You may think that the third world war would be a devastating one with nuke exchanges that will terminate the world, as we know in hours. No it did not happen. The cold war ended and other mini superpowers do not have the guts to launch the big one. You may think Osama and Al-Queda will create the problem. No they are right now running for cover. They got uprooted in Afghanistan proper and in Pakistan. There are little places where they can exert their menacing terrorism. That does not mean they are out of business. They just realized late last year – the third world war has started and they were fighting a wrong war with wrong ammunition called terror.

This new dangerous third world war is all on trade and energy resources. No country in the world can survive without viable and reliable source of energy without going back to cave ages. The farmers need energy, the factories need energy and in the developed world (who is really under developed these days?) you need energy to travel even a few blocks. At the same time nations also need to generate money to pay for the energy. Energy demand is rising rapidly as people in India and China wake up to the call of American dreams of good life and modern amenities. The Energy supply is stagnant if not declining because of various geopolitical situations and terrorism possibilities.

The third world war is about oil and trade. Three major blocks have emerged. The first is the Americans with some allies like Australia, Japan and so on. The second is BRIC (Brazil, Russia, India and China). The third is the European Union. The triangle of international politics is complex and a diplomatic challenge for all head of states. For example India is the process of a tug of war between the Bush led Americans and the Putin led BRIC. China is definitely in BRIC quarter. Russia is leading the BRIC with its big oil reserve. Brazil is in similar situation as India but they are leaning towards BRIC because of Chinese imports of Brazilian grain and other agricultural products. India is scared to antagonize the Americans. They love earning American dollars and Euros by exporting English speaking educated bodies or services to the West. But the heart of India is with the BRIC. Self respect and independence is very important in India. If you leave out the Indian oligarchs in the field of call centers, Information Technologies who make money by exploiting young educated people (a modern version of high tech slave trading), the rest of the country is pro-BRIC. India is also concerned about the ‘Pakistani nuisance effect” – Pakistan is not really a threat in any sense but can be a perpetual nuisance to deal with. For earning easy money based on H1 temporary work visas in America and so called providing outsourcing services and keeping Pakistani ambition in check, India just cannot antagonize the Americans. Also these Indian oligarchs fund the election of all the political parties. The Indian oligarchs control all the political parties. And as long as Americans keep providing outsourcing money to these oligarchs, India will stay neutral.

China is different story. They like to sell to the Americans and the Europeans but do not like to be dominated by them. They are spearheading an outright oil competition with America and India. They are happy with their fantastic balance of trade; sky rocketing foreign exchange reserves and they believe they can conquer the world once they have enough energy resources under their control. Lot of companies stampeded into China to make money with cheap labor, they are realizing that there is no way you can make money there. For communist China it is a one-way door. All direct investments are welcome in but do not ask for taking profit out!

Russians are still recovering from the century old communism. They are being pushed by the Americans in Ukraine, in Iraq, in Georgia and so on. They are planning to use oil as a weapon. They have oil – lots of it. They also have solid customer next door who can be an excellent provider of trade and finance – China. Russia’s covert nationalization of Yukos oil company and subsequent decision to sell parts of the same to China and possibly India just proves what we are talking about.

The Europeans are watching the world war of oil and trade nervously as it unfolds in front of their own eyes. Philosophically they are in tune with America and the allies. The recent Iraq war created some dampening of relations but as time goes by, they will get realigned with America and the allies. They are also wooing India on their side promising outsourcing contracts – knowing very well Indians love quick money the easy way and the Indian Government are run by the so called human trading oligarchs.

Americans are the only official superpower. They are influencing the world their way. Iraq definitely did not work out well. But they are probably in the best shape because if needed they can tap into Alaska and Canada. America’s problem is high standard of living, lack of high paying jobs and negative trade balance. Bush Administration realizes that and is fighting it out in their own way. The trade imbalance for America is not a big issue unlike in case of India. While common Indians have no clue about the fact that they just cannot afford to use oil for luxury and foreign goods and services based on promises of imported jobs, American consumer market is strong. If Americans can control their private (not public) debt, which are home mortgages, credit cards and other personal and corporate loans, America will be fine. There is a lot of talk about America’s problem with social security fund, budget deficit and so on. While no other big countries have anything like social security. Bush Administration is taking some correcting measures on that front. America’s biggest challenge though is in securing oil and positive trade balance. That is where the world war is being fought.

Al-Queda understood the new war on oil and trade very late. The traditional terrorism is not going to take them anywhere. They are now planning to attack Middle Eastern oil installations, destabilize Governments in Saudi Arabia and Kuwait, and create insurgency in Iraq. Soon they will realize that they have little power and the world has put them in a corner with little significance any further.

The third world war is being fought on oil and trade. China, Russia and India understand now the oil game. Brazil and China both are focusing on Venezuelan oil. American are securing Middle Eastern oil supply and ensuring on their traditional oil infrastructure. But the coming fight for oil and trade will be fierce as India and China becomes more oil hungry.

Europe, America and Japan is in a position to move into alternative energy sources, Most likely Hydrogen and solar power with some help from nuclear power will solve the problem for them. It will be interesting to see what the Russian, Indian and Chinese do.

http://www.indiadaily.com/editorial/01-10a-05.asp