcu1vKJznXMIm2Mt1NWdTeljmIUI5uB1n0mM3dgyX6jL/s1600/Tax_2.5L.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="890" data-original-width="1600" height="356" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHlufWi_C2jr7L3NEPR-9oZ7lrNL7OqyXwGgkDWRIWd2_rGQmbOYMLinNRNIOv7Gj3lmrQhssNwce6DXII2-hEaaLf140kS922Kcu1vKJznXMIm2Mt1NWdTeljmIUI5uB1n0mM3dgyX6jL/s640/Tax_2.5L.png" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 2. Tax Calculation at Total Exemptions/Deductions of Rs. 2.5 Lakhs/Year</td></tr>
</tbody></table>
<p>
For a total deduction/exemption amount greater than Rs. 2.5 lakhs, the tax from the new scheme is always greater than the tax from the old scheme. This can be seen in Figure 3.
</p>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2rPECDqfr3jdtHQksg994GECkgX_oV8z-E6-5pmfUZRGD5ZAAA4qRRkwwK-Qa0xlHRTObWwPO6MdKALNhdtcFQ2ZP3dcyh_cmx0KvXYpRebDlzDdnI_yYZfEn9-uKoYu9sB_-_lHW94Wv/s1600/Tax_3L.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="897" data-original-width="1600" height="358" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj2rPECDqfr3jdtHQksg994GECkgX_oV8z-E6-5pmfUZRGD5ZAAA4qRRkwwK-Qa0xlHRTObWwPO6MdKALNhdtcFQ2ZP3dcyh_cmx0KvXYpRebDlzDdnI_yYZfEn9-uKoYu9sB_-_lHW94Wv/s640/Tax_3L.png" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Figure 3. Tax Calculation at Total Exemptions/Deductions of Rs. 3 Lakhs/Year</td></tr>
</tbody></table>
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Conclusions
</h2>
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<p>
The new direct tax scheme is disadvantageous to anyone who has a total of deductions and exemptions higher than Rs. 2.5 lakhs. For a lower amount in deductions and exemptions, there is a threshold income above which the new scheme is more advantageous and below which the old scheme is more advantageous. This can be the case for those who live in their own (fully paid-up) home and so do not have any rent to pay or have any housing loan payments. For everyone else, it seems to be more advantageous.
</p>
<p>
For this year, this is not a serious problem for the people, since the choice of which tax scheme to adopt is left to the taxpayer. But it is a cause for worry for the future, because the government has indicated its preference for the new scheme and so there is a strong possibility that next year, the taxpayer will not have a choice but to use the new tax scheme and therefore pay higher taxes.
</p>
<p>
<strong>This budget is a lost opportunity for the government, and indicates that the government has still not understood the cause of the economic slowdown – that the slowdown is demand-driven, not supply-driven.</strong> Yet, all of the government’s measures have been aimed at the supply side. The government has been heaping sop upon sop for industry – decreasing corporate tax, removing the dividend tax, lowering interest rates, and so on. This would be a good prescription if demand were high and if what was stopping companies was the cost of doing business and of getting finance. But the situation in India today is one in which common people are cutting down on buying Rs. 5 Parle biscuit packs and underwear. No sane company will take out loans to build new plants when demand is so low and when asset utilization capacity is as low as it is today in India.
</p>
<p>
So the correct prescription for this budget would have been to drastically cut taxes at the low end. Perhaps by making incomes of up to Rs. 10 lakhs/year tax-free. That would have been a bold move. The income foregone by the government would have been more than made up for by revenues due to increased consumption, which would have given the Indian economy a boost and the chance to recover.
</p>
<p>
But such a tax cut would only have benefited the organized sector. A similar boost was also needed for the unorganized sector. In yet another sign that the government simply does not understand the economic crisis, the government has reduced the allocation for MNREGS from Rs. 71,000 crores in the previous year to Rs. 61,500 crores in the 2020-21 budget. With a devastated rural sector, the only thing saving them from utter destitution has been the MNREGS. The move to reduce funding to the MNREGS will only worsen an already bad situation on the rural front.
</p>
<p>
But, as we have seen time and again, the one thing most dramatically lacking in this government is common sense. And hence this insipid and worthless budget, which does not show any sense of urgency or any acknowledgment of the massive economic crisis that the country is in. <strong>One can only reluctantly conclude that the free fall the Indian economy has been in for the last year will continue unabated for the next year, thanks to the incompetent leadership of the country. And it does not look like we will hit rock bottom anytime soon.</strong>
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<strong>Disclaimer:</strong> All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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<strong>Disclaimer:</strong> The author is not a tax professional. These are purely his personal opinions and calculations based on assumptions that are clearly stated in this article. The author makes no claims as to the accuracy of his conclusions. Readers can judge the accuracy of his conclusions based on their own study. Readers are advised to do their own calculations and checks and not base any decisions exclusively on the author’s recommendations. The author recommends that anyone who is seriously considering the conclusions/recommendations presented in this article double-check them with a tax professional before adopting them. The author is not liable for any losses any reader may incur as a result of adopting any recommendations given in this article.
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com3tag:blogger.com,1999:blog-2647581039313842967.post-66258982501834978602019-12-25T12:30:00.001+05:302019-12-25T13:55:29.772+05:30Remembering Rajaji <article> <!-- Article Title -->
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Remembering Rajaji
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Written by Dr. Seshadri Kumar, 25 December, 2019
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December 25 is remembered in India not only as Christmas but as an important anniversary of some important Indians. Today is the birth anniversary of composer Naushad Ali (1919); of former PM Atal Bihari Vajpayee (1924); and of the great sarangi player Pandit Ram Narayan (1927). Today is also the death anniversary of the great Indian leader, statesman, and writer C. Rajagopalachari (1972), or Rajaji as he was popularly known. In this article, I give a brief summary of Rajaji's life and accomplishments. Much of my knowledge of this remarkable man has been gleaned from Professor Rajmohan Gandhi's Sahitya Akademi-winning biography of his grandfather.
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Today is the 47th death anniversary of one of the tallest leaders of the Indian independence movement, Chakravarti Rajagopalachari. Rajagopalachari, who was known also as Rajaji or CR, was a close confidante of Gandhiji, Jawaharlal Nehru, Vallabhbhai Patel, Rajendra Prasad, and Maulana Azad (who, with Rajaji, were the Mahatma's top 5 Generals in the freedom movement) and the last (and first Indian) Governor-General of India. He was also the Chief Minister of Madras State and Governor of Bengal at different times in his long political career. At one point, he was Gandhiji's anointed successor (and so might have been our first PM) but that honour later went to Nehru after Rajaji disagreed with Gandhiji on the Quit India movement and did not participate in it. But Rajaji himself would likely not have wanted to be PM. He felt insecure as a national leader because of his poor command of Hindi, and in any case was never a mass politician like Nehru, despite his indisputable brilliance — he never won an election to any lower House (he refused to contest). Despite this, had Rajaji desired, he could have had any position he desired — for example, as Congress President (which he was asked to become many times) or the first President of independent India (for which both Nehru and Patel preferred him to Prasad) — but he never threw his hat in any ring; he would only serve if asked. Rajaji was such an old veteran of the freedom movement and of Indian politics that he not only fought political battles with Jawaharlal Nehru in his later life, but also fought with Nehru's father Motilal in the earlier part of his life (this was on whether or not Indians should serve in the British Provincial Councils, which at the time Motilal Nehru and others favoured, but Gandhiji did not.)
</p>
<p>
Like Nehru, Prasad, Patel, and many others, Rajaji left a highly lucrative career as a lawyer and lived in relative poverty for most of his life to be part of the freedom movement. He was known to be a brilliant lawyer and one of the sharpest legal minds in the country in the early part of his long and distinguished career, before he gave up practice as a form of non-cooperation with the British government.
</p>
<p>
Rajaji was also Gandhiji's <em>sammandhi</em> — his daughter Lakshmi married Gandhiji's third son Devadas Gandhi. Two of their children are quite famous — the biographer and writer Rajmohan Gandhi, and the diplomat and former governor Gopalkrishna Gandhi.
</p>
<p>
Rajaji lived to a ripe old age of 94, and led an active life until the very end. In addition to his contributions as a statesman and politician, Rajaji was also an accomplished writer. His abridged translations, both in Tamil and English, of the Ramayana and Mahabharata, are classics. He was also a regular contributor to the “Swarajya” magazine published by Kalki Krishnamurthy.
</p>
<p>
Rajaji was also a highly vocal critic of Nehru's and Indira Gandhi's socialist policies. He was the person who invented the phrase, “License-Permit Raj.” To oppose the Congress government's socialist policies, Rajaji formed the Swatantra Party (at the age of 81!) which advocated free market economics. Rajaji was a staunch opponent of communism all his life. Unlike the Jana Sangh, which was also opposed to socialism, the Swatantra Party did not discriminate on the basis of religion. The Swatantra Party contested general elections in 1962, 1967, and 1971, winning 44 seats in the Lok Sabha in 1967. Rajaji died in 1972, after which the party gradually dissolved without his leadership. Rajaji was considered universally as one of India's wisest statesmen. Rajaji was prescient enough to predict that Pakistan would split in 25 years, which happened in exactly the time he predicted.
</p>
<p>
Rajaji was a strong proponent of Hindi as a national language before independence, because he saw Hindi as a unifying force for an India still under colonial control; however, when he was CM of Madras State after independence, he opposed the mandatory imposition of Hindi and favoured English as a national language. He was also an opponent of Hindi during the 1965 anti-Hindi agitations in Tamil Nadu.
</p>
<p>
One of his weaknesses was his tendency to not yield his position on an issue even when there was overwhelming evidence that he was on the wrong track politically. One such instance was when, as CM of Madras State, Rajaji passed a new education bill, whereby elementary school students would study in schools half the day and spend the other half learning their parents' occupations. This caused a furore in Madras, as the Justice Party of “Periyar” E.V. Ramaswamy Naicker accused Rajaji of trying to perpetuate the caste system. Rajaji could have easily withdrawn the bill and defused the situation. But he stubbornly clung to his position, leading eventually to his resignation and his replacement as CM by K. Kamaraj.
</p>
<p>
Rajaji's tenure as CM of Madras State during 1952-54 was also marked by the division of the state into its Tamil-majority and Telugu-majority parts, and the formation of Andhra Pradesh as the first linguistic state in India after the death of Potti Sriramulu in 1952. This, of course, led to the creation of language-based states all over India, leading to the map of India that we see today.
</p>
<p>
Rajaji was a proponent of nuclear disarmament ever since the first atomic bomb was dropped on Hiroshima, and argued for world peace to his very end. To this end, he even met with US President John F. Kennedy in 1961 as part of a delegation from the Gandhi Peace Foundation that was headed by him with the active support of PM Jawaharlal Nehru, even though Nehru and Rajaji were on opposite sides of the political fence by then. As Rajmohan Gandhi recounts, Rajaji was asked by the President of the Gandhi Foundation, R.R. Diwakar, to head the delegation to the US. Rajaji responded in the affirmative, but specified that he would only do so “if the Indian government would support such a mission and if he was not expected to respond with silence or evasion to questions about India that might be put to him abroad. If Nehru was uneasy on this score, he would rather not go.” It is a measure of how much of a democrat Nehru was that he promptly agreed to both of Rajaji's conditions. Can we imagine something like this happening today — a government sponsoring its chief political adversary to go abroad, represent the country, and even allow them to publicly criticize the very government that had sponsored the trip? At the end of the meeting, Kennedy said that the meeting “had a civilizing quality on me.”
</p>
<p>
A few years earlier, in 1954, Rajaji also had the occasion to lecture then-Vice President Richard Nixon (in the Eisenhower administration) on the importance of nuclear disarmament when he came to India on an official visit. <a href="https://en.wikipedia.org/wiki/C._Rajagopalachari#Legacy">Nixon wrote about their meeting in his memoirs 36 years later that the meeting “had such a dramatic effect on me that I used many of his thoughts in my speeches over the next several years.”</a>
</p>
<p>
All in all, Rajaji was a remarkable man - lawyer, politician, leader, statesman, litterateur. He was a mixed bag, and people will have different views on him, but there is no doubting his patriotism and his enormous contributions to India. He was honoured for his contributions by being conferred the very first Bharat Ratna in 1954.
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References
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<em>Rajaji — A Life</em>, by Rajmohan Gandhi, Penguin, 2000.
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com8tag:blogger.com,1999:blog-2647581039313842967.post-87738183928490145052019-11-23T00:14:00.000+05:302019-11-23T18:13:42.364+05:30The Cost of Hindu Appeasement<div dir="ltr" style="text-align: left;" trbidi="on">
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The Cost of Hindu Appeasement
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Written by Dr. Seshadri Kumar, 23 November, 2019
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Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
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The philosopher and essayist George Santayana famously wrote that “<a href="https://en.wikiquote.org/wiki/George_Santayana">those who cannot remember the past are condemned to repeat it.</a>”
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I fear I myself may have been guilty of this sin (forgetting the past) recently, when I wrote in a message to my friends, reacting to the SC verdict on Ayodhya, that I hoped that this verdict would take the biggest grievance and most potent weapon of the BJP for the past 30 years, viz., the Ram Janmabhoomi issue, out of their armoury, and force them to focus on issues of governance.
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That in itself is not an unreasonable hope: after all, the BJP’s rise and rise began only with the <a href="https://en.wikipedia.org/wiki/Ram_Rath_Yatra">Ayodhya agitation, which started in 1989,</a> under the leadership of LK Advani, and culminated in the <a href="https://www.theguardian.com/world/2019/nov/09/ayodhya-verdict-hindus-win-possession-of-site-disputed-by-muslims">Supreme Court verdict of 9th November, 2019</a>. This far-reaching verdict granted the entire land where the Babri majsid had once stood to the Hindus, even ordering the Central Government to build a Ram Temple at the spot (why this is a concern of the Honourable SC is a mystery). So to hope that the granting of the main demand of the Hindutva movement of the last 30 years might give us some respite is not illogical.
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDR0i85wMu64utMNQU6uCXTL0JkrdS9DFYl2Bpr12YZoN_TNZ7F_0zKr13JfdUBbl2JIJ4WD1HqRFOxvKyhcJ_PQ8m0SJoOR2RhIYgIaRWeZe9VJl4C5sCAmyGDDifBFfAtpS2VPApkiAp/s1600/BabriMasjidDemolition.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="630" data-original-width="1200" height="336" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiDR0i85wMu64utMNQU6uCXTL0JkrdS9DFYl2Bpr12YZoN_TNZ7F_0zKr13JfdUBbl2JIJ4WD1HqRFOxvKyhcJ_PQ8m0SJoOR2RhIYgIaRWeZe9VJl4C5sCAmyGDDifBFfAtpS2VPApkiAp/s640/BabriMasjidDemolition.jpg" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">The Demolition of the Babri Masjid on December 6, 1992</td></tr>
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<br />
However, in hoping so, I had clearly forgotten what history has taught us happens when you appease those who bully and oppress. The classic case of failed appeasement, of course, is that of the Nazis before World War II.
<br />
<br />
I am thinking of how, in the 1930s, Adolf Hitler first annexed the Saarland, then the Rhineland, then enforced the “<a href="https://en.wikipedia.org/wiki/Anschluss">Anschluss</a>” (union) with Austria, then annexed the Sudetenland, and finally invaded Czechoslovakia, before the rest of Europe decided that there was no end to his territorial ambitions, and declared war on Germany when Hitler invaded Poland in 1939.
<br />
<br />
It is important to note that at the September, <a href="https://www.britannica.com/event/Munich-Agreement">1938 Munich agreement between Germany, Italy, France, and Britain</a> to force Czechoslovakia to give up the Sudetenland to Germany under the threat of imminent war, Hitler grandly announced that the Sudetenland was his “last territorial claim” in Europe.<br />
<br />
And yet, within six months of the agreement, Germany had invaded and conquered the rest (the “rump") of Czechoslovakia. And in six more months, Hitler had invaded Poland.
<br />
<br />
It was the invasion of Czechoslovakia that told Britain and France that Hitler could not be trusted, and that the Munich agreement was a failure and a mistake.
<br />
<br />
What was the lesson of Munich for posterity? The lesson was that appeasement of an aggressor does not work; on the contrary, appeasement only encourages the aggressor to indulge in more aggression.
<br />
<br />
Fast forward to 2019.
<br />
<br />
Why did the SC rule in favor of the Hindus in the <a href="https://en.wikipedia.org/wiki/Ram_Janmabhoomi">Ram Janmabhoomi dispute</a>? And why were so many people “relieved” at the verdict?
<br />
<br />
There may be many reasons for this. It is hard for us to fathom why the Hon. SC delivered such a verdict. But certainly we can speculate on why many people have welcomed the verdict. In my view, one of the main reasons is the implicit (and often explicit) threat of violence in the event of a verdict that might be unfavourable to the Hindus. In today's hyper-aggressive posturing by the Hindu right, it does not take an Einstein to figure out that had there been an adverse verdict (for the Hindus), there could have been widespread violence, bandhs, and lynchings all over the country. Rivers of blood could have flowed in communally sensitive areas. This is not an idle speculation: Advani's “Rath Yatras” were accompanied by extensive rioting and killing. Whatever other motivations the SC might have had, this concern could not have been far from the surface, and the Court would have been very aware of the heavy responsibility that lay in its hands as it drafted the verdict. It is not inconceivable that the need to maintain public peace and order trumped other aspects of the case.<br />
<br />
Several commentators have pointed out some of the puzzling and unexplained aspects of the verdict. For instance, <a href="https://www.ndtv.com/opinion/serious-issues-in-ayodhya-verdict-that-cant-be-overlooked-2130842">Brinda Karat writes in ndtv</a>:
<br />
<blockquote>
The basic question which is troubling is that after the judgement accepts that the demolition of the mosque in 1992 and the placing of the idols in 1949 were “serious violations of the law,” why does the court reward the serious violators of the law by handing over the entire land to them? Are there any overwhelming issues which would support such a decision? The judgement does not provide any convincing reasons.
</blockquote>
<blockquote>
The judgement acknowledged, though perhaps inadvertently, the political dimensions. One of the reasons given while rejecting the Allahabad High Court judgement mandating division of the disputed land into three equal parts was that it "will not restore a lasting sense of peace and tranquility." Therefore, one can assume that the Supreme Court believed one of the aims of its judgement must be to "restore a lasting sense of peace and tranquility." This would be based more on a political assessment rather than one based on legal issues.
</blockquote>
Similarly, <a href="https://theprint.in/opinion/ayodhya-verdict-babri-demolition-confirmed-muslims-as-second-class-citizens/318988/">Zainab Sikander talks about one of the obvious contradictions in the SC verdict in The Print</a>:
<br />
<blockquote>
… the fact that the Supreme Court itself recognised that the demolition of the mosque was illegal and that placing of the idols in 1949 was a desecration of the mosque, and still gave the verdict in favour of those who believed it was originally a temple made the verdict seem contradictory. The judgment clearly states: “The destruction of the mosque and the obliteration of the Islamic structure was an egregious violation of the rule of law.”
</blockquote>
<blockquote>
Yet, the very act of placing the idols and destroying the mosque has been used to suggest that Muslims did not have exclusive possession of the inner courtyard of the disputed land, thus making the case stronger for Ram Lalla.
</blockquote>
One cannot escape a sense of deja vu at the implicit expression of hope that Karat highlights in the judgment, because it reminds us of <a href="https://en.wikipedia.org/wiki/Neville_Chamberlain#Path_to_war_(October_1938_%E2%80%93_August_1939)">King George V's words when Neville Chamberlain signed the Munich Pact in September 1938 with Adolf Hitler</a>:
<br />
<blockquote>
After the magnificent efforts of the Prime Minister in the cause of peace, it is my fervent hope that a new era of friendship and prosperity may be dawning among the peoples of the world.
</blockquote>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgc2dpWExFb26s4rDbxkFMnX4J-D-Vzsn9TD1KBKdnIX3nsMABvYRCapljn9sZBabuvGcCG69qwFDjQG8nVKTmoXOhsIrwPJtuUXXZ45HYls97MkHPyiM86L1M_l8apc9DuvkfTY0c3K9kP/s1600/MunichAgreement.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="583" data-original-width="768" height="484" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgc2dpWExFb26s4rDbxkFMnX4J-D-Vzsn9TD1KBKdnIX3nsMABvYRCapljn9sZBabuvGcCG69qwFDjQG8nVKTmoXOhsIrwPJtuUXXZ45HYls97MkHPyiM86L1M_l8apc9DuvkfTY0c3K9kP/s640/MunichAgreement.jpg" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">"I've Got It!" British PM Neville Chamberlain proudly displays the Munich Agreement After Returning to the UK</td></tr>
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<br />
And so, just as Europe unsuccessfully appeased Hitler to prevent a war from starting again in Europe in 1938 (it was, at the time, less than 20 years since the end of the Great War, aka WWI) and the big powers in Europe decided to cave in to Hitler's demands to prevent a second World War, we in India seem to have caved in to the demands of the Hindu right in Ayodhya to prevent further violence. Thirty years of strife and violence are enough, the Hon. Justices appear to have decided.
<br />
<br />
But just as appeasement of a bully did not work in Europe in 1938, it will not work in India in 2019.
<br />
<br />
Just as Munich was preceded by so many conquests, such as the return of the Rhineland and the conquest of Austria, Ayodhya, too, was preceded by several aggressive moves by the Hindu right — "<a href="https://en.wikipedia.org/wiki/Entry_of_women_to_Sabarimala">Sabarimala</a>; the <a href="https://www.leftbrainwave.com/2015/10/learning-about-modi-from-dadri.html">public lynching of Muslims</a> since 2015; the anti-“<a href="https://www.newyorker.com/culture/2017-in-review/the-year-of-love-jihad-in-india">Love Jihad</a>” campaign; the <a href="https://en.wikipedia.org/wiki/Citizenship_Amendment_Bill_2016">Citizenship Amendment Bill</a>; the <a href="https://scroll.in/article/930482/explainer-what-exactly-is-the-national-register-of-citizens">National Register of Citizens</a>; <a href="https://www.newsclick.in/land-gau-rakshaks-anything-goes-name-holy-cow">vigilante “gaurakshak” groups to monitor cow slaughter</a>; and many others. In every one of these instances, we have appeased the aggressors. Just as the Nazis had the support of a majority of Germans, the Hindu right has the support of a majority of Indians in these actions. But even those who do not support the Hindutva agenda do not oppose it lest it makes the Hindu right more agitated. I read an anecdote just the other day where someone said that they were travelling in an autorickshaw when a right-wing gang on motorbikes shouted “Jai Shri Ram” at them. The auto driver said “Jai Shri Ram” in return and counseled the lady passenger travelling with him that it is better to say what these gangs want than be dead or in the hospital. Violence works.
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidwdMzUGdm5eLvziETm0v0AJdpiON7zNiNCDfm7FNiq1U795h-hyIqwJLh9raz-zPgIpURoW75ChSrmajhtABkYB2dfXJRmqXOyZKPJisHg5ju6frELnyPskJVF2DwiEHXQ_DGgTswIAC1/s1600/HitlerTimeManYear1938.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="500" data-original-width="314" height="640" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEidwdMzUGdm5eLvziETm0v0AJdpiON7zNiNCDfm7FNiq1U795h-hyIqwJLh9raz-zPgIpURoW75ChSrmajhtABkYB2dfXJRmqXOyZKPJisHg5ju6frELnyPskJVF2DwiEHXQ_DGgTswIAC1/s640/HitlerTimeManYear1938.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Time Magazine's Cover in 1938. Adolf Hitler was Chosen "Man of the Year" for the Munich Agreement</td></tr>
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<br />
Just as Munich only encouraged Hitler to further invade Czechoslovakia and Poland, eventually leading to WWII, Ayodhya will only encourage the Hindu right to repeat its Ayodhya formula — in <a href="https://en.wikipedia.org/wiki/Gyanvapi_Mosque">Kashi</a>, <a href="https://frontline.thehindu.com/cover-story/article25545532.ece">Mathura</a>, and hundreds more places <a href="https://detechter.com/10-mosques-india-built-temples/">where the Hindu Right believes mosques were built after destroying temples</a>. And it will encourage the Hindu Right to continue its anti-minority agenda in other ways as well. The Citizenship Amendment bill and the National Register of Citizens (NRC) bill are slated for the next legislative session of Parliament, and it will not be long before the BJP will bring in a <a href="https://en.wikipedia.org/wiki/Uniform_civil_code" target="_blank">Uniform Civil Code</a>. The idea behind these bills is the same: the reduction of the Muslim to a second-class citizen.
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<br />
You can delay the inevitable, but you cannot stop it by appeasement.
<br />
<br />
It took a six-year destructive war that killed millions, a complete and humiliating defeat for Germans, and the total destruction of Germany, to change Germans from their virulent racism to the liberal democracy that they are today. One can only hope that it will take far less than that to change India from where it is now. Otherwise the future looks bleak.
<br />
<br />
We are staring into a bottomless abyss as a nation. We are clearly not the nation of Nehru, Gandhi, Patel, and Rajaji and, in fact, I would not be surprised if, in the near future, we formally become a “Hindu rashtra.” I <a href="https://www.leftbrainwave.com/2017/12/india-in-2027-theocratic-hindu-state.html">have already written about my expectations of the future and the disaster such a step will bring to India</a>. A Hindu India will be the mirror image of a Muslim Pakistan, and we all know what has happened with our neighbour in this aspect. This is a country that was unable to respect one of its own citizens, <a href="https://en.wikipedia.org/wiki/Abdus_Salam#Personal_life">a Nobel Laureate, Dr. Abdus Salam, for the only reason that he belonged to the Ahmaddiya sect</a>, which is a persecuted sect of Islam in Pakistan. Because of this, Dr. Salam was forced to leave Pakistan for England, and died in Oxford. Is this the sort of country we aspire to be?
<br />
<br />
Supporters of this regime might question the parallel with WWII Germany: after all, we are not engaged in a military life-or-death war of global domination, they might say. Why or how might we be utterly destroyed as Germany was in 1945? But destruction of a nation need not be physical or political. It can also be economic and moral. We are already seeing many signs of the decay of this country in the last five years.
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<br />
<a href="https://www.indiatoday.in/news-analysis/story/narendra-modi-government-nirmala-sitharaman-must-acknowledge-economic-slowdown-1594747-2019-09-03">One look at the trajectory of the economy in the last three years should be proof enough</a>. You may wonder what this has to do with the right-wing policies of the government. There are two connections. One is that people of talent stay away from reactionary governments such as these. It is a <a href="https://scroll.in/article/687697/modis-insecurities-have-resulted-in-a-dearth-of-talent-in-government">well-known and oft-commented fact that the Modi administration seems to have an obvious lack of talent and ability</a>. Its ministers seem to have been chosen not because of any exceptional ability demonstrated in the past but because of their servile disposition and their singular ability to carry out their master’s orders without question.
<br />
<br />
The other is the supreme leader’s own distaste for any feedback that might be even remotely critical of his government or policies. The last five years have seen highly qualified people in the finance ministry, such as Drs. <a href="https://www.thehindubusinessline.com/economy/raghuram-rajan-to-quit-after-term-ends/article8745997.ece">Raghuram Rajan</a>, <a href="https://www.businesstoday.in/current/economy-politics/why-modi-own-men-are-leaving-the-big-jobs/story/299329.html">Arvind Subramanian</a>, <a href="https://economictimes.indiatimes.com/markets/stocks/news/viral-acharya-resigns-as-rbi-deputy-governor/articleshow/69920647.cms?from=mdr">Viral Acharya</a>, and <a href="https://economictimes.indiatimes.com/news/economy/policy/heres-what-could-have-led-to-rbi-governor-urjit-patels-exit/articleshow/67026855.cms?from=mdr">Urjit Patel</a> leave the administration because the government could not handle constructive criticism from them. People of ability cannot function under such constraints. A policy is either right or it is wrong; a wrong policy cannot be certified as right simply because the supreme leader thinks it is right or cannot handle criticism. But in the current political climate, such disagreements are not tolerated.
<br />
<br />
The net result is disastrous policies such as <a href="https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation" target="_blank">demonetization</a> and <a href="https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India)" target="_blank">GST</a>, which are the primary causes of the tailspin the Indian economy is currently in. After stoutly denying any crisis in the economy, <a href="https://www.businesstoday.in/current/slowdown-blues/current-economic-slowdown-unprecedented-niti-aayog-rajiv-kumar/story/374696.html">the government has finally at least admitted that there is a crisis today</a>. But the crisis is far deeper than the government dares to admit. <a href="https://timesofindia.indiatimes.com/business/india-business/real-gdp-growth-2-5-lower-than-official-ex-cea-subramanian/articleshow/69748053.cms">The real GDP growth rate might be far lower than the 5% or so that is currently estimated to be the current annual growth rate</a>. <a href="https://www.news18.com/news/business/indias-unemployment-rate-rises-to-6-1-in-2017-18-says-centre-2167039.html">Unemployment is at its highest level in decades</a>. Things are so bad that <a href="https://economictimes.indiatimes.com/news/economy/indicators/consumer-expenditure-survey-not-to-be-released-due-to-data-quality-issues-government/articleshow/72074837.cms">the government is refusing to release its own reports</a>, be they <a href="https://www.telegraphindia.com/opinion/by-hiding-unemployment-data-the-government-will-not-help-the-economy-or-itself/cid/1681935">of unemployment</a> or <a href="https://www.thehindu.com/business/Economy/government-puts-household-spending-report-on-hold/article29986465.ece">consumer spending</a>. <a href="https://caravanmagazine.in/economy/modi-slowdown-package-fail-demonetisation-gst">Even the measures the government is implementing are flawed, as the government is focusing on supply-side measures, whereas the problem is one of demand</a>. This is again indicative of the incompetence in the government and the inability of this government and its leaders to listen to contrarian positions even at a time of crisis.
<br />
<br />
Another reason why economic performance must suffer under this government is that the very <i>raison d'etre</i> of the government has changed. In 2014, the Modi Sarkar was ostensibly elected to bring in “vikas” (development). By 2019,<a href="https://www.leftbrainwave.com/2019/04/have-acche-din-arrived-acche-din.html?m=0" target="_blank"> that promise lay in tatters</a>, and yet the Modi Sarkar was voted to power with a stronger mandate. Clearly the vote was a vote of confidence in the government's majoritarian policies, and in turn, Mr. Modi has rewarded his constituency, the Hindu right, by instituting the most hard-line Hindutva policies to date, with promises of further upping the ante.<br />
<br />
When a government is going to be judged on its majoritarian policies, it is obvious that economic policies and performance on economic metrics will take a backseat. So, if anything, we should expect the economy to slide even further.<br />
<br />
This is just the beginning of a snowballing crisis. The ghosts of those <a href="http://naradanews.com/2016/12/here-are-the-97-people-who-died-in-37-days-of-demonetisation/">who died waiting in the demonetization queues in November and December 2016</a> have come to haunt the Indian economy, and they will take down those who did not die along with them. This story does not have a happy ending.
<br />
<br />
So, utter destruction of a country need not be by war. It can also be the complete economic destruction of a country, the hollowing out of its productive capacity, the resulting virtual slavery, and the selling out of the country to foreign powers. It is this reality that is staring us in the face.
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<br />
And when all of it finally happens, it will be because we appeased Hindu majoritarianism for the last five years and continue to do so.
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com4tag:blogger.com,1999:blog-2647581039313842967.post-78006129076791485512019-09-21T13:30:00.000+05:302019-09-21T15:02:05.443+05:30Another Big Economic Blunder <article> <!-- Article Title -->
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Another Big Economic Blunder
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Written by Dr. Seshadri Kumar, 21 September 2019
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Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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The Indian government is flailing around trying to solve the problem of the economic slowdown that was caused by its own previous wrong economic policies, especially demonetization and a badly-thought-out GST. The latest move of the Finance Minister in lowering corporate taxes by 10% is not only going to be ineffective in solving the root cause of the slowdown, but has the potential to make things worse by reducing India’s financial cushion in the face of further global economic shocks.
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The <a href="https://www.indiatoday.in/india/video/fm-nirmala-sitharaman-cuts-corporate-taxes-for-domestic-new-manufacturing-companies-1601198-2019-09-20">statements of the Finance Minister, Ms. Nirmala Sitharaman, yesterday</a>, lowering the corporate tax rate by about 10% <a href="https://www.livemint.com/market/stock-market-news/sensex-surges-after-pm-modi-s-surgical-strike-on-bears-10-points-1568961641921.html">have led to euphoria in the stock markets</a>. <a href="https://economictimes.indiatimes.com/news/economy/policy/bold-brilliant-bazooka-heres-what-experts-are-saying-about-the-finance-ministers-corporate-tax-cut/articleshow/71214764.cms?from=mdr">Industry leaders are ecstatic about the “pro-business” attitude of the country</a>. Supporters of Mr. Modi <a href="https://timesofindia.indiatimes.com/social-humour-twitter-reacts-to-corporate-tax-rate-cut-by-nirmala-sitharaman/liveblog/71216286.cms">are also thrilled and have begun to hope that the long-promised “<em>acche din</em>” will finally come after 5 long years.</a>
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<p>
However, while it is true that this is a business-friendly policy change, it is unlikely to change the current economic situation on the ground. Industry leaders are understandably happy — who would not be if they had to pay less tax? And shareholders of companies are also understandably happy — the companies their money is invested in are making lower losses.
</p>
<p>
<strong>But what are they going to do with the money they are thus saving? Are they going to set up new factories and increase employment? Are they going to re-hire the staff that they fired in the last few months? Are they going to increase the capacity utilization of their existing factories?</strong>
</p>
<p>
<strong>NO.</strong>
</p>
<p>
I repeat, NO. The problem with this government is that it has fundamentally failed to diagnose the problem — partly because the correct diagnosis would reflect poorly on its own past performance.
</p>
<p>
The correct diagnosis is that <a href="https://www.thehindu.com/opinion/lead/why-indias-growth-figures-are-off-the-mark/article29425194.ece">demonetization devastated the informal and the rural economy, and a badly-formulated GST destroyed whatever was left.</a> Because of this, people have no buying power, no money, and no jobs. Small-scale industries and the rural economy have been destroyed in the past 3 years because of these misbegotten economic policies of PM Narendra Modi, leading to widespread unemployment and shattered businesses. So nobody has money to buy anything.
</p>
<p>
The root of the current slowdown in India is that there is no demand. <a href="https://www.bbc.com/news/av/world-asia-india-49548445/what-cars-and-underwear-say-about-india-s-slowdown">People are not buying underwear</a> and even <a href="https://www.news18.com/news/business/parle-could-lay-off-10000-workers-amid-slowdown-report-2278225.html">Parle-G</a> and <a href="https://www.business-standard.com/article/markets/britannia-industries-falls-nearly-4-as-worries-over-demand-slump-deepens-119082100187_1.html">Britannia products, such as biscuits</a>. And when that is the case, it is quite clear that <a href="https://www.bbc.com/news/world-asia-india-49645889">they will not buy cars and motorcycles</a>, let alone <a href="https://www.livemint.com/companies/news/the-real-estate-slump-may-not-be-over-yet-1564999127858.html">homes</a>.
</p>
<p>
The solution to the current malaise is putting money in ordinary people’s pockets by generating jobs on a massive scale. This can only be done by large public works, such as irrigation works and replenishment of water bodies (on a permanent basis). Water works are important also because India faces a looming water crisis. A large government program to shore up water resources would therefore achieve two objectives simultaneously – eliminate unemployment and ensure the country’s water future, which in turn will kickstart development in the future. Building highways is not the solution because these days, it is a largely mechanized operation. In addition, is unlikely to yield immediate returns, because we are not being constrained by transport bottlenecks. Trucks are not being sold today because there is reduced merchandise to ship because of the slowdown. <a href="https://www.livemint.com/auto-news/defaults-and-idle-trucks-abound-as-auto-slump-bites-logistics-sector-1565633596326.html">Trucks are sitting idle in the depots of transport operators because they have no goods to transport.</a> So what will more highways achieve?
</p>
<p>
Instead, the government has been barking up the wrong tree, by emphasizing supply-side economics. They put more cash into banks <a href="https://www.indiatoday.in/business/story/rbi-to-transfer-rs-1-76-lakh-crore-from-surplus-reserve-to-government-1591873-2019-08-26">by making the RBI part with a huge dividend</a>. They <a href="https://www.livemint.com/industry/banking/moody-s-says-rbi-mandate-on-linking-loan-rates-to-external-benchmark-credit-negative-for-banks-1568098665042.html">lowered interest rates.</a> And now they are reducing taxes on corporates.
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But why would corporates hire any more workers or build any more factories when people are not buying their existing stock of goods? Auto companies like Ashok Leyland (a truck manufacturer, notably, not a car manufacturer – which tells you the problem is more widespread than <a href="https://www.indiatoday.in/auto/latest-auto-news/story/finance-minister-nirmala-sitharaman-blames-millennials-for-car-sale-slump-says-they-are-not-buying-cars-1597654-2019-09-10">“millenials not buying cars” - as the FM opined recently</a>) are <a href="https://economictimes.indiatimes.com/industry/auto/auto-news/after-maruti-ashok-leyland-announces-production-shutdown-for-it-several-plants/articleshow/71043729.cms?from=mdr">shutting down factories for half of September because they already have excess inventory.</a>
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So, even if you did not tax companies at all, and even if you made interest rates close to zero, companies will not, in today’s business climate, either create new factories or increase production at existing factories, because there is no demand for their products. They will just sit on that pile of cash. If anything, they will invest abroad with that money, as <a href="https://www.thehindu.com/business/Industry/mahindra-to-double-investments-in-the-us-opens-office-in-dc/article29385784.ece">Anand Mahindra is doing – Mahindra recently announced that they are doubling their infrastructure and job creation in the US</a>. That’s a sensible business decision for Mahindra, because Modi and his government have brought India down to such a low level that the US is now looking like a more attractive destination for investment than India.
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On the other hand, the amount that the government is forgoing because of this corporate tax cut is around Rs. 1.45 lakh crores. Just recently, the government forced the RBI to part with its biggest dividend ever to the government – of Rs. 1.76 lakh crores. Clearly, most of that amount is going into this tax rebate for corporates. And it is not going to result in any increased consumption of goods or greater employment of people. It will not change the slowdown.
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So who will benefit from this largesse? India, Inc., will, and so will those who depend on it. Those who will reap the biggest dividends of this largesse will be those with the most shares in the companies — namely, the promoters. Individual shareholders, either directly or through mutual funds, will benefit to the extent of their shareholding; but clearly, the lion's share of this reduction in taxes will go to the promoters of companies — the Ambanis, Adanis, Birlas, Tatas, Mazumdar-Shaws, and the like. Nothing wrong with that if part of that goes back into the ecosystem by creating more jobs. But as we have already seen, the business climate today is not conducive to the creation of more jobs, because the problem is not supply-driven but demand-driven.
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So the government, after blundering monumentally by <a href="https://www.bbc.com/news/world-asia-india-41100610">Mr. Modi’s disastrous policy of demonetization</a> in November 2016 and a <a href="https://www.livemint.com/opinion/columns/opinion-the-man-made-blunders-that-require-quick-redressal-1567434288791.html">badly-thought-out GST policy</a>, and many other mistakes, such as <a href="https://economictimes.indiatimes.com/markets/stocks/news/what-the-tax-surcharge-means-for-fpis/articleshow/70323024.cms?from=mdr">its surcharge on FPIs</a> (which it has <a href="https://www.livemint.com/news/india/fpi-surcharge-removal-stimulus-measures-likely-to-boost-markets-experts-1566732332264.html">belatedly backtracked now</a>), has committed another major blunder which will not only not have any immediate effect, but will further deplete the already depleted treasury of the government, making it vulnerable to any external shocks such as a steep rise in oil prices, which has already started due to the <a href="https://www.cnbc.com/2019/09/20/oil-drone-attack-damage-revealed-at-saudi-aramco-facility.html">drone attacks on the Saudi oilfields</a> that has taken out half of the Saudi crude supply out of the market. Thanks to the RBI transferring vast quantities of its reserves to the government, which the government has been profligate with, India has very little financial cushion for any more global surprises. If there were a war in the Persian Gulf or a war with our western neighbor, that would be the last nail in the coffin of the Indian economy.
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This is not to say that a reduction in corporate tax rates is undesirable or a bad policy per se. It would have been a great boost to business in a good economy where we have robust demand and where growth is constrained by supply-side policies, such as interest rates or high taxation. But when there is a growth slowdown because of lack of demand, this is not the prescription the doctor ordered. It will fail to solve the country’s economic problem, and in fact will make things worse. The only people who will benefit are the promoters and shareholders of companies, because this cash saving will mitigate their current losses, and that is why Dalal Street is cheering.
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But there is nothing for the common man to cheer about. This move is a big blunder, because this money that was received from the RBI could have been used to really kickstart the economy, but the government has chosen to use it on a measure that will have no tangible benefits. Now the government has no more money left for any more major interventions. This was their last chance, and they have blown it. In addition, this will lead to an increase in the fiscal deficit, with all the accompanying evils of that development.
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<strong>It is in times like this that we understand why Harvard is more important than hard work.</strong>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com2tag:blogger.com,1999:blog-2647581039313842967.post-11985168015857873482019-09-01T15:48:00.005+05:302019-09-01T19:47:07.741+05:30When Bigotry and Stupidity Combine – The NRC Mess in Assam<div dir="ltr" style="text-align: left;" trbidi="on">
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When Bigotry and Stupidity Combine — The NRC Mess in Assam
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Written by Dr. Seshadri Kumar, 01 September 2019
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Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
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The story of the NRC in Assam is that of two competing streams of bigotry — one of Assamese chauvinism and the other of Hindu chauvinism. It had its roots in the Assam movement of the late 1970s and early 1980s, which ended in the misbegotten Assam Accord of 1985. One of the provisions of the Assam Accord was the fateful decision to expel foreigners from Assam. Successive governments since 1985, both at the Centre and at the State level, including Rajiv Gandhi’s own government, had wisely refrained from actually implementing the provisions of the Assam Accord. But the BJP and the AGP have, through their vote-bank activism (the former for the Hindu vote-bank and the latter for the Assamese vote-bank), opened the Pandora’s Box of strict implementation of the Assam Accord, with unpredictable consequences for the peace and stability of Assam, not to mention the profound humanitarian costs of declaring millions of people as noncitizens — people who have known no other country than India from the time of their birth.
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This entire push to implement the Assam Accord in letter and spirit is irresponsible, cynical, and heartless; and now the crows have come home to roost, with the National Register of Citizens mentioning in its second count that 1.9 million people in Assam have been identified as foreigners and will have to be expelled from India.
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The verdict has pleased no one. The BJP is unhappy because the NRC count has revealed that a large number of Bengali Hindus are illegal immigrants, and that a large number of Assamese Muslims have been identified as citizens — something that busts their narrative of India being inundated by waves of Muslim immigrants. The AGP is unhappy that more Bengalis, both Hindus and Muslims, have not been identified as foreigners. And, of course, those who have lived their entire lives in India and are suddenly being told that they are no longer Indians but foreigners are not happy.
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<strong>The issue that no one in the more-than-hundred-year-old history of the Assam agitation seems to have thought of — be they political parties, leaders, or courts — is where the so-called foreigners will be expelled to — because no country will accept them. This is the stupidity and short-sightedness of the entire movement that, when combined with the bigotry of the prime movers in the issue — the BJP and the AGP — has led to a complex and unpredictable situation in Assam today.</strong> To make matters worse, the BJP is threatening to pass the Citizenship Amendment Act — a backdoor way to make illegal Hindu immigrants legal in Assam — something that will certainly lead to chaos and violence in the entire Northeast.
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Background of Immigration Into Assam
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Most people in India must have heard of the NRC in Assam by now. The NRC is the National Register of Citizens. Even though the name has “national” in it, this register pertains only to the state of Assam.
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The NRC is a list of “legitimate citizens of India” in the Indian north-east state of Assam. The purpose of this list, according to the people who were responsible for it, is to identify who are legitimate citizens of India and who are illegal immigrants (specifically, from Bangladesh — or East Pakistan, as that region was known before 1971). This list was first created in 1951 in Assam. On January 1, 2018, the first revised list of the NRC in nearly 70 years was published. It identified 4.1 million people as non-citizens of India in Assam. Following this, the government said that this list was not final; that people could appeal their exclusion and a second list would be created after further checking. That second list came out on August 31, 2019, and <a href="https://economictimes.indiatimes.com/news/politics-and-nation/assam-final-national-register-of-citizens-released/articleshow/70919987.cms">it has now identified 1.9 million people as illegal immigrants</a>; the petitions of around 2.2 million people to be included in the list have been accepted.
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The purpose of this article is to tell you what this NRC is all about and <strong>why these 1.9 million people are going to be made stateless.</strong>
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The issue of illegal immigrants, or “foreigners,” moving in to Assam is <a href="https://en.wikipedia.org/wiki/Third_Anglo-Burmese_War">an issue dating to 1886</a>, when the British, after defeating the Burmese in the <a href="https://en.wikipedia.org/wiki/First_Anglo-Burmese_War">First Anglo-Burmese war of 1824</a>, gradually took control over Assam and then opened Assam up to migrants from the rest of the British Raj in India, particularly Bengal. This was followed by various waves of immigration into Assam, fuelled mainly by the tea estates which the British had established in Assam, for which the British brought in Bengali workers.
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Although immigration to Assam was continuous during British rule, involving both Hindus and Muslim immigrants, there were two important waves post-Independence. The first wave came during Partition, when Hindus migrated to India from East Pakistan following persecution by the Muslim majority there. It is estimated that around 500,000 immigrants from East Pakistan came in to Assam during Partition. Many of these settled in Assam. There was serious concern about the changing demographics of Assam. In response, the Indian Government passed the <a href="https://indiankanoon.org/doc/1523917/">Immigrants (Expulsion from Assam) Act, 1950.</a> This act came into effect on 1 March 1950. It mandated the expulsion of illegal immigrants from Assam. But how was the Government to know whom to expel? For this purpose, it created the first National Register of Citizens in Assam in 1951 as part of the 1951 census. The implicit assumption in the Act was that the Indian government would be able to send immigrants from East Pakistan back there. Nobody seems to have considered the possibility that East Pakistan might refuse to take these people back. In the event, no one was actually sent back, so the hypothesis was never tested.
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The second wave came to India because of the crimes committed against Bengalis in 1971 in the events leading up to the <a href="https://en.wikipedia.org/wiki/Bangladesh_Liberation_War">Bangladesh independence war</a>. Since then, both Hindus and Muslims have continued to migrate from Bangladesh to India.
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Things came to a head when, following <a href="https://en.wikipedia.org/wiki/Assam_Movement">the death of Hiralal Patwari in 1978, by-elections had to be held in the Mangaldoi assembly constituency in Assam</a>. It was noticed that the number of registered voters had risen dramatically since the previous election – much more than could be explained by population growth. This triggered a popular outrage against the “takeover” of Assam by foreigners, spearheaded by the <a href="https://en.wikipedia.org/wiki/All_Assam_Students_Union">All-Assam Students Union (AASU)</a>, led by Prafulla Mahanta.
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The Assam Accord and the IMDT Act
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<a href="https://en.wikipedia.org/wiki/Nellie_massacre">The Assam movement of 1979-1985 became extremely violent</a> and, to put an end to this, <a href="https://en.wikipedia.org/wiki/Assam_Accord">former PM Rajiv Gandhi agreed to the “Assam Accord” that he signed with Prafulla Mahanta on 15 August, 1985</a>. One of the key provisions of the agreement was that those immigrants who came in to Assam before March 25, 1971 would be considered legal immigrants, whereas those who had entered Assam on or after March 25, 1971 would be deemed illegal and expelled. To enforce this, the <a href="https://en.wikipedia.org/wiki/Nellie_massacre">Illegal Migrants (Determination by Tribunals) Act, also known as the IMDT Act, 1983</a>, was used. This act provided the mechanism by which people could be identified as either citizens or illegal immigrants. <a href="https://en.wikipedia.org/wiki/Prafulla_Kumar_Mahanta">Prafulla Mahanta</a> subsequently founded the <a href="https://en.wikipedia.org/wiki/Asom_Gana_Parishad">Asom Gana Parishad (AGP) party</a>, the political incarnation of the AASU, and subsequently became the Chief Minister of the State of Assam.
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This was an unwise agreement, despite having had the effect of stopping the violence, because no thought was given to what would be done with those deemed illegal immigrants. Deporting them to Bangladesh was the likely thought in the minds of the Assamese, but the Assam accord was drafted without ever taking consent from Bangladesh, and so there was never any assurance that anyone identified as a Bangladeshi immigrant by India would ever be accepted back by Bangladesh. In fact, <a href="https://scroll.in/latest/930979/bangladesh-government-expresses-concerns-over-assams-nrc-process-for-first-time">Bangladesh has recently reiterated that under no circumstances would it accept anybody back from India.</a>
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Despite this fact, the Assam Accord did not result in large-scale deportation of illegals, because the IMDT act had many safeguards for the immigrants that made deportation difficult. The most important among these was that the onus of proving that someone was an illegal immigrant was on the accuser, not the accused. If someone was accused, they could prove their citizenship by simply providing a ration card as proof. If the case still went further, it would be brought before a tribunal of retired judges who would decide on it. The central government also had the option to decide to throw out any petition for naming someone as an illegal immigrant on the grounds that the petition was frivolous. All this provided substantial safeguards for immigrants.
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The End of the IMDT and the Revival of the NRC
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It should be noted that the IMDT Act had some key differences with the Foreigners Act, 1946, which applied to the rest of India. Under the Foreigners Act, 1946, the onus of proving citizenship is on the accused and not on the accuser. Under the IMDT Act, on the other hand, the onus is on the accuser to prove that the accused is not a citizen. Because of this, very few people were actually deported under the IMDT act.
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To change this, Sarbananda Sonowal of the AGP (now of the Bharatiya Janata Party, or BJP) challenged the IMDT Act in the Supreme Court in 2005 and won the case. <a href="https://indiankanoon.org/doc/1436100/">The Supreme Court said in its observation</a> that because of the generous safeguards in the IMDT Act, less than 0.5% of all cases filed under it resulted in deportation, and struck down the IMDT Act as unconstitutional. The Court said in its judgement that “the Bangladesh nationals who have illegally crossed the border and have trespassed into Assam or are living in other parts of the country have no legal right of any kind to remain in India and they are liable to be deported.”
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However, the honourable SC does not seem to have seriously considered the question of where the said illegal immigrants were to be deported, given that no country would accept so many migrants back into their country. Furthermore, the decision on whether someone was an illegal immigrant or not was to be decided by India, not Bangladesh. <strong>Why any country would accept the verdict of another country on a matter regarding those it would be forced to accept as its own citizens is hard to imagine.</strong>
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With the disbanding of the IMDT Act, the question of how illegal immigrants were to be identified and dealt with came back to the fore. The issue was finally settled by the Supreme Court in 2013 in its judgement in response to writ petitions by Assam Public Works and Assam Sanmilita Mahasangha & Ors. In its judgement, the SC ordered that the NRC should be updated to identify illegal immigrants, and the illegals should be expelled.
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<a href="https://en.wikipedia.org/wiki/National_Register_of_Citizens_of_India">Accordingly, the process of updating the NRC was begun in 2015</a>, and the first draft of the revised NRC finally made it on 1 January 2018. This was then revised, taking appeals and objections into account, and the revised list was announced on August 31, 2019.
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Hindu vs Muslim Immigrants
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One of the central poll planks of the BJP had always been that Muslim migration from Bangladesh to India had been unchecked and had led to a rise in the Muslim population of India. They had always accused the Congress of not doing enough to stop the immigration because Muslims formed a useful vote bank for the Congress. The BJP had promised that, if elected, they would put a stop to illegal Muslim immigration into India.
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To this end, they decided to support the AGP. A political alliance was formed between the BJP and the AGP to form a government in Assam. The BJP reasoned that the AGP was against immigration into Assam, and the BJP was against immigration into Assam as well, and so this was a natural partnership.
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<strong>But this was anything but a natural partnership.</strong>
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The AGP’s objection to immigration was <strong>ethnic.</strong> They were opposed to the immigration of anyone who was not ethnic Assamese. This included <strong>both Hindus and Muslims.</strong> In particularly, the AGP was violently opposed to Bengali Hindu immigrants living in Assam. The AGP’s prime consideration was that Assamese culture was being wiped out due to Bengali influence.
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The BJP’s objection to immigration was <strong>religious.</strong> They were opposed only to the immigration of Muslims into Assam (and into all of India.) <strong>The BJP had no problems with Bangladeshi Hindus who had settled in Assam.</strong>
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The alliance between the BJP and the AGP was, therefore, an unholy marriage of convenience on a shaky foundation.
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The Citizenship Amendment Act
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The BJP realized this problem and, to solve it, introduced the <a href="https://en.wikipedia.org/wiki/Citizenship_Amendment_Bill_2016">Citizenship Amendment Act</a>. This act would confer Indian citizenship on all Hindu, Sikh, Buddhist, Christian, Parsi, and Jain immigrants, but would specifically exclude Muslims. This suited the BJP’s strategy of hate politics very well, because it selectively excluded Muslims. But it was absolutely unacceptable to the majority of the Assamese, <strong>because the Assamese correctly saw the Citizenship Amendment Act as a means to legalize illegal Hindu migrants into Assam through the back door.</strong> The BJP tried to pass the bill in Parliament, but was unable to because of the opposition to the bill.
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Despite all this, the BJP went ahead and encouraged the creation of the NRC to determine who was an Indian citizen and who was not, in line with the Assam accord. In doing so, the BJP was supremely confident that most of those who were about to be classified as foreigners would be Muslims.
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The whole thing is ugly on both sides. <strong>On one side of the coin is ethnic hatred, of Assamese for Bengalis; on the other side is religious hatred, of Hindus for Muslims.</strong>
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Now the revised list has been published, and according to most reports, <strong>a large percentage of the identified illegal immigrants are Hindus</strong>, in contrast to the BJP’s expectation that most identified illegal immigrants would be Muslim. This is why the BJP frantically (and unsuccessfully) tried to delay the publication of the NRC list, because when a large number of Hindus are denied Indian citizenship, it will hurt the BJP’s Hindu vote bank.
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<a href="https://www.ndtv.com/india-news/assam-nrc-final-list-conspiracy-to-keep-hindus-out-assam-bjp-leaders-unhappy-with-nrc-list-2093492">The surprise that the BJP has expressed</a> is evidence of its ignorance — after all, at the time of India’s independence, nearly a fourth of all Assamese residents identified themselves as Muslim; so the fact that a large number of Muslims in Assam are legitimate residents of Assam should not be a surprise to anyone who had done the minimum research on the demographics of Assam.
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If the leaders of the BJP had actually done some demographic research, they would have realized that this was going to be the outcome of the NRC. The facts have been in the public domain for a long time. But apparently, they believed their own rhetoric, which they used to whip communal frenzy among the people of India and win elections — that Muslim immigrants were streaming through the border and were going to make Hindus in India a minority. <strong>Their ideology blinded them to the fact that the community that was going to be affected most by the NRC in Assam was the Bengali Hindu community.</strong>
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It is astonishing that the BJP could not see the writing on the wall. The officials conducting the NRC drive are all Assamese, and bear no loyalty to the BJP’s religion-based agenda. Now the BJP will have to deal with the backlash from the Bengali Hindu community. Their only hope to avoid this is to bring in the citizenship amendment bill in Parliament. Just as they finagled their way with the Triple Talaq bill and the abrogation of Article 370, they might be able to pass this law in Parliament as well. But while they may succeed in Parliament, Assam will likely erupt in revolt if they indeed pass the Citizenship Amendment Bill to save the Bengali Hindus facing an uncertain future after being excluded from the NRC. <strong>One wonders if the government will send another 100,000 paramilitary forces into Assam to “maintain the peace” as they have done in J&K for the last month, and introduce the Citizenship Amendment Act in as stealthy a fashion as they did the abrogation of article 370.</strong> Will yet another state be put under martial law, with curfew for weeks, the state leaders imprisoned, and all communication cut off, in order to fulfil the BJP’s political objectives?
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One further point needs mention. The issue of “foreigners” is a sensitive one not only in Assam but in the entire Northeast. This is because of colonial history; when the British ruled in Northeast India, most of the administrative cadre came from Bengal. This has led to a lot of anti-Bengali resentment in many parts of the Northeast. Therefore, any attempt by the BJP to bulldoze its way with the Citizenship Amendment Act will have consequences not only in Assam but in the entire Northeast. <a href="https://en.wikipedia.org/wiki/Dkhar">Meghalaya</a> and <a href="https://www.outlookindia.com/website/story/tripura-journalists-murder-why-do-indigenous-people-perceive-bengali-media-as-bi/302072">Tripura</a> are prominent examples.
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Whither Human Rights?
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No matter how the NRC is conducted — whether the target is all non-Assamese or whether it is only Muslim immigrants into Assam — <strong>the entire idea is completely heartless and cruel.</strong> Not only is the standard of proof being demanded unusually stringent, in a country where the standard of record-keeping is so poor that a large number of people do not even possess birth certificates, but the entire process seems to have been conducted without any endgame plan in mind. <strong>That any court, let alone the highest court of the land, the Supreme Court, even allowed this register of citizens to proceed without careful consideration of the consequences is astonishing in the extreme.</strong>
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For, the entire NRC exercise offers no enlightenment as to what is to be the fate of those declared non-citizens of India. The Bangladesh government has made it clear that it considers the entire matter an internal matter of India, that it does not consider anyone who does not make it to the list of Indian citizens a Bangladeshi citizen, and has clearly said it will not take back any of these people. So what is the plan for these people? Does the government, and does the SC, propose to make these people who were hitherto living freely as Indian citizens prisoners and house them in internment camps? And for how long? No country will take them. If India will not accept them as Indian citizens, <strong>does India intend to keep 1.9 million people in jails for the rest of their lives?</strong> That would constitute an appalling violation of fundamental human rights.
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It is also worth noting that 2019 is a long way away from 1971. Think of someone who may have moved from Bangladesh to India in 1972 – 47 years ago. If this person was in his mid-thirties in 1972, he might not even be alive now. But his children might have been born and might have lived in India for nearly half a century. India is the only country they know. If you suddenly pronounce them non-citizens, where will they go? It is extreme cruelty to send them to another country at this age, even assuming that you can find another country to accept them in the first place.
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Incidentally, it is worth pointing out that getting “legal documents” in India is not very difficult if you have the money. Those with the money, even if they are illegal immigrants, whether Hindu or Muslim, would have found it fairly easy to establish their domicile in a country like India, where everything from birth certificates to passports to news can be faked. The present climate must have been a bonanza for forgers in Assam, as the going rates for fake documents must have gone up at least tenfold. <strong>The people who will be affected most, therefore, will be those without the means to buy their freedom.</strong>
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<strong>The entire issue of the NRC is a monumental, national disgrace for the people of India.</strong> It was a compulsion that forced Rajiv Gandhi to agree to the ethnic basis of the Assam Accord, but he did it as a stopgap bandaid to stop the violence. He also linked the Accord with an instrument like the IMDT Act that would actively nullify the Accord. It would have remained as an unfulfilled promise, had not the greed of the BJP for votes based on dividing people on the basis of religion gotten the better of them.
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<strong>This entire ugly affair is a stark reminder of what happens when a base impulse – bigotry – is combined with a lack of intelligence to see the consequences of that bigotry.</strong>
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The story does not end here. We have come so far in this tragedy that we must soldier on to the bitter end. There is no happy ending to this story. Hatred, once allowed free rein, always has victims. Allowing our basest instincts to rule our actions can and will only result in tragic consequences, and the NRC drama is no exception to this rule.
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com5tag:blogger.com,1999:blog-2647581039313842967.post-17133518799150962722019-05-27T20:56:00.000+05:302019-05-27T20:57:38.473+05:30Tumhari Hai Tum Hi Sambhalo Ye Duniya: An Appeal To Fellow-Liberals In India <article> <!-- Article Title -->
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Tumhari Hai Tum Hi Sambhalo Ye Duniya: An Appeal To Fellow-Liberals In India
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Written by Dr. Seshadri Kumar, 27 May, 2019
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Liberals in India have tried for the past five years to convince their fellow-Indians that Narendra Modi should not be re-elected in 2019 — and failed. Modi has come back to power with a bigger mandate than in 2014. What this means is that the other side is not receptive to the arguments of us liberals — for whatever the reasons may be. There is therefore no point in continuing to highlight what we liberals believe about Modi being bad for the country — the strategy has clearly not worked.
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It is therefore time for liberals to take a step back and to disengage from political discussions for a year or two, and watch what actually happens in India under Modi 2.0. If things are bad as we fear, then Modi's supporters will realize the facts for themselves. They will be more likely to admit that things are wrong if they do not have to constantly defend Modi against attacks from liberals. And if things in India actually end up being as rosy as supporters of Mr. Modi believe, then it will be the best of all possible worlds for all Indians.
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A Time to Understand Reality
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It is now 4 days since the election results were announced. Liberals who fought the war of ideas on social media with the supporters of Mr. Modi are shocked, angry, and depressed that he won with such a large mandate.
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<p>
They say grief is a multi-stage process, and many of my friends are in different stages. I understand it is hard. I myself have been very involved for the last five years in pointing out the problems in this administration and in trying to convince people not to vote for Modi for a second term. I only achieved closure after I posted my last post titled “<a href="https://www.leftbrainwave.com/2019/05/a-farewell-to-arms.html">A Farewell to Arms</a>” (Apologies to Ernest Hemingway.)
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<p>
So, while I understand what all of you are going through, here is my appeal.
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<p>
We tried to convince people that re-electing Modi would be a mistake. We pointed out the various problems, whether economic, social, intolerance-related, related to the scientific temper, or relating to foreign policy. We argued. We shared opinions.
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But we failed in convincing people. Modi was re-elected with an even bigger mandate.
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What does this tell you? I don't know, but it tells me that whatever I have been doing for the past 5 years has not worked. And so I have understood that repeating that pattern will not convince the other side, either.
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Unfortunately, I see many of my friends getting into the same pattern again. That was fine for the last five years, but to continue it is destructive and futile. Yesterday some community leader made some inflammatory statements, and everyone has been posting the video of those statements today, talking about how things in India are getting worse. Others are still arguing as to whether this was a “stolen” election — whether EVMs were selectively tampered. (It does not matter. Even if you somehow discover that they were, the ECI is not going to rerun the election.)
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All this is not going to help. These are the things that we tried explaining to them for 5 long years. The other side is not interested in listening. I found recently in a WhatsApp group that I belonged to that highly educated folks from the other side were <em>not even reading</em> my posts — including even instances when my posts had nothing to do with politics. Such is the rift between the liberals and supporters of Mr. Modi. They have closed their minds off and will not read anything you write — because it is you, a liberal, who is posting it. As symptomatic of that, I just responded to a Modi supporter who commented on FB regarding my “Farewell” post without even reading it and started telling me that I was wrong - even though he did not even know what I had written in it.
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<p>
<strong>That is how things are today. You can post all your arguments on how things are bad under Modi. The other side is simply not listening.</strong> And, with Modi having won a resounding mandate, they have even less incentive to listen to you.
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The Way Forward
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So what should we liberals do? I would say we should just take a deep breath, and stop posting on politics, Modi, Rahul, Muslims and Dalits getting beaten up (there are going to be a lot of such incidents now, because lumpen elements on the street will feel vindicated and think they have carte blanche now), and similar topics. Post absolutely nothing on any of these.
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<p>
Wait for a year at least. Maybe two. Let us see how things pan out.
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<p>
This has been a war of ideologies. There are those who believe that Modi will bring a golden age to India. There are those of us who believe that he is going to ruin India. Let us understand one thing: both sides genuinely believe that they are correct.
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Let us see who is correct here. If we are correct, the other side will realize that things have gone terribly wrong without us telling them a single thing or reminding them by sharing news links. They can read newspapers and websites too.
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If they are correct, then that is good news for us too. If the country is indeed going to be better because of Mr. Modi's wise leadership, all of us will be happy. We opposed him only because we are worried that bad things are going to happen. As of now, I believe that, based on what has happened during the last five years. But if the results are different in the next five years, I will have no problem with Mr. Modi. He has been making inclusive speeches since he won. Let us see if he delivers on those words. And let us hope his handling of the economy is better than it was in the last five years.
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But clearly, arguing on Facebook is not helping any of us. If the objective is to learn, then we seem to have come to a pass where the other side is simply not interested in even looking at what we share, let alone absorb and learn.
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<p>
Either they will learn the hard way that what we were saying was right all along, or we will learn the happy way that what they were saying was right all along.
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<p>
So that's my appeal to you: stop arguing, stop posting news links talking about all the bad things that are happening. Cede the social media space to them. Stop wasting your time arguing. And even if they taunt you, don't respond. After you stop responding a few times, they will stop taunting you, because there is no fun if the other person does not react.
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<p>
Maintain complete radio silence at least for a year. Or two. There may be times in the next year or two when terrible things happen. Maybe a village of Dalits gets burned (I am not saying it will, just giving an extreme example to make a point). Resist the temptation to say, “See? We told you so!” Let them introspect and come to the same conclusion on their own, without any prodding from us. As long as we are taunting them, they will defend Modi even if something indefensible has happened — just because we are attacking them.
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Let us see the worst (or best) that Modi can do.
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As Guru Dutt says in the immortal song in “Pyaasa,”
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Tumhaari hai tum hi sambhaalo ye duniya (“The world is yours; you take care of it.”)
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<p>
So, my fellow-liberals, take care of yourselves and your families, use the time that you were spending on Facebook and WhatsApp all these years on reading, music, travel, whatever. Cherish your loved ones. I would even advise not watching news on TV. I have stopped doing that. I get the newspaper anyway — I do not need to know what is happening minute by minute. If Rahul Gandhi is going to resign, it is fine if I find out next morning — it's not like I will go to his home to convince him otherwise if I find out at 3.43 pm.
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With that, I will keep my end of the bargain and post nothing more about Indian politics, at least for a year. I will wait and watch what happens and what Mr. Modi does.
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I would like to thank all those who have been part of this journey of the last 5 years with me. Your feedback, encouragement, and engagement have meant the world to me.
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But now it is time for me to rejuvenate myself. A writer needs to read a lot. Without that, he cannot write informed commentary. Unfortunately, there are only so many hours in the day, and so if you write a lot, you do not get that time to read. I hope to use this hiatus to catch up on my reading.
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I have also made many great friends through my writing – people who I admire and in whose presence (real and virtual) I delight to be. These friendships will continue, and I would aver that, in the end, that's what really matters.
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With that, Adios, and good luck in all your endeavours!
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Peace to all.
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com0tag:blogger.com,1999:blog-2647581039313842967.post-36103989931135193572019-05-26T14:03:00.000+05:302019-05-26T17:52:24.695+05:30A Farewell To Arms <article> <!-- Article Title -->
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A Farewell To Arms
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Written by Dr. Seshadri Kumar, 26 May, 2019
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The 2019 General Election in India represents a fundamental shift in Indian thought. The foundation of the Indian state in 1947 was secularism, that India was a country for people of all religions, in sharp contrast with Pakistan, which was conceived as a state for Muslims alone. India’s founding fathers wanted to prove that Pakistan was a mistake; that Muslims could live and thrive in a Hindu-majority India. India was conceived as a rejection of the “two-nation” formula on which Pakistan was predicated. That era is over now, and India is now a de facto Hindu nation if not de jure. It will become a Hindu nation in law in a few short years as well. And in such a state, there is no space for a secular party such as the Congress of old to survive.
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The Three Cassandras
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Five years ago, I formed a Facebook chat group with two of my close friends. The name I gave the group then, though we changed it later, was “The Three Cassandras.”
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For those who don't know, Cassandra is a character in the Trojan war, in the epic by Homer, the Iliad. She is the daughter of the Trojan king Priam, and is a priestess of the temple of Apollo. It seems that the god Apollo (the Sun god) was infatuated by her, and wanted her to be his lover, and as an inducement gave her the gift of seeing the future. But even after getting the gift, Cassandra refused to become his lover. An angry Apollo cursed her, saying that her gift of prophecy would be useless to her, because nobody would believe her prophecies from that time on.
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So, when the Greeks pretend to leave Troy after 10 years of fighting, and leave a huge wooden horse on the beach as a gift to Apollo (but within which Greek warriors were hiding) — the famous Trojan Horse — Cassandra realizes this is a false gift, and warns the Trojans not to bring the wooden horse inside the walls of Troy, which the Greeks could not breach for 10 years. But because of the curse of Apollo, nobody believes her. The result is that the Greeks come out of the horse at night and kill all the Trojans.
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Now I think that name I gave the group was very accurate. The three of us were certainly Cassandras — nobody listened to us as we pointed out the dangers of majoritarianism and of electing an unlettered and ignorant person as the PM. Now the Troy that is India is going to be saffronized, irreversibly. To me that is as good as destroying India. India without its secular fabric and scientific temper — and a religious state is the very antithesis of scientific temper — is as good as dead. A religious state, by definition, implies that there is only one version of the truth, and that everyone must conform to that version, under pain of punishment, and such dogma is antithetical to scientific thinking.
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IAC as My Inspiration for Blogging and Facebook Posting
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I was inspired to write by the political movement of the IAC — the India Against Corruption movement led by Anna Hazare in 2011. Until then, I was one among most Indians who was only worried about making my life more comfortable. I did read the news in the paper, but not very critically or analytically. The 2011 movement started the process in my life when I started reading the news more critically, started examining whether what politicians were saying was true or not, started delving into various domains like law, the Constitution, the history of independent India, economics, etc.
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<p>
While I lost my fascination for IAC and the AAP a little later, I continued to examine issues critically. I started writing a blog, and that started right at the time of the IAC agitation, because I realized, after even participating in an IAC rally in Pune where I shouted slogans like “Ek sur, ek taal, Jan Lokpal, Jan Lokpal,” that street politics and organization were not my cup of tea. So I started thinking about how I could contribute — and I realized that maybe writing about issues was a way to contribute, since I could write. But I knew I could not sit idle — I had to do something. I was inspired by what Gandhi had said: “Be the change you wish to see.”
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Although I was initially fascinated by Modi in 2013 and 2014 (I was not very familiar with what had happened in 2002, because I was away in the US then and not at all connected to Indian politics then — it was a different time, with little internet access), <span id="emphasizedCommentary">I gradually found my voice as a liberal. To me, it is the only position that an educated and critical thinker can have. The idea that all humans are essentially equal, no matter what their differences are, is a powerful one, and so I became opposed to majoritarianism of any kind.</span>
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Being a Liberal In The Modi Years
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And so I found myself in constant opposition to the policies of this government. I found myself repeatedly horrified by the silence of Prime Minister Modi in the face of repeated public lynchings of innocent Muslim men. To me, that was and still is tacit encouragement of violence towards minorities, and no amount of whataboutery can change that. Or the Citizenship Amendment Bill, which seeks to treat Muslims as the “other” — it is hard to think of a policy that is more polarizing than that. And telling me that well, the people of India voted for Mr. Modi again, does not change that. If a principle is wrong, it is wrong, no matter how many people support it. And a liberal is all I can be, no matter how much the environment around me changes. I cannot find myself discriminating against someone else because he or she belongs to a different religion, or supporting anyone who does.
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I realize the current political environment does not offer choices in terms of principled politics. Is there a single party that resonates with my liberal ideology? No. The Congress Party had adopted a line of soft Hindutva in these elections that seemed to serve it well in Kerala, but not in the rest of the nation. Clearly, pandering to soft Hindutva in the matter of Sabarimala helped them unseat the Left. Digvijay Singh publicly performed a puja to help him in his re-election with the help of “Computer baba,” but was defeated by Pragya Thakur, a terror-accused out on bail.
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How about the AAP? This was the party that forced Bollywood composer Vishal Dadlani to apologize for criticizing the Jain monk Tarun Sagar giving a sermon to the Haryana legislature.
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So no, there is no party in the country that actually completely subscribes to a liberal ideology. But as a practical matter, what does a liberal do when these are his choices? The only thing possible is to vote for the lesser evil. With all its flaws and hypocrisies, the Congress is still the lesser of the evils. And <a href="https://frontline.thehindu.com/cover-story/article26921112.ece">its manifesto for these elections was a breath of fresh air</a>, and a clear departure from the past — exactly the things a liberal would wish for — and so I hoped the Congress would win. It was not to happen.
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The Congress Party’s Shifting Ideologies
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Several articles criticizing the Congress Party have appeared in the print and online media following their loss in the 2019 general elections. Many of my friends are in denial, but the points need to be seriously considered. Think, for example, about the point that the Congress does not have a consistent ideology. Isn't this true today? It used to be that the Congress was the secular alternative, and some might say with some justification that they went too far in trying to be secular.
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But after seeing the BJP inflict drubbing after drubbing on them in state elections after 2014, the Congress decided to rework itself into a soft Hindutva party. Shashi Tharoor even justified it in an interview by saying we are a democratic party and so we have to cater to what our constitutents want. So essentially, when the people of India moved to the right — and I don't think any clear-headed person will dispute that — then the Congress party, in order to represent them and so win elections, decided to move to the right as well. Rahul Gandhi proclaimed that he was a “janeu-dhari” (someone wearing the Hindu sacred thread) Brahmin and a Shiva bhakt, and went on a pilgrimage of holy shrines to prove it to the public.
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The problem with that is that the party is seen to have no fixed ideology.
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Compare that with the BJP. They have had a consistent ideology for decades. Hindu Rashtra. Ram Temple at Ayodhya. No Muslim appeasement. End the subsidy for Muslim travelers to the Haj pilgrimage. End Reservations. etc. etc. No change in any position, just keep hammering away at it until it happens.
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Even the regional parties have more consistent ideologies than the Congress. BSP stands for Dalit upliftment, DMK stands for Dravida upliftment, and the SP stands for OBC upliftment. Caste based parties have a clear ideology. They exist to uplift the condition of the people from their caste, be they Jat, Patidar, Yadav, Bodo, or whatever else.
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The Changing Face of India And The Irrelevance of Secularism Today
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Why did the Congress abandon its long-standing philosophy of secularism? Because they were losing.
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And there is the rub. India is changing. While there is still some room for caste-based politics (Hindutva does not mean the end of selfishness), <span id="emphasizedCommentary">there clearly is no room for a secular philosophy, a liberal philosophy, in India today</span>. To be clear, the people of India at large are not interested in oppressing or killing Muslims. They just want a better life. But if oppression or killing does happen, they don't care any longer. Who is responsible for this? The blame should fall on the shoulders of the people of India for the unsympathetic attitude they have taken. But this does not mean that politicians are not responsible. The RSS has been propagating the poison of intolerance ever since Independence, but this was taken to new heights by Advani and Vajpayee during the Ram Janmabhoomi movement of the late 80s and early 90s. While people still bear the responsibility for their actions, the hate speeches of the BJP leaders during the Ram Janmabhoomi movement, culminating in the destruction of the Babri masjid, definitely poisoned the minds of countless Indians. When you constantly hear about how someone like Aurangzeb oppressed our Hindu ancestors, and when you hear a big leader like Advani equate the Mughals with the ordinary Muslims of today, not everyone possesses the discrimination needed to understand that a leap of logic has suddenly been made. The hardline intolerance of most Indians today definitely owes a lot to the <a href="https://youtu.be/OO-VaJBHiik?t=1033">speeches of Mr. Advani</a> and his companions, such as Uma Bharti.
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The BJP tradition of stoking the anger of the Hindus at wrongs committed centuries ago and blaming the Muslims of today continued over the years and found a new messiah in Narendra Modi after the 2002 riots. Modi is infamous <a href="https://www.outlookindia.com/website/story/should-we-run-relief-camps-open-child-producing-centres/217398">for having given a sspeech in Ahmedabad mocking the Muslim community for its birth rate</a> with his infamous “Hum paanch, hamare pacchees” (“We are five, our family is 25”) speech. More relevant is his speech during the 2014 election campaign, <a href="https://youtu.be/1ElnjqtBbuc?t=229">where he said in a speech</a>: “We have heard of the green revolution, we have heard of the white revolution. But under the rule of the Congress party, they have created the pink revolution” referring to the slaughter of cows for beef and the implied suggestion that Muslims are responsible for this. When the atmosphere is constantly vitiated by hate speech such as this, is there any surprise that cow vigilantism has been a major issue during Modi's first term? Supporters of Modi ask me how Modi can be held responsible when someone decides to lynch a Muslim - can he be monitoring every citizen? No, but all this violence is a consequence of the hate he spewed against Muslims in his speeches. People don't forget.
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<p>
And so, while it is the people who are responsible for their choices, politicians do make things considerably worse. Since winning the elections on the 23rd of May, Modi has made fairly inclusive speeches. And I am inclined to believe he is sincere now about not wanting to target minorities. As a Prime Minister, widespread violence in the country does him no good. But the problem is the Jekyll-Hyde character of Mr. Modi. Modi the campaigner is a different animal from Modi the Prime Minister. <span id="emphasizedCommentary">PM Modi would like Hindus and Muslims to fight poverty and not each other. Campaigner Modi would like to further cleave apart faultlines between Hindus and Muslims because it helps unite the Hindus to vote for him.</span> Unfortunately, the two cannot coexist. What has happened is that the continuous infusion of hate for the last 30 years from the BJP has fundamentally altered the character of the Indian people. I have actually criticized Modi for his silence when an Akhlaque or a Pehlu Khan or an Afrazul was killed and people of his party support the killings or garland the murderers. But Modi is silent for a reason — and it is not that he wants these people killed.
</p>
<p>
<strong>Modi is silent because if he criticizes those who commit these atrocities, he risks losing his support.</strong> After having been egged on to think of Muslims as the enemy for decades, if his followers now commit acts of violence against the Muslims and if he criticizes them, he will be seen by them as a turncoat. Modi is a keen student of history. He has seen how his mentor, LK Advani, fell from grace not too long ago. Advani was the darling of the right wing, and it was a given that if and when the BJP came to power again, he would be the PM since Vajpayee would retire soon. But he ruined his chances in one moment of weakness — in a visit to Pakistan in 2005, <a href="https://www.telegraphindia.com/india/advani-salutes-secular-jinnah/cid/873488">he visited Jinnah's tomb and publicly praised him as a secular person and as an ambassador of Hindu-Muslim unity</a>. That moment of weakness cost Advani the Prime Ministership and future leadership of the BJP. It was a key factor in the BJP cadre deciding to support Modi over Advani in 2013. Modi was seen to not be weak like Advani. And so, if, in the interest of a stable country, Modi actually chides his followers for committing acts of violence against Muslims, the backlash against him will be severe. Already the right wing of the BJP is upset that so many promises are pending, such as the construction of a Ram Temple in Ayodhya. That's why he will <a href="https://economictimes.indiatimes.com/news/politics-and-nation/will-never-forgive-sadhvi-pragya-for-her-remark-on-nathuram-godse-pm-modi/videoshow/69372884.cms">make token noises about “never forgiving Pragya Thakur for her comments against Gandhi</a>,” but he will never take concrete action.
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<p>
In fact, as I have stated many times on social media, <strong>the big mistake the liberals in India have made is to imagine Modi as this villain who is solely responsible for all the ills happening in India. Modi is simply an agent.</strong> Even though liberals do not like to acknowledge it, democracy is alive and thriving in India, even under Modi. Elections in India are never perfect, but I do believe that Modi being elected is the full expression of a democratic country. I am not a believer in EVM conspiracy theories, and I do not believe that 2019 was a stolen election. <strong>And that is, to me, the scary part.</strong> Modi said in his victory speech that the 2019 victory was a positive mandate for the good things he did. I am not arguing with the idea that many people voted for him because they thought he was the Messiah who would make India a great country. My only point is that none of the people who voted for him was the slightest perturbed about the persecution of minorities and the total silence from the ruling government on the atrocities. Nobody was bothered in the least as a Union minister garlanded murder convicts who were released on bail, or when another minister draped the body of a man who was part of a lynch mob that murdered a Muslim (for allegedly eating beef) in the national flag and paid homage to him on his death. To me, these things represent the death of secularism in India.
</p>
<p>
Some of my friends might disagree with my analysis because the Congress’ vote share has actually gone up by around 2.5% in this election compared to the 2014 election. Isn’t that a vindication of secularism, one might ask. But then you would forget the fact that in this election, the Congress abandoned secularism as their platform. I would argue that the Congress did so well only because it abandoned secularism — that if it had continued to talk about secularism and the protection of minorities, it would have done worse than it actually did.
</p>
<p>
Media has played a major role in this election — and in fact, for the past 5 years. And this is not just because of the large sums of money that Mr. Amit Shah has given them. Most of media is owned by upper caste Hindus, and most of them are sympathetic to the Hindutva cause. Just one look at the coverage of the election campaign by the various TV channels would have made that abundantly clear. Media anchors were behaving like cheerleaders for Modi. This is why a major scam like Vyapam, in which 40 people died (tell me how many people died in 2G?) was quietly swept under the rug. Just imagine — a scam is so big that 40 people are killed to prevent them from speaking up — and yet the media hardly spoke about it. Would this have happened if the Congress Party was ruling the country?
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<p>
Or think about demonetization. What a massive scam that was! <a href="https://www.indiatoday.in/india/story/rs-3-118-crore-deposited-in-11-gujarat-banks-linked-to-amit-shah-bjp-after-demo-congress-1266960-2018-06-22">The bank in which Amit Shah was a director made a killing</a>. Dozens of BJP functionaries were <a href="https://www.business-standard.com/article/economy-policy/several-bjp-men-caught-with-crores-karnataka-biggest-hotspot-for-illegal-cash-transactions-116120700330_1.html">found with hundreds or thousands of crores of freshly minted 2000 rupee notes in their possession</a>. Yet, was there a national outcry about corruption due to demonetization? No.
</p>
<p>
But is it only the media? How many of you have the guts to go to your offices and criticize Modi and the BJP when you go for a tea break? Just try it, and 20 people will descend on you like hawks on a mouse. Some of them will gently tell you you are deluded and falling for “sickular” propaganda, others will denounce you outright as an “anti-national.” What does that tell you? Forget whether you are right or wrong. It tells me that Modi has wide public support.
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<p>
Or go to the villages. I have seen interviews in which villagers would rationalize on Modi's failures. Such as saying, “Yes, the stray cows ate my entire crop, and caused me huge financial loss, but I will still vote for Modi. I think he will fix all this.” There were others who blamed the state leadership even though demonetization was a central measure.
</p>
<p>
As some in the media have commented, some of Modi’s development initiatives may have had an effect. But that is not my focus here. I am not going to argue here on whether there has been enough progress in the country or not, or enough rural development. <a href="https://www.leftbrainwave.com/2019/04/have-acche-din-arrived-acche-din.html">I have done enough of that, in excruciating detail, elsewhere.</a>
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<span id="emphasizedCommentary">My key point, as a liberal, is that secularism is no longer an issue in India.</span> And that was obvious even before the election. That we could see a Shambhulal Regar could torture and kill Afrazul in front of a camera, and then see people protest his arrest in Rajasthan, spoke volumes of the change in values of this country. Similarly, that a Pehlu Khan, clearly an innocent, was publicly slaughtered in Alwar by cow vigilantes, with someone filming the killing, and the police letting the killers off, citing lack of evidence, tells you how deep the rot in values is.
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There are many more instances, and the point here is not to discuss who was responsible for the killings or for the inaction in prosecution. <strong>More importantly, it is to highlight the complete indifference of the public to these public murders.</strong> The nation as a whole was not shocked or stunned. No candlelight vigils. No protests on the street demanding that the government of the day should do more in protecting its minority citizens. Nothing. About all that happened was that a bunch of liberal commentators wrote articles about it in the media and hyperventilated in debates on TV. Nobody cares in India about murdered Muslims any longer. Once they had a national party called the Congress that cared. Now the only party that cares is Asaduddin Owaisi’s MIM.
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And there is a cautionary tale in that observation. <span id="emphasizedCommentary">If Muslims feel that there is no moderate party like the Congress that will stand up for their rights, and if the Congress has vacated its role as a guardian of secular values, then some other party will step into that vacuum — and the new entrant may not be moderate at all</span> (I am not referring specifically to the AIMIM). This bodes ill for religious harmony in India in the coming years. Mr. Modi might find the lack of the use of the secularism slogan in this election something to gloat about, as he did in his speech on the evening of the 23rd, but this very thing can come back to bite his government in the times to come.
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The Existential Crisis of the Congress Party
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Many have analyzed this election as a failure in leadership of the Congress Party, and have put the blame on Rahul Gandhi. But is this the right diagnosis? The big news today was that Rahul Gandhi had given the Congress Working Committee his resignation and they had rejected it, but that he was firm on resigning anyway.
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One of the things blamed on Rahul Gandhi is his failure to stitch together an alliance with the Samajwadi Party and the Bahujan Samaj Party, along with the Rashtriya Lok Dal, in Uttar Pradesh. But look at the vote shares of all the parties. The BJP got nearly 50% of the vote share in UP. The BSP got 19%, the SP got 18%, the RLD got less than 2%, and the Congress got around 6%. Add them all up, and you still have only 45%. They could still not have beaten the BJP. So the Mahagatbandhan could not have won UP even if the Congress had joined them.
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Or take Delhi. Again, Rahul was blamed for not being able to reach an alliance with the Aam Aadmi Party (AAP) for the elections. But look at the vote shares: the AAP got 18% of the vote, and the Congress got 22% of the vote. In comparison, the BJP got nearly 57% of the vote!!
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In Karnataka, by mighty striving, with phone calls almost daily, Rahul managed to save the alliance with the JD(S). What happened? The BJP got 51% of the vote. The Congress managed only 32%, and the JD(S) 10%. Even with the alliance, they could not beat the BJP. Or take Haryana, where the BJP itself polled 58% of the vote. Even if all the other parties had united in an alliance, they could not have beaten the BJP.
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No. There are larger forces at work here — and it is beyond your and my poor power to add to or to detract from the damage these forces can cause and are causing.
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The larger problem the Congress faces is not one of leadership, but of philosophy. They can replace Rahul with, say, Shashi Tharoor — but will that solve their problems? I don’t think so.
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Why? <strong>Because the foundational philosophy on which it rested for 70 years since Independence — secularism and inclusiveness — has become irrelevant in today’s India.</strong> There was a reason why India became a secular country whereas Pakistan became a Muslim country. It was Jinnah's contention that Hindus and Muslims could never live together, and that was the basis of his demand for Pakistan. This is popularly known as the “two-nation theory” — one nation for Muslims alone and another for Hindus alone. The founding fathers of India, in contrast — Gandhi, Nehru, Patel, Azad — all felt this was a wrong prescription, that India could be a successful secular state that accommodated all religions, and argued that this is why partition was a bad idea. This prescription worked well for 70 years. <span id="emphasizedCommentary">But now Indians, by and large, have rejected secularism – a point not lost on PM Modi who, in his victory speech on the 23rd, proudly said that in this entire election campaign, not one person had the guts to say the word “secularism.”</span>
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Mr. Modi is a very smart man politically. He knows what is at stake here, and what the BJP is fighting for. And he knows they have achieved their objective.
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The Congress understood this shift in the Indian polity, but its response — an attempt to reinvent itself as a soft Hindutva party — was destined to fail. In Tamil, there is a saying that translates to “selling halwa to Tirunelveli.” Tirunelveli is a town in Tamil Nadu that is very famous for its halwa (a sweet). So selling halwa to a person from Tirunelveli is a metaphor used when you are trying to compete with an expert in the topic he is already an expert in. There is no way on earth the Congress could have competed with the BJP on Hindutva and won — the BJP practically invented the term.
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Some may say the Congress won in Kerala using soft Hindutva, especially in its position on Sabarimala. But Kerala is a very different state from the rest of India. Hindus, Muslims, and Christians have been living in harmony in Kerala from the time of the Arab seafarers and Vasco da Gama. It has never been invaded by Muslim invaders. So what works in Kerala will not work in the rest of India. Sabarimala was more of an issue of Kerala culture than of gender equality under the law. The fact is that although the SC verdict was legally correct, the people of Kerala really did not care about it. The ban on menstruating women was a tradition that had to be respected in Keralite society. And the Congress understood this.
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So where does all this leave the Congress – and India? <strong>The Congress Party has clearly no future in present-day India.</strong> It is not about Rahul Gandhi’s leadership. Many other parties have a clear ethnic basis for their existence. But not the Congress and its offshoots, such as the Nationalist Congress Party (NCP) of Sharad Pawar, which also lost heavily in this election. The writing is on the wall for another Congress Party offshoot, the Trinamool Congress (TMC) of Mamata Banerjee in West Bengal, where the BJP made astounding inroads this election. And why is this? Because all of these parties are secular. And secularism has become a dirty word in India today. The BJP even made inroads in Telangana, which has a Chief Minister, K. Chandrashekhar Rao (KCR), who is always traveling on pilgrimages, spends public money on renovating private temples, and spends public money on conducting “yagnas” for the long life of his government. <strong>That's because there is a difference between Hinduism and Hindutva. KCR is a devout Hindu. But it is not enough to show that you are deeply religious in today's India. You have to be seen as capable of putting the fear of God in the Muslims. That is Hindutva - Hindu majoritarianism.</strong> And KCR cannot afford to do that (or thinks he cannot afford to do that) because Telangana has a large Muslim minority whose support he believes he needs to win elections. The BJP, in contrast, believes it does not need a single Muslim vote to win an election — because 80% always trumps 14%.
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Secularism has been comprehensively rejected by the people of India in the last five years. And the result is that the Congress Party has lost its moorings. It cannot try to ape the BJP and become a Hindu party, no matter how many pilgrimages Rahul or Tharoor do. Because, as I said above, it is not enough to show that you are a devout Hindu. You must also show that you are capable of frightening the Muslims so that they can be “put in their place.” It requires an ability to be silent when people lynch Muslims in broad daylight, with full video recording of the act, and pretend that the murder never occurred. And since the Congress cannot bring itself to do this, it will die, because it is this kind of “toughness” that the people of India want — a hard, ruthless, unbending attitude towards Muslims. Narendra Modi’s dream of a “Congress-mukt Bharat” (A Congress-free India) will become a reality very soon. But Modi has succeeded not just in killing the Congress party; he has succeeded in destroying the very foundations of the nation that Gandhi and Nehru built. If Gandhi or Nehru had been alive today, they would have been denounced as anti-nationals. And there is no point in blaming Modi or the BJP for this degeneration of values. They are only doing what the people of India want. They have learned, sooner and better than others, that a tough and ruthless attitude towards minorities is necessary if one is to win elections in India comprehensively. Just look at the high-profile lynchings of Muslims that have happened in the past five years — Mohammad Akhlaque, Pehlu Khan, Afrazul, Junaid Khan — think of how many BJP leaders publicly supported these killings; and then think of the fact that the overall vote share of the BJP has jumped from 31% in 2014 to 37.4% in 2019. If the people of India were repelled by these murders, they certainly did not show their disgust at the ballot box.
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India appears all set to become a Hindu nation. The wish to transform India from a secular to a Hindu nation has been clearly articulated by several BJP leaders in the last five years, and no one should be in doubt. Most of today's BJP leaders have been raised in the RSS, which considers the secular Constitution of India an insult to Hinduism and to Hindus. They have said so publicly too many times to recount. Several BJP MPs, such as Anant Kumar Hegde, have publicly said that the Constitution should be changed. Modi himself has been a lifelong pracharak of the RSS, and there is no reason to think that he differs with his colleagues on this matter.
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All that stands between them and their dream is numbers. To change the Constitution to make India a Hindu-majority state, you need a 2/3rds majority in the Lok Sabha, a 2/3rds majority in the Rajya Sabha, and the approval of 50% of the states. With 350 seats in the NDA, the coalition is only marginally short of a 2/3rds majority of the total strength of the house (543), which is 358. After this resounding victory, more allies will join the NDA, and the BJP will have the requisite 2/3rds majority in the Lok Sabha. The Rajya Sabha will be reconstituted in 2020 and 2022, since 1/3rd of its members are replaced every 2 years. Given that the BJP controls most of the state legislatures, a 2/3rds majority in the Rajya Sabha will also be achieved by 2022 at the latest. The BJP already has governments in most of the states, so getting 50% of the states to approve the amendment is easy.
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Some will point out that there is something known as a “<a href="https://en.wikipedia.org/wiki/Basic_structure_doctrine">basic structure doctrine</a>” of the Constitution that will prevent this. But I will simply remind them that the Judiciary, too, come from the same mass of Indians, and they, too, have been infected with the same Hindutva virus. If you have doubts about this, think of this election. The role of the Election Commission is to ensure a free and fair election. And yet, this was the most biased Election Commission in history. Every complaint against Mr. Modi and Mr. Shah was summarily dismissed, and opposition leaders were being pulled up for minor offenses. So if the Election Commission, which is supposed to keep elections free and fair, will not properly discharge its duties, why do you feel that the Supreme Court, which should protect the Constitution from being tampered with, will do the right thing as we see it? Remember that these are all judgment calls: what constitutes an element of the basic structure is a matter of interpretation. If the government proposes a bill to amend the Constitution, somebody will definitely challenge it. Then it is up to the SC to decide if the amendment is violative of the basic structure doctrine. If the SC then decides it is not, then there can be no further challenge. <strong>If a hate speech that is clearly violative of the Model Code of Conduct can be given a clean chit, then so can a Constitutional Amendment that is violative of the basic structure doctrine.</strong> People should at least now give up their naivete.
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And so India, by 2022, will become a Hindu rashtra. There will not be much outcry about this, because a majority of Indians have voted for this. They will say that they did not vote for a Hindu rashtra, but for Swacch Bharat or Ujwala or whatever. But they were under no illusions that this was the intent of the BJP - <a href="https://www.ndtv.com/india-news/we-are-here-to-change-the-constitution-says-union-minister-anant-kumar-hegde-in-new-controversy-1792197">several MPs and MLAs have made it very obvious that if they returned to power, they would make India a Hindu rashtra</a>. So you may have voted for Modi because you think he will make India a “vishwa guru,” but you also ignored the clear signal that the BJP intends to make India a Hindu rashtra — it was not important enough for you. Some liberals will shout until they are hoarse when this happens, but it will matter little. <a href="https://www.leftbrainwave.com/2017/12/india-in-2027-theocratic-hindu-state.html">I have already written about what this entails for India.</a> And anyone who reads that will realize that even many of those who are celebrating today will mourn in a few years. But they will only learn through bitter experience.
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And, as for me, I now know that there is no space for a liberal commentator in India. The problem with Cassandra was that she kept advising the Trojans, even though nobody was listening to her. That only causes pain. Five years of writing about this has not yielded much result for me. I have only managed to convert one person in five years to my point of view – and that is one more than most liberal commentators can boast of doing. I spent so much energy on my blog and on social media because I hoped to help avoid the eventual transformation of India into a Hindu state. But now I see that it is inevitable, and am giving up my struggle. It will not change who I am as a person, but clearly speaking about this has not helped in changing minds. Will I stop posting on social media? I don’t know, I still might through force of habit, but eventually you can only bang your head on a concrete wall until it starts hurting. <strong>But the fight has gone out of me, because I realize that what is coming in a few years is inevitable. Our last chance was the 2019 election, and now it is over.</strong>
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One thing I must mention is that in many ways, India’s rightward tilt was inevitable — after all, this is a global phenomenon. From Erdogan to Trump to Brexit to the AdF in Germany to the neo-Nazis in Austria, the right has been gaining ascendancy everywhere. And there is a reason for that.
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Right-wingers unite very easily, and they operate very cohesively. It is very easy to get 10 million people to like a toxic and hateful post that targets minorities on the basis of outright lies. The post may be badly written and badly composed — this is often seen in India where English is not the first language of many of the people who post this. But nobody cares. Every right-winger cooperates in spreading the message. Right-wingers in any country do not worry about differences of opinion. If I hate someone, and you hate someone else, it doesn’t matter. We’ll add him or her to our list, too.
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But trying to get liberals to share a post is asking for the moon. I know a friend who will not share a post if there is a single typo or grammatical mistake in it. Every liberal has his own fetish. If two liberals agree on 99% of all issues — the economy, environment, trade, helping the homeless, universal health care, acceptance of minorities — you name it, but have a difference of opinion on one issue, say, abortion, one of them might block the other for it. Liberals can be incredibly petty about small differences of opinion. Most of them are highly educated, and fight on largely irrelevant and minor points of difference. And so liberals are never united in their causes, and make easy targets for conservatives, who gloss over such fine details. That is what has happened in India as well.
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India is sinking into a deep abyss. Only the people of India, if they can one day get out of this madness in their majoritarian thinking, can change things. That might take a very long time — perhaps decades — Iran is still unable to get out of the control of the mullahs, 40 years after their Islamic revolution. I fervently hope that day will come before I die — if not for me, at least for the next generation.
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com5tag:blogger.com,1999:blog-2647581039313842967.post-89428793425640463502019-04-26T18:33:00.000+05:302019-04-26T18:59:19.568+05:30Confessions of a City Slicker: Understanding Land Acquisition in India <article> <!-- Article Title -->
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Confessions of a City Slicker: Understanding Land Acquisition in India
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Written by Dr. Seshadri Kumar, 26 April, 2019
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Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
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Part 1. Childhood to College to America
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I was raised a city dweller, never having seen a village in my entire life. In the summers, we would go to my mother's native place, which was a town, not a village. So I had never seen a real Indian village.
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Like many Indian middle class kids, I studied engineering after XIIth standard. After four years of engineering in IIT Bombay, my plans were clear — go to the USA for a Masters degree, like two-thirds of my graduating class.
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For our convocation, IIT Bombay invited <a href="https://en.wikipedia.org/wiki/Yash_Pal">Professor Yash Pal</a> to give the convocation address. Professor Yash Pal was an eminent educationist and scientist, having obtained his PhD in Physics from MIT in 1958. At the time IIT-B invited him, he was Chairman of the University Grants Commission (UGC). Professor Yash Pal had a Padma Bhushan at the time of our convocation; he was later also awarded the Padma Vibhushan. He died in 2017 at the age of 90, after a long and productive life.
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The main thing I remember from Prof. Yash Pal's address to us — and I remember it so well because it annoyed me so much at the time — was his suggestion that after obtaining our B.Techs, all of us students should go and serve two years in rural India. He said that we needed to go there to understand the real India, to understand what problems India faced, and to know what solutions it needed.
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I was incensed. Here I was, taking steps to “advance” myself, launch myself into the greatest country in the world, and here this man was telling me that I needed to go backwards, to a “bloody village,” a “gaon???” I remember angrily telling my classmates — “who asked this guy to come talk to us? If he loves the villages so much, why doesn't he go live there?”
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Like many (most?) city dwellers, I had a certain contempt for villages and agriculture. Even the word “gawar” (meaning villager) was said by us in a voice dripping in contempt. It was customary to address someone who seemed not to be very savvy about things — a fellow-student, for example — as a <em>gawar</em>. Farming to me, then, was something illiterate and uneducated folk did. (Today I know, thanks to some amateurish attempts at growing vegetables in pots, how complex the science of agriculture is, and how much technology is needed to be a successful farmer; but then I was just an ignoramus.)
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So I got my advanced degrees in the land of the free and the home of the brave, worked there for several years, and decided to come back to India for personal reasons.
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Part 2. Return to India
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I took up a job with an MNC in Bangalore, and went around my mission to make money and create a better life for me assiduously (nothing wrong here.) I was still very much a city slicker, and knew little about the realities of life in India's villages.
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This went on until 2011, when I finally started getting seriously interested in politics in India, thanks to the Anna Hazare movement. I had always been very interested in politics, from childhood — I used to read the newspaper carefully every day — but after the Anna movement, I started to read everything a bit more carefully and critically. That is when I created my blog and started writing publicly. My express purpose at the start of the blog was to write in support of the India Against Corruption (IAC) movement, though my views have matured a lot since then - I would agree today that the excessive focus on a single person / organization like the Lokpal, with unlimited powers, is probably a misguided and potentially dangerous focus.
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I also started getting interested in things like economics for the first time, and in a few years, even started to write on topics connected with economics along with politics. It was then that I started understanding the immensity of India's agricultural sector and the importance of rural India.
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But in 2011, this enlightenment was still quite far off. So when Rahul Gandhi introduced the Land Acquisition, Rehabilitation, and Resettlement Act (LARR) that year, I criticized it savagely. Why? Because I felt that the clauses in the bill were extremely restrictive and would throttle productivity.
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Land Acquisition is one of the major hurdles that delays projects in India. Projects get announced, and then they run into cost and time overruns, with hundreds or thousands of crores of rupees wasted.
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What did the LARR do? It greatly increased the compensation to be given to the owners of the land that was acquired for industrial projects. But that was not all. It also put in a mechanism for grievance redressal that would allow people to stop a project if it did not have community support. In the past, the government could use “public interest” (known as eminent domain in the US) to evict villagers from a village and pay them whatever compensation it saw fit. The new bill not only greatly enhanced the compensation and put stringent rules about how to calculate it, but also allowed villagers to stop any project that they felt was against their interest.
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I said to myself, now no projects will ever get done. Thanks a lot for ruining India, Rahul Gandhi.
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Part 3. Anger
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But I had not understood the history behind this decision. For 64 years since independence, India had treated the villages with the same derision that I had for them when I was a fresh IIT graduate. Part of this is the result of the complex dynamic between Gandhian and Nehruvian views of India's future, with the Nehruvian vision winning. Gandhi believed that India lived in its villages. Nehru was a suave, sophisticated urbanite whose vision was focused on the cities; on steel, concrete, and dams; and all the other indicators of modern progress.
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And because of this urban vision that won in the battle of ideas, India tended to treat the villagers that came in the path of its urban “development” as nuisances, to be disposed off through “public interest” and a pittance for a payoff. If we wanted a dam, and some pesky villagers’ homes were going to be destroyed, well, that was a small price to pay for progress.
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Ok, if you want to be humane, give them more compensation, but let them get the hell out of the land, so that the dam or the factory or the highway can be built! Why were these Luddites, these anti-progress idiots, blocking our paths, we who were aiming to reach the moon, Mars, Jupiter, and the Andromeda galaxy? We who were trying to make India a first world country? Bloody plebians. Why can't they take the money and go? No, they have to organize a dharna, a protest, what have you. Like that irritating troublemaker Medha Patkar.
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Having lived an entire life without exposure to rural India endowed me with an astonishing level of apathy and indifference to the real problems and complaints of rural India and its inhabitants. To me, these were just people who were constantly holding us back from reaching higher and farther. The concerns they expressed during their protests were not sincere: they were just excuses from ignorant people who did not understand the great things we were trying to do as a nation. It was much later that I understood the answer to my question: “Why don't they just take the compensation and scoot?”
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Part 4. Enlightenment
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The answer, of course (which would have been obvious had I thought more carefully about it), is the counter question: “What are they going to do with that compensation money?”
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If you have been a farmer all your life, then that really is all you can do. You cannot suddenly become a lathe operator in a factory at age 50 with no training. It is also harder to learn as you get older.
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So what? Use the money to buy some land elsewhere, I would have said then. If farming is all you can do, go and farm somewhere else.
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Except, who is selling land for you to buy?
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Nobody will sell good agricultural land to you in India. And all the good land is already taken. If other farmers sell good land to you, then what are they going to do? They have the same problem as you do - they can do nothing else but farm. So the bottom line is: you cannot buy good agricultural land to replace the one you are being evicted from.
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Which means only one thing: you have to give up farming.
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Farmers who are forced to give up their land and give up farming end up becoming rootless and aimless. Typically, what happens to these people is that they blow up the fortune that they get through the sale fairly quickly, and end up as alcoholic paupers, who then work as watchmen on the same land that they once used to be masters of. I have personally known of examples of these in Pune's IT corridor in Hinjewadi.
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And this is why Rahul Gandhi's LARR bill had the right idea. Communities must be consulted with more widely before their land is taken away from them. It is a life-changing decision, and must involve a negotiation with the buyer and the government on the future of the farmer.
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This problem is highlighted with great wit in Douglas Adams’ classic, “The Hitchhiker's Guide to the Galaxy,” in which the opening scene has the setup that an advanced alien civilization is building a cosmic highway, and our “backward” Earth happens to be in the path of the highway, and must therefore be destroyed. The aliens then infom Earthlings that our planet has been earmarked for destruction, and so residents of Earth have an extremely limited time period to make alternative arrangements before their planet is completely wiped out.
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Sometimes the government gives farmers alternative land tracts to the displaced farmers. But as we have already seen, there is no good agricultural land left; so what the farmers get as compensation is typically worthless land on which nothing can grow.
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So, when farmers are persuaded to sell their land, the government must invest in their re-training so that they are able to work in the factories that are coming up on their land. The state must have a commitment to the displaced farmer, to ensure that he can survive after his land is taken away.
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And this brings me to the start of this piece. Had I listened to Professor Yash Pal in 1990, and spent two years in a village in India then, it would not have taken me 30 years to understand all this.
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com0tag:blogger.com,1999:blog-2647581039313842967.post-36549651039399973592019-04-08T18:53:00.000+05:302019-04-22T08:27:51.309+05:30Have Acche Din Arrived? The Acche Din Economic Report Card
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<div class="text">Why This Report Card</div>
</div>
<div class="mySlides fade">
<div class="numbertext">3 / 120</div>
<img src="https://i.postimg.cc/BvBM0DQw/Acche-Din-B003.png" style="width:100%">
<div class="text">Contents</div>
</div>
<div class="mySlides fade">
<div class="numbertext">4 / 120</div>
<img src="https://i.postimg.cc/LX4v6XJ4/Acche-Din-B004.png" style="width:100%">
<div class="text">Industrial Productivity and Output</div>
</div>
<div class="mySlides fade">
<div class="numbertext">5 / 120</div>
<img src="https://i.postimg.cc/L6gDsG8P/Acche-Din-B005.png" style="width:100%">
<div class="text">Industrial Output Growth for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">6 / 120</div>
<img src="https://i.postimg.cc/FK6fKnrL/Kumar-Acche-Din05.png" style="width:100%">
<div class="text">Industrial Output Growth for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">7 / 120</div>
<img src="https://i.postimg.cc/wM7VLG5S/Acche-Din-B006.png" style="width:100%">
<div class="text">Gross Fixed Capital Formation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">8 / 120</div>
<img src="https://i.postimg.cc/BZVN4J4s/Acche-Din-B007.png" style="width:100%">
<div class="text">GFCF for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">9 / 120</div>
<img src="https://i.postimg.cc/zv6kjF03/Acche-Din-B008.png" style="width:100%">
<div class="text">Index of Industrial Production</div>
</div>
<div class="mySlides fade">
<div class="numbertext">10 / 120</div>
<img src="https://i.postimg.cc/Sx0rYVnv/Acche-Din-B009.png" style="width:100%">
<div class="text">Growth in IIP for Manufacturing for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">11 / 120</div>
<img src="https://i.postimg.cc/prbpfhnV/Kumar-Acche-Din09.png" style="width:100%">
<div class="text">Growth in IIP for Manufacturing for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">12 / 120</div>
<img src="https://i.postimg.cc/SxWG688N/Acche-Din-B010.png" style="width:100%">
<div class="text">Consumption of Finished Steel</div>
</div>
<div class="mySlides fade">
<div class="numbertext">13 / 120</div>
<img src="https://i.postimg.cc/3wYFnRCj/Acche-Din-B011.png" style="width:100%">
<div class="text">Growth Rate of Steel Consumption for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">14 / 120</div>
<img src="https://i.postimg.cc/DfLW2gtS/Kumar-Acche-Din11.png" style="width:100%">
<div class="text">Growth Rate of Steel Consumption for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">15 / 120</div>
<img src="https://i.postimg.cc/cJhMjSXp/Acche-Din-B012.png" style="width:100%">
<div class="text">Container Port Traffic</div>
</div>
<div class="mySlides fade">
<div class="numbertext">16 / 120</div>
<img src="https://i.postimg.cc/B6w5SCWN/Acche-Din-B013.png" style="width:100%">
<div class="text">Container Port Traffic Growth for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">17 / 120</div>
<img src="https://i.postimg.cc/L86h3MhP/Kumar-Acche-Din13.png" style="width:100%">
<div class="text">Container Port Traffic Growth for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">18 / 120</div>
<img src="https://i.postimg.cc/B6vcfVzX/Acche-Din-B014.png" style="width:100%">
<div class="text">Railway Freight Tonnage</div>
</div>
<div class="mySlides fade">
<div class="numbertext">19 / 120</div>
<img src="https://i.postimg.cc/sxkpSDgh/Acche-Din-B015.png" style="width:100%">
<div class="text">Growth in Railway Freight Tonnage for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">20 / 120</div>
<img src="https://i.postimg.cc/6pjqH1Gm/Kumar-Acche-Din15.png" style="width:100%">
<div class="text">Growth in Railway Freight Tonnage for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">21 / 120</div>
<img src="https://i.postimg.cc/5yYB6FbJ/Acche-Din-B016.png" style="width:100%">
<div class="text">Summary: Industrial Productivity and Output</div>
</div>
<div class="mySlides fade">
<div class="numbertext">22 / 120</div>
<img src="https://i.postimg.cc/ry3G7gNw/Acche-Din-B017.png" style="width:100%">
<div class="text">Agricultural Output</div>
</div>
<div class="mySlides fade">
<div class="numbertext">23 / 120</div>
<img src="https://i.postimg.cc/28WdYv0F/Acche-Din-B018.png" style="width:100%">
<div class="text">Annual Growth in Rice Production for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">24 / 120</div>
<img src="https://i.postimg.cc/Qt5Md8Y2/Kumar-Acche-Din18.png" style="width:100%">
<div class="text">Annual Growth in Rice Production for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">25 / 120</div>
<img src="https://i.postimg.cc/QdrQdtPL/Acche-Din-B019.png" style="width:100%">
<div class="text">Annual Growth in Wheat Production for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">26 / 120</div>
<img src="https://i.postimg.cc/1XQ3gkLf/Kumar-Acche-Din19.png" style="width:100%">
<div class="text">Annual Growth in Wheat Production for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">27 / 120</div>
<img src="https://i.postimg.cc/YSrQQPMb/Acche-Din-B020.png" style="width:100%">
<div class="text">Annual Growth in Total Foodgrain Production for Various Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">28 / 120</div>
<img src="https://i.postimg.cc/sx4D5nrK/Kumar-Acche-Din20.png" style="width:100%">
<div class="text">Annual Growth in Total Foodgrain Production for Various Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">29 /120</div>
<img src="https://i.postimg.cc/9fLZbBfV/Acche-Din-B021.png" style="width:100%">
<div class="text">Growth in Foodgrain Yield for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">30 / 120</div>
<img src="https://i.postimg.cc/pVfTNdF8/Kumar-Acche-Din21.png" style="width:100%">
<div class="text">Growth in Foodgrain Yield for Different Regimes</div>
</div>
<div class="mySlides fade">
<div class="numbertext">31 / 120</div>
<img src="https://i.postimg.cc/8zBhJGQ7/Acche-Din-B022.png" style="width:100%">
<div class="text">Summary: Agricultural Output Performance</div>
</div>
<div class="mySlides fade">
<div class="numbertext">32 / 120</div>
<img src="https://i.postimg.cc/hjhx57Jm/Acche-Din-B023.png" style="width:100%">
<div class="text">Infrastructure Development</div>
</div>
<div class="mySlides fade">
<div class="numbertext">33 / 120</div>
<img src="https://i.postimg.cc/mkH9bfy2/Acche-Din-B024.png" style="width:100%">
<div class="text">Growth in Production of Coal and Lignite</div>
</div>
<div class="mySlides fade">
<div class="numbertext">34 / 120</div>
<img src="https://i.postimg.cc/P5xr8zFz/Kumar-Acche-Din24.png" style="width:100%">
<div class="text">Growth in Production of Coal and Lignite</div>
</div>
<div class="mySlides fade">
<div class="numbertext">35 / 120</div>
<img src="https://i.postimg.cc/gJ5RFkRT/Acche-Din-B025.png" style="width:100%">
<div class="text">Growth in Thermal and Renewable Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">36 / 120</div>
<img src="https://i.postimg.cc/Gm53P8W0/Kumar-Acche-Din25.png" style="width:100%">
<div class="text">Growth in Thermal and Renewable Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">37 / 120</div>
<img src="https://i.postimg.cc/c6GnC9F7/Acche-Din-B026.png" style="width:100%">
<div class="text">Growth in Hydroelectric Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">38 / 120</div>
<img src="https://i.postimg.cc/d1MqpMQ4/Kumar-Acche-Din26.png" style="width:100%">
<div class="text">Growth in Hydroelectric Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">39 / 120</div>
<img src="https://i.postimg.cc/PfPMpRMd/Acche-Din-B027.png" style="width:100%">
<div class="text">Growth in Nuclear Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">40 / 120</div>
<img src="https://i.postimg.cc/q76J1BrN/Kumar-Acche-Din27.png" style="width:100%">
<div class="text">Growth in Nuclear Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">41 / 120</div>
<img src="https://i.postimg.cc/Vkc9hLPN/Acche-Din-B028.png" style="width:100%">
<div class="text">Growth in Total Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">42 / 120</div>
<img src="https://i.postimg.cc/9MGWjxrV/Kumar-Acche-Din28.png" style="width:100%">
<div class="text">Growth in Total Power Generation</div>
</div>
<div class="mySlides fade">
<div class="numbertext">43 / 120</div>
<img src="https://i.postimg.cc/zD6FnFdK/Acche-Din-B029.png" style="width:100%">
<div class="text">Rural and Urban Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">44 / 120</div>
<img src="https://i.postimg.cc/8PvBwf33/Acche-Din-B030.png" style="width:100%">
<div class="text">Growth in Rural Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">45 / 120</div>
<img src="https://i.postimg.cc/d36whL2x/Kumar-Acche-Din30.png" style="width:100%">
<div class="text">Growth in Rural Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">46 / 120</div>
<img src="https://i.postimg.cc/CKhGFP1T/Acche-Din-B031.png" style="width:100%">
<div class="text">Growth in Urban Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">47 / 120</div>
<img src="https://i.postimg.cc/jq4sgkp4/Kumar-Acche-Din31.png" style="width:100%">
<div class="text">Growth in Urban Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">48 / 120</div>
<img src="https://i.postimg.cc/Sx7LbFmf/Acche-Din-B032.png" style="width:100%">
<div class="text">Growth in Overall Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">49 / 120</div>
<img src="https://i.postimg.cc/bNYqK98c/Kumar-Acche-Din32.png" style="width:100%">
<div class="text">Growth in Overall Electrification</div>
</div>
<div class="mySlides fade">
<div class="numbertext">50 / 120</div>
<img src="https://i.postimg.cc/B6t2FjHm/Acche-Din-B033.png" style="width:100%">
<div class="text">Average Road Km Built Per Day</div>
</div>
<div class="mySlides fade">
<div class="numbertext">51 / 120</div>
<img src="https://i.postimg.cc/sgqyGFWs/Kumar-Acche-Din33.png" style="width:100%">
<div class="text">Average Road Km Built Per Day</div>
</div>
<div class="mySlides fade">
<div class="numbertext">52 / 120</div>
<img src="https://i.postimg.cc/N0d1L69y/Acche-Din-B034.png" style="width:100%">
<div class="text">Growth in Railway Track Length</div>
</div>
<div class="mySlides fade">
<div class="numbertext">53 / 120</div>
<img src="https://i.postimg.cc/4xms34mW/Kumar-Acche-Din34.png" style="width:100%">
<div class="text">Growth in Railway Track Length</div>
</div>
<div class="mySlides fade">
<div class="numbertext">54 / 120</div>
<img src="https://i.postimg.cc/DZDLP7cn/Acche-Din-B035.png" style="width:100%">
<div class="text">Growth in Passenger Traffic</div>
</div>
<div class="mySlides fade">
<div class="numbertext">55 / 120</div>
<img src="https://i.postimg.cc/bvnPQ60b/Kumar-Acche-Din35.png" style="width:100%">
<div class="text">Growth in Passenger Traffic</div>
</div>
<div class="mySlides fade">
<div class="numbertext">56 / 120</div>
<img src="https://i.postimg.cc/wMmJWnWJ/Acche-Din-B036.png" style="width:100%">
<div class="text">Summary: Infrastructure Development Comparison</div>
</div>
<div class="mySlides fade">
<div class="numbertext">57 / 120</div>
<img src="https://i.postimg.cc/c1gQ48sH/Acche-Din-B037.png" style="width:100%">
<div class="text">Education, Science, and Technology</div>
</div>
<div class="mySlides fade">
<div class="numbertext">58 / 120</div>
<img src="https://i.postimg.cc/2jsnq86x/Acche-Din-B038.png" style="width:100%">
<div class="text">Growth in Education Funding</div>
</div>
<div class="mySlides fade">
<div class="numbertext">59 / 120</div>
<img src="https://i.postimg.cc/9Mjh1G1k/Kumar-Acche-Din38.png" style="width:100%">
<div class="text">Growth in Education Funding</div>
</div>
<div class="mySlides fade">
<div class="numbertext">60 / 120</div>
<img src="https://i.postimg.cc/NfRmRq2v/Acche-Din-B039.png" style="width:100%">
<div class="text">Growth in Number of Scientific and Technical Articles</div>
</div>
<div class="mySlides fade">
<div class="numbertext">61 / 120</div>
<img src="https://i.postimg.cc/wMqdYgCc/Kumar-Acche-Din39.png" style="width:100%">
<div class="text">Growth in Number of Scientific and Technical Articles</div>
</div>
<div class="mySlides fade">
<div class="numbertext">62 / 120</div>
<img src="https://i.postimg.cc/x1YHRxLJ/Acche-Din-B040.png" style="width:100%">
<div class="text">Growth in Number of Patent Applications</div>
</div>
<div class="mySlides fade">
<div class="numbertext">63 / 120</div>
<img src="https://i.postimg.cc/T1tvRBG8/Kumar-Acche-Din40.png" style="width:100%">
<div class="text">Growth in Number of Patent Applications</div>
</div>
<div class="mySlides fade">
<div class="numbertext">64 / 120</div>
<img src="https://i.postimg.cc/nLhm8XRn/Acche-Din-B041.png" style="width:100%">
<div class="text">Growth in Hi-Tech Exports</div>
</div>
<div class="mySlides fade">
<div class="numbertext">65 / 120</div>
<img src="https://i.postimg.cc/fTgQ14Bm/Kumar-Acche-Din41.png" style="width:100%">
<div class="text">Growth in Hi-Tech Exports</div>
</div>
<div class="mySlides fade">
<div class="numbertext">66 / 120</div>
<img src="https://i.postimg.cc/BngFwTCh/Acche-Din-B042.png" style="width:100%">
<div class="text">Summary: Education, Science, and Technology</div>
</div>
<div class="mySlides fade">
<div class="numbertext">67 / 120</div>
<img src="https://i.postimg.cc/ZqsdJJ2p/Acche-Din-B043.png" style="width:100%">
<div class="text">Government Expenditure, Revenues, and Fiscal Discipline</div>
</div>
<div class="mySlides fade">
<div class="numbertext">68 / 120</div>
<img src="https://i.postimg.cc/sXBZXtC8/Acche-Din-B044.png" style="width:100%">
<div class="text">Gross Fiscal Deficit</div>
</div>
<div class="mySlides fade">
<div class="numbertext">69 / 120</div>
<img src="https://i.postimg.cc/XNCC0S8B/Acche-Din-B045.png" style="width:100%">
<div class="text">Total Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">70 / 120</div>
<img src="https://i.postimg.cc/yxcghcdy/Acche-Din-B046.png" style="width:100%">
<div class="text">Total Revenues</div>
</div>
<div class="mySlides fade">
<div class="numbertext">71 / 120</div>
<img src="https://i.postimg.cc/DZt4bB2z/Acche-Din-B047.png" style="width:100%">
<div class="text">Components of Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">72 / 120</div>
<img src="https://i.postimg.cc/150VfGb9/Acche-Din-B048.png" style="width:100%">
<div class="text">Capital Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">73 / 120</div>
<img src="https://i.postimg.cc/8z1JWFVL/AccheDinB049.png" style="width:100%">
<div class="text">Revenue Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">74 / 120</div>
<img src="https://i.postimg.cc/SNbzSTTT/AccheDinB050.png" style="width:100%">
<div class="text">Components of Revenue Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">75 / 120</div>
<img src="https://i.postimg.cc/Z5V9LTT2/AccheDinB051.png" style="width:100%">
<div class="text">Defence Revenue Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">76 / 120</div>
<img src="https://i.postimg.cc/0N4bLcKC/AccheDinB052.png" style="width:100%">
<div class="text">Expenditure on Subsidies</div>
</div>
<div class="mySlides fade">
<div class="numbertext">77 / 120</div>
<img src="https://i.postimg.cc/HLnrZfnx/AccheDinB053.png" style="width:100%">
<div class="text">Revenue Expenditure Analysis</div>
</div>
<div class="mySlides fade">
<div class="numbertext">78 / 120</div>
<img src="https://i.postimg.cc/G2sHrGkn/AccheDinB054.png" style="width:100%">
<div class="text">Capital Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">79 / 120</div>
<img src="https://i.postimg.cc/hvWhGvrz/AccheDinB055.png" style="width:100%">
<div class="text">Capital Outlay</div>
</div>
<div class="mySlides fade">
<div class="numbertext">80 / 120</div>
<img src="https://i.postimg.cc/XNdpzKjw/AccheDinB056.png" style="width:100%">
<div class="text">Defence Capital Expenditure</div>
</div>
<div class="mySlides fade">
<div class="numbertext">81 / 120</div>
<img src="https://i.postimg.cc/MH7HfwPs/AccheDinB057.png" style="width:100%">
<div class="text">Components of Revenue</div>
</div>
<div class="mySlides fade">
<div class="numbertext">82 / 120</div>
<img src="https://i.postimg.cc/dt9DqqT3/AccheDinB058.png" style="width:100%">
<div class="text">Direct Tax Collection</div>
</div>
<div class="mySlides fade">
<div class="numbertext">83 / 120</div>
<img src="https://i.postimg.cc/qMrzVtqW/AccheDinB059.png" style="width:100%">
<div class="text">Personal Income Tax Collection</div>
</div>
<div class="mySlides fade">
<div class="numbertext">84 / 120</div>
<img src="https://i.postimg.cc/y8YxxwFP/AccheDinB060.png" style="width:100%">
<div class="text">Corporate Tax Collection</div>
</div>
<div class="mySlides fade">
<div class="numbertext">85 / 120</div>
<img src="https://i.postimg.cc/g2SJZNsP/AccheDinB061.png" style="width:100%">
<div class="text">Indirect Tax Collection</div>
</div>
<div class="mySlides fade">
<div class="numbertext">86 / 120</div>
<img src="https://i.postimg.cc/g0x0q8tL/AccheDinB062.png" style="width:100%">
<div class="text">Summary: Government Expenditures and Revenues</div>
</div>
<div class="mySlides fade">
<div class="numbertext">87 / 120</div>
<img src="https://i.postimg.cc/0NhytjhW/AccheDinB063.png" style="width:100%">
<div class="text">Foreign Trade</div>
</div>
<div class="mySlides fade">
<div class="numbertext">88 / 120</div>
<img src="https://i.postimg.cc/767YjDkx/AccheDinB064.png" style="width:100%">
<div class="text">Annual Foreign Exchange Addition</div>
</div>
<div class="mySlides fade">
<div class="numbertext">89 / 120</div>
<img src="https://i.postimg.cc/G3FmQcKK/AccheDinB065.png" style="width:100%">
<div class="text">Balance of Payments</div>
</div>
<div class="mySlides fade">
<div class="numbertext">90 / 120</div>
<img src="https://i.postimg.cc/GtChCNLv/AccheDinB066.png" style="width:100%">
<div class="text">Constituents of Balance of Payments</div>
</div>
<div class="mySlides fade">
<div class="numbertext">91 / 120</div>
<img src="https://i.postimg.cc/QCJNxbCw/AccheDinB067.png" style="width:100%">
<div class="text">Constituents of Balance of Payments</div>
</div>
<div class="mySlides fade">
<div class="numbertext">92 / 120</div>
<img src="https://i.postimg.cc/kX7XYkhm/AccheDinB068.png" style="width:100%">
<div class="text">Current Account Deficit</div>
</div>
<div class="mySlides fade">
<div class="numbertext">93 / 120</div>
<img src="https://i.postimg.cc/CxQh1dMh/AccheDinB069.png" style="width:100%">
<div class="text">Capital Account Surplus</div>
</div>
<div class="mySlides fade">
<div class="numbertext">94 / 120</div>
<img src="https://i.postimg.cc/QxSN20RW/AccheDinB070.png" style="width:100%">
<div class="text">What Happened During UPA II?</div>
</div>
<div class="mySlides fade">
<div class="numbertext">95 / 120</div>
<img src="https://i.postimg.cc/Cx1MSbgr/AccheDinB071.png" style="width:100%">
<div class="text">Foreign Direct Investment</div>
</div>
<div class="mySlides fade">
<div class="numbertext">96 / 120</div>
<img src="https://i.postimg.cc/R0JMn9qc/AccheDinB072.png" style="width:100%">
<div class="text">Foreign Portfolio Investment</div>
</div>
<div class="mySlides fade">
<div class="numbertext">97 / 120</div>
<img src="https://i.postimg.cc/KzXmPVgC/AccheDinB073.png" style="width:100%">
<div class="text">Total Foreign Investment</div>
</div>
<div class="mySlides fade">
<div class="numbertext">98 / 120</div>
<img src="https://i.postimg.cc/cHQ0XmRC/AccheDinB074.png" style="width:100%">
<div class="text">Trade Deficit</div>
</div>
<div class="mySlides fade">
<div class="numbertext">99 / 120</div>
<img src="https://i.postimg.cc/PJyhk5Fk/AccheDinB075.png" style="width:100%">
<div class="text">Invisibles</div>
</div>
<div class="mySlides fade">
<div class="numbertext">100 / 120</div>
<img src="https://i.postimg.cc/Zn4ZgdHc/AccheDinB076.png" style="width:100%">
<div class="text">Why is the Trade Deficit Lower for the Modi Sarkar?</div>
</div>
<div class="mySlides fade">
<div class="numbertext">101 / 120</div>
<img src="https://i.postimg.cc/pXVRJKpV/AccheDinB077.png" style="width:100%">
<div class="text">Exports</div>
</div>
<div class="mySlides fade">
<div class="numbertext">102 / 120</div>
<img src="https://i.postimg.cc/xTsYxqzv/AccheDinB078.png" style="width:100%">
<div class="text">Oil Imports</div>
</div>
<div class="mySlides fade">
<div class="numbertext">103 / 120</div>
<img src="https://i.postimg.cc/HW9TM6WP/AccheDinB079.png" style="width:100%">
<div class="text">Non-Oil Imports</div>
</div>
<div class="mySlides fade">
<div class="numbertext">104 / 120</div>
<img src="https://i.postimg.cc/nhgxx5TM/AccheDinB080.png" style="width:100%">
<div class="text">Summary of Foreign Trade</div>
</div>
<div class="mySlides fade">
<div class="numbertext">105 / 120</div>
<img src="https://i.postimg.cc/d0CYVBS6/AccheDinB081.png" style="width:100%">
<div class="text">Effect of Oil Prices on UPA I and UPA II</div>
</div>
<div class="mySlides fade">
<div class="numbertext">106 / 120</div>
<img src="https://i.postimg.cc/Ss7bWK4z/AccheDinB082.png" style="width:100%">
<div class="text">CAD with Oil Import Costs as in Modi Sarkar</div>
</div>
<div class="mySlides fade">
<div class="numbertext">107 / 120</div>
<img src="https://i.postimg.cc/fLhht9GN/AccheDinB083.png" style="width:100%">
<div class="text">BoP with Oil Import Costs as in Modi Sarkar</div>
</div>
<div class="mySlides fade">
<div class="numbertext">108 / 120</div>
<img src="https://i.postimg.cc/prsN61pW/AccheDinB084.png" style="width:100%">
<div class="text">Foreign Exchange Additions at Modi Sarkar Oil Prices</div>
</div>
<div class="mySlides fade">
<div class="numbertext">109 / 120</div>
<img src="https://i.postimg.cc/kGJ3wdMY/AccheDinB085.png" style="width:100%">
<div class="text">Inflation and Unemployment (1/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">110 / 120</div>
<img src="https://i.postimg.cc/gcsPjr4C/AccheDinB086.png" style="width:100%">
<div class="text">Inflation Rate for Agricultural Workers</div>
</div>
<div class="mySlides fade">
<div class="numbertext">111 / 120</div>
<img src="https://i.postimg.cc/QxMZTsyH/AccheDinB087.png" style="width:100%">
<div class="text">Inflation Rate for Industrial Workers</div>
</div>
<div class="mySlides fade">
<div class="numbertext">112 / 120</div>
<img src="https://i.postimg.cc/cLgqFhZW/AccheDinB088.png" style="width:100%">
<div class="text">Food Inflation Rate for Industrial Workers</div>
</div>
<div class="mySlides fade">
<div class="numbertext">113 / 120</div>
<img src="https://i.postimg.cc/fTgn7FG5/AccheDinB089.png" style="width:100%">
<div class="text">Inflation and Unemployment (2/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">114 / 120</div>
<img src="https://i.postimg.cc/CxW3X8Lq/AccheDinB090.png" style="width:100%">
<div class="text">Inflation and Unemployment (3/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">115 / 120</div>
<img src="https://i.postimg.cc/GpGWCpHS/AccheDinB091.png" style="width:100%">
<div class="text">Overall Summary and Conclusions (1/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">116 / 120</div>
<img src="https://i.postimg.cc/DZhtyKGf/AccheDinB092.png" style="width:100%">
<div class="text">Overall Summary and Conclusions (2/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">117 / 120</div>
<img src="https://i.postimg.cc/0QChzHGY/AccheDinB093.png" style="width:100%">
<div class="text">Overall Summary and Conclusions (3/3)</div>
</div>
<div class="mySlides fade">
<div class="numbertext">118 / 120</div>
<img src="https://i.postimg.cc/RhVyKQGj/AccheDinB094.png" style="width:100%">
<div class="text">External Factors</div>
</div>
<div class="mySlides fade">
<div class="numbertext">119 / 120</div>
<img src="https://i.postimg.cc/0jW3fMBr/AccheDinB095.png" style="width:100%">
<div class="text">Performance of UPA-I Government during Global Financial Crisis of 2008</div>
</div>
<div class="mySlides fade">
<div class="numbertext">120 / 120</div>
<img src="https://i.postimg.cc/jqZGKmSK/AccheDinB096.png" style="width:100%">
<div class="text">Have Acche Din Arrived?</div>
</div>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
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</footer>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com5tag:blogger.com,1999:blog-2647581039313842967.post-37421866047511200172019-03-04T23:06:00.001+05:302019-03-04T23:36:33.786+05:30The Pulwama-Balakot Affair: An Unqualified Disaster for India <article> <!-- Article Title -->
<header> <!-- Article Title -->
<h1>
<br>
The Pulwama-Balakot Affair: An Unqualified Disaster for India
<br>
<br>
</h1>
</header>
<footer> <!-- Authorship, Copyright, Date -->
<h3 class="specialHeaderIndent">
Written by Dr. Seshadri Kumar, 04 March 2019
</h3>
<h5 class="copyright">
Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
</h5>
</footer>
<hr>
<section> <!-- Section on Series Abstract -->
<header> <!-- Header for Series Abstract -->
<h2 class="SeriesAbstractTitle">
Abstract
</h2>
</header>
<div id="SeriesAbstract"> <!-- Content for Abstract -->
<p>
The Balakot airstrikes have been an unqualified disaster for India on every front. They have shown that we cannot defeat cross-border terror by military means; that we cannot intimidate Pakistan with our conventional military; that Pakistan will retaliate with attacks on our military facilities if we attack terror camps in Pakistan; that our military equipment is outdated; and that the Indian people do not have the stomach for a war. Further, they have given Pakistan a chance to take the high road and act magnanimous with the release of our Air Force pilot, thereby making this a PR victory for Pakistan and its President, Imran Khan.
</p>
</div>
</section>
<hr>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC1">
Imran Khan’s Speech in the Pakistani Parliament
</h2>
</header>
<div>
<p>
Some friends of mine are sharing a video of Pakistan PM Imran Khan's speech in the Pakistani Parliament on Facebook, citing it as an example of the statesmanship missing in our country.
</p>
<p>
I am not going to share it or provide a link to it.
</p>
<p>
The reason is that while it is a cleverly-written and well-delivered speech, it rests on a base of what I believe are lies.
</p>
<p>
What the speech illustrates beyond doubt is that the whole Balakot misadventure by India has led to one consequence: it has immeasurably raised Imran Khan's stature, both domestically and internationally.
</p>
<p>
What are the lies? Imran says that his government had nothing to do with Pulwama. That's a brazen lie. Hafez Saeed and Masood Azhar are both free in Pakistan to organize terrorist activities against India in Kashmir. Despite repeated complaints and dossiers, Pakistan has done nothing to stop them for decades. They keep lying that there is no evidence to convict them. Even when the links of the suicide bomber in Pulwama to the Jaish-e-Mohammad (JeM) are clear, Pakistan has done nothing. They have no intention of doing anything.
</p>
<p>
Imran claims in the speech that they had taken a decision a while ago not to support any terror activities on their soil, whatever previous governments may have done. There is no evidence of this. To put it indelicately: Imran is lying.
</p>
<p>
Now that the dust has settled (or is settling) over the whole Pulwama-Balakot episode, we can take stock of what happened.
</p>
<p>
To put it mildly: the entire episode was a disaster for India.
</p>
<p>
Imran Khan's speech, in which he masquerades as the messiah of peace, the one rational voice in the subcontinent who wants to prevent nuclear annihilation, in the face of an irrational and warmongering India, is only the latest confirmation of why this is a disaster. Of course this projection of Pakistan is not true; Pakistan continues to support terrorist groups on its soil and claim that it is the victim. It is clear that Imran will do nothing to change this. He is continuing the tactic of demanding proofs when we have given mountains of evidence to Pakistan, which was perfected under Asif Ali Zardari during the 26/11 attacks. But anyone watching that speech of Imran will not guess any of this. It was a masterpiece of obfuscation and grandstanding.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
Why Balakot Was a Disaster
</h2>
</header>
<div>
<p>
What was achieved with the strikes? Let us look at the sequence of events.
</p>
<ol>
<li>
A JeM suicide bomber killed 49 CRPF jawans in Pulwama.
</li>
<li>
We sent aircraft to bomb Balakot. At first there were reports that no damage had been caused and no lives lost; newer (unconfirmed) reports suggest that maybe some 35 militants died in the strike, which Pakistan covered up.
</li>
<li>
But then Pakistan retaliated by attacking us at the LOC, and even downed one of our aircraft and took one of our airmen prisoner.
</li>
<li>
Then Pakistan acted very magnanimous in releasing him.
</li>
<li>
Now the hostilities are over. (There is the routine cross-border shelling that is a constant, of course.)
</li>
</ol>
<p>
So, what was achieved?
</p>
<p>
Clearly, we have not destroyed the terror infrastructure. All we did at most was kill 35 JeM militants.
</p>
<p>
Some people say that we showed that we wouldn't take a terrorist attack lying down - that we could give it back. Yes, we did give it back but then so did they. So are we even or are they one up? I see it as Pulwama: Pak 1, India 0; Balakot: Pak 1, India 1; Pak retaliation: Pak 2, India 1. We lost. What Pakistan has told us (and Imran says it in his Parliament speech) is that if you strike us, we will strike you back. We have lost the advantage.
</p>
<p>
When they gave it back, one of our airmen was caught, and it became clear that we no longer had the stomach for war. Did that not expose a weakness in India? Now the Pakistanis know that one PoW and the game is over for India.
</p>
<p>
Our goal was to wipe out the JeM and to send such a strong message to Pakistan that they would stop cross-border terrorism, if government sources are to be believed. Was this realistic? What have we gained?
</p>
<p>
All we have now to show for our efforts is that the US, the UK, and France have sponsored a resolution in the UN calling for a ban on JeM.
</p>
<p>
But we have seen what happens in these cases. Even if the resolution is passed and the ban goes into effect, Masood Azhar will go underground and continue to control his organization, which will change its name. They will say JeM no longer exists. It will just come back to life under a different name and a different nominal leader. Nothing will have been achieved. There are some unsubstantiated rumours about Azhar having been killed, but these have only been circulated by supporters of Mr. Modi so that they have something to show for this disastrous misadventure. Even if that were true, these organizations will not collapse after the death of a single person. The terror will go on. And now, knowing that we targeted them, they will be looking for an opportunity to prove that they can still strike at us. We should be ready and on high alert for a huge terror strike by the JeM in the near future somewhere on Indian soil as they seek revenge on us.
</p>
<p>
So, the bottomline is that the whole Pulwama-Balakot episode is a disaster. It has achieved nothing for India, and allowed Pakistan to take the high ground as the responsible party which tried hard to de-escalate the situation. From every angle - militarily, politically, the attempt to end terrorism, and public relations - the whole episode has been a debacle for India.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC3">
The Unwritten Maxim of War
</h2>
</header>
<div>
<p>
There is an unwritten maxim of war that has been in force in the US ever since Vietnam, but which still continues to be violated by foolish US Presidents. That maxim is: one must only initiate war when one is sure of a comprehensive victory.
</p>
<p>
President George HW Bush followed this policy in Desert Storm. The objective of that war was not to unseat Saddam Hussein, but to remove him from Kuwait. The US had overwhelming military superiority on land, at sea, and in the air, and reduced Saddam’s vaunted Republican Guard to a pulp.
</p>
<p>
His son, President George W Bush, did not follow this maxim, and the results have been inconclusive wars in Afghanistan and Iraq. Afghanistan is actually a comprehensive defeat for the US, and Iraq too is going to be a defeat. In Afghanistan, the contours of the post-war settlement are being made without even consulting the present government that has been supported by the US, telling us how bad the American situation in that country is. That has happened because America went into Afghanistan without a clear idea of what they were doing. They could never finish off the Taliban and the al-Qaeda. To be sure, they killed a lot of important Taliban and al-Qaeda leaders, but these organizations are not crippled if one or two leaders are killed. That should have been a lesson to India, but who is listening?
</p>
<p>
What went wrong in Afghanistan? Sure, the US had overwhelming superiority in conventional weapons, but they could not possibly examine every mountain cave. In fact, this is something known to India from our knowledge of Maratha history. The Mughal emperor Aurangzeb had superiority in conventional forces, but the Marathas defeated him through guerilla warfare and by hiding in the hills.
</p>
<p>
All this knowledge should have informed India that it was impossible to defeat terrorism or even reduce it with a single “surgical strike” in the mountainous areas of Pakistan. You need a prolonged war, and you need the assistance of the Pakistanis, to defeat the terrorists. And that is not likely to happen anytime soon, considering that it is the Pakistani military and the ISI themselves who enable the terrorists in the first place.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC4">
So Why Balakot?
</h2>
</header>
<div>
<p>
Were the Indian defence forces unaware of all this? Highly unlikely. So why were the Balakot attacks carried out?
</p>
<p>
One word: Optics. The Indian government wanted to send a message that it could retaliate, to satisfy the anger of the people who were outraged about the Pulwama attack. Unfortunately for us, the Pakistanis retaliated, and now it is clear that this course of action cannot be repeated in the future. This is like the story of the warrior Karna in the Mahabharata, who could use his irresistible Indra Shakti only once. Our Indra Shakti was military retaliation using air strikes. We have used our Indra Shakti, and it is now impotent. We now know that a military attack on Pakistan or on terror camps will not solve the terror problem in Kashmir.
</p>
<p>
Balakot has failed to achieve any useful strategic or tactical objective. It has been a failure in military terms. It has only exposed our weaknesses, which is a good thing. It has shown us that our military equipment is outdated and that the common people do not have the stomach for a war. And that last fact may be the most useful lesson from this charade, because it will discourage any future administration from embarking on a similar course of action, knowing that the capture of a single PoW can drastically diminish the apettite of the populace for war.
</p>
<p>
What this tells us is that the hardline policy of the present government on Kashmir is a failure. Kashmir cannot have a military solution: it needs a political solution. Whether that political solution can happen will depend on the willingness of both India and Pakistan to make concessions. Until that day comes, peace in Kashmir is a distant dream.
</p>
</div>
</section>
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<footer> <!-- Disclaimers -->
<br>
<p>
Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
</footer>
</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com1tag:blogger.com,1999:blog-2647581039313842967.post-29975535897459610872019-02-28T13:21:00.000+05:302019-02-28T13:21:44.881+05:30We Need An Adult In The Room <article> <!-- Article Title -->
<header> <!-- Article Title -->
<h1>
<br>
We Need An Adult In The Room
<br>
<br>
</h1>
</header>
<footer> <!-- Authorship, Copyright, Date -->
<h3 class="specialHeaderIndent">
Written by Dr. Seshadri Kumar, 28 February, 2019
</h3>
<h5 class="copyright">
Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
</h5>
</footer>
<hr>
<section> <!-- Section on Series Abstract -->
<header> <!-- Header for Series Abstract -->
<h2 class="SeriesAbstractTitle">
Abstract
</h2>
</header>
<div id="SeriesAbstract"> <!-- Content for Abstract -->
<p>
What started off as a suicide bombing in India is now threatening to balloon into a full-fledged war between India and Pakistan, with terrible consequences for the entire region and the world. A benign end to the conflict that seems to be rapidly escalating is highly unlikely, unless the great powers of the world step in and recognize the dangers of this rapidly snowballing conflict.
</p>
</div>
</section>
<hr>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC1">
Introduction
</h2>
</header>
<div>
<p>
India and Pakistan appear headed for a full-scale war. The cause of the war is the attack on India’s Central Reserve Police Force (CRPF) forces in Pulwama in the Indian state of Jammu and Kashmir on February 14, 2019, by a suicide bomber with links to the Pakistan-based terrorist group, Jaish-e-Mohammad (JeM). The attack killed 49 personnel of India’s CRPF, and inflamed passions in India, with many Indians screaming for revenge.
</p>
<p>
The Indian government promised retaliation, and it finally came in the form of air strikes at a town deep inside Pakistan, called Balakot, inside the province of Khyber Pakhtunkhwa, in the early morning hours of February 26, 2019. The Indian side claimed that they had specifically targeted JeM terrorist training camps operating in that town. It was reported that three locations were planned, but the location that was accurately hit was the camp in Balakot.
</p>
<p>
In response, Pakistan sent its attack aircraft across the line of control on the morning of February 27th, aiming to attack Indian military establishments. The Pakistani aircraft were met by Indian fighters, and a dogfight ensued, resulting in one Indian aircraft being downed and one Pakistani aircraft being downed. The pilot of the Indian aircraft ejected and was captured by the Pakistanis.
</p>
<p>
Following the Pakistani response, Pakistan PM Imran Khan issued an appeal to India on the 27th to resolve this issue through talks. Many on both sides of the border had hoped, in the interests of peace, that the Modi government in India would accept his offer.
</p>
</div>
</section>
<div class="floatclearClass"></div>
<section>
<header>
<h2 id="TOC2">
Escalation of the Conflict and Its Causes
</h2>
</header>
<div>
<p>
However, India rejected Imran's latest overture. Not only did the Indian government angrily reject the offer on the evening of the 27th, saying that the Pakistanis had escalated the conflict by attacking India, Finance Minister Arun Jaitley also compared the Indian attack on Balakot to what the Americans had done by taking out Osama bin Laden. This gloating was accompanied by India saying that there would be serious consequences to the Pakistani response. Most likely, there will be another attack from the Indian side, this time on a Pakistani military establishment, which will provoke another response from the Pakistani side, and so on. This suggests a continuous ratcheting of the pressure and an escalation of hostilities until a catastrophic end.
</p>
<p>
Why did Imran issue an appeal for peace on the 27th? And why did India reject his offer? There are multiple potential reasons, but let us look at a few.
</p>
<ol>
<li>
<p>
The major reason for both Imran's peace offer and for India's rejection is to do with counting.
</p>
<p>
For the Indian side, Pulwama was Pakistan's attack no. 1; Balakot was India's response no. 1. Pakistan's attack on the morning of the 27th was attack no. 2, and therefore India must respond for parity to be achieved. It should be noted that after the Balakot attack, the Indian government said that it was satisfied with its attack and was not looking for further escalation or attacks.
</p>
<p>
For the Pakistani side, Pulwama was an internal matter, which, according to it, cannot be blamed on Pakistan, and Balakot was India's attack no. 1; and its response on the 27th was response no. 1, and so, according to Pakistan, the two sides are even and so, can talk peace.
</p>
<p>
In addition, India is making a distinction between its attack on Balakot on the 26th and Pakistan’s response on the 27th. India characterizes its attack as a “non-military strike,” by which it implies that since its target was a terrorist camp, not a Pakistani military establishment, it does not count as a military strike. Pakistan’s attack on the 27th was targeted at Indian military establishments, which India views as an escalation. Whether this distinction will be accepted in international law is to be seen.
</p>
<p>
Of course, neither side is completely correct. Pakistan's response that it had nothing to do with the Pulwama attack is disingenuous considering that the JeM is free to operate with no restrictions inside Pakistan in spite of repeated protests by India; and once Indian fighters crossed the international border and attacked a target within Pakistan, it is an act of war, even if the target was a terrorist camp. India has violated Pakistani sovereignty. For instance, there is an Indian-origin economic offender by the name of Mehul Choksi, who has taken refuge in the country of Antigua and taken Antiguan citizenship, because that country does not have an extradition treaty with India. If India were to launch a clandestine commando operation to kidnap Choksi in Antigua and bring him to India, the Antiguan government could view it as an act of war, even though no military action was involved, because Antiguan sovereignty was violated. Since the justifications and counts of the two sides (India and Pakistan in this case) will never agree, this is going to be an escalating spiral of violence.
</p>
</li>
<li>
<p>
Sending attack aircraft 80 km behind enemy lines, successfully executing an attack on Pakistani soil, and safely returning without any casualties would have given India a lot of confidence. India probably feels that, given their success on the 26th, they can do a lot more damage to the terrorist infrastructure within Pakistan with another raid. Whether this is true or not will soon be verified. But another attack on Pakistan is very likely soon, within a time frame of hours to days, given the Indian official response that “there will be consequences.” It is fair to say that a war is well underway. Retired air marshals are urging a continuation of hostilities on talk shows on Indian TV, saying that quitting while having the upper hand is not the right thing to do.
</p>
<p>
This could be the reason for Imran's peace initiative too - that he realizes they are getting hit, and wants to reduce further damage.
</p>
</li>
<li>
<p>
The relative failure of Pakistan's counter-attack on 27th morning has clearly emboldened India. Unlike India, which was able to evade Pakistan's aircraft defenses and go 80 km deep into Pakistan and return, Pakistan's aircraft could not cross the Line of Control (LOC) without encountering Indian Air Force (IAF) planes. While Pakistan managed to down an IAF plane in a dogfight, the damage India did at Balakot was likely a lot more. The IAF’s experience in the Pakistani raid on the 27th must have confirmed to the Indian military that India has the capability to prevent a Pakistani air attack on its territory.
</p>
<p>
Again, Imran's peace overture may have to do with understanding the realities and the intrinsic weakness of Pakistan's conventional military capabilities.
</p>
</li>
<li>
<p>
Both Pakistan and India cannot sustain a long war due to lack of supplies, ammunition, and spare parts. This is well known. But Pakistan is in worse shape than even India is. India probably feels that if it continues the military pressure for a couple weeks longer, it can bring Pakistan to its knees. This will certainly hold if China does not come to Pakistan's aid.
</p>
<p>
Again, this calculation could not have escaped Imran's attention and that of the Pakistani military, and it certainly could be a reason for his peace initiative.
</p>
</li>
</ol>
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A Fatal Miscalculation
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<p>
All this is certainly true, and this accounts for the triumphal reactions of the retired Air Marshals and Generals on the talk shows. There is a lot of enthusiasm in India to continue the attacks. Military analysts are saying that India should not stop the offensive until Pakistan agrees to stop support for terrorists, until all the terrorists have been flushed out, until Masood Azhar and Hafiz Saeed are in Indian prisons, etc.
</p>
<p>
But there is a serious miscalculation in all of this.
</p>
<p>
Let us grant, for argument, that the Indian military is superior to the Pakistani military, both in training and equipment.
</p>
<p>
Let's grant that the Indian military can outlast the Pakistani military in a conventional war.
</p>
<p>
But what's the endgame here? Are the Indians being realistic?
</p>
<p>
Do Indian military chiefs really think Pakistan will agree to all the camps of the LeT and JeM in Pakistan being destroyed by the IAF at will? Do they really think Pakistan will submit to such humiliating terms as are being discussed on Indian TV channels, often by retired Air Marshals and Generals, such as Pakistan handing over top terrorists and destroying terrorist camps that they have themselves built and sustained for decades?
</p>
<p>
Do the Indian planners really think that they can keep inflicting defeat after defeat on Pakistan and nothing will happen in return?
</p>
<p>
Does the Pakistani political and military leadership not need to face their people? Can they afford the optics of continuously being beaten by the Indians? Will they not need to show a victory on their side to save face?
</p>
<p>
What happens if they cannot produce victories? If they lose face, then it is curtains for both the political and military leaders of Pakistan. Can they afford that?
</p>
<p>
NO. They cannot. That’s when the nuclear option becomes a reality.
</p>
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<h2 id="TOC4">
Pakistan's Nuclear Option
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If it is a question of their political survival, and if their backs are to the wall, they may not hesitate to use the only trump card they possess - the nukes. A small military setback may be acceptable to them. A comprehensive and crushing military defeat at India's hands would end the careers of Pakistan’s top politicians and generals. Nobody in power in Pakistan wants that.
</p>
<p>
They may not be able to deliver the nukes using their planes, as India’s air defense is very strong, and their planes will certainly be intercepted before they can reach any significant targets.
</p>
<p>
But they do have ballistic missiles. And we cannot stop an ICBM fitted with a nuclear warhead, especially if they launch multiple nukes at once. At present, Pakistan is estimated to have about 120 nuclear weapons.
</p>
<p>
To be sure, if they launch nuclear weapons at Indian cities like Amritsar, Chandigarh, Ahmedabad, Jaipur, or Delhi, India too can lob their nuclear ICBMs at Karachi, Lahore, Multan, Sialkot, etc.
</p>
<p>
But is this the endgame that India wants? A nuclear holocaust that will destroy both countries?
</p>
<p>
This is not an exaggeration. If the Pakistanis do not have a face saver and a way out with honour, the world might be staring at Armageddon.
</p>
<p>
And it is clear from the past few days that if the Pakistanis do have some victories - if they do manage to evade India’s air defences and bomb some defence establishments in India - then the chorus to escalate and retaliate will only rise in India. Just one pilot being captured and one plane being downed has the Indian government promising to escalate the situation further. Imagine if the Pakistanis had a major success.
</p>
<p>
So, whether India succeeds in dominating militarily over Pakistan or not, unless India compromises, the end of the current hostilities can only end in a terrible tragedy.
</p>
<p>
Unless the mood in India changes, and unless Indians put pressure on the government to ease off, the world could be staring at an apocalyptic future.
</p>
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The China Factor
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<p>
So far, China has stayed out of this conflict. But if the conflict continues over several days, and if Pakistan is continuously losing (to take the best Indian scenario), then would China sit idly by? A dominant India is not in China's interest - that is why it has opposed India's attempts to corner Pakistan in international fora such as the UN; why it has opposed India's entry to the NSG unless Pakistan is also admitted; and why it has objected to Hafiz Saeed being labelled as a global terrorist. It is unlikely that China would just sit idly and watch its client state Pakistan go down in flames. This is especially true given how much it has invested in Pakistan as part of its Belt Road Initiative (BRI). Condoning a single attack from India on a JeM camp is one thing. Doing nothing over multiple days as its ally is getting pulverized is quite another. If China enters the war, even indirectly, Indian casualties could rise, and this could provoke more demand for retaliation. This could either force India to stop the hostilities without a clear achievement of its goals, or it could lead to the nuclear holocaust discussed before. Either way, it does not look good for India, Pakistan, or the world.
</p>
<p>
India should look at history for a clue. In the Korean War, Douglas MacArthur took his troops right up to the Yalu river in his counterattack starting with the Inchon raid, and he was convinced (like many Indian planners today) that China would not intervene.
</p>
<p>
But China, after being quiet for a long time, did intervene, and their intervention almost completely annihilated the American force in Korea. At that time, MacArthur issued calls to use nuclear weapons on China, for which he was relieved of duty. His successor Matthew Ridgway stabilized the situation.
</p>
<p>
Closer to home, we all know what happened in 1962 when Nehru and Krishna Menon implemented their “forward policy” — Menon ignored intelligence reports that the Chinese were unlikely to take this provocation lying down, and the rest is history. We suffered our worst defeat in history.
</p>
<p>
So China has a history of watching carefully and intervening at the right time for them. If Pakistan is pushed too far into a corner, India may have a nasty surprise awaiting them.
</p>
</div>
</section>
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<h2 id="TOC6">
We Need An Adult In The Room
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</header>
<div>
<p>
Both India and Pakistan are locked into this game of one-upmanship. India will only talk of de-escalation when it has the upper hand, and so will Pakistan. This can only escalate to dangerous levels.
</p>
<p>
The only thing that can prevent this from becoming a nuclear holocaust is intervention by countries like America, Russia, and China, possibly with the aid of the UN. Only such an intervention can stop the childish behavior of both countries which are both currently saying “He did it first.” To be sure, both have compelling reasons domestically. Modi is facing general elections in May (this may be postponed if the war continues) and cannot afford to look weak. In the current hyper-nationalistic atmosphere in India, he has very little wiggle room, and any concession may be viewed as weakness. Modi has backed himself into such a corner with his rhetoric that now he needs to show a comprehensive victory to save face. Even a proposal like that floated by the French, the British, and the Americans in the UN to brand Masood Azhar a global terrorist, if China does not veto it, may not go far enough for India in the current atmosphere. In the same way, Pakistan’s PM and military cannot afford to look weak in front of their population. Both leaders have almost no room for compromise, and so the only benign outcome from this confrontation is if the big powers intervene and negotiate a settlement.
</p>
<p>
And they should because it is very much in everyone’s interest in the world to stop a nuclear holocaust. If a dozen nuclear bombs are exploded in the Kashmir border, in Pakistan, and in Delhi and other Indian cities, the consequences will be faced by far more than just India and Pakistan. The radiation clouds will spread to China (Xinjiang and Tibet), to central Asia, to Iran, Turkey, the central Asian republics, the Ukraine, and southern Russia. The rivers originating in the Himalayas, including the Ganga and the Yangtze, will become poisoned by radioactive elements such as cesium. Northern India and Pakistan will both become wastelands, incapable of habitation for at least 50 years. There will be mass starvation on an unprecedented scale in India as the bread basket of India will be destroyed (all of Pakistan will likely be destroyed as well.) The world will not recover from this shock for decades.
</p>
<p>
And unless the rest of the world steps in, this is exactly what will happen in a few weeks’ or months’ time.
</p>
</div>
</section>
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Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
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</article>Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com1tag:blogger.com,1999:blog-2647581039313842967.post-72912145664173489012019-02-16T10:56:00.000+05:302019-02-27T13:42:36.060+05:30Why War With Pakistan Is Not The Answer to Pulwama <article> <!-- Why War With Pakistan Is Not The Answer to Pulwama -->
<header> <!-- Why War With Pakistan Is Not The Answer to Pulwama -->
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<br>
Why War With Pakistan Is Not The Answer to Pulwama
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<footer> <!-- Authorship, Copyright, Date -->
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Written by Dr. Seshadri Kumar, 16 February, 2019
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Copyright © 2019 Dr. Seshadri Kumar. All Rights Reserved.
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Abstract
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<p>
In the wake of the terrible attack on CRPF personnel by a suicide car bomber affiliated to the Pakistan-based terrorist organization, Jaish-e-Muhammad, in Pulwama in Kashmir on 14 February, 2019, many people are raising the spectre of war against Pakistan as the correct response. However, this is motivated more by politics and emotions than hard realities. I discuss the reasons why war at any scale, whether a full-scale war or a “surgical strike,” is simply not a viable option.
</p>
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<p>
This is the time for all Indians to be extremely vigilant. Think carefully about whatever you read or see.
</p>
<p>
Why?
</p>
<p>
What you, I, and most of the country feel about the Pulwama attack:
</p>
<p>
It is a terrible, tragic day that has resulted in 41 of our servicemen losing their lives.
</p>
<p>
What Modi and the BJP think about the Pulwama attack:
</p>
<p>
It is a golden opportunity that has fallen into their lap, considering how Modi has his back to the wall because of his failures in every aspect of governance — the economy, jobs, foreign affairs, corruption — nothing is going well for Modi, and people are losing their faith in him. So they will not hesitate to milk this tragedy for every drop of political advantage by pressing people’s buttons and appealing to their patriotic outrage. And your life and mine are the last things on their mind as they relentlessly exploit this. This is not unique to the Modi government — every government, anywhere in the world, has used this tactic when their backs are against the wall (think of Clinton’s attack on Bosnia and the Hollywood movie “Wag the Dog”.)
</p>
<p>
This incident offers them a great way to divert the people’s attention from the failures of Modi’s government. The display of the coffins on TV yesterday was very disturbing and will further inflame passions, which is probably what this government wants. So too talk by the PM about how “people’s blood is boiling.” Notice that no one is now talking about Rafale or demonetization. Instead, the Hindus of Jammu went into a violent frenzy yesterday and attacked Kashmiris who were living in Jammu. This can easily become a Hindu-Muslim fireball that will consume the country — unless we are extremely vigilant.
</p>
<p>
Understand that a war — even a limited one — even “surgical strikes” — are extremely destructive. They result in the death of innocents; they destroy our economy and set back economic growth. You or I will not lose our lives — our brave soldiers will die, and their families will grieve. We have no business asking them to die for us when we are not ready to die for the country ourselves. For the government, especially the PM, it offers a chance to posture as a “strong leader,” but the consequences for the country from any war can only be negative.
</p>
<p>
Let there be no illusions. We cannot win a war with Pakistan as long as China, the superpower in our area, is firmly backing them. Painful as it is, we cannot defeat them, and we cannot do anything to retaliate at a military level. And Pakistan has strong financial backing from the wealthy kingdom of Saudi Arabia. Realize also that we do not have the advantage of surprise now. The Pakistani armed forces will be on high alert, and they will be expecting an attack from us. No war can be won without the element of surprise.
</p>
<p>
We even have very limited leverage over them in a commercial sense because we do not trade very much with them. Our removal of MFN status of Pakistan, which Mr. Jaitley announced yesterday, will have negligible impact. We can stop their musicians and actors from working in India, and we can stop cricket matches. None of this will matter much. China is there to provide everything the Pakistanis need.
</p>
<p>
I know this is frustrating for us all, but the only thing we can do is prevent another incident like this by being alert — by focusing on our true enemies outside India than froth at the mouth about some imaginary “tukde tukde gang.” After 4.5 years, at least now the Modi Sarkar can focus on real national security than go after actors, writers, and intellectuals, and brand them as anti-nationals — people whose only crime was to criticize the government and the PM. Today we know who the real anti-nationals are — they sit outside our borders and plot our downfall. If we are alert to intelligence inputs; if we take the local population into confidence and try to build a positive relationship with them instead of constantly threatening them, then we will get useful ground-level intelligence that will prevent a recurrence of Pulwama.
</p>
<p>
War is never the answer.
</p>
<p>
Do not fall into the attempts of those who try to suck us into a vortex of hatred and a dangerous conflagration for political gains.
</p>
<p>
Be also aware of the propaganda being spread that in this hour of crisis, we should not disagree with or criticize the government. This is, of course, what the government would like. But should we agree to any decision? I have just explained why war of any kind would be catastrophic. We would lose lives; property worth tens of thousands of crores will be destroyed in cross-border bombing raids (and never discount the possibility that the other side might use a nuke when they are facing defeat); and the economic damage due to disruption of the economy will be huge.
</p>
<p>
So no, I do not agree with “whatever the government decides” - which some of my friends have said, and which Mr. Rahul Gandhi, the Congress President, has also said. In particular, I would disagree if the government’s decision is war of any kind. And that is what any patriot should do. It is not patriotic to root for a destructive war that will set us back in our growth.
</p>
<p>
We are a growing country with great ambitions for the future. We want to be a superpower someday. A war sets us back in this trajectory.
</p>
<p>
Pakistan is a failed state with no real ambitions. A war would make little difference to their terminal decline. They have nothing to lose in a war — in fact, their leaders would welcome it as a relief from having to answer their citizens on why their country is a failed state.
</p>
<p>
Some people are comparing our situation to that of America when it took out Osama bin Laden in Abbotabad, or of Israel as it deals with Palestinian or Hezbollah terrorists with strong-arm tactics. But we do not have the same situation. America does not share a border with Pakistan, and Pakistan is dependent on American cash. Israel has overwhelming military superiority over the Palestinians. Our situation with Pakistan is very different. We are essentially at parity in every respect — in conventional as well as nuclear weapons. A war will only mean bloodshed and economic loss.
</p>
<p>
Let us not fall into this trap. Let us not agree to everything.
</p>
<p>
It is not patriotic to agree with bad decisions. It is patriotic to support what is right for the country.
</p>
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<br>
<p>
Disclaimer: All the opinions expressed in this article are the opinions of Dr. Seshadri Kumar alone and should not be construed to mean the opinions of any other person or organization, unless explicitly stated otherwise in the article.
</p>
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Seshadri Kumarhttp://www.blogger.com/profile/16367107762267474532noreply@blogger.com4