Living On

Armen is heavily missed. His absence left a hole in independent observation of the political and economic risk situation in Latin America. Beyond the merely analytical though his work was wide-ranging from Armenian philanthropy and social observation of Latin and European lifestyles through to being a "fly on the wall" at the Cannes Film Festival every year and reporting back on the more exotic foibles of the international jet-set.

We miss his wit, his sense of history and his bon mots (in French, Armenian and, even, Turkish). Armen was very much a product of the Levant but then, like so many other Levantines, converted to an international stage where they offer insight into all around them. This record tries to humbly accumulate his collected writings for public consumption so they can be preserved and appreciated for the urgency of the moment in which they were written to the timelessness of the observations.

How best to categorise the uncategorisable? Maybe Armen could be described as an Armenian/Anglo/Franco Samuel Pepys for our times.....

It is ironic that ultimately it was the very mediocrity and self-satisfaction of the Chilean "system", which he documented so thoroughly, that brought about his tragic end.

Friday, October 21, 2011

Untimely End - 21st of October 2011

Roberto Kouyoumdjian

Many of you have enjoyed my father's essays over the years. Some of you have perhaps taken them more seriously than others but I'd like to think they'll be missed. It was important for my father to connect intellectually with people and give his opinions, however critical and self-consciously ironic they could sometimes be. My father had the talent of being able to discuss any topic and making it sound interesting by providing it with a different, unique angle. This essay will perhaps not be full of the quirky, cut throat remarks that you identify with him, but is a story that my mother has insisted I tell on his behalf. This will be the last essay you will receive from or on behalf of Armen Kouyoumdjian, following his sad death on Friday the 21st of October 2011.

This should never have been the last essay for the simple reason that my father should not be dead. We are all convinced that, had it not been for the inefficiencies in the health system in Chile, he would still be very much alive.

My father would never apologise for telling the truth but I feel I should advise you that the rest of this paper may be explicit and occasionally hard to accept, because we are dealing with someone we all knew that was sadly mistreated and ignored by the system.

It seems that, in Chile, if you require emergency treatment on a weekend you will find it very difficult. If it's on a long weekend, you are in the hands of the gods.

In May, this year my father became one of nearly 350 million people worldwide who has been diagnosed with diabetes. He had seen a specialist who recommended a strict regime of exercise and diet but just after that my father was experiencing various symptoms including nausea and severe constipation which were getting gradually worse..

On Saturday the 8th of October at around 6pm, my mother realised that his symptoms were reaching unprecedented levels and tried to convince my father to go to hospital and have him checked. My father insisted it would be a waste of time as it was on a Saturday, on a long weekend and no hospital would take him in as there would be nobody there with the expertise to treat him. Dismissing his attitude as another one of his outrageous rants she rang a good family friend, a doctor who works at the Hospital Naval in Vina del Mar, to explain the situation. Being such a well known and respected private hospital, my mother was convinced that he would be received in such a place and was desperate to have him seen. Our friend responded that it was on a Saturday, on a long weekend and hospitals would only have a basic, skeleton staff and there would be nobody there with the expertise to treat him properly. My father had it spot on. Undeterred, she rang the Clinica del Mar of 13 norte and had the same response.

My father then had the idea of calling the privately run ambulance/medical service 'HELP', with whom we have a contract, to send a doctor over. Being a long weekend, presumably they were short of doctors so could only provide a basic consultation over the phone so sent my mother to get some medicine that would help, which she did. When she returned, his symptoms had worsened and the medicine had absolutely no effect so she rang HELP again who said a doctor would come and visit as soon as possible.

Approximately two hours after, a doctor arrived, attached a drip, 'stabilised him' and said, unequivocally that he did not require urgent hospital attention and that on Tuesday, in 3 days time, she should contact a gastroenterologist and take it from there. My mother pleaded to take him to the hospital but she insisted there was nothing to worry about in the short term as he'd be feeling better soon. This all took place around 9pm.

At approximately 3.30am my father started vomiting blood uncontrollably due to a severe gastric haemorrhage. In a complete panic my mother called HELP and this time they told her that they would send an ambulance urgently which arrived about 20 mins after and again, 'stabilised' him, and the doctor (a different one) started to ring the various emergency units in the region's hospitals to get him checked in.

This is where the real nightmare begins. He called my father's preference, the aforementioned Hospital Naval who declined on the aforementioned grounds of not having the necessary resources to deal with such a case. Clinica Renaca said the same. As you can imagine, after that, it's all a bit of a blur for my mother but she knows he tried every other hospital in the region, all of which had the same response: it was a Saturday, on a long weekend and hospitals would only have a basic, skeleton staff and there would be nobody there with the expertise to treat him properly. On top of that she had to hear the doctor over the phone saying, ''si, tienen plata" (''yes, they have money'') and "se ve que es gente con medios" (you can tell these people have money). My mother was desperately trying to tell him that money was not a problem, that we did have an excellent international private insurance that would cover all eventualities.

My mother swears to god that when she got in the ambulance with my dying father, in the middle of the second largest city of one of the world's most 'up and coming' countries, they did not have a hospital to go to. At some stage on this journey, in a last ditch attempt to save my father whose blood loss was getting worse, the doctor tells the ambulance driver to take him to the Hospital Naval and just hope for the best.

Once there, they took him in quickly, someone examined him and the only surgeon there was overheard by my mother as saying that he did not want to take the responsibility on his own and needed someone else to help with the operation. As far as we know, they eventually managed, around 5.00am, to find someone to assist, and the operation finally took place.

The agonising waiting game for my family starts. A mixture of all sorts of emotions wrapped in a bubble of incredulity at how a developed country can fail to provide such basic service.

Just before 8am on Sunday, one of the surgeons, briefcase in hand and ready to leave, spoke to my mother and brother and family in the hospital hallway and casually remarked that my father's haemorrhage was contained, that it was caused by a invasive tumour in his stomach and that part of his stomach was taken out. The tumour was so invasive that all his organs had been affected, and that if he survived the aftermath of the operation he would not last long. 2 months were mentioned in case of a miracle.

Over the whole of Sunday and Monday, the same diagnostic was given to us again and again. Gastric cancer with absolutely no hope of a proper recovery. The biopsy, with the results would be ready in a few days but, as one doctor told us, the results ,in this case would only confirm their diagnosis.

On Tuesday, things started to change. Doctors started to appear in the hospital (incredible, I know). Nurses, support staff and general signs of life started to fill the wards and the place had changed completely. My father was put under the care of one of the hospital's best surgeons and examinations, scanners and a whole variety of treatments started to take place. The long weekend was definitely over and it was time to start work again. My father recovered well from the first operation and even came off the artificial respirator on this day. Despite the verdict, there were good signs. Then, this new doctor seemed to show doubts as to the initial diagnosis made by his colleagues after reviewing the scans.

Without going into details, my father's health started to deteriorate again and he made the decision to operate on him on Friday to find out what was causing the pain. After his intervention, he summoned the family and said that, in his opinion, there were no signs of any cancer and that his diagnosis was at this stage: peritonitis and that the haemorrhage must have being caused by a gastrointesntinal tract. In other words, a stomach ulcer. Although the first operation had been a mess, chances were that my father would, as you'd expect, recover from this. It was of course a far better scenario than the cancer that was going to kill him any minute.

On Monday the 17th of October, after seeing the results of the biopsy the doctor concluded that it was definitely not cancer.

He recovered exceptionally well from this second intervention but unfortunately only for a couple of days. On Tuesday the 18th of October things started to go downhill again and my father was put back in intensive care as his organs were again showing signs of deterioration. The doctor said that he had contracted an internal infection, but did not know where it came from. In light of this, my father was given heavy sedatives and was once again connected to all the necessary equipment. He was not responding.

The next day, the doctor decided to operate for the 3rd time as again many of his vital organs were deteriorating because of further infections, potentially caused by the other operations. Whether we admitted this or not, we were starting to realise that something, somewhere had gone wrong and that my father would not get out of this one alive.

The 3rd operation had gone well and they had filled his body with antibiotics to try and kill the infections but my father's body had, by this stage, stopped responding.

On Friday the 21st of October at 6.15am, my father was pronounced dead.

We got a suit ready for him and an Armenian cross to stay with him, took them to hospital and did all the necessary (is it?) paperwork. Next day we went to pick him up at the morgue at the designated time. Despite having given them notice the day before, my father was not ready, dressed or anything. To make matters worse, they had lost the cross. It all took over 2 hours to sort out.

We are convinced that my father died because of the failures in the system to give him the right treatment when he needed it, despite living in a large, urbanised and developed city.

For us, writing this is a chance to vent our feelings of frustration but also to fulfil, what, we believe, would have been his wishes. To tell this story to you. Such a tragic story, both on a personal and an institutional level. A story that digs deep into the very nature of human spirit. Is a human life really that worthless that a man can survive or not depending on what day of the week he gets ill? Are institutions morally obligated to look after us? Should the health care system be more closely regulated? And most importantly, what can we do to prevent this from happening again?

I, on behalf of my mother Pilar and brother David, would like to thank you for reading this and my father's many papers over the years. He took great pleasure in writing and for us, the very notion that there were so many of you out there reading them, fills us with joy.

Friday, May 20, 2011

FRANCE’S SECRET DIPLOMATIC WEAPON …Is none other than the Cannes film festival

Fourteen consecutive years of attending the Cannes film festival as a fully accredited journalist is an eye opener, not just on the international film industry. As this was not my real professional activity (though I am satisfied that I performed it well), I would benefit from considering the wider picture as an international analyst.

A series of events over the years, some of which will be detailed below, caught my attention. Though there is no doubt that the festival is primarily a cinema showcase, it is used regularly by the French authorities to score diplomatic points, taking political postures, and bear influence on world opinion with the smokescreen of the film industry.

METHODOLOGY First of all (and it would require a separate paper to detail in full), the Cannes Festival has a rigid and bureaucratic protocole and structure which are a mix between Louis XIV’s court at Versailles and the Chinese Communist Party. The people who run it, from CEO down even to the security apparatus, remained unchanged throughout the years I was present. Decisions are taken by half a handful of people at the top. You are subjected to strict behaviour, and if you step out of line, depending on the gravity of the offence, you are either called-in for a severe talk, or just expelled in perpetuity. Each year, you have to prove that when you attended last year, you actually wrote about it rather than spend your time on the beach. Still, if you are interested in the movie world and what comes with it, it is a unique experience.

However, the festival is sponsored by the French foreign ministry, and
that is where the discreet diplomat posturing comes in. Sometimes, the
“facilities” are also lent to friendly foreign countries who have agendas
of their own. It is an ideal place for putting across political points
linked to international events. Over 4,000 journalists from all over the
world are present, and not only are they not international affairs
experts, but they are avid to be fed with anything original. This makes
Cannes the third most covered event in the world after the Olympics and
the World Cup, except the the latter take place every 4 years, whereas the
festival is annual.

The system is well known to intelligence services and government image
building departments. Plant a story in a place remote from the event, and
wait for it to be picked up by the mainstream media. Even papers with no
personal correspondens give high coverage to Cannes, so the potential is
unlimited. We have the recent example of the London International
Institute for Strategic Studies (IISS), supposedly independent but stuffed
with personnel from British and US intelligence services, publishing
negative reports about Ecuador’s president Correa, and the Peruvian
candidate Ollanta Humala (it seems talking on the phone to Chávez is now
an international criminal offence). The IISS, and I can vouch personally,
has no historical expertise on Latin America. The method even has a French
name: “intox”, short for intoxication (of the mind).

The practical way the positioning is made on specific issues depends on
the circumstances. If it is a matter which started well before the
programming is finalised (around mid-April), it is incorporated into the
official programme. On the other hand, if it is, to quote CNN, a “breaking
story” , then schedules are modified to add it on. This causes problems
not just for the organisers, who may find that there are no screens
available, but particularly for the journalists who are already facing
16-hour working days, and even then unable to cover everything they want.

THE CASE OF VICTOR LITVINENKO Let us start with the most blatant case,
though it is one where Cannes lent its facilities to “friendly
governments”. In late 2006, a Russian journalist, apparently with links
to the FSB (ex-KGB), but who had fallen out with them, died from a
difficult to identify radiation poisoning in London. The British
authorities accused the FSB of having engineered his death. Whatever the
case may be, in the middle of the May 2007 festival, we are suddenly told
that a documentary on his demise would be projected as part of the
festival, followed by a press conference attended by Litvinenko’s widow.
The film was obviously one-sided, aiming to prove the British theory, as
was, predictably, the press conference. The event, was not heavily
attended, probably due to the fact that it was not a hot story any more,
and the difficulty of fitting it in if you had an interview with Brad Pitt
scheduled at the same time (such things, if you can get them at all, take
three days of formalities and pleading with press agents, the most
obnoxious and arrogant bunch of tarts I have ever come across, who torture
journalists during the day, party all night and as a result are
unreachable until lunch time). Connasses!

Back to the Litvinenko event, and the funniest part. As we went out of the
room, a number of journalists who had not been present were waiting to
interview those of us who had. I myself gave three interviews in French,
Arabic and English. The English TV crew caught my attention. They were
over-eager, with short-cut hair, and a camera on which there were three
letters that, after living 20 years in Britain, I did not recognise as
belonging to any known channel. They grabbed me first, and asked me what
was my opinion of the Litvinenko case after this. I told them that I had
an open mind, which did not please them very much. They were obviously an
intelligence service “channel” (MI6-TV?). Their presence could not have
been possible without official complicity, if you know how hard it is to
get a journalist badge for Cannes.

week, where as some readers will know, the controversial Danish director
Lars von Trier was declared “persona non grata” by the festival
organisers, though he had a film in competition. This unprecedented
situation was due to his ramblings at his film’s press conference, where
he tried to say that he had some sympathy for Hitler as a person, and
after thinking he himself was a Jew, found out that he was a German,
therefore a Nazi. The sayings, however rambling, were taken out of
context, as he never said he agreed with the Holocaust or denied it, nor
proferred anything anti-Semitic (contrary to the Dior designer John
Galliano some months ago).

We live now in a world where you can insult the Arabs burn Korans, carry
out extra-judicial assassinations, deny the Armenian Genocide (as did
the Swedish Prime Minister who was in Santiago this week, and who when his
parliament passed a resolution recognising the plight of the Armenians,
sent a letter of apology to the Turkish government). However, it is
forbidden to criticise the State of Israel, nor any Jewish person or
institution, or even upset them, without at least being branded an
anti-Semite, losing your job, or even ending up in jail.. Voltaire was
certainly absent from this year’s film festival.

Now Lars von Trier is a clown, not a very common trait in Scandinavia, but
to use an untranslatable Spanish expression, a “tonto grave”. He came to
fame by founding the Dogma school of film-making, and after acquiring a
number of followers, suddenly dropped it. He pretends to be a Communist,
but lives like a bourgeois. The first time one of his films was selected
for the festival, and contrary to protocole, he said he would not be
attending. The organisers pleaded with him to change his mind, and he
finally ceded, driving all the way from Copenhagen because he has a fear
of flying. However, he imposed one condition: when going up the red
carpet, the music (which normally is something related to the film),
should be the Internationale. I can imagine the ensuing discussions, but
he got his way, and from the balcony of the press room, seeing all those
beautiful people going up the steps with von Trier raising his fist and
the Communist anthem playing, was rather surreal.

Within 24 hours, the festival authorities published a communiqué declaring
him “non grata”, and all the media concentrated on the fact that he said
he sometimes sympathised with Hitler. His film is unlikely to get any
prize, whatever its qualities. Would it have happened if he had said
instead that Muslims are promiscuous because they can hav up to four
wives? I doubt it. After all, it was in his country that a cartoonist got
away insulting the Prophet Mohammad. Would it have happened if instead of
him, it had been Jean-Luc Godard? Well, some years ago, there was a social
conflict in France involving temporary workers at artistic events (such as
Cannes..). Godard had a film at the festival. He came into the press
conference and said he was ceding his time to one of these workers, who
was shown in and delivered a political diatribe totally unrelated to the
film. Godard was not expelled, nor is ever Catherine Deneuve, who smokes
like a chimney at each press conference she attends, though it is strictly
against French law. Opening a Chilean parenthesis here, the death this
week of two more Carabineros in a car accident, because they were not
wearing seat belts as the law demands (FOR EVERYONE), is a ridiculous
waste. The police are supposed to enforce a regulation they themselves
they do not obey (most Carabineros drive around without belts). Too busy
clobbering pregnant women at peaceful sit-ins? Or protecting my psychopath

Now we know which side of the Middle Eastern conflict the sympathies of
the Sarkozy adminstration are to be found. This being said, and after
being criticised for their dilly-dallying in the early days of the Arab
protests, they had to appear to show sympathy to the cause. An “Arab day”
was added on to the festival, with Egypt as special guest. Now Egyptian
cinema has a long and honourable reputation, although contrary to the more
recent Iranian phenomenon, it has not circulated much outside its own
region. From time to time, a bone is thrown to Palestinians with the
screening of a rare film made by a Palestinian director. When that
happens, be sure that there are one or two Israeli films in the programme

The Kurds have had their moments. Of course, it is only the Iraqi Kurdsh
community, not the much bigger and equally discriminated minority in
Turkey. Never mind that the Kurds have never had a country or national
structure at any time in history. There is an exiled Kurdish director
living in Paris who made the first Kurdish feature film. He was invited.

I shall not even dwell, for lack of detailed knowledge, on the African
aspect of French dilomacy, in a region with traditional links to its
former colonial power.

THE ARMENIAN GENOCIDE After Israel, one of the darlings of the French
authorities, under various governments, is Turkey. The festival is pleased
to oblige. In 2004, the film Ararat, one of the few ever made dealing with
the Armenian Genocide despite 96 years having passed, was premiered in
Cannes, under the direction of the respected Canadian-Armenian director,
Atom Egoyan.

The film was eventually screened in Cannes, but at what price. It did not
take part in the competition section in case it won something, and that
would have upset the Turks. An anti-Armenian demonstration was organised
next to the red carpet, an area normally under strict security. The
following year, “in compensation”, two Turkish films were selected to take
part in the festival, and the former personal yacht of Ataturk was moored
just off the Palais des Festivals with a Turkish flag nearly as big as the
boat itself. In 2007, Turkish Nobel Literature prize winner Orhan Pamuk
was a member of the festival jury, though I am not sure what they meant by
that considering that he is one of the few Turkish intellectuals to have
condemned the Armenian Genocide.

In my 14 years there, not a single movie from Armenia itself was selected
for the festival. Last year, there were two shorts, but they were from
Diaspora Armenians (Russia and Lebanon). On four occasions, I sponsored
the presence of journalists from Armenia (there were none otherwise). The
problems I had to get them an accreditation and a French visa were
tremendous. On two occasions, staff at the French consulate hinted that if
the girls accepted to be “friendly” or paid a bribe, it would make things

For the 60th anniversary of the festival, there was a get-together of
many famous directors to speak about the present state and future of
cinema. I rose and asked why was there so little Armenian presence at the
festival since independence ? Roman Polanski walked out saying “he was
wasting his time here with stupid questions” (sure man,. we do not want
any competition for the Pianist). Next day, I was called before the
headmistress (I mean the head of the press office), and told not to
misbehave again. However, lo comido y lo bailado..

PUNISHMENT “Punishing” misbehaving countries whose actions are not
appreciated by France is also a regular feature. Iran and China, if they
have jailed or put any restrictions on film makers, are publicly pilloried
by various manifestations of public support for them during press
conferences, etc..

Sometimes, the tables are turned and France, as represented by the
festival, is the subject of criticism and boycott, particularly from the
Americans if the government has failed to support or criticised any aspect
of US policy.

So as you can see, in France, cinema is politics by other means, not just
local “engagé” film-making, but a way of scoring international diplomatic

Saturday, May 7, 2011

CHILEAN REACTIONS TO WORLD EVENTS - Strange Analysis & Unpublished Letters

Long protected by a chain of high mountains and a difficult sea journey
away in pre-Panama Canal days, the flow of information and knowledge about
faraway places and events has not been a forte of Chilean society. Even
after air travel and telecommunications made instant exposure possible,
the threat of the “foreign” and the “different” is set with clichés and
prejudices. When the main national cable TV franchise was owned by
Argentines, you would get channels from most of South America and Mexico.
Now you can only get Argentine TV and a Mexican variety channel. Sure, you
can, as I do every morning, view the whole South American press on
internet, but how many people do, even if it is up their professional

The further and more different the events and culture behind it, the
bigger the ignorance. The sin is magnified with a compulsion to expose
that ignorance, feeling safe that as the rest of the population knows even
less, nobody will know better, and they will all praise the “expertos”
because they are famous or come from one or other institution.

From the various major events that have made the news in the past
fortnight, I have selected three examples whch I shall detail below.

THE CHILDREN OF THE ASHRAM Where have those who manage Chile’s economy
and finances studied? Chicago? Wrong! Harvard? Nope! MIT? No way!
Stanford? Cold! No dears, they have all been to a secret Ashram in India
specialised in Economic thought. They probably learned the words of
Kautilya “One should crush the sands forcibly and extract oil;a thirsty
person should drink water from a mirage; wandering ceaselessly, obtain a
hare's horn; but one should never try to reason with a fool who is
characterized by stubbornness." Ministers and undersecretaries, together
with their academic fan club, recite mantras. They could of course also
have gone to a Tibetan Buddhist monastery where prayers also have Sanskrit
roots, and it is less tiring because the Buddhists have the prayer wheel,
whose spinning is equivalent to reciting the mantras aloud. I have never
seen a Chilean official with a prayer wheel (I am sure their wives’ Opus
Dei confessors would not like it), but they certainly practice the oral

The main object of recent mantras has been the exchange rate, with the
constant reciting of two texts: “The dollar is falling abroad and there is
nothing we can do about it”, and the other is “The answer to the strong
peso is productivity”. I will suggest another one “Why did they transplant
your Lingam into your brain?”.

Strangely enough, though the dollar has fallen everywhere, other
neighbouring countries have managed to limit the fall to a fraction of the
Chilean one? Maybe they have better traders. I wonder how many public
servants managing the economy in Chile have spent even an hour on a
trading desk?

When things really get dramatic, and most of the damage is already done,
they organise an intervention. Can you imagine a military operation where
the commander announces in advance at what time and where he is going to
attack, for how long, and the maximum quantity of ammunition he plans to
use. This of course allows the enemy to take cover and wait the passing of
the small cloud. Thus, pre-announcing an intervention with a fixed daily
sum (equal to no more than 5 % of market turnover), for a limited time, is
the most ridiculous thing I have seen in financial markets over more than
40 years of career.

Interventions should be like intelligence and commando operations. They
should strike by surprise, at moments of vulnerability, with variable
means as befits the daily situation. No wonder they do not work in Chile.

Productivity. The suffering sectors are led by agriculture and tourism.
They are both labour intensive. What “productivity” are they expected to
introduce. Reduce staff and create an unemployment problem? Put up dollar
prices and price themselves out in a very competitive market? Make the
berries smaller? Use contraband fuel to counter the authorities disgusting
hydrocarbons pricing policy? Can we please get some details of the
“productivity” measures learnt in the hills of Darjeeling?

I sent a very short version of this analysis, concentrating on the lack of
expertise in intervention methods, to El Mercurio. It was not published.

LACKEY OR GENERAL? The Royal Wedding gave mental orgasms to all the
media which in any case spends its time and resources, in Chile and
elsewhere, following the antics of the famous. This was their apotheosis
and they fully lived up to it .

It could only happen in Chile, but someone decide to use the event to
score a military point, though the pages of El Mercurio. Unfortunately, he
got it wrong. A former commander in chief of the Navy, admiral Vergara,
wrote a letter saying how pleased he was to see “so many uniforms” at
Westminster Abbey, contrasting it with the fact that in Chile, “the
military appear to be like an embarassment” adding that even the
presidential AdC at ceremonies took a back seat.

Taking that last point first, presidential AdCs at ceremonies ARE supposed
to be unobtrusive unless needed, so a very bad example to complain about.
As for the uniforms at the wedding, maybe admiral Vergara did not know
that all the British royals, including female ones, and I am sure many of
the crowned heads and princes invited from abroad, hold honourary military
ranks. In the UK, various other officials also have military-looking
uniforms (as do staff at the Palace). The bridegroom being a military
officer, it would also be normal to think that his fellow officers were
invited, and as they do in Chile, came in uniform. I would be very
surprised if the whole high command of the armed forces had been invited
to the wedding . You may want to check the guest list with the British

I am the first one to think that the military in Chile have been badly
treated, having had to do the élite’s dirty work by protecting their
privileges threatened by Allende’s regime. They then were the only ones to
be tried and imprisoned for human rights abuses, whilst their civilian
puppet masters enriched themseves on privatisations, became senators and
deputies, sometimes ambassadors, without a single one of them spending a
night in jail.

The final coup de grace on the horizon is the plan to repeal the Copper
Law, completely handing over major procurement decisions to venal
bureaucrats and politicians, helped by “advisers” of very dubious quality
and hidden allegiances.

The problem with admiral Vergara’s complaint (as I explained in another
letter to El Mercurio which similarly went unpublished) is basically
incorrect. I studied for three years in France and worked for 20 years in
London. I have been interested in military affairs since I was 8 years old
, but in all these 23 yearsin Europe, I did not once meet or even see a
military officer at a social event, inauguration, conference or seminar
(except when they specifically dealt with military affairs). It is true
that the presence of uniformed representatives at diplomatic receptions in
Chile has fallen since I first arrived, though I am not sure which part is
due to their not being invited, or not going. In fact, spouses are
generally not invited either these days (not even to the Royal Wedding, as
we heard). Can you imagine my wife writing to El Mercurio complaining as
to why she was not invited to the national day of Uzbekistan, though David
Beckham’s wife was at Buckingham Palace?

AFTER LENIN DIED Though Marx was the theorist, Lenin was the practioner
of Communism. He died in January 1924. The Soviet Union went on for
another 66 years without him, even surviving the demise of Stalin for 37
years. The USSR and the Communist system in general were very centralised,
with orders coming from the top and having to be obeyed. Al Qaeda is a
loose franchise, so why is it going to fall apart because Usama bin Laden
is dead? Not a chance.

I have mentioned in my two previous notes on the Egyptian and Libyan
upheavals, about the poor state of knowledge and analysis of the Middle
East in Chile. Despite the presence of a large community of Palestinian
origin, even culture and language among them are a minority activity,
whereas the rest of the population knows nothing about it. The only Middle
Eastern studies centre at the Univeristy of Chile is non-descript. One has
to say that Arab embassies have done little to counter this situation,
even letting the government palace host annual Jewish celebrations as if
it was a Chilean holiday (how many Chilean ministers have been to the
Santiago Mosque?).

Ah, but we have the “expertos”. They surpassed their performance on the
Arab crisis by commenting on the killing of Bin Laden. Among the three
comments I picked up, the best one was the analyst who placed Pakistan in
North Africa on a TV debate, but the others were also notably off the

“A Great Victory for the USA”, a columnist wrote. Really? What is great
about it? The fact that it took you 10 years to locate a guy sitting with
a large part of his family in a house 40 km from your embassy in
Islamabad? And that with a U$ 40 bn annual security and intelligence
budget and airport procedures which transformed air travel into a hellish
experience? Was it the great performance of the Navy Seals (parasail down
from helicopters onto a house full of women and children where nobody shot
back, and the main target, unarmed, was killed in cold blood)? This is
back to the times of the Far West posses and lynching of Blacks in the
Deep South. The law West of the Pecos river. It is now politically
incorrect to lynch Blacks, particularly if your president is one, so there
are the Arabs, neigh, Muslims in general (never mind that your president
holds the second name of Imam Husain, the most venered Shia martyr).

Can you imagine the scandal if during Pinochet’s detention in London,
Spain had sent a commando unit to shoot him at the London Clinic? Remember
the complaints high in the sky about the Bulgarian secret service killing
a dissident in London with a poisoned umbrella- high marks for
originality- or the more technically sophisticated disposal by slow
radiation poisoning of a Russian dissident, also in London. Let us not
even mention the breach to Pakistani sovereignty, however well or badly
exercised by its government. The US of A, like its devilish offspring the
State of Israel, has never bothered about legal niceties in international
relations. Full marks to Ricardo Lagos as the only Chilean politician who
did not deem it necessary to lick arse in his reaction.

Another academic declared that the killing of Bin Laden was good for the
prospects of the US economy. Wow! So the budget deficit and the bankrupt
Social Security system were all due to the wicked Osama, huh? Like with a
magic wand, the deficit is going to disappear and the unemployed will all
find jobs.

Though it has nothing to do with the subject, except to signal the level
of competence of the security services in Anglo-Saxon countries, a
headless corpse was fished out of an English river recently. The press
gathered and asked the senior police officer about more details. Sorry, he
replied, he could not confirm the person was dead until he had been
examined by a doctor. Just shows that you do not nned a brain after all.

FREEDOM OF EXPRESSION Though it was unplanned, I am proud that the day
of my birthday was chosen as the yearly celebration of International Press
Freedom Day. I shall continue to live up to the honour whenever I feel
like it, and that despite of the fact that me and my family have been
under undescribable pressure to make our lives hell. It takes more than
that to stop Armenians, but if something happens to me, do suspect foul

Thursday, April 21, 2011

A BASKET FULL OF CHILEAN EASTER EGGS - Otherwise known as Huevadas

“It was the first thing that shocked me about Chile: people only work
because they have to, for the money. Nobody really sought success, or was
passionate about what they were doing. If they find elsewhere a job that
pays the same money for less work, they leave.”

Yoel Gutierrez, Cuban-born trainer of Chile’s Olympic athletes

The unworthy and ungrateful readership of my deceased Chilean weeklies
supposedly enjoyed the Huevada de la Semana, which has also stopped.
However, as we are leading up to the Crucifixion of Our Lord later this
week, I thought I would crucify a few Chileans (though I fear it will not
save the world), and include some foreigners in the process too.

ECONOMIC HUEVADAS Because Chile is the only country in the world where
every aspect of life is ordered by economists (or the Church), what they
say is always headline news, and God knows they talk a lot, both in and
out of government. Among very fierce competition, the winner of the Golden
Egg competition is unanimously named as Central Bank president José de
Gregorio. Of course, he did not comment about the OECD report pointing out
Chile as having the most unequal education system among members, nor that
Chilean adolescents were the region’s second highest cosumers of cocaine,
but 90 % of them does not have even a basic working knowledge of English,
hardly surprising when in a voluntary testing of 11,000 public sector
teachers, 36 % were found as incompetent. There is no explanation as to
why the sale of cigarettes was up 13.3 % in the first quarter of 2011

Here is a non-comprehensive selection of declarations made by the laureate
since the beginning of the year:

-“We shall not submit monetary policy to exchange rate considerations”
-“ We are surprised by the high level of consumer interest rates”. This is
a perennial discovery, as if all astronomers died every few years and
their successors “rediscover” Halley’s Comet. Finance ministers and
Central bank presidents beat their breasts from time to time as to why
with inflation and Central Bank intervention rates at around 5 %, stores
charge from 30 to 150 % to customers. In a country where they cannot even
calculate compound interest !
-“The intervention of the dollar was not meant to push it up, only to
relieve (sic) tensions”. Have you tried masturbation instead?

A very poor second comes Finance Minister Felipe Larrain in the
competition, though his single entry was of high quality: “ The cut in
expenditure for 2011 is to help the poor and needy”. This reduction is in
fact the most stupid economic measure taken by any Chilean government in
years. In a year where the budget will be balanced, cutting U$ 750 million
is pointless. He was also “economical with the truth” , by initially
saying that it would apply only to current expenditure, such as
travelling, paper clips, entertainment and new cars, but when he presented
the details (much later) it turned out to include a postponement of the
recruitment of new Carabineros (supposedly a government priority),
freezing defence procurement and kicking forward the already behind
schedule new army headquarters. There are probably more such surprises if
and when we see the full documents). How does all this helps the poor? It
is all in the Codex Chicageum, which replaces the Bible in Chile. If you
lower expenditure, you lower inflation so people have more money to spend,
goes to theory. Tell that to the unemployed who were going to join the
Carabineros or the building workers at army headquarters. Read the whole
book next time you are at a US university. It DOES NOT apply if the budget
is in balance.

Private sector economists also took part, and I shall single out as
consolation prize the pronunciation of Chicago Boy Francisco Rosende, who
said that “extending maternity leave was a tax on employment”.

NON-ECONOMIC DECLARATIONS Of course, as I said that all aspects of life
in the country were in the hands of a small coterie, there were other
themes too. One current hot debate is a government initiative to improve
health of young people and fight obesity ( which has become catastrophic,
particularly among women, most of whom now have bums the size of the
Hindenburg..a few spoonfuls of beans and they might fly). A law was
prepared banning the sale of junk food in and around educational
establishments. The business community, in typical Chilean fashion, the
business community objected and started lning up its congressional pet
dogs in defence of “free entreprise”. Forgotten were the “role models” of
Scandinavia which had taken the bull by the horns on such matter, with
very positive results.

That is what produced a declaration by senator “Spotted Dick” (imagine
that for years this guy was a heartbeat away from becoming president of
Chile. He described the uathorities as “Talibans who thought they knew
better as to what people should do”. Considering the senator’s own past
baggage, if I were him I would refrain on commenting. On anything.

THE HUEVADA THAT NEVER WAS The self-promoting crook (she should have
married Segovia of the SEK) and former Prefect Jacqueline Van Rysselberghe
was finally cornered into resigning, but she had barely left her office
with the cardboard boxes containing the witch’s brew, that some wise guy
started mentioning her as a possible replacement for her UDI congressman
colleague Mr Lobos who died in a car accident. In Chile, parties replace
any resigning or dying congress member at will without going through a
by-election or a pre-appointed stand-in. However, common sense seems to
have prevailed, and the idea abandoned. Talking of Mr Lobos, can someone
explain to me why the first reports said he was not wearing his seat belt
(his daughter riding next to him did, and survived), and then this was
“corrected” by the police who declared that both occupants were wearing

DIVINE JUSTICE ON EARTH As some veteran readers know, in the early 90’s,
soon after my arrival in Chile, I was the victim of a theft, in fact a
scam, committed by one Fernando Hurtado Lambert. He is the nephew of
Carlos Hurtado, who at the time was minister of Public Works in the Aylwin
government, and his nephew carried out his scams (there were other
victims) from the offices of a construction design company owned by his
minister uncle.

I lost over U$ 20,000 in the episode, with no possibility of redress as no
press, lawyer, business organisation or consular authority would touch
such an “honourable” family. In fact, one of them, a lawyer by the name of
Sven Herlin Kaiser, brother in law of Fernando, rang and threatened me
with unspecified dire consequences if I even told the story about town.

Why am I bringing this up again? Because the Lord moves in mysterious
ways. The other day, Carlos Hurtado’s household was the subject of a
telephone scam ending up in around U$ 50,000 being stolen. I am genuinely
sorry to say I did not organise it, though I would have been pleased to do
so given half an opportunity.

NO CANNES, THANKS TO CHILEAN INDOLENCE In the past 14 years, at this
time, I would be starting making my bags to go to the Cannes Film
Festival. I did it as a serious hobby, to the extent that quite a few
people at the event started respecting me sufficiently to interview me
about films etc..One year, I was even co-presenter of a Chile day, at the
request of the festivalk organisers.

This was made possible because my sister and I had inherited a penthouse
there, and it reduced the cost (which I entirely covered) of the trip. I
reported for a number of Chilean media, which paid not a penny towards the
benefit of having their own correspondent at what is, after the Olympics
and World Cup, the world’s third largest mediatic event. It allowed me to
be there, so each side benefitted, though I think the Chilean media got
the better deal. Not that they were grateful. La Nacion, when it existed
in printed form, basically ignored all material sent over the week-end,
when all the interesting stuff takes place in Cannes. So exclusive
interviews that had taken days to set up would be wasted. El Mostrador
last year decided to cover Cannes on its online video system frm Santiago,
and did not even bother to tell me. I arrived in Cannes without anybody to
report to. Only Chileans can be so pendejos, though I also have to mention
that as one of only two or three people from Chile covering Cannes, I was
never invited at the pre-festival gathering for the Chilean delegation
(the rest all being paid by the taxpayer) given by the French Embassy (nor
to nay other event at the said embassy, soit-dit en passant). .

Alas, financial needs forced us to sell the apartment, but I did not lose
hope. By now, as I said, I was respected by the organisers, who already
paid all expenses for El Mercurio to be there. I heard that La Tercera was
not using its Paris stringer any more, so I hinted to the festival press
office that if they could treat La Tercera with an invitation as they did
El Mercurio, I could represent them. Though they did not give a firm
commitment, they were pretty positive in their reponse, and asked me to
get a letter frm the paper appointing me as their correspondent. I passed
it on to the power that be at La Tercera and waited, and waited, and
waited. I sent four chasers. Nothing, until 5 days before the process
closed, I was told that they had been “too busy”. My guess is that they
decided to send osmeone else and did not consider it was the minimum
courtesy to let me know. Adios Cannes!

LINGUISTIC AND FACTUAL EGGS The website of the newly created and
already under its second incumbent, the Joint Chief of Staff, has, like
all government departments, a list of staff, contract and consultancy
employees. They are an excellent osurce of information about perosnnel
movements and related matters. Currently, the list of consultants includes
one Ricardo Ibarra, whose job description is put as “labores de
extención(sic) docente”. He is thus involved in extra mural training
activities, which I hope do not include spelling.

I am not sure who owns the Citroen dealership in Chile, but they are also
in dire need of syntax advice, as their publicity describes their products
as “Créative Technologie”, supposedly in French and I am sure inspired by
the 1980’s Audi slogan “Vorsprung Durch Technik”. The problem is that in
French, you should write Technologie Créative in that order.

In one of the few occasions in my nearly 41 year career when I was
actually “dismissed”, the Stockholm Peace Research Institute SIPRI,
considered the standard reference work on military expenditure, took
umbrage at something I had written in one of my Chile weeklies (nothing to
do with them, or Defence), and declared that they “could not be associated
with me any more”. To the extent that I was not making any money out of
it, and they did not even allow me to say publicly I worked for them, It
was no big loss. A couple of weeks ago, they published their yearly
analysis, and the person responsible for working out Latin America, even
thought she should give an interview, widely reported by the international
press. This Argentine woman was obviously an expert. Citing the reasons
for the fact that Brazil and Chile had the highes procurement expenditure,
she referred to Chile as “wishing to project its power regionally”, and
for good measure that “the Copper law has been abrogated”.

The morale of all this, coming on top of the super huevadas written by the
IISS in London some years ago, again on Chilean procurement, is that you
should never take a declaration, statement or analysis at face value
however supposedly prestigious the source is. And I am not just talking on
military affairs.


Thursday, March 24, 2011

UPS & DOWNS OF HANDLING CATASTROPHES - Are the Japanese the Chileans of Asia ?

“The world rightly seen is a burning house, and it is that because it's a
fragile world, it's made the more fragile because of human greed and
avarice and desire, and a way to deal with it is to curb desire if not to
suppress it entirely.”

The Lotus Sutra (Classical Sanskrit text)

STILL THE MEDIA In recent days I ran a mental competition as to who
would make the most asinine remark between the two current headline
grabbing stories, the Japanese nuclear situation and the attack on Lybia.
I have to say that in a very hotly competitive field, the Japanese
situation won, in the words of Eugenio Guzman, Dean of the School of
Government at the ultra-neo liberal Universidad del Desarrollo. His
argument in favour of nuclear energy was that in the past 10 years, 70,000
Japanese had died as a result of road accidents, as compared to a maximum
toll of 4,000, including indirect deaths, from Chernobyl. The numbers were
strongly in favour of radiation. From 2004 to 2005, Guzman was a member of
the Presidential Commition* on Public Ethic. Pouquoi riez vous?, dirait le
Canard Enchaíné. *The few literate readers I have may have noticed that
“Commition” is wrongly spelt. In fact, I took the sentence directly from
an OECD document. As the OECD is made up of developed countries (Chile,
after all, is a member), they must be right. Otherwise the OECD may wish
to employ me as a proof reader, as my other talents are obviously of no
interest to them.

On the Lybian crisis, and its wider Arab context, there is no real Chilean
angle but suddenly out of the woodwork came out a plethora of local
“expertos”, who, when they did not confuse “Lybia” with “Lebanon”, were
eagerly sought for their learned thoughts. On March 24, the Universidad
Mayor held a seminar on the subject. Main speaker was Vittorio Corbo, that
great gift to Arabic studies and Orientalism, as he is to exchange rate

JAPANESE HANDLING OF RESCUE When the earthquake first happened, Chilean
and other media organs were in awe about the speed of the deployment of
100,000 rescuers in the disaster zone. They expected, no, they were sure,
that such an advanced, developed and disciplined country would set an
example of how to conduct a rescue operation. It already led the field in
educating its citizens in prevention measures against earthquakes.

Nearly two weeks after the quake, the mounting evidence points exactly the
opposite way. Far from being a model of efficiency, and just concentrating
on the humanitarian aspects, besides the nuclear consequences, the relief
operation has been shamefully inefficient. Yes, it was a big quake. Yes,
it was in difficult terrain. Yes, it was very cold. However, the handling
was closer to a show by ONEMI and its supporting cast, than from a
state-of-the-art exercise.

It just could be that however smart they may have been in inventing the
cassette player, the Walkman, the VCR, and Nintendo, they might just not
be very good at rescue operations. I remember that on August 12, 1985, a
Japan Airlines 747 jet crashed into a mountain near Tokyo. It took two
days for the authorities to pinpoint the location, after which they sent
the rescue teams..up the wrong mountain! There was little they could do
anyway. 520 out of the 524 people on board were dead by the time they were

On the March 11 quake and tsunami, the authorities have now admitted that
their preparations were inadequate with no plans to handle a disaster of
that magnitude. They did not have adequate equipment. The military had
idle capacity which was not put to use. Funnily, the head of the Japanese
Defense Academy decided to visit Chile recently. The sea walls that were
to protect the coast against the tsunamis were of insufficient height. The
foreign rescue teams were not taken advantage of, and there were long
bureaucratic delays to allow the rescue dogs in, on the grounds of health
safety (with millions of people crying out for help and risking radiation,
the authorities worried about importing fleas and distemper!) Funnily,
exactly the same happened on the Argentine border with Chile after last
year’s quake in Chile.

When action was taken, it looked about as efficient as Piñera’s house
rebuilding programme. Those helicopters throwing buckets of water over the
reactor were as ridiculously useless as the CONAF Polish-made fire
fighting converted crop sprayers that try to douse forest fires in Central
and Southern Chile. Have the Japanese not heard either of the
purpose-built Canadair or Beriev-200 aircraft?

The most criminal example of inefficiency came out of the interview at a
hospital in the disaster zone, where many refugees had huddled. The chief
doctor said he was running low on food and medical supplies. People were
getting a ball (not a bowl, but a ball) of rice as food for a single day.
What? Don’t tell me that the same helicopters spitting on the reactors
could not be better used for an air bridge to these hospitals, round the
clock, carrying food and medical supplies. Helicopters do not need a
landing strip. After all, the TV crew could get there.

Shameful. I think not just the government, but the Emperor should
abdicate. Pity Seppuku is out of fashion, as the disciplined young
Japanese have turned, like their Western counterparts, into Information
Technology addicts for the purpose of games and entertainment, and are
fast losing all what made the nation powerful (as it has no natural
resources, if it loses its people quality, Japan will end up like Greece
or Britain, a museum of past glories). People forgot too soon how badly
the Kobe quake was handled in 1995. Mishima was the last great Japanese.

NEGATION SYNDROME There are important socio-cultural aspects to take into
account. Japan is a corrupt society, and we know that not just nuclear
incidents but defects on other products such as motor cars, were hidden
from the public for long periods. Only after US lawyers start putting
their nose into the matter than they suddenly start recalling zillions of
vehicles. The contradictory remarks on how much radiation risk there was
are part and parcel of the same syndrome. One day the population is told
there is no risk, and the other day they advise not to give Tokyo tap
water to babies, hundreds of kms. away from Fukushima.

The Japanese character is hostile to spreading bad news, because it
implies criticism of someone’s acts. When I was working in the City of
London, it was well known that Japanese brokers never issued “sell”
recommendation on Japanese companies, even if they were in an ENRON
situation, because it did not look very gentlemanly. People who deal or
negotiate in that part of the world also know that they hear “yes” more
often than “no” from their interlocutors, though it never means that they
are in agreement and even less that a deal is done.

HOW OTHER COUNTRIES DO IT Major natural catastrophes are overwhelmingly
located in the developing world, with Japan being a rare exception. Other
countries do have disasters, small, big and medium, and they have
different ways of coping with it.

Starting with the region, China is also prone to major earthquakes with
death and destruction. There is less first hand information compared to
the live coverage of the latest events in Japan, but we know for a fact
that compared to the 10,000 houses that Piñera and his team of academics
from the sort of university Eugenio Guzman teaches at, managed to put up
in a year, the Chinese, headed by military construction group, rebuilt a
large town that was almost totally destroyed in 6 months. The Chinese also
showed long-range efficiency by evacuating in a few days, 30,000 of their
national from Lybia in a textbook operation involving a navy vessel, air
force transports and privately chartered planes.

Russia has a full ministry for handling disasters, and even though their
record may be patchy, at least there is a structure and their heart is in
the right place. France has a really integrated plan called PLAN ORSEC for
complete coordination of all institutions in case of an large
emergency (though I suppose they have not been tested after a force 9

Thank heavens that the UK rarely faces natural or man-made emergencies,
because it is an utter disaster. A recent public inquiry on bombings in
London’s public transport some years back reflected an amazing number of
shortcomings in the rescue services. Even their famed crack military units
are fast becoming a joke. Because, like many countries round the world,
the RAF preferred to buy expensive combat planes that are only used to
kill babies in Moslem countries, rather than logistical equipment, the
Foreign Office could not gather official transport to evacuate British
civilians from Benghazi (that is what the town is called and pronounced,
ignorant Chilean journalists, not Bengasi). Instead, they chartered from
someone like Air Uzbekistan a plane that broke down at Gatwick airport
before leaving, and delayed the operation by 24 hours. Those to be
evacuated by ship did not fare better. The frigate HMS Cumberland, which
was on its way back to the UK for cashiering off, was diverted to pick up
evacuees at Benghazi. They duly came on board, and than sat there like the
troops on the even of D-day because the ponzis that commanded the vessel
decided that the sea was “too rough”. These are from the same source as
half the frigates Chile has acquired. It is to be hoped that the Peruvians
rather than the Argentines will attack the Chilean high seas fleet,
because obviously they cannot tackle the Magellan straights, if they
cannot sail in the Mediterranean. Is it necessary to also mention the
“crack” (is that what they were on?) SAS unit which, accompanied by an MI6
agent, landed in the rebel zone without being invited and instead of being
welcomed as liberators were duly jailed for trespassing?

As Aristotle once said: “Excellence is not an act, it is a habit”. Sadly,
a habit that is fast disappearing.

NOTE In answer to several queries, my weekly papers have NOT resumed. I
only write some thoughts from time to time (it may be twice a month,
followed by nothing in two months), and I try to keep them as general as
possible so as not to provide free homework help for the readership. I
already know that my last paper on the Shortightedness of Defence Salesmen
was not taken seriously by anyone among those it was particularly destined
to. Lastly, the behaviour of some embassies, international organisations
and corporate readers is getting beyond the acceptable, and one of these
mornings when I get up on the wrong foot, I will say “Unchi” to all of

Friday, January 14, 2011

THE COLD WAR IS ALMOST OVER And the Winner is China!

I am sure many readers would have liked to see an analysis of the latest events surrounding the departure of Jaime Ravinet from the Defence ministry. Alas such things shall not circulate any more, due to the readership’s small mindedness and ingratitude. My weekly reports cease as of today (Lists PR,DM,GO,OF1,OF2,VIP & T). I shall continue to issue from time to time some thoughts on security and geopolitics, without any specific frequency. These will primarily go to my “military” lists (M1, M2, M3, M4, VIP-M), although I may transfer a very selected number of “civilians” to the circulation.

Of course, you can get a report of mine on most subjects. All you need to
do is pay (presumably you know what money is?). Your short-sightedness was
very counterproductive. There is probably nobody in Chile who knows as
much as I do about all the ramifications of the Ravinet situation that led
to his dawnfall. I also wrote soon after he was appointed by Piñera, a
10-page detailed background profile on the man, which I offered for sale.
Not a single person showed interest. Here is a prescient extract:

“A Short-Term Appointment? Though it is very unlikely to be his own
expectation, a number of people (including in private senior military
officers, for whom it might be a wishful thinking exercise) do not expect
him to last very long. They see Ravinet’s stumbling on the stairs of the
platform the day Piñera presented his cabinet, as a premonition.”
Written in March 2010!

All of you probably subscribe to the motto that “ignorance is bliss”. The
most “helpful” comment I received among the very few who reacted to last
week’s farewell message, was one saying I should not criticise Rodrigo
Hinzpeter (no, it was not from the Israeli ambassador. Need I say more?

And on to the boat for China.

CHINA AT LAST Some two centuries, Napoleon Bonaparte, one the most
capable statesmen who ever lived, said that “when China wakes up, the
world will tremble”. We have had many false starts on Chinese hegemony,
but this time it seems to be for real. The trouble is many people do not
realise it, and consider it like just another “emerging” country where
there is business to be done. To put China in the same “BRIC”
classification as Brazil, a bunch of 200 million over-indebted
fanfarrones, is ignorance on the verge of being criminal.

At around the same time as Napoleon talked about China, the strategist
Carl von Clausewitz spoke about War. He declared that “War was the
continuition of politics by other means”. Of course, the Chinese, with Sun
Tzu’s Art of War written around 500 BC, were already codifying the
strategy. Another BRIC country, India, was writing 36 chapters about
sexuality which make up the Kama Sutra. Each one had his priorities. Not
that the Chinese did not write about Sex. The Tao practice as described in
Shuang Mei Ching An Ts’ung Shu, edited by Yeh Te-hui, is but one example,

Let me describe the creeping Chinese domination, involving the firing of
very few shots if any, as “Economics being the substitute of War through
other means” (Armen Kouyoumdjian dixit).

AMPLIFYING INFLUENCE Some people think that the Chinese strategy is
just to secure energy and raw materials, and safeguard export markets.
This is only part of the picture, albeit an important one. China wants to
become indispensible in everything, and be involved in all global things.

The most visible aspect has been the domination of consumer markets in a
short period of less than 20 years. Whenever you pick up a product these
days, if it dos not come from China, it is the exception. Sure, others can
and have made shoes, clothes, computers, air conditioners and medical
supplies, as well or better, but not cheaper. Once people have been used
to buy a DVD player for U$ 40, it will be hard to make them buy a Finnish
one for U$ 200, except for niche markets of brand snobism. The current
Chinese effort is in the automotive market (from small cars to trucks),
leaving only aerospace industries to tackle (strangely, Japan, despite all
its prowess in aircraft design before and during WWII never managed to
break the Airbus/Boeing duopoly, or even the niche markets of the likes of
EMBRAER and Bombardier).

Like the Japanese in the early days, the Chinese might not be afraid of
industrial espionnage with which to accelerate quality and technological
progress. The recent scandal surrounding the theft of information of
Renault’s electric car may be a case in point. Do not worry, the Japanese
went that way too. When I worked in a London bank, one of our shareholders
was DKB, then the largest bank in Japan. Even though they only had 5 % of
the capital, they insisted on having an intern work with us all the time.
Contrary to the indolent British staff, these would stay alone after
normal hours and copy any documents they could find lying on the desks. We
always used to joke that if we ever lost a piece of paper, we were safe
with the knowledge that there was a copy in Tokyo.

The Chinese are also wary of any other producer challenging them too much.
The announcement of a 35 % cut in exports of “rare earth” materials in the
first half of 2011, is to be seen within that context. These are used in
many high-the industries, and China has a dominating position in most
varieties of rare earth.

NEW FORMS OF DEPENDENCE In 2010, 54 million Chinese travelled abroad.
Though this makes a small percentage of the population, I would guess that
in terms of numbers it makes for the largest number of tourists from a
single country. Though no place as yet depends on Chinese tourism for
survival, and it is becoming more difficult each day to find destinations
where you get frozen, flooded, killed by narcos or American bombers, the
potential is there when some of the rest of the 1.5 billion Chinese start

What China as a country has most of is money. Reserves stand at around U$
2650 bn , double the next in line (Japan). In my previous paper I gave
details of US fiscal dependence on Chinese T/B purchases. The scene has
now moved on to the Euro.

It is appalling how the supposed clever brains still misunderstand the
nature of the crisis. It is not about growth, employment or any such minor
issues. It is about fiscal survival. The way people tackle it (“how to
make growth start again”?) are as stupid as someone planning to add
another floor to his house when there is a major fire in his basement
which is out of control.

The Chinese have declared that they will support the Euro, and put their
money where their mouth is by participating in recent debt issues, such as
this week by Portugal and Spain, both of which oversubscribed at lower
rates, almost certainly due to Chinese participation. Before that, they
are reported to have also purchased French and German debt. As this badly
treated crisis will go on, China could become for Europe what it is
already for the US: the unavoidable junkie finance provider for hopelessly
overspent countries. What do you mean building high speed trains in Spain,
when 30 years ago you were happy to accept waiter jobs in Geneva?

Whereas the “rich” countries get credit, the poor get gifts, or at least
cheap loans, free infrastructure donations, etc..That also makes them
Chinese-dependent or at least Chinese-grateful. From a trade negotiation
to a politically-motivated US vote, you can see where their allegiances
will be.

The Chinese have another weapon: the presence of a large Diaspora.
Initially limited mainly to Asia, where in some places (Malaysia,
Singapore), they are part of the national fabric, the traditional
Chinatowns of other places which were little more than folkloric, have now
extended to major communities. Up and down the Pacific coast from
Vancouver down South, and in many Latin American cities too (in Argentina
they control virtually all the small urban retail minimarkets). I hope
that they are more supportive than the Armenian Diapora, whose main
activity is to stab good Armenians in the back.

At the higher end of the scale, they have been buying companies at various
levels of the chain. I mentioned last tme the purchase of IBM’s consumer
division by LENOVO, but did you know that they have bought 50 % of BRIDAS,
Argentina’s second largest hydrocarbons group, and Occidentals’ operations
in the same country. There are many such examples.

THE DEFENCE ASPECT: USA & RUSSIA Though many countries and industries
can do little to escape from the Chinese onslaught, geopolitically, the
USA is the most frustrated because it will realise that all its military
might cannot allow it to produce DVD players for U$ 40, and it prefers to
bomb populations who do not sing the Stars & Stripes before school every

In Dostoievski’s Crime and Punishment, Rodion Raskolnikov owes money to
his landlady, which he cannot pay, and chooses to murder her instead. If
the USA arrives (and the inertia of compound interest certainly points in
that direction) to that situation, will they choose to nuke China thinking
it would mean a debt write-off? Military attacks for collecting debt have
a long tradition in History. Attacks in order no to pay debt are less
frequent, but they could still have a go at it.

So in parallel with their economic might, the Chinese are not taking any
chances and building up the quality of their armed forces. On a visit to
China last week, US Defence Secretary Robert Gates admitted that the
Chinese were advancing faster than the USA in developing their defence
matériel. The stealth fighter is a strong example. They have nuclear
power and have sent a man in space.

He also hinted at some unease about the increasing Chinese military might.
He should well be. If the USA could not control Afghanistan or Iraq, how
are the going to “neutralise” 1.5 bn Chinese? Not being able to complain
too overtly (remember these T/Bill purchases), the USA used The Economist,
that despicable moutpiece of the Anglo-Saxon neo-cons, to write an
editorial saying Chinese policies were “wrong and dangerous”, as was their
“policy of military build-up and aggressive (sic) diplomacy”. A classic
case of the pot calling the kettle black. If they expect China to continue
playing the coolie and Charlton Heston’s son play in a remake of the “55
days of Peking”, they have a surprise coming.

One should not forget another aggrieved party, namely Russia. In the
heydays of Communism, it looked upon China as its pupil, who eventually
decided to go its own way, but was not really a serious threat. We do not
buy Russian DVD players. We could have. A distant relative of mine was the
representative in Lebanon of Russian consumer electronic goods back in the
1960’s. The products were not that good (nor was the first Honda I saw at
the Paris Motor Show at about the same time) but there was forward
thinking. I remember a leaflet on “forthcoming products” which included
something I thought total fantasy: a flat TV screen that was hung on a
wall like a painting. Sounds familiar? This was half a century ago!

Russia has among the world’s largest reserves of gas, oil and coal, but
these will run out one day. Its infrastructure is in shambles, its small
towns full of unemployed drunks. Its health standards are falling as is
its population. The natural resources will end one day, and then what? In
2010, the accumulated reserve fund from high hydrocarbon prices was
virtually depleted. It has unruly Moslems within and across its borders.
Let us not even start about the corruption. What can be done about all
this? I have no idea, but to lose any chance of regaining some sort of
counterbalance of power with the Americans now appears an impossible
dream, and I can guess that the Kremlin is worried.

Many years ago I bought a badly written book published in 2000, called The
Bear & the Dragon. It is by Tom Clancy and describes how the USA and
Russia unite forces to give a bloody nose to a Chinese aggression. Can you
see the Russians really doing that, playing bag carrier to the Heritage
Foundation and the Mount Pélerin Society?

RISKS FOR CHINA The road towards dominating world affairs has some
obstacles and minefields for China. These are not necessary unavoidable,
but have to be taken into account.

First and foremost, and Sun Tzu emphasized this, the enemy should not be
totally destroyed and humiliated, nor his food eaten. China must ensure
that there is enough economic activity and few crises in its client
countries for them to continue buying its goods, otherwise it will have an
oversupply of offer, and more dangerously, a sharp increase in
unemployment. Its society has dissidents, crime (200,000 children just
disappear each year), and regional unrest. It needs an economic crisis
like a hole in the head. It should continue to pay high prices for
commodities, in order to see a great part of that money come back to it
through exports. Nor does it help China to have a major financial crisis,
be it in the USA or Europe. Not only wil it lose many of its reserve
assets, but the deterioration in the means of payment will alos affect its

There are a number of things it needs essentially. One is oil, of which it
imported 4.79 million b/d (+ 17.5 %) last year. This is more than all of
Russia’s oil exports. It also needs other things, apart from the usual
commodities, bth food and industrial. Cobalt is a good example.

Notwithstanding its language difficulties in a world where many people
cannot even speak and write their own language properly, let alone such a
complicated one as Chinese, it should make a bigger effort to spread its
own culture, and undertsand that however dependent they may become on
Chinese money, goods and donations, when in Rome, you should really try to
do as Romans do.

HUEVADA DE LA SEMANA If you cannot manage with a crook, try a
perpetrator of gender violence. In the very day that the Segovia stand-in
was elected to head the Chilena professional Football Association, it was
revealed that he had been indicted for physical violence agaisnt his wife
and verbal threats towards his son. He was condened to follow a 6-month
course in rehabilitation. He was still elected, and when asked about this
incongruous situation, the head of one of the country’s most important
clubs, who voted for him, described the accusations as “an infamy”.
Remember the case had been tried, it was not just an accusation. Welcome
to Chile, where telling the truth makes you an isolated person, but being
inept, ignorant and badly informed gets you all the attention. Ciao folks.