The Fuhrer pioneered military industrial complex

Even though it was President Eisenhower who coined the term “military industrial complex”, the original concept was etched by none other than the Great Fuhrer. He conceptualized this complex as a triad for achieving goals in geopolitics, geoeconomics and geostrategy. Let me shed light on geoeconomics.

It all began as a partnership between state and the private enterprise. State support came in the form of approvals, land allocation and funding mainly raised by the issuance of MFFO bills providing liquidity. These credit notes were sold to wealthy individuals and companies dealing in banking, investment and other capital market intermediaries.

Partner Selection

The Fuhrer identified key German establishments that could fit the bill. The leading lights at that time include but not limited to giants like Krupp, IG Farben, Siemens and AEG who were best known and well accepted. Pubic acceptance is the key for identifying and selecting the right candidates who could marshal physical and human assets in proper combination to bring the out best results.

Main Actors

Krupp the steel and industrial giant was tasked to manufacture all range of moving weaponry such as wheeled tanks, artillery pieces, trucks for transporting troops and military supplies at faster speed

IG Farben the chemical giant was appointed as solo producer & supplier of synthetic rubber, fuel, and Zyklon B

Siemens the electrical and electronic giant was chosen as the lead producer, supplier and maintenance firm for all things that is electrical

AEG, was given the noble job of manufacturing aircrafts and related components, locomotives and railway stock with a special option of providing observation cameras fitted into the system along with radio communication equipments.

Let me say this boldly. During the WWII, it was Germany who exhibited technical and technological brilliance which was later copied on by the so-called allied forces.

By-products

In addition to the military side, the Fuhrer encouraged German firms to devote time and effort to improve the ‘quality of living’ within Germany. He understood that to have strong geoeconomics power, the domestic economics must be placed up-scale. Hence, the selected companies were given additional work on turning out consumer products. Volkswagen car, radios. Televisions, textiles & clothings and coffee mixers are few of the items developed & patented by German military industrial complex during the Hitler Era.

Conclusion

Today the ruling German coalition is clueless as regards to finding a via media in balancing domestic economics and strengthening geoeconomics status. Lopsided policies that prioritised European Union at the expense of domestic compulsions have resulted in the mess they are in.

Then for the Fuhrer, navigating strategy amid geoeconomics was vital for both domestic and external success. Sadly, Germany has missed the bus today! 

 

Cheers! 

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

Sweet or sour crude, Germany got screwed

Russia-Germany energy initiative that began under the Chancellorship of Willy Brandt in the Seventies culminated during the tenure of Gerhard Schroeder in September 2005 as Nord Stream 1. His successor Angela Merkel supported throughout because it was a sweet deal of sour crude. Sadly, February 2022 saw this pipeline blasted and Germany got screwed.

Facts

Crude oil is divided broadly into two categories: sour crude is the heavier one containing 0.5 to 1.0% of sulphur. German refineries located in the eastern part processed the type known as Russian sour crude named ‘Urals’ pumped via Druzhba pipeline. Until 2021, Russia accounted for nearly 35% of the total crude imports of Germany. Refineries such as Leuna and Pck Schwedt carried the bulk of the work where the latter generated electricity as well.

Generally sour crude processing brought out several by-products the main one being elevated sulphur which is heavily used in chemical industries and also in farming as fertilizers. The next one in importance is petroleum coke used in heavy industries. Others include fuel oil, asphalt and hydrogen sulphide. All these supported the industrial backbone of Germany since the end of WWII.

Analysis

Russian invasion of Ukraine in 2022, stormed a thorny relationship between Western Europe and Russia.  Being the lead economy, Germany wholeheartedly supported sanctions against Russia that included her crude oil exports. Furthermore, Germany postponed certification of Nord Stream 2 as well.  In July 2022 the Nord Stream 1 pipeline was bombed and rendered useless.

Germany is now forced to search for alternate sellers. There is nobody who could match up with the Russian crude in its properties. Hence, the decision was made to switch over to using sweet crude. This move required heavy capital expenditure of establishing new refinery system that could process sweet crude.

In the meantime, the demand for oil related products started to climb up. Petrol for light vehicles, Diesel for heavy vehicles, gas and kerosene for household uses and generating electricity all of these saw uptick.  In 2025, total crude imports alone coughed up more than US$ 41 billion. Monthly usage of crude ranges 5 to 6 million tons adding to annual figure of 75 million tons.

Major Sweet crude suppliers include Norway ranging between 16 to 20%, USA 15 to 18%, Kazakhstan 13%. Recently, Russia ordered suspension over pumping Kazakh oil via Druzhba pipeline. Libya which was then found as an additional party starting with 9% of the total crude imports. Some imports from Middle Eastern countries gave a breathing space to Germany. However, Hormuz blockade ended this. Libya is now filling the vacuum created by this blockade. Hence, imports from Libya might go up as high as 18% in the coming months.

Synthesis

While sweet crude lends a helping hand in the state policy of de-carbonisation the production of sulphur based items used in chemical industries and fertilizers in the farmland has declined immensely. The deadliest punch delivered to Germany recently was the jacking up of fertilizer price globally affecting German farmers severely.

Strategy Advice

The bottom line is sweet crude has screwed Germany in her most vulnerable point: geoeconomics. Food security and energy security are vital parts of national security. National security is contaminant part of geoeconomics power structure.

Hence, navigating strategy impels Germany to resort to the use of both sour crude and sweet crude evenly as far it is feasible!

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser

 

 

 

Germany lusting after war, will this work?

A sinister attempt is quietly being played out in the Western Capitals. Only Germany has the potential to replace the U.S. as the military backbone in Europe and through NATO globally. Hence, Bundeswehr must be prepped to do just that: lusting after war. But will this work?

Friedrich Merz recently declared: “Russia threatens our security; China challenges our economy and the transatlantic partnership can no longer be taken for granted." In sum he has put the cart before the horse. Instead of analysing the present geoeconomics fiasco Germany is in Merz is emphasising more on the security and foreign policy aspects rather than on the domestic economy and Germany’s status in geoeconomics.

Facts & Analysis

1. Nominal GDP ranking expected in 2026 goes as USA $ 30.50 Trillion, Russia $ 2.50 Trillion, China $19.23 Trillion, India $3.87 Trillion and Germany $4.74 Trillion

2. Juxtaposing defence expenditure we get fairly alarming position. America accounts for $954 Billion, Russia $190 Billion, China $336 billion India $92 Billion and Germany $114 Billion

3. Defence Expenditure as percentage of nominal GDP of these countries work out as USA 3.1%, Russia 7.6%, China 1.7% India 2.3% and Germany 2.4%. These figures are approximations only.

Synthesis

1. Lusting after war requires Germany to jack up the defence expenditure to GDP more than that of the US ratio, say at 4%. At the present level of GDP that would be around $190 Billion. Incidentally this figure equals the current defence overlay by Russia

2. Where this additional defence expenditure of $76 Billion go? To recurrent expenditure such as salaries & upkeep for the servicemen in payroll today or to expand the current military strength of uniformed personnel from 184,194 to be around 250,000 men & women soon  to fight mainly against Russian army of 1.5 Million.

3.  There again the question of the military industrial complex output in Germany comes into play. Although the annual output is estimated as $34 Billion one of the major contractor Rheinmetall AG alone has a backlog of $39 Billion to be processed.

Strategy Direction

1. If the lust for war persists, Germany has no option other than sourcing military supplies from America or NATO countries in Europe such as Britain, France & Turkey

2. Geoeconomics is therefore stupid, as national coffer depletes in Germany and the cash flows to these countries making them stronger in geoeconomics stature at the expense of German public as well as arms manufacture.

3. Due to the foregoing, it is clear that war lust of the German government will not work but will consume the prosperity of the nation.

Navigating strategy amid geoeconomics, therefore, emerges as necessary policy perspective for the German planners!

 

Cheers!

 

Muthu Ashraff

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser