Geopolitics in the 21st Century

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Interestesting article detailing the apparent decline of US power along with the rise of the EU & China, forming the new Big-3. The Big Three make the rules — their own rules — without any one of them dominating. And the others are left to choose their suitors in this post-American world.

Lying alongside and between the Big Three, second-world countries are the swing states that will determine which of the superpowers has the upper hand for the next generation of geopolitics. Second-world countries are distinguished from the third world by their potential: the likelihood that they will capitalize on a valuable commodity, a charismatic leader or a generous patron. Second-world states won’t be subdued: in the age of network power, they won’t settle for being mere export markets. Rather, they are the places where the Big Three must invest heavily and to which they must relocate productive assets to maintain influence.

The geopolitical marketplace will decide which (of the Big-3) will lead the 21st century.

by Parag Khanna, a senior research fellow in the American Strategy Program of the New America Foundation & author of “The Second World: Empires and Influence in the New Global Order"

 

[vishalrao]

lets not forget russia and latin america are also asserting their "independence" or new-found might...india i feel still has a ways to go before we can start bullying people

 

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The article does talk about them but i won't spoil it

 

[gregory house]

Brrr. Spine chilling stuff. Adapted from his book the note says. A good attempt at crystal gazing. It hurts a bit when he relegates us to row two, but that is more or less a fact coz we are a docile nation, not interested in browbeating or threatening other countries. Economically, we will be in the top three in a few decades, but not militarily and strategically. Maybe we can turn that to our advantage - become a benevolent giant.

America
If you leave India aside, and see what he says about America, he is spot on as to the direction in which the US is moving. But what about the inherent resilience that the US is famous for? The capability of bouncing back from self made disasters again and again and again. During the first half of the 20th century, they were doing their own thing till Japan poked them in the eye and dragged them kicking and screaming into WW2. Hitler knew of US might and what they were capable of if pushed into a corner, and wanted to run over Europe before they decided to do something about it. But Japan miscalculated. And they changed the course of history. So can we really write the US off so simply?

He talks quite a bit about oil and Euros and Iran and Chavez. But consider what is happening. Agreed that the US is living on borrowed funds. And hence the mighty dollar is sick. But is that the only reason why people are moving towards the Euro? Why aren't we doing that, in that case? And why aren't the Chinese? The reason is that Iran and Venezuela have strong political reasons behind their decisions. Both are irked by what they consider (and they are right) unnecessary US interference into their internal affairs. What better way than cock a snook at the big bully.

Europe
He gives a lot of credit to Europe, as if they have just now discovered some strategy guide to covert world domination. They have always been like that, especially post WW2. During the cold war, it suited them to align with the US. After that it was no longer necessary. Time to assert the European identity with the EU, and a spanking new currency as well. He is right about the army and good use of policing. Large standing armies are a thing of the past. They might give you an instantaneous military victory. But only good governments with a competent internal security apparatus can manage a country for you (Unfortunately, successive US governments always seem to pay more attention to the groups that beat the war drums than to those who advice caution.)

Another thing is that things in Europe are hardly as calm as he makes them out to be. All these countries that have come together under a single flag hardly have anything in common. And new countries = more migrants to developed nations. They too have their share of Raj Thakreys and disgruntled local populations that question the logic of throwing open the gates for all and sundry. What do the Polish and Hungarians and Turkish have in common with the Italians and Germans and French and English that they can sit around a table and talk shop in 10 different languages? Another thing is that terror has affected Europe more than America. Its proximity to the middle east and the presence of a sizeable Asian and African origin community, with quite a few of them having questionable loyalties, cannot be ignored. And the threat is not going to disappear just like that.

Russian control over European gas supplies is a real threat, no matter what he thinks of Russia. Putin is real and absolute state control of strategic assets is real. Africa is hardly the saviour it is made out to be. See what is happening in Sudan and Nigeria. the moment someone even mentions oil, militias will battle for control over territory. Even Chinese operated rigs are not spared. How reliable is a supply in such a scenario? The Saudis at least deliver oil on time thanks to American help. And Russia turns off supplies at will. Seems that various armies, Chinese included, will have to get used to a relatively new role - security guards to oil supplies.
So no assured supplies of anything to the EU. Not when China is grabbing all it can find. And America doing the same (time to open up Alaska) And India.

An EU-China JV takeover of Russia? What if Russia decides to walk into Poland or Hungary or any of its former satellites? What with the EU do?

China
China is the only case I fully agree with. It has the economic, military and strategic reach to do what it wants. South East Asia is heavily invested in China (And China in the US). Its unsurpassed appetite for natural resources of every denomination is by now well known. And that is why it is wooing African dictators. Since it hardly has any scruples of its own, why would it case about human rights and bogeys of that kind when it comes to Africa. Bribe - acquire move on is what it is doing in Africa. What the world needs to fear is the possibility of China turning nasty. That is very dangerous territory. Hopefully it will become democratic by then.

'Swing' States
Again, wooing them is nothing new. This game has already been played, albeit between the US and Russia, each falling head over heels bribing, donating and doing what not to make countries cross over to their side. It has never worked in the past and is hardly going to work in the future. People are not stupid. In a war of supremacy between two players, the third one is bound to gain something. Yes there are some not so small countries in the list and together, they make a big market. But they won't control anything in any substantial manner. Considering current examples, US-China or US -Japan trade will make any other comparison and dreams of changing economic equations appear patently foolish.

One of the major problems the world is facing and will face in the future is government owned investment vehicles bidding for strategic assets. In the recent WEF India Summit 2007, there was an American Senator who talked on this issue. Crying wolf on Dubai Ports was a mistake, he said. But he also said that any acquisition of assets for purposes non-economic will hit a wall. Russia and China was what he was referring to.

All in all, there are only three global threats I perceive - Islamist terrorism, Putinist Russia and a militant China. Considering all this, we still need US as a bulwark, however crazy it acts at times. A Big 3 without India is probable. But who has seen the future?

 

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But what about the inherent resilience that the US is famous for? The capability of bouncing back from self made disasters again and again and again.So can we really write the US off so simply?

Agreed that the US is living on borrowed funds. And hence the mighty dollar is sick. But is that the only reason why people are moving towards the Euro?Why aren't we doing that, in that case? And why aren't the Chinese? The reason is that Iran and Venezuela have strong political reasons behind their decisions. Both are irked by what they consider (and they are right) unnecessary US interference into their internal affairs. What better way than cock a snook at the big bully.


Well, the article had the word 'hegemony' in it, so i started digging, came up with an interesting article by Henry C.K. Liu.

In short the dollar is propped by the central banks of this world that need it in sufficient reserves to protect their currency from speculative and manipulative attacks and it also has the advantage of being able to buy Oil. I agree with your points on the polital reasons for Chavez & Iran to go with the Euro.

I've never understood the reason to switch from the dollar to the Euro completely as it, to me, is inviting even more uncertainty as the euro is a product of many countries vs just the one with the dollar. In other words i don't see any immediate tangible benefit replacing the dollar with the euro, other than insulting the americans.

And this status quo has been the main reason the US keeps 'bouncing back from self made disasters again and again and again' as theirs is a fiat currency.

How long for tho ?


Russian control over European gas supplies is a real threat, no matter what he thinks of Russia. Putin is real and absolute state control of strategic assets is real. Africa is hardly the saviour it is made out to be. See what is happening in Sudan and Nigeria. the moment someone even mentions oil, militias will battle for control over territory. Even Chinese operated rigs are not spared. How reliable is a supply in such a scenario? The Saudis at least deliver oil on time thanks to American help. And Russia turns off supplies at will. Seems that various armies, Chinese included, will have to get used to a relatively new role - security guards to oil supplies.

I get the impression from the intl. media that Putin is just sabre rattling for domestic benefit. To appease his citizens that Russia still matters. Militarily atm they are not considered much of a threat with their armed forces having been cash starved for many yrs. So the growling noises serve as a wake up call here as well, signals a willingness by the govt. to bring back military readyness but it will take time as their defense spending is still a small fraction of that spent by the US or the EU. I might add that trying to outspend the US & EU in defense was a leading cause for their demise in a former life.

The interesting point the author mentions is that the EU is Russia's biggest investor, this gives them a fair bit of leverage over what Putin threatens to do. Also Russia has only recently become 'a' supplier to the EU, upto now the EU probably sources its oil & Gas from both OPEC & others. They will never allow themselves to be held hostage to just one supplier. Africa in this case largely means Libya coming online to add to the mix.

What if Russia decides to walk into Poland or Hungary or any of its former satellites? What with the EU do?

I'm guessing it would be harder this time around as the countries mentioned are now NATO members
not to mention being counter-productive to Russia's medium to long term need for development

I think the former soviet satellites were always more at risk to Russian whims, than the EU, so they wasted little time in joining NATO. Now in some ways you can see why Putin is little upset as Russia's former assets have defected and are allowing a missle shield to be hosted on their soil.

An EU-China JV takeover of Russia?

I found this another interesting point, i think its talking about the weakness of its economy in comparison to that of the EU & China's. If both continue to increase investments in Russia and Putin needs cash to grow the economy, there will be an effective deterrent not to mention mutual interest to keep Putin at home.


What the world needs to fear is the possibility of China turning nasty. That is very dangerous territory. Hopefully it will become democratic by then.

..this is a potential threat in the future, but the Chinese will have to grow significantly to be in a position to threaten their bigger neighbours, who won't be sitting still



Again, wooing them is nothing new. This game has already been played, albeit between the US and Russia, each falling head over heels bribing, donating and doing what not to make countries cross over to their side. It has never worked in the past and is hardly going to work in the future. People are not stupid. In a war of supremacy between two players, the third one is bound to gain something. Yes there are some not so small countries in the list and together, they make a big market. But they won't control anything in any substantial manner. Considering current examples, US-China or US -Japan trade will make any other comparison and dreams of changing economic equations appear patently foolish.

Yes, but with the big-3 there really isn't a idealogical war anymore, its more one of influence, to get to resources, to be in a dominating position. Good news for the world's dictators if they also have oil. In some ways you're right its just deja vu again.

Aliiances are quite fluid and our position is quite cloudy if this discussion is anything to go by

One of the major problems the world is facing and will face in the future is government owned investment vehicles bidding for strategic assets. In the recent WEF India Summit 2007, there was an American Senator who talked on this issue. Crying wolf on Dubai Ports was a mistake, he said. But he also said that any acquisition of assets for purposes non-economic will hit a wall. Russia and China was what he was referring to.

Not sure i follow ?

the ports issue was prolly played up a bit too much but ceding control of ports of entry to a foreign party might not be very popular considering the prevailing political climate, reasons for going into Iraq & Afghanistan.

 

[gregory house]

In short the dollar is propped by the central banks of this world that need it in sufficient reserves to protect their currency from speculative and manipulative attacks and it also has the advantage of being able to buy Oil. I agree with your points on the polital reasons for Chavez & Iran to go with the Euro.

I've never understood the reason to switch from the dollar to the Euro completely as it, to me, is inviting even more uncertainty as the euro is a product of many countries vs just the one with the dollar. In other words i don't see any immediate tangible benefit replacing the dollar with the euro, other than insulting the americans.

And this status quo has been the main reason the US keeps 'bouncing back from self made disasters again and again and again' as theirs is a fiat currency.

How long for tho ?

Petroleum and forex reserves are the two areas where the US dollar is strongest. And it has historical reasons associated with it. Even in the days of the cold war, did anyone hold rouble reserves? The problem with the dollar however is its value. A currency has to derive its value from something. Earlier there was the gold standard, a non arbitrary standard of measurement, and all currencies based themselves on it. But now, things are completely out of control. The US will never have a glut of dollars. All its money is going to the vaults of sheikhs and foreign central banks, and is then coming back into the country as investment. So, as HCKL says, it is getting all the oil for free. If there is a shortage, it can always print more currency. And if there is a surplus, it can raise bank crr rates, scooping up hundreds of billions of dollars in a single day.

Other countries are not so lucky. Consider India. If the RBI faces a sudden glut of dollars in the market, unless it or the SBI steps in to buy dollars, the market will floor the dollar. The rupee will appreciate and our exports will become uncompetitive. On the other hand, if there are no dollars in the market and importers/ FIIs taking money out of the country demand the same, if the RBI does not sell, the dollar will appreciate and the rupee will crash, making imports costlier. So we have to deal with a currency on which we have no control. The US can however forget about such things and only worry about local money supply. In recent times, the yuan is the only currency that has caused it some problem coz of its artificially depressed value and the Chinese hold on US consumers.

It would be very interesting if the gold standard were to come back.
Is the Gold Standard History?
Dollar collapse will lead to a new gold standard - Money Week

I get the impression from the intl. media that Putin is just sabre rattling for domestic benefit. To appease his citizens that Russia still matters. Militarily atm they are not considered much of a threat with their armed forces having been cash starved for many yrs. So the growling noises serve as a wake up call here as well, signals a willingness by the govt. to bring back military readyness but it will take time as their defense spending is still a small.

Not too sure of that. Always have to be wary of nationalist leaders with an authoritarian streak who don't care about their own citizens (sounds like Bush, doesn't it?). He now owns one of the world's biggest oil companies and surely knows how to squeeze people.

Not sure i follow ?

the ports issue was prolly played up a bit too much but ceding control of ports of entry to a foreign party might not be very popular considering the prevailing political climate, reasons for going into Iraq & Afghanistan.
The US parliament overreacted by forcing Dubai Ports to sell their US ports to a US owned company. P&O was fine coz it was a British venture. The CNOOC-Unocal issue was another matter altogether.

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Another 'how to bring the dollar to its knees' article (2002) by HCKL - China vs the almighty dollar