Retreat or face defeat that is the question

The West sleepwalked into a geoeconomics quagmire when she collectively imposed series of sanctions to arm twist Russia lately and Iran for decades. There was a fault line between the will to defeat the target country and the pathways that were followed up. Here is my critique:

As regards to Russia the sanctions pathways did open up for her new alternate markets and consumers. Russia wasted no time in upgrading her strategic partnership with China and with the hereto dark continent of Africa. Russia-China inter-trade was done in Yuan and Ruble amounting to US$137 Billion in the first half of 2024 alone. Significant part was channelled across the land border. Africa was a combination of food & weapons. In terms of food, Russia delivered more than 200,000 metric tons of grain to the Sahel region as well as to Eritrea & Somalia. Added to this is unspecified number of weapons exported to Africa as a whole.

USA led west faces a dilemma. Either retreat from geoeconomics warfare or be defeated soundly by Russia and her team mates China & Iran. Here are six delimitations faced by the west as a warring party:

1. Over-investing on sanctions along with bungling Ukraine theatre. Failure of sanctions was gradual and remained un-noticed for quite some time. Contrarily, despite initial success the war in Ukraine bled white the resources of the west

2. Both sanctions as geoeconomics tool and the proxy war in Ukraine were carried out in wrong time, wrong place, using wrong methods and finally alluding wrong reasons

3. Both geoeconomics warfare and military confrontation led to the de-industrialization of Europe in general and Germany in particular

4. Failure in balancing full spectrum military warfare with a total geoeconomics contest resulted in the global south aligning with Russia and gradually moving out of Western dominion

5. Neither America nor Europe were willing to fight a long term attrition warfare primarily in the military field and secondarily in the arena of geoeconomics

6. The real loss was not felt in politics but in economics. In geoeconomics concept, policy and strategy must be co-ordinated in proper manner such that one leads to the other and be networked seamlessly. The heart of the matter is geoeconomics actions and counter actions must be properly integrated and be practical. Regrettably, the west failed to read the tea leaves. Result: Russia got two gold medals one in geopolitics and the other in geoeconomics!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

China real estate business strategy changing

As real estate market is on decline in China, the major players are re-evaluating their business strategy. The push by the Chinese government in framing its national policy regarding housing forces these firms to change course. Here are few highlights:

Current position of realty in China

1. Housing sale by floor area in 2021 was 1794.3 Million sq. metres falls to 1,117.4 Million sq. metres in 2023

2. Total real estate investment fell by 9.8% year-on-year, to the tune of  Yuan 3 Trillion equal to USD 0.44 Trillion

3. Valuation of housing stock is around USD 113 Trillion with a growth rate in the range of 2.11% on average

4. Overall sales is dipping and the major players in housing market burned their fingers with a dip well over 30%

5. Added strain is the housing prices are down by 5% in 2023.

State policy re economic growth & housing

1. China will continue to emphasise on the manufacturing side of the economy with twin objectives of enhancing the quality as per technical standards and innovation along with price competitiveness

2. As regards to housing, concentration is placed on living as an abode rather than for holding it for trading, investment and/or speculation, provided that, secondary market of re-sale of houses be allowed due to reasons such as moving out of the area and so on.

Tweaking business strategy

1. Firms must alter the current business strategy of making a kill to the one based on long term stay in the market

2. Affordable housing as the goal must be in-built in long range planning

3. Re-assess the building materials in areas like sourcing, storing and using, such that optimum input cost is achieved

4. Fall of housing prices overall should be restricted to the run-of-mill structures

5. Luxurious and fabulous housing stock be marketed intensively to foreigners as well upper echelon persons domestically.

The crux of the matter is firms in real estate sector have got to analyse the changes taking place inside China as well as in the wider geoeconomics area where she is playing second to none role!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Shiaite grip over energy reserves

The Shiaite population in the Middle-East and Caucasus are sitting over a large quantum of energy reserves that enables them to play with geoeconomics. Here is a review of the population, percentage of Shias therein and estimated energy reserves.

There are seven vital nations in the Shiaite globe, six of these are located in the Mid-East and Azerbaijan in the Caucasus. I am listing the countries in the order of population as hereunder:

1. Iran the largest Shiaite country has a population of 89 million out of which 90% and over profess Shiaism. She is the 3^rd largest in terms of proven oil reserves and second largest in natural gas. Need I say anything more of her geoeconomics clout arising from energy resources?

2. Iraq with a population of 45 million is next in order after Iran boasting a Shiaite proportion around 60%. As the fifth largest depositor in proven oil reserves and 12^th largest in natural gas Iraq cannot be easily dismissed as a strong geoeconomics player.

3. Yemen has a population of 34 million out of which almost 35% is loyal to Shiaism. An estimated gas reserves of 17 Trillion Cubic Feet (Tcf) which is equated to 980 times over the annual consumption of gas domestically, leaves Yemen with a strong hand. Besides her strategic position in Bab- Al-Mandab Strait grants her capacity to interdict naval traffic in Red Sea & Arabian Sea.

4. War ravaged Syria has 22 million population. Although Shiaites are estimated as 15% of the population they occupy the halls of power in armed forces and in administration. An estimate of 2.6 Billion of oil Equivalent (Bboe) is not that great in terms of quantum, but unexplored regions within the country might have quite some surprises in her oil sector.

5. Azerbaijan the only country outside Mid-East and located in the Caucasus has just over 10 million people with Shiaites accounting for over 60% of the total. An estimated 1.3 Tcf gas reserves helps her becoming the biggest exporter after Qatar in natural gas market.

6. Lebanon has trimmed down population of just above 6 million. Less than 30% of them belongs to Shiaism. They came into prominence due to the founding of Hezbollah. So far no one was able to compute natural gas reserves within the country and in the part of Eastern Mediterranean that belongs to her. Yet a conservative estimate of 25 Tcf is not out of place.

7. Bahrain is tiny and her population of 1.5 million might not matter in terms of geoeconomics power play. The Sunni-Shia split in the middle range and her geolocation in the Persian Gulf makes Bahrain as a vital centre of foreign navies including US 5^th Fleet headquarters. Proven oil reserves is just around 124.6 million barrels, though.

All seven countries combined, there stands an undoubted Shiaite power centre that can wield immense force when it comes to the field of geoeconomics!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist