08/18/2006 03:55 PM

The New Cold War

The Global Battle for Natural Resources

By Erich Follath

The global economy is booming, and experts predict it will stay healthy. But competition for natural resources will change the balance of power among the world's nations as a new age of conflicts over energy begins. In a new online series, SPIEGEL documents the global competition for dwindling supplies of natural resources.

British troops in Kuwait 2003: Coordinating the battle for global resources

British troops in Kuwait 2003: Coordinating the battle for global resources

It isn't always bombs and bayonets, wartime victory or surrender that shift the coordinates of world politics. Sometimes tectonic changes happen in less than spectacular ways.

That was what happened over half a century ago, when the Americans handed over patents for computer technology to the Japanese for a few dollars. What could those backward people in the Far East, weakened by the war, possibly do with the patents, the Americans wondered? But the industrious and highly motivated Japanese developed the technologies and built global corporations that forced Western companies in the entertainment and automobile industry out of the market.

A similar thing happened back in December 1978, when Chinese Premier Deng Xiaoping managed to convince fellow senior members of the Chinese Communist party -- in a resolution that was adopted with little fanfare -- to tolerate initial experiments with a free market economy. China has since transformed itself into a major economic power able to compete with the likes of the United States and Europe.

The rise and fall of nations is a game in which the cards are sometimes concealed, played by surprising and unexpected rules.

It's no different today, now that a new cold war has begun. We live in an age of dramatic distribution battles over resources that are becoming increasingly scarce and yet required in ever-growing amounts. It's also an age in which international politics are increasingly determined by questions of energy security. The cards are just now being reshuffled for potential winners and losers. Americans have discovered India as a new strategic partner, and energy-hungry China is making overtures to its old rival Russia. Strange bedfellows.

The point future historians will define as the start of this era is anyone's guess. Perhaps it'll be the day in May 2005 when the world's most expensive oil and natural gas pipeline was dedicated in a festive ceremony in the Azerbaijani capital Baku. That pipeline stretches from Azerbaijan through Georgia and ends at the Turkish port of Ceyhan -- a geographically remote and highly controversial project that was promoted by Washington in an effort to curb Iranian and Russian influence in the region.

Or it might be the day China secured resources for the next few decades in a $70 billion deal in Tehran.

Iran threatens to use oil as a weapon; Russia has already used natural gas as a political tool in its dealings with neighboring countries, and it can even shut off the natural gas spigot to Europe. Venezuela is toying with the idea of cutting off oil shipments to the United States, and terrorist organization al-Qaida recently tried, for the first time, to blow up Saudi Arabian oil facilities.

In a recently published study, experts from the investment bank Goldman Sachs and international political consultants from Washington, London and Singapore named international terror as the number two threat to the global economy. According to the report, only one issue poses a greater threat: raw material shortages and the related high price of oil.

In these frosty times, even the American superpower is getting nervous. US President George W. Bush, the domestic oil lobby's man in Washington, and long a proponent of unchecked consumption of fossil fuels, has recently made a surprising about-face. In his address to the nation in late January, Bush said that America was "addicted to oil," deplored the unstable situation in the energy-rich Middle East, and proposed that the nation wean itself off the black drug.

Bush had nothing but good things to say in his speech. He waxed lyrical about hybrid cars, biodiesel, wind and solar power. His proposals included expanding nuclear power, offering the Third World a "global partnership for nuclear energy," coupled with small reactors and a US guarantee for delivery of fuel rods. His critics say the idea is nothing but a new form of imperialism designed to generate dependency.

Terrorism is only the second-greatest threat to the world economy -- behind shortages of raw material.

Terrorism is only the second-greatest threat to the world economy -- behind shortages of raw material.

In any case, Bush's visit to India in early March set a historic precedent. Washington offered New Delhi a privileged energy partnership, which would include shipments of nuclear fuel and state-of-the-art reactor technologies -- despite the fact that India never signed the Nuclear Non-Proliferation Treaty and should, by all rights, be treated as a nuclear pariah.

This American initiative hasn't gone unnoticed in Europe. European Union Commissioner Benita Ferrero-Waldner recently announced that the EU is making "the issue of energy security a key element of its foreign policy," a necessary shift that she attributes to recent "wake-up calls."

An increasingly desperate-seeming Europe is searching for a common resource policy. "If we can speak with one voice," says Gérard Mestrallet, CEO of the French energy management company SUEZ, "we can apply pressure to any supplier." But it's a rocky path from energy dependency to becoming an energy powerhouse, as was all too apparent at an EU summit in Brussels earlier this year, which produced little more than statements of intent.

Back to the future

So why does this new cold war seem, in many respects, so much like the old one that followed World War II? What are the differences? Where and how has the emphasis shifted?

The first Cold War started with the bomb -- and with a dispute. After defeating Hitler's Germany, the Allies in World War II split into two camps, partly as a result of deep feelings of mistrust between then-US President Harry Truman and Soviet dictator Josef Stalin. It was clear that Moscow planned to use whatever means necessary -- some rising almost to the level of armed conflict -- to secure its war spoils and aggressively expand its sphere of influence.

After the American scientists had successfully tested the first nuclear bomb in the New Mexico desert on July 16, 1945, and -- a few days later -- American bombers dropped the most horrific of all bombs onto Hiroshima and Nagasaki, the balance of power initially shifted toward the US. In a secret memo, the military heads of the project were already estimating the "atom bomb requirements for the destruction of strategic regions in Russia." The memo went on to list possible target cities, including the Soviet capital, Moscow.

Only after the USSR had detonated its own nuclear weapon in August 1949 did Stalin's backward realm regain the rank of "superpower" (even though the Soviet Union's rigid ideology, bureaucratic calcification and excessive military buildup already constituted the germ of its downfall). An equilibrium of horror developed which, in the face of the credible threat of mutual destruction, at least ruled out a "hot" military conflict between the superpowers.

Ronald Reagan in Berlin, 1982. The Cold War led to "a horribly stable world."

Ronald Reagan in Berlin, 1982. The Cold War led to "a horribly stable world."

This precarious nuclear balance guaranteed Western Europe, including West Germany, a long period of peace. Of course, for many others it was, in the words of author George Orwell, "a horribly stable world," one in which the ideological rivalry between the superpowers led to the formation of blocs, or clearly defined spheres of interest.

Those who lived on the right side of the Iron Curtain were well off, living as they did in prospering, democratic societies with free market economies. Not as well off were those who -- like the Hungarians in 1956 and the Czechs and Slovaks in 1968 -- wanted to break free from the Soviet straitjacket and, following the bloody suppression of resistance, were forced to feel their chains even more painfully.

But some Third World countries weren't even in a position to offer their citizens the horrible status of "Soviet satellite state." Washington and Moscow weren't fussy when it came to choosing allies; in fact human rights were the least of their concerns. Both superpowers thought nothing of propping up "allies" unconditionally, even if they were brutal dictators on the "right" or on the "left."

The US and the USSR never allowed themselves to be forced into a major direct confrontation. But large parts of Africa, Asia and Latin America never enjoyed Western Europe's enduring peace. Instead they were plagued by violent conflicts -- the "conventional" proxy wars waged by the superpowers on their territory. The biggest losers during this era were those living in underdeveloped regions, which the major powers selfishly used as battlegrounds -- and as suppliers of cheap energy.

Take, for example, America's relationship with Saudi Arabia. For decades Washington supplied the country's corrupt princes with the latest in modern weapons and fighter aircraft. In return for cheap fuel, America showered its supplier nations with billions. Hardly anyone was interested in whether the blessings of US currency ever reached the majority of people in these countries, or whether their rulers instead used the money to suppress democratic movements.

Money, the Bomb, and 'Wild Peace'

Nagasaki, 1945.

Nagasaki, 1945.

Hiroshima and Nagasaki demonstrated the horrific consequences of nuclear weapons -- as well as mankind's horrible potential for self-destruction -- but the bomb turned out to have uses aside from total destruction. One was to help differentiate between the haves and have-nots. Thus, it comes as no surprise that, following the British and the French, the Chinese pushed open the door to the club of nuclear powers in 1964, with the Israelis (unofficially) following suit in 1967.

Despite the fact that an end to the Cold War was repeatedly proclaimed during the détente phases, it was only the collapse of the Soviet Union in 1991 that brought real change. The Soviet Union -- too big, armed to the point of bankruptcy and cut off from new technologies -- was essentially forced to declare itself bankrupt before its own citizens and the world.

In the end, the Soviet Union's departure from world history was marked by a sigh, and not some horrible explosion, thanks in part to the level-headedness of then-premier Mikhail Gorbachev, who had no option but to support reforms. The collapse of the Soviet Union also spelled the end of monolithic blocs. But after an initial phase of euphoria, even the Western victors quickly realized that the "end of history" predicted by their triumphalists had not come about.

A post-Cold War interlude

The Cold War, the age of the permanent but generally manageable conflict, initially turned into a phase of "wild" peace. During this transitional period it became clear that the US model of democracy wasn't necessarily transferable, that the dangers to world peace had not evaporated, but simply shifted, and that major countries of the Third World could no longer be forced to act as proxies for anyone else.

The economic reforms in Leninist-capitalist China and (more than a decade later) in democratic-socialist India, released tremendous forces that changed and continue to change the balance of power in the increasingly globalized world of the 21st century.

Ultimately, however, "wild peace" in the wake of the Cold War -- the period between 1991 and 2001 -- was nothing but an interlude in which the actors on the world stage positioned themselves. Europe searched for its identity and possibly its own path, while opening membership in its Union to the countries of the former communist East. An insecure and humiliated Russia set out in search of new alliances and tried its hand at a form of state capitalism with democratic overtones. The US, as the sole remaining superpower, settled in to its dominant global role for an indeterminate period of time, making itself "indispensable," as former Secretary of State Madeleine Albright has said, in crisis situations the world over. It also continued its military buildup -- to the point where the 2007 US military budget will equal the weapons expenditures of all other countries in the world combined.

From the wild peace to a new Cold War

However, America was unable to stop the proliferation of nuclear weapons. In 1998, India and Pakistan successfully detonated their nuclear warheads, and North Korea declared itself a nuclear power in 2005. There have also been unsettling developments in the bomb's motherland. In violation of the provisions of the Nuclear Non-Proliferation Treaty, Washington planned to support the development of "mini nukes" -- thereby lowering the threshold for the use of the most horrible of all weapons.

But a few years later, it looked as though the wild peace could develop into a permanent state of non-war. Although Islamist underground groups were attempting to attract international attention with the spread of terrorism, they chose suicide attacks as their preferred weapon. Nuclear power, no matter how imposing, was no match for the perfidious concept of the human bomb. Though unsettling for the West, the problem seemed manageable as long as the attacks by murdering "martyrs" were mainly limited to the Middle East and only sporadically affected US interests.

Osama bin Laden in a video grab from January 19, 2006.

Osama bin Laden in a video grab from January 19, 2006.

Of course, all that changed on Sept. 11, 2001, when al-Qaida terrorists attacked America's heart, and about 3,000 people died in New York's World Trade Center, at the Pentagon in Washington and in a Pennsylvania field near Pittsburgh. What had been a "wild peace" suddenly turned into a hot war -- if an understandable one, as long as it was seen as a punishment of Afghanistan. The country's Islamist Taliban regime had, after all, provided safe haven and logistics for al-Qaida leader Osama bin Laden and his fellow terrorists.

But Afghanistan wasn't a big enough prize for the White House. President Bush, and especially Vice President Richard Cheney and hawkish Secretary of Defense Donald Rumsfeld, used misinformation about supposed weapons of mass destruction to inflate support within the US population and an international "coalition of the willing" for launching a military campaign against Iraq and its dictator, Saddam Hussein.

Not many in Washington were concerned by the global community's refusal to sanction this step. The attacks of Sept. 11 had made Americans painfully aware of their physical vulnerability, as well as shining a spotlight on the unreliability of its partners and the potential hostility of an entire world region. After all, 15 of the 19 terrorists on the Sept. 11 aircraft were originally from Saudi Arabia, whose corrupt royal family had supported Bin Laden for many years.

Quagmire in Iraq

Bush's Iraq campaign was about toppling a dictator, America's strategic interests and its military bases, and the attempt to "implant" democracy in the Middle East. More than anything, though, it was a war for oil.

Iraq has enormous oil and natural gas reserves. And whoever controls the land on the Tigris and Euphrates rivers can exercise decisive influence over developments in this volatile region, sometimes dubbed the "world's gas station" because of its vast natural resources.

But it's been clear for months now that the campaign has failed. The US occupation force was not greeted with flowers and, as a result of its inability to provide even the most basic necessities, such as water and electricity, it is increasingly abhorred by the Iraqi people. Terror wrought by al-Qaida, which made Iraq its new center, has claimed more Iraqi victims than Americans.

Despite all appeals to stay the course, Baghdad will not be able to liberate itself from economic lethargy through oil exports anytime soon. Almost daily terror attacks against pipelines have reduced production even further. Former Prime Minister Ayad Allawi already says that his country is descending into civil war. But US President Bush continues to believe in "victory" and that world has become "a safer place" since the Iraq invasion.

A clear majority of Americans now oppose the war, and many feel bitter about the negative image a country considered a democratic leader is currently projecting in the wake of scandals from Guantanamo to Abu Ghraib. Throughout its history, the United States has alternated between periods of global intervention and domestic navel gazing, and it could become increasingly introverted in the near future. A second military adventure, in Iran, for example, is highly unlikely to happen, partly because most Americans are apparently more concerned about a 50 percent increase in gasoline prices in the last 48 months than about a distant country's nuclear ambitions.

The big problems remain: the proliferation of nuclear weapons, radical Islamism and terrorism. No one knows how to prevent an Iranian president who -- at least verbally -- is committed to the destruction of Israel from building nuclear weapons. Osama bin Laden has managed to establish, in large sections of predominantly Muslim and economically backward states, his Islamist worldview as a counterweight to a supposedly exploitive, "godless" Western society. Although al-Qaida's role as a tightly run terrorist organization has diminished, its comprehensive ideology of terror has spread throughout the world, making it more dangerous than ever before.

Saudi Arabian oil refinery: A chess piece in the new cold war

Saudi Arabian oil refinery: A chess piece in the new cold war

Only an improvement in living conditions -- including integration into globalized world trade under free, non-protectionist conditions and, in particular, personal opportunities for advancement -- can reduce the hold radical leaders have over people in these countries. This social change is the prerequisite for a civil society and, when it comes to democratic social interaction, is far more important than free elections, for example. It can only be achieved through the production, supply and equitable distribution of consumer goods, and it is based on the condition of undisturbed access to all types of natural resources, including fossil fuels, uranium and renewable energy.

A major problem has been pushed to the forefront. All major powers -- the United States, Europe, Russian and up-and-comers China and India -- have now made resource security a top priority political issue. They have devoted considerable efforts to building a network of pipelines across deserts and grasslands and beneath the oceans. As they court the custodians and owners of the resources, trickery, bribery and bargaining have become the order of the day. But in the foreseeable future, this battle is likely to be waged below the threshold of military conflict, which means the intermediate phase of "wild freedom" following the collapse of the Soviet Union has shifted to a different era: the New Cold War.

Translated from the German by Christopher Sultan


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