Innovation means that you have the most knowl edge, but when this knowledge is imported, you do not have innovation. The potential vulner ability of the Gulf States is that all their techni cians and managers are imported. The last facet is the power of credit, which played a big role in the financial crashes that took place in Asia. Karl Marx built his whole theory concerning the power of pro duction on the basis of his understanding of how you can mix labor with raw materials and produce goods, which is what produc tion is all about. What be came much clearer later, however, is the power of credit.
Nobody can save enough money to build a fac tory, to buy the plant, etc.
Today, the inter national power structure dictates that certain international banks, particularly Western banks, have a very strong hold on the power of credit. As far as the United States is con cerned, the Islamic Republic of Iran is not to be traded with, not to be lent anything, not to be dealt with at all. In fact, America has actually said that if one penny of IMF or WB money goes to Iran, the United States will withdraw all its funding for both organizations, which would liter ally kill them. Since the crash 18 months ago, the Japa nese banks and therefore the whole Japa nese econ omy have found themselves in trouble for lend ing to insecure ventures based on insufficient security. One impor tant aspect of the British and the Japanese relationship with the United States is that the British and the Japanese along with Canada the three largest foreign investors in the United States - are the most exposed in terms of their investments there.