The start of Big Brother, and the end of Big Oil

George Orwell was amazingly prescient in his prediction in the novel 1984 (written in 1949), when he forecast that ‘Big Brother is Watching You’. Facial recognition technology is making it possible for States to locate anyone within minutes. China uses it extensively in its large cities and, as per a recent article ‘Facial Surveillance in the United States’ on the website www.americaunderwatch.com people living in Detroit and Chicago will soon also be subjected to constant surveillance.

These are signs of the fear of states over social control, and bring to the fore the debate of ‘security’ versus ‘privacy’. Privacy generally loses, especially in countries where courts of law are not independent enough, or their leaders not strong enough, to stand up to the state. This state of affairs becomes even more alarming for a citizen given the fact that 43 per cent of the newly-elected MPs have criminal records, of which 29 per cent are serious crimes.

This state of affairs exists only because an MP is disqualified if he loses all appeals; so long as an appeal is pending he cannot be disqualified from standing for elections and, as statistics show, winning. This is why the judiciary permits adjournments of cases

ad nauseum and why the common people never get justice delivered to them. Hopefully, a stronger Modi will have the courage to change that. Greater digitisation has meant that citizens have already lost most of their privacy with sites such as Google, Facebook and others having the ability to know where you are at all times. It has also led to the ability to hack into systems, creating perhaps one of the biggest threats to nations, as hacking becomes more sophisticated.

In 2010, the US and Israel collaborated to introduce into the Iranian nuclear power system a worm called Stuxnet, which effectively crippled Iran’s ability to create enough weapons grade uranium to make bombs. It was a cheap way to achieve the aim of preventing the spread of nuclear weapons and reported in an August 11, 2011 issue of

Der Speigel .

Other countries learnt the art of cyber warfare; North Korea used it to infiltrate, and steal from, a Bangladeshi bank and Russia created a virus called Notpetya to wreak havoc on several large companies like Mersk, UPS and others (the virus spread uncontrollably, ironically hitting Russian banks).

In the suspicious environment of today, the arms race is garnering more resources than the human race, more’s the pity!

And in this arms race, weapons are becoming increasingly more sophisticated, more dangerous and more expensive. Cyber warfare is one such, and will be taking resources away from development, and for destruction.

In the US-China trade dispute, Trump felt he could arm-twist China by banning the use of its leading telecom supplier, Huawei, which is the world leader in 5G telecom equipment and technology. Firms like Google have stopped Huawei from using its apps (like Google Maps and Gmail). Of course, China and Huawei will retaliate by banning US consumers from using their apps. This can only affect the consumers, who will have to decide which they use more, and choose the phones accordingly.

The Chinese are also contemplating banning export of rare earth minerals to USA, a group of 17 chemical elements with special characteristics, of which over 85% come from China [4]. Without this supply, US manufacture of rechargeable batteries, cell phones, computer memory etc will be badly hit. US soya bean farmers have been badly hit after Chinese farmers refuse to pay the hike to import it (their exports down 80% in Q1) and tractor companies like John Deere are also in strain. Yes, and cyber warfare will also be affected.[5]

The other big danger is the impending downturn of Big Oil. There are some 932 ‘giant’ oil fields in the world (those with over 500 million barrels of reserves), which supply 60 per cent of the world’s crude oil. The largest is Ghawar, in Saudi, which produced 5 million barrels per day (bpd), which is now down to 3.8 bpd. An article ‘The End of the Oil Giants’ on a site SRSroccoreport.com explains what this means. Giant fields are not being discovered. The huge load of debt taken by the world (global debt, at $ 240 t. is 3X global GDP), a large part for developing oil fields, would become unpayable. This is a huge worry for a world in which interest rates have fallen too low to provide a cushion for a further cut.

Today is the swearing in ceremony of the new, unified government. Had, by any freak chance, it would have been the opposition that won, it could well have been the swearing at ceremony.

(The writer is India Head — Finance Asia/Haymarket. The views are personal.)