Category Archives: Forecasts

2007 Policy #02 Diplomacy Forecast

PDF:  P02 Diplomacy

POLICY:  Diplomacy

Sooner or later, the US will be forced to resolve a contradiction – how can it be “Leader of the Free World” and “World’s Greatest Democracy” but undemocratically deny a “vote” in the agenda to those it is leading. Iraq, more than any event since 1945, has put unilateralism back into everyday debate. But the United Nations was formed to be an alternative to unilateralism.


Britain, had foreign policy mechanisms well in place by the 14th century, but arguably the isolationist US did not start doing serious foreign policy until 1940. This, and other factors, is responsible for the several serious foreign policy mistakes in the last 60 years – backing the “wrong side” for short term political motive to have that decision blow back with a vengeance.  Iraq has been a watershed for US diplomacy, causing US credibility in many places to wear very thin, and in some places to add credibility to the anti-US challenge from global Islamic militantism.  Can the US be the only one in step?


Diplomacy need not be the zero-sum game. All states act in their own national interest, and often ruthlessly, but the point of diplomacy is to achieve national ends while making as few long-term enemies as possible. It is arguable that the US has not got this highly nuanced game right yet. But it needs to if it is not to find itself in a world less and less able to share its vision — to be not only the tolerated “fat kid in the canoe”* but suddenly to be friendless. Diplomacy nurtures and furthers national interests which are so important that they should transcend administrations. Politics is about tomorrow and the next election; Diplomacy is about the nation’s place in the world a generation from now.  *[attributed to Dean Rusk]


Doubtless the US Diplomatic Corps has talents equal to the best in the world but there is a sense in many places that the US is new to “the great game”, and it shows.  The negotiations alleged this week between the UK Foreign Office and the Muslim Brotherhood is instructive. As the spiritual parent of most radical Islamic movements in the world today, the Muslim Brotherhood seems an unlikely partner. But, thinking deeply about the roots of Islamic militantism throughout history and today, it is obvious that the only way to a lasting solution is to beard the lion (or one of the lions) in the den and establish a win-win position.  Far-sightedness is everything.

2007 Policy #04 Education Forecast

PDF:  P04 Education

POLICY:  Education

A Nation’s best defense is an educated citizenry.  – Thomas Jefferson (1743-1826; 3rd President 1801-1809)

Defense from whom? Defense against foreign enemies needs only a capable elite, a credible armed force, and a war-chest; not necessarily an educated citizenry. So, Jefferson would educate a citizenry not only against any the outside threat but also against threat from within; against elites manipulating a population into a disenfranchised lifetime at the oars with little say on the direction of government. The Republic that the Revolution founded was to be a creature of the people, not of a king, or an elite, or a clergy; and education, for Jefferson, would be guardian of the Revolution. How successful that goal has been is a matter of opinion.

Historically, federal involvement in education has been sporadic and to meet specific needs. Thus had been the GI Bill (Servicemen’s Readjustment Act) of 1944, the National Defense Education Act (NDEA) of 1958 and a range of equal rights measures under LBJ’s Great Society programs in the 1960s. The GI Bill had greater impact on US education than any single measure; it enabled a generation of 16 million veterans into universities they would otherwise have had little chance of attending. NDEA aimed at the advancement of science, mathematics, and foreign languages when the US suddenly thought it had lost the world lead in key disciplines; it became law months after Sputnik 1 had been launched in October 1957. The federal government then had little policy say in education until recently and in controversial circumstances. Some hard-line “constitutionalists” still claim the federal government has no part to play in education policy and to this day oppose the creation of the US Department of Education (USEd) in 1979/1980 by “President Jimmy Carter, Liberal-left Democrats and the radical teachers”. Of the best known federal policies at present, No Child Left Behind (NCLB), the John Birch Society says “The Bush administration’s No Child Left Behind program represents one of the largest expansions of the federal government’s unconstitutional invasion of education since Jimmy Carter’s creation of the DOE in 1979.”

This last twenty years of federal interest in education can be traced to the 1983 report “A Nation at Risk” by the Reagan-appointed National Commission on Excellence in Education which concluded the US schools system could not have been worse if it had been imposed by a hostile power1. The sense that US international competitiveness was at risk – as indeed it was – led some to think of education as a national issue rather than something of only local and family concern. The report was alarmist but that was by design; in the Cold-War-speak of the day it said “We have, in effect, been committing an act of  unthinking, unilateral educational disarmament”; the US was threatened not by a Red Tide but a “rising tide of mediocrity”. President Reagan suggested that vouchers, prayer in schools, and abolition of the new USEd would fix all of the ills. Twenty years later a polarized debate continues; some claim that US schools are still awash with mediocrity: others such as the Constitutionalists say the 1983 report was based on biased or falsified data and is a stalking horse for implanting universal liberal-left values in schools. But what has changed in schools over the last twenty years? If NAEP (National Assessment of Educational Progress) scores are a guide, not much. There has been some relative improvement in science results but all key disciplines are worse than or equal to scores thirty years ago. Despite the detail – and debate is heated on the validity of comparing scores over time – one element that remains from the 1983 report, to the chagrin of some, is that education is an issue in the national domain. With NCLB, federal involvement in local education was codified, in good monetarist manner. Schools receiving federal funds were made measurable and accountable under federal testing.

SIDEBAR: NCLB (No Child Left Behind)

When the Elementary and Secondary Education Act (ESEA) of 1965 was reauthorized in 2002, the Bush Administration included new conditions that tied federal funding to measures such as “adequate yearly progress.” Under NCLB, schools getting Title I 
funds are required to offer students a transfer to other schools if they fall short of annual assessment goals for two consecutive years, and to offer a choice of tutoring services to low-income parents if they fall short for three years. The administration acknowledged in 2006 that NCLB is not working as well “for parents” as it should. GAO reports that only 2% of students eligible take advantage of transfers to another school and only 19% of the 2.2 million eligible for tutoring take advantage of it. One reason for this may be that – allegedly — many schools are reporting test scores late so many parents don’t find out they have a right to transfer until the new school year has begun.  Opponents of NCLB say that schools are doing all they can and that schools are not being given additional funding to achieve the raised expectations of the initiative; they say “no child left behind” is a political slogan rather than a promise to improve national education

The Purpose

Is school simply child care, or protective custody, or a scheme to keep children off the streets? Is the real purpose of school to create docile factory workers who know how to do their job, and little else? Or is school a determiner of social cohesion, the place where each citizen learns intellectual creativity, learns how to learn, and how to share information? Are some schools dedicated to perpetuating a national elite and others to producing those who will serve the elite. Or are schools dedicated to the national interest through equity, creativity, and preparing each student for life-long learning in a multicultural, multilingual, globalized world?  The only certainty is that no national educational system will succeed unless the people and the government first agree on the purpose and priorities of education.

SIDEBAR: Nationalization of Standards (NAEP). Although schools have traditionally been operated at a local level in the US, in the 1960s there were moves to get a conspectus of US education so that each district could share its approach and experience with others. This was articulated by James Conant, sometime president of Harvard, in Shaping Education Policy (1964) which called for a mechanism that would “give voice to the diverse interests, needs and traditions of states” and “enable them to cooperate and communicate with one another”. Clearly the time was ripe – within two years 50 states and the US Congress had agreed to the Compact for Education and the creation in 1967 of the Education Commission of the States (ECS). This coincided with moves towards a national student assessment system. A broad panel of experts had developed a suitable test that would later become the National Assessment of Educational Progress (NAEP) but there was suspicion the test would increase federal power over local education and be one step towards a national curriculum. In 1969 NAEP testing became official and was put in the hands of the new federal-state ECS. Fourteen years later, NAEP was removed from ECS – decimating the organization – and entrusted to a new non-profit private body, Educational Testing Service (ETS) which administers NAEP for the National Center for Education Statistics. The Commissioner of Education Statistics in the USEd is required by law to administer the NAEP program. It measures students in grades 4, 8, and 12 across the US in key subjects.

Measuring Education

What in education can be reliably measured and be accounted for, and what makes a difference? Thinking on this is distinguished by the relative weight placed on standards, methods, funding, market forces.


It is self-evident that schooling should bear some result and testing is the only straightforward way to indicate this. An unfortunate but vivid metaphor questioning testing is “A pig doesn’t grow just because you keep weighing it.” But the ripost is “You can’t tell whether the pig is growing if you don’t weigh it”. Testing is so integral to education that education without testing in some form seems meaningless. Through testing, the teacher can tell which students or areas of work need more effort and – crucially for modern government funding – higher authorities can get an indication of which teachers and entire schools need more effort. But the downside of formalized testing, say educators, is that students learn and teachers teach “for the test”. Also, two or four years hard work by both student and teacher – and the fortunes of both – are made to depend on a “high-stakes” tests, a form of educational Russian roulette. The SAT (Scholastic Assessment Test) or ACT (American College Test) have become the rite of passage for the majority of US high-school students. Tests such as this bring about suicides in some places such as Japan and many claim they are cruel and unnatural ways of passing academic judgement on a student. Policy-makers, teachers, parents and others who have been through high-stakes testing themselves tend to see more virtue than vice in the process but there will always be room to consider fairer methods such as averaging of a number of tests and trying to make allowance for students who are greatly stressed by the formal testing as such. But testing, measurement and setting of standards is immensely practical for several purposes. It allows merit to show itself independent of any personal particular, favoring a Jeffersonian meritocracy over hereditary oligarchy. Also, as shown in recent years, it allows policy-makers to take some objective measure of standards across the country and can reveal shortcomings that should be revealed. The recent addition of an essay question to SAT (and ACT) brought the biggest dip in aggregate scores in over 30 years, showing that multiple-choice and short-answer testing can hide that which should not be hidden.

The NCLB initiative has exposed the politics and social theory that is always just below the surface in education. The Bush administration has applied the purest monetarist praxis in saying why should taxpayers continue to fund (Title I) schools that are not performing? Teachers in those schools and others say how can performance improve without funding? In the middle ground, there is now a nexus between funding and outcomes which in some way will probably remain and a debate will continue on how local needs and national interest can both be maximized. NAEP has put school standards in the headlines to an extent not seen before and, surprisingly for the conservative administration that promulgated it, the notion of national standards now begs the question of national curriculum.

Standards, like motherhood and apple-pie, are a “good thing”. But in turning to detail, the debates begin. Some think national standards are just a step away from a national curriculum (as in France, and many other countries) – a worthy goal to some, anathema to others. Some say standards, tests and measures are just a small part of education and the standards probed in NAEP, ACT and SAT are just a dumbing-down of what education should be for the needs of commerce, a tool of a “Pedagogy of Oppression” that reinforces the worst of the 19th century “factory model of schooling”.


Some say that education is not the transmission of facts but the transmission of methods. What this means varies tremendously from discipline to discipline. Mathematics of its nature teaches students about solving problems by type, but history, geography, literature often do not make clear that the student is learning critical skills rather than “the 10 causes of World War I”, or just that country, or just that great novel or that work of Shakespeare. This hits the nub what it is to be a “good teacher” or a “good student”. A good student is fortunate enough to see the curriculum as just examples of the subject; a good teacher is skilled and diligent enough to produce as many students as possible with that insight. Seeing education as a method and not just facts also prepares the student for a life of changing facts and for more sophisticated post-secondary studies. The student or the parent who asks What good is it later in life to know the rivers of France? hasn’t dug it. Life in today’s globalized information-based world is about learning new skills and assimilating new facts continually. That can only be taught and practiced by assimilating fact sets and understanding systems of thinking, and then doing it some more until those cognitive processes are well-honed. Similarly if a foreign language is taught along with some formal linguistics (Chomsky Deep Structure, etc), the student will learn not only some aptitude in that language but also how to learn any language. Education with this emphasis costs more. Qualitative tests, rather than quantitative, are far costlier to set and to assess. Machines can assess multiple-choice tests at a fraction of the cost it takes an educator to read and assess an answer for clarity of critical thinking, method of attacking the problem, and comprehension of the issues. Emphasis in this way on method produces students more likely to find learning new things a rewarding experience; they will know what to do when confronted with new problems – they will research, try the methods they know and learn new methods if those don’t work. They will have the skills to leverage their natural human intelligence. Importantly, they will also be able see the range of positions in an issue, the different points of view in religious, cultural, national, social questions and will never feel threatened because the world of ideas is their natural habitat. This, rather than rote learning, has resonance with Jefferson’s educated citizenry.


If You Think Education is Expensive, Try Ignorance.  – Derek Bok, (1930- ; President Harvard Univ 1971-1990)

Another perspective says education is all about money; the more you spend, the better the outcome. Whether or not this is true, a corollary probably is — the poorest students at the neediest schools with teachers who would prefer to be elsewhere get the worst education. Educational miracles against all odds do happen but, statistically, poor funding is related to poor outcome. This is why the NCLB measure of reducing funding to needy schools that fail to improve has attracted such scathing attacks from those who say struggling schools need more support, not less. More money is helpful in any endeavor but actual expenditures per pupil per year (PPE) and results, measured by high school graduation, do not show a strong correlation. Iowa with PPE of $8,405 ranks first in graduation with 93%; Georgia with a higher PPE of $8,623 ranks last in graduation with 54%. New Jersey has the highest PPE ($12,959) but ranks 18th with 75% graduation; Mississippi has the lowest PPE of $5,890 and ranks 44th with 62%. A broader measure, achievement, as scored by Center for Education Reform based on SAT, ACT, and NAEP scores, ranks Minnesota ($9,697 PPE) first and Mississippi ($5,890 PPE) last. A special case is DC which ranks last in assessment but first in PPE ($15,489) and almost last in graduation rate (59%). These facts alone provides talking points for both sides in the funding debate – the schools with highest PPE have better outcomes than those with the lowest (“funding is good”), but higher PPE does not invariably lead to better outcomes (“funding is not the full story”). DC should be ignored in all arguments but it doubtless encourages those who claim funding without accountability leads to peculiar circumstances. Across the US, PPE (on a dollar-adjusted basis) has more than doubled over the last 30 years. However, the proportion of government spending on education is also not necessarily a guide to relative outcomes; the countries shown include both high and low technology achievers, developing and developed, with no obvious correlation across a range of 9% to 19% of government expenditure.

Federal funding is only about 8% of around $550B that is spent throughout the US on elementary and secondary education in 2005/2006, but these small federal monies are spent in key areas and in leading edge programs that often have leveraged impacts throughout the system. For 2006/2007 Title I real funding has decreased for 90% of schools. This comes at a time when schools say they are under increased load imposed by NCLB requirements but is in line with the general budget austerity brought by the President’s goal of cutting the deficit in half by 2009 and emergent security and war costs overseas.

Click on Image to Enlarge

Click on Image to Enlarge

Market Forces

Another emphasis – rather than standards, methods or funding – is to allow the famous invisible hand of the market to improve public education. In this theory, public schools have difficulties and do not improve because they have no competition. If government gave parents vouchers allowing the child to attend any school, public or private, each public school would improve, or would close down for lack of students. Elements of this “school choice” policy are already part of NCLB. Milwaukee and Cleveland have already tried to include private and religious schools in voucher plans and Cleveland won a US Supreme Court challenge against it that cited separation of church and state. There is a widely held-belief that private schools do a better job for students than public schools, but in academic standards there is little to support this belief. In recent standardized tests, private schools did no better than public schools and some private schools (and charter schools) with good reputations failed to meet national standards. Private schools do however often do better in other important matters such as discipline, safety, teacher-student ratios. There are also the tacit social advantages of a “good school”.


Parents are the first, most important, and most formative of teachers. Parents teach the child the language, how to eat, how to sleep, how to interact with others. It is parents that set the context for responsibility, inquisitiveness, and other traits of character without which no degree of schooling and socialization will succeed. Although systems of nannies and boarding schools seemed to have served British elites well for generations, a population comprising one-income two-parent families has historically proven to be the fundamental building block for a stable, low-crime society. Educational policy must therefore complement family policy as well as health, immigration, labor, taxation and other policies. Those social conditions, together with an efficient world-class educational system, made equitable irrespective of where the child lives, will give the nation’s children equal opportunity to grow, learn, and contribute to society and America’s place in the world.


An element often forgotten in considering funding, curricula, methods and the place of school in society, is the teacher. “We know nothing helps a child learn as much as a great teacher,” says Secretary of Education Spellings. But attempts to quantify this invariably fail. NCLB will enforce standards of teacher qualification but nothing can systematically produce what every fortunate student knows to be a “good teacher”, that ineffable talent that imparts not facts but a facility with a discipline and the desire to learn more. Discussion of merit pay for good teachers in the US and elsewhere have ground to halt because it is too difficult to formalize and/or presents teachers’ unions with the dangerous precedent of recognizing qualities beyond the job description.


Educated citizens are better citizens. The social role of schools in preparing citizens for life is so pervasive as to be often unnoticed. K-12 provides social experience beyond the family and – if all goes well — skills just as important for life in society as academic skills. But this is an art of balance. For some students, school is little more than social life and in worst cases it can be a direct link to crime, violence, drugs of addiction, pregnancy and/or death. This socializing aspect places immense, unremunerated burden on teachers who have trained to teach not to be social workers, child-minders, or wardens. Further to this vital socializing role, schools also play another direct economic role as de facto child-minding centers. The massive increase in two-income families throughout the developed world would not have been possible if children were not absent at school for part of the day for part of the year for 10 or 12 years. This is a social value of schools that is not included when governments consider the cost of schools. The socializing value of schools grows more important by the year in an increasingly multi-cultural world. School takes the child beyond the family into a microcosm of US society which is in turn a slice of the wider world. In the 1960s, schools in some areas were a sad proxy for the segregation wars, the result of “America’s birth defect” as Secretary of State Rice puts it. Schools have played an invaluable role for wider US society in helping to heal the defect. The high school dropout rate among Blacks has fallen from almost 30% in 1970 to the aggregate of 10% but dropout rates among Hispanics has remained steady at around 25% to 30%. The White dropout rate has fallen from around 12% to around 6% over the period.


K-12 schooling is a preparation for life in society, but in practice it is commonly preparation for colleges, universities and other post-secondary education and the higher earning power that higher education offers. In 1900, about 2% in the US attended post-secondary education; around 65% attend today. Of 12 million post-secondary students, about 44% attend community colleges which offer an increasing range of competency-based training courses, continuing education, adult education, and general interest (“hobby”) courses. Fees at community colleges are often little more than nominal but fees for US universities are among the highest in the world, from around $4,000 per year for state universities to almost $20,000 per year in “ivy league” universities, substantially more for degrees such as medicine. Generally, students graduate with thousands of dollars of debt in government student loans, an aggregate of around $17,000. The well-trodden secondary / post-secondary path is still not perfect. The National Center for Education Statistics says 30% of all new post-secondary students need some form of remedial learning to fit them to their new studies, suggesting some systematic shortcomings with secondary schooling.

The Future?

The child is father of the man.  – William Wordsworth (1807)

Diversity is a blessing in diet and the world of ideas but it is difficult to find any intrinsic virtue in the diversity found in the US school system. K-12 education is a one-time experience formative in the life of each child and nothing, particularly the pet theories of a state or a school district, should stand between that and a world-class education. But localism runs deep in the US to an extent that puts it in contrast to all other developed (and developing) nations. The Bush administration has contributed, perhaps unintentionally, towards standardization by creating accountability based on national standards, one of the major recommendations of the controversial A Nation at Risk report.

There are a multitude of school administration details that could and should be arranged locally but there seems little reason to teach a different history or chemistry in each school district. “There is not one kind of math in North Carolina and another kind in New York or California. The science that our children need to know is the same in North Carolina as it is in London and Singapore and Bombay.” The only objection to a broad national curriculum is localism, a distrust that some say derives from King George 250 years ago but more likely stems from the Old Testament venomous distrust of all authority except God. It is conceivable that a national curriculum could be developed by a council of the wise representing all stakeholders, perhaps under the aegis of the Education Commission of the States, but implementing even a broad multiple-choice national curriculum would precipitate a heated, polarizing debate spanning several years. For instance, debate on how Evolution / Intelligent Design would be incorporated in a curriculum could stalemate any panel for decades – confirming the role of the Old Testament in US policy-making – but some wise way should and could be found to satisfy all parties in the national interest. NCLB aims for 100% proficiency in the 3Rs (Reading-Riting-Rithmatic) by 2014, meaning by then no American school-child would fall below the grade of “proficient”. This is a noble policy but not qualitatively different to that of countries with a bigger task such as Indonesia. Concentration on the lowest aggregate may produce another generation of process workers who can read but distracts attention and resources away from the Jefferson goal of an educated citizenry, a qualitatively different population.

Unarguably, this is the Age of Information but that has been the case for 30 years; we are now moving into an era beyond information, into contact with the last element of the familiar Data – Information – Knowledge – … hierarchy. The last element is often shown as Wisdom, but Conceptualization or Imagination also convey what “applied knowledge” entails. Wisdom is the ethical use of knowledge. To some extent values, and ethical praxis, can be taught but they are best self-realized within an education system that encourages free-thinking and critical thought. It is a long way from No Child Left Behind to free-thinking conceptualization but it is a transition the US must make to survive. By placing education in a national context perhaps NCLB is a modest step in the right direction.

Wired Education

The Information Age offers options in education which are not “soft options” but new highly leveraged and cost-effective educational possibilities. The World Wide Web has already shown the immense value of connection to a world of information but now this connectedness means access to a burgeoning range of online learning, student-paced autonomous learning, peer-to-peer learning groups, and just-in-time fact acquisition. The pedagogical techniques evolved in decades past in distance learning and correspondence schools can be readily adapted to web-based education in virtually all areas. Courses dependent on detailed demonstration can meet some of that requirement with computer simulation, virtual reality, and serious games. These possibilities at present are applicable largely to post-secondary courses but inevitably, funds permitting, there will scope to offer elementary and secondary course-work via the Web for the disabled, the remote, or where parents have a zealous belief in home schooling. Wired education in its many possible forms offers students, schools, colleges, universities and the government the opportunity of multiplying the returns for each education dollar spent and a new order of equal opportunity to the isolated, the disabled, the poor, and the very busy. However, as with any prolonged engagement with computers (or mobile phones), these new modes of education miss the socialization element of institutionalized instruction. On the downside, large numbers of better educated sociopaths may be produced. One downside has already appeared. The very poor results from the recent inclusion of essay questions in SAT showed the danger of neglecting traditional skills but it also showed that US children are longer taught to write. Only 15% of the SAT essays were written in cursive writing — the rest were printed in block letters. This in itself may or may not be alarming but it does demonstrate how easily basics can be forgotten in pursuit of the new. Crucially, little of this brave new world of universal, cheap, quality educational possibilities will be of use if students have not been taught how to learn and to research, the heuristics and pedagogical tricks of each discipline. This emphasizes again the importance of sound grounding in K-12.

National Security

A Nation at Risk foretold a decline in economic competitiveness and a generalized disassembly of US society. Only the most light-hearted could put an entirely positive spin on the looming economic triumphs of China (shortly followed by India). In many senses this was the competitive disaster foretold. Jobs of all descriptions are now being exported to China. Direst of all, the talent for innovation and America’s secret – vast capital – are also now growing offshore. Certainly, many nominally US businesses and entrepreneurs are sharing in the China boom but the US heartland is seeing only loss and de-skilling. The Report was written in the context of the US maintaining its lead as the leading superpower against the devious Soviets who were still able to do good science (and espionage) in appalling economic conditions. The Report then knew nothing about stateless asymmetric terrorism, despite the hints of the Munich Olympics (1972), the bombings, assassinations and kidnappings by the Baader-Meinhof Red Army Fraction (1972-1993), thousands of violent acts by the Italian Brigate Rosse during the 1970s, or Russia’s loss to guerillas in Afghanistan (1979-1988). The 21st century offers challenges to states, the US more than most, that were unimagined only a few years ago even by (or particularly by) the national security community.

Although the most recent education budget shows cuts in almost all areas of federal spending on education, the budget continues to put emphasis on mathematics and science in the interest of US global competitiveness. With the multi-agency National Security Language Initiative it aims to “significantly increase the number of American students learning foreign languages critical for national security and global competitiveness” (such as Chinese and Arabic). $35M in the current budget is USEd’s portion of that initiative. In comparison, 20-times that ($669M) is allocated to English Language Acquisition for immigrant children with limited English aptitude. A Nation at Risk stressed the US lack of language skills almost 20 years ago and clearly not much has been done since – in 2006 just 33 of 12,000 FBI agents have proficiency in Arabic. It is not possible to have a smart nation – and a smart intelligence and security community – with a dumb education system and now more than ever national competitiveness and national security will depend on how many smart people can be given the education they deserve. In 2006, only 15% of US graduates are in the science / engineering fields; in China this is 50%. The intelligence community, among its many tasks, is faced with appreciating some 600,000 terabytes of data appearing on the internet each day. Nothing short of an initiative of the scale of the Manhattan Project will have any success.


After 23 years, many of the alarms in “A Nation at Risk” are still unheeded. The “rising tide of mediocrity” is still lapping at the foundations of US society. At its best, US education equals the best in the world but the vast rump of the system is directionless, unable to change as fast as a fast-changing world and lacking leadership to set new goals. But change is beset with a more basic problem; there is no single cohesive educational system to lead or improve. Any reform will be no easier than herding cats unless states and school districts recognize a common purpose. The arduous task to gain consensus devoid of social agendas should start now.


Assessment is important but not for its own sake. It is important to measure what matters, not how well students have been trained for the test.
The system is suffering from change fatigue already and any future changes to curricula or testing – even obviously necess-ary ones – should come with only the widest possible con-sensus of educators with an eye on world’s best practice. It is not idealism but a necessity to transition from simplistic fact-learning to an exploratory, critical thinking, civic-minded environment. “Why was Paris built here?” is more instructive than learning


In the longer term, fruits of a more robust and challenging education system should emerge. The time will be taxing enough for the US to use all the best skills it can muster. It is not possible to have innovation, and smart security and intelligence systems arising out of a dumb (or mediocre) nation. The “war on terror” has shown that the new shrinking world is more complex than military solutions alone. Wisdom and foresight and lucid understanding of foreign societies – multicultural intelligence – will be the main foundation for survival. These skills can be only be produced by an enlightened education system.

Selected sources
Center for Education Reform, Education in America: State-by-State Scorecard (April 2006)
Center on Education Policy
Charlotte Observer
Christian Science Monitor, “Twenty years after ‘A Nation at Risk’”
Daily Californian, “Teacher Quality Key in School Performance, Federal Report Says”, 20060821
Dept of Education [US], 2007 Budget Summary
Education Commission of the States,
John Birch Society
Monthly Review – USA (VA), “The Pedagogy of Oppression: A Brief Look at ‘No Child Left Behind’”, 20060822.
National Center for Education Statistics, Institute of Education Sciences
Public Schools of North Carolina, Education Fact File
The Guardian
UNESCO Education overviews
UPI, “DNI’s danger zone [Analysis]”, 20060927,
Washington Post, “FBI Agents Still Lacking Arabic Skills”, 20061011,
Washington Post, “Civic Involvement Tied to Education”, 20060919,
Washington Post, “Most Charter Schools Miss Test Benchmarks”, 20060927,
Washington Post, “Researchers See a Downside as Keyboards Replace Pens in Schools”, 20061011,
Washington Post, “Some Highly Touted Schools Land on Failure List”, 20060908,

2007 Policy #05 Energy Forecast

PDF [with Graphics]:  P05 Energy

POLICY:  Energy
The energy slogan of the year is about curing “America’s addiction to oil”. In the next breath there is always mention of what new form the addiction will take; akin to curing heroin addiction with opium. Just as China’s economic “miracle” is yet to factor in apocalyptic environmental devastation wrought by China’s industrial “miracle”, so too much of US legendary productivity has rested on the salad days of wastefully-used under-priced energy. The “energy” issue is really two-fold – energy security, and the environmental degradation associated with pursuit of that security. There is no single answer to energy security or to associated environmental issues; the real world offers a mix of compromises. Getting this mix right with a wise balance of short-term need and long-term results is the challenge for policy-makers.
The US consumes about one-quarter of all world energy, about 100 quads (quadrillion BTU) of about 450 quad world total. Almost two-thirds of world energy consumption is by six industrial powers: US 23%, China 13%, Russia 7%, Japan 5%, Germany 3%, India 3%. Until recent years, the US used about one-third of world energy but with the breakneck industrialization of China, the US relative share has dropped. From all views, the US is a profligate energy user. Its energy consumption per capita is over twice that of industrialized nations such as Japan. Certainly the US is a power-house economy but per capita energy consumption is not proportionate to the GDP per capita of other productive nations. The US is simply wasteful or inefficient in its energy use and to date any attempt to make significant impact on this profligacy has been seen as tantamount to unpatriotic. However, the aggregate usage figures over time show that although the US is hooked on high energy use the addiction is not getting significantly worse (or better).
Greenhouse Gases (GHG)
A key GHG goal of the Administration’s 2002 Global Climate Change Initiative is to reduce US GHG intensity by 18% over the decade 2002 to 2012. GHG intensity is the ratio of GHG emissions to GDP. Thus, if the goal is met but GDP grows by 18% or more during the decade (which it will), the absolute quantity of GHG will still increase but at a rate less than GDP. DoE forecasts that, on its present assumptions, the GHG Intensity will be around 17%, slightly under target, and well under actual GDP growth of 30% to 40% over the decade.
US Energy Use
The sources of US energy are oil 40%, gas 23%, coal 23%, nuclear 8%, sustainable sources 6%. There are two distinct sub-plots in this. Almost 70% of oil is used (as gasoline and diesel) for transportation and over 60% of all oil is imported. Over 90% of coal, over 1 billion tonne each year, is used for generation of electricity and at present all of this is mined in the US. These two – coal  and oil, both fossil fuels – are the superstars. If oil stops, the US stops moving; if coal stops, electricity stops and with it industry, commerce, PlayStations, Starbucks and chunks of the internet.
Electricity (generated from coal 50% gas 19%, nuclear 19%, hydro and other sustainable 9%) is used almost equally across sectors: residential (36%), commercial (33%), industrial (27%). A breakdown of residential consumption is instructive in figuring future trends: air-conditioning 16%, lighting 9% , water heating 9%, and a multitude of “other appliances” using 42% of total comprise must-haves such as clothes dryers 6%, color-TVs 3%, personal computers 1.5%. When some say a lump of coal is used each time an order is made on Amazon, they are exaggerating but are making an important point – 10% reduction in electricity use means 10% less generating fuels used, more than all contribution at present from “green” electricity. The projections for total US electricity sales in 2030 range from 4,828 million GWh to 5,854 million GWh. Slowing growth in electricity demand relative to GDP growth – due to greater efficiency in devices, better building insulation standards, and market saturation in white-goods – is expected to keep electricity prices at around 7.1 to 7.6 cents per kWh. All forecasts show an increase in coal consumption over future decades and that the US for the first time will become an importer of coal.
Gasoline (and diesel) are the lifeblood of the American road and the most politically-sensitive of all energy issues. About 40% of all US energy use is in the form of gasoline and diesel from largely imported oil. A naïve analysis of sources of world oil would conclude that the US would have (or would foster) good relations with Canada, Iran, Iraq, UAE, Kuwait, Venezuela, Russia, Libya, Nigeria. With the exception perhaps of Canada, US relations with all of these countries is either strained or problematic. In all forecasts, US domestic crude oil production declines in coming decades and import dependence increases. Prices are volatile, affected by world events and by policies of petroleum exporting countries. Retail prices can change rapidly by as much as 20% , unlike any other commodity. Fuel prices do not have a strong correlation with vehicle use but increases are felt in other parts of economy — and by low-wage earners — as cash is diverted from discretionary expenditure to gasoline. As most oil is imported, higher oil prices also add unfavorably to the international terms of trade. Despite gasoline prices being a raw electoral nerve, analysts claim that the US is no longer as vulnerable to “oil shocks” as it was in the 1970s, because the element of surprise is now lost and that much of the economic damage of the period was due to monetary policy, not oil prices alone. Forecasts for crude oil prices in 2030 range between $28 per barrel and $96 per barrel (in 2004 dollars), showing that all that is certain is uncertainty. This is one motivation for the current attention to “America’s addiction to oil”.

Irrespective of the resource used to produce energy, energy solutions generally are concerned with either of the two national energy systems: reticulated energy (grid electricity and reticulated gas) for industrial and domestic use and portable energy (gasoline, diesel, tanked natural gas). In each case, the energy issue is concerned with reducing GHG, and/or achieving greater output per unit input (efficiency), and/or blunting demand through frugality or better buildings and cars. Both of these energy systems are supported by infrastructures which need modification to accept new energy sources or new energy regimes.Alternatives

Greener Electricity
Electricity generation by coal powered steam turbine is still the dominant method for electricity generation, as it was 100 years ago. The technology is mature and coal is relatively plentiful; however the US will start importing coal for the first time in coming years and CO2 emissions from coal-fired power stations are the core of the GHG issue. Several broad-brush solutions to the electricity-CO2 nexus have been on the table for some time: CO2 sequestration (removal of CO2 from coal-fired emissions); increasing use of “clean, green” alternative power generation (wind power, solar power,…); and increase in the use of nuclear-fired generation, which has no CO2 emissions.
CO2 Sequestration

If CO2 could be removed from coal-fired emissions, the energy-GHG nexus is broken in one step. Current ideas for this CO2 capture – carbon sequestration – involves capturing the 3% to 12% CO2 of smokestack gases, compressing the gas to liquid for transport and then sequestering it in some place where it will remain indefinitely. This seems like sweeping detritus under the rug because it is. Where to “hide” it is the issue – deep cold oceans where it will remain solid because of the high pressure, or in exhausted aquifers, coal mines or oil wells are the main suggestions. Norway has for some years been pumping one million tonne of liquefied CO2 each year into depleted natural gas domes under the North Sea. An advantage of this or other emission capture processes is that SO2 (sulphur dioxide, the cause of acid rain), mercury and other undesirable emissions apart from GHG CO2 can also be removed. Sequestration, whatever the details and possible ecological hazards, will add cost to electricity generation. One way costs might be ameliorated is to sequester the CO2 into aging oil reserves to increase the pressure and hence the yield. One elegant advance on this method is to capture the CO2 before it gets to the smokestack. Following successful demonstrations in Algeria and Norway. BP and partners are building a 350MW power station in Scotland using this “decarbonised fuel”; natural gas is first “split” into hydrogen and CO2; The hydrogen provides clean fuel for power generation and the CO2 is piped directly for sequestration in North Sea oil reservoirs.Sustainable (“Alternative”) Electricity

A range of technologies that 30 years ago were known as “alternative” are now referred to as renewable or sustainable. DoE adds a realistic note to this loose terminology by referring to resources that are nondepletable on a time scale of interest to society and tend to have low and stable operating costs. Significantly, the qualification of negligible environmental impact is absent from the definition and must be added. This is why the term sustainable captures the idea better than renewable. Felling trees for wood-burning energy production is use of a “renewable” resource (trees grow) but it is not a sustainable resource. Strictly speaking, even the “greenest” of energy sources has some impact and intensive use can have intensive impacts. Damming of rivers for hydropower, huge wind farms, large tidal power schemes all the environment to varying degrees, changing and killing rivers in extreme cases, changing coastline sand deposition, killing or disturbing wildlife and natural processes. The low-impact quality of  truly sustainable resource use should be kept in mind in a critical examination of current proposals.
Wind-power electricity generation has grown twenty-times worldwide from 3.5GW in 1994 to 59 GW by 2006; and is now an accepted mainstream, albeit small, contributor to electricity generation in suitable areas, often offshore where the wind is not impeded by landscape. It is attractive for future applications in areas such as the Great Lakes, close to large energy markets. Work recently done by the National Renewable Energy Laboratory says many early wind energy models using single turbines are automatically a “worst-case scenario” and give unduly gloomy results. Multiple units better model the real-world “lumpy” nature of wind in an area. Mature technologies will including blade adjustment including feathering for dangerously high winds, and automatic mounting and demounting.
Hydro-electric power is a mature base-load power generation technology; in countries with the appropriate natural resources it provides the majority of electricity; in Brazil 75% of electricity is hydro. Research continues on other hydro technologies such as instream tethered turbines which exploit the force of fast-flowing rivers without large capital works such as dams. Similarly, in suitable places fixed turbines can exploit the force of tidal flow. In future, immense installations larger than the biggest modern oil rigs may be installed off-shore in permanent ocean currents. In all of these cases, the natural force of wind or water is harnessed in the uncontroversial tradition of the centuries-old use of wind-mills and water-mills. A high-technology variant of these methods, ocean-thermal generation, exploits permanent temperature difference at two different ocean depths. Although presently obscure, technologies such as this may in the long-term warrant immense capital investment in large mid-ocean works that will provide “permanent” and “free” electricity on a continental scale.
Geothermal energy exploits the heat of the Earth’s molten core. The quantity of energy available at the surface is estimated at over 40 Terawatt (million GW), around ten times the total electricity generation everywhere, but only about 9GW are used for electric generation and 16GW for direct heating (hydrothermal) mainly in Iceland, New Zealand and about 20 other countries. Geothermal could be of use in Alaska where it is not presently used. Although the earth’s prodigious heat source is for practical purposes inexhaustible it is easily accessible only in places which, by definition, are geologically unstable and for that reason is often distant from high population areas. In future it may be possible to “package” geothermal energy into some portable energy-intensive form such as liquefied hydrogen but no demonstrations of this have yet been completed.
Solar-Power — the costs of photo-voltaic (PV) cells which convert sunlight directly to electricity has dropped over the last 30 years from about $30 per Watt in 1970 to under $3 per Watt now and PVs are expected to continue dropping with research and economies of scale in manufacture. There is already over 2.5GW generated by PVs worldwide, led by Japan where PV partly serves 160,000 homes. Germany, Israel, Spain, Portugal – and the US and Australia – are also investing in commercial-scale PV. Spain will bring 354MW more online within a year. Solar PV technology is solid-state (durable with no intrinsic moving parts) and, once installed, produces “free” electricity while the sun shines. It is ideal, for instance, when integrated into a larger grid as it performs at peak at precisely the time air-conditioning demand in hot sunny weather puts grid-crashing loads on the system. PV is likely to develop as both commercial-scale generators and as an energy augmentation measure at a household level. Almost certainly the “zero-energy house” idea will gather increasing interest and will prompt developments such as optional roof cladding sections integrating PV cells; rather than an additional structure covering an existing roof, the PV panel will be the roof itself which will reduce the nett cost. Isolated domestic PV is problematic  because of the cost of storage in some type of accumulator such as lead acid battery banks adds appreciably to cost, complexity, footprint, and maintenance. With the appropriate grid operating framework, any domestic PV installation with the right black boxes can sell energy to the grid when it is not needed and draw from the grid when needed. The grid works like a virtual accumulator. Solar-thermal is a related clean, green approach which uses focussed solar energy to drive conventional steam turbine power generation. Climate, capital cost, demand patterns and other issues determine whether solar-PV or solar-thermal is indicated in any particular case. A primitive yet highly effective use of solar heating is solar water heating which has been in use over several decades and continues to improve in efficiency. It is one of the most elegant of energy subsystems; water is heated directly by the sun with no intermediate processes, avoiding the very wasteful use of electricity to heat water.
All of these technologies have an optimum context. They are not a list from which one technology will eventually emerge as triumphant – all of these are part of the answer. The fact that the answer is complex – rather than simplistic – is one of the major indicators that will be needed in energy infrastructures. DoE calculates current consumption from renewable energy sources in the US at around 6.1 quads, around 6% of total consumption, but along with the contributions of hydropower (45%), waste (9%), and wind and “other” (15%), is listed a 31% contribution from wood. In most contexts, wood is not regarded a “renewable” fuel source. There will be many debates over what “renewable” should mean in coming years which is why “sustainable” predisposes a better perspective taking account of all inputs and all outputs.

Since commissioning of the first commercial nuclear power station at Calder Hall (Sellafield, UK) in August 1956, nuclear (fission) power has had mixed fortunes and a mixed press. The “nuclear debate” has been given new life now because nuclear electricity generation offers savings in GHG emissions over coal-burning and other combustion power stations and some argue that nuclear is a valid clean, green alternative – it emits nothing (with luck) and waste can be safely handled using synroc storage technology (created in 1978 in Australia). Others argue it is the least green alternative conceivable because of radiation risks before, during and after use, and vulnerability to terrorist attack. The unique property that some nuclear power technologies can be produce weapons-grade materials puts nuclear in a separate category. Current dependence on nuclear varies significantly among countries — France (79%), Germany (28%), Japan (28%), UK (20%), US (20%). Some countries such as Sweden are actively downscaling their dependence on nuclear generation, but during 2006 several countries announced their intention to implement or expand nuclear power – Indonesia, Egypt, Belarus, Argentina, Nigeria, Iran. There is now an array of “fourth generation” nuclear fission reactor  designs addressing safety and cost issues, including the Pebble Bed Modular Reactor (PBMR – a South African initiative), the Gas-Turbine Modular Helium reactor (GT-MH – a Russian initiative partly aimed at consuming decommissioned weapons plutonium) and the International Reactor Innovative and Secure project (IRIS – a multi-nation consortium formed by Westinghouse). Also, in September 2006, DoE granted $8M for research into engineering “pre-conceptual design”, a full rethink of future nuclear plant design. Nuclear has a continued attraction as it offers small, self-contained power generation units that can be brought online and offline relatively quickly, ideal for cycling to meet daily peaks. Although safe nuclear-generated electricity may be more expensive than coal-fired stations, this ability to support peak demand – obviating the need to build more coal-fired capacity – is still attractive.
Nuclear Fusion
The ITER project (International Thermonuclear Experimental Reactor) comprising the EU’s EURATOM, Japan, China, India, South Korea, Russia, USA aims to demonstrate the scientific and technical feasibility of fusion power at the ITER device in Cadarache [France]. Fusion, if feasible in this application (a controlled hydrogen bomb), will provide benign and abundant electricity on a transcontinental scale. Nuclear fusion must be confused in no way with the fission reactors which have been in use since 1956.
Greener Portable Fuels
Oils Ain’t Oils
“Oil” comes in many different forms and this accounts for the frequent contradictions in forecast of reserves. “Light sweet crude”, low sulfur readily-refined oil has been the benchmark and most desired resource since the inception of the petroleum industry. This was the first class of oil to be exploited and it is now in shorter supply or has been exhausted in some places. The aggregate quality of crude oil is dropping. This coincides with the gradual tightening over decades in emission standards – of lead, sulphur, mercury – and both factors have put increasing obligations (and costs) on refiners Average sulphur content (the “sweet-sour” parameter) has increased from 0.9% to 1.4% over the last 20 years. Imported crudes are becoming heavier and more corrosive. The anecdotal shortage of refining capacity in the US is due to this convergence of tighter output specification (often varying by state and season) and declining feedstock quality. Adaptation often requires capital-intensive upgrade, replacement or addition to refinery plant.
Synthetic Crude Oil (Syncrude)
Generous estimates of petroleum reserves still available generally include resources such as oil sands (bitumens), shale oil, and extra heavy crude. Much of Canada’s reserves are in the form of oil sands; Venezuela’s estimated 1.36 trillion barrels petroleum deposits are largely Orinoco extra heavy crude, a high-sulphur oil. As crude oil prices rise, known technologies will be applied to produce syncrude (synthetic crude oil) and traditional petroleum end-products from these resources. If crude oil prices remain above around $30 per barrel bitumens (oil sands) and extra-heavy crude will be economic to refine. The viability of shale oil is less certain. Shale oil is largely kerogen, a “young” form of crude oil. It can be burned directly as a solid fuel in place of coal or can be processed into syncrude at the rate of about of 25 gallons (0.6 barrel) of syncrude per tonne of oil shale. There is an estimated 2.9 trillion barrels in syncrude in known shale oil deposits, about 750 billion barrels in the US – equivalent of about 100 years of current demand. Where’s the catch? The processing cost of shale oil require a crude oil price of around $70 to $95 per barrel to be competitive. Also, a shale oil industry has apocalyptic environmental impacts. For each 1 million barrel per day of syncrude production, mining and remediation of 500 million tons of rock is needed each year, and 3 million barrels of water are required each day.
Non-crude Portable Fuels
Coal-to-Liquids (CTL) is a proven technology largely used in the US but is competitive only when  crude oil is above about $40 per barrel and the price for suitable quality coal is modest (about $1 to $2 per MBTU). The process is extremely dirty – there are challenges of waste disposal, water supply, and waste water disposal or recycling. CTL activity is sited in coal regions in the US mid-West and DoE forecasts the process will continue to be used, producing 1M to 2M barrel per day in 2030. Gas-to-Liquids (GTL) technology is more complex than oil refining; it converts natural gas into a range of petroleum fuels. The process is viable when the crude oil price is over about $25 per barrel and natural gas is in the range of $0.50 to $1.00 per MBTU.
Biomass-to-Liquids (BTL) originates from renewable sources, including wood waste, straw and agricultural waste, garbage, and sewage sludge. BTL fuels are several times more expensive to produce than gasoline or diesel with wholesale costs of around $3.35 per gallon now (a crude oil equivalent price of $80-$90 per barrel), but this is expected to drop to around $2.40 per gallon by 2020. There is no commercial BTL in the US but DOE commissioned some investigation from Bechtel in 1998. The world’s first commercial BTL plant, with a capacity of 4,000 barrels per day. is scheduled to come on line in Germany around 2008, with others to follow. BTL front-end technology is new and evolving and has parallels with cellulose ethanol process in its use of sophisticated enzymatic technologies. BTL in the short-term is limited to use as fuel extenders rather than primary fuels. In the long-term, in the absence of a major energy breakthrough such as fusion power, BTL may become a mainstream source of portable fuels.
Renewable Portable Fuels (Biofuels)
Biofuels are seen as a certain hope on the energy horizon but partisan positions often put an overly optimistic or overly pessimistic view. In all cases, projected costs should take account of the energy used in the fuel-making process, as well as any catalysts, other chemicals, and labor. Making fuels of the future from straw and similar materials has a labor-intensive component absent from the petroleum industry and, with agriculture as the main source, only solid planning will ensure a year-round supply of raw materials. Those processes restricted to using “waste” are noble causes but will have a tough time ensuring continuity of materials supply in a local area, and those which use agricultural crops directly (sugar cane, corn) are competing with food supply for land use and may produce unintended social consequences.
Ethanol — Ethanol (ethyl alcohol, an intoxicant) is currently the most widely used biofuel. It is produced from plant sugars — sugar beets in Europe, sugar cane in Brazil, and corn [wheat] in the US., and cassava experimentally in China. Production costs are generally low – around $0.75 per gallon in Brazil – but supply can be disrupted by drought or any adverse affect on the source crops. US Department of Agriculture expects corn-based ethanol annual production to soon exceed 7 billion gallons per year (=167M 42-gal barrels) and forecasts 60 billion gallons per year by 2030, almost 4M barrels per day. Ethanol production uses only a small part of the plant; the residue which can not by recycled as a soil conditioner, an animal food or as a building material is an addition to the world’s pile of agricultural “waste”. With difficulty, ethanol can also be produced from this cellulosic plant waste. This a more complex (and expensive) process but does not detract from food supply in the way the common process does, and uses materials presently regarded as waste. DuPont has invested in a commercial-scale cellulosic ethanol plant suggesting there is some long-term business return in that industry. The Departments of Agriculture and Energy have recently awarded a further $17.5 million (a tiny amount) in grants for research into biomass research, and development and demonstration of commercially viable processes for converting agricultural waste into ethanol. Given the biochemistry involved in this, breakthroughs (and windfall profits) are certainly out there to be discovered, probably in the form of the right enzyme and heat-treatment processes. Ethanol can already be readily blended into gasoline up to 10% and there is pressure on manufacturers to produce engines that can use blends of up to 85% ethanol.
Biodiesel — “Biodiesel” is one of the most-used terms in relation to current rethinking of energy sources. Biodiesel can be produced from a wide range of “sustainable sources” — vegetable oils and animal fats;  rapeseed and sunflower in Europe, soy oil in the US, and soy or palm oil in Asia. There have also been studies of this use for coconut oil. The oil feedstock is put through a well-established catalytic process of esterification with an alcohol (methanol or ethanol) to produce methyl or ethyl esters, and glycerin and fatty acids as by-products. The by-products have some value but less than the esterification cost of around $200 per tonne. Biodiesel has been in reliable use for over a century – mainly in stationery large-plant applications and during times of diesel shortage – but it is a stronger solvent than conventional diesel and can destroy fuel lines and other components not designed for it. The oils used all have a long-standing value as human or animal food. This and the cost of processing make biodiesel an expensive alternative to petroleum-based diesel oil. Although methyl esters have long been used as a component in soaps and detergents, it is only price competitive to diesel oil when oil prices are high. But the “renewable” nature of biodiesel rather than price has been a reason for interest. Governments may legislate use of some blend using biodiesel for import replacement reasons or green-motivated consumers may create increasing demand. Vehicle engines are now designed with the solvent properties of biodiesel in mind and to handle problems with quality variation and clogging that can cause damage to older engines. Typically a 20% biodiesel blend is the maximum recommended but some manufacturers now allow up to 100% biodiesel. Popular anecdotes that any vegetable oil will work in a diesel engine – such as filtered oil from deep fryers – is true to the extent that a wide range of substances will “burn” in the compression-ignition diesel but unprocessed oil wills eventually damage the engine.
Gas Fuels
Fossil gas fuels yield less GHG emissions (mainly CO2), hydrocarbons, nitrous oxides, particulates, and sulphur. Liquefied Petroleum Gas (LPG; “autogas”, “bottled gas”) is best compatible with gasoline (spark ignition) engines, with about 75% of the energy density of gasoline. It is generally propane (C3H8) and/or butane (C4H10), and other hydrocarbons (depending on source) and can be liquefied at normal temperatures. In contrast Liquefied Natural Gas (LNG) is mainly methane (CH4) which is best suited as a diesel substitute, but has an energy density of only about 60% of diesel. Where LPG can be compressed at normal temperature, LNG must be compressed (and stored) at around minus160°C and 8 bar pressure, a costly requirement and one limiting its use to heavy applications. The liquefaction process removes almost all impurities, producing almost 100% methane. The ratio of hydrogen to carbon in a hydrocarbon is a measure of how much CO2 will be produced; the higher the H:C ratio the better – hence methane (CH4) is a cleaner fuel than propane (C3H8) when fully combusted.
Some energy initiatives such as the use of landfill waste as an energy source have double benefits. Methane (“marsh gas”) is emitted by all rotting organic waste. It is a major GHG and landfills are the largest source of US methane emissions. Capturing this gas displaces the use of other fuels and prevents the methane joining the GHG load. The City of Memphis has operated a landfill gas project since September of 2004, displacing the use of more than 67M gallons of gasoline in its first two years of operation, according to the EPA.
Natural gas hydrates (NGH) are a yet-untapped source of gaseous hydrocarbons. NHG is generally methane trapped in sponge-like structures of watery ice. The US Geological Survey estimates there is 320,000 trillion ft3 of NGH in deep water offshore the US coast and around 600 trillion ft3 in Alaska’s North Slope. This NHG potential dwarfs US natural gas annual production of around 20 trillion ft3, and reserves of around 200 trillion ft3. Commercial exploitation of NGH has not been attempted and there is no pressure at present on the Alaska reserves while large natural gas deposits remain at Prudhoe Bay and elsewhere. Interest is likely to continue in the offshore deposits but all recovery methods presently envisaged (heating and/or pumping water into the deposit) are energy-intensive or problematic.
There has been a move to run vehicles on LPG in many countries because it is cheaper or has been made cheaper by government incentive towards slightly greener fuel. In the pattern of world energy usage it must be noted that LPG plays a crucial part in the lives of billions of people in the developing world as  the ultimate in portable energy used for cooking, heating, refrigeration, and lighting. Coupled with modern small turbines as generators and water pumps, LPG is a strategic commodity on a global scale.
Greater Efficiency
Greener Buildings
With 20% of electricity used for heating and cooling and 16% for lighting, significant improvement in efficiencies in just these two areas would have impact of many GWh across the country. Work in solid-state lighting (SSL) already offers possible 50% savings in energy costs for lighting and the impact of insulation and glazing on heating-cooling costs are already well known, but DOE’s Zero Energy Homes (ZEH) program is attempting a “whole house” approach in systematic achievement of energy savings. Importantly, here as across the whole spectrum of energy issues, there is no “magic bullet”, no single technology that will alone save the day. Already, ZEH prototypes have shown that an energy-efficient building shell, efficient appliances, and the appropriate mix of solar water heating and photo-voltaic (PV) can produce a dwelling with near zero net energy purchases.
Lighting (domestic and commercial) consumes around 16% of US electricity and is a good target for improved efficiencies that will have widespread impact with noticeable effect on the energy bottom line. Solid-state lighting (SSL) – using light-emitting diode (LED), organic LED (OLED), polymer (PLED) technologies – offers promise of over 50% reduction in power consumption for equivalent light output. SSL promises efficacies of 150 to 200 lumens per watt, twice the efficacy of fluorescent lighting and 10 times the efficacy of incandescent lighting (the common Edison “globe”). Also, SSL units have typical lifetimes of 100,000 hours, the light is produced without heat and units can be incorporated architecturally in ways not possible with conventional lighting.
The AC/DC Problem
Electricity is electron flow — direct current (DC) – and all early work in electricity such as Edison’s work with electric illumination was concerned with these simple flows. But direct current does not travel well over significant distances and it was soon discovered that alternating current (AC), particularly in high voltages, does travel without equivalent losses. So electricity is routinely distributed from power stations as high voltage AC and converted using transformers down to domestic voltages, between 110V and 250V in various parts of the world. But scores of electronic devices in every office and home use low voltage DC, which is why millions of little black transformers now litter the power outlets of the world. Some significant energy could be saved if buildings had a reticulated DC circuit. A standard may arise which pipes DC (perhaps 18V or 24V) from a single efficient large transformer in each building.
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Greener Transport
As vehicles account for 40% of US energy use mostly drawn from imported crude oil, any improvement in vehicle efficiency has a direct effect on the US bottom line. Much has been done by mandate to clean up vehicle emissions in the last few decades but little impact has been made on absolute fuel use. Vehicle innovation take two forms – incremental improvement in present designs, and radical rethinking of power-plant  (motor) and power-train (transmission) design. Over the last 20 years, motor vehicles have increased slightly in weight, have increased about 80% in power, and have improved fuel-consumption by about 20% to a typical 29 miles per gallon. There will be continuing incremental innovation in lightweight materials, aerodynamics, friction reduction, and low rolling-resistance tires. These improvements are marginal but they are independent of type of power-plant. Some innovation of conventional power-plant and power-train design are relatively low-tech and have been satisfactorily demonstrated in buses and heavy vehicles. These include dynamic energy transfer to flywheels or to hydraulic pressure reservoirs – braking energy is transferred to the storage system and taken back again to assist with starting off, resulting in up to 50% in fuel economy.
The greatest single radical change to vehicle thinking is a range of electric-powered designs. The electric motor is a highly desirable power plant – it has a low-parts count, is intrinsically efficient, is compact, low-maintenance, and gives the highest torque at greatest load (when starting). Compared to the properties of the electric motor, the internal combustion ignition engine is one of the greatest mistakes in history. The efficiencies of electric rail and light rail (streetcars, trams) is legendary and has never been bettered. The first generation electric automobiles had almost 100 years of innovation, from the 1830s into the 1920s, when Henry Ford’s mass production, and the availability of West Texas crude, killed them. Electric vehicles were still hand-made and were marketed to the well-to-do for town use; Ford’s vehicles were one-third the price and could travel the highways appearing all over the US. Then as now, the energy efficiency of the electric motor was no match for the challenge of providing a portable high-endurance source of electricity. The challenge is two-fold – the cost, weight, and design-life of the electric source, and the vehicle range before recharge. Three answers have emerged – the all-electric vehicle with the cell technology available ideally suited to urban travel, the hybrid gasoline-electric vehicle (first implemented in 1916) that charges its battery while under gasoline power, and the fuel-cell that provides continuous electricity fuelled typically from a tank of hydrogen fuel. The fuel-cell is not a battery of electric cells; it is a catalytic electrochemical device that produces electricity while fuel is provided. All else being equal, the hydrogen fuel-cell electric vehicle – often called the hydrogen car — has all the qualities of the vehicle of the future, and market penetration will certainly grow as fuel-cell costs drop and hydrogen filling stations spread. The first hydrogen filling station in the US was opened by BP in Michigan in October 2006; it manufacturers hydrogen on the premises using mains energy. DoE forecasts that the new vehicle sale of hybrids will grow from 0.5% now to around 9% by 2030, but sales of all-electric vehicles will continue to be almost non-existent at around 0.1% [sic] by 2030. Substantial decreases in the cost of electric vehicles may change those figures dramatically.
The strategic plan of the US Climate Change Technology Program (CCTP) recognizes that transition away from GHG-emitting (and uncertain) fossil fuels to renewables will require “continued improvements in cost and performance of renewable technologies”, which is obvious but, most significantly for real progress, the plan calls for “shifts in the energy infrastructure to allow a more diverse mix of technologies to be delivered efficiently to consumers in forms they can readily use.” This means two things – energy infrastructures must link to “a portfolio of renewable energy technologies” in situ, and – most radically – the grid must fully accommodate two-way energy flows to and from local areas and individual consumers. Energy corporations must not now be in the business of selling electricity (or gas) anymore; they now must sell connectedness to a dynamic and smart grid that is evolving every year (or every day) into a greener network of resources. Reticulation itself is the new industry.
It is the mix of a “portfolio” of new energy technologies that brings a new order of energy security. The distributed nature of DARPA’s internet is the key to its ruggedness and distributed generation is the only possible answer for electricity grids of the future. Also, the distributed generation concept opens an  entirely obvious new possibility in world development. For instance, micro-turbines fed on biomass gases (or reciprocating engines fed on cow dung) could bring electricity to clusters of Indian villages now, rather than waiting for massive investment in huge central coal-fired power stations and high-voltage distributors.
In its simplest forms, local generation of energy is not new – elegantly simple solar hot-water technology has saved millions of GWh during its decades of history; solar powered remote telephone exchanges and satellite uplinks has also for decades brought communication to remote regions throughout the world.
Distributed Generation
One raft of clean, green solutions for distributed energy come from unexpected sources – the jet engine, and an engine design dating from 1816. The laws of physics allow the turbine (“jet”) engine to scale very well from the very large to the very small, which is not possible with the internal combustion (gasoline or diesel) engine; hence, micro-turbines run from portable or fixed gas supply can generate electricity with high efficiency anywhere anytime. The Stirling external-combustion reciprocating engine is the Beta tape of the engine world. The whims of investment rather than technological supremacy allowed the gasoline engine to kill off not only the electric vehicle in the 1920s but proven mature technologies such as the reciprocating engine that is highly efficient, has few moving parts, and is open to a wide range of fuels.
Large scale gas turbines in commercial power generation waste around two-thirds of energy input through heat that is dissipated into the atmosphere. Cogeneration – that harnesses and delivers this heat as a valued service — is an approach that more than doubles energy efficiency and halves GHG emissions. Some large institutions now use cogeneration to provide off-grid electricity and heating (or refrigeration). Large commercial power plants are generally distant from populations; cogeneration applications based on small turbines can be installed in a matter of days in the center of population centers where the electricity and heating/cooling services are used. Micro-turbines – with or without cogeneration – are quiet, have a higher power density (power to weight) than piston engines, extremely low emissions and very few moving parts (sometimes just one). Some are designed to be air-cooled and can operate without lubricants or coolants. They can use a range of fuels — propane, diesel, kerosene, methane, or other biogases from landfills and sewage treatment plants. The transportable turbine generator can be brought to the source of the biogas and latched into the grid rather than needing the biogas to be somehow moved to a power plant. This cavalier fashion in which generators can be attached (and unattached) to the grid firstly depends on a regulatory framework that provides for that; there are no technical obstacles – modern power switching “black box” technology is highly sophisticated and inexpensive.
Dumb Grids and Smart Networks
In just 13 minutes the power grid of the 80,000-square-mile Canada-US Eastern Interconnection area was toast.  – Steve Silberman, “The Energy Web”
The electricity distribution network – heavy-duty copper cable terminating in every home and office in the developed world – offers a high-technology convergence that is yet to get the attention it warrants. Broadband Over Power Lines (BPL) has been demonstrated for some years in places such as Australia and in April 2006 a regulatory framework was approved in California. BPL exploits very basic physics. For many decades, consumers have been able to opt to have electric water heating turned off during peak demand for a lower tariff. The signal switching heating circuits on and off is the crudest and earliest  application using signaling over power lines. BPL at speeds of 12Mbps have already been commissioned and the theoretical maximum bandwidth for each consumer is many times higher. BPL will allow remote customers beyond ADSL telephone service or cable to have broadband services. In areas already serviced, BPL will provide a “third pipe” ensuring even keener competition for broadband services.
More importantly, BPL enables smart grid technologies that have been the subject a very detailed theoretical development. A smart-grid would allow domestic devices to talk back to the power grid; the consumer could set simple equipment, probably from their existing PC, to negotiate prices and qualities of electricity supply. Doubtless a deluge of BPL interfaces and software will appear once penetration reaches a critical point and will give the term “smart building” a real meaning. A new activity, hobby, obsession of “energy tuning” will emerge that will not only switch electrical devices but will decide which should be adjusted based on the prevailing tariff. If tariffs soar during peak load, BPL-based controllers may switch a device such as an air-conditioner off, or adjust its temperature setting. Conversely if a grid supplier sees demand slipping, they could tout for extra demand from controllers that are allowed to switch suppliers. When critical mass is reached, the presently dumb electricity grid starts to become a smart web-like (or web-based) network. BPL offers obvious price advantages to consumers but it also gives electricity suppliers the opportunity to smooth peaks and troughs in demand through real-time price “negotiation”. This would lead to the second generation use of the “smart grid”. Obviously, the consumer does not get just those electrons their chosen supplier sends to them but in aggregate the system does work like that. If enough consumers specify 60% of their requirement must come from green sources, the system will warn household controllers (or simply start switching things off) when the network aggregate demand reaches the level of supply. The market would become “perfect”.
Another issue concerns quality. For crude electric uses such as heating and lighting, the quality of the supply is secondary to continuity – dim lights are better than no lights – but there are an increasing range of manufacturing processes, and home-office requirements that are greatly inconvenienced by as few as one or two blackouts or brownouts each year. A growing demand for power conditioning is certain. Whether this will be manifested in sophisticated (and expensive) home-office systems or local / neighborhood systems remains to be seen. What is certain is that vast electric grids stepping high-voltage AC down to districts and then down again within each local area is simply unable to guarantee the level of quality that high-tech equipment needs. Lightning events, storms, or a road accident bringing down lines, all threaten the Goliath hub-and-spokes model of electric grid. Traditionally, electricity suppliers have had a supply goal of 99.9%, (“three-9s”) representing an outage of about nine hours in a year. In India, Iraq, and all of the developing world that goal is a distant dream; in the middle of Manhattan, or Tokyo, nine hours over two or three incidents a year is no longer tolerable. More importantly the quality of this supply is below specification for far less than 99.9% of the time. New goals in the electricity industry – and the high-tech equipment lobby – speak of “nine-9s” (99.9999999%) as the new reliability and quality standard. For practical purposes this is impossible to meet without a systematic decentralization of the grid. To achieve the next generation, electricity sub-stations and transformer points throughout the grid must be able to disentangle themselves from a grid crisis and continue to serve local areas with acceptable quality for a practical period of time. All of these possibilities need just one more “black box” in each building’s meter box, where the grid meets the consumer. This would be the intelligent junction for any or all of the following:
•  Tail-end from any local photovoltaics, wind power (DC probably 12V);
•  tail-end from any local mains voltage generation;
•  head end of building mains power circuits;
•  head end for building DC circuit/s;
•  head end for vehicle charging circuit;
•  tail-end from the electricity grid (the “supply”).
But, above all, policy-makers must create regulatory framework that permits the nation’s grids to join the digital age and mandates standards and installation safety.
Just as “climate change” in a few years has moved from an assertion of the lunatic fringe to scientific fact, just so the realization that there is some-thing very wrong with public energy policy will soon enter common discourse. Much data about the relative virtues of various energy initiatives is misleading (by accident or intent) because it does not take into account all the costs (cradle-to-grave) of each techn-ology. Now that water security is more precarious than even energy security, technologies that consume or render water unusable should be seen as high-cost. Grain ethanol technology – the shining star of the moment – is certain to come to tears at some stage as it competes direct-ly with the food supply for land. Broadband Over Power Lines (BPL) is within reach now and awaits only sound policy frameworks. The opportunity to provide basic broadband services over an existing link will attract third parties to invest in the line and head-end infrastructure which will achieve most that is required for an intelligent two-way decentral-ized (internet-like) energ.
Allah has been most merciful with distribution of oil reserves, to Arab nations and to non-Arab Muslim nations such as Iran. It seems it will be ultimately a political imperative rather than green consciousness that will put a brake on crude oil usage. Crude oil, the source of a vast array of unique plastics, is a resource to valuable to burn while there are alternatives. Fifty years ago, rail supporters said policy-makers would rue the day they neglected rail in favor of road transport – that day may be here now. Energy prices for portable fuels are certain to cause even more pain to road transport as rail lines sit growing weeds. In the mid-term, critical mass may arrive in the fuel cell market and lead-acid batteries and many of their modern counterparts can be consigned to recycling centers along with the internal combustion engine. With the right regulatory framework, and regime for safe, authorized connection to the grid, the smart grid can get started. Architects in droves will join their cutting edge colleagues who now design buildings for efficiency (or even self-sufficiency). Cities in windy areas will have tasteful wind generators; sunlit cities will have integrated photovoltaic roofs. Home energy enthusiasts in their millions will drive rapid innovation in gadgets, gizmos all aimed at “energy tuning”.
Hydrogen probably is the terminal point for all energy endeavors in search of a clean, green, portable energy source but the takeup rate will depend on the numbers of early-adopters willing to pay a premium while the price is still high. Within a few years nuclear fusion may appear, deus ex machina, to solve the world’s energy problems forever. Or not. In all events, if China, India, and the US continue as now, the next major wars may be not over ideology, or water, but energy.
After some experimentation, the “energyplex” or “eco-industry park” concept will mature –suites of co-located industries will use “waste” energy (often heat) and “waste” output material of one operation will be an input for another; process water will be recycled. This will not motivated by clean, green sentiments but by cost savings.
Energy reticulation itself is the new industry.

2007 Policy #12 Water Forecast

PDF:  P12 Water

POLICY:  Water

Earth, the watery planet; has dangerously low levels of fresh water. Unlike climate change, where many aspects of the issue are still under debate, water scarcity is a certainty and its consequences are a certainty. Many of the consequences, even the most dire, are not decades hence but will appear two or three years hence. Futurists have admitted they were wrong in 2000 … some events they forecast for 2025 have already happened in 2006.

Water – The Reality

The green revolution of the 1970s was a success, but there were victims and consequences. The 1972 Limits to Growth of the Club of Rome formalized forecasting at a global level; its multi-factorial computer projections demonstrated world population growth rates were very close to crunch time. Resources – the focus then was mainly oil — would simply not sustain the growth rates. Many of the factors such as “death due to overcrowding” extrapolated with Malthusian objectivity from rat populations, were self-explanatory, and sufficiently colorful to grab the attention of the world. Such forecasts probably stiffened China’s resolve to implement a “one child” policy which had marked effects on its population growth. During the 20th century the world’s population tripled but with widespread introduction of “modern” agricultural techniques including intensive irrigation the world’s grain harvest also tripled during the later half of the century. That revolution has come at immense cost and with an entirely false sense of security. All of the world’s great rivers and fresh water bodies have now been severely comprised or polluted and withdrawals made from underground water reserves during decades will take thousands of years to replenish. The “crunch” was merely postponed for a generation.

Most of Earth’s water is sea water, and most of the fraction that is fresh water is locked up in ice. Less than 0.1% of Earth’s water is available for human use. The history of human settlement reflects the nexus with water – Indus Valley civilization, Nile civilization, Fertile Crescent. Civilizations not only rose but also fell by water; ruins of cities throughout the world now in the middle of dusty nowhere once stood near water-courses that moved or dried up. History is replete with attempts to control water, to dam, store, and move it. The Marib high civilization in 6th century BC Yemen lasted as long as the Marib Dam; Rome lasted as long as its lead-lined aqueducts.

Around 7,450 billion cubic metre per year(Gm3/yr) of water is used for all purposes around the world; a simple average of 1,240 cubic metre per head per year (m3/cap/yr). India is the greatest user of water in absolute terms, but has a below average use per capita. The highest use per head is in the US with 2,480 m3/cap/yr, twice the global average. The Chinese use 700 m3/yr per capita, less than one-third the US usage. At least 70% to 85% of all water around the world is used in agriculture, 5% to 10% is used in industrial processes and only around 5% is used by households, and only a small part of that is drinking water; most is used in cooking, cleaning, sanitation, and bathing. Thus, water scarcity is a vague term. It may mean insufficient water for agriculture or some industries or insufficient supply of water to people in villages or cities. Whether the water is drinkable or not is a different dimension to scarcity. Of the 20% of people who lack access to safe drinking water, many of these are the 50% of the world’s population who lack satisfactory sanitation. Water scarcity can not be overcome by any amount of hygiene or filtration.

Virtual Reality

Most water now, as ever, is used by agriculture not by people in cities; and in exporting and importing commodities, water – virtual water — is moved around the world locked up in the goods that consume it in their production. Virtual water is now a mature concept and no serious discussion of water is possible without it. One potato requires 25 litre of water to produce; one glass of milk requires 200 litre. One sheet of office paper requires 10 litre; exporting 1,000 sheets of paper is to export of 10,000 litre of water. Common food grain requires 1,000 times their own weight in water to produce; one tonne of grain is 1,000 tonne of virtual water. But even more water-greedy is cotton; one cotton T-shirt has a virtual water component of 4,100 litre. Clearly, water is not just an incidental detail of agricultural production – it is integral to the strategic equation of world food supply, and the supply of essential goods. Exporters of grain and other goods are exporting water. Similarly, a country imports those goods it does not have sufficient water to produce; it in effect is importing water. Nature handles the miracle of growing the grain; supplying sufficient water to where it is needed is the man-made miracle. World trade is water trade; grain futures is water futures. For these reasons, systemic water shortages in a large world player such as China, India, or the US will be transmitted around the world.

Water Management

The where and when of water is critical. In many areas, drought will be broken by monsoon rains or hurricanes causing catastrophic floods – then the yearly cycle of drought and flood will repeat. Even cities and regions with severe water scarcity will drain storm rains away as a nuisance rather than collect it even for agricultural purposes. Most cities are built for drought, or for flood, rather than a sensible synthesis of the two. Waste and loss are also major elements of the water equation. Losses through evaporation from shallow standing reserves, from canals, leaks from pipes in cities, and waste from agricultural irrigation is a significant component of water use. In New Delhi and Mexico City up to 40% of reticulated urban water is lost due to leaking pipes. Pollution, another negative impact on water resources, often costs nothing – it requires only a moonless night and/or the price of an official’s blind eye. But the cost of pollution is borne by the whole community and, if cleanup is possible, the cost is invariably far greater than the cost of orderly sequestration or recycling of dangerous wastes in a safe manner. Education, policing and crippling penalties are the only solution for willful or careless destruction or degradation of public water. Systematic pollution such as pesticide and nitrogen-rich fertilizer runoff, and untreated sewage outfalls into estuaries and oceans is causing loss of ocean habitat and a decline in fish near large population centers. The oceans are large but they are a sensitive interconnected earth sub-system needing a similarly-interconnected overview as land water systems.

A callous disregard for the future is also found in the use of groundwater reserves (aquifers). Aquifers that take centuries or millennia to recharge have been drained in decades in the US, China and elsewhere. Use of aquifers is often a political expedient or commercial windfall. Rather than solve water problems with capital-intensive storage and diversion of rainwater, government sees groundwater as a quick fix. But it is a temporary and disastrous fix. Fossil aquifers are, like oil, not renewable; porous rock aquifers do replenish but in exponentially-longer timeframes than they are being depleted. Aquifers are being drilled deeper and deeper with lessened flows each year. A day will come – tomorrow, or the day after – when the aquifer will give out and government will be left with industries, towns, whole regions economically dead. Equally catastrophic is the slow death of the region interconnected with the aquifer, often ecologically-rich wetlands or marshes. In coastal areas, salt seawater can flow into the aquifer and spoil the entire reserve. As aquifers are sucked dry there will also often be land subsidence, as seen in Bangkok, Mexico City and Venice. Similarly, badly-planned dams or overuse of rivers has lead to silted unhealthy waterways. Vast bodies of standing fresh water such as the Aral Sea or the Great Lakes have been starved of flesh inflows and/or have been severely polluted.

Water-borne disease

In some parts of the world, comprehensive water policy must integrate with the management of water-borne and water-related diseases. Diarrheal diseases afflict one billion people each year and lead to the deaths of just over three million; malaria affects 400 million and kills 1.5 million. Over 90 million each year are infected by Onchocerciasis (“river blindness”), Bancroftian Filariasis (“elephantiasis”), or Dengue Fever, all related to mosquitoes or river-dwelling insects.

The sanitation-water nexus

The UNICEF report Progress for Children: A Report Card on Water and Sanitation (September 2006) is almost all good news. Since 1990, 1,200 million more people have gained access to clean drinking water; 83% of the world’s population now has access and the Millennium Development Goal of 89% by 2015 is now achievable. Latin America, the Caribbean and South Asia are likely to reach targets 10 years early. In most cases, the greatest danger to potable water supply is human settlement itself. In the industrialized world, water pollutants are most likely to be a toxic cocktail of persistent industrial chemicals, but in the developing world pollutants are most commonly sanitary waste. Hence, water supply, sanitation, and basic hygiene are aspects of the same issue. Often, providing safe water simply means improving sanitation arrangements not delivery of a new water source. Half of the world’s population do not have access to satisfactory sanitation facilities.


Desalination using thermal or membrane technologies can recover clean water from sea-water or brackish groundwater. Energy consumption per-unit and the cost of membrane modules in membrane separation plants is decreasing but indicative costs remain high at around $1.50 to $3.00 per 1,000 gallons (≈ $500 /Mlitre), allowing for the original capital cost of $100M or more. Desalination is the mainstay of water supply in Saudi Arabia and Kuwait, where the real cost of energy is nominal, and in Israel where there is no choice but it is also used to augment water supply in the US in locations such as California.

World Water Policy

The first intergovernmental gathering to consider to water issues was Mar del Plata United Nations Conference on Water in 1977. After several more specialist meetings, the World Water Council was founded in 1996 with headquarters in Marseilles. There have now been four meetings of the World Water Forum, the most recent in Mexico City in March 2006 had 24,000 participants. These meetings have the benefit of a global perspective comprising numerous case studies. A common factor that can examined across the world is water stress – a state where use approaches or exceeds sustainable supply. All populated areas of the world, and their grain-growing areas, are experiencing water stress.

China and India are crucially important to more detailed examination of water issues because they are case studies writ large and trends there affect world markets.


Two-thirds of China’s grain production and one-third of its population is in the northern plain but the region has only 20% of China’s water. One of the great rivers bringing water, the Yellow River, is greatly depleted by use further upstream – in 1997 it was dry for 75% of the year. Decreasing supply of river water such as this and over-pumping of shallow aquifers has caused the water table to drop at around 1.5 metre per year. Some farmers are now pumping from the deep (non-replenishable) fossil aquifer at depths of 300 metres (1,000 feet). The region is simply drying out – year by year, desertification is spreading further south. China’s grain production peaked at 392 million tonne in 1998. The 2005 harvest was 358 million tonne. For years, shortfalls were met from a vast command economy reserve but this is now depleted and in 2004 China started to import grain. China’s increasing purchase of grain will – as with oil – affect prices and supply throughout the world.

China’s answer to its water difficulties is a Pharaonic hydrology project that will divert 50 Bm3 of water each year from the Yangtze and Yellow rivers thousands of kilometers northwards in three great canals. But China’s own water planners say three to five times that will be needed in the north by 2030, and much of the increased supply will be absorbed by industry rather than the grain-growing that needs it now. Also, as with all such great schemes there will be downsides such as silting, leaks and other losses, and depletion of once great rivers. Without radical rethinking of water use, China will continue to fight against basic statistics: it has 22% world population but only 8% of world renewable water. This extreme stress is exacerbated by China’s environmental and pollution control policies which to date have been shoddy or non-existent or ignored. In 2004 almost 60% of hundreds of monitoring sites on China’s seven major rivers found the water unfit for human consumption; 400 major cities across China already have serious water shortages.

This serious situation has occurred with China still on the edge of rapid development. It has managed to limit population growth but China is not only growing, it is growing affluent and that invariably means an improvement in diet towards Western levels. Average consumption is still quite modest but as the Chinese diet grows towards Western levels, 40% of today’s world grain harvest would be needed just for China. As grain consumption reaches a record 500 million tonne in 2006, demand for foods such as meat (high virtual water) grows, and domestic grain production falls, China faces a catastrophe brought by its own success. The Chinese people have increasing demand which its water supply will not meet. This will lead to social discontent or to massive and increasing grain imports. China’s leaders admit there will be critical water shortage by 2030 when the population is forecast at 1,600 million but there is every indication it is already critical.


India is already in a more precarious situation than China. The average minimum diet is very close to the level necessary to sustain life. Grain harvests are still increasing but water supply for irrigation is at high stress levels. As elsewhere, farmers have augmented surface water irrigation by pumping groundwater from under their own land. There are no restrictions in India on this use of groundwater but the farmers are depleting everyone’s water not just their own. Village wells must be deeper and deeper each year to supply drinking water. But for India’s 1,100 million there may be lifesaving hidden capacity. India’s water handling infrastructure is so severely inefficient that capital upgrades anywhere in the vast archaic irrigation and reticulation system will find water presently being wasted. Large cities such as New Delhi have water shortages but at least 40% of water brought into New Delhi is lost through leaking pipes. Immense capital intensive projects on water supply are easier said than done in India where World Banks full of capital could be spent in every direction but the situation does afford India some hope of staying just behind the disaster curve.
Drinking water, not just irrigation water, is a severe problem in India. Only about 10% of sewage is treated and both urban and industrial pollutants (and corpses) are commonly dumped directly into waterways.” Which in turn severely contaminates ground water. This is a classic demonstration that sanitation is an inseparable aspect of water supply.

Water Disasters

Many water disasters have already occurred and are indicative of the nature and extent of disasters yet to come. Soviet command economy turned the Aral Sea from the world’s fourth largest body of fresh water into a toxic desert. River diversion to feed insane cotton projects caused the water level to drop 16 metre in 30 years. What water did reach the Aral was heavily polluted with now-outlawed insecticides used to grow cotton. Mexico City drained the Aztec lakes it was built on and deforested the surrounding area. The city is now subsiding due to the rapid loss of groundwater. There is growing water scarcity but when there are deluges flood-water mixed with sewage runs through the city. An estimated 40% of reticulated water is lost through 100 year old leaking pipes. The major Murray-Darling river system in Australia, the driest continent, has been critically damaged by intensive irrigation for agriculture. The water table has risen and forced ground salts to the surface and turned increasing areas of once fertile land into deserts. If all remediation were commenced today, much of the river system would take several decades to recover.

Water wars?

The conditions for future water-wars are developing in several places. Syria and Iraq accuse Turkey of taking too much water from the headwaters of the Tigris and the Euphrates, the same territory the Kurds claim as homeland. One reason for Israel’s reluctance to withdraw from Syrian territory on the Sea of Galilee is that this is now the source of 30% of Israel’s water. Israelis have “Western” patterns of water use, with a per capita consumption four times that of neighboring Palestinians. Egypt has warned Ethiopia and Sudan that it is prepared to resort to war if they continue to extract from the Nile the increasing quantities water they need for their own growing nations. The Ganges, running from India to the sea in Bangladesh is so depleted and polluted that coastal mangroves are dying. Global warming is disrupting the annual freeze and thaw cycle that feeds the river threatening an ever-diminishing flow. Pakistan accuses India of depleting the flow of the Chenab and threatening to deplete it further by building a US$1B dam at Baglihar in disputed Indian-controlled Kashmir. The flow of the Indus has been so reduced that sea water has intruded into coastal estuaries and has harmed 90% of the agricultural land in Sindh. Indian generals say that they do not need a nuclear bomb against Pakistan; a “water bomb” is sufficient.

Water Policy – US

In the early 1990s there were 90,000 federal employees working on water problems within 10 cabinet departments, 2 major agencies, and 34 smaller agencies.

In 1965, Congress established the Water Resources Council under the Water Resources Planning Act, but the Council had liaison powers only and could not formulate or even recommend policy in its own right. In the early 1980s, the GAO reported that the WRC had some “unifying presence” but it was mystified by what it actually did and it was axed by the Reagan administration as a cost-saving. By the 1990s, there were armies of federal employees working across the array of water issues, but they did not talk to each other, or always fight on the same side, and rarely coordinated with even larger numbers of state and local and private sector employees involved with water issues. The Western Governors’ Association in 1989 called for policy coordination at a White House level, but this and other calls has not led to a unified US policy framework for water.

It is only in light of the crises emerging throughout the world (and in the US) now that the wide scope of water-related policy areas is fully understood. All of the policy areas land use planning, river basin management, catchment management, metropolitan utilities maintenance, pollution and environmental management, water quality management have developed within their own silos with as little coordination with other policy areas as possible. If policy oversight exists it is spread so thinly across a range of agencies as to be invisible. Countless projects – federal, state, and local – have been mission specific; build that dam, approve that housing development, upgrade that drainage system, without reference to a coherent whole.

Interest groups are providing the only focus at present around which an integrated policy may coalesce. American Rivers warns “There are some towns that are literally running out of water because they haven’t paid attention to supply and demand”. Smart Growth America says, of Atlanta’s water crisis, “There are no natural boundaries to the city’s growth, so it sprawled in all directions”. Some cities and counties are aware aquifers can only recharge if cities leave as much unpaved surface as possible; most are not.
Numerous issues throughout the US need the attention of an integrated policy. One urgent issue concerns a major part of the US grain-producing region and its use of the Ogallala aquifer which is being depleted at around 12 billion cubic metre each year (Bm3/yr). Already the equivalent (says the BBC) of 18 years total flow of the Colorado River has been extracted from the aquifer. Although porous-rock aquifers gradually recharge from rainwater, much of the Ogallala is a fossil aquifer – a deposit sealed up millions of years ago – and it will not replenish. This type of irrigation – bores extracting water to exactly where it is used – is highly productive. Conversely, as bores are exhausted or must be pushed to greater and greater depths the loss of productivity, and rise in cost of production, will be keenly felt.

There have been some moves towards integrated water policy. The U.S. Army Corps of Engineers established the Institute for Water Resources to provide “forward-looking insights and analyses on emerging national water resources issues”. Also there is federal coordination on some broad-brush issues. In October 2000, Washington announced “a framework for land and resource management focused on watersheds” involving the departments of Agriculture, Defense, Energy, Interior, NOAA, EPA, Army Corps of Engineers, the Tennessee Valley Authority (TVA).

The multi-function, multi-state TVA of the New Deal is a rarity on the US scene and may be a way forward for the type of multi-mode approach that water policy demands. The TVA – its successes, its lessons-learned, the skills it has evolved in brokering competing interests – are just those capabilities needed in a “Federal Water Authority”. Australia, the driest continent with a dire array of water crises established a high-level post of Water Commissioner in the Prime Minister’s Department in late September 2006; better late than never said many. An equivalent US position would be in Department of State (or very senior post in DOD) or the White House.

Water Futures

All of North Africa, the Middle East and Iran have become major grain importers. Increasing urbanization and increasing affluence inevitably lead to demand for reticulated water and a diet more costly in virtual water. Governments have little choice but to let urban populations win in competition with agriculture for water but in consequence agricultural products must be imported. Egypt, with 79 million people, now imports 40% of its grain supply and is competing for top spot with Japan as the largest world importer of wheat. For the first time in 5,000 years the Nile has failed to meet all of Egypt’s needs. Even more precarious is Algeria, with 33 million, that must import over 50% of its grain supply. The imports of North Africa represent another great river like the Nile flowing into the region in the form of the water locked up in imported grain. These examples are unremarkable except in the context of new players such as China or India entering world grain markets. If huge nations like these need an extra 2% or 3% — or annually increasing amounts – from the world grain market, much of the world will be affected. With a year or two of bad harvests, or grain disease or drought in grain producing countries, widespread famine and doubled or tripled grain prices are probabilities not possibilities.

In the 1970s, this was foreseen as a food shortages but what is really at play is water shortage.

A truly critical situation has been averted by some years by draining aquifers, in China, the US and many other places. Like living off a credit card, this tactic is unwise and of limited life. Water levels in aquifers will continue to fall to greater depths, the cost of exploitation will increase and finally, the quality and quantity of water will be unsuitable for the agro-industries that have burgeoned above them. The “water bubble” will burst and along with it the “grain bubble”. This is likely to coincide with huge middle classes in India and China who, like the West, have grown accustomed to a lifestyle built on cheap grain, and “free” water. Two or three Horsemen of Apocalypse seem to be waiting in the wings.

Is there Hope?. In theory, yes; but only if governments convince their populations that water has value related to its cost and scarcity, only if aquifers are treated as non-renewable resources, only if immensely wasteful “green revolution” irrigation systems are replaced throughout the world with more efficient systems. The only way to make this series of miracles happen is to pass on the actual cost of water to its users. Farmers will pay for what they use and much food will cost more. Many years ago, the bean-counters insisted that public libraries, museums and public transport be run on a “user pays” basis; perhaps with the same zeal they can now calculate what billion-dollar agribusinesses should be paying the public purse for the water they use. The only point of a cost basis, and its only virtue, is that it will force or encourage the use of more efficient irrigation such as drip irrigation and reduce waste and losses. In some areas, it will also encourage use of rainwater for household use or (where suitable) for drinking. Effort can impact the water problem — Singapore’s upgraded water system has losses of less than 5%.

Who Owns Water?

In 2000 there was an unseemly spat between the World Bank and Bolivia. Using monetary threats, the World Bank made Bolivia privatize the water supply for Cochabamba. A subsidiary of Bechtel bought the rights to manage the water supply, and almost immediately tripled the water charge to households, and (reportedly) cut off water to the poor who could not pay. This led to protests, a general strike, riot police, and at least one death. Four months later, “Bechtel fled to the United States” and sued the Bolivian government for compensation. The activists said Bechtel was making the poor ”lease the rain”; Bechtel said this was the only way Cochabamba would have a reliable, well-maintained, corruption-free water supply. As ever, the real issues are to be found somewhere in the middle.

Reticulated water for urban populations is just one element of the water issue but it involves the majority of the electorate. Mexico City (and Delhi, and many other cities) urgently need a major upgrade of water reticulation to halt wastages up to 40% and make the water safe for drinking but these massive works are capital intensive and some model recovering the cost over, say, 50 years is necessary. With the proviso that the truly poor can always be exempted from any charges, a Bechtel like arrangement seems to be the only way to move forward. The poor certainly do own the rain but do not necessarily own billions of dollars of pipes.


Water is a national security issue. A growing consensus says there is not a water problem, but a water management problem. A manageable national security issue is rare. Action on preventable losses and uneconomic use of water is do-able. Valuing water is contentious but necessary – to value water reflecting its replacement and handling costs. This is not a means of raising revenue from the poor but of determining the true cost of production of common crops and manufactured goods. When true water costs are factored in, some crops or other goods may be clearly uneconomic to produce in some areas. China and Australia have started to take a national overview of water; the US as yet has not.


In much the same way carbon credits have been suggested as a means of calibrating hydrocarbon usage, so the concept of virtual water could be used more widely by planners, and policy-makers in determining resource priorities. With the relative acceptance of environment conservation notions in the last decade, a wider public acceptance that water has a cost is politically possible. Fossil aquifers should be classified as national treasures, and not used to grow crops. Notions of what constitutes “ownership” of water and what that entails will be increasingly up for discussion whatever the traditional view has been.


Unlike the Climate Change debate, there is very little debatable about water issues; very little room for political stances. Raw statistics show that water stress of today is famine or war of tomorrow. But before going to war for a bag of grain or a glass of water, each nation should acquire a comprehensive understanding of its own water position, including all the presently isolated issues of international trade, pollution, land use. In the US, the only multi-mode body of the type necessary to get this overview is the Tennessee Valley Authority. A similar type of “Federal Water Authority” will be necessary, better sooner than later.

Selected References

American City and Country
BBC, Dawn of a thirsty century
BBC, World Water Crisis
California Dept of Water Resources
Earth Institute, Columbia
Institute for Water Resources (U.S. Army Corps of Engineers)
International Water Management Institute
National Drought Mitigation Center [USA]
Pacific Institute
Pacific Institute Figure 18
Texas Water Development Board
World Politics Watch
World Water Council Item 1,
World Water Council Item 2,

2007 Demographic #01 Brazil Forecast

PDF:  D01 Brazil
Brazil is the world’s fifth largest population, the largest land area in South America and the world’s largest Portuguese-speaking nation.  It is one of the largest iron ore producers and exports of this and other minerals are booming, driven by China’s voracious
appetite for all manufacturing inputs. It is also the world’s largest producer of sugar, coffee, beef and a major producer of soy, cotton, cocoa, forest products– all commodities with guaranteed ongoing demand.
Brazil’s experience of democratic government is recent and filled with disappointment. Since Lisbon’s rule ceased in 1808, Brazil progressed through various governments controlled by the landed elite or the military until 1985 when the military returned to civil authority the rule they had nervously appropriated in 1964. In 1989 Fernando Collor de Mello received 53% support in the first direct presidential election since 1960. In 1994 Fernando Henrique Cardoso received 54% and served for two terms. In 2002, Luiz Inacio Lula da Silva (“Lula”), having tried for office four times, received 61% of the vote. Lula is the first elected president in a generation with anything like a comfortable popular vote and polling indicates that Lula will be re-elected for another four-year term in
October 2006 unless something unforeseen happens. If re-elected, the margin of his vote will be an important indicator of the direction the administration will take. If both the Right and the Left polarize the country against him, he will preside over a precarious, inequitable Brazil: if his vote is increased above the 61% he will have a mandate both inside and outside the country to continue moderate-Left reforms.
According to the World Bank, Brazil (along with Venezuela) has the world’s most extreme concentration of land in the hands of a few so only Lula’s diehard enemies see land reforms as apocalyptic. But Lulu has faced increasing pressure from the landless movement, Movimento dos Sem Terra (MST), to make good on his promise to deliver land to over 400,000 families in his first term. Only about a quarter of that goal has been achieved but the government insists that families are being properly settled and given financial and technical support to ensure successful use of their land. [This is in contrast, for instance, to the catastrophic gesture towards land reform in Zimbabwe.]  When Lula’s election seemed likely in 2002, the Brazilian currency hit an all-time low and financial markets panicked at the prospect a one-time shoe-shine boy from the Workers Party (PT) gaining control.  Four years later, Lula is seen as successful above all expectations. Economic fundamentals are stronger now than in 2002 and the “markets” have fewer fears about what a Lula administration might do.  The IMF has applauded Lula’s “well-disciplined macro-economic management” but this has been at the cost of sweeping social reforms at a pace expected by his electorate [IMF says Brazilian economy stabilizes and has potential to grow (#7193)]. This is very similar to the situation in South Africa where the government has also taken great pains to be, and be seen to be, economically responsible in meeting the needs of a massive dispossessed and previously di
senfranchised population. In consequence, some of Lula’s fiercest critics are in the Left that elected him (as is true of the ANC in South Africa). For this reason, all that might disrupt Lula’s re-election in October 2006 is an attack from divided Leftist factions

[Leftist a threat to Brazil president (#8220)]. Some say Lula has been lucky, that world demand for Brazil’s export commodities in the last four years have been instrumental in turning around Brazil’s serious debt position. This is true but demand in just those commodities is certain to be maintained for the next four years and Lula’s critics are also certain to demand commensurate social benefit.
BRAZIL – Key statistics
Population: 188 Million
GDP (PPP): $1.6 Trillion
GDP per capita (PPP): $8,400
Unemployment: 9.8%
Poverty rate: 22% (1998 est.)
Consumer price inflation: 6.9%
Debt – public: 51.6% of GDP [reduced by 2006]
Debt – external: $188B
Military spending: 1.3% 2005 est. unless otherwise shown;
PPP – purchasing power parity-
Collation: OSS.NET from several sources
Brazil is classed as a ‘innovating developing country’ (IDC), along with China, India, South Africa – countries with the metrics of a developing nation but also the capacity to develop quickly. One measure of this is Brazil’s use of its equatorial location in October 2004 to perform it first space launch. But development is messy. In September 2006 Volkswagen forced 11,000 auto workers to take vacation following wage demands and strikes — the growing strength of the currency and rising wages means vehicles can no longer be produced in Brazil at “third world” prices.
Brazil is in a fortunate energy position. It will become a net exporter of oil by the end of 2006 with increased output from the Campos Basin and future reserves recently discovered off the coast of Rio de Janeiro state. As with Iran, oil is in surplus and means hard currency as hydroelectric power provides about 74% of Brazil’s energy needs. Capital projects also strengthen Brazil’s long-term energy security – a gas pipeline project announced in June 2006 will connect the country’s southeast with the northeast reducing dependence on imports from Bolivia and the US. Brazil also has joined Venezuela ’s in regional energy strategies such as joint exploitation ventures between their state oil corporations.
During 2006 there were pitched battles with the First Capital Command criminal gang. This unique level of endemic criminal insurgency is a legacy of a massive impoverished 81%-urban population. These urban areas are an important market for cocaine
from Bolivia, Colombia, Peru and a transshipment point for moving cocaine into Europe. The Tri-Border Area, a dangerous region at the convergence of Argentina-Brazil-Paraguay, is rife with money laundering and trafficking in arms and narcotics. The three stakeholder have recently opened an enforcement intellig ence center in the area.
International Relations
Brazil (like the US ) has refused to recognise the compulsory jurisdiction of the International Court of Justice. Although Brazil has not joined the Non-Aligned Movement, it is friendly to NAM’s aims and frequently sends observers to NAM summits. Brazil is a member of Mercosur (Mercado Común del Sur; Portuguese Mercosul,Mercado Comum do Sul- Southern Common Market) a customs union of Brazil,Argentina, Uruguay, Paraguay, Venezuela, founded in 1991.
US Relations
The US was the first country to recognize Brazil’s independence in 1822 and there have been several two-way state visits in recent years. Superficially US-Brazil relations are cordial but there is an instinctive distrust in Washington for any left-leaning regime in La
tin America which in past decades this led to direct often covert intervention in various nations. Well aware of this, the Lula administration is careful to maintain the blessing of bodies such as the IMF in its social reforms.
Near Term:
Brazil is the centre of gravity in Latin America. Stability or instability there will influence the future to varying degrees of its ten neighbors. Due to bountiful water, exportable commodities and energy security, only the most extreme misgovernance, with or without

external interference could bring Brazil to state failure. The US has long seen itself as the diplomatic leader in the Americas but with Brazil’s emergence as a world entity of the scale of Indonesia, diplomacy in the Americas may need to be rewritten on a more collegial basis.
Crime is a critical problem in Brazil. Fueled by cocaine and other crime monies, criminal gangs are not just a police matter; rather they engage government forces in pitched battles using heavy weapons.  Major criminals are able to continue control of their organizations from prison and the immense amounts of money involved in crime are able to suborn officials at every level.  This is a non-trivial impediment to Brazil’s development as it robs the nation of revenue and diverts government resources.  Only a prolonged military OOW campaign can dislodge the gangs.
t is still early days for social development in Brazil and adjoining Venezuela. There are obvious empathies, but Brazil has been careful to avoid any hint of union of socialist republics – partly because it is unnecessary and partly because it would cause a Congressional conniption in the US . However, synergies throughout Latin America, through vehicles such as Mercosur, seem certain to develop over time into a powerful trading entity similar to the EU or ASEAN  This would be a de facto regional challenger to the US.

2007 Demographic #02 China Forecast

PDF:  D02 China [with Graphics]


China was ruled by a Dragon-Emperor for over 2,000 years. The subsequent sixty years of rule by the Chinese Communist Party has used that as a model for its equally unquestioned centralized dictatorship.

Note: Where possible pinyin standard transliteration has been used. Pinyin was officially adopted in 1979 for spelling Chinese in Roman letters. Variants such as “Peking” and “Mao Tse Tung” will soon disappear entirely.

The Dragon Emperor (221 BC – 1967)

In 221 BC Yi Zheng (of terra cotta warriors fame) founded the Qin dynasty and united many warring fiefdoms into a single entity that continues through to today as the core of modern China. This was not an

Three hundred years before Yi Zheng, Confucius (K’ung-fu-tzu; 551-479 BC) had committed the principles of good governance to writing. Confucius – like his contemporary Lao Tzu – was an archivist, a courtier familiar with the written precedent and able to advise the ruler on traditional wisdom, “ lessons learned” in modern terms. These social systems proved resilient against all impacts – when the Mongols invaded China in the 13th century, they were subsumed into Chinese society, and ruled in the Chinese manner.

Although the Han are the dominant ethnic group, the Manchu were able to supplant the Ming dynasty in 1644, establishing the Qing dynasty centered on Beijing. This was to be last dynasty. Assailed throughout the 19th century by the British and others who forced China to trade at gun-point, by Russian intrigue and by Chinese republicanism, the last emperor P’u Yi (1906-1967) was deposed by the nationalists in 1912, and was “non-ruling emperor” until 1924. The Japanese later attempted to reinstate P’u Yi for their own imperialistic purposes but he was captured by the Russians, handed over to the incoming Chinese Communists and re-educated. The last Dragon Emperor – Lord of Ten Thousand Years – died as an ordinary Chinese citizen in 1967.

The Dictatorship of the Proletariat (1949– )

The emperor was the least of worries for the republican nationalists Sūn Yìxiān (“Sun Yat-sen”) and his protégé Jiǎng Jièshí (“Chiang Kai-shek”). From 1916 into the 1920s, China fragmented into warlordism, shifting alliances between warring regional leaders. The Russians fresh from their own people’s revolution were eager to advise the nationalists and helped establish the Guómíndǎng (“Kuomintang” – Nationalist People’s Party) with the germinal Chinese Communist Party as junior partners. With the death of Sūn Yìxiān in 1925, Jiǎng Jièshí saw it necessary to take full control of the Guómíndǎng and he started to kill his Communist allies. Twenty years of struggle followed, punctuated by a brutal invasion by Japan, ending in 1949 with the Communists under Mao Zedong winning control.  Jiǎng Jièshí fled to Taiwan and declared Taipei the capital of the Republic of China; Mao Zedong declared Beijing the capital of People’s Republic of China (PRC). Taiwan retained the “China” seat on the UN Security Council.

China was exhausted. Generations, perhaps centuries, of failing imperial rule, depredation by the West, genocide by Japan, and twenty years of civil war had done little to improve the lot of an agrarian, feudal population.

The Great Leap Backwards (1958-1966) 

The authority of the Communist Party quickly filled the vacuum of public order throughout the country, with order assured by the massive politically-correct People’s Liberation Army (PLA) still bloodied from years of battle. Within a decade Mao thought he knew better than his Russian advisers and instituted the Great Leap Forward, universal industrialization from the bottom up. Countless “backyard” iron and steel refineries and small factories sprang up throughout much of China. This revolutionary approach may in some form have worked over time – in some ways it did – but in the short-term it was disastrous and China experienced the worst famine in history 1960/1961. The diaster coincided with emerging ideological differences and Russia ceased all technology transfer, withdrawing all advisers by August 1960. Sino-Soviet relations froze.

Most, if not all, saw the need for a new strategy and Liu Shaoqi (State President) and his protégé Deng Xiaoping (Party General Secretary) promulgated practical middle-way policies. Mao (Party Chairman) refused to forsake his Way and in 1966 launched a vast proletarian “ Cultural Revolution” against the “revisionism” of Liu and Deng. The Red Guards – youth with Mao’s authority and a zeal verging on religious mania — attacked party and state official s and organizations at every level to purge China forever of reactionary thought and backwards-going. Few were killed but a generation of intellectuals and the capable were deposed, humiliated, and “re-educated” by ignorant 14-year olds. The widespread anarchy achieved nothing to advance the Chinese people.

By about 1973, the teenagers had exhausted themselves and Deng was appointed in 1975 to the Politburo Standing Committee, Chief of the PLA, and Deputy Premier, a potent triumvirate of posts. But the Mao camp was not beaten — Mao’s wife, Jiang Qing, and three others (later known as the Gang of Four) continued the Cultural Revolution and fought all that Deng stood for. On 05 April 1976, a spontaneous demonstration was staged a in Tiān’ānmén Square in memory of the popular Zhou Enlai (who had died in January) and in implicit support for Deng. They may also have sensed Mao was on his death-bed. The authorities panicked and forcefully dispersed the demonstration. Deng was blamed for the un-Chinese disorder and stripped of official posts.

With Mao’s death in September 1976, the Gang of Four were arrested and humiliated and then China went very quiet for almost a year while workable consensus was reached among the elite. In August 1977, Deng was rehabilitated to all of his previous posts and “pragmatic” – rather than “revolutionary” – policies were again on the table. The party also tried to rehabilitate elements of society who had been alienated by the Cultural Revolution; intellectuals and social critics were given license for critical analysis but it was clear to all that no license extended to critic ism of the Party’s singular authority. In 1980 the Cultural Revolution was officially described a catastrophe. Appointment of reformist Hú Yàobāto Party General Secretary in 1981 further signaled the future course had been set.

Reform policies, and particularly the suspension of central direction – a de facto “free market” — brought immediate improvement in the living standard, particularly among urban workers. But market forces also brought price rises, the re-emergence of crime, and seemed only to highlight how much greater reform was possible. In December 1986, there were demonstrations calling for faster reform. The Party failed to see this as healthy social criticism. Spontaneous assembly was seen as social instability and next month Deng was forced to blame his own protégé Hu Yaobang for the “unrest” and dismiss him as Party General Secretary, to be replaced by Premier Zhao Ziyang. Note how this reveals the relative importance of posts – Party General Secretary is a more powerful post than Premier (“Prime Minister”).

But Zhao was also a reformist and he came under attack from both camps – from some in the Party for courting social upheaval, and by some in the population for either slow reform or for consequences of reform such as price rises and inflation. A border away, in June 1987 Mikhail Gorbachev introduced the policy of Perestroika (“restructuring”), a watershed in Soviet history and winds of change that may have frightened some in China. A disaffected urban population was forming and the death of Hu Yaobang in April 1989 provided focus for demands for continued and faster reform, and for an end to official corruption. Protestors, mainly students, assembled in Shanghai, Chengdu, and Guangzhou and in Beijing at Tiān’ānmén Square. The crowd in Tiān’ānmén refused to heed government directions to disperse; martial law was declared on 20 May 1989 and several more days of standoff followed. On the night of 3/4 June army units from beyond Beijing cleared the Square with prejudicial force and a yet unknown number of demonstrators died.  Deng and the reformers were again blamed for causing social instability and “reform” became a politically-dangerous word.

Three years later, Deng made his third and final comeback. In early 1992 he traveled to the industrial heartland in southern China signaling market-based pragmatism was again to the fore. The living standard of the proletariat was to be China’s primary policy objective, even if this meant arrangements with “capitalist” principles were necessary. Crucially, the Party Politburo publicly issued an endorsement of Deng’s policies of economic openness. This has remained official policy since that day. China had finally resolved the dilemma between Communist rule and Free-market Capitalism with a unique solution – free-market capitalism under Communist dictatorship.


Deng Xiaoping died in 1997 (1904–1997). Unlike Mao, Deng was an urbane man educated in France (as were Ho Chi Minh, hero of Viet Nam and Zhou Enlai, China’s first Communist premier). He never held top State office of President or Premier but for 20 years was de facto leader of China, and for decades before that one its key helmsmen. He is the person most responsible for the form of modern China. His repeated survival and re-emergence attests to consummate skills of negotiation and persuasion.

Transition to a new generation was seamless; power devolved to President Jiāng Zémín (1926- ) and in March 1998 Zhu Rongji replaced Li Peng as Premier   In November 2002 Hú Jntāo (1942-), another Deng protégé, became General Secretary. By late 2004 he was also elected President and Chairman of the Central Military Commission, control of the PLA. China has not significantly resiled from its commitment in 1992 to economic reform and accession to the WTO in 2001 meant China had met “free market” standards that Russia is yet to meet. China sees its hosting of the 2008 XXIX Olympiad in Beijing as a final proof that the Long March has brought a modern China into a modern world.


The Han Chinese (92%) are the overwhelmingly dominant ethnic group but minorities such as the Manchu (10 million) have played a major part in centuries of Chinese history. Other minorities – the Turkic and Muslim Uygur (7 million), the Mongolians (5 million), and Tibetans (5 million) – are not fully willing citizens of the Chinese Republic. Other substantial minorities are Zhuang (16 million), Hui (9 million), Miao (8 million), Yi (7 million).

The Chinese population of 1,314 million is 20% of the human population. The government estimates the population will stabilize in around 2050 at around 1,600 million. Decades of zero-population-growth (ZPG) policy has produced an demography similar to Western nations – the median age of 33 years is closer to that of the USA (37 years) than to the median of Indonesia (27 years). Indicative comparisons are: Nigeria 19; India 25; Indonesia 27; China 33; USA 37; UK 39; Germany 43. There were reports offorced abortions in some regions to enforce ZPG but this may have been excesses of local party apparatchiks rather than the hand of Beijing. The one-child policy has been mainly pushed through propaganda and monetary sanctions. ZPG has largely worked and China has curtailed unsustainable population growth. As a capricious side-impact this has produced a nation of only children, often obese and self-centered only children, a vast number of “Me Generation” individuals which will have yet unknown social and political consequences.


The Chinese constitution places the 2,985 seat National People’s Congress (NPC) as the legislative branch and supreme organ of government. This is a delegatory body, representing the Chinese population more than any other institution. It elects (or confirms Party recommendations for) the President, the Premier, and the State Council (Cabinet) and other functionaries of day-to-day government. The NPC has a permanent Standing Committee which exercises the authority of the NPC when it is not in session.

In reality the Party runs China and, in the most cynical view, the NPC simply rubber-stamps Party programs. Only 5% (66 million) of the population are members of the Chinese Communist Party. Constitutionally, the Party’s supreme body is the Party Congress, which generally meets every 5 years but the24 member Politburo (and its core 9 member Politburo Standing Committee), and the Secretariat headed by the General Secretary are the locus of real power. In a reductionist analysis, the Party General Secretary (or the Chairman in Mao’s day) is the center of power. But with Hú Jǐntāo’s rise to power all three key offices of President, General Secretary, and head of the PLA, reside in him. This may signal the first generation of a shift of gravity from Party to State-like apparatus.

China’s reality mitigates against a hopelessly cynical analysis. The complex story of China’s last 50 years is conspicuously lacking the purges and murders of Stalinist Russia. Deng Xiaoping would not have returned from political disgrace so many times – or lived to 93 — in many other societies. China does believe that only a ruthless autocrat – the Dragon Emperor – can rule China but the Chinese way is also one of personal relationships and consensus. The world press sees highly orchestrated NPC meetings but China watchers say there is active debate in closed sessions and a desire to rule by consensus.


The China Democracy Party – with offices in Washington DC – is overtly opposed to the Chinese regime. Along with opposition elements based in Taiwan, it seeks the democratization of China in the Western manner. Although fundamental human rights shortcomings remain in China, the new policies of guided free market capitalism has considerably defused economic arguments for regime change.

The reasons China has banned Fǎlún Gōng as a subversive group are not clear. It is a quasi-religious spiritual movement with no overt antagonism to the regime; however it is fiercely proscribed in China and the government seeks to deny it comfort anywhere in the world. A likely explanation is Fǎlún Gōng’s success. It was formed in 1992 and by 1999 was said to have over 70 million followers, more than the Chinese Communist Party. The Party may find it perturbing to see a movement of any type grow so large so rapidly. It may be that Fǎlún Gōng offers a dangerous precedent for a broad-based democracy movement.

Separatism is a threat in waiting for China. The Turkic Muslim Uigars of Xingjiang-Uigar Autonomous Region have more in common ethnically, religiously, historically with Kazakhstan and Kyrgyzstan than with Beijing. The Uigars identify with other “oppressed” Muslim populations in Central Asia where Islamist activism is a challenge to some degree to each government in the region around the Fergana Valley. During the 19th century when central authority was already weakened by a number of challenges, Russia fomented separatism in Xinjiang that almost succeeded in breaking it from China. At least two other Autonomous Regions are similarly disenchanted with being part of China — Nei Mongol (“Inner Mongolia”) and Xizang (Tibet). People of Nei Mongol identify with adjoining independent Mongolia, and Tibet, the last repository of tantric Buddhism, is threatened by complete cultural obliteration by Chinese transmigration. Of these alienated provinces, only Xinjiang is capable of mounting serious armed (asymmetric) insurgency against Beijing. China is rightly fearful of any salutary examples of separatism. Were Xinjiang to revolt, it is most likely other provinces would follow the lead and pose a stinging embarrassment to China. As some say, “freedom” can be messy. Economic liberalization has brought a taste of affluence and personal choice and that curse of the West, individualism. It has also brought crime, traffic jams, electricity shortages, unemployment, and rising prices. There is no precedent for such a massive undertaking, for the transition from a feudal basket-case to the world’s largest economy within two or three generations. Perhaps China’s rulers are wise enough to know that great social upheaval is possible, which is why they respond with such disproportionate force to any show of massed public disaffection.

Proof of this nervousness amidst economic liberalization is China’s persistent censorship of the internet. Some degree of control is possible if Internet Service Providers (ISP) filter a growing list of proscribesites but the measures fall into the absurd when individual entries in encyclopaedia pages need to be modified for China conditions. It is unclear precisely what groups of users China is trying to protect from what content – to stop anyone knowing the Politburo puts on its trousers one leg at a time, to stop villaknowing how far they are falling behind the cities, or to stop urban elites knowing things they already know. One clue is the order in September 2006 that all foreign news bureaus must distribute their content through the state news agency Xinhua. The ability of large sections of the population to communicate to coordinate is probably the underlying reason for nervousness. This is consistent with the measuresagainst Fǎlún Gōng and the Tiān’ānmén protestors. The everyone else thinks it is – these measures are the clue. With increased officer exchange and growing professionalism in the military, the PLA may in futuan unexpected role in Chinese political affairs. Several possible scenarios may place the PLA in a dilemma between Party authority and the constitutional civil authority. Ideological correctness will incline them one way, modern military doctrine will incline them another.


China has had the fastest sustained economic growth in history. Its continuing growth of 8% to 10%boosted PPP GDP to almost $9 Trillion and PPP GDP per capita from subsistence levels to almost $7,000. Average unemployment is 9% but substantial unemployment (and underemployment) in rural areas is 20% or more. Since Deng launched the notion of a “socialist market economy” in 1992, China hmoved step-by-step towards privatization of state enterprises and relaxation of controls throughout the economy. This has brought immense social risks. Prices for basic foods freed from command econcontrols have risen and many millions of workers have been left jobless when unsustainable state enterprises closed. Today, China is the fourth largest economy in the world — in parity adjusted (PPPterms it is second to the US – but there is a need to sustain nothing less than world record growth to manage the economic transition without social disaster. The World Bank estimates 100 to 200 millionpeople in the inland provinces live in poverty on less than U.S. $1 a day. Incomes of the middle class urban elites has grown substantially in the last decade but the 50% of the population engaged in growing food have standards of living largely unchanged since 1950. This disparity is unlikely to trigger a Great Proletarian Revolution but it may trigger famine, epidemics, unrest, and embarrassment. The massive increase in throughputs of money which deregulation and growth have brought is fertile ground for corruption, tax avoidance, petty crime, and serious organized crime. These bring loss of government revenue and social discomfort. There are other discomforts as well. Much of China’s basic industrial growth has used 19th century processes and pollution is now apocalyptic in some areas. Apfrom white-goods, China’s economic miracle has also exported unemployment to the US and other countries. The euphemism off-shoring has meant factories throughout the industrialized world have closed and moved their capacity (sometimes lock, stock, and barrel with plant and equipment) to ChAt first, vast numbers of unskilled workers were left without jobs (but with the prospect of buying cheaper white-goods); now off-shoring means workers at any skill level may have their jobs exported.  Perhaps China’s 1950 goal of exporting proletarian revolution to the West will succeed afterall.


Energy policy is of supreme strategic importance for China. Any interruption to the relentless growth will throw millions into unemployment, whole regions into poverty, and a population into discontent with the regime. In 2003, China passed Japan’s energy consumption and became the second-largest world energy consumer after the US. China is energy rich – it is the third-largest energy producer in the world after thUS and Russia but supplies are inadequate to its current growth. Energy concerns are two-fold – China needs to import an increasing proportion of its energy, and the main of primary energy source is still coal,a dirty 19th century source that has caused massive pollution problems. China is the world’s largest producer and consumer of coal; it contributes over 60% to energy inputs. Although China has steadfast policies on reduction of the share of coal in energy inputs, consumption will continue to rise for many years in absolute terms due to the rate of growth. A slightly cleaner fuel is oil but China’s own productiocan not meet needs and it has been a net importer since 1993, largely from the Middle East. Imports are forecast to be around 3.5 million barrels per day by 2010. China is interested in diversifying the sources of its oil imports and has invested in oil operations around the world, from Sudan to the Gulf of Mexico.

China is driven by the two equally important imperatives: energy security and pollution reduction. It seeks energy security through greater efficiencies, diversification of sources, and security of delivery. Th11th Five-Year Plan (2006-2010) calls for a 20% improvement in energy efficiency per unit of GDP by2010, development of renewable energy sources and increased regard to environmental issues. With a forecast 45% increase in GDP during the plan period, efforts will need to be ceaseless to meet the goal. Among China’s “renewable” energy alternatives, is nuclear power and the country’s abundance of hydro-electricity potential but these projects – such as the Three Gorges Dam ($24B)– are capital intensive, longin completion, and invariably present new downsides. The Three Gorges Dam will have a total output 18 Gigawatt of “free” energy when fully complete in 2009, but China estimates it needs to add 15 Gigawof capacity each year to maintain present growth.  Clearly, imported primary energy sources will be crucial for some years to come.

Unlike Japan which imports most of its oil from the Middle East through the Malacca Strait, China hasdiversified its sources and means of delivery. Oil sources at present are Angola (18%), Saudi Arabia, Iran, Russia, Oman, Equatorial Guinea, Yemen, Congo, Libya, Venezuela, a diversity that provides some measure of intrinsic security. One additional layer in protection of energy sources is the StriPearls strategy, which calls for a string of tanker facilities on the Indian Ocean rim in Thailand, Myanmar, Bangladesh, Pakistan. Much of this infrastructure has already been built. In Pakistan, the first stage of the new port of Gwadar will be working during 2006. China can offload oil at Gwadar andpipe it through Pakistan to Western China. A project in waiting is a long-discussed plan to build a new canal across the Kra Isthmus in Thailand which would bypass the Malacca route entirely. Projectsas Gwadar indicate that China seems to have foreseen the current energy crunch years before some Western governments. Years of careful preparation have begun to deliver results apart from Gwadar. During 2006 the first batch of crude oil arrived through the China-Kazakhstan pipeline, a huge LNG terminal was opened, and natural gas reserves exceeding 100 billion cubic meters were proven in deep water in the Pearl River Basin. Also in 2006 China announced two coal-to-oil plants ($12B) in the North-west that will produce oil at around $27 per barrel, and announced a Sino-Thai hydro plant in Myanmaon Southeast Asia’s longest undammed waterway. Apart from maintaining good trading relations with Iran and Venezuela, China sees an oil future in Africa. It continues to cultivate relations with oil-rich Angola, and has a 40% stake in Sudan’s oil industry. Some think that Chad’s recent nationalization of ChevronTexaco and Petronas assets, ostensibly in a dispute over taxes, is a move in preparation for China to manage the reserves [Opinion]

During 2006 the State Council (Executive cabinet) produced a strategic energy policy, the first oin China. This and the goals of the present Five-Year Plan call for 10% of energy to come from renewable sources by 2020. At present nuclear power accounts for just over 1% in 2000 but this is forecast to grow to 5% by 2030. China’s high earthquake risk present difficulties for wide-spread use of nuclear power but energy imperatives may force an accelerated use of this problematic source.

Environmental Degradation

Diseases caused by air pollution are now a leading cause of death in China. Seven of the world’s ten most air-polluted cities are in China. On a bad day, Chinese air pollution reaches California. Acid rain now affects one third of the country and some regions are receiving nothing but acid rain. Around 20% of agricultural land has been lost or degraded since 1949, with serious desertification in some areas. Half of the population now lacks access to clean water; 90% of water bodies in urban areas are severely polluted; one third of cities have no centralized sewage treatment. Water scarcity, particularly in Northern China, is now a serious brake on sustained economic activity; over 300 cities are now water-stressed; aquifers, asin India and the US, are critically depleted.

All of this has resulted from China’s rapid industrial development. The leadership are giving increasingattention to these severe, sometimes irreversible, problems; not as idle tree-huggers, but from genuinconcern that decades of progress can grind to a halt in a toxic swamp. Various studies have estimated pollution costs the Chinese economy 7%-10% of GDP each year, more than $80 billion in 2004. Iresponse to the hazards looming ever larger, the State Environmental Protection Administration (SEPA)was upgraded to ministry level in 1998; but the levers on re-greening the environment are not as responsive as the levers of industry. China has recently admitted that the water pollution goals, and the goal of the Tenth Five-Year Plan (2001-2005) to reduce total toxic air emissions by 10% have not been achieved. China is caught in the dilemmas that all development brings. The massive Three Gorges Damproject will produce the hydro-electricity and flood mitigation China urgently needs but it will bring about displacement of large populations, silting of the Yangtze River, loss of endangered species, and – environmentalists warn – other long-term dire consequences.

China actively participates in global environmental forums. In 2005, it joined the Asia Pacific Partnership on Clean Development (with Australia, India, Japan, South Korea, US), a forum on strategies for pollution reduction and climate change mitigation and adaptation. It is a signatory to the Basel Convention governing the transport and disposal of hazardous waste and the Montreal Protocol fthe Protection of the Ozone Layer, as well as the Convention on International Trade in Endangered Species and other major environmental agreements. But China insists that this is a shared problem – in one way or another, the cost of any remedies will be shared with the industrialized world. This may mean a doubling (or tripling) in the price of many Chinese exports and/or assistance with remediation projects of a gigantic scale. Assistance may also take the form of cutting edge technology transfer — in September2006, China invited foreign investment in water conservation, sewage treatment, waste water treatment and recycling. Water shortages may halt growth and progress in some areas before energy shortfalls.  In some coastal cities it may be necessary to build water desalination facilities but these are energy-grand further complicate China’s water/energy equation.

China is taking every step to ensure a positive outcome from the Beijing Olympiad in 2008 and is investing heavily in pollution control measures directed at Beijing.  One measure is to close all industry in the Beijing region for the duration.  Only time will tell if the action taken is cynical window-dressing or a useful pilot project that can be applied in the rest of China.

Transnational Crime

Crime and organized crime is new to China.1 In 1992 China had 1.2 million police officers and, like the PLA of the Long March, no system of rank – the men know who to obey. In pre-1992 China, a society with limited personal property, cash, and freedom of movement, petty crime was difficult and unprofitable and the crime of old Shanghai and similar entrepot cities was extirpated by the incoming communists. With the liberalizations starting in 1992, there was new mobility, a gravitation to urban areas; money, jobs, unemployment, and, as night follows day, crime. Affluence and urban concentration salso brought recreational drugs and drugs of addiction which spawned crime sub-cultures of their own. Whereas China was once a transshipment point for opiates from the Golden Triangle, it is now also a significant market. It is now also a manufacturing source for newer drugs such as amphetamines now inwide use (as shabu) throughout south-east Asia. Personal crime such as highway robbery of bus passengers in rural areas is a priority for the government because it is seen as a direct challenge to its ability to keep law and order. Persons convicted of this and a vast range of “petty” crimes are executed.  The Chinese government has a very keen vision of what China should be like and it does not include new anti-social trends such as crime. Organized crime is doubly anathema because the leadership have a particular dislike for covert organized groups. In 2005 China reported success in over 50 money laundering cases involving around US$1.25 billion, but this is only a fraction of the estimated annual money laundering turnover of $37B to $50B. During the first half of 2006 China claimed a fall in (already llow) violent crimes and solving of 33,000 white-collar (“economic crimes”) involving about $7.27B. Organized crime and the associated money laundering need some degree of official corruption to survive. Corruption of public officials robs the Party of credibility at the level of the masses, and often deprives the government of revenue In 2002, the Party established the high- level Central Discipline Inspection Commission and charged it with extirpating corrupt party officials. China and organized crime brings triads to mind; wrongly say experts. The secret societies now known Triads date from 1674 when underground groups formed to resist the Manchurian interlopers.2 Starting something not unlike the Masons or Opus Dei, they are now a collection of loose-knit groups or gangs and not a monolythic criminal organization as such.  Some organized crime syndicates may include triad members but that is incidental.

Foreign Relations

In the early 15th century, China extensively explored the world by sea. Using the magnetic compass and other advanced navigation and mapping skills, Admiral Zheng He sailed to most corners of the world including the Americas in fleet of 300 ships.3 Zheng He’s report on return was detailed and extensive.  But the Chinese did not like what they heard. The world was different to China, hence inferior and dangerous. The fleet was burned and any further contact with the outside world was prohibited. The few years after the declaration of the PRC in 1949 had foreign policy implications that resounded for decades. China was quick to form fraternal relations with the Soviet Union, and the West suddenly sawthe specter of world-wide godless Communism beating at the gates. Proof came the next year when China sent troops to assist North Korea against UN forces. The Yellow Peril was on the move. With MaoGreat Leap into the Iron Age, the Soviets withdrew their advisors from by August 1960. Cooperation hadsuddenly transmuted into competition for ideological influence throughout the world. Bewildered Communists in the West had to choose between Moscow-line and Peking-line; Marxism or Maoism. The Soviet invasion of Czechoslovakia (1968) was condemned by China as vigorously as in the West but Radio Peking had a better vocabulary – Soviet hegemony was abroad in the world and was just as mucan enemy as US hegemony. China accused the Soviets of colonizing various parts of the world such as Cuba and Vietnam. Clashes on the Sino-Soviet border in 1969 proved the disagreement was not just ideological; the two great Communist powers thought the world wasn’t big enough for both of them, a dangerous sentiment for two nuclear powers. China embarked on its own foreign policy throughout thworld. It sought influence in third world nations and neighbors such as Pakistan and Indonesia, third-world nations which were resource-rich of of other strategic value and which the Soviets had not yet signed up for fraternal relations.

By the early 1970s, it became an increasing global absurdity that China – a quarter of the world’s population — was not a member of the United Nations and the China seat as a permanent membeSecurity Council was held by tiny Taiwan.  In 1971, Taiwan was unceremoniously displaced by PRC, the first major recognition that Communist China would not simply go away. Japan established diplomatic relations in 1972.. China continued to court far-flung members of the Nonaligned Movement (NAM), but now also began improving ties with the West, notably the US, the world’s anti-Communist flag-bearer. China offered anenticing deal – it could assist in countering Soviet hegemony if the West assisted China with modernization. Sino-US diplomatic relations were finally restored, after a 30 year interval, in 1979 and the two set about technology transfer and vigorous trade. As a condition of diplomatic relations China always insisted, then and now, on the one-China policy, recognition that Taiwan is an inseparable partChina. Any support for the principle of self-determination has proven weaker than the desire to trade with China. Now 159 states have diplomatic relations with Beijing; 25 have diplomatic relations wTaipei (the Holy See and some of the smallest nations in the world). In the 1970s China continued to see hegemony in its immediate region. It condemned Vietnam’s adventures in Laos and Cambodia in late 1978 and fought a token border war with Vietnam in early 1979. The Soviets were on the move too, invading Afghanistan in December 1979. Also, the Soviecontinued to maintain troops on the Sino-Soviet border and in Mongolia, provocations that China feared would foment separatism in Nei Mongol (“Inner Mongolia”) and excite the Muslim population in Xinjiang bordering Afghanistan.

June 1989 was a turning point for both China and the Soviet Union. Russia withdrew from Afghanistan with 14,000 dead; two years later the USSR had collapsed. China cleared Tiān’ānmén Square witunknown number of dead; the world realized that China meant what it said – any liberalization would bon the Party’s terms, not Western notions of free market anarchy. In the immediate aftermath of Tiān’ānmén, many countries suspended or reduced diplomatic and trading contacts with China. China worked vigorously to rebuild relations, but only on its own terms.  Cheap white-goods prevailed.  By late 1990, normal relations had been reestablished with almost all nations including the republics of the former Soviet Union.

The first two thousand years of self-imposed isolation created the highly homogenous self confident culture that lives on as modern China. But, for better or worse, isolation in the 24-hour connected globavillage is not possible. Foreign relations now take China’s leaders around the world in continual relation-building. China’s national interests are found both far and near. In its immediate neighborhood, China borders 14 countries — Afghanistan 76 km, Bhutan 470 km, Burma 2,185 km, India 3,380 km, Kazakhstan 1,533 km, North Korea 1,416 km, Kyrgyzstan 858 km, Laos 423 km, Mongolia 4,677 kmNepal 1,236 km, Pakistan 523 km, Russia (northeast 3,605 km, northwest 40 km), Tajikistan 414 km, Vietnam 1,281 km. Now China seems to have made peace with world at large, it has concentrated on affairs in its immediate sphere of influence. The Shanghai Cooperation Organization (SCO), established in 2001, comprises China, Russia, Kazakhstan, Kyrgystan, Tajikistan, Uzbekistan. It is primarily a security alliance with counter-terrorism as its main objective. China has also overcome much of the suspicion of Chinese hegemony in Southeast Asia and now has constructive relations with the Association of Southeast Asian Nations (ASEAN) Regional Forum, and the new (2005) East Asia Summit (EAS) which comprises ASEAN along with China, Japan, South Korea, India, Australia, New Zealand, with Russia as an observer. SCO and EAS – China is the only full member of both – places China at the heart of an oil rich high-growth consortium of nations which already rivals the economic might of the US. Forums such as this also serve to improve China’s relations with sometime enemies India and Russia. Premier Wen’s visit to India in 2005 and President Putin’s visit Beijing in April 2006 symbolize efforts on all sides to forge new relations.

China is the only nation to have a “special relationship” with North Korea and is relied on in the Six-Party Talks to prompt some reasonable position on North Korea’s nuclear weapons program. China is no longer a revolutionary regime. Although China once actively exported revolution to the Viet Cong, Pathet Lao, Khmer Rouge, in recent years it has carefully guarded the franchise on the term “Maoist”. It specifically says that Peru’s Shining Path rebels, Nepal’s self-described Maoists, and the Naxalite revolutionaries in several states on India are not Maoist revolutionaries and are unworthy of the word. Export of revolution is no longer a priority; it’s bad for business. This is not to say that China is not engaging in the more rewarding great game of cultural imperialism. Already, there is astounding growth in numbers learning Mandarin in Latin America and other parts of the world. Some forecasts see Mandarin passing English as a second language of choice throughout the world with a decade or two. In recent years, China has been increasingly active in the UN and other world forums and has contributedto UN peace-keeping missions. However, China has shown tardiness verging on contempt for multilateralism in its efforts to combat transborder disease threats such as H5N1 and HIV/AIDS, and in issuing alerts on the SARS crisis. This Chernobyl syndrome — unwillingness to admit problems — is  systematic in a Politburo-led system without a fourth or fifth estate.

International Disputes

Beijing has now resolved many long-standing border and maritime disputes, significantly with Russin1997 and in 2000 with Vietnam (with some islands in the oil-rich South China Sea still disputed).  Disputes with Japan over areas in East China Sea are largely perpetuated by heart-felt hatred over Japan’s genocide against China in the Second World War. In 2005, China and India began to resolve multiple border disputes, particularly in the Siachen Glacier and Karakoram Pass where the borders of China (Aksai Chin, North Ladakh) and India (Jammu and Kashmir) and Pakistan (Azad Kashmir and Northern Areas) meet. China’s occupation and cultural genocide in Tibet (Xīzàng Zìzhiqu) is regarded by the Tibetians as an outstanding dispute but no major nation has thought the self-determination of the unique Tibetan people sufficiently important to risk its trade relationship with China. China asserts sovereignty over the Spratly Islands together with Malaysia, Philippines, Taiwan, Vietnam. The parties in 2002 promulgated the Declaration on the Conduct of Parties in the South China Sea which has eased an unseemly scramble to erect tents and weather stations on various tiny islands. Vietnam has sometimes breached the code of conduct in establishing “site-seeing” tours to certainbut China has been instrumental in a pragmatic scheme to exploit the Spratlys oil/gas resources withouconflict – by initiating joint ventures with other claimants, and has commenced projects with the Philippines, and Vietnam. Whilst all claimants have been quick to condemn any one nation making territorial gestures, the group finds it more difficult to oppose joint activities. This may well be simple effective tactics born in Beijing’s politburo.

China occupies some islands in the Paracel Group that are claimed by Vietnam and Taiwan.

Projection Capability

Starting in 1978, the PLA demobilized millions of personnel and, consistent with Deng’s modernization policies, embarked on strategic redesign of the armed forces. Although Tiān’ānmén (1989) emphasized that the PLA (rather than the police) would remain the bulwark of ideological correctness, China remainsintent on transforming the PLA into a modern, high-tech, high-leverage, mobile force. In a model set fby the UK and then by the US, a state needs a blue-water navy to credibly protect its strategic sApart from strategic nuclear weapons, China has also developed a range of modern missile and other systems and acquired Sovremmeny-class destroyers, SU-27 and SU-30 aircraft, and Kilo-class submarines from Russia. Although this gives China the capability to wreak its will on a state such as Angola (and perhaps Taiwan), it is a limited projection capability for a nation that will soon be the world’s second economy. Although the US has expressed general nervousness about growing military power it is confident China will have no substantial force projection capability for several decades, but all observers agree that the question is not if but when China will acquire or build its first aircraft carrierstart to form credible carrier battle-groups. Russia started constructing the Kuznetsov-class carrier Varyag (67,500 tonne)in 1985 but work was discontinued in 1992 and she was partly stripped and sold for scrap in 1998. Despite rumors that she was to be a floating casino in Macau, the ship is now being repaired by PLA-Navy in drydock in Dalian (Liaoning Province bordering on North Korea).  China claims it will be a tourist attraction but it has now been painted service gray and most believe China intends to commission the carrier, either as a training ship or as its first operational carrier.

Although India-China relations have improved considerably, India is still a strategic rival, particularly as much of China’s oil imports still cross the Indian Ocean. India expects carrier INS Vikramaditya (formerly Admiral Gorshkov) to enter service in 2008 after refitting.  It also began construction of another carrier (37,500 tonne, 30 aircraft) in 2005, scheduled for completion in 2013 to replace the INS Vikrant (formerly HMS Hercules) decommissioned in 1997.


Although all Russian technical assistance was withdrawn from China in 1960, China was able to continueits nuclear weapons program and hold its first nuclear test in October 1964. China was the first nuclear power state to announce a no first use policy. It joined the IAEA in 1984, agreed to halt atmospheric testing in 1986, acceded to the NPT in 1992 and signed the Comprehensive Test Ban Treaty (CTBT) in 1996 (but has not yet ratified CTBT). Also in 1996, China agreed not to provide assistance to nuclear facilities without specified safeguards and began implementing regulations establishing controls over nuclear-related dual-use items in 1998. In May 2004 China joined the Nuclear Suppliers Group. China has committed not to engage in new nuclear cooperation with Iran (even under safeguards), but will complete existing cooperation as soon as possible.

China became a major international exporter of conventional arms during the 1980s and 1990s to many of the world’s conflicts. It joined the Middle East arms control talks in 1991 but walked out in September 1992 when the US agreed to sell F-16 aircraft to Taiwan. China is not a member of the Missile Technology Control Regime (MTCR) but since March 1992 has undertaken to abide by MTCR rules however in August 2003 a Chinese enterprise was found to have transferred scheduled equipment atechnologies to Iran, leading China to issue more comprehensive regulations on arms export.

In April 1997 China ratified the Chemical Weapons Convention (CWC) and by October 2002 had promulgated regulations on dual -use agents and precursors on the Australia Group control list.

US-China Relations

The journey from fighting a war in Korea in 1950 to President Nixon’s visit to Beijing in 1972 was eventful. The American Embassy had followed Jiǎng Jièshí to Taiwan in 1949 and China and the US exchanged artillery fire and vitriol since then. Starting with exchange of ping-pong teams, Sino-US relations were sufficiently positive for President Nixon to make a state visit in February 1972. This produced a joint statement, the “Shanghai Communiqué”, which has been a yardstick for Sino-US relations since. China insisted the communiqué embody the “one China policy” but acknowledged the US would maintain normal trade relations withTaiwan. As a transition, a Liaison Office operated in both countries 1973-1978, and diplomatic relations were formalized 01 January 1979, ending thirty years of antipathy. Several high-level visits were exchanged during the 1980s but with Tiān’ānmén in June 1989, the US and many other governments reduced or suspended bilateral arrangements and arms sales on human rights grounds. Although some othese suspensions remained for 10 years, trade and Chinese intransigence triumphed. But continuing improvement in relations could not prevail against one of China’s raw nerves. In 1996, following the “private” visit to the US of a Taiwanese former President to the US, China held military exercises near Taiwan. The US saw this as a provocation and sent two carrier battle groups to the vicinity. Both countries believed they had made their point. But US-China relations survived this and the (accidental) bombing of the Chinese Embassy in Belgrade in May 1999 and collision of a Chinese F-8 with a US Orion in international airspace near China in April 2001.

US investment in China is now over $50B. US-China trade has grown ten-fold in the last 10 years and is presently growing at 20% each year. The US trade deficit with China now exceeds $200B. Consistent Upolicy is to encourage China’s integration into a “global, rules-based economic and trading system”, but confusion about what those fine sentiments exactly mean is evidenced by the recent death of the Doha Round. China has grown very quickly from an isolated impoverished agrarian country to become an active participant in international institutions and a major trading nation. Both Marxism and Wall Street can claim a share in the credit.

One of the fruits of Sino-US relations is the role it is believed China can play in the Six-Party Talks with North Korea.  China has long had a special relationship with the failed Stalinist state but this has produced little practical progress yet.  Similarly it is hoped that China (along with Russia) can reinforce the US/EU views on Iran’s ambivalent nuclear program.  This is not a certainty, as Iran is an important (and close) oil supplier.

Near Term:

Chinese over-reaction to demonstrations and to ostensibly harmless groups such as Fǎlún Gōng betray insecurities felt by the leadership that are apparent in no other way. It is likely that the Politburo is correct – the population will not tolerate partial political freedom; it will be all or nothing. Like everyone else, the Politburo doesn’t know how the story ends yet but how it responds to challenges will be critical. China’s position as the “hub” member of both Shanghai Cooperation Organization and East Asia Summit, and its forward looking energy strategy, will gain it status on the world stage faster than econompredict. The only obvious weak point in its security is terrorism / separatism in Xinjiang province.


As China rapidly becomes a world power and its leadersis populated by the only child me-generation, there will be increasing pressure on the Politburo to make the sort ocompromise that Deng saw as China’s only course. Unless there is widespread unrest accompanied by separatism in border provinces, the Party will not be forced to cede power tomulti-party system. But some wise Party official may seethe only way to guarantee the1949 Revolution for another 5years is some astounding compromise – perhaps 50% multi-party seats in the PNC, 50% old system. Communist Capitalism was a compromise nobody foresaw.  China may have similar tricks to play.


China does not have a history of imperialism far beyond it borders, but in one or two decades growing wealth, and the massive Chinese industrial capacity, may be able to produce a number of carrier battle groups. If there are then any awkward standoffs with the US these may be over the question of Taiwan but they are more likely to be disputes involving energy sources, and the likely to be in awkward places such as off Nigeria. Chinese cultural “imperialism” throughout the world will make the world significantly more Sinophone and Sinophile than now.  That world will be very different; it will fundamentally change the nature of “them” and “us.”

1 “Organized Crime In China”, Dr. Chu Yiu-Kong, Visiting Assistant Professor, Sociology Department, University of Hong Kong,

2 “Triad” is derived from the triangular sign of the societies.
3 The “Bimini Road” in the Bahamas thought by some to be remnants of Atlantis is the slipway Zheng He built to repair his ships. The stones are “foreign” because they are ballast from China.

Reference: China — Administrative divisions:
23 provinces — Anhui, Fujian, Gansu, Guangdong, Guizhou, Hainan, Hebei, Heilongjiang, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Jilin, Liaoning, Qinghai, Shaanxi, Shandong, Sichuan, Yunnan, Zhejiang plus Taiwan as 23rd province

5 autonomous regions: Guangxi, Nei Mongol (“Inner Mongolia”), Ningxia, Xinjiang, Xizang (Tibet)
4 munmicipalities —  Beijing, Chongqing, Shanghai, Tianjin

2 special administrative regions — Hong Kong, Macau