Though Washington continues to rely upon Tokyo as a bulwark against Chinese socialism, Japanese imperialism has not forgotten the humiliating terms imposed by the IMF when it threw a cash line to Asian economies struck by the 1997 crisis. Nor has it forgotten the indecent haste with which US imperialism hoovered up significant swathes of those economies at fire-sale prices.
Ironically, it will be the IMF again that oversees the bail-out, but this time the begging bowl is mostly in US and European hands, and a large part of the funds will spill from Japanese coffers. Washington should not be surprised to see Tokyo wring the maximum advantage from this reversal of fortunes.
The deep shock to US imperialist arrogance is summed up in a recent article in the International Herald Tribune, pointing out that “six months ago, five or six ‘bulge bracket’ US investment banks stood astride the globe virtually dictating the terms of engagement of international finance – managing deals, pronouncing companies or countries investment worthy or not, and dispensing advice that companies and countries ignored at their peril. Now these brash US institutions have been swept away or tamed.” (‘Japan sees itself as a potential “white knight”’ by Martin Fackler, 22 October 2008)
Small wonder, then, that voices should be raised in Japan in favour of Tokyo filling the leadership vacuum!
One way Japan hopes to do this is by using its massive foreign currency reserves to help develop infrastructure in Asia and Africa, thereby ramping up demand for Japanese commodities in those markets.
Ironically, in so doing, the Japanese will be taking a leaf out of China’s book – with the significant difference that, whilst Japanese imperialism cannot but strive to supplant US neo-colonial exploitation with its own Japanese neo-colonial exploitation, socialist China is able to offer an economic relationship based fundamentally on reciprocity and mutual advantage.
Europe, meanwhile, is divided over how best to deal with the financial crisis. France wants the sovereign wealth funds – state-owned investment funds mostly run by countries in Asia and the Middle East – to keep dispensing largesse from their $2.5tr assets to help keep European economies afloat.
However, they do not relish the prospect of being treated as Asia was 10 years ago. The French president, Sarkozy, spelt it out at Strasbourg: “I don’t want European citizens to wake up in several months’ time and find that European companies belong to non-European capital, bought at the share price’s lowest point.” (Cited in ‘Europeans divided by sovereign fund idea’ by Katrin Bennhold, International Herald Tribune, 22 October 2008)
Sarkozy’s brainwave to resolve this quandary is for European nations to “create our own sovereign wealth funds” which “could eventually coordinate to form a business response to the crisis”, meanwhile protecting endangered home enterprises by the expedient of direct government investment.
However, whilst France wants to have her cake and eat it – milking foreign investment funds whilst propping up ‘national champions’ – Germany dismisses Sarkozy’s grand plan with contempt.
The German economy minister told the press: “The French proposal to protect European industry from foreign sovereign funds with government stakes contradicts all the successful principles of our economic policy.” (Ibid)
No pan-European solution to capitalist crisis that fails to chime with German national interests can hope to succeed.
One explanation for Berlin’s less gloomy view of its own national prospects may be found in the changing character of its relations with Russia. Through all the post-war years, West Germany acted dutifully as America’s ‘bulwark against Bolshevism’ in Europe. Unsurprisingly then, the collapse of the Berlin Wall was hailed by US imperialism as the guarantee that the new millennium would usher in the ‘American Century’. Things have turned out somewhat differently, however.
In her struggle to keep from being swallowed in the ditch opened up by the US-triggered financial crisis, Germany is looking to strengthen her economic relations with Putin’s Russia. Germany is Russia’s biggest foreign trading partner, and in 2007 over 3 percent of Germany’s exports went to Russia.
Over 4,600 German companies in the manufacture and energy sectors have set up shop in Russia, and Germany gets more than 35 percent of her natural gas from there. This might explain why German industrialists have not been vocal in support of Shell or BP when those companies’ attempted bullying tactics against Russian national interests blew up in their own faces. (‘Berlin deepens its Moscow bonds’ by Judy Dempsey, International Herald Tribune, 22 October 2008)
Not for nothing do some in Washington worry that “Germany might slip its Atlanticist moorings and try to play middleman between the White House and the Kremlin”! (Ibid)
The worsening crisis will confront the whole imperialist world with the question of redividing the world market in accordance with the real economic potential of all the players, as opposed to the present division of the market organised around unquestioned US dominance.
As old alliances weaken and new ones impose themselves, the crisis may bring together some very strange bedfellows indeed.