Vol 2 No 26 | August 2022

Your Editor, Jamari Mohtar, is concerned that the recently announced negative growth of the US economy in the second quarter of 2022 which makes the country experience two successive quarters of negative growth is a harbinger of a domino effect which would pull the whole world into a global recession, amid a galloping rise in global inflation.

  • The looming global recession that is expected by many seems to turn real when the US on July 28 announced the much anticipated result of its second quarter (2Q22) Gross Domestic Product (GDP) contracting at 0.9% quarter-on-quarter (QOQ), following the contraction of 1.6% QOQ in 1Q22.
  • Don’t be intimidated with the word “QOQ”. It is just a measuring technique that calculates the change between one quarter and the previous quarter, which gives investors and analysts an idea of how a country is growing over each quarter in the short run.
  • It is similar to the year-on-year (YOY) measure, which compares the quarter of one year (such as the first quarter of 2022) to the same quarter of the previous year (the first quarter of 2021), which is a long run or time series phenomenon.
  • The result means the US economy is experiencing two successive quarterly negative growths, which in economics is the definition of a technical recession. That means officially the country is not in a recession but patently moving toward one.
  • If the US manages to prevent another negative growth in the third quarter, then officially the country does not experience a recession in 2022 unless the final result for the whole year, which can only be known in the following year, shows a negative growth.
  • So, what it takes for recession to occur in a country is three successive quarterly negative growths, which can be avoided with the right and judicious mix of monetary and fiscal policies to stabilise the economy.
  • But economics is a strange discipline, or rather economists are a strange breed of people.
  • After arriving at this textbook definition, policy wonks (economists of course!) in the US Treasury and US Federal Reserve (Fed) are very defensive and sensitive about the word “recession” and trying their best to play it down by saying the economy is not in a recession but just “slowing down”.
  • This is unprecedented. When it comes to economic data, the US will always call a spade, a spade and not a cangkul (the Malay cangkul is a bit different in shape from the western spade).
  • No one is actually saying the US economy is in a recession. Analysts who talk about it say the US economy is strongly heading towards a recession. Isn’t this what technical recession is all about?
  • Can’t the policy wonks in the US tell the difference between an economy in a recession, and an economy heading towards recession?
  • Could this denial by officials of the Biden administration the result of a realisation that even the hint of the US is heading towards a recession is an admission that the massive sanction against Russia spearheaded by the US is a colossal failure, as it boomerangs back to the US and its sanctioning allies, hurting them more than it hurts Russia?
  • Who cares if recession occurs in the US, but when the US is acknowledged as the numero uno (number one) economic superpower in the whole wide world (pun with the world wide web intended), there is a lot of truth in the adage “when the US sneezes, the whole world catches a cold” which makes all of us care.
  • So when all of us care about the US heading towards a recession because it is going to affect us sooner or later, it is quite baffling the US did not reciprocate our care by denying its economy is steering towards a recession.
  • Is this also a subtle admission that hinting at a recession tantamount to admitting the US is no longer an economic superpower or rather its economic superpower status is on the wane like the waning effect of all Covid-19 vaccines, as its sneeze won’t cause a cold if it is no longer an economic superpower?
  • Because this time around it looks like when the US sneezes, Russia and many other countries including Malaysia won’t get a cold because their economies are all relatively doing better than the US and EU economies judging by the relatively higher inflation rate in the latter countries and a good balance of payment data in Russia, despite the sanction regime imposed on Russia.
  • Or is this an insidious attempt by the US to prevent international rating agencies from downgrading its economy and its concomitant sovereign rating, which will pull the plug to more investments coming into the country?
  • One thing is clear: sweeping all these scenarios under the carpet is pointless, as all these scenarios will affect profusely the US’ stance that it must ensure the Ukraine war is settled on the battlefield until the last Ukrainian instead of at the negotiating table.
  • This US stance is reflected in some US politicians arguing in favour of supplying more weapons and rejecting diplomacy. The basis for this support in the case of US Representative Dan Crenshaw is the opportunity of fighting Russia with Ukrainian lives when he said: “Investing in the destruction of our adversary’s military without losing a single American troop strikes me as a good idea. You should feel the same.”
  • US Secretary of State Antony Blinken is more circumspect in framing the proxy war in more benevolent terms by suggesting that the US was arming Ukraine to ensure Kiev would be in “the strongest possible position at any negotiating table that may emerge.”
  • Perhaps, that is the difference between the intellectual capacity of a high-ranking US diplomat and a mere representative of the US Congress like Crenshaw.
  • Chas Freeman, a former US ambassador and assistant secretary of defense, however criticised this US position as a cynical “fight to the last Ukrainian.”
  • Although such a position won’t result in the death of a single US citizen in the war, it will nevertheless make the US a pauper nation with loads of debts and spending that the whole world would no longer want to finance.
  • Isn’t this the familiar path that all great powers on earth have to tread before finally falling from a high pedestal?
  • Just take a look at the history of the Great Roman/Byzantine Empire, the Great Ottoman Empire, the Great Chinese Dynasties, the Great British Empire, and the Great Soviet Empire, etc. if assurance is needed.
  • True, these empires still held sway for some time and a force to be reckoned with, despite their pauper status but the rot has finally reached a level where it marked the beginning of the end.
  • How many whammies does the world want? We already have a triple whammy occurring simultaneously – pandemic, climate change and the Ukraine war that have resulted in galloping inflation.
  • Do we really want two more – the looming recession, which could lead to an unprecedented global stagflation, and the looming US-China conflict which could lead to an unprecedented war between two nuclear-armed nations?
  • For many people all over the world, it is indeed a huge relief to see the uncertainties and sabre rattling between China and the US over the visit of US Speaker Nancy Pelosi to Taiwan has finally ended when she arrived safely there on late Tuesday (Aug 2).
  • But it is a grave mistake to think that the uncertainties and sabre rattling are finally over. China still continues its military drills around the Taiwan Straits despite the presence of a US Navy fleet nearby.
  • And Russia, which in the past has stayed clear of the cross-strait issue, has come out with a statement describing the visit as “purely provocative” act and fully supports China in its dispute with Washington.
  • “We stand in absolute solidarity with China here. Its sensitivity to this issue is understandable. It is justified. And instead of respecting this, the US is choosing the path of confrontation. It doesn’t bode well,” Kremlin spokesman Dmitry Peskov said, adding that Washington’s decision is “regrettable.”
  • Prior to Pelosi’s arrival in Taipeh, some friends have asked your editor whether Pelosi will really visit Taiwan on her way to South Korea and Japan from Malaysia to which I frankly said then I don’t have the answer.
  • Based on her official statement first issued on July 31, Pelosi did not mention Taiwan in her itineraries.This has sort of defused the stress and worry by many people all over the world of an upcoming conflict between the US and China, which would turn ugly.
  • But the respite is brief, as a day later sabre rattling which has been going on between the two countries still went on and on, brought about by report from Reuters, CNN, and other media outlets that Pelosi would actually visit Taiwan, in defiance of China’s warnings of a possible military response.
  • The thorny issue of Taiwan has been a long-standing one between China and the US.
  • The current siege mentality on both sides actually started on May 23, when Biden angered Beijing by making a blunder in declaring that despite abiding by the ‘One China Policy’, the US would involve its military in any potential conflict between China and Taiwan.
  • This was taken by China and many analysts as unraveling the decades-long policy of strategic ambiguity with regards to Taiwan independence.
  • Although the White House swiftly clarified the president’s words did not represent a change to the US’ long-standing recognition of China’s sovereignty over Taiwan, the damage was done.
  • Chinese Foreign Ministry Spokesman Wang Wenbin said the US leader’s comments put him at “opposition to the 1.4 billion Chinese people.”
  • Three days later, US Secretary of State Anthony Blinken declared Washington’s policy of strategic ambiguity toward Taiwan remains intact.
  • Under the 1979 Taiwan Relations Act, the US recognises, but does not endorse, China’s sovereignty over Taiwan. While the act codifies the US’ ‘One China Policy,’ it also authorises informal diplomatic relations with the government of Taiwan, and allows Washington to provide Taipei with enough military support “to enable Taiwan to maintain a sufficient self-defense capabilities.”
  • The act does not guarantee or rule out US military intervention should China threaten to assimilate Taiwan by force. Instead it considers any attempt to change Taiwan’s status a threat “of grave concern to the US,” intended to dissuade China from going down that road, and to dissuade Taiwan from issuing a formal declaration of independence.
  • However, Blinken also said “while our policy has not changed, what has changed is Beijing’s growing coercion.” He accused China of “provocative rhetoric and activity” toward Taiwan, citing alleged flights into Taiwanese airspace by Chinese aircraft.
  • Earlier last month, authorities in Taipei accused the Chinese military of flying 18 aircraft, including two nuclear-capable bombers, into its air- defense zone.
  • These actions, Blinken said, “are deeply destabilising. They risk miscalculation and threaten the peace and stability of the Taiwan Strait.”
  • All these posturing and war of words occurred in late May, and by July, the issue of Pelosi’s visit took centre-stage culminating in a tense phone call on July 28 between Biden and his Chinese counterpart Xi Jinping, where Xi issued his famous warning for the US not to “play with fire” in Taiwan, and “those who play with fire will eventually get burned … I hope the US side fully understands that.”
  • This was shortly followed by the great respite a few days later when Pelosi issued a statement stating her itineraries without mentioning Taiwan, which was hailed by many all over the world as an end to the tension between the two countries which eliminates fear of a global conflict.
  • But this great respite was shorter still because a day later (August 1), US National Security Council spokesman John Kirby told reporters the Biden administration has warned China is poised to stoke geopolitical tensions around Taiwan, perhaps through military “provocations”, raising the risk of an unintended escalation in Beijing’s row with Washington over Pelosi’s possible visit to the self-governing island.
  • “China appears to be positioning itself to potentially take further steps in the coming days and perhaps over longer time horizons … could include military provocations, such as firing missiles in the Taiwan Strait or around Taiwan, operations that break historical norms such as large-scale air entry into Taiwan’s air defense identification zone . . . air or naval activities that cross the median line and military exercises that could be highly publicised.”
  • Saying the speaker has the right to visit Taiwan, and a former speaker of the House has visited Taiwan without incident, alluding to a 1997 trip by Newt Gingrich, Kirby went on to say: “Nothing has changed about our One China policy … We have said that we do not support Taiwan independence, and we have said that we expect cross-strait differences to be resolved by peaceful means.
  • “There is no reason for Beijing to turn a potential visit consistent with longstanding US policy into some sort of crisis or conflict, or use it as a pretext to increase aggressive military activity in or around the Taiwan Strait.”
  • He also said any further steps by China to exploit the Pelosi controversy would continue based on “concerning trend lines that we’ve seen in recent years, but some could be of a different scope and scale.”
  • A US Navy strike group, led by the USS Ronald Reagan aircraft carrier, may be heading toward Chinese waters amid the latest tensions with Beijing, a Chinese report suggested on Aug 1.
  • Asked whether Pelosi’s trip could put her or the Taiwanese people at risk, Kirby said the US would “make sure that she has a safe and secure visit.”
  • While Washington doesn’t expect a direct attack, Chinese threats and provocations could trigger a conflict.
  • “It does increase the risk of miscalculation, which could lead to unintended consequences. We and countries around the world believe escalation serves no one. Beijing’s actions could have unintended consequences that only serve to increase tensions. Meanwhile, our actions are not threatening, and they break no new ground.
  • “Nothing about this potential visit . . . would change the status quo, and the world should reject any PRC effort to use it to do so. We will not take the bait, or engage in sabre rattling. At the same time, we will not be intimidated. We will keep operating in the seas and the skies of the Western Pacific as we have for decades.”
  • Kirby made his comments after Reuters, CNN, and other media outlets reported that Pelosi would visit Taiwan after all, in defiance of China’s warnings of a possible military response.
  • Actually one can clearly see it is the US who started all these after perhaps being frustrated with the failure of its own efforts to bring China to its side in the Ukraine war as China still refuses to condemn the Russian invasion of Ukraine, and participate in the massive sanction against Russia due to the invasion.
  • It is mind boggling that after the great respite is achieved when Pelosi issued a statement on her visit to four Asian countries that excluded Taiwan, Kirby would play a game in saying that it is up to Pelosi to visit Taiwan.
  • What is happening now after Pelosi has touched her feet on Taiwanese soil is precisely the scenario that Kirby has outlined which means the US knows in accurate details what China is planning to do.
  • Instead of using this info to bring down the tension one notch lower by postponing Pelosi’s trip, or calming down the situation ala a “statesman” superpower, Kirby after outlining the scenarios of what Beijing will do, brought up his trump card that Pelosi has the right to visit Taiwan.
  • Except for China and the US, who cares whether Pelosi has the right or not to visit Taiwan? The world only cares that the Ukraine war needs to be stopped and no new whammy should be created.
  • So the timing of the visit really stinks.
  • And it doesn’t help that Pelosi is playing a game too after contributing immensely to the great respite by omitting Taiwan in her itineraries in her statement on July 31.
  • Why make such a statement? Instead if she really intends to visit Taiwan because it was an innocuous one, she should have included Taiwan in the itineraries as a matter of principle that she as the Speaker has the right to go to Taiwan.
  • Instead of postponing her visit, the 82-year old grandmother relishes the prospect of playing a Mission Impossible movie game of keeping everyone in suspense in her “escapade” from the Chinese trap to arrive at Taiwan unscathed.
  • Except for China, no one is banning her from entering Taiwan. To use an analogy of Bill Clinton’s successful campaign slogan in the 1992 election, ‘it’s the timing, stupid!’
  • Moreover with the Ukraine war on its plate, the US can barely handle it with optimum efficiency. So why pick a fight with another big country, more so another nuclear-armed country?
  • With the US and the EU providing heavy weapons to the Ukrainians, the war should have ended earlier in Ukraine’s favour. The fact that the war still dragged on shows the US cannot handle it with optimum efficiency and should consider bringing the two parties to the war on the negotiating table.
  • The world desperately needs the war to be stopped because it has caused not only the people in the combatants’ countries to suffer but also people in the whole world including the US and the EU.
  • Instead of eliminating one of the whammies that has caused untold suffering and misery of the global population, the US is pushing China into the warm embrace of Russia, which will just prolong the war, and creating a potential new one.
  • Many analysts including US former Secretary of State Henry Kissinger has already warned the US not to push China into an alliance with Russia because it would not only prolong the war but also a lethal combination for the US – two superpowers against one.
  • Perhaps it is time for the US to accept that the world now is no longer a unipolar world with the US at the apex but a multipolar world where the US, Russia and China should treat each other as first among equals.    
  • Glenn Diesen, professor at the University of South-Eastern Norway and an editor at the Russia in Global Affairs journal sums up the deficiencies the US has exhibited being the superpower in a unipolar world:
  • “In recent years, the US has unilaterally withdrawn from security agreement with its main adversaries, which has set in motion an uncontrolled escalation.
  • “It has put the Americans on a path to war with countries such as Russia and Iran, and Washington is now also taking steps towards an accidental war with China by incrementally abandoning the One China Policy. Beijing is now warning of an unprecedented military response if Pelosi follows through on her planned trip to Taiwan.”
  • Let’s hope saner heads will prevail in the Biden administration that will accept the realities of today’s multipolar world by working hard to prevent the Pelosi saga into becoming a deadly conflagration with a global impact just like how the Ukraine war has been.
  • Ditto with China, let’s hope saner heads prevail that will not turn this into a deadly conflict.

 

  • Meanwhile on the same day (Aug 1) that Kirby is playing his game, UN Secretary-General Antonio Guterres has warned the rising geopolitical tensions around the world have put the global populace at its greatest risk of being wiped out by nuclear weapons since the Cold War ended.
  • “Today, humanity is just one misunderstanding, one miscalculation away from nuclear annihilation,” Guterres said at the Non-Proliferation Treaty (NPT) review conference in New York. He urged the world’s nations to “put humanity on a new path toward a world free of nuclear weapons.”
  • The UN chief claimed that conflicts around the globe, human rights violations, the climate crisis and the Covid-19 pandemic “have put our world under greater stress than it has faced in our lifetimes.”
  • Risks of nuclear warfare are at the highest level since the height of the Cold War, he added.
  • “Humanity is in danger of forgetting the lessons forged in the terrifying fires of Hiroshima and Nagasaki. Geopolitical tensions are reaching new heights. Competition is trumping cooperation and collaboration. Mistrust has replaced dialogue, and disunity has replaced disarmament.”
  • The NPT should be strengthened to “make it fit for the worrying world around us,” the secretary-general said, citing the Russia-Ukraine conflict and tensions in the Middle East and on the Korean Peninsula.
  • “Almost 13,000 nuclear weapons are now being held in arsenals around the world. All this at a time when the risks of proliferation are growing and guardrails to prevent escalation are weakening.”
  • Guterres lamented countries are seeking security by investing hundreds of billions of dollars to stockpile “doomsday weapons that have no place on our planet.”
  • He argued that trying to reduce the risk of wars breaking out isn’t enough because “eliminating nuclear weapons is the only guarantee they will never be used.”
  • The UN chief said he would travel to Japan for the August 6 anniversary of the US’ nuclear bombing of Hiroshima, then make stops in other Asia-Pacific countries for talks with their leaders on non-proliferation.
  • The US, the only country ever to have deployed a nuclear bomb in war, reportedly spent US$44.2 billion on such weaponry in 2021, exceeding the US$38.2 billion spent by the eight other nuclear-armed nations combined.
  • China ranked second in nuclear spending at US$11.7 billion, while Russia was number three at US$8.6 billion.
  • “The clouds that parted following the end of the Cold War are gathering once more. We have been extraordinarily lucky so far, but luck is not a strategy. Nor is it a shield from geopolitical tensions boiling over into nuclear conflict,” Guterres added.
Read more on the global looming recession, the Ukraine war, Pelosi’s controversial visit to Taiwan, cross-straits saber rattling and the danger of nuclear war: 
 
  • Seputeh MP Teresa Kok drew flak from many Malaysians for making a mountain out of a molehill over the question of the Malays’ preponderance in the civil service.
  • Special functions minister Abdul Latiff Ahmad had informed Parliament that about 90% of the 1.2 million civil servants were Bumiputeras. He had said Putrajaya did not impose any quota based on race or ethnicity for the civil service intake.
  • Latiff said of the total number, 987,333 comprised Malays, 73,190 Chinese, 60,084 Sarawak Bumiputeras, 59,978 Sabah Bumiputeras, 47,751 Indians, 2,417 Orang Asli and 8,698 others.
  • As for the top posts (super scale) above the Grade 56 category, 3,300 are Malays, 386 Chinese, 240 Indians, 74 Sabah Bumiputeras, 53 Sarawak Bumiputeras, three Orang Asli and 42 others.
  • He maintained that the Public Services Commission’s recruitment was based on merit and competency.
  • Relying solely on the figures given by Abdul Latif, Teresa concluded:
  • 1) Race-based policy in civil servant recruitment and promotion has made many talents reluctant to apply to join the civil service.
  • 2) Low salary structure and lack of opportunities for career advancement were among the key factors deterring non-Bumiputeras from joining the civil service.
  • 3) Race should not be the determining factor when promoting or hiring civil servants.
  • 4) There must be political will from the government to attract more non-Bumiputeras to join the civil service to reflect the spirit of prime minister Ismail Sabri Yaakob’s “Keluarga Malaysia” motto.
  • Meanwhile her opponent in GE14, Chan Quin Er, relying on the same data provided by Latiff, worked very hard not only to get other official statistics on the racial composition of the civil service but also use her brain to analyse what the figures really meant, and come out with a shorter but very powerful conclusions:
  • 1) More Malays applied to join the civil service with 754,000 applicants followed by 109,985 other Bumiputeras, 32,708 Indians, and 19,216 Chinese;
  • 2) Successful applicants constitute 14,430 Malay Bumiputera (1.91%), 2,803 (1.89%) other Bumiputera, 1, 907 Chinese (4.72%) and 3,105 Indians (9.49%); and
  • 3) The two categories in higher positions collectively known as Turus and Jusa, which of course mean higher pay due to promotion comprise 3,300 Malays (0.3%), 388 Chinese (0.53%) and 243 Indians (0.51%).
  • So what is the difference between the two sets of conclusions?
  • While Quin Er’s conclusions give us a very profound and good overview of the situation, Teresa’s conclusions are very superficial and a reflection of misusing statistics to score point in order to get re-elected again by using identity politics.
  • Strange that the opposition will always say all Malay political parties especially those in the government are whipping up identity politics to gain power.
  • Here then is a clear example of a DAP MP scoring point by playing up identity politics, perhaps because she and her party leaders could sense that they will be trounced in GE15.
  • Not that identity politics is necessarily bad: it’s just natural for one to help his or her community first, as long as the assistance given is not at the expense of the other communities.
  • Why blame the government for the low intake of Chinese in the civil service when they are not interested to apply for a job in the civil service?
  • And don’t give silly excuses blaming race-based policy, lack of promotion, opportunity for career advancement and low salary structure for the small numbers of Chinese in the civil service, because these applies to all applicants including Malays.
  • If there are some Chinese in the civil service who experience a lack of promotion, there are many more Malays experiencing this; if there are Chinese earning a low salary, many more Malays have a low salary, etc.
  • Blame instead on your sloppy research for coming up with such superficial and racist conclusions.
  • The Minister has other important jobs to do, so don’t waste his time in spoon-feeding you. You are also paid quite a hefty allowance/salary as an MP, so don’t be lazy with your research.
  • Perhaps the time has come for the government to also consider cutting the allowance/salaries of MPs other than just the salary of minister only.
  • By the way, Quin Er’s research has been viral. (See the link to watch her video).
  • Finally we may have heard of the quotable quotes on statistics: “There are lies, damned lies and statistics” attributed to Mark Twain. But what I like most is the quote by Fletcher Knebel: “Smoking is one of the leading causes of statistics.”
  • The quote is hinting at arriving at something (i.e. concluding) with no concrete substance as the aim of statistics, and to wit, we are all indeed “smoked” by Teresa’s conclusion on the data provided by Latiff.
  • Perhaps Health Minister, KJ should also take note because this involves “smoking” at the wrong conclusion of a statistics (😎✌️🙏)
@themerdekatimes Susulan kenyataan Ahli Parlimen Seputeh, Teresa Kok berkaitan isu ketidakseimbangan kaum dalam komposisi perjawatan awam, seorang peguam berbangsa Cina, Chan Quin Er menyelar kenyataan tersebut dan menyifatkan politik perkauman sebagai perkara yang sudah jemu dimainkan. Quin Er memberitahu bahawa jumlah pemohon jawatan di perkhidmatan awam dalam kalangan bangsa Cina (19,216) sehingga Jun tahun 2010 jauh lebih rendah daripada pemohon Melayu (754,106). Jelas sekali pemohon daripada kaum Bumiputera Melayu dan lain-lain mempunyai bilangan yang lebih tinggi berbanding kaum-kaum lain. Kredit: @chanquiner #teresakok #pegawaikerajaan #perkhidmatanawam #bumiputera #themerdekatimes ♬ original sound - The Merdeka Times (TMT)

The looming global recession that is expected by many seems to turn real when the US on July 28 announced the much anticipated result of its second quarter (2Q22) Gross Domestic Product contracting at 0.9% quarter-on-quarter (QOQ), following the contraction of 1.6% QOQ in 1Q22.

The result means the US economy is experiencing two successive quarterly negative growths, which in economics is the definition of a technical recession. That means officially the country is not in a recession but patently moving toward one. 

If the US manages to prevent another negative growth in the third quarter, then officially the country does not experience a recession in 2022 unless the final result for the whole year, which can only be known in the following year, shows a negative growth.

So, what it takes for recession to occur in a country is three successive quarterly negative growths, which can be avoided with the right and judicious mix of monetary and fiscal policies to stabilise the economy. 

But economics is a strange discipline, or rather economists are a strange breed of people. 

After arriving at this textbook definition, policy wonks (economists of course!) in the US Treasury and US Federal Reserve (Fed) are very defensive and sensitive about the word “recession” and trying their best to play it down by saying the economy is not in a recession but just “slowing down”.

This is unprecedented. When it comes to economic data, the US will always call a spade, a spade and not a cangkul (the Malay cangkul is a bit different in shape from the western spade).

No one is actually saying the US economy is in a recession. Analysts who talk about it say the US economy is strongly heading towards a recession. Isn’t this what technical recession is all about? 

Can’t the policy wonks in the US tell the difference between an economy in a recession, and an economy heading towards recession? 

Could this denial by officials of the Biden administration the result of a realisation that even the hint of the US is heading towards a recession is an admission that the massive sanction against Russia spearheaded by the US is a colossal failure, as it boomerangs back to the US and its sanctioning allies, hurting them more than it hurts Russia?

Who cares if recession occurs in the US, but when the US is acknowledged as the number one economic superpower in the world, there is a lot of truth in the adage “when the US sneezes, the whole world catches a cold” which makes all of us care.

So when all of us care about the US heading towards a recession because it is going to affect us sooner or later, it is quite baffling the US did not reciprocate our care by denying its economy is steering towards a recession.

Is this also a subtle admission that hinting at a recession tantamount to admitting the US is no longer an economic superpower or rather its economic superpower status is on the wane like the waning effect of all Covid-19 vaccines, as its sneeze won’t cause a cold if it is no longer an economic superpower? 

Because this time around it looks like when the US sneezes, Russia and many other countries including Malaysia won’t get a cold because their economies are all relatively doing better than the US and EU economies judging by the relatively higher inflation rate in the latter countries and a good balance of payment data in Russia, despite the sanction regime imposed on Russia.

Or is this an insidious attempt by the US to prevent international rating agencies from downgrading its economy and its concomitant sovereign rating, which will pull the plug to more investments coming into the country?  

One thing is clear: sweeping all these scenarios under the carpet is pointless, as all these scenarios will affect profusely the US’ stance that it must ensure the Ukraine war is settled on the battlefield until the last Ukrainian instead of at the negotiating table. 

This US stance is reflected in some US politicians arguing in favour of supplying more weapons and rejecting diplomacy. The basis for this support in the case of US Representative Dan Crenshaw is the opportunity of fighting Russia with Ukrainian lives when he said: “Investing in the destruction of our adversary’s military without losing a single American troop strikes me as a good idea. You should feel the same.” 

US Secretary of State Antony Blinken is more circumspect in framing the proxy war in more benevolent terms by suggesting that the US was arming Ukraine to ensure Kiev would be in “the strongest possible position at any negotiating table that may emerge.”

Perhaps, that is the difference between the intellectual capacity of a high-ranking US diplomat and a mere representative of the US Congress like Crenshaw.

Although such a position won’t result in the death of a single US citizen in the war, it will nevertheless make the US a pauper nation with loads of debts and spending that the whole world would no longer want to finance.

Isn’t this the familiar path that all great powers on earth have to tread before finally falling from a high pedestal?

Just take a look at the history of the Great Roman/Byzantine Empire, the Great Ottoman Empire, the Great Chinese Dynasties, the Great British Empire, and the Great Soviet Empire, etc. if assurance is needed.

True, these empires still held sway for some time and a force to be reckoned with, despite their pauper status but the rot has finally reached a level where it marked the beginning of the end. 

For many people all over the world, it is indeed a huge relief to see the uncertainties and sabre rattling between China and the US over the visit of US Speaker Nancy Pelosi to Taiwan has finally ended when she arrived safely there on late Tuesday (Aug 2).

But it is a grave mistake to think so as it is still not over yet. China still continues its military drills around the Taiwan Straits despite the presence of a US Navy fleet nearby.

And Russia, which in the past has stayed clear of the cross-strait issue, has come out with a statement describing the visit as “purely provocative” act and fully supports China in its dispute with Washington.

“We stand in absolute solidarity with China here. Its sensitivity to this issue is understandable. It is justified. And instead of respecting this, the US is choosing the path of confrontation. It doesn’t bode well,” Kremlin spokesman Dmitry Peskov said, adding that Washington’s decision is “regrettable.” 

Prior to Pelosi’s arrival in Taipeh, some friends have asked me whether Pelosi will really visit Taiwan on her way to South Korea and Japan from Malaysia to which I frankly said then I don’t have the answer.

Based on her official statement first issued on July 31, Pelosi did not mention Taiwan in her itineraries.

This has sort of defused the stress and worry by many people all over the world of an upcoming conflict between the US and China, which would turn ugly.

But the respite is brief, as a day later sabre rattling which has been going on between the two countries still went on and on, brought about by report from Reuters, CNN, and other media outlets that Pelosi would actually visit Taiwan, in defiance of China’s warnings of a possible military response. 

The thorny issue of Taiwan has been a long-standing one between China and the US. The current siege mentality on both sides actually started on May 23, when Biden angered Beijing by making a blunder in declaring that despite abiding by the ‘One China Policy’, the US would involve its military in any potential conflict between China and Taiwan.

This was taken by China and many analysts as unraveling the decades-long policy of strategic ambiguity with regards to Taiwan independence.

Although the White House swiftly clarified the president’s words did not represent a change to the US’ long-standing recognition of China’s sovereignty over Taiwan, the damage was done.

Chinese Foreign Ministry Spokesman Wang Wenbin said the US leader’s comments put him at “opposition to the 1.4 billion Chinese people.”

Under the 1979 Taiwan Relations Act, the US recognises, but does not endorse, China’s sovereignty over Taiwan. While the act codifies the US’ ‘One China Policy,’ it also authorises informal diplomatic relations with the government of Taiwan, and allows Washington to provide Taipei with enough military support “to enable Taiwan to maintain a sufficient self-defense capabilities.”

The act does not guarantee or rule out US military intervention should China threaten to assimilate Taiwan by force. Instead it considers any attempt to change Taiwan’s status a threat “of grave concern to the US,” intended to dissuade China from going down that road, and to dissuade Taiwan from issuing a formal declaration of independence.

All these posturing and war of words occurred in late May, and by July, the issue of Pelosi’s visit took centre-stage culminating in a tense phone call on July 28 between Biden and his Chinese counterpart Xi Jinping, where Xi issued his famous warning for the US not to “play with fire” in Taiwan, and “those who play with fire will eventually get burned … I hope the US side fully understands that.”

On August 1, US National Security Council spokesman John Kirby told reporters the Biden administration has warned China is poised to stoke geopolitical tensions around Taiwan, perhaps through military “provocations”, raising the risk of an unintended escalation in Beijing’s row with Washington over Pelosi’s possible visit to the self-governing island.

“China appears to be positioning itself to potentially take further steps in the coming days and perhaps over longer time horizons … could include military provocations, such as firing missiles in the Taiwan Strait or around Taiwan, operations that break historical norms such as large-scale air entry into Taiwan’s air defense identification zone . . . air or naval activities that cross the median line and military exercises that could be highly publicised.”

Saying the speaker has the right to visit Taiwan, and a former speaker of the House has visited Taiwan without incident, alluding to a 1997 trip by Newt Gingrich, Kirby went on to say: “Nothing has changed about our One China policy … We have said that we do not support Taiwan independence, and we have said that we expect cross-strait differences to be resolved by peaceful means.

 

While Washington doesn’t expect a direct attack, Chinese threats and provocations could trigger a conflict, Kirby also said: “Nothing about this potential visit . . . would change the status quo, and the world should reject any PRC effort to use it to do so. We will not take the bait, or engage in sabre rattling. At the same time, we will not be intimidated. We will keep operating in the seas and the skies of the Western Pacific as we have for decades.”

Actually one can clearly see it is the US who started all these after perhaps being frustrated with the failure of its own efforts to bring China to its side in the Ukraine war as China still refuses to condemn the Russian invasion of Ukraine, and participate in the massive sanction against Russia due to the invasion.

It is unfortunate after the great respite is achieved when Pelosi issued a statement on her visit to four Asian countries that excluded Taiwan, Kirby would play a game in saying that it is up to Pelosi to visit Taiwan.

What happens after is Pelosi has touched her feet on Taiwanese soil is precisely the scenario that Kirby has outlined which means the US knows in advance accurate details on what China is planning to do.

Instead of using this info to bring down the tension one notch lower by postponing Pelosi’s trip, or calming down the situation ala a “statesman” superpower, Kirby played his trump card by saying Pelosi has the right to visit Taiwan.

Except for China and the US, who cares whether Pelosi has the right or not to visit Taiwan? The world only cares that the Ukraine war needs to be stopped and no new whammy should be created.

So the timing of the visit really stinks. 

And it doesn’t help that Pelosi is playing a game too after contributing immensely to the great respite by omitting Taiwan in her itineraries in her statement on July 31.

Instead of postponing her visit, the 82-year old grandmother relishes the prospect of playing a Mission Impossible movie game of keeping everyone in suspense in her “escapade” from the Chinese trap to arrive at Taiwan unscathed.

Except for China, no one is banning her from entering Taiwan. To use an analogy of Bill Clinton’s successful campaign slogan in the 1992 election, ‘it’s the timing, stupid!’ 

Moreover with the Ukraine war on its plate, the US can barely handle it with optimum efficiency. So why pick a fight with another big country, more so another nuclear-armed country? 

With the US and the EU providing heavy weapons to the Ukrainians, the war should have ended earlier in Ukraine’s favour. The fact that the war still dragged on shows the US cannot handle it with optimum efficiency and should consider bringing the two parties to the war on the negotiating table.

The world desperately needs the war to be stopped because it has caused not only the people in the combatants’ countries to suffer but also people in the whole world including the US and the EU.

Instead of eliminating one of the whammies that has caused untold suffering and misery of the global population, the US is pushing China into the warm embrace of Russia, which will just prolong the war, and creating a potential new one.

Many analysts including US former Secretary of State Henry Kissinger has already warned the US not to push China into an alliance with Russia because it would not only prolong the war but also a lethal combination for the US – two superpowers against one.

Perhaps it is time for the US to accept that the world now is no longer a unipolar world with the US at the apex but a multipolar world where the US, Russia and China should treat each other as first among equals.

Glenn Diesen, professor at the University of South-Eastern Norway and an editor at the Russia in Global Affairs journal sums up the deficiencies the US has exhibited being the superpower in a unipolar world:

“In recent years, the US has unilaterally withdrawn from security agreement with its main adversaries, which has set in motion an uncontrolled escalation.

“It has put the Americans on a path to war with countries such as Russia and Iran, and Washington is now also taking steps towards an accidental war with China by incrementally abandoning the One China Policy. Beijing is now warning of an unprecedented military response if Pelosi follows through on her planned trip to Taiwan.”

Let’s hope saner heads will prevail in the Biden administration that will accept the realities of today’s multipolar world by working hard to prevent the Pelosi saga into becoming a deadly conflagration with a global impact just like the Ukraine war.

Ditto with China, let’s hope saner heads prevail that will not turn this into a bloody conflict.

Regards,

Jamari Mohtar
Editor, Let’s Talk!

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