From Trade follows Flag to Flag follows trade
Beatrice E. Rangel
In the early stages of capitalism trade could only spring from territorial control. Thus, the British navy ensured that the factories of the UK would be continually nurtured by trade. Colonial expansionism entered the world stage and the axiom “ Trade follows flag” became a shorthand to describe the world order. And both territorial control by leading world powers as well as trade flourished for two centuries. World powers would enter given geographies and theretofore develop a trade system that would support home industries. Trade while not a creation of political power was greatly enhanced by its makings. Trade truly followed flag.
Enter technology change, reduce the traveling time ten times; multiply by millions the velocity to transfer data and the data storage capacity and upgrade maritime transportation with container shipping.. Wealth creation decouples from the relative access or lack thereof to raw materials and agricultural inputs. Open political systems to new degrees of participation. Instantly inform citizens of what is unfolding in the world and territorial control not only becomes obsolete but a rather expensive proposition.
Trade begins to spring all over the world and either shatters or opens fissures in political systems. Political power and influence depend now on trade Flag now follows trade. This largely means that private ventures pave the road for political influence in emerging markets. Thus, political interests will be served in so far as they can support themselves in private wealth creating ventures. The switch brings about very complex dilemmas to heads of corporate entities that thrive in the commodities space particularly in the minerals and fossil fuels.
Oil is a commodity that seems to love barbarians. If you list the 10 largest world oil reserves only two are in so called developed countries: the US and Canada . The rest are in Venezuela, Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, Russia, Libya and Iran. This latter set of nations could not be defined as democracies by any rational mind. To be sure, these are societies that are subject to truly abject tyrannies tolerated and condoned by the Free World on account of their waning geopolitical weight. Applying to these nations the Western standards thus seems to be truly futile. And as the world accelerates its passage from fossil fuel centered energy matrices to multiple source energy matrices holding reserves of fossil energy gives companies a greater leverage in international trade negotiations.
They thus cling to their assets worldwide. And while many succeed in evading controversy some are caught by truly horrible developments like those of Venezuela where Baker Hughes; Chevron, Haliburton and Weatherford would like to stay in order to be able to develop a position of preeminence at the world largest oil reserve but the country is subject to sanctions from the US government that is all set to bring down the criminal regime of Venezuela. And while those companies try to protect its future business it is now part of the crime Inc. snapshot given that only truly corrupt enterprises remain in Venezuela. The company thus is at the center of one of its worst dilemmas. That of continuing to hold assets in Venezuela to enhance US interests in the future while paying a short-term tribute to organized crime which is the true power in Venezuela. Time will tell what is best for the US and Western interests. But for now, Chevron and the rest of the major oil producers are thorn by the US dilemma.
Published by laht.com on October 6th, 2019
*The opinions published herein are the sole responsibility of its author.*
Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O’Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.