Focusing On The Non-Oil Sector - Part 23 - Iraq & Bin Laden Plan For Saudi Oil.

With the US busy trying to stabilise Iraq, 'Usama bin Laden is said to be working on a strategy to destroy the "far enemy" in North America, but only after destroying the royal regime in Saudi Arabia as well as its oilfields. This is what bin Laden, head of the trans-national Neo-Salafi network al-Qaeda, seems to have explained in an Internet posting on Dec. 29, 2007, as a follow up on a posting he had made on Oct. 22, 2007.

Bin Laden's plans, however, seem to have far more sinister implications for the US than many of his enemies appear to expect. While he is aiming to control the biggest energy reservoir in the world, believing that his Islamist allies in Afghanistan had defeated the Soviet empire in the 1980s, he is using the tribal element in the Muslim society to change the US-backed regimes in Pakistan (see news4-TerrorPakUS-Jan21-08) and Turkey.

Bin Laden seems to have assumed that the US, his "far enemy", has already been defeated in Iraq (see his plans for Iraq and Saudi Arabia on the following pages). Years earlier, he had explained that one of the worst enemies for the Neo-Salafis - the most fanatic and most violent strain in Sunni Islam and perhaps as dangerous as the supremacists of the Ja'fari strain in Shi'ism - was the Islamic democracy in Turkey which is still being developed by the ruling AKP despite the continuing strength of the Kemalist military establishment.

Turkey, the largest trading partner of and investor in Iraq's Kurdistan, is a NATO partner of the US and its military establishment is one corner of a strategic triangle involving American and Israeli forces. Ankara, under an AKP government, is also part of the US-led alliance in the Middle East and the Muslim World, poised to play a bigger role in Iraq's crude oil exports to the Mediterranean.

A third pipeline is to be build from Kirkuk to Ceyhan to bring Iraq's northern export capacity to more than 2m b/d by 2010. Turkey is the sole outlet to the sea for Iraqi Kurdistan's future trade which will include crude oil. So the current anger of the Kurdistan Regional Government (KRG) with Ankara and the Americans over Turkey's incursions into its territory in pursuit of Kurdish separatists, the PKK, is only a temporary development (see Part 22 in ood6-IraqTurkeyDec31-07).

The global perspective, meanwhile, is worrying as the world economy is in grave danger. Some say there is already a recession in the US and a much worse situation could be expected on the global scale. Prices of world commodities, from food to steel or energy, have been rising at an alarming pace. The price of crude oil has risen four-fold since 2002. But the cost of projects in all sectors has risen five-fold - in some cases six-fold - in the past five years.

Most worrying is a stagflation in the West. A rare economic disease, Stagflation is an inflationary situation characterised by a decline in industrial output. Economists call it "C20", a blend of stagnation and inflation. A slowing economy usually leads to deflation, while a booming economy leads to inflation. Yet, the reason the world may see stagflation is because the economies in the US and Europe are slowing down, and thus likely to stagnate in an inflationary environment.

The insatiable appetite for commodities and currency-pegged-growth of China and its partners among emerging economies (EEs) is what is leading to inflation, combined with signs of stagnation in the West. Wealth is migrating from the West to the EEs and this transfer seems to be rapid. The question is whether there will be a war to stop this migration. If so, where will this take place and when?