Blood for Oil and the Petrodollar

posted 13 Aug 2019, 06:36 by Christoph von Gamm
Afghanistan and the Defense of Democracy at the hindukuch  

The economic well-being of the western world will be decided at the hindukush. 

A political essay by  Dr. Christoph O.-Ph. v. Gamm and Prof. Dr. Florian G. Mildenberger, 

May 2017

German Original article - Artikel auf Deutsch 

Europe will only stay stable, as long Afghanistan stays unstable.

Historians and commentators often recognise processes like these one generation after they happened and they almost everytime evoke the same question: “How could we have overlooked such an apparentness?”  In private, the answer is clear to those who are asking the question and they exactly know why they never asked these type of questions, because out of respect of superior interest which just might be the proper ones. 

Regarding the Afghanistan-war, which lasts now almost 40 years interrupted by several breaks, the evoking question in a geography lesson would be: “Where is this country located and what are the neighboring countries?” Afghanistan is located between Iran and the People’s Republic China. Both states are criticized by the USA and their western alliances  not only because of their human rights issues, but furthermore because their expanding-strategies. Both states share reciprocally interests: By this time, China needs even more oil than the USA and Iran has to sell as much as possible.

The defense of  the western democracy at the Hindukusch is not an meaningless topic.  If Afghanistan “falls”, the dollar is in danger, because it is based on oil. And if the dollar falls, the Euro will fall, too.

The German Bundeswehr deployed their troops  in Massar-el-Sharif, an important strategic location near Taschikistan, not far away from the Wakhan Corridor, an ancient trading-route, which probably even Marco Polo have crossed. 

40% of the oil-trade worldwide are passing one Street: the Street of Hormoz, a barely 39km wide strait, which is strongly surveilled/controlled by the USA. The observation of this street by the USA is also the reason, why the dollar as a currency for oil is/ has to be accepted. 

After the breakdown of the gold standard in the year 1973 and the quasi default of the US dollar towards gold, the former US-president Richard Nixon called out the oil-standard. You could only pay in US-Dollars for fossil oil and everyone, who tried to pay in another currency, was sanctioned, like Saddam Hussein, who wanted to pay his oil in euros. Maybe that “last domino” was the reason for his  fate, among a long list of other provocations.

Also China needs to calculate her oil in the currency of the US-dollar. Therefore, they need a huge amount of the Dollar, which originates from their export proceeds. Without any proceeds from exports, there is no Dollars, without Dollars, there is no oil, and without oil, there is no economic recovery. Despite some minor in-house production, China still has to import oil. 1.5 billions of the inhabitants of China  want to drive a car and enjoy several other oil-based conveniences of the capitalism (eg. plastic toys) and don’t want to freeze in winter like under the government of Deng Xiaoping.

And even China has to transport the oil from Arabia via the Strait of Hormoz.  The destination of the oil takes a long and exhausting journey until it’s finally in China: With tankers above the Strait of Hormoz, past the Maledivenes, through the poisonous Pirate- Street of Malakka, by Singapur and the Vietnam it has reached one of the many chinese oil-harbours. China has to pass more than two “Choke Points” to get their oil. For a long time, China thinks about strategies finding new alternative routes to shorten the path. China even offered Thailand money to build a canal through the “Isthmus von Kra” to avoid the Strait of Malakka. But nothing has changed - it seems the Strait of Hormoz is the one and only possibility.

A good alternative would be using the country road in form of a pipeline. But  certain requirements to build a pipeline have to be fulfilled: developed and accessible country roads in the mountains and political stability in case of assaults to draw-off oil. A matching route would be starting in Iran (one of the richest oil-countries in the world) with  connection to the pipelines in Kuwait, Saudi Arabia etc. could lead through Afghanistan. Other alternatives for a pipeline could be in Pakistan, through the North of Himalaya, as well the North-route passing Turkmenistan, Uzbekistan and Kyrgyzstan. The route through Pakistan for a pipeline is not practical because of the Himalaya-mountain and moreover, Pakistan is in dependence on the USA, like the former dictatorships in Middle America (Columbia etc.) The route through the North, also known as the northern “silk road” leads through too many states of the former UdSSR, with countries that are increasingly hostile towards each other - as a result that road is practically closed. The most predictable route would be the southern silk road.

The route from Tehran/Iran to Shache/China, the first location of the East of Himalaya and before the desert Gobi. And from that point, it’s geographically and politically rather easy for the building of a pipeline: it guides through Afghanistan (a former route for truckers guides 3187 km through Kabul). You can calculate approx. four days of a solid truck drive. Depending on the oil-pressure in the pipeline, oil approaches in roughly seven days, it’s much faster and once it’s built - much cheaper than shipping overseas. Moreover, there are possibilities for strategic partnerships. 

Iran always had good economic relationships with China, they even got more intense since the crisis with the West 1979 (Iran Revolution).  The isolationist policy of the West towards the islamist regime was also a contributing factor, here. 

The plans of building pipelines are not new. Occasionally, revolutions and invasions emerged in an astonishing time-order. You can see this in the year of 1979, when the Sowjetunion initially refused to invade Afghanistan. But just right after the Iran Revolution, the SU understood the importance of Afghanistan as an ally against China. For this reason, there weren’t many protests in the USA and the USA didn’t intervene, except their political threats to sanction the Olympic Games 1980 in Moscow. It was rather the opposite: the oil-price climbed higher and made the Dollar more valuable, just because of the Iran-Afghanistan-crisis.

Almost 10 years the Soviet Union endured to be active in Afghanistan, in this time the oil standard established, whereas gold became less important. If you read this article carefully, you might interrupt right here and think: USA  supported the islamic religious fighters from Afghanistan with weapons and money, promoted by Hollywood Busters as “Rambo III” or 2009 “The War of Charlie Wilson”. The aim of USA was not be against the SU, it was rather to keep the region in and around Afghanistan unstable. However, the USA would not have needed a well-functioning Afghanistan - also thanks to the Soviets - who received wheat by the U.S. for well behaving since the 70ies.

After 10 years of mutual socialist help and the war of the Mujahdin- partisans, Afghanistan was heavily bombed, so no safe place for a pipeline. The Civil War continued until  1999, when the troops of Taliban pushed the estranged northern-alliance away, so Afghanistan developed from a failed state like today’s Somalia back to a working state. 

2001 the troops of the northern-alliance were almost suppressed of their last territory, the Valley of Goritik in the Province of Badakhshan, the maybe most important geographically area of modern time in the north-east of Afghanistan, especially for the Dollar-hegemony. 

If the troops of the northern-alliance would have lost this dispute, the  “Islamic Emirate of Afghanistan” would be more popular for Iran and China, and lastly, the Taliban troops also need money to do their business. 

It didn’t came this far because of the events of 9/11. At this point it has to be emphasized, that the authors will not line conspiracy theories around collapsing skyscrapers and fanaticized islamic terrorists, even though they might sound highly interesting from a criminological perspective. The cooperation between the troops of Taliban and Al Qaida turned out to be lethal.  Even the strategic geographical, economical and political plans of China and Iran to cooperate throughout Afghanistan were bombarded by the US Air Force. This has been prevented in a significant way by a reorientation of the US-american engagement in that region of the world. Instead of only focusing on subsidies or the supply of military goods, it became more important to intervene directly and accompany the rebuilding process politically and economically from the beginning. Only those powers who were participating at the military endeavour were allowed to share the geostrategic fruits. 

Accordingly, you can only defend the democracy at the Hindukusch, if the following statement is allowed: Only if Afghanistan is a pacified country then projects for the infrastructure are possible. If projects for the infrastructure are possible, then a oil-pipeline could link up the country which produces the most oil with the one which consumes the most oil. If this is possible, who needs the Dollar anymore?

There is a vital interest to leave things like they are now. As long Afghanistan is an area of disaster, the western World is living well. That means: In Afghanistan, the troops of Taliban must get support as well by the western states to sow strife./The western states have to support the Taliban in Afghanistan as well to sow strife. Since the Taliban doesn’t run the country anymore, most of the exports in Afghanistan are based on Opium. The final products like Heroine (which makes 30% of the gross domestic product of Afghanistan) are  delivered primarily to Russia, which can’t intervene in Afghanistan due to time-historical reasons. 

Picture: Pipeline vs. shipping-route ,approx. course: Source: Google, text description by Authors

In parallel, a demonization of Iran would not harm the US interests. But through the allegations of the nuclear arming, this is exactly what happens: And who wants to advocate for the misuse of nuclear powers?

Anyway, the discussion about the withdrawal of troops in Afghanistan is rather pointless. As the State Head of Germany - the Bundespräsident Horst Köhler - tried to broach the issue of the German engagement at the Hindukusch, he was promptly fired from his post by the forces behind the scenes. This can be seen as a warning to other critics not to overthink about this topic. 

A withdrawal out of Afghanistan would give chances to China and Iran to collaborate and leverage the geographical advantages of a free Afghanistan.

Both states share interest in economic relationships and would bring prosperity to Kabul & Co -  with a system of values which has nothing in common with the western idea of living, eg. equality or the participation of women.

If the pipeline is built one day, the southern GUS-states will connect and a western pipeline-project with Turkey would be finished. 

Through a pipeline, oil can be transported more fastly and easily and as a consequence, the western states would be “drained” - it’s like two persons drink a big cup of Cola, one person gets the straw, the other person only gets a spoon.

And now it’s your turn to over think: If China got a pipeline, they don’t need to drive oil-tankers through stressful Choke-Points. China can therefore pay in chinese currency instead of Dollars. Those states which are exporting oil will still keep on buying their goods from China. China don’t need to export goods in countries with the currency of the Dollar no more because then the main reason for the export -Dollars for oil- is unnecessary.

If this will be the case, there will be a tremendous  shift in economic powers. The chinese Renmimbi would then be the worldwide currency, which is overdue because most of the world’s population are Chinese - they are powerful in economic affairs and export very much. And with a pipeline from China via Iran to Arabia they would have had enough oil.

Which position does Europe - except Germany - and the USA play in this worldwide competition with their overpriced pension system and symbolizing a paradise for people enjoying social welfare? Thinking that through, the troops in Afghanistan are just a small prize for a huge economic well being. However, one question remains: How long does it keep up?