Andre Gunder Frank

Blowback and Fallout: Indo-Pak War and the U.S. Policy of Provocation

Whatever were the remote and immediate causes of previous Indo-Pakistani wars over Kashmir, the present nuclear threat must be laid at the door of Washington, which did everything it could to provoke it and almost nothing to prevent it. Plenty of warnings were available to abort the US policies that would inevitably lead to the present impasse. The most visible of these policies have been the overt political ones, but they also include the as ever US economic policies that fail to alleviate but further deepen the economic crisis in both Pakistan and India as part of the present world economic crisis.

It was US pressure on Pakistani President Musharraf to become a puppet instrument of US rhetorically ''anti-terrorist'' but real world aggressively geo-political economic policy in Afghanistan and Central Asia that defined and limited Musharraf's present options. The Pakistani president was obliged by the Bush administration to turn against and even betray extreme and not so extreme Muslim elements in the American CIA's client ISI Pakistani secret service and military as well as in the socio-political [dis]order in general. That had to deepen the divide and heighten the tension within the Pakistani socio-political/military establishment and society in general.

As a result of that US policy, three possible but not mutually exclusive short-run scenarios and their derivatives now present themselves in South Asia:

1A. Musharraf's political options are now reduced and confined to continuing his anti-Muslim clamp-down AND giving at least the appearance of NOT doing so excessively and especially NOT doing so at the behest of the US and even less so of India. That requires a now even more pro-active stance and praxis regarding the ever present Kashmir issue. Moreover, many Taliban and al-Qaeda activists that were previously confined to Afghanistan have now been chased out by the US and spread through Pakistan and probably Kashmir. That is the direct result of irresponsible US policy.

1B. Reduced political room for maneuver in Pakistan in turn increases the political bargaining power and its use by the Government of India. That India is also a victim of economic crisis and has a Hindu nationalist and fundamentalist BJP government in Delhi and an even more so state government in Gujarat, which has responded by deliberately organizing the recent anti-Muslim pogroms with over 1,000 victims, provides the background. Moreover, recent electoral alliance and voter setbacks at home now make patriotic diversions abroad more attractive for the BJP government. A more aggressive Kashmir and anti-Pakistan policy in India and a corresponding response by Pakistan is the immediate result - with 200,000 troops facing each other on the border, 2 million troops behind them, and rattling the nuclear saber by both sides. That is the direct result of US policy.

2A. President Musharraf is assassinated; the US looses its ''man in Islamabad;'' Pakistan looses its present stabilizing force or symbol; and blame is or is shifted onto Muslim ''fundamentalists.'' All Hell Breaks Lose. Although always possible, that is now more likely as a blowback result of US policy.

2B. Supporters of Musharraf try to save the present STATE of affairs by wholesale crack-down on Muslim nationalist/fundamentalists at home - with even more aggressive anti-Indian policies abroad to buy off some of the Muslim opposition at home. The already sufficiently dangerous situation provoked by American irresponsibility becomes even more dangerous.

2C leads to 3. The Pakistani state is split down the middle, with the army divided and most of ISI re-aligned against the pro-Musharraf forces, and general socio-political caos. US policy is not the only, but now is a primary cause of such developments.

3A. Via scenario # 2, or even without it, the present regime is overthrown and replaced by a more militant Muslim/nationalist one - with nuclear arms at its disposal- that escalates the Indo-Pakistani conflict still more -- if that is then still possible. That would also embolden a Hindu nationalist BJP government and its supporters in India still more to go after its own Muslims who number more than those in all of Pakistan and could be cast as its 5th column in India itself. All that would be a direct blowback result of US policy.

3B. The United States implements already existing military exercises to try to '' take out'' the Pakistani nukes, by destroying them or moving them to China or Russia [or Kazakhstan or Uzbekistan]. That IS US policy, but it may not work; and the political consequences may be too horrendous to foresee. Moreover, the participation in this drama of Russia and China are as yet unclear, except as 3C.

3C. Instead of only TWO nuclear states mobilized against each other in South Asia, Eurasia then has FIVE of them actively involved in Eurasia, since Pakistani ally China and Indian ally Russia could also mobilize, as well as the US itself. Is that what US policy wants? Or is it an only ''unintended'' but a certainly foreseeable blowback of irresponsible US policy in Asia.

4. Simultaneous sharpening of other political flash-points that are also the direct result of unconscionable US policy is proceeding certainly in Israel-Palestine, will probably result in the replacement of the US puppet regime in Saudi Arabia and maybe in Egypt, and the insanely aggressive US policy towards Iraq and other Arab states can only aggravate the world political situation. Instead of trying to reduce the sources of political desperation or even taking the wind out of the socio-political support for those who are already desperate, the US continues and aggravates the policies that have already generated and are now escalating terrorism against its interests and citizens. The possible repercussions to any and all of these are incalculable, but ALL ARE THE DIRECT RESULT OF IRRESPONSIBLE US POLICY.

5. Aggravation of the present world economic crisis, now already visible in all parts of the world, may still result in a fundamental change in the world economic position and policy of the United States. For the time being, and ever since the mid 1980s when it changed from being the world's biggest creditor to becoming its biggest debtor and especially during the 'boom' of the 1990s, the United States is till running a global PONZI SCHEME, in which its liquidity and credit depends on the continued giant vacuum cleaner absorbtion of new credit capital to service the ever growing service, not to mention principal, of its accumulated past debts, which now amount to almost double its GDP. These debts are most importantly to foreigners who have bought US treasury certificates from Washington and invested in stocks , or worse their derivatives, in Wall Street. However, US corporate, household and consumer debt have also continued to rise with so far no limit in sight except the always existing and ever greater threat new capital will one day cease to flow into the US, thus making it impossible to re-finance the old debt. And of course, they higher that Ponzi house of cards pyramid continues to be built up, the greater its crash if and when it comes. For then, the cessation of capital inflow must generate a rapid flight capital outflow from the US, as it did from other areas that had 'enjoyed' earlier speculative capital inflows.

The ONLY RESPONSE POSSIBLE will be to DEFAULT on much of the debt owed across and within US borders - with disaterous consequences all around. But that can and would be done in a variety of ways or combinations thereof: simple wipe out of stock values, a sharp increase of printed or credit-created US dollars both to meet demand for the same and to devalue the debt by inflating out of it. Or the free-trade and open-market apostle that the US claims to be will impose controls on capital outflow abroad and limitations on capital transfers and the use of bank deposits at home- also following other countries whom US policy has already forced into situations that gave them no other choice, as now spectacularly so in Argentina. All would result in FALL IN THE US DOLLAR'S VALUE. That would also spell the end of the US role as the world's consumer of last resort.

Before a dollar confidence and supply crisis becomes that acute, a number of possible measures could pave the way and result already in a decline of the dollar, which then at any moment could turn into an abrupt fall. All of these eventualities should also be considered as potential political economic blowbacks to recent and still current irresponsible US policy. Among them are:

• Japan's banking crisis obliges Japanese to withdraw money invested in the US and bring it home to shore up their exposed positions there
• China devalues, becomes still more competitive in the world market, and forces other Asian producers into still more precarious financial positions and corresponding defensive policies
• Europeans transfer their international currency reserves from the US dollar into the Euro
• Others decide to do the same
• OPEC decides to re-price its oil exports in Euros instead of dollars, or even in a basket of currencies including both or maybe even the Chinese yen, and/or
• OPEC countries individually or collectively decide to place and keep [some of] their earnings in Euros, especially if they are priced in that currency, but even if they are not.But if the dollar exchange becomes costly, te rational thing to do will be to price out of the dollar to begin with.
• Somebody/anybody gets upset at yet another outrageous US policy/praxis, and out of fright or spite decides to try to put their money in a safer haven than the US. Depending on who does that when and how, it could trigger a run on the 'US BANK'.

To appreciate the seriousness of any and all of these very possible scenarios, it is important to realize that US economic 'strength' really is based on a world wide Ponzi Scheme House of Cards whose essential element is that the US can print US dollar world currency, and nobody else can. However, the opposite side of that dollar coin is that this dollar supply and demand is the ONLY ECONOMIC STRENGTH THE US NOW HAS. The importance of US TNIs, industrial and agricultural productivity, high tech, education and all pale in the shadow of the DOLLAR. The other pillar of US strength is the Pentagon, which claims already to be encumbered by lack of dollars. However, the deployment of Pentagon forces abroad is dependent on having highly valued dollars abroad with which to buy national currencies to defray local costs of bases, supplies, deployments and other military expenses. So the strength of the Pentagon is in part dependent on the strength of the dollar - and vice versa [see A.G. Frank we-page on 'US Economic Overstretch and Hegemonic political military blowback?]. Their hand in hand decline, in the face of present official [and popular?] hubris overconfidence, could spell incalculable political costs at home and abroad.

THE BUSH ADMINISTRATION IS DOING ALL IT CAN TO PROMOTE SUCH BLOWBACK DISASTER AT HOME AND ABROAD AND NOTHING TO PROTECT THE SECURITY OF AMERICAN - LET ALONE OTHER COUNTRIES'- CITIZENS.