CENTERS IN EUROPE: A STEP FORWARD?|
to Western Defense Studies Institute, Rome
and President to
European Osint Nexus - EON, Paris – Bruxelles)
Copyright: Jean Labrigue on line
Spain, Hungary and Belgium have agreed to cooperate
during the period they will each head the EU.
The challenges are many and amongst them there is one
that we should monitor with interest: inter-government cooperation in the
sharing of information and intelligence. I use both words deliberately. In the
modern computerized world, information - masses of information, is readily
available to everyone, private citizen and governments alike…however,
intelligence is that information which has been collected, processed and
analyzed…usually by governments. It is this process of collection, analysis and
dissemination that makes information useable, i.e. intelligence…and also
probably sensitive and classified.
In 2007 Hungary launched an initiative called Open
Source Intelligence or OSINT. Much to their dismay, the founders discovered
that the EU apparatus were, to say the least, reluctant to the idea of pooling
or sharing intelligence. In fact, immediately after the launching, EU agencies
made it clear that, intelligence, open source or other, should be a
government-only initiative and that NGO’s were to be kept far from the
One member of the Roman think tank, Western Defense
Studies Institute, suggested the use of different semantic i.e. open source
information instead of open source intelligence. This was favourably received,
and at the third Budapest meeting, OSINT Budapest Club became OSINF Budapest
Club. This was immediately appreciated by the EU government agencies attending
the meeting. It changed the chemistry of the gathering.
A fourth meeting was held in Bucharest. Some agencies
tried to relegate the Hungarian initiative -OSINF Budapest Club- to a secondary
role and to even neuter the innovative concept of open source information
sharing by treating it the same manner as traditional government intelligence –
to be jealously protected, guarded and NOT SHARED!
But the ball was already rolling, some member
countries were co-operating with the Budapest Club initiative. New information
technologies were combining with the ancient practice of human
information/intelligence collection (HUMINT or HUMINF). One could no longer
ignore or dissolve the process without risking to be left behind, conceptually
in the last century.
Although the Budapest Club had to accept that separate
meetings would be set-up for government only, they insisted and obtained that
recognition a union of both NGO’s and government representatives was also
useful. Those meetings looked more to be commercial presentation of
technologies which could be used by government “Intelligence agencies”.
EU agencies such as EDA organized seminars where the
private sector could present their “know how”.
A key element, in fact the sine qua non, of
inter-agency and intra-government information and intelligence sharing is a
formal organizational structure dedicated to this purpose which has become
known world wide as a fusion center…that is a center where, ideally, all-source
information is collected, analyzed (“fused”) and disseminated by a variety of
professionals from different disciplines…and even different agencies or
governments. In fact, this concept of multiple source staffing (“fused” in
working together) is important in habituating different agencies to collaborate
for a common goal and is the foundation of trust that will eventually lead to
real cooperation between European national intelligence agencies.
Now, with the support of the next three presidencies
for the initiative of OSINF, and its practical operational manifestation, the
fusion center, one could hope that the concepts will finally be recognized as a
plus to the EU and its member governments, instead of an unwanted intrusion
into a sector were parochial secrecy and sovereignty privileges are the norm
and sharing the exception!
only hope that this will come to be, in spite of the still strong conservative
Establishment opposition to international cooperation. The advantages far
supersede the negative points. Will EU find itself innovative in this field?
Bleeding of Western Power
Published Jan 06 2010 by European Osint Nexus
The Bleeding of Western Power.
by EDWARD PRICE
Paul Krugman has hit the nail on the head four times about the Chinese government
pegging their currency to the Dollar. He wrote about it in October, in November
and twice end December 2009. John McCain recently wrote something similar and our Dutch economist writer Heleen Mees does so as well. Left and right, people are beginning to stir. However,
the pegging of the Renminbi to the Dollar is not the whole story.
Keeping the Chinese currency artificially low is only one of three major parts
of the picture. At a certain juncture, Krugman writes, ?If I were the Chinese government, I?d be really worried.? Even
a near genius like Krugman can make an error. Dean Baker (The American Prospect, December 28) was right about that. Truth is,
the Chinese government is not worried at all. It knows very well that the odds
of international trade are unfairly stacked in China?s favor. It wants to keep it that way and the Chinese will say anything
they feel to be useful in preventing us gullible Americans and Europeans from
changing the present situation. It is not worry that we find over there, it is
The Chinese Reservoir
The second of the three aspects to consider is the sheer number of very poor
Chinese citizens. Until 2001, such a factor of near inexhaustible, cheap, and
available labor in a single country never played a role in world trade.
Independently from the currency peg, this enormous human resource pool stands
the logic of free trade on its head. Of the about 1.35 billion Chinese
population, roughly 400 million are now doing very well. This number includes
millionaires as well as taxi drivers, businessmen as well as housewives,
teachers as well as civil servants. The visitor to Beijing, walking out of the airport, sees them everywhere. In terms of local
purchasing power, and except for the taxi drivers, these 400 million are
comparable to our US
and European populations, with the difference that their incomes are more
Less visible are the approximately 200 million Chinese who are poor, but still
have a decent roof, reasonable shoes, mostly enough food and often a mobile phone.
Finally, only to be seen by the traveler who ventures outside tourist routes,
are the 500 to 700 million really poor Chinese who live on less than $3 a day.
125 million of these have less than $ 1,25 a day. Because of its economic
impact, I dubbed this group "he Chinese Reservoir".
Information on these numbers varies, but whether the Reservoir holds 300
million or 700 million, its incredible size helps China to continue competing with other countries at unbeatable prices. This
certainly provides delight for the Chinese government, which sees China?s wealth increase. But it soon will have disastrous consequences for
us, and not just for us. China?s economic power also unsettles other countries such as Indonesia (NYTimes, December 9th, 2009, article by Michael Wines).
The Theory of Free World Trade
We in the West believe in the benefits of free trade. The concept has a wide
following, and U.S.
governments in particular have been promoting this notion with enthusiasm. World trade is based on the idea that when rich countries buy simple products
from poor countries, the populations of these poor countries will progressively
get richer and so can begin their development. This allows the richer countries
to buy simple goods cheaply and to concentrate on their own activities of a
higher, more scientific and more sophisticated level. As affluence in the poor countries
grows, new markets in those countries are being formed. The low salaries will
gradually increase, and so the global economy will remain in balance, assuring
everyone's well-being. Macro-economically and in practice, this theory is roughly correct. Or
so it was until recently.
The Chinese Reservoir has a negative influence on the idealized functioning of
free trade because the number of people in it is so huge that their income, and
therefore their cost of manufacturing, does not substantially increase and will
not do so for the coming 15 years! When a hundred million of these poor would
seek higher wages, they can and will be exchanged for another 100 million from
The Reservoir. The result is that the inflow of extremely low paid workers from
rural areas and city slums into the Chinese economy can continue years into the
future and can keep costs at bottom levels. This is new in world trade. The
total picture is somewhat more complex, but this is its essence.
The Renminbi pegged to the Dollar and the existence of The Reservoir together
are violating accepted world trade logic for the first time. Every month, every
quarter, every year, China enriches itself with a huge trade surplus income, while the West is
being impoverished by the same amounts. In the short eight years since China joined the WTO, Chinese holdings in foreign currency have already
become momentous: In September 2009, the total was larger than 2.2 trillion
Dollars, a tenfold (!) increase from the already neat 212 billion of 2001. We
now see China buying in Africa on a scale never witnessed before. This enrichment process is very fast
and, more importantly, it is only just beginning.
If this trade disequilibrium is allowed to continue ? and at present all signs
are that the West will let that happen ? 15 years from now, these amounts will
have changed the balance of power in the world. Not a little bit. Fundamentally.
What it means
China will soon be able to buy all it wants, in whatever domain. It is good
to stop a while and think what this means. China will not only be able to buy the best researchers, the best companies
of the world, any patent it cares to have, but also the most sophisticated
military hardware. China will have no budget qualms about increasing its navy fourfold.
Moreover, which set of shareholders anywhere in the world owning a valuable
asset will not crumble when offered double the going rate? The list is
frightening. China will be able to buy real estate of its choice anywhere too. And it can
buy loyalty of governments as well as all the commodities it wants.
The result: Excessive political and military power is accruing to China.
We in the West will soon not be able to compete because we will be debt-ridden
and suffering from diminished purchasing power. In other words, the present
imbalance in trade terms makes power bleed from the West to China.
Is China our friend?
We must be clear in our basic attitude. We do not begrudge China?s growth into a major player in the world. In fact, the West should be
happy to see China do what we ourselves did in the course of the last few centuries. That
is, we got rich thanks to our combination of good legal and economic state
structures and a strong, organized work ethic. We did not get rich by working for a foreign power at cutthroat rates.
We pulled ourselves up by our bootstraps. It will be fine if China does that too, and joins us. We also should not mind exchanging
products and knowledge with China, as long as it is for mutual benefit. But we would be
very short-sighted if we continued to allow China?s riches to grow unfairly and faster than normal at our expense.
The third factor to consider is Chinese mentality. I have been to China 25 times and my wife is Chinese. One can like China a lot and acquire a strong admiration for the Chinese people. I do, and I have. But we must also see reality.
In China, the spirit of fair play is not in the book, except sometimes inside
the family. Fair play is to be found neither in business nor in politics. In
the Chinese mind, in the present post Second World War period, fair play is synonymous with weakness. The Tibet example, although discussed ad nauseam, is still
revealing. If fair play were still an element of the Chinese political psyche, Tibet would have been left to its own religious and happy
devices during the last 60 years, just like it was by pre-communist Chinese
emperors, wisely and fairly, during almost three centuries. The copy of a
Tibetan temple, which earlier Chinese rulers erected in Beijing, is still a landmark of the bygone evenhanded mentality of the old
Middle Kingdom. The previous rulers respected the Tibetan way of life and showed
it. At present, fair play and evenhandedness have vanished.
Recently, President Obama displayed a friendly attitude when visiting China. He at least behaved kindly when visible by the press. We do not know
what he said behind closed doors, but friendliness or, in other words, not
talking about serious problems that we may have with a Chinese position or
attitude in the interest of maintaining good relations, is not understood as
friendliness as we know it. It is understood as a weakness to be leveraged
against the speaker.
When in future, we talk tough to the Chinese, we should remain as polite as we
will be strict. This keeps the door open for accommodation. Strong and loud
language may close the door. Perhaps the President did very well behind closed
doors, but we do not know.
These last ten years
Most people do not remember that in 2000 and 2001, China played European nations against each other and then very successfully
played Europe against the US. At the beginning of this millennium, in order to be accepted
as member of the World Trade Organization, China had to change a lot in its legal, fiscal, and banking
organization. It had to legalize ownership of private property, change its
banking system, accept name and patent protection etc.. Many more demands of
the WTO were submitted and, step by step, these were met. As
a last demand, after China had already done a lot, at least certainly on paper if not always in
practice, the WTO members demanded that China let its currency float freely. Everyone who has really studied John Maynard Keynes? theory knows this is a condition to equilibrium. At
the time, the Renminbi, also called Yuan, was already pegged to the Dollar.
China then lodged clear complaints, claiming that it had already acted in
good faith and suggesting that Western countries were just trying to keep it
out of the greater world community in which it wanted to become a member in
At that juncture, something happened for which each European citizen should be
ashamed. Opportunistic leaders in Germany and France publicly announced that they would accept China into the WTO regardless of its currency pegged to the Dollar. This
left the US as the only
strong voice in the WTO refusing to let China in on those conditions. The Chinese government then mounted a superbly
executed public relations offensive, stating that the US wanted to keep China out of the WTO, sometimes citing reasons of power play, sometimes
suggesting the US
was reacting out of fear. China succeeded in casting the US in the role of the backpedaling,
dark, jealous opponent. That was at the beginning of George W. Bush?s presidency. Surprised and cornered into that
position, the US government decided not to harm future relations with China and capitulated.
From this sorry episode we must remember, first, that Europe was at the origin of the present Renminbi-Dollar problem; second, that
a clever opponent can play European countries against each other and against
This is the major intrinsic consequence of the fact that the European Union is not a federation but still just a group of
independent sovereign countries, each of which often first thinks of its own
interest before considering the greater good. As it happened, the then German
chancellor Gerhard Schr�der was a clever opportunist who liked to grandstand against the US and to
posture for electoral gain. He may also have reasoned that being nice to China would help his country?s exports. His neighbor, former President Chirac
of France, although a more principled character on other issues, followed suit.
Third, The Chinese have a first-class ability in public relations and in
manipulating public opinion. In this field, they make worthy opponents and
should never be underestimated. Finally, fourth, if the West wishes to tackle
the problem of the bleeding of its power, it is imperative that the US government succeed in having its major European allies lined up
and agreeing before even starting any action. Unfortunately, it remains
unlikely that an initiative in this respect will come from Europe. It can only come from the US.
Civilization, History and Ethics. The Perspective
The rules and even international law under which much of the world currently
functions come from the thinkers of the West. These are not Islamic inspired,
they are not Communist rules, not Egyptian nor Buddhist; they are from our Western Christian or ex-Christian civilization. For
better or for worse, it is not just the English language, but it are the
results of Western thinking that are circling the globe. We have created our
society over centuries, after long and often arduous struggles. Although we
need not forget that, many centuries ago, the great Muslim Empire in Central Europe played a vital role as keepers, enhancers and transmitters of thought
and knowledge for our long term development and although we may marvel at the
wonderful level of Chinese technical ability a few hundreds of years before
Christ, we should remain conscious of the fact that the present world society
has come out of our Western hands, our thinkers, our statesmen. We need not boast
about it, but neither should we ignore it: Even though practice has often been
raw, the system under which we function and under which all the peoples of the
earth increasingly function, comes from us. The basic ideal is that this should
help make a better world, where riches are gradually spread more equally and
where poor societies can grow and join.
One of many great institutions created by our Western society is the World Trade Organization. But now, in our relationship with China, free trade is being put into practice in a way that is fast
undermining our Western society. Do we have the right, are we allowed to change
and adapt the rules to this new reality? Of course we do! In fact, we should
consider ensuring equality and fairness for all concerned to be a profound
The medium term future of Communism
China, under Deng Xiaoping, reverted from communist state monopoly to free
market, individual ownership and competition. One does not forget Deng?s adage:
?No matter the color of the cat, as long as it catches mice!? Many of us were
happy to see China join our ideas when it changed its economic structure. Together with
the demise of the Soviet Union, this confirmed for us that we are on the right path with our society.
Optimism went as far as a Mr. Fukuyama famously writing ?The end of History?? For a while, in this euphoria
our sense of reality was lost. After the dissolution of the Soviet Union, we in the West have often thought that Communist rule in other
countries would eventually crumble under the appeal of our free society. We
looked at China with a benevolent feeling of superiority and President Clinton, at his visit to China, spoke in that sense.
However, from the demise of the USSR
the Chinese have drawn different conclusions. These seem to be: Never to let
down the authority of the Party like the Soviet Union did. Nip any talk of democracy or dissidence in the bud and use all
necessary force or violence to do so. Throughout China, they continually indoctrinate civil servants, personnel of government owned companies and the huge military
about ?correct Party thinking?. This is done with obligatory seminars, on
average one full week a year and, before important job promotions, for a full
month. With this indoctrination, more than half the salaried jobs in China are covered.
In other words, the Chinese Party leadership has decided the same will not
happen to them, period.
It is not for this article to discuss whether that is good or bad; the Chinese
choose their ways like we choose ours, but we must understand how things are
done over there.
The background is also very different from what it was at the Soviet demise of
20 years ago. Unlike the Soviet Union and Western Europe, the two geographies of the West and China are not contiguous. There is no thin and chilling Iron Curtain between
them. There is not a whole series of satellite countries craving for their own
independence, occupied by force like they were by the Soviet Union in Eastern Europe. There is no rich
versus poor attraction from the West, like there was with the Soviet Union and its East
European satellite countries. Neither is there much desire for freedom in China. Living in China, for many, is not so
horrible. In short, in China there is less of a
feeling of ?Our system is failing? and more of ?We are doing better than the
others, and we will show them.?
There is certainly an affinity for our free and democratic societies, and
there are some dissidents whose life is made hell, but they are fewer in
numbers than in Europe 20 years ago. And in China, there is this strong
Party ready and willing to nip dissidence in the bud.
Thus, waiting with self-confidence for the Chinese regime to implode is an
error. So is thinking that a soft approach to China will succeed. And it
would be na�ve to
believe that everything will come out all right through some natural balance
of all matters.
How China functions.
Sidestepping the precise legal aspect, one could almost say that China is being run under two
very different constitutions. Everything that has to do with how the Communist Party keeps its
power is inspired by Marxist theory. Everything that has to do with market and
economy, with some exceptions, is being run under the market rules developed
by the West. However, in the end, on any decision of importance, the power
lies with the Party, not with any market forces. Marxist and Leninist advice
on how to keep power is entirely focused on the self-interests of the Party.
There is no altruistic idealism of any sort, even though theoretically
everything is for the benefit of the workers. There is nothing in China?s political
fundamentals that can be likened to the ideals that one finds so clearly
stated, so well meaning and generous, in the United States
The Importance of Now
Doing the right thing about this skewed situation is now, for the West, the
single most important foreign policy issue to be
tackled, and it should be resolved successfully in the course of the two or
three coming years. This will require strength, determination and unity of
purpose. Astonishing as it may seem, compared to this question and its
consequences, Afghanistan is a secondary
issue. The war on the Taliban is not putting our
very position in the world at risk. The Bleeding of Power is.
Europe and the US must first agree, then act together
As recent events have taught us, to turn things around the US and Europe must be able to act
together. Without unity, the vital policy of stopping China?s unfair enrichment,
and stopping our corollary road to secondary status, will fail.
Many parameters should be right for this action to succeed and, on a few
scores, we happen to be lucky.
The American President is a capable man.
In France and in Germany we see political
leaders with a less inward-looking philosophy than before. Both Chancellor
Merkel and President Sarkozy are on record for emphasizing the importance of Europe acting with more
coherence and unity on the global political scene. The United Kingdom, as
experience would indicate, can probably be relied upon to follow a US
Then there is the Director General of the WTO, Mr. Pascal Lamy. He has been
reappointed for a second 4-year term on September 1st, 2009 and is now in full
understanding of his job. He will be comfortable with its challenges, and will
have time for important decisions. It is also positive that Mr. Lamy is not an American, but
a European citizen: He is French and a good man. There will be European
These factors seem to augur well for an American initiative based on the
notion of the West as a coherent group with shared interests in major issues
of world politics.
The corridors of the State Department
It will not be easy for all this to be understood. In the eyes of experienced
politicians, economists are often seen as nerds of a necessary but less
exalted discipline than their own. One almost tends to agree with that.
However, here, this instinctive paradigm will have to be taken with caution:
the major foreign policy issue of the
day is based on hard and sound economic information. An excellent and
experienced man like Joe Biden and a tough
thinker like Hillary Clinton will have to
execute a rethink in order to grasp and fully embrace the realities and action
requirements of the present economic danger. A first reaction will almost
inevitably be: ?The nerds are exaggerating their own importance again!? Well,
not this time. For once, what the economists say is going to be vital to our
position in the world. In fact, we should not underestimate how difficult it
will be to convince ourselves of the present reality.
What is needed
Once the Bleeding of Power is understood, the first question that arises is
?So what should be done?? It would seem a negotiation with China must be initiated
towards obtaining that trade flows are equal. This means that in- and outflow
of goods and money must be equalized and will have to be monitored so that
they stay roughly in equilibrium. THis will be difficult to obtain. Many will
see this as a step back and it certainly is! It is a step backwards in the
gradual and necessary opening of generalized world trade. So the question is
?What is the overriding logic here??. The answer is that in survival, in
strategy, a step backwards is sometimes the only right course and it is here.
Charging forward, blindfolded to the consequences, would be the error. To
revert to the macroeconomic sanity that we enjoyed prior to the beginning of
the millennium, there will have to be tough interior adjustments. Wal-Mart and its
ilk will have to redirect their purchases elsewhere and many Chinese factories
will have to close.
The Reaction we can expect from China
For China, it will probably be
impossible to accept without a good fight the removal of the unfair advantage
on which they have already built. The present situation brings China huge riches and global
power in record time! We must therefore expect China to initially react
furiously and negatively. If so, the US with its European allies will
unilaterally have to terminate a number of important aspects of their treaty
with the WTO. Given the
demonstrated Chinese expertise at public relations, such an action on the part
of the West will have to be accompanied by a well orchestrated, thorough and
truthful explanatory campaign to the press and to the world at large.
How to understand it all
This must not be seen as an action against China. The aim is to make,
maintain and monitor a trade equilibrium that entirely stops the unfair
Bleeding of Power, duly executed with the deep respect that the nations
involved should have for each other. We will be happy when China gets rich and joins us
in a civilized world, fairly.