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Entries in Russia (65)


Wikistrat's "The World According to Tom Barnett" 2011 brief, Part 6 (Flow of Security)

In this section I cover the symmetricization of the Long War, nuclear proliferation (and the lack thereof), how America shaped this world with its grand strategy, and who the key superpowers will be in the post-2030 landscape.


WPR's The New Rules: Turkey's Long Game in the Cyprus Gas Dispute

"Resource wars" enthusiasts worldwide have a new -- and unexpected -- poster child:"zero problems with neighbors" Turkey. The Turkish government of Prime Minister Recep Tayyip Erdogan is beside itself over Israel's recent moves to cooperate with Cyprus on surveying its Eastern Mediterranean seabed for possible natural gas deposits thought to be lying adjacent to the reserves discovered last year off the coast of Haifa.

Read the entire column at World Politics Review.


WPR's The New Rules: Debunking the 'Russia Threat' Hype 

When the Berlin Wall fell in 1989, I was completing my doctoral dissertation on Warsaw Pact-Third World relations. I immediately understood that my time in Soviet studies was done. Why? Because I knew that Russia was full of brilliant political scientists who, once free to pursue their craft free of ideological constraints, would do a better job explaining things there than outsiders could. 

The generation of Russian scholars that emerged in the post-Soviet era proved me right, and none has consistently impressed more than Dmitri Trenin, who heads up the Moscow office of the Carnegie Endowment for International Peace . . . 

Read the entire column at World Politics Review.


WPR's The New Rules: The New World Order-After-Next

There is no faster route to second-tier great power status than for an actual or aspiring superpower to fight a crippling conflict with another country from those same ranks. Moreover, if history is any guide, the glass ceiling that results is a permanent one: This was the fate of imperial Britain, imperial Japan and Germany -- both imperial and Nazi -- in the first half of the 20th century, and the same was true for Soviet Russia in the second half of the century, despite Moscow's conflict with the West being a cold one. The lesson is an important one for Washington, Beijing and New Delhi to keep in mind in the years ahead, given that the two most likely dyads for major war in the 21st century are America-China and China-India. 

Read the entire column at World Politics Review.


WPR's The New Rules: A Post-NATO Europe Should Look East

Among the mutual recriminations ringing out between the U.S. and Europe regarding NATO's already stressed-out intervention in Libya, we have seen the usual raft of analyses regarding that military alliance's utility -- or lack thereof. As someone who has argued for close to a decade now that America will inevitably find that China, India and other rising powers make better and more appropriate allies for managing this world, I don't find such arguments surprising. You don't have to be a genius to do the math: Our primary allies aren't having enough babies and have chosen to shrink their defense budgets, while rising powers build up their forces and increasingly flex their muscles. In terms of future superpowers, beyond the "CIA" trio -- China, India and America -- nobody else is worth mentioning.

Read the entire column at World Politics Review.


Time's Battleland: Future grand strategists: Russia will someday be forced to outsource its security

Hailing again from Wikistrat's International Grand Strategy Competition (30 teams of grad students/interns from elite universities and think tanks around the world), where I serve as head judge (and I get paid), I wanted to share the decidedly provocative vision of Russia's long-term future security paradigm as crafted by the New York University team (find their national trajectory here). A certain segment of the US national security establishment got all jacked by Russia's short war with tiny Georgia in August 2008, seeing in that raw display of power a “resurging” military superpower. NYU begs to differ.

Read more:

Read the entire post at Time's Battleland.


Time's Battleland: "US bases in Afghanistan for decades?"

Waiting on the Obama speech explaining this one.

Guardian piece Monday predicts that current US-Afghan talks will cement a very long-term deal on presence [hat tip to World Politics Review Media Roundup].

American and Afghan officials are locked in increasingly acrimonious secret talks about a long-term security agreement which is likely to see US troops, spies and air power based in the troubled country for decades. [italics mine]

This is described officially as a "strategic partnership," but nobody in their right mind would describe it as such. It's a dependency - pure and simple. The longer we stay, the more we'll infantilize the system. Ten years in and virtually everything we've set about to create is still described as "fragile" - meaning it collapses and disappears the minute we pull out.

Read the entire post at Time's Battleland.


On NPR's Morning Edition with Renee Montagne 1 June

Taped remotely this morning at WFYI here in Indy.

She said it would run near front of program, so EST at about 5:10-15, then 7:10-15, then again at 9:10-15.

Even hours on the West Coast.  All very confusing, but you know what I mean.

Subject is Af-Pak and America's choices.

Spoke for close to half-hour, but they will edit down to best bits, which should make my pollen-addled brain sound smarter.


Chart of the day: Declining # of siloviki in Russian government

From FT story on Russian politics.

If Medvedev gets to stay, this would indicate a sea change.  But if Putin reinserts himself - mostly out of ego, then it may not mean all that much.

Putin needs to brush up on his Lee Kuan Yew.

Still, you see a chart like this and you realize that Kremlinology is alive and well.  I did this sort of data gathering in the 1980s.


WPR's The New Rules: Long-Term U.S. Presence in Afghanistan a Mistake

The Obama administration has begun talks with Afghanistan designed to quell the Karzai government's fears about being abandoned by the West come 2014. Those talks are said to involve negotiations for long-term basing of U.S. troops involved in training Afghan security forces and supporting future counterterrorism operations. This can be seen as a realistic course of action, given our continuing lack of success in nation-building there, as well as our inability -- although perhaps unwillingness is a better term -- to erect some regional security architecture that might replace our presence. But there are good reasons to question this course.

Read the entire column at World Politics Review.


WPR's The New Rules: Strategic Balancing vs. Global Development

The World Bank's 2011 World Development Report is out, and this year's version highlights the interplay between "conflict, security, and development." That's a welcome theme to someone who's spent the last decade describing how globalization's spreading connectivity and rules have rendered certain regions stable, while their absence has condemned others to perpetual strife. But although the growing international awareness of these crosscutting issues is long overdue, the report ultimately disappoints by focusing only on the available tools with which great powers might collaborate on these stubborn problems, while ignoring the motivations that prevent them from doing so. 

Read the entire column at World Politics Review.


WPR's The New Rules: U.S. Global Role Depends on Hard Fiscal Choices

Much of the global perception of America's long-term decline as the world's sole surviving superpower is in fact driven by our fiscal decline. That's why I was disturbed to hear Democrats so quickly dismiss GOP Sen. Paul Ryan's bold, if flawed, federal budget proposal on the grounds that it would "end Medicare as we know it."  Frankly, arresting our decline means ending a lot of things "as we know them." That's simply what being on an unsustainable path forces you to do.

Read the entire column at World Politics Review.


How Russia will matter beyond energy and minerals

From WSJ blurb "How to Bet the Farm on Mother Russia" (23 March 2011).

Besides being impressed with EU wheat production (they grow wheat like we grow corn), the point is how low Russia's yields remain.  You combine that with all the fallow fields (one-third) and unused arable land, and Russia's upside is considerable - if it gets the foreign investment.

Blurb is about Russian company hoping to get investment.  The company, Rusagro, wants to modernize old collective farms and buy up new land previously given to rural dwellers who aren't using it for agriculture (but might like the money). 

Big hold up on investment is the climate - as in, business climate.  


Appearance on "The Alyona Show"


Where I blew it:  I moved around too much.  I have a terribly hard time holding still, because the more still I am, the more boring I am, and the more I move, the better I sound--but don't look.  I also got too close at points, letting my chin get covered by byline and making me too big relative to her in the 2-shot look.  Next time I will hang a cut-out over the screen so I know where my head should be.  Beware the big head!

It is a conundrum.

Other thing:  I have a clip-on mike that I could have and should have used!  Could have lit myself better too. Next time I will do better.

I had spent a good chunk of time just beforehand spreading mulch outside--hence the raccoon-like lower eyelids.

I will say, though, so much nicer just to do from office as opposed to the 2-3 hour effort to go all the way downtown, etc.  that part I simply love.


WPR's The New Rules: U.S. Defense Cuts a Step in the Right Direction

U.S. Defense Secretary Robert Gates unveiled his much-anticipated budget cuts last Thursday, signaling the beginning of the end of the decade-long splurge in military spending triggered by Sept. 11. Gates presented the package of cuts as being the biggest possible given the current international security landscape, warning that any deeper reductions could prove "potentially calamitous." Frankly, I find that statement hard to swallow.

REad the entire column at World Politics Review.


Esquire's Politics Blog: Obama's Afghanistan Review, Decoded

So the White House just released its much-anticipated review of our ongoing military efforts in Afghanistan (and Pakistan, mind you). And while President Obama, Bob Gates, and Hillary Clinton took pains to explain in a press conference on Thursday that "this continues to be a very difficult endeavor," it can also be very difficult to parse propaganda from, you know, the actual end of a modern war. But since this is a reasonably well-written document that the president's talking about here — and since it more or less outlines the past, present, and future of our troops' presence in region in a still-untidy five pages — it seems worthwhile to deconstruct the review line-by-line... and (white) lie-by-lie. Here goes.

Read the entire post at Esquire's The Politics Blog.


Whither Russia: the latest tilt to the West

Couple of stories from WSJ and Spiegel on Russia's latest mini-bout of Westernizing fever.

It used to be that these tilts, one way or the other, went on for decades--centuries!  But since Cold War's end, it seems, like everything else in this networked world, to come and go so much faster.

Yeltsin's time was an age of aping the West, then Putin led the return back to Russian-ness.  Now Medvedev and others sound the age-old alarm about "falling behind the West/world" and needing to modernize once again.  It's the same old Westernizers versus Slavophiles debate:  Russia is a failure in its isolation and backwardness and must adopt the ways of the West versus Russia is not a failure but unique and wonderful and the champion of Slavs everywhere and we must stand up to the West and protect our brothers . . . by sucking them into our empire and putting a big wall around them!

If the last bit sounds like some modern-day Islamic radical fundamentalist impulse, it's because it is very similar.  It's just an earlier version of rejecting the capitalist west.

From "Blueprint":

Last year I took my kids up to Boston, and during that trip we visited the Museum of Science. It’s a kid-oriented place, and my job was mostly to make sure my youngest son, Jerome, didn’t run off into some crowd. Near the end of the day, after the lightning show and the planetarium, we stopped by an exhibition on archaeology, where the kids got to mess around with various assembled skeletons. So while they were stacking bones in one corner, I found myself scanning the room for something to look at. I was drawn to a world map hung on a nearby wall. On it was displayed the migration of humans from our earliest origins in sub-Saharan Africa, roughly 100,000 years ago.

Now, the first thought that hit me is one that I’ve heard many times in the past: the spread of humanity around the planet was the first form of globalization. But as I stared at the timeline legend, another thought occurred to me: the spread of the current model of economic globalization is really the reverse track of that original spread of humanity. Humanity first spread from Africa to the Middle East; then to Eurasia; then to Europe, Japan, and Australia; and finally into the New World of the Western Hemisphere about 10,000 years ago. So if you were going to date civilizations, the age ranking would roughly correspond to the spread of humanity, with Africa and the Middle East being the oldest and the Western Hemisphere being the youngest.

But today’s version of globalization really began in the Western Hemisphere (the United States), then spread outward to include the West (Japan, Australia, Europe), finally conquering the Eurasian socialist bloc in the last generation, and now finding itself fundamentally stuck (no pun intended) on the oldest and least globalized parts of the world—namely, the Muslim world and Africa. In effect, modern globalization can be described as roughly a 150-year trek from the “youngest” parts of the world to the “oldest,” which is why it’s gotten harder and not easier with time, because it’s had more and more tradition and custom and history to overcome at each stage of its spread.

Admittedly, this thought didn’t come to me in a flash right then and there, because, as always, I was pretty tired from chasing my kids around that huge museum all day. What happened right there was that a different thought that had been crystallizing in my head for several days finally made sense when I saw the map. For that one, I have to take you to my nightly exercise on the treadmill, where I like to watch documentaries on my laptop.

Turns out a few days earlier I was watching Ken Burns’s masterful The Civil War, and listening to the descriptions of the conflict and what was at stake for both sides, I couldn’t help but think that the American Civil War was really the first Core-Gap war of the modern era. The North was the land of great cities, railroads, and factories, bristling with connectivity to the outside world in all forms, but especially in terms of immigrants streaming in from Europe. In contrast, the South was the bucolic, agrarian, and far more homogeneous landscape, largely disconnected from the outside world except for the narrow but voluminous trade in cotton, and distinguishable fundamentally for its heavy reliance on slave labor, which further isolated it from the rest of the world.

I know what you’re thinking: substitute oil for cotton and Asian guest workers for slaves and you’ve got some interesting parallels with a United States–led Core coalition of states seeking to transform the Middle East in another bloody war of conquest and occupation. The Union didn’t exactly invade the Confederacy to “secure” the cotton, now, did it? And the reality today is that we don’t need to invade the Persian Gulf to “secure” its oil, either. Hell, given the region’s great dependency on oil revenue, the regimes there have far fewer choices about selling their oil than the rest of the world has about buying it.

Well, it was following America’s Civil War that you really saw the second industrial revolution begin to flower in the United States, helping to speed up the westward expansion of the Union. Once the country became effectively networked with railroads, most of the movement of raw materials in our land fed the giant industrial beast rising in the northeastern quadrant of the continent. It was roughly in the last quarter of the nineteenth century, then, that the United States finally began to resemble the multinational economic and political union that it is today, with its amazingly free and efficient movement of goods, services, people, and information across dozens of states all bound together under a federal government made significantly more powerful through civil war.

Meanwhile, of course, while America was rising “peacefully” in the Western Hemisphere, Europe spent the nineteenth century expanding its vast network of colonial possessions around the world in a great race among imperial powers, giving rise to the first great modern phase of globalization (Globalization I), running roughly from 1870 through 1914. This globalization, though, was largely based on the uncompetitive movement of raw materials from the periphery (colonies) to the home world (Europe), and it was enforced primarily by the occupation of foreign lands by European nationals augmented by extensive military networks (primarily defined by navies). When that system of global economy self-destructed in two great world wars (1914–18 and 1939–45), Europe was divided between the two victorious external powers: the United States and the Soviet Union.

At that point, Western Europe was connected, along with Japan and Australia, to America’s new version of globalization (Globalization II, from 1945–80), one not based on colonialism but on free markets, free trade, transparency, democracy, and collective security. On the other side of the Yalta line, Eastern Europe was disconnected from the rest of the world and fell under the isolating control of the Soviet Union for almost half a century. When China subsequently fell to the Communists and South Asia broke free from Europe’s colonial grip, basically the rest of the Eurasian landmass was lost to the socialist mind-set, remaining largely disconnected from the West’s embryonic global economy for roughly a couple of generations.

After that period of blocked expansion, the Western-defined globalization process renewed its march eastward with the collapse of the Communist bloc in 1989, with China actually predating that conversion by several years, thanks to Deng Xiaoping’s “four modernizations” push in the early 1980s, which marked the beginning of the third great age of modern globalization (Globalization III, from 1980 to 2001). At the end of the Cold War, only the former colonial regions of the Gap, which had overwhelmingly fallen victim to homegrown authoritarian regimes after the collapse of the European empires following the Second World War, remained fundamentally outside the global economy, with the two most disconnected regions being the Middle East and sub-Saharan Africa. Not surprisingly, the Middle East now defines the battlefront in the grand historical struggle between the Core’s forces of connectedness and the Gap’s most bloodthirsty foes of that integration process (Globalization IV, from 2001), and once it likewise falls to globalization’s embrace, only deepest Africa will remain—that first cradle of humanity.

Realizing that modern globalization’s advance essentially traces backward the earlier spread of humanity is important on another level: Modern globalization’s advance has met with consistently violent resistance throughout most of its history from rejectionists armed with exclusionary ideologies. These rejectionists, starting with the slaveholding South and extending right on through to our current enemies, have always pleaded that mankind must be saved from the machine-driven logic and exploitation of the industrial world. Typically, these rejectionists not only have sought to resist integration into this industrialized world but also have proposed competing systems of government and economics that would both avoid this outcome and do it one better by leapfrogging humanity into some idealized alternative universe of near-utopian self-fulfillment.

The odd thing is that as globalization has progressively advanced in its technology and modernization, the rejectionist ideologies have been forced to retreat farther back in time to attempt to build their alternate universes. When Marxism began in the mid-nineteenth century, the assumption was that socialism would naturally be achieved at capitalism’s pinnacle of development, or at the point of the superabundance of goods. This ideology actually sought to extend the capitalist model of development beyond what were perceived as its logical limits. But since that ideology proved wrong in its diagnosis of capitalism’s weaknesses, it fell to Vladimir Lenin to turn Marx on his head at the start of the twentieth century and argue that socialist revolution was far more likely to succeed in a largely precapitalist society, meaning not industrial Germany but Russia just as it was approaching what would have been its industrial phase of development.

Later in the same century, Lenin’s great ideological successor, Mao Zedong, took his theory farther back in time, arguing that socialist revolutions made even more sense in largely agrarian societies like China, meaning a revolution led by rural peasants and not by an urban proletariat. Cambodia’s subsequent Khmer Rouge Communist movement later took Mao’s ideology to its logical extreme, not just engaging in “cultural revolution” against largely city-based “enemies of the state” but literally emptying the cities and forcing millions to endure “reeducation” (marking the revolutionary Year Zero that would reboot the system completely) and eventual genocide in the most backward rural areas of the country.

Meanwhile, with the fall of the Portuguese empire in sub-Saharan Africa in the mid-1970s, the Soviet Union’s leadership, despite the complete lack of revolutionary spirit back home, nonetheless deluded itself into thinking that successful socialist states could be constructed in some of Africa’s most backward economies, generating Moscow’s brief but ultimately failed ideological fling with the so-called Countries of Socialist Orientation (e.g., Angola, Mozambique, Ethiopia). When the bankruptcy of that approach was made apparent in the failure of the Soviet puppet regime in Afghanistan at the beginning of the 1980s, the great collapse of the socialist bloc began in earnest, fueled in Asia by China’s rapid turn toward market economics under Deng.

It was at this point in history that many political theorists began speaking of the “end of history,” a phrase made famous by philosopher Francis Fukuyama, who, not accidentally, began his career as an expert on the Soviet bloc and its relations with the Third World (the subject of my Ph.D. dissertation as well). What was meant by that was the notion that no feasible alternative to democracies and capitalism seemed to exist anymore, signaling the historical supremacy of each in combination. As a great wave of democratization swept the planet in the wake of the socialist bloc’s retreat and collapse, the judgment appeared warranted.

And in many ways this historical judgment does remain valid, for what has arisen in the years since the Cold War cannot be described as a full-fledged alternative model of development, since the Salafi jihadist movement promises no economic development whatsoever, but rather a strange sort of retreat into the past, with the utopian promise of somehow not only getting it right this time (i.e., returning to the golden age of the first several centuries following Muhammad’s life), but doing so in such a way as to become far superior to the current perceived alternative (“Westoxification” at the hands of a corrupt capitalist world system). Indeed, the world witnessed this back-to-the-future outcome in the Taliban’s rule in Afghanistan across the late 1990s, right down to its pointless destruction of all symbols of foreign religions, the banning of television and music, and severe restrictions on the education of females (the quintessential disconnect). In all, the Taliban’s definition of the “good life” was almost prehistorical in its quality, demonstrating the absurd lengths to which the violent resistance to globalization has traveled in the current age.

Yet, despite this retreat into the past, which corresponds to globalization’s progressive encroachment into the world’s most ancient civilizations, the Salafi jihadist movement of today is, in the words of economist Brink Lindsey, “strikingly similar to its defunct, secular cousins.” For like all the Lenins and Maos before it, al Qaeda’s antiglobalization movement, while feeding off its adherents’ sense of alienation from, and resentment of, the Western-fueled globalization process, is still nothing more than a naked grab for power over others, or what Lindsey calls “the millennial fantasy of a totalitarian state that is the fundamental feature and common thread that unites all the radical movements of the Industrial Counterrevolution.”

But, unlike previous versions of ideological resistance to this expanding model of global economic connectivity such as socialism or fascism, which offered a marriage of conservative social values with modern technology, the Salafi jihadists promise simply the rejection of modernity—which, as Lindsey points out, effectively kills any sort of global appeal beyond their most like-minded coreligionists. So how can bin Laden and al Qaeda still maintain their widespread popularity in the Islamic world? Easy. Their main competition is the rigid, unimaginative authoritarianism that grips so much of the Middle East. With history “ended,” where else can young Muslims turn in their anger over the lack of both freedom and development in their countries?

You know, one of the things I like about the Wikistrat globalization model that we're building right now, is that we're using bits and pieces from the books like this to illustrate points and aspects of the model, so we're doing exactly what this Civil Affairs officer at Monterey asked if I could someday do:  create an online space where people could come and really immerse themselves in the ideas but have them framed and accessible around an ongoing exploration of globalization.

Anyway, I give you the clip there to illustrate:  Bolshevism & Marxism-Leninism was just a time-phase variant of the anti-capitalist/anti-globalization response that's existed throughout history (the clip, if I had extended it, would have gone into Occidentalism, or hatred of the West/modernity), but it was also a natural variant of the Russian relationship with the wider world.  

Russia, not unlike big chunks of the Middle East, is a tough place to live with the harsh winters and such.  So the code and rule sets there were strict about conformity, collectivism, and so on.  And outsiders were largely shunned in the early formative days of that civilization.  

When the West begins to make itself known, it is, by comparison, an opportunity for enrichment--if Russians are willing to change themselves and integrate.  This is a huge choice, and a frightening one.  To do it means to abandon a lot of the past rules and identity and that usually only is possible when you feel those rules and traditions have been radically trumped.  So it feels like surrender to the alien outsiders:  me bad, you good, me want to be like you!

Not easy stuff to swallow.  Naturally, such perceived self-abasement triggers an opposing emotion:  me not bad, you really bad, me actually unique and better and I need to act on that and make my world that much bigger and stronger and secure to keep you and your bad influences out!

That's basically the inner dialogue of the Westernizers and Slavophiles, and it's been going on for centuries, with the first great turn West coming under Peter the Great.

Well, Russia, after its bout with "restoration of power" under Putin, now suddenly feels like it's a commodities producer with nothing else to offer the world.  Maybe not Upper Volta with nukes but not much better than Iran--soon enough.  So, when Medvedev and Putin do their little dance about who gets to be president next, the old debate resurfaces, with Medvedev as the latest Westernizing siren.  

Medvedev has said, in effect:  we are not a modern country and we need to become one in this globalized age. We need to get closer to Europe--not pull away or be nasty over natural gas.  And we need to use these contacts to learn better their ways and make ourselves more like them.  

The underlying current of the Westernizers has always been, "Because going the other route and becoming more Asian really sucks!"

Putin had his time to emulate the Chinese, but the Russians, deep down, feel more European than Asia--always have and always will.  They admire and hate Europe, but they despise the Chinese.   Chalk it up to whatever, but that undercurrent is always there, by my estimation.

So the WSJ story talks about a big privatization plan the Russians are pursuing ($59B) "as the Kremlin seeks to cut the state's role in the economy and raise money to balance the budget."

Doesn't mean their version of state-dominated big-firm capitalism goes away tomorrow; just means they know it's not the future.  Living as a commodities producer just isn't a way to grow yourself, so the effort is back on to convince Western (and Eastern) investors that Russia can be made safe--once again--for investment.  

Second story from Spiegel speaks to a subject near to my heart for almost two decades:  Russia should join NATO.  Not just have close or better relations; it should join NATO.

Putin by contrast had attacked the "almost uncontained hyper-use of military force" by NATO and the US in his famous speech to the Munich Security Conference in 2007 in which he warned that Russia had weapons systems that could get through Washington's planned missile shield, designed primarily to intercept missiles from Iran.


Under Medvedev, by contrast, the Kremlin appears ready even to contemplate Russia joining NATO one day. The Institute for Contemporary Development, whose board of trustees is headed by Medvedev, called in a strategy paper for Russia to integrate itself into NATO.

Now, everybody says that would "destroy" NATO's identity, but that's a past identity.  What NATO is today is undersubscribed (a point I made yesterday in the Global Political Trends on the Wikistrat model):  it's the closest thing we have to a Core-wide military alliance and it has too few members for its legacy sense of responsibility.  It simply needs to grow, and Russia's an obvious next target.  Not the Ukraine or Georgia BEFORE Russia, but Russia and perhaps those to soon follow.

As always, this kind of forward thinking is considered too naive, too out there, too whatever.  But compared to NATO's efforts to make Afghanistan work without Russian (and other) help, I think the idea is pretty sane.

We'll keep doing it the hard way because that's what our "wise men" know from their past--along with their trained next-generation acolytes.  But eventually, new minds come along and what is "inconceivable!" (in that Princess Bride way) suddenly becomes reasonable.

Is this the last go-around on the Westernizer-Slavophile merry-go-round?  I would never say never on that.  

But eventually, yeah, it will stick--if Europe is smart enough to make the deal.


This week in globalization


Clearing out my files for the week:


  • Martin Wolf on why the US is going to win the global currency battle:  "To put it crudely, the US wants to inflate the rest of the world, while the latter is trying to deflate the US."  We win because we have infinite ammo.  But better that we come, per my Monday column, to some agreement at the G-20. 
  • Sebastian Mallaby, also in FT, says that, despite the current currency struggles, the "genie of global finance is out of the bottle" and not to be stuffed back in.  Wolf had noted $800B capital inflows to emerging markets 2010-2011, which is gargantuan, thus the crazy struggle of some places to keep their currencies low.  As for America stopping China from buying US bonds in retaliation for our not being able to buy Chinese assets?  China holds only about one-third of the US T-bonds abroad ($3T total), so it can buy all its wants from others in the system.  There is no turning back, he says.
  • Meanwhile, the Pentagon makes plans to turn back the clock on the globalization of defense manufacturing.  A new spending bill provision--inserted at DoD's request--includes the power to exclude foreign parts suppliers (read China). Just about every US-based defense firm uses offshore suppliers, so this is going to get very expensive very fast.  It'll be a lot harder to find that $100B in savings over five years. This is almost a fifth generation warfare version of shooting yourself in the foot--first, before the other guy can.  China does nothing here, that frankly we shouldn't be able to handle, but we move down a path that instantly adds a significant tax to everything we buy in the growing-by-leaps-and-bounds IT realm.  One hopes there's a half-billion for that American rare earths mining co. that's looking for a new investor.  Interesting how China's becoming vulnerable to, and dependent on, so many unstable parts of the world for resources, and we're going to cut off the tip of our IT nose to spite our face.  I can imagine a cheaper way, but that would be so naive in comparison to spending all this extra money.
  • China continues to buy low, as a ruthless capitalist should. Giving us a taste of what it could be like if we don't get too protectionist, it's buying up Greece's "toxic government bonds."--and plenty more in Europe. All of the EU is getting a taste, says Newsweek, as Chinese investors are snapping up bankrupt enterprises and--apparently--putting people back to work.  China also, like a ruthless capitalist, seeks to make bilats reduce the chance of EU-wide restrictions on its trade. Old American trick.
  • Another sign of globalization on the march:  emerging economies buying up food and beverage companies in the West that would otherwise naturally be targeting them for future expansion. Bankers expect the trend to continue.  Gotta feed and water that global middle class that keeps emerging at 70-75m a year.  Emerging economies are buying up the companies from equity firms that had previously bought them during down times.
  • Great FT story on how Turkey has the Iranian middle class in its sights.  Long history of smuggling inTurkey dips a toe in, would like to drink entire tub eastern Turkey.  Sanctions hold up what could be a major trade, so the black-marketing local Turks mostly smuggle gasoline--and a certain amount of heroin.  But the official goal is clear enough:  be ready to take advantage whenever Iran opens up.  A local Turkish chamber of commerce official floats the notion of a free trade zone at the border. Those 70m underserved Iranian consumers beckon.
  • India's airline industry can't keep up with demand generated by itsGet me planes and pilots--now! booming middle class. Boeing says Indian airlines will buy over 1,000 jets in the next two decades. Already they're forced to have one-in-five pilots be foreigners.
  • Fascinating WSJ story on how China's car economy is going wild, with ordinary Chinese exploring the freedom of the road.  Drive-in service is taking off, weekend jaunts mean hotel business, etc. In past visits I saw a lot of this coming down the pike.  Just like when America's car culture went crazy after WWII, this is a serious social revolution.

Don't forget your meal of eternal happiness!

  • Funny thing about all this South China Sea hubbub: "Corporate ties linking China and Japan have never been stronger," says the WSJ.  Serious driver?  Japan is exporting its mania for golf to China--the fastest growing market for the sport.  It's what middle-class guys do.

Coming soon: the "golf wars"


  • WSJ story on Vietnam creating its own Facebook to keep a closer eye on its netizens.  Defeat the anti-capitalist insurgents!What caught my attention: "The team has added online English tests and several state-approved video games, including a violent multi-player contest featuring a band of militants bent on stopping the spread of global capitalism."  I would say we finally won the Vietnam War.



WPR's The New Rules: Global Warming Shifts Focus to Friendly North


From the Arctic Council's website.

According to virtually all global warming projections, humanity faces significantly more conflict in the decades ahead as we fight over dwindling resources in climate-stressed lands. However, those reports typically overlook one likely outcome that could counterbalance the more negative impacts of global warming -- that of northern territories becoming significantly milder, more accessible, and, most intriguingly, more hospitable to immigration. This is the essential good news to be found in Laurence C. Smith's fascinating new book, "The World in 2050."

Read the entire column at World Politics Review.

Read about the book because of Smith's piece in the WSJ, which I blogged.  Asked Putnam for the book and got it pronto.  Like I hint at in the piece, Smith's survey of futurism was only average and didn't really add anything to the book.  I have no idea why he or his editors felt the need to promise "the world in 2050," because the text simply doesn't deliver. But the book-within-the-book on the "New North" was eye-popping. I would have loved to hear more about that and skip all the surveying.


The Great North as globalization's future economic hot zone

WSJ weekend full-pager by Laurence Smith, prof of geography at UCLA, and it's pulled from an upcoming book, "The World in 2050."  Get used to seeing such analysis: exploring global warming's upside--geographically speaking.

A lot of good, fertile land sitting with technologically advanced and relatively wealthy populations will come into play, along with a lot of transportation connectivity made possible or kicked into year-old exploitation.  

This article focuses on the Arctic (above the Circle), and flips Jared Diamond on his head, asking not what makes civilizations perish but what allows them to grow?   His answer:  

First and foremost will be economic incentive, followed by willing settlers, stable rule of law, viable trading partners, friendly neighbors and beneficial climate change.

Point being, you toss in the beneficial climate change and the northern states have all the mixings.

Now, the guy does rightfully call out Russia an an outlier, but my expectation is, Russia will see this as a godsend and fall into the misguided notion of having to dominate to flourish because its geography and experience base will put it in good stead.

Right now the Arctic is a welfare state of sorts: deeply subsidized economic activity that centers on extractive industries (the Core's version of the Gap sans the violence).

Will these wastelands get settled?  Did the barren desert of America's southwest?

The close:

I imagine the high Arctic, in particular, will be rather like Nevada--a landscape nearly empty but with fast-growing towns. Its prime socioeconomic role in the 21st century will not be homestead haven but economic engine, shoveling gas, oil, minerals and fish into the gaping global maw.

Sidenote:  here's another slew of countries China will need to be friends with due to its extreme resource dependencies.

Just thank God we bought Alaska while we could.

While not exactly on topic WRT this piece, it raises the question of whether or not buyers of certain ag commodities could exploit global warming to shift production from current locations to better ones--as in, safer, more stable, easier to control, etc.