Reordering

The Philippine government did not succumb to populist agitation demanding all excise and VAT charges on oil products be suspended. This is a good thing.

This will be a long crisis. We do not yet see the end of the tunnel. Many terrible things could still happen. It is government’s duty to consolidate its fiscal position. Keep the powder dry. This is the way of prudence.

Our outstanding debt is piling up, driven by endless demands for more subsidies. We are nearing the point where it becomes unsustainable. We are eating into our foreign currency reserves, being an economy highly dependent on imports of everything. Should the global economic crisis deepen, we must have fiscal reserves in stock.

The war of aggression against Iran cannot be resolved soon enough. What matters is larger than a mere ceasefire. We are looking at a more profound process of geopolitical and economic reordering that will take time to complete.

Forget about Donald Trump. This man has no understanding of how the world works. He cannot be educated. Each day, he reacts to events mainly to manipulate his country’s stock markets. He is ruled by his ego, not by any logical competence. He personifies the dangerous combination of arrogance and stupidity, captured by classical Greek tragedies, that wrought so much suffering in the past.

Consequently, he cannot grasp the overpowering global forces unleashed by his stupid war. These global forces need time to work their way through. Meanwhile, supply chains will continue to break, productivity will be undermined and basic goods will be repriced. Life will be more difficult for everyone.

We do not exactly know how the dynamic of global forces will shape things in the end. History holds no lessons for disruption on this scale. There are too many factors in play.

What we do know is that the epoch of US hegemony is coming to an end. During this sad epoch, the US committed every sort of aggression at will. Washington unilaterally decided on its warlike actions. In the 250 years of the American republic, the country was not in a war for only 16.

In the case of Iran, the US arrogantly imagined it alone decided who may have a nuclear weapon and who will not. It nursed this imagination even if historical reality proved otherwise: countries like China, Russia, North Korea, Pakistan, India and Israel acquired nuclear capability without American consent.

America has difficulty reconciling with the idea that we now exist in a multipolar world. A world where the metrics of military power alone measures nothing. It cannot singularly determine the outcomes.

In the case of Iran, geography plays a major role. The country the US and Israel attacked unprovoked is also driven by an intense sense of honor that a pathetic character like Trump can never grasp.

The dishonorable attack on Iran released a genie no one can control – not even with aircraft carrier battle groups. It is a genie, however, that obeys the new realities of trade, financial power, control of vital resources and information access.

There are several processes simultaneously in progress.

A new generation of financial technologies and tools, fueled both by artificial intelligence and cryptocurrencies, breaks the traditional hegemony of the US dollar and the American banking system. With these new technologies and tools, the US can no longer impose traditional sanctions like it did before. Countries can exchange wealth outside the purview of traditional chokepoints such as the SWIFT system.

Global alliances are quickly shifting. America’s traditional European allies have chosen not to participate in its insane war on Iran. France and the UK are spearheading a caucus of several dozen countries to carve a new path out of the resource stranglehold created by the war. The economic map of the world is being reimagined – independent of the US.

Nuclear-armed Pakistan emerged as an important broker for peace and guardian of stability in a volatile region. Pakistani troops and armaments this week moved into Saudi bases traditionally used by the Americans. This is seen as the first stage of displacing the US as guarantor for stability in the region. It also makes a non-Arab South Asian country an important power in a redefined region.

Egypt, Saudi Arabia, Turkey and Pakistan have formed a Sunni axis of sorts to avert either Israel or Iran’s rise as regional powerbroker. This axis further deepens the diplomatic isolation of the US and Israel in the region.

Turkey, for its own purposes, is more strident in its rhetoric against Israel. With its large armed forces and its own military-industrial base, Turkey wants to carve a larger role for itself – a role that began when it sent its army to calm the Libyan civil war. A war between Israel and Turkey is obviously on the table.

Both Russia and China are supporting Iran both diplomatically and with weapons shipments. Their alliance with Iran gives both access to oil as well as leverage against the emerging middle powers in this part of the world. Both can help develop overland routes to Iran that will open up the trapped economies of West Asia. Russia and Iran share access to the increasingly more strategic Caspian Sea. China wants to reopen the old Silk Route traversing resource-rich economies.

Iran is at the fulcrum of this great reordering.