Sinking Globalisation with Oil

It has been interesting to observe since the 1970s how the term ‘globalisation’ gained traction and found a place in our lives. It has threaded its way into our subconscious, evolving to a point where it relates to all things financial, economic, political and cultural. Indeed, it has been defined as the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture.

Along the way, it was broadly dismissed by some detractors who mocked globalisation as the ‘Americanisation’ of the world. The International Monetary Fund identified trade, capital investment, migration and dissemination of knowledge, as the four basic aspects of globalisation. So what does it mean for globalisation now that the U.S.A. is moving towards a ‘protectionist economy’ trumpeted by the new president-elect?

Within weeks of the November 2016 U.S. Presidential election, the incoming administration announced that the U.S. will be withdrawing from the 12 nation Transpacific Partnership Pact or the cross-Pacific free-trade deal, meaning Australia may miss out on billions of dollars in benefits, reportedly ‘painting a bleak outlook’ according to the Australian Chamber of Commerce. If a free-trade deal meant that Australia ‘were to be winners’, then you can’t blame the losers for withdrawing, when clearly one major aspect of globalisation, trade, is no longer viewed as beneficial. So why are we surprised and what’s next?

The outlook is undoubtedly an environment where ‘capital costs’ will be higher, migration restricted and there will be a decline in shared aspirations as certainty diminishes with the effective dismantling of globalisation. The U.S. will no longer be criticised for their role as the ‘world’s police’, as they withdraw into protectionism and focus internally. The game changer for the U.S. ‘military establishment’ and clearly recognised by the new administration, occurred in 2011 when the U.S.A. became a net exporter of refined petroleum products and the world’s third-largest producer of crude oil and second-largest exporter of refined products. So where does this leave Australia in the new paradigm, particularly in relation to Defence?

That other transpacific pact, the 1951 ANZUS Treaty was an agreement to protect the security of the Pacific, which has over time provided some Australians with a false sense of security regarding our Defence arrangements, as they believe our ‘fall back’ position in defending our sovereignty is to rely on our allies in the USA & NZ. Well, maybe not anymore, it depends on what Mr Trump means when he says our alliance is a ‘special relationship’. It may be that we now need to prepare our Defence on the basis that support is no longer a given, if it ever was.

Certainly the U.S. have been looking at some of our more recent Defence policies and actions and would question why they should risk American lives to defend our inanity, based on some imprudent decisions in relation to matters like ‘Submarines’ and the ‘Port of Darwin’, the latter a strategic asset which forms part of the Australian-United States Alliance’s Strategic Defence Framework, now leased to a company with Chinese State interests.

Some would argue that the recent submarine deal demonstrates that we do have a long-term Defence plan, primarily for the benefit, welfare and votes from the good people of South Australia. The first of 12 submarines arrive in 15 years’ time, the last in 50 years i.e. 2066.

The 50 billion dollar submarine contract ($4.12 billion per sub) for equipment powered by ‘diesel electric’ technology was awarded to France after it was decided not to proceed with the bid from Japan. Apparently, ‘too soon’; it’s only 70+ years since midget subs breached Sydney Harbour.

Interestingly, it has been reported that the Israeli Navy is in negotiations with Germany to supply superior nuclear submarines for only A$600 million each. Not ‘too soon’ for Israel! So why the 595% price ‘mark-up’ for Australian taxpayers? Well, it’s not a matter of poor probity on behalf of Defence, when it’s a political decision. This is particularly concerning given that in the last 15 years we have witnessed the momentous shift in global economic power, the biggest since the Industrial Revolution, back in favour of our eastern neighbours.

So, looking at the global geopolitical trends, do you think we are adequately responding and adapting to our changing environment or alternatively are you reasonably satisfied with the current complacent status quo; the ‘she’ll be right, we’re the lucky country’ strategic plan? Pope J.P.2 made the point that we are ‘lucky’ because as a country we have never been really tested. So may the ‘Age of Luck & Denial’ continue and we’ll just ‘hope’ that the ‘reality test’ is not forced upon ‘US’… the clock is ticking!

22nd November 2016

In June 2010 Australian Emeritus Professor Frank Johannes Fenner, AC,CMG,MBE,FRS,FAA predicted the extinction of the human race within around 100 years.

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Author: Gooriara

An old Australian bloke... sharing a few thoughts.

1 thought on “Sinking Globalisation with Oil”

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