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Commentary: CHIMEA no chimera

By ARNAUD DE BORCHGRAVE, UPI Editor at Large   |   Dec. 21, 2007 at 9:23 AM   |   Comments

DUBAI, United Arab Emirates, Dec. 21 (UPI) -- Below Washington's geopolitical radar screen, where Iraq and Iran tend to blur out the rest of the world, momentous events are in the making. Among the most significant:

CHIMEA is not a chemical formula, but the emergence of the new growth hub of China, India, Middle East and Africa. There are now large areas of what the developed nations of the North still call the developing South that now see themselves as the new fulcrum of something bigger and potentially richer.

At a recent "CEO Retreat" in Dubai organized by A.T. Kearney's Global Business Policy Council, CHIMEA was all the buzz. A reshuffling of the global deck of cards is under way. The Middle East and the wider Islamic world are no longer locked into the traditional (and for 300 years dependent) relationship with Europe and the West. In Dubai, the world's new Hong Kong, the big planetary players see the new hub of global economic growth as a crescent that stretches from the Red Sea and East Africa through the Persian Gulf and the Indian Ocean to the Straits of Malacca and China.

As the dollar is knocked off its pedestal, partly through the recent manifestations of short-sighted naked greed, better known as the subprime mortgage fiasco, at root a global criminal enterprise, CHIMEA emerges as a new engine with extraordinary potential. The ingredients of this explosive growth are Arab energy and hundreds of billions of dollars in "sovereign investment funds," Chinese manufacturing, India's information technology skills and services, and "a vast and young regional workforce with East Africa's agricultural potential."

CHIMEA also encompasses half the world's population, which will rise to two-thirds by 2050. Today, the new geopolitical construct produces 11 percent of global gross domestic product; by 2030, current projections show it at 50 percent. China's Industrial and Commercial Bank recently dropped $5.5 billion to acquire 20 percent of South Africa's Standard Bank -- the single largest amount ever invested in sub-Saharan Africa. Beijing is even helping bail out some of America's most prestigious financial institutions, guilty of subprime management skills in the subprime housing bubble.

All the pieces of CHIMEA are showing dramatic rates of growth -- e.g., North Africa at 7 percent; Egypt 8 percent; even sub-Saharan Africa above 5 percent for the past three years, due to Chinese and Indian trade and investment. South-South commerce is gradually displacing the North-South relationship born some 600 years ago when Portugal annexed Macau during the Ming Dynasty.

UNCTAD -- the U.N. Conference on Trade and Development -- was launched in Geneva in 1964 to address what was then called "The Scandal of the Century," the growing chasm between rich and poor nations. Che Guevara was the Cuban representative at the inaugural conference. Today, the gap is narrowing rapidly. The North's wealthy club no longer monopolizes the list of the world's billionaires. The Middle East, India, China, Thailand, Malaysia, Singapore and Indonesia have produced scores of billionaires out of the world's total of more than 1,000 (up from 350 since the beginning of the decade).

Multinational corporations have morphed into TNCs -- genuinely transnational where flags are meaningless. Those nations that once held all the cards still have most of these behemoths. But Fortune's 500 now includes 52 from "developing" countries. India's Tata Steel giant recently took over Corus, the Anglo-Dutch steelmaker, in a $13.4 billion deal.

Oil and gas producers from the Organization of Petroleum Exporting Countries are providing the fuel for the rapid emergence of CHIMEA. Revenues have tripled in four years -- from $210 billion to an all-time high of more than $700 billion this year, most of it to OPEC's Arab countries. Qatar, a small progressive country of half a million and one of the world's largest natural gas producers, is setting aside $100 billion a year for investments abroad.

Unquenchable oil thirsts in China and India drove up prices -- and propelled CHIMEA from chimera to reality. These two giants of more than 1 billion people each saw their oil needs doubling and trebling in the last four years. China is now a bigger oil importer than Japan.

In the January 2008 Wilson Quarterly, CHIMEA scholar (and UPI Editor Emeritus) Martin Walker quotes the Hedge Fund Research Group as estimating Middle Eastern oil and gas capital available for investment at $4.1 trillion -- almost the size of Japan's annual GDP. Saudi Arabia alone is building six new cities. Morgan Stanley estimates Abu Dhabi's Investment Authority's fund at $875 billion. By way of contrast, the final reckoning of U.S. bank losses in the subprime scandal will be close to $100 billion.

Unnoticed in the U.S. media are the comings and goings of heads of state and government from South to South, from the Gulf to India and China and vice versa.

CHIMEA is redrawing the global landscape for mergers and acquisitions.

Top U.S. law firms are opening offices in Dubai (where the slogan is "Do buy in Dubai"), the freest city in the Gulf, where there are no Islamic restrictions on liquor and where Russian hookers ply their trade.

© 2007 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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