Beyond Capital

Polemics, Critique and Analysis

On the logic of imperialism – US & India

leave a comment »


To say that the US invasion of Iraq “was not all about oil” is nothing novel. The triviality of “all about oil” argument is perhaps most clearly shown in the works of Marxists like Cyrus Bina. When neoliberal economic journalists like Swaminathan S Anklesaria Aiyar criticise this argument, they ultimately circularly reiterate the same argument – not all about oil, but still all about oil. So he in one of his recent gems published on 10 March 2007 starts with saying:

“Many Indians, including respected foreign policy analysts, believe that the US invaded Iraq and ousted Saddam Hussein in 2003 simply to grab his oilfields. “Its all about oil,” they said. Well, it’s now four years since the invasion. Yet, we see no sign of the US grabbing Iraq’s oilfields”.

And ends by:

“The US still has a strong interest… in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers. So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

That’s just “one reason”, but in Aiyar’s write-up it is the only “one reason”.

Definitely, we cannot ask him to comprehend the dialectics of abstract and concrete, essence and appearance etc – the complex relationship between economy and polity, where we cannot reduce any to the other. Also, we cannot expect him to avoid the circularity of bourgeois economics.

However the interesting aspect of his article is the details which he offers to prove his “not all about oil” argument – when he draws parallel between Indian and the US oil interests:

“Those familiar with India’s oil policy will find the Iraqi controversy over production sharing [contracts to foreign companies] mystifying, even comic. India has long signed production-sharing deals with private and foreign oil companies, and nobody regards this as a sellout.

The latest bidding round this year drew 32 domestic and 36 foreign bidders. In production-sharing deals, the foreign or private sector partner bears all exploration costs, but shares with the government any oil or gas that is found. The terms of production-sharing have varied in different rounds of bidding in India.

But typically the winning bidder whether Indian or foreign first gets enough oil to recover costs of production and exploration (called cost oil); then gets two to three times as much as profit oil; and then hands over most or all of the residual production to the government.

For instance, the government’s share in gas at Reliance’s Krishna-Godavari field starts at roughly 15% at the beginning and goes to 85% in later stages.

The most successful foreign explorer in India has been Cairn Energy, which hopes to produce 7.5 million tonnes a year from its fields in Rajasthan. British Gas has also experienced some success.

ONGC itself has entered into production-sharing contracts in no less than 15 countries, including Russia, Vietnam, Sudan, Venezuela, Canada, Brazil, Nigeria and Cuba.

Reliance Industries has also signed production-sharing deals in Yemen, Oman, East Timor and Colombia. Indeed, ONGC and Reliance have jointly signed a production-sharing deal in guess where? Northern Iraq. This is not Indian imperialism. Nor have these Indian oil companies encountered US resistance.

So, Indian foreign policy analysts who think the Iraq invasion was all about oil, need to brush up their knowledge of the oil business. They are living in the past.

There was indeed a time when the US used military power to back US oil companies. When Mossadegh in Iran nationalised oil companies, he was overthrown in a 1953 coup masterminded by Britain and the US. However, that was the last act in the history of oil imperialism.

This was shown when OPEC countries in 1974 nationalised all oilfields, converting oil multinationals from owners to just buyers of oil. Some US diplomats and politicians wanted military action to regain the fields. But the US Administration ruled that the days of oil imperialism were over, and it was time to deal with sovereign governents.

The US still has a strong interest as does India in seeing that oil production in the Persian Gulf is not disrupted or monopolised by any military power. This was one reason why the US forced Saddam out of Kuwait, which he had invaded and occupied in 1990. The US Navy has for decades patrolled the sea lanes to ensure security for oil tankers.

So, oil matters. But it is somewhat ridiculous to think that oil alone matters. The US invasion of Iraq was a terrible mistake, but it was not “all about oil.”

Here Aiyar has given some facts, ignored even by leftists suffering from third worldism. They are relevant for understanding the material base of India’s expansionist, even imperialist ambitions. Private (foreign and domestic) and State capitalist production sharing is nothing new. In recent years, India’s state oil companies like ONGC have been proactively involved in satisfying the energy requirements of India’s capitalist development by their overseas exploration and operation. Aiyar also tells us that now private capitalists like Reliance are increasingly being given space in this industry, where the State had been the pioneer.

However, for Aiyar, if “this is not Indian imperialism” then there is no US “oil imperialism”. But why do we presume that there is no Indian imperialism? In fact, let’s reverse the order of the argument – if all such facts have grounded US imperialist interests in the Middle East and elsewhere (even if not just for oil, but “oil matters”), then the parallel that Aiyar draws between India and the US must tempt us to probe India’s ambitions too, without precluding their possible imperialist nature. Definitely, the export of capital is not sufficient to make a state imperialist, but what makes it so is the state’s capacity and interest in defending that export through international political intervention, of which war is just a part, as Clausewitz taught us. Maybe if “Indian oil companies [in their outward expansion in the Middle East have not] encountered US resistance”, this is just another proof that India is a part of the imperialist coalition led by the US, or the US sees it as as an ally. This would give us a key to interpret the tremendous growth in the US-India-Israel relationship too.

Of course, in capitalism collaboration does not preclude competition – there will be moments when collaborating interests would clash too. But we should not presume that if collaboration between US and India is occurring, it is a patron-client relationship. Likewise, competition too is not liberation, India’s frequent amorous passes to Russia, China and others are not necessarily anti-imperialist or anti-US.

Advertisements

Written by Pratyush Chandra

April 26, 2007 at 10:44 pm

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: