Parts to Wholes: the Socionomic Systems Nexus

Our plan was to pass on to other international issues but this week's news from Yemen, Detroit, Iran, et.al. suggests a brief interlude with some recent news and opinion. It also suggests taking a broader look. Our analysis of the ME is actually drawn from a broader body of work on the nature of good government, how it might be developed, the application of that framework to the specifics of foreign policy and the specific analysis of particular problems, e.g. the ME or Iraq. At this point there's good news and bad news. Having developed the framework over several years and tested it against real world events in the last couple it's working. The bad news? Well, it's working. For example our assessment that good government is necessary for stability and progress but socionomic development is necessary for government stability and legitimacy is being tested to the limits by the Iranian regime.

After the break we'll provide more background links to white paper collections. In case you haven't noticed our postings tend to be mini-essays that fit into these broader frameworks. Over time it turns out we end up with quite a collection of machinery, tools, principles, findings and applications. Taking a brief interruption to point you at them seems like a useful sort of thing to do therefore.

Let me set the stage and reinforce the importance by pointing to a few recent news items that are worthwhile but also support our arguments - more test cases if you will.

Continue reading "An Interlude on Good Governance: Iran, Yemen, ME Instabilities and the Theory" »

Posted by dblwyo at 07:42 AM | Permalink | Comments (0)

This post is by way of exploring cases and proof points. It's also, in an odd way, a sort of Christmas card for the geopolitically realistic idealist. To wit - we think the case is well established not just in history but in pretty hard data that the points we raised in the last post about THE fundamental goal of policy is to establish peace and stability as the foundations for progress and prosperity. Wishful thinking about the world you'd like to have, one without sins of any sort, let along all the original ones, is more dangerous than being willing and able to face the world as it is yet make it a better place. And if that's possible, if we are slowly learning how to do it and if the evidence is clear then that's a pretty good happy holiday message in our books. Which makes the messages lying behind this Doonesbury cartoon self-serving, disingenuous and, even (sad to say) self-decieving. Think about - we may come back to or put up a pop quiz :)!

Considering the Developed Powers: Europe and Japan

Let's start by considering the major developed powers and, courtesy of both Gapminder and the Legatum Institute see how things have played out. Starting with the two "island powers" (a historical comparison oft used) - the UK and Japan. Britain is the home of the Industrial Revolution but it didn't take long for Japan to start catching up despite a much later start. Which is encouraging. NB: notice that per capita/GDP increased much more rapidly than lifespans (health) - this will be important later so take notes.

Like most European power the Brits took a bloody setback in WW1, and again in WW2. But the nation that came as close as any, as a country, to committing hari kari was Japan in WW2 and the aftermath. The drop in life expectancies and income was phenomenal and abysmal - literally. But the came roaring back at an amazing rate to catch, match and surpass Britain. Helped by the Brits giving themselves  the "British diseases' of a sclerotic bureaucracy and state-controlled socialism that stagnated them until Thatcher's revolution.

On that same line of thinking you can compare the olde enemies of France and Germany who both made two major attempts at suicide, almost literally, and suffered accordingly. Since the end of WW2 they've both gone roaring ahead on all cylinders - and we don't consider it coincidental that it was the post-war period that saw the first relative stability in government, firm commitments to democracy and adoption of market-based economies for real.

Continue reading "Virtuous Cycle in Action: Europe, the BRICs, LA & Africa" »

Posted by dblwyo at 07:18 PM | Permalink | Comments (0)

In the course of our taking up various topics it's time to cycle back around to Foreign Policy. At the same time it's also drawing toward the close of the year and some sort of wrap up and status check is appropriate. We started the year in the middle of the worst worldwide economic crisis we've seen since the Great Depression and WW2, and have avoided the first. It's not as likely that if we hadn't we'd have seen another world war but there were legitimate worries about major sociopolitical collapses that would have been too close for comfort. Organizing and leading concerted world action to deal with these crisis were the principal foreign policy challenge that started the year and the successful navigation, despite almost nobody really acknowledging the US's role as leader, wasn't a bad way to begin the year. Especially when it was done so that it lays the foundation for new institutional frameworks for future collaboration and development.

Did we say that nobody noticed? Well, that's not quite true. As it happens the last several years have seen the emergence of new tools to measure the value of a country's "global brand", which is not as wacky as you might think. By using very large surveys, among other data sources, you get a certain quantitative and analytical rigor (though that can be distorting). But there's a real value - "brand" measures influence, ability to attract investment and trade and otherwise influence the course of events. Interestingly country rankings tend to be relatively stable from year-to-year, very stable. This year the US brand value not only shot way up from $9.7 to $11.9T ($2T jump of 23%) but the US had the biggest jump in relative rankings ever seen in the studies.

Continue reading "Pragmatic Idealism: Peace, Stabililty, Progress & Prosperity" »

Posted by dblwyo at 12:39 PM | Permalink | Comments (0)

We've been meaning to get back to foreign policy for a while now but this last week's news gives it a certain sense of urgency, though HC Reform continues to be a (if not THE) major domestic agenda item. Specifically the recent news out of Afghanistan and Iran is going to cause us to shift gears and focus on the ME in general and the hot spots in particular. As to why we should care, since it seems to be off the table yet again, let's reiterate something we've said before: a stable and progressive ME is the most urgent, and perhaps the most important, foreign policy problem we have for the next decade. Aside from the obvious that we don't want any more 911s the chart, without a lot of further explanation, pretty well sums it up. Without a stable ME that becomes a reliable energy supplier in the face of mounting demographic and socionomic challenges the world economy would be in danger. When you add in the number of major flashpoints, particularly a nuclear armed Pakistan that's fragile and unstable, benign neglect is no longer feasible.

Let's Start With Iran

We've talked about Iran before and suggested that a policy of constructive engagement combined with containment is our best bet. Unfortunately that's not when the typical voter or talking head wants. They want something dramatic, quick, effective, that suits our prejudices and they can then forget about. The problems with that are manifold - it won't work, there aren't simple, short, quick or cheap answers. On top of which each of these countries and regions are their own things. All the alternatives among the chattering classes are, sadly, being frame that way and will cause more trouble than they'd fix. Take the case of Iran - the alternatives as presented are either get more stringent sanctions or mount a military attack. That was preceded of course by what appear to be fraudulent elections and protests and continued civil opposition. Of course the talking heads immediately wanted the President to come out decisively in support of the opposition, speak forcefully for democray and de-legitimize the regime. 

Continued ... 

Continue reading "Middle East Challenges: Game-changes, ME, Iran, Iraq & Afghanistan" »

Posted by dblwyo at 10:17 AM | Permalink | Comments (0)

The point we implied in the last post (Existential Crisis in the Agora I: Economy, Policy and US Strategic Outlook (Addons)) was that we're facing major, multi-part crisis and challenges which must address key questions that are at cusp points that will define our futures. Last post we focused on the strategic economic situation and pointed back to almost the entire collection of related postings. But more than the US faces these challenges on a shared basis - it's a world wide phenomenon. Key questions include: 1) how will we organize our economies and the socio-political structures that support them, 2) what institutional and governance frameworks will each country build to sustain itself and become a member of the international community and 3) how will we re-structure the architecture of the international system by evolving the old to something more inclusive, adaptive and connected ? Last time the primary focus was on the first question, now we're going to focus on the next two by looking at selected individual country stories and some shared challenges. The last post on International Affairs (Brave New World: the Emerging Balance, Pluralities, & Non-zero Sums) summarized a series and inventoried all the prior analysis and surveys as well as wrapped up the most recent series with a checklist that blueprints the things that are happening, and need to happen, for a satisfactory resolution.

The central question we're wrestling with is whether or not a plurality of the world's nations realize that this is a non-zero sum world where they are each better off with a stable and prosperous world order and act to support it's continued emergence. Or whether they pursue the zero-sum, opportunistic strategies that are the historical norm. Fortunately more seem inclined to be collaborative than not, despite some opportunism - which is natural and inescapable. But on balance the early signs are encouraging. And make no mistake, these changes are well underway, having already brought more people farther out of poverty than at any time in history. Contemplate the accompanying graphic which traces out population and income/capita over the last 200 years and notice how key players are crossing the knee of the development curve. The chart was built using Hans Rosling's Gapminder World tool to look at the US,Russia, China and India. But besides just looking watch these two videos from Hans that take a quick dive into these changes: 200 Years That Changed the World and Yes they can! - which'll give you a perspective on bit the changes are and how fast they're happening.

Refreshing the Framework: Governance and the International Architecture

Back in the 1830's a Frenchman named Alexis de Tocqueville visited the US and wrote one of the most astute assessments of American character, institutions and outlooks every concieved. One of the point he made was that in a 100 years or less the two dominant world powers would be the US and Russia. And in a way he got it dead on. Why ? Because he was extrapolating potentials based on resources, trends, character and outlook. This was at a time when the US had a population of 13 million people and a vast, unpopulated continent that was a wilderness to deal with. Prescient indeed. The population, resources, wealth, power and economic influence of the other three "powers" were all out of proportion. So what happened ? Our explanation in the prior Foreign Affairs post was R X P X H X C X I = Power. Or in words the power and wealth of a country is determined not just by raw resources but by Resources, Population to develop them, Human Capital, Economic Capital and Institutions. Tiny little Holland defeated the world's mightiest empire in the 150-1600's because it was more efficient and effective than Spain. In other words because of it's institutions and governance. As societies become more complex and sophisticated the need for inclusive institutions that act for the betterment of the whole society, not just the priveleged powerholders. There is a tradeoff between complexity, form of government and the amount of resources that is effective and legitimate for government to collect. When a government is exploitative, that is it extracts more than it gives back, and/or the form is mis-aligned with the history and culture it will collapse.

The second major institutional challenge we must deal with is getting each of these governments to be a proactive, constructive and relatively non-opportunisitic stakeholder in the world system. One can never expect any nation to act against it's own strategic interests but you can reasonably expect them to trade-off intelligently between national advantage and world effectiveness from which they benefit in a non-zero world. To the extent that more and more governments see it as in their interests to support the emergence of a constructive international institutional framework the world will establish the kind of foundation needed to keep things on an even keel. And meet the major challenges of today as well the bigger ones we know are coming tomorrow. Right now the early evidence is that we are collectively opting to move toward and onto the green path toward a more stable and prosperous world. Certainly measured by post-WW2 norms a lot of progress is being made. And measured by prior historical experience there is literally no comparison - we are living thru a fundemantal re-think unique in human history. The emergence of a new, pluralistic international framework evolved from the old and adapting to the new. Interesting times indeed !

Stories From Around the World

In the readings after the break you'll find sections updating you on current US responses, selected country stories from key players, a list of some key emerging issues and a final section of the future of Capitalism. The graphic is the 10-point checklist we developed to summarize what we think is going on at the end of the last series of foreign affairs postings. As we go thru the readings we'd like to keep it in mind as measuring indicator along with the two concepts of the "brave new world" framework.

A. US Update -

... starts with a really fascinating CSpan video of David Kilcullen discussing his conclusions about what we learned in Iraq (Kilcullen was one of the principal architects), how it applies in Afghanistan and Pakistan and broader lessons. Key ones include the fact that military force is a small part of it and the real requirement is for nation-building. There are three other CSpan clips of Clinton or Obama. They're included because a) the enthusiastic reception of the State, CIA and military for them is indicative of the kind of relationship they've already got, as well as for details on our approaches. But, in a few short days, we've already under-taken major new initiatives and established a level of interest and cooperation on a worldwide basis we haven't seen in two decades.

B. Country Stories

1. Japan is struggline mightily to start addressing the re-factoring of it's economy. Something it's put off for two decades but with the most severe downturn in a long time can no longer avoid.
2. Europe - as the result of the crisis blind free-market capitalism is loosing a lot of credibility in Europe and the European countries are re-thinking their approaches. At the same time there's been a distinct shift rightward in politics.
3. Eastern Europe was a major beneficiary of globalization, the EU and the eastward march of NATO but a lot of that is coming under threat.
4. Russia is beginning to face the fact that in twenty years it's gone nowhere, the recent commodity and energy boom helped but the necessary investments in futures wasn't made and malfeasant government and corruption are disrupting attempts to adapt.
5. India on the other hand is doing reasonably well while...
6. China has had a severe drop but relative to the rest of the world is doing very well, has responded quickly and forcefully and is in a position to become the US's major partner in crafting this new world.
7. Islamic World - is large, complex and convoluted. But nonetheless it's becoming clearer that major steps are underway to start dealing with and adapting to the modern world. This won't be easy but it's both encouraging and in all our best interests.

C. Key Future Challenges

1. The mainstream media has finally noticed that CyberWar is a rapidly escalating challenge though folks like StrategPage have been covering it for years (as have you - just check your spam)
2. The US coasted thru the '90s and let it's foreign affairs, defense and security and international development capabilities wither away with the result that we got caught flat-footed. There's been a major re-direction and re-development of Security and obviously of Defense capabilities. Now it's beginning to happen on civilian side of the house.
3. Nonetheless America, as we've pointed out before, is not in terminal decline. In fact it'll reamin the major military, economic and political power for decades. As a result it must continue to develop and provide leadership. At the same it must also encourage (hence the section above) the growing roles and responsibilities of serious stakeholders.

 D. Future of Capitalism

We spent untold millions of lives and billions of $ testing the question of what was the best way to organize the economic and socio-political structure of our societies in the 20thC. In a way the modern version of the European Wars of Religion - literally. The result was pretty clear - there is no more effective organizing principle than market-supporting economies. The problem was in that in settling that issue we went to far and forget that markets themselves must live in institutional frameworks to function. Now the worldwide debate, which will determine the worldwide fate, is on just what form the future of Capitalism will take and how best to govern it. IOHO this is one of the 4/5 most critical questions facing us.

Continue reading "Existential Crisis Around the Agora II: New World Stories" »

Posted by dblwyo at 02:39 AM | Permalink | Comments (0)

While international affairs are full of sudden crisis even they emerge from clear trends and always based on deeper structural characteristics. Like understanding how the great currents of the ocean move around the world and inter-act with the global environment grasping the future must be, and can be, based on understanding the structure, trends and dynamics of the world socionomic system. Which is under-going a radical shift in response to pressures that have accumulated over the last three decades and will take another three to work out; and which will be subject to enormous soci-demographic, ecological and economic strains in that period. To survive and prosper the global system requires an evolved institutional framework, which necessarily rests on the support of force but also requires a balance of smart-power instruments, and appropriate participation and contribution relative to benefits by each major stakeholder. But that evolution holds out the promise of the greatest increase in human welfare and well-being in human history if we keep the wheels on the wagon. The central debate will be between foreign and economic policies of mercantilism, "beggar-thy-neighbor" which views the world as a zero-sum gain where your losses are my gains. Or a world of free exchange, cooperation and collaboration which is decidedly non-zero sum where statesmen, not politicians, realize that the pie of world wealth can be grown enormously even if they end up with a smaller share. In all of this the US will remain the indispensable nation thru at least the rest of this century because of it's geography, resources, human capital and resilient institutions. Indispensable doesn't mean dominance though, it means major stakeholder, direction-setter and major player. We have to be prepared to see other powers take their rightful places at the table based on their interests. In both cases though the future is dependent on whether our collective leadership understands that those interests include the stability, peace, progress and prosperity of the system as a whole. As late as post-WW2 European nations were still pursuing traditional maneuvers of the old school which threatened to collapse Europe into chaos and were saved by the intervention of the US thru the Marshall Plan. The US acted partly out of altruism with many domestic political challenges and barriers and partly out of deep-seated self-interest. Now our bright new future can result from the balanced pursuit of balanced strategic self-interest by the emerging and existing stakeholders. Such a future will require major domestic shifts as well by all parties as well as the emergence of a new pluralistic world order. Those are the lessons we draw in this, the last in a series of posts, on the state of the world. Call it the "New Realism" or the pragmatics of knowledgeable self-interest and check out Leslie Gelb's CSpan interview to get a flavor.

Re-thinking US Policy, Power and Instruments

There are a lot of mis-conceptions running around about the relative position of the US in the current and future world from social to political to economic to military. By way of disabusing some of those, it not all - which we've been addressing piecemeal in the previous posts on this subject, we borrow from StrategyPage.com to show the relative position of the USN vs the rest of the world's naval powers. A similar graphic on world military power in toto is here. As the Somali pirates just learned the USN has a long-arm. In fact the world's sea lanes are more under the control of the USN than ever the Mare Nostrum was of the Roman Navy in it's heyday. But in both cases the result was and is safety, security and predictability for world trade...with all the resulting benefits for everybody. Those relative positions are not just unlikely but nearly impossible to change in five decades...and as long as the US continues to act as the guarantor of the trade lanes no one has the incentive, let alone the resources. Navies are beyond expensive but they can make for a peaceful world. But the nature and structure of all instruments of national power, hard and soft, will need to be adapted, radically, to this new world. In in less than a 100 days the new Administration has put down more markers in the right directions than at any time in the last 30, perhaps 60+, years ! Presuming balanced good judgment manages to triumph over partisan self-interest here's our summary of the state of things:

1. We're ten years into a multi-decade adjustment and adaptation process that represents a historical re-balancing (more akin to the world of 1300 or 1800 than anything seen in a long-time).
   
2. Historic because the dynamic, thrusting and resilient institutions of a pluralistic and aggressive Western Europe created a set of societies that were competitive, aggressive and innovative. In the last 2-3 decades the rest of the world has begun adopting and adapting those to it's own circumstances
3. This adaptation will go on for next 30 with timetable driven by population growth and it's already locked in leveling off combined with numbers of resource barriers (water, air, oil, etc.).
4. THE key is a new world system architecture that adapts the existing one - the best in history but aging - to new major players and new challenges.
5. Early signs are somewhat encouraging: Davos09 + stakeholder responsibility by China, India, et.al. Russia not a major player over this horizon because of institutional failures, demographics and likely implosion. Europe will remain a player but needs to get it's act together while Latin America and Africa are beginning the transitions.
   
6. Critical factor is resilience of domestic institutions in each major stakeholder which are badly strained by current crisis and were in many cases reaching thresholds of disruption in any case; as a trigger for change this crisis may in fact be all to the good before the "REAL" problems hit !
7. US has best combination of geo-political position, innate resources and capabilities (pop, ed., size, resource base) and adaptive and inclusive institutions that are pro-growth.
8. Bottomline therefore is stability and evolution of domestic institutions in world's players, particular the major potential stakeholders
9. ...which therefore becomes a vital national interest of the US
10. ...and makes it a vital interest that the US continue to support the evolution of a new world institutional framework while continuing to play a role in the development of each country, region and geography as constructively as we can manage.

 Re-balancing the World: Zheng He's Treasure Fleets

Between 1405 and 1433 the Ming Emperor Yongle (a reign name) sponsored a series of seven huge exploratory and political voyages by the eunuch and fleet admiral Zheng He with fleets of hundreds of ships and thousands of men. While the exact dimensions of the major Treasure Ships are in some debate there's no question that the West didn't build their like until the late 19thC. This wasn't all a matter of a show of face - these voyages not only over-awed the local potentates with the power and capabilities of China but created secure and stable trade lanes that saw a huge upsurge in trade and prosperity in the Indian Ocean and China Sea. A soft infrastructure that the later Europeans (primarily the Portuguese and then the Dutch) inherited and exploited. The European "Age of Discovery" was in fact heavily dependent on the Chinese fleet's history. Semi-fortunately the eunuch's clique lost power and influence at court while the traditional Mandarinate was restored and re-emphasized more internal concerns. Given the major projects from re-building Peking/Beijing to expeditions into nomad lands to restoring the Great Wall and the Great Canal they may in fact have made rational decisions about resource allocation trade-offs; after all nobody mounts five Apollo Programs at the same time ! When Columbus went to the New World his flagship could have been a tender for one of the Treasure Ships; no wonder the locals were impressed. Those ships were the end state of almost 400 years of Chinese development in marine engineering and naval operations that really got started under the Song. (When China Ruled the Seas: The Treasure Fleet of the Dragon Throne, 1405-1433 by Louise Levathes ) China, India and the rest have acquired or are acquiring the knowledge and skills they need to return to positions of prominence. Now we'll see if they're up to it.

R X P X H X C X I = Power: Exchange and Welfare

When tiny little Holland held off the world's mightiest empire in the 16th and 17thC for 80 years it did so because of it's institutional advantages, manufacturing and trade. Power is NOT simply counting heads or rocks though Population and Resources are critical elements. Equally important are Human Capital (the education and attitudes of that population), financial resources (which in turn are created by Capital markets) and Institutions. The difference between the decline of Spain and France and the rise of Holland and England lay, ultimately, the differences between their institutions. One was centralized, rigid and subject to political gamesmanship while the other was open-ended, competitive and pluralistic while providing secure foundations of the rule of law, security of property, non-arbitrary justice and some (relatively speaking) opportunity for any person to better themselves. [For a graphic comparing the modern powers of Europe] When you enlist the interests of the populace in getting ahead AND they understand and believe that the State is the best guarantor of those opportunities you have cracked the code for sustainable progress. That progress depends on and is driven by the gains from free exchange, in the proper institutional framework. [Structure and Change in Economic History by Douglass C. North, The Rise of the Western World: A New Economic History]

Consider two villages who grow corn (C) using Hoes (H). Their total output is limited by land, water and heads. But supposed one village is closer to the river with rich lands while the other is closer to the mountains with ready access to the flint for Hoe heads and wood for handles. BOTH can raise their individual outputs by focusing on what they do best. Seem fanciful and simplistic ? Well consider why Chicago specialized in meat-packing and grain trading while NYC focused on trade and finance and LA on making movies and planes. Each could have done each but they were all better off collectively and individually by letting the other do what they were best at. Nor does it stop there - supposed the Mountain Village finds a source of clay for Pottery (P) which allows corn to be stored better and more water to be carried for growing it. Re-investing some of the surplus in new capabilities means that innovation grows both economies yet again. And it doesn't end there - we face another cusp point in the world situation where protectionism reduces the benefits for all, where we keep trading but have limited innovation or where we really hit the jackpot and not only grow the world's economies thru open-exchange but increase the rate of growth thru innovation. To do that of course means investing in Education, Healthcare, new technologies (Green anyone) to adapt our Human Capital to the challenges. The shape of the world to come is being defined around us as we sit here and it can go many different directions.

Rising to the Challenges

So far it appears to be moving in the right ones. Now it's up to us to keep it so.

This post is the capstone of our survey of the state-of-the-world and the fourth major one we've done. Those prior posts are listed in the readings sections along with selections on the radical changes back to realistic pragmatism by the US, representative cases (Mexico & Drugs, the Pakitani near-death implosion, & African futures) along with some readings on the challenges to the world system. The various titles along are revealing IOHO but if you check back for compare and constrast we've moved from a world of challenges and no response to one of bigger challenges and greater responses. Actually that's encouraging in our book, even if we wished the motivation had been cheaper !

Continue reading "Brave New World: the Emerging Balance, Pluralities, & Non-zero Sums" »

Posted by dblwyo at 08:44 AM | Permalink | Comments (0)

If we learned anything from 911 a critical insight is that we can no longer safely ignore what goes on in the rest of the world - our oceanic barrier walls are that no longer. Which means, geo-political and economic issues and threats aside - it's important to us on a personal level. A derivative lesson is that we can no longer treat the rest of the world with semi-benign neglect but must be willing to be involved, all tradeoffs considered, appropriately in each area of concern. But as we've learned in Iraq appropriate is based on local conditions, details and idiosyncrasies. That, taken all together, makes the current multiple series of crisis of in the ME important and a laboratory for US foreign policy in general. Here we want to provide another update of the status of each country involved and suggest that we need to treat them 1) for their own sakes, 2) as part of a great ME whole (a systematic, systemic and holistic approach is called for) and 3) take what we've learned and are learning there as lessons for elsehwere. Suitably adapted and customized of course.

The Multi-Factor ME

One of those key learnings, which we've discussed before (The Next Decade's Crisis: ME, Bubbling Cauldrons & Fracture Lines) so we'll just briefly review, is that it's one damm thing after the other. Put differently each country and sub-region must be evaluated on it's own terms but also with regard to it's linkages to other countries and players. Here's out previous attempt at mapping out some of these complexities with some, certainly not all, of the linkages involved being shown. Now experts in the area have usually always had this sort of perspective, at least in their heads if not explicitly mapped out. But the really good news is that the current administration seems to be shaping a holistic policy of balancing a focus on local problems with integration into the broader context. For example we now have senior level special envoys of the highest caliber dedicated to the Israeli/Palestinian and Afghanistan/Pakistan problem. And they clearly understand that things are linked. They also clearly understand that US policy must be built on a deep local understanding of the cultural, political and institutional characteristics of the different players. Something that is new to the US at this level and with this sort of focus. Judging by recent Presidential speeches this inclusive and balanced approach where tactics and strategy are balanced and attempt to integrate local with broader concerns is now central to our approach to foreign policy. That's the really good news - we're making as concerted a good effort as we've ever made. The bad news is that the challenges may still exceed the capabilities and resources - in which case there's not much of an available fallback except to bend over and kiss it goodbye.

The Devil's Details: a Checklist for the ME

In another previous post (Witches Brew Recipes: ME Details (Iraq to Iran) {Updates}) we suggested a series of steps that the US should undertake in dealing with the Israeli/Palestinian dilemmas and alluded to the possibility that it was a more general checklist of actions and strategies for shaping a constructive foreign policy. Historically we and others have simply attempted to contain the dysfunctions of the various ME countries within their own boundaries, interpreted local events within our own context (seeing everything for forty years for example strictly within the framework of the Cold War; which led us to abandon Afghanistan, encourage Pakistan's ISI to support the Taliban and alienated most of the Arab countries by ignoring their concerns and interfered in legitimate Iranian local politics strictly in our own interests). We'll see if we've move on at all but the penalty for not trying is pretty severe. We've made no pretense of populating the checklist for each of the local situations, instead leaving that to the experts for now. BUT...we will suggest that the historical assessment would be that we've simply focused on the first few steps and now we MUST evolve policies that lead to effectiveness on all of them. In the readings below you'll find current selected news on each of the key countries:

1. In Iraq where we've learned that force must be coupled with civil development which has resulted in enormous strides. Iraq became an independent country 87 years after it's founding. The same timeframe in US history was the day after Gettysburg. Judged by appropriate standards a lot of progress has been made in a very short time with a long road ahead. A road that there are increased indications that the Iraqis are willing and able to walk.

2. The Administration has announced a bold "new" strategy for Afghanistan that builds on these lessons and has garnered widespread applause from knowledgeable pundits of widespread political persuasions. This will be, again, a long, hard road in very different and more difficult circumstances that nonetheless holds great promise.

3. The key to Afghanistan lies in Pakistan, which is a sovereign country in which "kinetic intervention" is not an option. Yet the lessons still apply suitably morphed. Our primary national interest is in preventing an unstable and fragile country that is nuclear-armed from breaking down into chaos. Whatever it takes.

4. If we segue over to the Mediterranean coast we now have very clear evidence that the Syrian site bombed last year was in fact a nuclear weapons development center with heavy North Korean and Iranian involvement. Can you imagine the world with Hezbollah having access to nuclear weapons ? The lessons for being locally informed, constructively involved and controlling adversarial interference from outside powers seem pretty clear; and ones that pass all possible cost/benefit tests.

5. The Israeli/Palestinian conundrum continues to be just that yet it's one of the great running sores in the ME that we cannot NOT afford to be constructively engaged in. (Gaza and the ME: Flames for the Fuses) Unfortunately local attitudes appear to have both hardened up and deteriorated. A great irony is that both Israelis and Pallestian populations would prefer peaceful solutions yet don't know that about each other. A critical key will be to move on from past hatreds, not forgetting or even forgiving but at least tolerating in mutual self-interest.

6. So far the spoiler in the ME appears to continue to be Iran which in the name of it's own Revolution continues to support violence and develop WMD at the expense of the health of it's own society and economy. President Obama is beginning to reach out so we'll have to see. What people are missing in their commentaries is that this is a brilliant strategy AND tactical maneuver - if the Iranians fail to respond constructively and sincerely they will simply isolate themselves more and strengthen the case for more restrictive sanctions and concerted worldwide efforts to contain. And cooperation would be in their self-interest. The real dilemma is is it in the interest of the power-holders who control the fruits of the country for their own benefit ? Aye, there's the rub.

7. During his visit to Turkey the President not only reached out to the Turks in ways that were extremely well received but also to the rest of the Muslim world. As the example of Indonesia shows not all Muslims are dedicated to reglious extremes. They are choosing instead to pursue an increased religiosity balanced with more open and secular governments. The lesson and hope would be that similar stances could be evoked and evolved from other players. Possible ? Yes. Likely ? Perhaps. Easy ? NO. Quick ? Definitely NOT. Alternatives ? None good. Either disciplined, constructive and patient engagement or worldwide economic disruption that will make the current crisis look like a walk in the park. We have little to loose in spite of the armchair quarterbacking.

The Confluence of Self-interest: Lessons Learned ?

Looking back at the lessons of 911, the Cold War or farther some other key lessons come to mind.

1. It is in the clear self-interest of the US to promote stable, progressive regimes thruout the ME.

2. We must be constructively engaged.

3. It is in the interests of each of the individual countries as well.

4. The primary opponents of moving forward seem to be self-serving power holders in various countries who put their immediate advantage over the long-term welfare of their populations.

5. Those populations have been so inculcated with emotional shibboleths that it will take time and effort to de-tox them. And ask of them some hard, hard, hard choices to give up their hatreds which are counter-productive but immediately emotionally satisfying for possible long-term benefits. Surrendaring immediate emotional gratification for long-term abstract benefits is not something humans do well. Just ask yourself how your last diet or anti-smoking efforts went.

6. A critical challenge to all the parties is to give up the "bloody shirt" of revenge for a civil society. Or more importantly we must figure out how to engage and sell the long-term benefits to the street...not just he power-holders.

911 Lessons: Pointing Fingers vs Potential Futures

And before we point to many fingers at supposed local irrationalities let's ask how well public spirited policy has faired in this country as opposed to partisan posturing and the pursuit of self-interest. (Back in the US: Economic Realities vs Partisan Posturings) Flawed, narrow and destructive self-interest as opposed to the enlightened variety ? The basic tradefoffs are between creating and supporting a virtuous vs a vicious cycle of self-destruction vs one of mutual gain, between a zero-sum and a non-zero sum set of public policies.

UPDATES: 

We've added three stories related to Iran that sketch the complications and convolutions of dealing with that theocratic kleptocracy in the context of the ME maelstrom. Egypt's arrest of Hizbollah operatives apparantly plotting an attack against Syrian tourists, the supression of press freedom thru intimiation of foreign journalists and a sudden peace overture by Pres. Ahmadinejad. Taken all together it's hard to reach a summary conclusion but we take it as continued evidence of the multiple influences straining that country as power protection by the clerics bumps against the realities of needing to rejoin the world. Will they or won't they ? On that MUCH hinges.

Continue reading "ME Update: Exemplar, Laboratory and Conundrums (Updates)" »

Posted by dblwyo at 02:48 PM | Permalink | Comments (0)

With the conclusion of a jam-packed foreign policy week+ from the G-20 to NATO to trips to Turkey, Iraq, etc. it might be time to gain a little perspective. Unfortunately that's very hard to do from the headlines and stories as they've drifted by, for many reasons. Let's start by setting reasonable expectations. The interesting thing about a dancing bear is not so much how graceful and skilled they are but that they're dancing at all. Something everybody forgets, along with the fact that there is no magic fairy dust where with a few words, the wave of a wand and shazam...everything's all of a sudden mended. As it happens, while the words reported were fairly accurate, they were moved far enough out of context and then interpreted by folks who appear to have totally lacked the historical, analytical and technical background to analyze, interpret and explain exactly what went on at these meetings. So we're going to take our best shot at it but there's no substitute for actually listening to some of the press conferences. If you have any interest whatsoever in foreign affairs and are willing to invest a little time there are two that are very...very worthwhile. The first is the joint press conference between Brown and Obama that kicked off the G-20 and the second is the townhall meeting in Strasbourg where the President spoke to the locals.

The press tried to magnify the differences of opinion and policy among the attendees by emphasizing the "vast" differences between them on many issues, e.g. stimulus. In fact we're here to tell you there were NO major differences and there were debates mostly on the margin. Now the press is biased by it's business model - if it bleeds they'll read and we'll get paid. Which unfortunately is not a reliable indicator of value and interest. Of the many major policies considered the level of substance, agreement and commitment was literally stunning. We are in fact laying the groundwork for an evolutionary re-architecting of the world system by including more key players and involved parties and working out collaborative agreements on how to proceed on all these major challenges that have been deferred or ignored for so long. The bear danced very well indeed.

Meetings of the Minds: the Other's Perspectives

Both WW1 and WW2 were triggered by, among several key factors, by a fundamental view that the world was/is a zero-sum affair where my wins are your loses. An alternative view that's supposed to prevail inside society is that by living in an agreed upon political, legal and civil framework we can agree to get along and work in fair exchange. This is a non-zero sum world and is the source of ALL the world's progress. In an international situation it's not often clear where different countries will choose to tradeoff their immediate narrow interests against the good of the whole system, even when their own long-term interests benefit from a stable, secure and predictable system. And since no one country has a monopoly of force any international framework must be agreed by the participants. After WW2 when Europe was collapsing in chaos (literally) and it looked like the Soviet Union was going to be able to cheaply conquer all of Western Europe the US committed to the Marshall Plan which saved Europe and laid the foundations for it's future stable evolution. One of the most interesting things the US administrators found early on was that the various European powers were pursuing the same self-aggrandizing policies that "beggared their neighbors" as they'd pursued at Versailles. And pretty much the same ways for the same reasons. There was a 3-5 years period there were Europe as we know it today was going extinct. (The Most Noble Adventure: The Marshall Plan and How America Helped Rebuild Europe). It was literally the US who forced collaboration and cooperation and set up the necessary institutional frameworks.

At the G-20 there were more players with more interests but nonetheless we're seeing massive global stimulus programs, concerted efforts at monetary easing and collaboration, rigorous new policies fore worldwide financial regulatory reform, some joint efforts on climate change, major new commitments and investments on trade and aid and on down a long list. Consider the number of powerful players this is probably the most effective and substantive major international meeting in several decades. Possibly rivaled only by Bretton Woods but this time more open, inclusive and forward-looking. This is not to say all was sweetness and light or that it will be but what you say was responsible stakeholders finding common ground based on enforceable and workable agreements that serve their individual and collective interests. Any time you want to get a group of power players together around a policy you need to recognize the 4P's of Negotiation: Issues/Policy, Players, Position, and Power. And understand that serious resources commitment come about if and only if an agreement provides workable satisfaction to all relative to their gains and costs. Try looking at the above graphic and ask yourself what each of the major players position and influence was on each of those issues. We saw more coming together this time than we've seen in at least three decades. BtW for a graphic depiction of the full range of major policy risks click the highlight to see a graphic summary from Davos.

Re-Stabilizing the World: the Emerging Plurality

Let's re-visit another old graphic we put together to try and look at what leads to a stable international order. The vertical axis represents different US strategic policy positions while the horizontal represents a collective summary of the other major stakeholders policies. (Foreign Policy for a Dangerous Old World: Adoption, Adaptation & Resilience) A key to getting widespread buyin is understanding, reflecting and incorporating the interests, positions and biases of all the players. In the readings section you'll find a representative sample of some decent information looking at the positions of China, Russia, Europe, Mexico and Brazil to serve as a representative sample. You'll also find some key other readings excerpts on just what the stakes were and are in terms of getting this right. The stakes literally couldn't be higher. We're really playing for all the marbles here.

But not all we're going to be playing for. As a final note and a point we've made before...the next thirty years will see the continued development of the rest of the world. Which will require a new global architecture to hold things together. As the incomes rise and resource demands increase the pressures on the world for resources, economic competition, etc. etc. will escalate exponentially until we reach a new steady state of stable population and no major new surges in income growth. That's in an ideal world. In the world we know from history, recent history, the international system fails to adopt and adapt, countries pursue pure aggrandizement and the result....KABOOM.

What we need then, and now, is a pluralistic system where stakeholders rights and responsiblities are in balance as are their contributions; the latter relative to their gains. That's what we saw the groundwork being laid for in London this last week. Judged by realistic expectations and historical standards it literally couldn't have gone better. Which doesn't mean the next several years will be easy. But looking at the preceeding graphic where would you rather be - the green line or the red one ? Judging from the talking heads and the pontificating pundits we were headed to red perdition or at least the yellow road to devolution. In fact our judgment is that we're started down the blue road  to plural stability, however shaky and fragile that path might be. Something else you'll find in the readings is a set of vidclips from Hans Rosling, Paul Collier, et.al. on the challenges and opportunities which we urge you to take a gander at. Hopefully they'll convince you of the magnitude and urgency of the situation while also persuading you that serious improvements are in fact happening RIGHT NOW and that it's to all our benefits.

UPDATES: We've just added a new reading on the growth of Indian and Chinese naval power in the Indian ocean and the need for evovling a new multi-party arrangement. Which exemplifies and amplifies many of our main points.

Continue reading "G-20 Persepctives: How Well Do Bears Dance ? (Updated)" »

Posted by dblwyo at 06:46 PM | Permalink | Comments (0)

Peter Drucker had a famous and insightful saying (many actually): "change the people or change the people". In other words when an organization had to change to meet new circumstances and challenges either the behavior of the people had to change or you need to get new people on board. We can paraphrase that by in these times by saying, "change the institutions or change the institutions". This applies on the micro-level, for example with the re-regulation of the Finance Industry (Helmet Laws vs Adult Supervision: Re-Regulation & Finance Industry Futures), or on a macro and global scale. To get those changes however we need leadership for and from all the organizations and institutions who are involved as serious stakeholders. That paraphrase can be extended however and just how and when is best captured in the accompanying YouTube video clip. Either change the institutions or they will be changed for you, by a mob of angry citizens. Unfortunately history is not very encouraging as to the results. One cannot argue, for example that the 2nd French Revolution led to either permanent or constructive changes. Rather it seems to have continued a dysfunctional cycle in French socio-politics that still exists to this day. In a Charlie Rose interview Lee Kuan Yew, the founder of Singapore, made the fascinating observation that family ties and guanxi were so important in Asian socieites because they had millenia of surviving failed states and they only thing they knew to fall back on was family and social ties. AS the worldwide credit and economic crisis continues to metastasize into a worldwide social and political crisis it would be well to keep the alternatives in mind !

State of the World Economy

 If you look around the world there is no single country where trade hasn't literally fallen off a cliff. That ought to tell the whole story if you understand how critically dependent many, even most, of these countries are on trade for manufacturing, employment and general economic health. Whatever you think the situation is in the US the depth of the economic downturn is more severe in most of these countries. And threatens to drive many of the poorer ones over other kinds of cliffs. That drive will lead over a third precipice - profound socio-political instability that could strain many of these governments to the breaking point. Something they are all well aware of. With the upcoming G-20 meetings the question then becomes how will they respond ?

Trade is the Lifeblood...and Credit the Oxygen

We can say that but it's not entirely clear it has emotional weight to most, including ourselves. Let's consider an analogy. Consider the human circulatory/respiratory system that takes air and food from the environment, processes it, turns it into cellular structures and then carries those to each and every location in the body where complex, large-scale and very fast bio-chemical interactions enable us to breath, burn energy, build new bones, muscles and other tissues and, in short, exist. Not enough food and we begin to waste away, literally eating ourselves up. What allows for that food to be burned up is the oxygen in the air. Well trade is the analogy of food and the energy it contains while credit is the air that fuels the fires.

Where Are the Adults ? Into the Valley of Decision

When the crick's rising to fast, the food running out and there's a fire in the school we can either all pull together or we can run around in circles, screaming, shouting and pointing fingers of blame. And we can look to our leaders to step up the challenges of putting out the fire, organizing the dike repair teams, buying food from other regions and then making sure enough is saved out for Spring planting while also changing the engineering of the dikes and creating a  fire department when we didn't have one. The upcoming G-20 meeting was supposed to be the opportunity of the key world leaders to step up and do the right things. Unfortunately there seems to be an extremely limited supply of folks acting to both quell the emergencies, repair the system and start the process of evolving a new and improved one. Actually, broadly speaking, the folks acting proactively and correctly seem to be limited to the US, China, the UK and Brazil while the erstwhile leaders of the EU still seem to be in profound denial and Japan is rocking from one political breakdown to another. When you add those up you've added up the bulk of the world economy. On which the fate of all now rests. What was that about interesting situations ?

Unfortunately the number of self-responsible adults let alone the ones willing to take public responsibility seems to be very limited even in the countries who are leading. Pundits to the left of them, politicians to the right, challenges in front, still into the Valley of Responsible Decision-making rode the six hundred (600 ? Really). With all apologies to Tennyson !

That's hardly our sole assessment, btw. In the readings excerpts you'll find everything from state and outlook on the world to key oped pieces by Steve Perlstein of the WaPo and David Brooks of the NYT to the first in a series by the Economist on re-thinkings of global capitalism. We particularly recommend the Martin Wolf Rose intereview and the Perlstein/Brooks pieces. As well as the Yellen situation summary and our own prior posts on the situation and the realities vs the politics.

Continue reading "Sounds of Angry Men, Whimpering Politicians & the Global Crisis" »

Posted by dblwyo at 08:40 AM | Permalink | Comments (0)

If we learned anything on and from 911 it should be that we can no longer neglect the rest of the world or deal with it as an after-thought. With that in mind we're going to continue our dive into international affairs by looking at Europe, Latin America and Africa. Some other principles have emerged as well. First good government is critically important, second while you can frame these little looksees the devil's in the details of each region and country so you have to get granular within the framework. On the other hand the framework is powerfully useful for analyzing structures, trends and outlooks. Perhaps that's a whole separate set of principles - the data is important. AND you have to have structurally accurate frameworks but apply them granularly ? Which leads to another finding which we'll organize this posting around to some extent - all the world's countries can and are proceeding down the same paths to development. Some at different rates and with different challenges. You can see that in the accompanying graphic which shows the GDP/capita against life expectancy for the key developed powers. Notice that first everybody worked up the life expectancy ladder and then followed similar paths in income growth (each circle is a year and the size represents population). Here you see Great Britain, the US, Japan, France and Germany, and not by accident. Those are and were the great economic and socio-political powers of the last 150 years.

New Europe

In this next chart we look at the New Powers, at least the European ones and have left the UK and Japan as comparative benchmarks. There are several more lessons that are fundamental here (aside from let the data tell you what's really going on - thank you Gapminder !). First off Japan developed earlier and faster than the new powers of Italy, Ireland and Spain. Western European (& US) pride and complacency aren't justified by the historical record. You just have to map different countries to the same historical structureal trendlines to understand them correctly. Secondly European late-comers didn't really start accelerating until the late 20C ! Remember in the last post we used Spain and France as our bad examples of how rigid, non-responsive and special interest controlled governments led to historical sclerosis ? Well let's consider that a well-established hypothesis, being polite. If we were to also look at Taiwan, South Korea and the advanced SE Asian nations we'd likely find them ahead of the European laggards ! Perhaps the most important historical finding here is that we're living thru the biggest changes in human history there have been. The US didn't create a prosperous middle class until the 1950s - a historical first. The most advanced European countries didn't follow, arguably, until the 1970s while the lagging countries didn't hit their strides until the '90s !!! And Asia is coming up fast.

Latin America

Shifting our focus to some key countries in Latin America we look at Brazil, Argentina, Mexico and Cuba, compared to the UK again as the benchmark. Did you know that Buenos Aries was considered the Paris of Latin America in the 19C ? Well a century of oscillation between exploitative oligarchies and populist malfeasance left it's mark on a continent endowed with resources, skills and capital. Nonetheless they too have begun their ascents. In fact when you look at Latin America overall the progress in establishing good governance and socionomic development is remarkable - much of it concentrated in the last 10-20 years no less ! There's a meme running around that Mexico is a failing state for example and nothing could be further from the truth. First off they're struggling with a transition delayed for decades to a truly representative democracy with the PRI's loss of power. The Cartel Drug Wars are a major challenge that's JUST now coming to US attention though it's been a burgeoning problem for years. One that perversely is more due to US drug consumption habits. And they still have a rigid economy controlled by the old powers with major challenges in re-development. Brazil has similarly made enormous progress. In fact of the four BRICs it's turning out to be the most stable, resilient and internationally respected. BtW - maybe this is the time to point out that whatever problems you think the US has are worse abroad. Much worse. Riots across Europe, major economic problems, shell-shocked governments refusing to adapt, etc. Actually Brazil and China are doing better in terms of level-headed responsiveness than continental Europe !

Africa

When you look at Africa the same picture emerges with a couple of major caveats. First off though we want to emphasize our basic argument - when judged by relative historical stage African countries are moving ahead at about the same pace that the European countries or the US did. They just started from enormously farther back. And have had enormously worse governance problems which has caused, again being polite, some strong "recidivism". For comparative purposes you should think of the bulk of Africa today as being equivalent to early 19C Europe, Spain in the 1950s, western and rural China today or the vast mass of peasant agriculture of India. And victims in some ways of a much more damaging historical legacy than Latin America as well from being thrown to their own devices without adequate socio-political resources during de-colonization (which also btw leads us to rememer that European colonization of Africa was a senseless competition that cost the home countries more than it ever made them on the whole) to being a Cold War battleground. If you want to understand how this poisonous mixture and wounded pride led to terrible consequences go watch "Last King of Scotland" or read the news from Zimbabwe today. You can see the consequences in the graphic where the Congo has regressed enormously and even South Africa has stalled out because of the AIDs crisis. A crisis made enormously worse by conspiracy theories that prevented proper treatment and prevention as well poverty. That Japan ranks roughly with these other world powers should put paid to the notion that Western institutions are unique prerequisites for socionomic development !

Current Pessimisms vs Future Optimisms

Nonetheless the challenges are similar around the world, the real questions are going to be which governments are both resilient and effective and we're enterring into a period of greater stress that will test those capabilities severely. Strangely enough however we still remain hopeful and optimistic for several reasons. First off is the historical record combined with our improved understanding of the multiple factors involved in development. Second, perhaps even more perversely, is our feeling that it's better to have these crisis of world re-balancing now because it gives us a chance to re-engineer the world governance systems before the continued rise of the middle class around the world strains available resources and socionomic infrastructure to far. And third - it highlights the opportunities. After all if China is exhausting it's water and needs clean energy those become the new economic opportunities. What we really need to remember and realize is that if we all grow the pie we end up better off rather than where we end up when we squabble over splitting it up. In fact given how essential governance and global cooperation is to all our prosperities squabbling leads to implosion (the red line), hunkering down to devolution (the yellow line) and re-architecting and collaboration to bigger pies all around (the green line).

Continue reading "From Complacent Stablities to Disruptive Challenges: Europe, Latin America, Africa" »

Posted by dblwyo at 02:31 PM | Permalink | Comments (0)

The last foreign affairs post was a broad overview of the ME situation, the challenges and the context (The Next Decade's Crisis: ME, Bubbling Cauldrons & Fracture Lines) and built on an earlier one focused on the Gaza situation (Gaza and the ME: Flames for the Fuses"). Here we'd like to take a deeper dive on specific countries, including Iraq, Afghanistan, Pakistan, Israel and Iran. Interestingly enough two of the four are wrestling with important national elections (Israel, Iran) - one wrapping up but not resolved and the other underway while another (Iraq) finished one that testified to how much progress has been in re-building a badly damaged society. In our last post, and yet again, we ended up arguing that the most important strategic factor to support in the ME was the evolution of good governance.(SoW IV(the Ugly): Israel, the ME and Good vs Bad Government) Let's start by reinforcing that point and then consider the consequences. The graphic shows the different histories and timepaths of four major European powers and the consequences of their different strategies. Spain opted for rigid central authority and had taxes that favored certain interest groups that were easy to collect from. They have yet to recover to this day. France followed a similar but more flexible path yet in the last two centuries has had a very turbelent history as governments came and went. Tiny little Holland fought the Spanish to a standstill over almost a century of continuous warfare with a market-based economy and representative government while England learned from it's own multi-decade war with Holland and it's own experiences and created modern capital markets and was the progenitor of the Industrial Revolution. The case for flexible, inclusive and adaptive government with security, the rule of law and forward-looking policy seems pretty clear and has shaped history. The question then becomes what's feasible in the ME in what timeframe ?

Continue reading "Witches Brew Recipes: ME Details (Iraq to Iran) {Updates}" »

Posted by dblwyo at 11:39 AM | Permalink | Comments (3)

Let's continue our foreign affairs survey with a look at the overall situation in the ME. In fact we're going to split it in two, or counting the earlier post on the Gaza situation, three. As this week's news from Pakistan, which we rollup in the ME, tells us the fragility and risk factors are high even though Iraq has made enormous progress. The general ME, and Iraq in particular are not new topics and we've poked at them enough that they have their own separate archives in fact. We're going to make a flat prediction - just as 911 and Iraq were the foreign policy challenge of this decade ME stability and progress will be the critical challenge for the next decade. We've managed to sashay on by and treat the region with minimal involvement, benign neglect and looking the other way for decades. None of which can continue, as we've discussed multiple time, for two primary reasons. First, the escalating demographic explosion is more and more likely to create a socionomic implosion. And second, ME oils supplies are the sine qua non of the world economy and will be for at least the next three to four decades. (Gaza and the ME: Flames for the Fuses) Period, end-of-story. We can either continue to roll the dice and hope the Laws of Averages let us keep sliding by, or we can figure out how to get more constructively engaged. There is no muddle thru middle road left to anybody, even though that's probably not visible to the man in the street yet. By the time it is it'll be to late. Fortunately the ME is drawing increased attention from US policy-makers and our involvement in Iraq, Afghanistan and Pakistan commits us there for this next decade. (Oil and Other System Shocks: Beyond Iraq & Georgia)

Complicated Context

On the other hand you can hardly blame anybody for not wanting to get involved deeply and permanently in the region. Ugly and messy doesn't begin to cover it. Worse yet each country and sub-area is it's own enormously complicated problem and they all inter-act. Back when we first started poking at Iraq here it quickly became clear that the Iraq problem wasn't confined within it's borders. The graphic is one we first came up with in 2007 to try and frame the problem and get some handle on how all the pieces fit together. The reason for building such a picture of the inter-woven relationships is that it tells you what you have to deal with tactically, strategically and on a policy level. By under-taking the most startling self-transformation in military history while under fire the US Military not only put the lid back on a situation looking to spin out of control it's actually laid the foundations for future progress. Which is NOT being Pollyannish IOHO....there's still a long way to go but the prerequisite was establishing security and local control. That transformation led to tackling most of the internal problems, many of the external ones and really left only Iran hanging out there as a continuously disruptive factor. Strangely enough though the Iraqis themselves reduced Iranian influence by mounting Operation Knight's Charge to suppress and control the Iranian sponsored Shi'ite militias in Basra and Baghdad. An operation which cut down Iranian influence (The Iran Dilemma: They Like Us, Not; We Like Them, Not...usw.), removed a major domestic source of instability, proved the level of progress made in re-vitalizing Iraqi security forces, established the credibility of the central government and received almost no attention the US. But we wouldn't be where we are without it !

Context Part II: the Perennial Sore

Since the technique of relationship charting worked well enough we re-applied it to the Gaza situation in the context of the broader ME. Iraq and the related instabilities (Afghan., Pakistan) are quasi-recent events but the Israeli-Palestinian conflict has been a running sore for decades, even by some countings a century or more. Again, IF we can find the lever, the fulcrums and the weights we can probably deal with each of the separate situations illustrated here (consider this graphic the zoom-in expansion of the I/P/L triangle in ME context from the previous map) but it'll be more challenging. And much more important now. As we put this chart together it again became clear that reducing, moderating or controlling Iran's influence in the region was vital however. In fact each of the "small" stand-alone problems is even more intricately connected to the larger picture so that any long-term solutions must start locally and evolve regionally. For example one by one the major Arab powers have struck their own separate deals with Israel after loosing a conflict but always without addressing the Palestinian dilemmas. And often using the conflict as a "bloody shirt" to distract their local populations from bad governance and failing socionomic systems that aren't keeping up with growing populations and declining well-being. Hmmm...have we just suggested that encouraging the evolution of good governance, more inclusive regimes and investing in socionomic development are essential to prevent a blow up. We believe so. One final observation about Realpolitik vs Ground-truth. Much as we might dislike the situation and the players Hamas and Hizzbollah have established their rights to a seat at the table; unless somebody is prepared to eliminate them entirely thru force. And who can and would bell those cats ?

Readings Guide

The readings cover four topics: history of the region (in a limited way), attempts at reform, the realities on the ground and the policy and political realities. A friend has organized a current affairs reading club and is trying to stretch their interest to include deeper books instead of current lite-weight best-sellers and had a challenging time. A major source of pushback is lack of background in what drives the symptoms being treated as conceptual candy in those. Put another way we've always found that analysts don't do history while historians don't do analysis yet one can NOT understand a current situation without understanding the historical roots, currents and constraints.The problem is culture persists and persists and drives history AND current events. Some roots of Arab culture go back thousands of years while Islamic extremism is rooted in the failed reforms of the Wahabist movements of the 17thC and the institutional reponses of the Ottomon Empire ! (ME Faultlines(Readings): Values, Culture & Conflict)

The history section starts with two C-Span Booknotes interviews from a Jewish scholar of current affairs who's also an experienced soldier. The insights and new information he provides are just stunning IOHO. For example for those of us who could never figure out why Russia supported Israel's independence....guess what ? It split the the British Empire at it's most vulnerable point. The second interview is with the religious scholar Karen Armstrong who, in a very broad-ranging interview, provides a superb introduction to the roots of Islam. Which was, at it's founding, one of the world's more progressive and liberal religions which tried to suppress much of the violence and abuses endemic to the existing tribal cultures. What Islam is at it's core and best is something we'd all like to see restored, or perhaps reformed. And let's judge fairly by comparing similar historical stages - the bloodiest civilization in human history over a sustained period of time was Western Europe and a major source of that violence was religious wars under-taken in the name of God and Reform. Those arguments rippled right down to three modern world wars. And as recent news shows Arabs and Muslims are well aware of their challenges.

Arabs Are People Too: Good and Bad

Let me put that another way - Arabs are people too with all our faults and defects, they have a unique culture with strengths and weakeness but they are in fact trying. And truth to tell have actually made enormous progress judged fairly. If you doubt that just look at the Gapminder chart on life expectency vs per capita income; they haven't done as well as Israel but they had and have a bigger problem, not so many advantages and growing challenges. And if you doubt that they are human or that they are trying give a listen to Queen Rania of Jorden's YouTube broadcast. At the end of the day history matters, cultures persist and govern behavior for centuries and changing them is the hardest thing in the world. Be glad these folks are giving it a darn good shot. Better yet let's figure out how to support them and help them - in our own enlightened self-interest if for no other reasons !!!

Continue reading "The Next Decade's Crisis: ME, Bubbling Cauldrons & Fracture Lines" »

Posted by dblwyo at 04:55 PM | Permalink | Comments (0)

That last post re-started a focus on International Affairs with a survey of the major crisis facing us collectively and the (re-) introduction of some conceptual frameworks on designing and managing a stable international system and the role and importance of good domestic governance. In particular we emphasize the importance of the peaceful control of force between nations and within nations combined with the criticality of domestic stability for economic development and socio-political health. The arguments can be summarize as 1) the viability of the international system depends on the interest and commitment of the potential stakeholders relative to their interests and capabilities, 2) those interests and capabilities depend on their domestic stability and development, 3) the US has mad major strides in coming back on balance, re-factoring it's Defense and Intel/Security institutions and is re-positioning it's foreign policy strategies to balance hard and soft power and 4) it is a vital national interest for US to be constructively engaged in promoting the stable progress of other nations while encouraging their responsible behavior while discouraging irresponsible free-loading and/or opportunism. Here we're particularly thinking of Russia and their wounded amor prope (discussed in prior posts cited in the Russia section btw). Now we'd like to take a deeper dive using some of those concepts and tools on the situation and prospects for China, Russia and India.

Markets as Geo-political Indicators

Amusingly business and finance types ignore geo-politics until it blows up in their faces, at least in theory. But in practice what they react to is the prospects of stability, economic progress and earnings. The bottomline results (implied joke intended) are that, to some extent, international markets are useful proxies for taking the temperature for the general world assessment of any particular country and the regime that governs it. Brazil for example seems to have finally broken the Oligarchic exploitation/Populist Revanche cycle that the Latin countries have been in since the dis-memberment of the Spanish Empire. As a result it's actually performing better over the last several years than many others, has a very solid reputation in the markets and looks to weather the storms relatively better than the other BRICs. Those relative assessments are represented here by a composite chart showing the relative performance for India (BSE), Brazil (BVSP), China (SSEC) and Russia (RTSI) since Jan08 and for the last six years. Notice that for five of those years India, Brazil and Russia moved up dependably on the meme that the BRICs were the "Next Big Thing"  while China showed some serious speculative swings as it's new markets went thru some speculative excesses. Since Jan08 they've all fallen over the same crisis-induced cliff but the real "tell" is the long-term differences relative to the start point. China started giving back speculative excesses early but has recovered somewhat. B/I/R started over the cliff later but have had enormously different timepaths as India has re-stabilized, Brazil had a reduced fall and is re-climbing a bit and Russia came apart at the same in two different cusp points as it's internal structural weaknesses became apparent under stress and stupidities.

Re-balancing the World

Make no mistake about it the world is changing, willy-nilly, and it won't look like anything we've experience in our lifetimes and on which we tend to base our rules-of-thumb for decisions. But strangely enough what it's really doing is beginning a process of re-stabilization and re-balancing as we can see in this chart. It combines world shares of GDP, GDP growth and per capita GDP. The first sub-chart shows that China and India dominated the world economy for better than a 1,000 years; almost 1500 or better in fact. Then Western Europe and the US crossed the Malthusian barrier to modern exponential growth, based on industrialization and good governance. It's not far of a stretch to argue that this entire phenomenon is relative recent, within the spans of "four to five" generations, from great-gparents to kids now. That's born out in the third sub-chart that shows per capita GDP. Notice it's early rise in Europe and the US followed by Japan - the first Asian nature to put a modern socionomic infrastructure in place. We take this composite set to argue that what we'll see in the first will be the equalization of per capita GDP around the world and the re-balancing of relative shares. Of course that all depends on two things. One, keeping the lid on thru this crisis and reaching the other side still in shape to work on these challenges. And two, the gradual and continued development of more inclusive governance that enlists broader portions of the polity in socionomic progress. In the WaPo's most recent neo-logism competition willy-nilly was defined as "impotent". Ironic and amusing because willy-nilly the world will re-balance...the only open question is at what level. High per capita or low per capita GDPs ! Progress or catastrophe...take your pick. Our vote is pretty clear, we think.

Stability, Progress and Governance: China & Russia

The key to which path we collectively follow depends very much on each separate nation-state establishing the institutional foundations that provide stability and are built from their culture and history. History in general is pretty clear...good government is the sine qua non of progress. But it's also clear that as societies become larger, more complex and more difficult to manage that the more inclusive they are the better, all things being equal. That is if representative government and associated civil institutions can sustain that inclusion. Because history is equally clear that trying to leap ahead of yourselves can be disastrous. Let's compare and contrast the cases of China and Russia.

CHINA

 From the historian and socionomic analyst's perspectives China is almost an ideal field study since it's had millenia of good and bad government. In fact it seems to continually cycle thru the rise and fall of dynasties as chaos and corruption led to the fall of the old, the slow emergence of the new, the rise of competence, the development of organosclerosis by self-serving elites and the re-start of the downward spiral. Hence the region of the graphic that shows China's historical experience; picture it oscillating inside that region for thousands of years. The discussion points outline more recent Chinese history and show the fall of the last Dynasty, the rise and de-generation of the Kuomintang, the Communist victory in the Civil War and their self-immolation under Mao and, finally, the emergence of a new technocratic oligarchy more interested in the general public welfare than in exploitation..though corruption remains a very serious problem. Just to keep on flogging the historical analogies the founder of "modern" China was the Quin Emperor who was quickly replaced by a great dynasty the Han. Mao seized power but was eventually replaced by the more reformist leadership. Will cycles never cease ?

 RUSSIA

Russia on the other hand has had an entirely different historical experience, over several millenia and in the last 150 years. For starters Russia was effectively a howling frontier wilderness, more comparable to the the North American experience than the long-settled Asia geo-polities. The first semi-stable governments were the descendants of the Vikings (the Rus) who were displaced by one of the harshest and most exploitative regimes in history, the Mongols. As their power waned they were replaced by the "modern" Russian dynasties, started by Ivan the Terrible and succeeded by the Romanovs. Ivan's surname was incredibly well earned but he set the pattern of strong, intelligent, willful and merciless powerful rulers that's embedded in the Russian soul to this day. If you think we've just summarized Putin's rise and impact we wholeheartedly agree; and if you don't we beg to differ strongly. Think about it. Unfortunately in saving Russia from the oligarchs he's also re-birthed the old models which appear to be quickly succumbing to the old vices. But the lesson on "Big Bang" democratization when it's not congruent with historical capabilities should be pretty clear indeed !

Historical Experiences: China, India & Russia

This next chart translates those qualitative assessments into relative economic performance by comparing these three countries over the last two millenia in terms of GDP, Population and GDP/capita indicators. In some ways, odd as it may seem, this is one of the saddest charts we've ever seen. Let's explain why, starting with Russia. During the 19thC the Romanovs were beginning to make some serious progress but the 20thC was as bad for Russia as anybody. The two world wars and the Communists collapsed the population though Stalin managed to fore-march per capita income increases. As corruption and mis-governance became pervasive even that tanked. No wonder the Russians are suspicious and paranoid - the world has been out to get them. Combine that with the historical lack of relative socio-poitical maturity and you get a prideful people who all too easily succumb to things like the Georgian incursion. China and India have done enormously better (note that the scales have shifted enormously) though China has done relatively a lot better than India. Notice that this is due partly to differences in population growth - the Indians didn't curtail population growth and as a result experienced lower GDP/capita growth. Also notice that all three were stuck in the Malthusian trap until the 19thC and China, in particular, was experience a Rennaissance. Which was likely curtailed by foreign incursions, the Opium War which forced addiction of tens of millions of Chinese and drained the state's revenues. It also set the stage along with dynastic decay for the Taiping Rebellion which led to a massive loss of 40 million lives (relatively much worse than the Communists screwups) and permanent foreign debts, dependencies and influences. The wonder is that anything survived. But as we wrap historical narratives around dry charts....don't think the Chinese have forgotten who was the proximate trigger if not cause of one of the very worst periods in their history. Almost on a par with the Mongol destructions and depredations ! That they and India are seeking their places on the world stage should be no surprise though their acting responsibly is a tribute to their good sense and self-discipline. That the Russians are acting "less so" is also no surprise, at least in IOHO, given the cultural legacies of their history.

Continue reading "3of4 BRICs: Governance, Stability & Outlook in China, Russia and India" »

Posted by dblwyo at 11:36 AM | Permalink | Comments (0)

With the Fall socionomic crisii plus the election and (can it only be a "month") the jumpstart of the Administration we've sadly neglected Foreign Policy; aside from the "detour" to address Gaza and the ME it's been since August. But because we've not talked about it doesn't mean either that a lot isn't going on nor that a lot isn't being done. Our intent here is to refresh, update and frame all that and provide a benchmark against which we can measure the FP situation going forward. The accompanying graphic is from a Davos09 session detailing the kind, nature and magnitude of the major risks facing the World Community. The readings survey the vital role of the US, the general world situation, the growing depth, breadth and sophistication of the US institutional response (which in all fairness despite rhetorics and mis-interpretations is more building on Bush Administration initiatives and is also a continuation of policy and strategies !). In the readings you'll find the URL (as always click to visit on the blue-shaded titles) to this and at the end a careful selection of other key Davos sessions (along with some valuable Kennedy School and TED talks). But if you listen to nothing else listen to George Friedman's survey of the structural nature of things and the world outlook (The Next Hundred Years: A Forecast for the 21st Century), along with Hans Rosling's TED talk (Rosling's TED profile with two great talks) which'll greatly surprise you IOHO !

Let's summarize things a bit to sketch out what we're going to talk about:

1. The "end of history" is flat wrong - instead we're re-discovering history and all the old political power games, need for international institutions and requirements for national security, defense, a robust and clever foreign policy and, most especially, the need for the US to be constructively engaged in re-factoring the post-WW2 institutional framework and adopting new forms to enable adaptation to new realities, or old ones re-discovered.

2. The single most urgent FP crisis is the metastasizing worldwide economic crisis which could threaten the stability of many different countries and regions; which also means that the Administration's focus on economic policy is in fact the sine qua non of re-stabilizing the world. Despite all the arm-waving in fact the US is more than ever the in-dispensable country, both economically and politically.

3. That means we need to be constructive in our engagement which means pursuing our national interests as the pre-dominant stakeholder while also recognizing other's critical interests and emphasizing getting as many as possible to also act as responsible stake-holders in the state of the world.

4. A critical component, however it works out in details, is focusing on encouraging good but appropriate governance suited to the level of development and cultural history of these potential stakeholders.

 So with that as a set of assertions, which we think are provable, let's dive right in. Bear with us a bit here as we're going to cover some ground at a mostly conceptual level and lay down some machinery which we'll be re-using in the future in deeper dives on particular topics.

Re-stabilizing the World

Let's start by taking a look at this little jewel of conceptual over-compression expressed in graphics. One of the things that most folks are in denial about is the fact that violence, or being more sensitive, the control and management of force, governs the nature of how things are run. Just ask any German Baron with a castle on the Rhein. It's always greatly amused us that the US Navy dominates the world's oceans more completely than the Romans controlled the Med and as a result the sea lanes are safe for everyone's commerce. Without it and it's hidden support the world's economy couldn't function yet no critic of so-called American Hegemony objects. Stop and think about it for a while. And has been true for a long-time whether or not the US acts to support the world system or goes ostrich has enormous impacts on everybody else's ability to do their business. The converse is also true - as we should know beyond a shadow of a doubt after 911 ! In an international system control of force is a negotiated balanced among those with the capability, one reason among many that nations will continue to dominate international relations. If we compare and contrast US policy to some representative average of the world's other players we end up with this graphic. Let's say the US can be isolationist and self-centerred, strictly pursuing it's own agenda, call that a Chauvinist. Or it could say the devil with the rest of you all, we're going to pursue our own narrow interests, call that an Evangelist. Or it could act to actively promote worldwide institutions and a stable world order, rather as it has done to  a large extent for the last century.(WRFest 27Jan08: What World Do You Want to Live In ?) We think the case is pretty clear-cut that our prosperity and security is better served by pro-active and constructive support of the world system. Contrawise the Rest of the World (RoW) would choose to Tolerate and respect the rights of other nations, go along to get along and Muddle Thru or pursue their own aggressively chauvinistic policies. WW2 was caused by the Axis powers pursuing an aggressively self-centered set of policies while the RoW just let them. The result was a major implosion. The graphic shows this as a dynamic flow of currents over time; wherever you start each set of policies will tend to create force vectors which will move the trends one way or another. Prior to Iraq the US leaned isolationist though it was THE major under-pinner of the system as it existed while the other major powers tend to want to pretend that everything was alright and let it drift. So, for example, Iraq had pursued a corrupt and corrupting Oil for Food program and threatened the stability of the world sytem. The Europeans denied all that and we were eventually headed for a major problem. Not getting int'l support the US chose to act unilaterally. Oddly enough our difficulties in Iraq caused more foreign powers to become more interested in being contributors rather than free-loaders and the current crisis has taken that up a bunch of notches. That timepath is mapped out by the Blue Line which, at this current point in time, presents us with future strategic alternatives of joint collaboration as responsible stakeholders (Green), a gradual degradation driven by un-balanced policies (Yellow) or a true implosive devolution (Red) based on "suave qui peut", or save yourselfs. The catch is that nobody, including the US, can just save themselves. In some ways the Davos speeches and Brown's recent Congressional speech suggests the meta-crisii have presented us with the best opportunity to re-formulate the world system in generations.

Responsible Stakeholders & Good vs Bad Governance

The ability of any government to both maintain it's own stability, manage the socionomic crisis and be a contributory stakeholder rests on the soundness and stability of their governance institutions. (Peace, Stability and Prosperity: the Nature of Good Government) That is can they hold things together, provide the institutional framework for their societies and economies, maintain their legitimacy (their citizens trust them and are committed to supporting them) and balanced inclusisveness. That last is particularly important - the purpose of government is to make societies work better and a critical factor is the extent to which the interests of the citizenry and polity are reflected in decision-making. There's been a slew of books in the last two years or so highlighting the fundamental changes in the world and arguing that China, India, Brazil, et.al. will dominate the next century eventually. State capabilities are ultimately based on two factors: the totality of resources available to them and the efficacy and efficiency with which those resources are deployed. Have you ever wondered how tiny Holland fought and eventually won a century long war against the mightiest power on earth - the Spanish Empire ? While the latter drove itself to bankruptcy multiple times and so encumbered the institutions of Spain with rigid, non-adapative and non-progressive characteristics that Spain to this day hasn't even begun to recover ? The secret lay in Holland's modern, progressive economy, it's manufacturing and trading capabilities, capital markets and representative government. On a 1-10 scale of effective use of available resources the Dutch were probably an 8 while the Spanish were arguably a 3 at best. The French created and experiened similar problems until the repeated bankruptcies and corruptions of the Royal regime led to the Revolution and two centuries of French political instability and dysfunction. Friedman alludes to all this but at the end of the day the ability of the emerging powers to continue their startling progress rests firmly on their ability to re-vamp their institutional foundation. Europe for example has never been able to marshall the continent wide governance to make it's potential power effective. Among other things the accompanying graphic is trying to tell us is that government must be appropriate - don't try to leap to full-blown democracy until the social institutions will support it for example. Russia underwent a big bang that led to the Oligarchs taking power and exploiting the "state" for their own purposes. Putin's rise was essentially the restoration of the Civil Authority. Unfortunately we seem to be seeing the resurrection of traditional Russian power politics, a rigidification and corruption of the system and a likely collapse. Ditto for Europe with a lower probability. What's required for domestic strength AND international contribution is a government that's appropriate AND at least on the frontier that balances extractions of resources with re-investment in socionomic development. The US clearly has a very strong framework as does the UK. It's not clear about Japan, India is fragmented, China is doing alright and Brazil doing quite well, all things considered.

 Putting the House in Order: Getting Back on Balance

The guiding principles for US foreign policy are two. First, encourage and support the best achievable governance frameworks around the world. And second, get our own house in better order. We've argued that, aside from the consequences of the socionomic implosion, the most critical (as in urgent and important) foreign policy challenge we face is pro-active engagement and support for the Middle East. (Gaza and the ME: Flames for the Fuses) Every situation is unique and policy, strategy and means have to be adopted that are appropriate for the circumstances. Nonetheless we'd like to suggest that our outline of a sustained US strategy that moves beyond simply keeping the lid on is in our own best interests. And that the strategies sketched in that post are a) models of how we should approach the RofW; for example Latin America and particularly Mexico. And b) an example of the kind of detailed thinking that needs to go on with regard to all our foreign relationships for both geographies and countries as well as the problems inventoried by the Davos group.

At the same time we need to get our own house back in order. The accompanying graphic is from our last post and creates a simple model of post-WW2 US history that argues that we've cycled around civic-minded effort and self-minded indulgence. In that model after the recovery efforts, so-to-speak, of the '80s we went over-board in the '90s and paid the price this decade. And will continue paying it for some time. Since all the troubles we've been wrestling with from the War on Terror (now the Long War) to the changes in the world system to the crisis are all metastasizing we effectively got blindsided. To meet these challenges requires a return to core values, concerted efforts and the design, development and implementation of new institutions and capabilities. Again much that the Bush Administration did behind the scenes was trying to adapt to the new emergencies without having adequate capabilities on hand. Enormous strides have been made in many areas, for example Intelligence. (There's no better example of perspective and insight than this Kennedy School talk:Today's Challenges, Tomorrow's Threats: Why America Needs an Agile and Robust Intelligence Community . Nor no better example of the organosclerotic barriers to adaptation than the post we built around another one:Changes and Challenges: a New Year Unlike Most Others).

Meeting the Enemy

Now, to get our own house in order, we need to make and implement the same kind of policy initiatives and strategic capability development in a whole host of other areas (). Which brings us full-circle back to the importance of domestic economic policy, investment in the future and the development of new institutions and policies in Regulation, Education, Healthcare and Education ! (Miracles on Pennsylvannia Ave: Make it So, No. 1 !, The Devil's Advocates: Dancing Dimagogues vs Economic Policy (Update),To Boldly Go Where We Must: Speech, Budget and Dr. Noes). Unfortunately too many seem to be interested in manuvering for partisan political advantage rather than acting for the general public good. We need a loyal opposition but it must needs be a constructive opposition. As that great philosopher and statesman Pogo told us so long ago we have met the enemy and he's us.

Continue reading "Foreign Policy for a Dangerous Old World: Adoption, Adaptation & Resilience" »

Posted by dblwyo at 09:13 AM | Permalink | Comments (0)

There's more to the major policy issues confronting the candidates, and us, than economic and domestic challenges, obviously. As we've been reminded recently by our friendly neighborhood bear. Yet there's far more going on than "just" Iraq, or the Middle East or Georgia. Though each of them is individually important, critical (as in possibility of a Simpson-like red zone incident) individually and collectively. Nonetheless there's a lot more going on in the world than than just these small isolated events. Just kidding in a way and not in others. After the break you'll find a slew of readings worth your skimming that we've selected to provide the same kind of cross-sectional and decent quality sampling across international problems that the prior post tried to for politics and domestic issues. They range from key stories in the developed countries, including the surprise resignation of yet another Japanese prime minister - an indicator of Japan's continuing failure to find the leadership it needs to adapt to the changes in the world. Or the story about the growing political strength in Germany of the Far Left and their political alliances - can you imagine a re-tread Communist forming the next German government ? That's not the only challenge - both China and India are rapidly reaching short- and medium-term cusp points in their development paths that will create major systemic stability problems for them. And are already reflected in severe tremors. Some of the other news is from the Middle East and Iraq. In the latter, despite the lack of MSM coverage lots of the news continues to be outstanding, such as the handover of Anbar province to Iraqi control - or the fact that Iraqi bonds are now rated less risky than state government bonds in the US Midwest !!! The other news includes a nice little summary of Iran's multi-dimensional breakdowns coupled with Syria's increasing feistiness and renewed maneuvering.

Oil Shock to Crisis to Systemic Threats

Those last two in particular illustrate a key point we'd like to make - things don't happen in isolation. Syria has more room to manuver and manipulate because Russia's less likely to pressure it and is increasing arms sales. Similarly while Iran is imploding it's getting more dangerous and less subject to international pressures now that Russia has over-turned the last twenty years of progress in re-architecting the international system. But we're not just picking on Russia or those particular examples - rather we're using them to point out that not only is it one damm thing after another but they are all inter-related and feed off one another. Have you ever thought what it might be like to be in the situation room in the White House and have five of these a day come whistling at you ? Any one of which could blow up to a major crisis with little or no warning. We can say that but it's hard to grasp.

Fortunately our friends at Harvard's Kennedy School have done us all a great public service by hosting a public policy war game that was developed  by several think tanks that looks at a relatively "minor" disruption in oil supplies and what happens. There's a whole bunch of things you can learn from watching this and we can't recommend it highly enough. An incomplete list would include:

1) What it's like to be in the hot seat during one of these crisis. This "game" is constructed exactly like war games that are used to analyzed policy issues all the time and this particular one includes extremely high powered people who've sat in the real chairs. What you see is what we're all gonna get.

2) The discussion of oil supply disruptions and how it spreads across the global economy is accurate.

3) The complicated linkages to other geo-political, diplomatic and national security problems illustrates as well as anything we've seen in the public domain how these things all play off one another and establish scary feedback loops.

4) The scenarios depicted are actually somewhat optimistic since they are pre-Georgia, i.e. Russian cooperation is presumed in looking for resolutions.

5) The discussions of a National Energy Policy, the constraints, the possible alternatives and how long it would take to put those alternatives in place is also quite accurate. We won't detail them on the grounds it's better for you to be snuck up on but trust us - it's all entirely in line with our previous sketch of the situation (In Search of a Nat'l Energy Policy: Check the Mirror Pogo).

6) The discussions of how to position the President's responses mirrors everything I've ever read, the people I've talked and my own more limited experiences in much smaller settings. The distance between what the actors know is the short- and long-term best response and what they can sell is honest, excruciating and debilitating. As Larry Summers points out - one of the things you should learn and we'll give away - if you think we can become independent of foreign oil inside 2-3 decades you're nuts. No matter what we do. In other words we're now in a cleft stick where we're reaping the results of ignoring a rational energy policy for thirty years.(Inside the Sausage Factory: the 4P's of Political Reality).

We really hope you can find the time to watch the simulation - total time is about two hours but you'll learn more in those two hours about oil, the energy crisis, the real problems with policy-making and a whole host of other things. If you have trouble getting to the KSG multi-media center try clicking here. And if you're interested in a downloadable PDF report that provides some background briefings the report is here. Click and dload as you would.

The one other observation, comment and suggestion we're going to make is what we really hope you take away is this: every single story below could turn into one of these little games. For real. 

Continue reading "Oil and Other System Shocks: Beyond Iraq & Georgia" »

Posted by dblwyo at 11:54 PM | Permalink | Comments (0)

Historically, without much fanfare, US President's spend approximately 50% of their time and energy on foreign affairs even when things are going well. When Bill Clinton came into office he cut that as close to zero as he could manage and focused on domestic, and eventually, personal issues. Don't believe me ? Well it's rather extensively documented in Halberstam's interesting little book: War in a Time of Peace: Bush, Clinton, and the Generals by David Halberstam. But we can't entirely blame Clinton - he was reflecting the consensus of the times that the old ideology wars were over, that liberal democracy and free-market capitalism were triumphant and now all we had to do was put a Lexus under every Olive Tree. Well we've pretty extensively document the deep structural fallacies with that but in case you were wondering 911 was a wake-up call why hiding behind our oceanic moats was impractical and dangerous. And in the last couple of weeks our friends in Moscow have given us another lesson in why they call it Realpolitik, why Furst von Bismarck was brilliant and far-sighted statesman whom we all miss and why at least 50% of the President's time is likely not enough.

Now hindsight is 20/20 and it's not fair to criticize the leadership for doing their best on the facts as they knew them at the time. The critically important thing is to figure out where you're at, where you want to go and can go, and how you propose to get there. That said studying the past still makes sense because history defines the trends and context - after all what were/are the Balkan Wars without millenia old ghosts ? And Russia's invasion of Georgia but the legacy of paranoia built into the Russian DNA by the Mongols and Ivan the Terrible, who is btw still a great historical hero to the Russian people for the stability and order he created.

Dealing with the brave old world of great power politics is now back on the front burner so we thought we'd take a little survey of the news and the issues. And let's not think a cigar and a you-know-what is more important please. Just for the record and to help sort things out here's our little architected list of key policy and strategic issues. You may notice the Foreign Policy is one of the "Big Three" IOHO. As it happens, and strangely enough, while it's critical to our survival we don't consider it the #1 priority. That goes to economics. But not at the exclusion of each other - there must be a balance. With that in mind after the break you'll find some excerpted readings in the FP area that survey what we think are the biggest concerns, in the order of urgency but not necessarily significance, facing the next President.

At this point we should have learned it's not a single-pole world but an evoling multi-polar one where the interests and concerns of the other players have to be considered. They are not just blind ciphers were we can pull a lever and get what we want. And their interests are not our interests. On the other hand the US will continue to be the dominant political and economic power for decades. And as a result we have a greater stake in a stable, orderly and workable international system than any other. At the same time the rising powers have benefited enormously from the system the US created and maintained with its' allies post-WW2. In the next iteration and evolution we need their active participation and contribution balanced against their benefits and interests. Our challenge therefore is to be constructively engaged with the nations of the world in a way that promotes their positive contribution where possible and feasible. And to carry on around them where not. Part and parcel of that constructive engagement is to encourage them to do as well for their own people as they can manage.

Which leads, based on the framework we've sketched and the readings below, to the following assessments and suggestions.

1. Middle East - Iraq is going much better than anticipated but has a ways to go. Obama's reluctance to admit this is disheartening; nor is Afghanistan the central problem of our times. Contrawise hunting down Usama isn't either, Johnboy. Afghanistan is certainly at risk and will take a concerted and integrated effort, like we should have made after Charlie's War and were forced into in Iraq. But it requires nowhere near the resources and does require the NATO so-called allies to actually perform to promise or be replaced. If you want a balanced assessment Gen. Barry McCaffrey's After Action Report is worth your time. If you click and read you can also download. The real problem though is that the kind of Unified Action he's recommending that's really nation-building in disguise is urgently required in Pakistan, which is coming apart at the seams. Replacing Musharrif was all well and good but Pakistani politicians have a decades long history of incompetence and corruption which is on the verge of creating a catastrophe. The Middle East in general and Pakistan in particular become the #1 foreign policy problem.

2. Russia - despite Russia's subterfuge and intransigence in Georgia, which has been building and built over decades going back to the very disdainful way they were treated by Clinton, they are neither military, economically or politically powerful enough to cause us to re-think our overall strategies. We must deal with this, they have destroyed the assumptions of a peaceful new order and returned us to something older, and in the process destroyed the last three decades of European complacency whether they admit it or not, but do not in fact violate our views of how the world system should and could work. They just make themselves untrusted participants who may be in the process of committing socio-economic suicide.

3. China and India - are the most important long-term foreign policy issues we have to face. Fortunately for us the US has pursued adult relationships with them over the last several years, respected their interests while defending our own and encouraged them to be constructive participants in the international system. They are both crossing several key cusp points that will be challenging for us all. The worldwide economic downturn that's emerging will put severe pressure on their domestic systems. At the same time those systems were facing the need to evolve to the next level of capabilities anyway. Finally we need to encourage to continue to be constructively engaged and contributory to the re-architecting of the world system we hope to achieve.

Our ability to accommodate China and India's rise, to adjust the system, to encourage them to contribute and to see the health of that system as in their own long-term best interests will be the central question of early 21rst C international affairs. 

Consider this your blueprint and checklist for evaluating the candidates - in this case how do they respond to the stories we're being told, rather forcefully. Agree or disagree, build your own or not. But don't just take empty slogans or give them a pass. All of the issues we worry about day-to-day required a peaceful and stable world order for easier and cheaper resolution. At the end of the day you really do care. 

Continue reading "Stories Being Told to Us: Welcome to the New World Disorder" »

Posted by dblwyo at 01:24 PM | Permalink | Comments (0)

Yesterday's post (Marching thru Georgia: the World Just Changed and We Can't Get Off) on the war in Georgia laid out a first round of assessments and evaluations. Now let's add some further reflections for your consideration as well as try to put this, at least conceptually, in a larger context. After the break you'll find an even larger collection of readings grouped into Media reporting/analysis, assesments and diagnosis and strategic consequences. Interestingly this worldwide collection of what could be considered the more thoughtful folks tends to converge on our prior arguments. Which is not to say that if we were just collecting stories and commentaries that a much wider spectrum wouldn't be possible - there's quite a bit of "they had it coming" and "the running dog US lackies should have expected this" or "this is all a vast CIA conspiracy" stuff out there. Since those struck us as ill-founded, distorted and un-constructive they aren't, by-n-large, shown. A partial exception is made of Mihail Gorbachev's Wash Post editorial which parrots the party line to a T; and should see the revocation of his Nobel IOHO.

Hot UPDATEs:

US, allies contemplating action against Russia The United States on Sunday accused Russia of stalling its military pullback in Georgia, but the Bush administration is not rushing to repudiate Moscow for its actions. The White House is struggling to figure out the best way to penalize Russia. It doesn't want to deeply damage existing cooperation on many fronts or discourage Moscow from further integrating itself into global economic and political institutions. At the same time, U.S. officials say Russia can't be allowed to get away with invading its neighbor.

• Rice, Gates Say Russia's Role in WTO, G8 at Stake in Pullout From Georgia

Round Two Strategic Assessments

1. Following on - this has immediate benefits for control of energy resources, Central Asia and playing power games with Europe. At least a decade's worth of ripple consequences. But it doesn't do them as much good as developing their oil, bringing in foreign investment, diversifying their economy, building road, schools, etc. etc. On balance they've made a very bad choice but a traditional one.

2. In the long-run they've destroyed themselvs. Population is declining, productivity is down, they've made themselves potential pariahs though the Europeans will wiffle and are no longer as critically important, the Chinese will hold their noses and watch their backs and much of the rest of the world will applaud as the political cartoons (some) illusrated. Including some of our own more benighted and misguided citizens. In the long-run as few will do as little business as they can manage, which will cut them off from the resources required for the future they could have had. Actually a very sad thing to see.

 

3. The biggest danger they create is systemic. Everybody games the system to their own advantage, whether it's the Chinese, the Brazilians, the Indians, the Europeans, or whomever. Nonetheless what all we've spent nearly three decades benefiting from and supporting one way or another, is the architecture of the world system that the US created and supported. And were looking forward to, admittedly difficult, evolution into a new one with greater roles for various players. But nonetheless the emergence of a major adaptation to the rising powers. Now that's in serious question. And Russia's role and reliability even more so.

 

4. Russia's returning to the old way of doing things makes that more difficult and indicts the fundamental assumptions that the prognostication and policies were built on. Begger thy neighbor instead of let's grow the pie and then compete for who gets what piece. If Russia's example is not managed and contained we could end up aborting the international framework that underpins the growing worldwide prosperity we've seen over the last two decades. Collectively we cannot afford to let that happen.

Or, beyond that, why would they think the other major emerging players who's survival depends on continued economic growth in a stable and predictable international system tolerate the Russians breaking this for only their own advantage ? Now that's an interesting question indeed !

Continue reading "Georgia, Scary Old World and the Return of History (Updated)" »

Posted by dblwyo at 12:39 PM | Permalink | Comments (0)

Stop the world, I want to got off. Where's Tom Friedman, his Lexus and his Olive tree, when you need them ? Crushed under the treads of a Russian tank likely. At least let Eddie Arnold do the sound track ("Make the World Go Away"). Presuming, since you're reading this, that you haven't missed the minor detail of Russia's making an unprovoked attack, disguised as a peace-keeping mission and ethnic-cleansing stopper, you might want to stop and reflect that your world just changed. Well actually not. And on a 1-10 scale we're about a 3 and those poor folk in George about a 20. We though we'd summarize a bit of the news and wrap it in some context in case your MSM headlines didn't help anymore than they typically do. When we finish sorting things thru a bit we suspect the cartoon not only won't be funny but it'll ring as an all too accurate assessment of the brilliant geo-political maneuver it is. As well as the triumph of amor prope (hurt self-image) and testosterone.

1. First off this was presented as the a quick response by the noble Russian defense forces to stop the mighty Georgian army from proceeding with ethnic cleansing of the ethnic Russians of North Ossetia. To understand what a crock that is you need to look at the map AND understand that you don't mount a multi-divisional attack thru tough mountainous terrain without months of preparation. Nor couple it with multiple coordinated airstrikes and a major amphibious assault with more of the same.  Clicking on the map should talk to an interactive version where you can watch all this play out.

2. Second you need to know that this has been bubbling away for years, if not decades. We're pretty sure we wouldn't have attacked into Ossetia if we were president of Georgie but then again Russian "peacekeepers" have been sitting there, and in Abkhazia, for a very long time. Mostly to encourage the pursuit of separatist leanings and support "banditry" into Georgia (smuggling, attacks,etc. etc.). Though we will also admit that, looking at the map, we'd have let North Ossetia - on the wrong side of terrible terrain, go a long time ago.

3. There is no evidence, let alone credible evidence of any attempt at "ethnic cleansing" on the part of the Georgians. 

4. This has been presented, as we said, by the Russians as a noble enterprise. It actually fits the working definition of a massive disinformation, or "Maskirovka" campaign worthy of any of the better attempts of the KGB. In the starting perspectives section of the excerpts you'll find some background therein as well as two Charlie Rose interviews. The second, with Russia's UN ambassador, is a finer example of the art than even Ahmandenejad's appearance. But much more dangerous.

5. The general European reaction is truly worthy of the folks who let real ethnic cleansing go on in the Balkans for years while they dithered, having emasculated their military forces. But again more dangerous on several levels.

• It brings a new level of "old" Russian/Soviet/Czarist discipline back to those countries in what is referred to as the "near-abroad"; the countries immediately bordering Russia they spent centuries conquering once upon a time and effectively have started in again on.
• BtW - after the "cease-fire(s)" Russia kept attacking thruout much of Georgia and it's not clear how much has been destroyed; or even if any country will be left.
  
• It completely isolates the new nations of Central Asia from Western Europe, and effectively the rest of the world.

6. It also brings all the potential energy resources of Eastern Europe under Russian control or direct influence. And thereby finishes isolating Europe from any major energy sources that are not imported under the political control of potentially hostile powers. Need we mention how much at the mercy of the Russians this puts them now ?

7. It changes the world system back to the old one we were all hoping was gone forever. The one of zero-sum games, lack of international institutions and realpolitik. All on the Russian historical theory that there are no win-win solutions. Which they are in the process of re-proving as an effective principle of statecraft - to their own long-run detriment, given how badly they need trade, investment, technology and other Western resources.

8. It changes the balances of power in Central Asia and the Middle East.

9. And it makes it more likely that Russia will support and encourage intransigence on the part of folks like Iran. In a worst case scenario it even makes it more likely that Iran will get the window of opportunity to pursue its' own aggressive export of terror and the continued development of nuclear weapons. It at least makes it easier - if for no other reason than any chance at sanctions just went out the window.

10. Finally, for now, it makes (or should) Russia a pariah state who should be expelled from the G8, now have no chance at membership in the WTO, makes investment in Russian operations and companies one of the riskiest on the planet (not that they weren't already headed that way) and, given what's likely to happen on the Security Council henceforth, makes that august debating society even less useful and productive.

And that's all this week - what will serendipity, hurt feelings, domestic nationalism and out-of-control testosterone bring us tomorrow...or next week or next year. Strangely, considering the level of potential damages, nobody seems to be reacting very much to this. Aside from some well-meaning hang-wringing in the European chanceleries. 

Continue reading "Marching thru Georgia: the World Just Changed and We Can't Get Off" »

Posted by dblwyo at 06:36 PM | Permalink | Comments (2)

Since the candidates aren't being as clearly forthcoming with their policy directions as we'd like the  next step is to return to foundations and parse out the details, to some extent, ourselves. And since Barry is just finishing up his triumphal tour of foreign shores the area of Foreign Affairs and National Security seems like the appropriate place to start. After the break are a set of collected excerpts that review the national security situation, the broader topic of US grand strategy with respect to the world and Iraq specifically. Unfortunately for us all his posture on Iraq seems to be accurately captured in the cartoon - which despite being a couple of weeks old represents the feedback we've been getting on several fronts. Despite what you heard on the news both the Iraqi government and the commanders on the ground told them the last thing they wanted was a definite timetable. While supportive of an eventual withdrawal, or at least drawdown, what they're after is a flexibility to decide in concert with the evolution of events. Along with a longer term US commitment to Iraqi security, defense and on-going support. What Col. Austin Bey characterizes as strategic over-watch.

In fact the Surge strategy has been enormously successful and laid the basic foundations for a more durable civil environment. At the same time the defeat of al-Queda in Iraq (AQI) has had three fundamental consequences. First it's functioned as an enormous rat trap with every nutjob inthe region and further being drawn into the meatgrinder and suffering enormous casualties. Second the unchecked violence deployed by AIQ has resulted in a major defeat for them in the public mind thruout the ME. And third, though only a far-away glimmer, it raises the potential for a stable, improving and democratic country sitting in the middle of the world's most unstable, dangerous and strategic geography. Which btw means Barry's emphasis on Afghanistan as the "central front" is an error of judgment of monumental proportions, as pointed out by no less than the Washington Post on its' editorial page. His posturing and manipulation of the press coverage - preventing all active coverage and interviews and presenting somewhat distorted views of what he was getting as feedback, can at best be described as disingenuous and self-serving. As Lord Keynes put it, "when the facts change I change my mind. What do you do, sir ?"

Which is not to say that Iraq was, by any means well-executed. But we did succeed in adopting and adapting in "orderly, proficient, military manner" to quote GSY T. Highway. Which leads to broader questions of what did we learn and how do we apply those lessons worldwide for a more open and inclusive US Foreign Policy. Earlier we'd argued (Brave New World: Non-Flatness, History and Challenges, Peace, Stability and Prosperity: the Nature of Good Government) that the central principle of US FP ought to be constructive engagement with the world to establish a new world system based on a stable int'l regime that asked for support from major stakeholders in line with the benefits they receive. And one that also recognizes that failed states are in no one's interest.

With those governing principles in mind the lesson for strategic development of our FP capabilities include a more balanced emphasis on bringing to bear all our capabilities in an integrated whole, which is NOT well-received among the bureaucratic turf-mice. It also includes using those TBD capacities in our specific strategies, the example given here being Pakistan. And finally it means putting more emphasis on soft power and public diplomacy. An integrated perspective we've tried to represent in the accompanying graphic.

Yet at the end of the day this requires vision, leadership, integrity and honesty as opposed to pursuit of narrow and partisan political advantage. Take a look at the readings below - where we've deliberately and typically passed on the more polemical and biased sources in favor of the informed and balanced. After you skim them - or better, clicked thru and read a few - make up your own minds regarding whether Barry was a) being disingenuous, b) right, c) flexible and d) public-spirited. On the whole my interpretation of these reports does not lead to a favorable conclusion. 

The Democrats fought the surge with every maneuver and ounce of energy they could muster, including pejorative attacks on our commanders and distortions. Notice that they've been notably silent since around Oct. Given their position that we'd screwed up it would seem to me civic responsibility called for fixing the problem...not trying to make it as much worse as possible.

So how would you like to evaluate things ? The final excerpt on Iraq outlines a strategic alternative that serves all our goals and applies these lessons. And Sen. Obama would achieve a new stature in my mind if he'd carp the diem and adopt some version. Instead he seems to be doing his level best to come out even more mis-guided than when he went in. Very sad for a reasonable, rational man who could have been one of the great leaders of our time.

Continue reading "Foreign Affairs, Security & Iraq: Poseur in Chief ?" »

Posted by dblwyo at 03:32 PM | Permalink | Comments (1)

Did you ever stop to wonder why we won the Cold War ? And how hard, difficult, costly and unlikely it was ? Not to mention a big element of luck and good fortune ! Well there are big answers and little answers. Beyond some of the theoretical abstractions were people like "Goodtime Charlie" Wilson. A hard-drinking, hard-partying Democractic Congressman from Texas who engineered the largest and, arguably, the most effective covert war in US history. If you click on the graphic it starts up the movie trailer which captures a lot of the gist of the movie - much better than almost any other trailer I've seen. And what a movie - just as movie. First off it was put together by Tom Hanks as the lead producer - in other words he wanted to make this movie and went out of his way to "make it so". He also played the lead along with Julia Roberts and Phillip Seymour Hoffman - three Academay Award winners is a lot of horsepower. They all must've seen something in it as well. It was directed by Mike Nicholas, one of America's greatest modern directors (The Graduate, Catch 22, Silkwood,...), and written by Aaron Sorkin of West Wing fame. That means to start with it was not only extraordinarily well acted and written but on the surface it's very funny, very clever and very insightful. BtW - it's almost the only recent gig that Sorkin fought hard to get - another telling indicator. You see it's also a true story. And offers up several lessons we think tell us a lot about manuvering inside the Sausage Factory (Inside the Sausage Factory: the 4P's of Political Reality) to get things done for the good of us all. Hard as that might be to believe. The Wikipedia synopsis is pretty decent though a tad limp-wristed trying to be even-handed.

You see we won the Cold war partly thru inherent dysfunctions of the Soviet system which made it unable to adapt and grow. Partly thru the military and economic pressures Reagan put on the Soviet system, including a secret economic war which has yet to make it beyond hints in various thrillers - if you can ever find it it's worthwhile tracking down Cap the Knife Weinberger's review of Tom Clancy's novel "Cardinal of the Kremlin" - written as the sitting Sec. of Defense and published as the main editorial in the WSJ of all places. Talk about a broad hint. Another reason was the growing restiveness of Eastern Europe, particularly the Poles, encouraged and motivated by Pope John Paul II. But did you ever wonder why the Red Army didn't put down the Poles like they had earlier put down the Czechs and the Hungarians ? Because they weren't allowed to after the debacle of Afghanistan where they sufferred horrendous casualties, demonstrated a barbarism toward the population more reminiscent of the Mongols, had (as Charlie Wilson points out) their hearts broken and destroyed their credability with the Politboro. Gorbachev wasn't just being civilized when he wouldn't support their plans to suppress Eastern Europe - he didn't believe they could do it. It's worth your time to watch this interview on Charlie Rose with Goodtime Charlie in which the supposed buffoon has a lot to say about politics, partisanship, and partying. And this much earlier one with George Crile - the 60 Minutes producer who first got Charlier interview and later wrote the book that brought all this to light for us. Who basically back up the fact that a rogue Congressman who set out to do the right thing was the primary mover on one of our greatest foreign policy successes. An amazing story from the real world, better than fiction.

In fact the movie's tag line captures it exactly - "base on a true story...you think we could make this up ?" 

And some of the lessons are pretty sad indeed, and revealing and salutory. But if we want the sausage factory to make better sausage we'd better figure out how to learn them, apply them and repeat them. After the break we'll dig into several of them - though perhaps we did't catch them all and you'll have to watch the DVD and get back with some comments. In the meantime this quote captures the nature of the challenge:

CIA Award Presenter: The defeat and break up of the Soviet empire, culminating in the crumbing of the Berlin wall, is one of the great events of world history. There were many heros in this battle, but to Charlie Wilson must go this special recognition. Just thirteen years ago the Soviet army appeared to be invincible. But Charlie, undeterred, engineered a lethal body blow that weakened the communist empire. Without Charlie, history would be hugely, and sadly different. And so for the first time a civilian is being given our highest recognition; that of honored colleague. Ladies and gentlemen of the clandestine services, congressman Charles Wilson.

One final question, maybe two:

1. What would it have cost us in the '90s to turn Afghanistan into a viable state - $30-40 million a year ? (Wilson's estimate). What did it cost us on 911 ? What's it costing us now ?
2. What 4P lessons do we take away here for Energy, Education, the Economy and National Security that a) we've known what to do about for decades ?

Continue reading "Having Fun, Doing Good, Making Sausage: Goodtime Charlie's War" »

Posted by dblwyo at 11:15 AM | Permalink | Comments (0)

Iran may be the fulcrul point of ME stability over the next decade, much as Iraq was in the last. I had a fascinating range of exchange last week prompted by this column by an Iranian ex-pat reporter: "On a recent afternoon, while riding a rickety bus down Teheran's main thoroughfare, I overheard two women discussing the grim state of Iranian politics. One of them had reached a rather desperate conclusion. "Let the Americans come," she said loudly. "Let them sort things out for us." The full article is excerpted more after the break along with a couple of others - including a superb David Brooks editorial that says what I've been trying to say much better, more pointedly and more clearly. Of course it's his job and gets paid a bit for it :). Anyway a friend of mine who's spent time in Iran had this to say in response:

"I had a woman beg me to take her back with me. Those people know their government is screwed up and feel almost like they are being held hostage. But it’s not our place to liberate them even though we have a deep history with Iran going all the way back to 54. It’s their job to save themselves this time no more Olie North or contra crap. But if you went to Iran and saw those people the thought of killing them and ruing their lives would totally escape your brain no matter what the hyped up false threat is. The only way to give them a democracy is to broker a deal between the reformers (mostly youth) and the regime to allow total government restructuring to take place without any American agenda (which will be impossible) because those are the allies we want in that region those are the people you lean on in that region because we can’t trust the Saudis or anyone else in that region. We are setting ourselves up for failure if we ruin that relationship and I hope the republicans understand that. I hope an accomplished scholar says the same thing soon so people can start viewing Iran as the potential great American resource it can be. We didn't have to attack Iraq to have a powerful base in that region all we had to do was help the people of Iran. I kid you not Tehran is like Manhattan."

Not sure I agree entirely with all his arguments but all of them make sense. And he raises an interesting and constructive potential - what could happen in Iran, in the ME and for the world in general if we could get Iran constructively engaged in its' own welfare. Rather than having a minority continue to export terror and develop nuclear weapons to support their own grip on power. Here's what I had to say in reply:

All that you say makes enormous sense and is consistent with my own views and understandings. In fact my first basic principle of US foreign policy is to constructively engage with the world to promote as good a government as possible locally because it is in our own long-term best interests.

 

There is a great divide, as in many times in history, between the people, what's best for the people and good governance and the power structure. In Iran that power structure is fractious, factioned, malfeasant, kleptocratic and pursuing multiple foreign policy initiatives that make it a threat to the peace and stability of the world. In the last week the UN agency responsible has issued a very harsh report on Iran's pursuit of nucs, which is something we cannot allow. And the Iranian extremists in pursuit of their domestic advantages, not I believe, as a concerted national policy, have been exporting terrorism via Hamas, Hezbollah and the Shiite militias in Iraq for years. At the end of the day there is no logical reason or advantage to doing that which means something escapes me. I think their reasons are the use of the rhetoric of the Islamist revolution to keep and maintain power. Whether consciously or not. They're certainly not serving the interests of their country or people.

 

And there you have our great dilemma with regard to Iran in a nutshell. Our best strategic alternative is to contain them while trying to slowly wean the government and the polity into a more progressive stance. Hopefully encouraging them on the path toward a self-sustaining virtuous cycle of improvement. But power-seeking factions inside the government are pursuing policies that are truly disruptive and dangerous and may require more massive intervention to prevent from reaching a dangerous point - or crossing a threshold into nuclear weapons.

It will take a clever, insightful, courageous and practically skilled foreign policy to bridge this deep dilemma. We have people who have proven capable of such, including some in the government today (Zoellick, Hill, et.al.). Whether we can raise it to the level of policy is another question. But as you say if some scholar will start the ball rolling then it might slowly accumulate. And this article was a first of many small steps - being as it came from the editorial pages of the Christian Science Monitor that's not a bad starting pulpit.

  And there you have it, IOHO, in a nutshell. If we could find a way to contain and constrain Iran while constructively engaging with them and supporting the emergence of more progressive elements we'd all be better off. Especially them with their collapsing economy and increasingly frayed society. Yet in our own and others interests we may be reluctantly forced to measures that are acceptable only because they are less terrible than the consequences of a theocratic kleptocracy with nuclear weapons, a collapsing society and a posture of exporting terror in the name of an extremist religious belief that most of them no longer truly believe in. Sound like anybody else you know ? Like Russia post Stalin ?

A final and key observation - if this is really serious then it's time for the kind of narrow, self-serving posturing we discussed in yesterday's post to be put aside in the national interest. If it's not serious by all means carry the posturing into office, whomever wins, and let the games begin. As Brooks points out once you're in the seat Mr. President the campaign rhetoric must deal with realities on the ground. And we will talk to Iran however we can. And we won't be soft or forgiving either because we've, despite the public image, done a lot of talking over the years.

 But make no mistake - this is not an easy, simple nor straight-forward problem. No matter what you're told or would like to believe.

Continue reading "The Iran Dilemma: They Like Us, Not; We Like Them, Not...usw." »

Posted by dblwyo at 06:19 AM | Permalink | Comments (0)

Now it's time to take a look at Russia...and hopefully this won't be the only only. After the collapse of the Wall and the well-meaning but deeply flawed and culturally/historically mis-informed imposition of free-market facades on Russia by the reformers the net results were the near (maybe actual) collapse of the Russia socio-economic system. A point which is lost on almost all Western commentators who evolved from pitying disdain thruout the '90s to hectoring lectures about Putin's methods as he restored peace, stability and economic progress to angst and agita about where Russia's headed. Now don't construe those as endorsements of Putin and Russia's current path ahead; they're not. Be need to recognize realities grounded in facts on the ground and history.

And the first fact is that in the Country of Ivan the Terrible the Russian's had no cultural nor institutional memories of civic society with the rule of law, peace and stability, respect for property nor any of the other things we take for granted. Instead what they had was memories of Mongol oppression and exploitation burned into their folk memories at the deepest and most subliminal levels. Combined with a post-Mongol history of strong men taking power and ruling with terror and oppression but creating stability and a measure of prosperity.

When Putin removed the regional governors from direct election as well as squashed the oligarchs he crushed exponentially growing challenges to the central authority. When Khondorvsky was sent to prison it wasn't just an abuse issue. Rather he was starting to use his own power and wealth to become, as many/most of the oligarchs were, to seize increasing control of political power and the institutions of the state. A position of power that resulted from their own fortunate and fortuitous exploitation of the corruption and weaknesses of the Yeltsin regime to seize monopoly control of state assets, e.g. gas, oil, forests, mines, etc. etc. They were acting under different veneers much as the Warlords did in China during the '20s and '30s but with less attention to the well-being of their controlled populace.

So Putin who has restored some measure of peace and honesty and definitely, on the backs of rising worldwide oil prices, economic progress is understandably very popular with the Russian populace and electorate as a whole. The question is now what because that success has bred it's own challenges. Partly because the new centralized authority is falling back on corrupt cronyism as a means of governing with all that entails for malfeasance and economic inefficiencies. But mostly because Russia's way forward lies in taking the next jump step in strategic institutional innovation and adaptation - which they know. 

The graphic, courtesy of the Economist, captures the Potempkinesque nature of Russian prosperity and strategic outlook but let's put in "dry" context. That is let's tell the story with yet another graph of historic economic performance. If the chart at right doesn't cause your heart to bleed you need to think about what you're looking at. We've made the comment before that Communism and similar ism's and ologies conducted the largest open-air experiments in political economy in history, and ultimately failed abysmally. You can see where slow, semi-Malthusian progress was made under the late Czars and where the early Communists were able to jump-start growth and per capita well-being thru a Command & Control economy. You can see the terrible prices paid in lost lives thru the 20thC, the spurts of growth under the  late Czars and early Communists with an accompanying rise in per capita GDP. Due more to falling population than not. And the collapse of population growth beginning in 1973 followed by a collapse that accelerated thruout the '80s and '90s. And if you ever wondered how/why we wont the Cold War now you know.

So as you skim these reading excerpts you might bear all that in mind. 

Continue reading "SoW III (the Bad): Challenged Russia...another Potemkin Village" »

Posted by dblwyo at 12:39 PM | Permalink | Comments (0)

Continuing our little survey of the State of the World here's some interesting stories from Africa and Asia. Bad as the stories continue to be out of Africa, Darfur, Somalia, et.al. for example, large parts of the rest of the continent aren't quite the abyss they've been. In fact Africa as a whole has experienced more socio-economic progress in the last few years than it has in decades. A key part of that is the growing demand for African resources from the Emerging countries, especially China and India.

When you stop and think it that's actually perfectly natural and reasonable. For one thing they're geographically proximate. For another they've had trading relationships, literally, for millenia. And, most importantly, this is a win-win for everybody. China and India need resources and African nations need customers, financing, development and markets. Sounds like the theory of classical trade to me.

It's also a symptom and harbinger of the new, emerging world order. We're used to thinking of the world as bi-polar, pun intended, during the 1950-1990 Cold War period. Though it wasn't really. Or planetary with the US "super-power" as the central start around which various players orbited. Now a better model is a molecule or tinker-toy. Think of each of the players establishing it's own network of relationships. The patterns, structures and power flows of the new world are going to be very...very different. If you want two interesting canaries that have flown in ahead of the storm listen to world music and ask yourself what the cultural synthesis, geo-political and socio-economic interactions will be in 25 years or 50 years if similar links and fusions occur. As they are beginning to. Or look at the rapid evolution of the Olympics - who's got large contingents and how well they do in which sports.

So with all that in mind, and presuming you don't need any more news on the Earthquake problems, our China excerpt focuses on a different aspect. China's adjusting to its' new role and the rest of us adjusting to it. And by way of compare and contrast between relatively good government and terrible government we have Burma where maintainence of power is more important than the lives of the populace. 

Continue reading "SoW II(the Maybe So): Africa and Asia (China, Burma)" »

Posted by dblwyo at 05:36 AM | Permalink | Comments (0)

SoW stands for State of the World and we ended up accumulating enough readings that we'll end up with multiple posts covering various parts of the world that share some common characteristics. Those however won't strictly be geography or level of economic development. Rather we're going to emphasize a redcurrant theme - what does a stable, progressive and prosperous society require to achieve those goals. Earlier we'd reviewed (Iraq Resartus (Readings): Stability, Progress and Will) the situation in Iraq using the comprehensive, thorough and deeply insightful work of Col. David Kilcullen, the Australian counter-insurgency expert, to analyze the situation in Iraq. The point we'll make here is that the "nation-building" requirements that we've re-learned so painfully in Iraq are the same ones, at various stages of development, required to answer those critical questions. If you'll take another look at the chart it lays out the structural underpinnings that create a good society - things we often take for granted in the US and in the rest of the developed world. Yet ones that are scarce and difficult to come by in many places, not least Iraq of course. But our point remains that each and every society must "answer the mail" on these critical elements. As you skim over the excerpts below we'd ask you to read them with this in mind.

The excerpts cover Britain - one of the historical exemplars for centuries of an adaptive and innovative society where these pillars are so deeply embedded in the Culture that everybody, not just the Brits, takes them for granted. But consider for example what other even of the advanced countries where that is true ? France - it had a major revolution as recently as the 1950s ? Germany - well under the aegis of the US they've managed to establish and keep a democratic system since the end of the Occupation (NOTE: not the end of WW2). Who else ?

Two countries that have had relatively small instabilities but seem to be making some sort of progress are Brazil and Mexico. Mexico has been ruled by the same institutional framework since the Revolution of the early 20thC and has undergone major changes in the last decade or so. But finds itself seriously challenged by drugs and violence. Contrawise Brazil finally seems to be moving into the camp of societies that have learned the cardinal rule: "we're all better off when we're each better off". And to continue to pursue a moderate, centrist course vs its' historical swings between Populist demagoguery and Oligarchic dictatorship.

Finally India which, as a lead character in one of my favorite fun movies (Bride and Prejudice) India is a very young democracy which has nonetheless managed to remain stable, cohesive, and now, growing. Not without some really serious and growing challenges of course. As last week's headlines about terrorist bombings show. Kilcullen's summary chart, reproduced here, is actually a pretty good checklist of the things that any society must do. Keep it in mind any time you see the headlines and ask yourself - against that checklist how would we rank the various factors ?

Once you stop taking our hard-won heritage for granted and asking those questions your views on how the world works might develop in very different directions indeed. Try it, you may not like it of course. But it'll be good for you, and us. :) !!

Continue reading "SoW I (the Good): Britain, Brazil, Mexico and India" »

Posted by dblwyo at 02:47 PM | Permalink | Comments (0)

We've talked before about the tremendous changes going on all around is, which significantly impact all of the political and policy challenges we face (discussed in the last two posts). But we'd like to take a step back and talk about the "brave new world" that's emerging here. After the break you'll find a collection of readings which speak to this macro concerns from the accelerating pressures and breakdowns facing Europe's middle class, on which sustainable long-term prosperity and socio-politico development depend, to growing strains in the world system as more countries reach beyond initial takeoff. That middle class breakdown is a symptom of these deeper and larger changes as are exponentially rising energy and commodity costs and the metastasis of the food crisis. Fareed Zakaria's recent appearance on Charlie Rose is worth an evening's entertainment. He's always thoughtful though we don't endorse all of his arguments and conclusions. But in his argument that we're facing a new and growingly multi-polar world we wholeheartedly agree and second. What we find enormously ironic is that this new world has been visible for almost a decade now. In other words Zakaria's position is something he should have come to a long time ago...but then he had a few distractions. What that does tell us, given that he's an "inside-baseball" player is the level of grasp on the things going on around us.

Just to wrap some context around this discussion let's take a look at the long-term performance of Europe over the last two millenia (again basing our charts on the work of Angus Maddisson). Take a look at the chart on the right which shows the average % change in GDP, Population and GDP per capita for as long as Prof. Maddisson's data will allow us to take a look and let's decipher it a bit. One would think that such dry statistics are....well, dry. But in fact when you stop to think about it the entire history of the Continent is represented from a certain perspective. The stories, the lives, the achievements and the disasters. And it all shows up in the numbers. Stop and think for a minute what the per capita numbers might be telling us - in how many centuries could how many people afford even a basic minimal caloric requirement ? In Fogelman's work(The Fourth Great Awakening and the Future of Egalitarianism) on l.t. bionomic indicators he found that ~ 1/3 of the European population wasn't eating well enough to work more than a few hours/day. And that it wasn't until the post WW2 revival that food intake was sufficient to create a healthy lifestyle for the majority of the population.

You can see the various periods in European history laid out rather cleanly. History may not be entirely what you thought it was but you can see the 700 years of a Malthusian economy from 1000-1700 where famine was a constant threat. Yet you can also see the period of the High Middle Ages when GDP rose relatively rapidly, partly thru population growth but also thru the invention of major new technologies from the horse collar to windmills. Dark indeed ! Then you see the beginnings of the Smithian revolution in 1700 when GDP and per capita growth exploded though population growth flattened out as the requirement to have lots of babies was replaced by the advantages of investing more in children who might survive. And then of course there was the Industrial Revolution which changed the game for Europe, and everybody else now. But what did Europe do with their new found wealth ? They committed suicide. Look at the abrupt drops in all indicators beginning around 1913. Talk about paying the piper ! You can see the post WW2 recovery (think Marshall Plan please) where GDP and per capita income recovered. Yet population growth slowed and has now gone negative. In the long-run it's the sum of productivity and population growth that increases wealth and well-being. Europe appears to have replaced a rapid suicide with a slow-motion democide. That along explains all the "guest workers" brought into France, Germany and elsewhere in the '80s. And the foundations for the current minority troubles all the European countries have experienced.

So you see numbers can tell a story as dramatic as any written by the great Greek playwrights...if you know how to read the text. Now as you read the following excerpts consider what other stories are being told about the rest of the world duplicating the early history of Europe's rise. The question is...can they and we find an alternative to adjusting to the pressures than the ones the Europeans founds ? 

Continue reading "Brave New World: Non-Flatness, History and Challenges" »

Posted by dblwyo at 11:11 AM | Permalink | Comments (0)

China has been unprecedentedly successful over the last several decades in creating a rapidly growing and modernizing economy that has brought more wealth and well-being for more people than at any other time in history. Anybody's history. Hopefully they'll be able to continue but associated with that development are a rising set of challenges that arise as a consequence. Some of those issues have to do with how China relates to the world, how it develops the necessary institutional infrastructure and how it recovers and re-develops the necessary cultural values. Before we dive into discussing those and the related readings let's wrap it in a little context with the chart at right. Drawing on the work of Angus Maddisson on long-term economic development it shows shares of world GDP by major region. For well over a 1,000 years Asia was the dominant economy, not largest. DOMINANT. And for nearly 1500 it was the largest. It wasn't until the Industrial Revolution really got going toward 1870 that its' relative share declined. Well boys and girls welcome to the brave new world where China, India and the rest of Asia is re-discovering, or re-covering, their historical positions.

Now long-term socio-economic performance is based on three things: population growth, growth in productivity and social-economic structure. For millenia no matter what else what went on we were all trapped in the Malthusian economy cycling from feast to famine. Western Europe began to break out of that with the emergence of Commercial Capitalism around the late 1600s but China under the Sung dynasty had done the same thing around 1000 a.d. In the West however the socio-economic innovations were the foundation for the industrial revolution. At the end of the day it is this "big picture" organization of society that enables the breakout. The West has enjoyed a 100 years of clear superiority based on it's organizational innovations but societies learn, adopt and adapt. Asia is beginning to do that.

The two major drivers of socio-economic resiliency are Institutions and Values. We've pretty well established that the key institutions for capitalism and industrialization are secure private property that's immune from arbitrary seizure - otherwise nobody makes long-term commitments. And the Rule of Law and a justice system that is fair, predictable and credible. As well as a government that provides these things as well as security and isn't too predatory in it's tax collections. Better even if those taxes are re-invested in the general social capital, from bridges to education to healthcare because that re-investment of capital accelerates growth, health and per capita income.

That's the necessary institutional framework for progress. A parallel requirement is a set of values that place an emphasis on hard-work, honesty and diligence. That's the values part. China enjoyed nearly 1.5 millenia of prosperity because it had a history of enterprise, good government that was on the whole honest and acted in the general interest, had a large population and natural wealth and a set of Values developed almost 3,000 years ago that supported the sinews of a stable and relatively prosperous society. Take all that down to today. China is having to adjust to its' growing importance on the world stage, to become an invested stakeholder as Zoellick puts it.It must also adapt and innovate its' current institutional infrastructure to increase the security of the population, address growing income distribution disparities and gain and maintain a sense of legitimacy; that is it must convince the populace that it deserves to be the government. All of which places a burden on the political and cultural processes.

The latter is addressed by culture, both high and low. Low culture, as we've discussed are those unconscious and pre-programmed rules by which we live our lives and make decisions. The Chinese have a bedrock foundation that's been consistent for many millenia. What they lack is a sense of purpose and commitment which is the role of High Culture. Ironically, in case you haven't noticed, the Government has been promoting what it calls "Social Harmony" as the new set of values that replace the now badly discredited Communist doctrines. Unfortunately under Mao they did their level best to destroy their cultural inheritances in the name of progress. Considering the corruption and dysfunction of the last dynasty's final decades one can hardly blame them. But what do they evolve to replace it ?

Well there are several pieces of good news. First off Chinese cultures, as all are, is extremely persistent and much of the old high culture survived. On that note btw "Social Harmony" was the central value of Confucianism and of good Chinese government. But even more importantly a new Chinese "intelligentsia" has emerged that is wrestling with developing a new High Culture. Hopefully they will be successful.

After the break you'll find a set of readings on Chinese current events, particular the recent talks with Taiwan as well as the unrest in Tibet where they are talking to representatives of the Dalai Lama. Yet if various protests get out of hand we'd be in danger of seeing the sort of spontaneous combustion of popular protest that has brought down prior dynasties in Chinese history. At the same time China has a healthy, vibrant and evolving socio-economic eco-system based on adaptations of historical institutions which we hope continue and become more formal and structured; and thereby sustainable. Finally we borrow several recent NYT reviews to illustrate a small sampling of the new efforts at re-developing a High Culture.

These are indeed interesting times.....boy, don't you just hate that. Thought it's not as if we have any choice. As Gandalf puts its it, "we don't choose the times we're given. It's up to us to deal with them as best we may" ! 

Continue reading "Knowing China (Readings): Issues, Trends, Futures, Culture" »

Posted by dblwyo at 04:26 PM | Permalink | Comments (0)

Let's catch up with the last week or so's excerpts on world affairs and politics - all of which share one crucial thing in commom. Most of the "shake-your-head" problems are largely self-inflicted consequences of three repeated failures: 1) not understanding how the "buzz saw" works, that is not understanding how one thing links to another - people would rather starve in the dark apparantly than make their heads hurt by thinking it thru. Compounded by 2) not telling people what's really going on, which is consistent. After all if a simple and self-interested explanation sounds good who cares if it's right. And then 3) there's the little problem of facing up to crisis and cowboying up the realities. So while we seem to be surrounded by "Black Swans" most of these things have not only been coming for years they've been anticipated for years. It's just that nobody wants to face up. The problem with that is the Black Swans tend to reproduce to the point of metastasis until the take us all over the cliff along with the rest of the lemmings. Or put another way if we keep deceiving ourselves with high-flown, emotionaly appealing rhetoric that leads to PCPolicy that in fact leads to crisis, death and destruction how sound was our ideological purity in the first place ?

We start the readings with three excerpts, one from our prior post on an approach to framing and analyzing these complex and inter-linked phenomenon. It's a little abstract and one would need to develop and apply the approach for each major problem area. Nonetheless we'll argue that each story below fits nicely into the framework. That's coupled with two more general articles on worldwide trends and issues. Then in the specifics we start with a series on Italy which could be the posture child for emotional choice and self-inflicted wounds. Berlusconi is back in office years after promising to address all the problems he now faces. Someday the Italians may go thru the Pogo Revelation and have the right religious experience - you know "we have met the enemy and he's us" ?

The stories on Russia and China are a bit more benign. The first is a Rose interview with Russia's UN Ambassador that's worth watching IOHO - especially the part where he almost pleads with us to not necessarily treat them as an equal but at least respect them and accord them the same rights to act in their own interests. When you consider what America's historical insularity has cost us and will cost us in combination with centuries of grudges built up one isn't surprised. And that's not a bash America statement, far from it. In fact I've made the argument that America's contributions have been major and instrumental .

China was making progress in new high-level talks with Taiwan. Which may unfortunately get a lot of backwash from the troubles with Tibet and internal dissent and disruption (WRFest 13Apr08(China): More Troubles in Big China). But the real poster children of UiC (Unintended Consequences) are Mexico and Zimbabwe. In fact Z. is so bad with all it's bright promises destroyed by a government and egomaniac that it's really more pathological than "mere" wounding. As Z. continues to a complete and utter self-created socio-economic breakdown and collapse this is giving Col. Kurz a bad name. After all he was only being sociopathic in a small area not a whole country who's fundamental institutions are being degraded and will take decades to recover.

Similarly Mexico which has made great progress but has great obstacles badly needs to at least maintain oil production but nationalist intransigence prevents allowing foreign investment that would provide the funds, expertise and technologies needed to keep up production and develop new fields. Something that Russia is also doing. Worse Mexico has fore decades under-invested in existing fields and has used the cash flow to subsidize a corrupt and oligarchic system. Sigh... 

Continue reading "WRFest 20Apr08(World Politics): More "Black Swans", UiC, and Self-Inflicted Wounds" »

Posted by dblwyo at 09:39 AM | Permalink | Comments (0)

A Black Swan is a perfectly natural event that's usually perfectly comprehensible after the fact of its' observation, the perfect historical example being Australian Black Swans which are quite natural and completely unanticipated. Now oddly enough the recent Housing and Credit Market crisis are NOT BS's. Despite the talking heads and MSM key folks have been talking about this for, literally, years. To a large extent the other two major shift changes in int'l affairs this last month are not either. If you recall we saw and see the Shiite uprising being supressed by the Central government in Iraq as a sign of growing maturity and capability, badly....badly reported and analyzed by the MSM (Three More for the Road: Iran, Sistani and the Big Snake). And the Tibetan uprising is also something that's not surprising though it's just the opposite of hopeful and represents a serious threat to the legitimacy and stability of the regime and is likely to end badly because of Chinese cultural attitudes and political constraints (WRFest 13Apr08(China): More Troubles in Big China). The sudden emergence of a major worldwide food crisis isn't as explainable though also a natural consequence of the state of things.

The reason it qualifies, IOHO, as that rare thing a true black swan is because long-simmering systemic problems with rising energy and food costs metastasized in the last several months with little warning into a major threat. There are several causes, including the unintended consequences of our own corn for ethanol programs. So remember that when the starving Mexican peasants come storming across the border to eat. Which'll be helped along by the falterring Mexican economy and drug border wars. Talk about illegal immigration problems !

There's a bunch of interesting readings excerpted but let's try and summarized it. Obviously the driver force is exponentially rising food costs. That's a worry because food price increases are painful in the developed countries, though many lower income folks are on the edge there as well, e.g.Central LA. But in the developing world we're talking about slipping over the knife-edge between life and death for millions. We're also talking about worldwide foot riots, protest, social breakdowns and the collapse of governments and societies at the extreme. Let's hope it doesn't get that far.

It is addressable in the short- and long-terms but not readily nor easily. The proximate cause is rising energy costs which always raise food production costs. The hidden implication is that the lack of a coherent and effective national energy policy is a major contributing factor to the risks of millions of deaths. Just to put a point on it the anti-nuc movements have, with the best of intentions, the worst of analysis and terrible moral responsibilities, contributed to the situation.

Two other major causes for rising food and energy causes are the rapid development of the BRICs which has caused energy demand to exceed supply. As it turns out we aren't finding new oil fast enough to develop to offset this and the old supplies are so aged and under-invested that oil production is dropping from Mexicto to Saudia Arabia. On top of which as incomes have gone up the developing new middle classes in China and India are raising their dietary standards, just as Japan did. That often means more meat consumption and that tends to be more energy intensive.

Since these prime drivers are all natural consequences of rapid development worldwide this is a systemic problem that will be with us for a long time, barring major collapses of course. In other words it ain't going away any time soon. Whatever we can do to move emergency food supplies abroad will be helpful as a short-term pallative. In the intermediate-term we need to get a new Green Revolution growing which means lots of demand for fertizilzers, tractors, etc. Which we can help with. But in the long-term there are only really two complementary systemic solutions. Reduce the supply/demand imbalances by increasing energy production and/or reducing consumption. Which in turn gets back to things like nuclear power and a concerted national energy effort. A new Manhattan project. And an equivalent effort to find new sources. That 2nd Green Revolution. Let me close with a quote from Dr. Norman Borlaug but kick if off with the obseravation that EU, African and other efforts to suppress "frankenfoods" may kill a bunch of folks in pursuit of ideological purities. Not the first time of course - just look at the 00's of millions of deaths caused by Communism in Russia and China.

Continuing the Green Revolution Persistent poverty and environmental degradation in developing countries, changing global climatic patterns, and the use of food crops to produce biofuels, all pose new and unprecedented risks and opportunities for global agriculture in the years ahead. Agricultural science and technology, including the indispensable tools of biotechnology, will be critical to meeting the growing demands for food, feed, fiber and biofuels. However, science and technology should not be viewed as a panacea that can solve all of our resource problems. Biofuels can reduce dependence on fossil fuels, but are not a substitute for greater fuel efficiency and energy conservation. The debate about the suitability of biotech agricultural products goes beyond issues of food safety. Access to biotech seeds by poor farmers is a dilemma that will require interventions by governments and the private sector. Seed companies can help improve access by offering preferential pricing for small quantities of biotech seeds to smallholder farmers. Beyond that, public-private partnerships are needed to share research and development costs for "pro-poor" biotechnology. Finally, I should point out that there is nothing magic in an improved variety alone. Unless that variety is nourished with fertilizers -- chemical or organic -- and grown with good crop management, it will not achieve much of its genetic yield potential.

Just as an example of where UiC has "helped" us in the past consider the micro-examples here: Unintended Consequences: Blowing Off Our Own Feet

Continue reading "Black Swans & Unintended Consequences: the Food Crisis" »

Posted by dblwyo at 04:09 PM | Permalink | Comments (1)

A while back we mentioned that amidst the all the noise that the two biggest int'l stories were the central government's move to suppress Shia insurgents in Basra, which has held up more than well as learn more. And that the troubles between China and Tibet were serious and threatened the fundamental political stability of China and would not likely come to a feasible benign multi-winner outcome because of the political immobility of the leadership. We now want to add a third to be picked up later - the growing Food Crisis thruout the world where rising foods costs driven by inflation are likely to lead to major socio-political disruptions. Let me put that another way....KABOOM. If that's not clear enough wait a bit.

Meanwhile back to China you can see our earlier summary here: WRFest 30Mar08(Asia): Trouble in Big China. Unfortunately it's not only holding up well it's holding up way to well. If anything positions are hardening and getting more unreasonable all the way around. At the root of this is a profound mis-understanding of Chinese history and culture as it currently is. We remember them as a monolithic communist police state (shades of Tianmen). Well they're certainly still a centralized authority but they're not either a police state nor that well centralized either.

More importantly the Chinese gov'ts actions are milder than a wide majority of the population would prefer. They think that Tibet is an integral part of China - not historically absolutely true though. In fact the irony is that if they could manage to grant Tibet the kinds of automony and self-rule it had under previous imperial regimes this crisis would resolve itself.

In the meantime and par for the course US and other int'l politicians are adding fuel to the fire by posturing for their domestic constituents rather than explaining the situation to them. China has centuries of legitimate resentment built up thru the abuse they took from the Western powers. That history is taught every day in every school and may be closer to the general understanding than last year's Final Four is for Americans.

Amazingly you can see all that by just reading sequenced headlines of the story excerpts below - which are laid out in our best logical order. Including the English language editorials from Xinghua which basically boil down to "hang the traitors". This is gonna get real interesting. 

Continue reading "WRFest 13Apr08(China): More Troubles in Big China" »

Posted by dblwyo at 04:50 PM | Permalink | Comments (0)

Well we've now heard from Petraeus and Crocker and the short answer is that things are going well, as measured by progress on security, stability, political reform and central government development. Which hasn't stopped the MSM punditocracy from downplaying all that or not covering it at all. And of course the Democracts are downplaying for everything they're worth since they announced multiple times last year that the Surge was an abysmal failure before it even got started. And that's not to underestimate the fragilities and risks that are still in front of us or the Iraqis either. But there are two major things, actually three, that are not getting reported in any venue that I can find. As we've already mentioned (WRFest 30Mar08(Iraq): the Emergence of Central Authority) the launching of a major effort on the part of a Shia central government against other Shia is a huge and amazing step forward.

A 2nd and equally great step forward is the political progress with the passage of national reconciliation and other major legislation which gets no coverage. Perhaps the most important thing is what's implicit in the about-face of the Sunni tribal leaders. This means that they've decided it is in their best interests to become full-fleged participants in the national political process. Amazing. If you'd like to see all this on display we highly recommend this recent Rose review and especially the points made by Gen. Jack Keene.

Related to all this is what what on and why'd it work ? And what are the implications for the future. It worked because there was a major shift in strategy and doctrine on the part of the military from force on force to supporting the civil process. Which may hold many lessons for the future. In the excerpts below you'll find a discussion of how things are working on the ground, the emerging consensus and commitment to "nation-building" as a critical component of our national strategy, some continued poopoohing on the part of selected pundits, some hard-nosed assessments of the impacts of Iraq on terrorism and al Queda in general and what it might mean for the future. With all these excerpts we've also pointed to some other resources including our own prior posts that provide a strategic context for these discussions. 

Continue reading "WRFest 6Apr08(National Security): the Surge, Iraq, the Military & Terrorism" »

Posted by dblwyo at 06:10 PM | Permalink | Comments (0)

With all that's going on the two biggest pieces of international news were the Iraqi government's attack on the Shia militias in Basra, which we'll pick up in the future. And the sudden outburst of protests in Tibet which the Chinese gov't is handling so badly. The real question is why and that probably deserves it's own seperate post and discussion but here are several reasons that occur to us and they'r wrapped up in Chinese history and cultural attitudes.

Continue reading "WRFest 30Mar08(Asia): Trouble in Big China" »

Posted by dblwyo at 08:07 AM | Permalink | Comments (0)

Having put off our regular readfests for a bit we're going to end up with a bunch of postings covering the last two weeks so they'll be combined around certain topics. Here we're going to focus on Int'l Affairs, specifically Europe. And narrowing it even further France and Russia. Both of which are very interesting.

After all his early promise of shaking things up by introducing a new agenda Sarkozy, otherwise now known as Pres. Bling-Bling to the Fr. press, seems to have turned into his own worst enemy. He can run but can he govern ? If he doesn't figure out how France will return to its' slumber.

Russia on the other hand saw its' own governmental transitions from Putin to Medvedev (to Putin ?). We'll see how that all plays out but Russia, which say a restoration of order under Putin's increasingly autocratic rule along with significant economic growth which benefited a wide swath of society, is now facing deeper challenges. They've been able to reverse their rather severe decline under Yeltsin but a large part of that has been new-found prosperities based on oil and resources prices. Now they'll need to deal with much deeper structural issues. Putin may have done an arrest and save but they're still on the mountain with a long way to go to the top. Let's hope they make it. 

Continue reading "WRFest 30Mar08(Europe): France and Russia - What's that Tune ?" »

Posted by dblwyo at 06:52 PM | Permalink | Comments (0)

ROW stands for rest of world and after the break you'll find an interestint potpouri (sp ?) of international affairs readings that span the recent (almost) war in South America to election results plus associated major problems in Spain, Nigeria and Malaysia. We'll kick start it though with some good news immediately below the break. To wit - hopefully most people are increasingly aware that world economic growth has done more for more people than ever before. But when you look at GDP/capita it's even more interesting because the usual suspects aren't necessarily the ones doing well or for the reasons you might suspect.

Before diving in let's mention that these stories, again, share a common theme. Which is they're all about, one way or another, challenges to governance. So one of the key readings serendipitously is about the growing awareness of "Rule of Law" and economic development. We'll also mention the worst example of a breakdown where Chavez not only faces mounting domestic breakdowns in the economy but has allied himself with Narco-terrorists disguised as revolutionaries. AND it turns out he wasn't just supporting them but as more intel pops up was actively involved. So much for keeping faith with the people, eh ? Below the break are interesting stories about that war, Chavez and FARC, and elections in Spain, Nigeria and Malaysia. 

Continue reading "WRFest 16Mar08(ROW): Latin Beat to Flamenco to Nigerian drums" »

Posted by dblwyo at 05:46 PM | Permalink | Comments (0)

After the break you'll find a set of interesting excerpts on Japan, India and China. While not deliberately filterred they tell a common story. All three have done well or better for quite a while now but all three face certain struggles to keep on that are mounting. Not to stretch the points too far of course since Japan's situation is vastly different from China's and India's. But they do all face a single common problem - re-vamping their political appartus to deal with the challenges facing them.

Continue reading "WRFest 16Mar08(Int'l I): Japan, India, China" »

Posted by dblwyo at 05:12 PM | Permalink | Comments (0)

It's amazing how far National Security affairs have moved off the front page in general and as an issue in this election. The good news is that our guys are doing darn well. The bad that these are not issues that ever go away - as we hope the various candidates (aside from McCain) recognize, accept and are prepared to deal with. There will be a lot of 0300 phone calls and from "her" track record in the '90s it's not clear Hillary is anybody you want answering the phone.

After the break you'll find this week's collection of interesting story excerpts for your skimming or click-thru pleasure, as it may be. We start with an interesting study of Lt.Gen. Ray Odierno who was Petraeus' depty in Iraq and the man who made the new Counter-Insurgency strategy work. The article does as fine a job of any we've seen in going into detail and dissecting why and how. But that's not the only issue on the table. For a balanced overview we highly recommend this recent appearance on Charlie Rose of Adm. Mike Mullen, the Chairman of the Joint Chiefs. Aside from an informed and balanced overview of the major concerns two things struck us. One was that the head military guy has a broad appreciation and understanding NOT matched, or even close, by his civilian counterparts. Rather sad when the chief military guy has a deeper and more nuanced understanding than the "softside" guys. Interestingly he places great emphasis on soft power as part of the overall balanced toolkit that we need. You might also want to watch this shorter interview on the role that nation building now occupies in our evolving doctrine. (A conversation with Lieutenant General William Caldwell).

In addition you'll find the NYT's take on the emerging "War in Space" and some necessary objections to their "blame the US" perspective. The only good news is that at least they've noticed which doesn't counter-balance the profound lack of grasp and imbalance of their position. Actually very sad. The other two pieces are on specific aspects of these challenges. One on the strain of multiple tours of combat duty - which is unprecedented in American history and a tribute to the members of our armed services and their professionalism and dedication. The other is on the "Art of Interrogation" - which obviously needs some more work and investment 

Continue reading "WRFest 15Feb08(Nat'l Security):" »

Posted by dblwyo at 02:58 PM | Permalink | Comments (0)

Here's the rest of last week's int'l news ranging from some coverage of the Russian elections to the Colombian-Venzualian border drug war to Iran and Iraq. No surprise that Putin's hand-picked successor was chosen and Putin will likely be the next Prime Minister. A result decried by all right-thinking Western pundits and roundly applauded by the Russian people. Two facts which are also widely noticed but not analyzed. It doesn't seem to occur to the pundits that peace and stability verses the virtual collapse of Russian society that Putin inherited, coupled with economic progress (largely but not entirely driven by energy) go a long way toward justifying a certain level of support. What we should've learned but haven't yet is that the blind imposition of Western style democracy on a society without the right cultural under-pinnings is rather difficult.

But South of the border Chavez of Venezuela continues his comic opera tragedies. In case anybody was wondering it turns out he's been supporting FARC - the ex-Marxist guerillas turned drug lords - in their attempts to overthrow the legitimate government of Colombia for some time. Speaking of legitimacy challenged governments that of Iran continues to watch its' economy turn into a shambles. Meanwhile as Iraq stays off any page of American news, except for the occasional bombing of course, significant progress continues to be made.

One of the growth industries internationally is NGO's, or Non-Governmental Organizations. Originally intended to help with disaster relief, famine prevention, medical care etc. as they've grown hugely in numbers they've also morphed into socio-political change agents; or so they think. But the end result of their agend-driven acitivities has been to disrupt local societies without making much progress. One wonders. 

Continue reading "WRFest 9Mar08(Int'l): Russia, Iran, Iraq and the New Caudillos" »

Posted by dblwyo at 10:43 PM | Permalink | Comments (0)

Here's last week's interesting stories (some anyway) on China and India. Some of our constant themes have been the rapid re-shaping of the world political system as the result of their rise, the adoptions and adaptations required by this and the impacts on various players. We should add two more major ones that'll be playing out. One is the internal challenges to all these players as the changes strain their internal capacities. The other is the resurgance of ancient cultural and tribabl artifacts - the end of history indeed ! Which shouldn't take anything away from what either China or India have been able to accomplish - which have indeed been technocratic miracles. But they're on cusp points of major shifts needing to be made to create new institutional frameworks to hold their socieites together to adjust to these pressures and keep themselves on track. And recent news has exposed a great number of fault lines which highlight certain fragilities that are under stress.

Continue reading "WRFest 9Mar08(China/India): the Rise of the Dragon and Elephant" »

Posted by dblwyo at 12:31 PM | Permalink | Comments (0)

The immediate prior international news readfest focused on the outlook for the next several decades as the world is forced to adopt a new architecture with the rise of the rapidly developing economies, especially the BRIC countries. We'll keep on top of that because it's one of the, if not THE, most important themes facing us all. Just to review the bidding our point, from the readings, was that continuing to sustain growth and the associted improvements in human welfare was beginning to severely straing the socio-political frameworks of the BRICs. As a result of which new and increasingly fragile fault lines are being exposed to increased pressures which may result in major collapses. They are certainly leading to major policy challenges.

The other side of the coin is how are the "old powers" adapting to these deep structural changes. And the answer is not well at all. Of the three major European powers (Britain, France and Germany) only Britain has demonstrated a sustained capacity for adopting new strategies and adapting behaviors to make those strategies reality. On the other hand with the rise of Merkal in Germany and Sakozy in France both countries began to face the new realities. Unfortunately the resulting strains and/or personal failings of the leadership have expoed old fault lines which are beginning to crack.

Continue reading "WRFest 2Mar08(Europe): the Failure of Reform and Adaptation" »

Posted by dblwyo at 09:55 AM | Permalink | Comments (0)

There's such a tidal wave of interesting stories this week that we're going to have to split things up into smaller buckets or ignore some of it. So we're going to start with the general international news excerpts and move on from there.

A point we've made before but it deserves re-iteration (re-it, and re-it, until people start adjusting). We're are in the earliest stages of the biggest structural shift in world affairs since the early 1800s, when China and India were the major world economies and had a healtheir and more prosperous socio-economic systems than any others. The West didn't eclipse them until ~ 1850's, particularly when you measure it by per capita income and indicators of social-economic health like caloric intake. We are headed back to that world and will spend the next 3-4 decades going there. So far in the process just over the last 20 years more people have made more progress in income and well-being than at any previous time in history. But these trends and opportunities carry risks and expose fault lines. Germany's rise in the late 1800's laid the groundwork for WW1 while Japan's in the '20s and '30s was a major contributor to WW2. As we move forward on these paths it is inescapable BUT it will also STRAIN the world system and put enormous pressure on world resources. Failing to pass thru these bottlenecks will break the still emergent system and cause a major collapse.

Continue reading "WRFest 1Mar08(World Affairs): Seismic Changes a'Comin" »

Posted by dblwyo at 05:02 PM | Permalink | Comments (0)

In these weekly reader linkfests we try to provide excerpted summaries of interesting and valuable stories that cover the range of topics impacting our world: Int'l Affairs, Politics & Economics, Science, Culture & Values with the coverage varying by the ebb and flow of news and interests. This time there's been enough that we're going to split them up into three parts with the first one being on Int'l Affairs. Yet at the same time we'll ask you to remember that they're part of a bigger whole and are woven together. Or can be interwoven with a little word and thought magic by looking at the shared themes, linkages and constructs.

Here let's focus on what's going on in the world. We've talked before about a couple of things. First is all the rapid fire changes and second is the fact that in the last 2-3 decades more things have gotten better for more people than at any time in human history. Think about that for a minute - you are literally living thru an evolutionarily important moment. Take a look at the multi-part chart. The top chart shows GDP per person since 1980. It may help to know that a roughly equivalent chart since 1500 a.d. is pretty flat at best. In fact as best we can guess it's flat for the last 10,000 years. Literally.

The bottom chart shows the same data for different regions of the world. You'll notice some significant and profound differences. The question is why. Let's point to a recent paper by Andrei Shliefer:

The Age of Milton Friedman. The last quarter century has witnessed remarkable progress of mankind. The world’s per capita inflation-adjusted income rose from $5400 in 1980 to $8500 in 2005. Schooling and life expectancy grew rapidly, while infant mortality and poverty fell just as fast. Compared to 1980, many more countries in the world are democratic today. The last quarter century also saw wide acceptance of free market policies in both rich and poor countries: from private ownership, to free trade, to responsible budgets, to lower taxes. Three important events mark the beginning of this period. In 1979, Deng Xiao Ping started market reforms in China, which over the quarter century lifted hundreds of millions of people out of poverty. In the same year, Margaret Thatcher was elected Prime Minister in Britain, and initiated her radical reforms and a long period of growth. A year later, Ronald Reagan was elected President of the United States, and also embraced free market policies. All three of these leaders professed inspiration from the work of Milton Friedman. It is natural, then, to refer to the last quarter century as the Age of Milton Friedman. The association between free market policies and social progress notwithstanding, economists remain divided in their assessments of this Age. Two recent books illustrate the divisions.

Click on the link and you can read the whole thing, which is very non-technical, explains that graph and several others and discusses some of the issues and debates (it's also dloadable if you like). We'll give you one more from a major Indian entrapaneur talking sustaining and extending India and the developing country's success to date (btw in the chart above a) India is South Asia roughly and b) it picked up after market reforms in the '90s):

A Challenge for India N.R. Narayana Murthy, chief mentor and cofounder of Infosys Technologies, sees a bright future for developing countries — if they can use their success to address the problems of poverty. Infosys Technologies, one of India’s oldest and biggest software companies, is a dominant player in the outsourcing industry. And its cofounder N.R. Narayana Murthy has helped drive India’s emergence as a global economic powerhouse. He recognizes the enormous growth that lies ahead for India, China, and other developing nations as they take greater part in the global economy, but also sees challenges. For Murthy, who has long eschewed the trappings of wealth in favor of a more modest life, India’s success — and, implicitly, the continued growth of other developing nations — will not be guaranteed until its benefits reach the country's rich and poor alike.

 So we'd ask you to read the following excerpts with all that in mind: what is progress, how does it come about and what kind of political framework is required ? Most of these stories are about folks struggling with one or another or all of those questions. There all interesting (otherwise why post) and probably deserve their own post but they make an interesting set. But we'd like to point to three in particular because they highlight some key issues.

1. China has concentrated it's development efforts on the coasts, just as earlier they started with Agricultural reform to lay a foundation for manufacturing. Now the coast is experiencing rising labor coasts, congestion and pollution while the central provinces have lagged and there's rising social dissent at the income disparities. It's always been the plan to eventually shift to Central China but that's now becoming a major new direction. Remember China has to create something like 60 million new jobs/year just to break even. They can't afford for growth to slow without social collapse, and therefore neither can we.

2. Everybody is worried about the resurgence of aggressive Russia foreign policy but in fact the underlying reality is that their military forces are incapable of projecting power and on a relative scale are not very meaningful. What this is really all about is a bit of posturing for the domestic audience to continue to restore a little pride and faith - a pride which was sadly damaged by the West's not-so-benign paternalism. A little forebearance and civilized charity a decade ago on our and the Europeans part would have done a great deal to have kept a calm bear. As yea sow so shall yea reap.

3. Germany is beginning to undertake the most serious re-consideration of it's socio-economic structure, quietly, without fanfare and without quite meaning to, since the formation of the modern state in the late 19th C. Germany the modern nation was formed by the shape and nature of German corporatism which is often given credit for the post-WW2 "Wirtschaftswunder", or economic miracle. Perhaps but it also leads, and has led, to a lot of cronyism, corruption, malfeasance, lack of adaptation and innovation and general non-responsiveness. All of the things we were lecturing the SE Asian countries about a while back, eh ? :). What most people don't realize is how central the institution and forms of big business are to the central structure of our societies. Nor how the different ones evovled by different choices on industry, structure and governance. The reference work cited along with the article on German changes will take you toward the best discussion ever written, IOHO, to explaining how that's worked around the world over the last 100 years. If you'd like to know what some of the deep currents and structures have been...well...try that...

Continue reading "WRFest 23Feb08(Int'l Affairs): What Makes for Progress" »

Posted by dblwyo at 01:48 AM | Permalink | Comments (0)

All the major policy issues we're going to be facing in this election and dealing with for decades can, in our humble opinions, be grouped into three major categories: 1) Foreign Affairs, 2) Economics, 3) Social Policy. Some day we'll break those down into sub-topics and walk thru 'em but of now we'dlike to throw up the National Security sub-topic in FA and point to a selection of readings from StrategyPage.com that illustrate a bunch of stuff going on that never makes it to the MSM or general public discussion. Below you'll find selections on the War in the Heavens, the War in the (Cyber) Clouds and strategic posturings by Russia and China.

Continue reading "Major Policy Issues: Thinking About National Security" »

Posted by dblwyo at 12:23 AM | Permalink | Comments (0)

Here's the final posting of last week's intereseting readings. mostly about International Affairs since we put several other posts on politics and the US elections. Along with some on key policy issues, particularly economics. This post has several other interesting readings on policies as well.

Mostly this election has been about personality, i.e. mostly about character, vision and leadership. While Edwards managed to get several interesting policy choices tabled, e.g. Healthcare, by and large the primaries have not been policy-driven so far. But there are several major and distinct differences between the Republican and Democratic candidates. Whom I like to refer to in my lighter and/or more cynical moments as the Publicans and the Dimowacks. You know - Publican as in "publicans and sinners" from your h.s. English class ? :)

Continue reading "WRFest 3Feb08: In Addition to US Politics" »

Posted by dblwyo at 12:53 PM | Permalink | Comments (0)

UPDATE (Jan17): On reviewing this post it dawned on that we just leaped into the topic without, likely, motivating it. Or less politely put - why do you care ? Two reasons and both important for the future and the well-being of your grandchildren. 1) Success in Iraq REQUIRES this adaptation to cultural realities and its' growth and evolution to a broader sense of Unified Action on our part and collaborative nation-building with the Iraqis. And 2) this is a template for challenges we're going to be facing for decades into the future. Consider Pakistan and Afghanistan let alone Latin America, especially the bubbling cauldron of Calderon's war against the druggies which could explode into a socio-political breakdown at any time. In many cases we can't/won't intervene but the concept of understanding how foreign cultures work and what local ground truths are and HOW to WORK with them as they are rather than how we fantasize them will be central to US Foreign Policy. Hopefully that's a sufficient answer for why you care ! ;) 

Now back to our previously scheduled blogpost. 

Learning to Eat Soup With a Knife is, within the community of counter-insurgency operators, a pretty well-known little book. But as it happens outside that charmed community hardly known at all. When you ask what's happened in Iraq this past year there are several keys, which are traced out in the chronological readings below.

Continue reading "Readings(MilDoctrine & Foreign Policy): Learning to Eat Soup With a Knife" »

Posted by dblwyo at 03:05 PM | Permalink | Comments (0)

If the week before last was dominated by Iraq and the Petraeus/Crocker testimonies then the visit of the Pres. of Iran dominated this week’s. Coverage was extensive and largely unfavorable – which likely played into his hands. He wasn’t talking for us he was posturing for his domestic audience and very effectively and successfully.

There’s a lot of other Iranian and ME news the two most important of which were the secret airstrike by Israel on Syrian targets. Which nobody denies, is perfectly willing to talk about but not to tell anybody anything. “Informed sources”, i.e StrategyPage and StratFor are puzzled but think it likely that three things were going on. There was Nkorean nuclear equipment in Syria, messages were being sent to Syria and others and the key other was Iran. The rest of the news indicates that everybody’s loosing patience with Iranian posturing to the point where there are very…very public discussions of targeting methods and tactical capabilities. The Soviets call that Maskirova – or disinformation. One doesn’t discuss that sort of thing other than as part of such a Masque. What’s happening at minimum is that the pressures are being raised and the continued Iranian support for all insurgents inside Iraq is finally beginning to receive its’ just reward.

On a more hopefully note, and it is incredibly hopeful, Egypt and Saudia Arabia are making serious progress in reforming their institutions and how business friendly they. One can’t under-estimate, despite how much is left to do, how critically important the foundations of a stable, honest and free society is. So let me also draw your attention to the posting on which institutions are critical for economic growth and socio-political development.

Special & General

 Egypt, Saudi Arabia Rise in World Bank Rankings Egypt and Saudi Arabia, long considered bureaucratic mazes, changed their laws and regulations to make it substantially easier to start and run businesses, according to a yearly World Bank report that tracks business reforms globally. Among the top 10 "reformers" cited by the World Bank in its fifth-annual ranking were four countries from Central and Eastern Europe (Croatia, Macedonia, Georgia and Bulgaria); two from the Middle East (Egypt and Saudi Arabia); two from Africa (Ghana and Kenya); and China and Colombia. The bank has regularly lauded the Eastern European countries, China and Colombia for reducing barriers to business; the emergence of Saudi Arabia and Egypt is new. Egypt was listed as the top reformer, having made improvements in five of 10 categories affecting business tracked by the World Bank. Developing nations compete with one another to move up on the World Bank rankings of 178 nations, figuring a better ranking will mean additional investment and, ultimately, economic growth.The report also becomes a way for the World Bank's private-sector unit, International Finance Corp., to encourage economic ministries to press ahead with market-friendly changes. A computer simulation model on a World Bank Web site, www.doingbusiness.org, lets officials see how changes in, say, their bankruptcy or tax rules would likely affect their standings. [www.doingbusiness.org ]

·         Which institutions matter for economic growth?, by Liam Brunt, Vox EU Historical evidence from a natural experiment in South Africa suggests that changing particular institutions is really only tinkering at the economic margins. Establishing clear property rights, by contrast, facilitates almost all economic interactions and unleashes the full potential of the economy. Several developing economies – such as Vietnam and China – have recently been moving down this road, and history suggests that the economic gains are likely to be large.It is obvious that a country’s political, legal, economic and social institutions will affect its rate of economic growth. However, it is much more difficult to identify exactly which institutions matter and exactly how they matter. This is an issue of some practical importance. Countries are free to redesign their institutions in order to improve their economic performance. But, unless they can pinpoint the beneficial aspects of particular institutions, the only option is to import wholesale the institutional structures of another, more economically successful country. This happened in Japan in 1945 with respect to many US institutions and again recently in Dubai, which adopted the entire panoply of commercial law that regulates the City of London. However, in many cases it may be infeasible or inefficient to change the entire institutional régime, or it may be politically or socially unacceptable. For this reason, it would be useful if we had a better idea of exactly which aspects of which particular institutions were beneficial for stimulating growth. But the evidence on this matter is very mixed.

Continue reading "Weekly Reader 30Sep07: Middle East, Iraq and Iran" »

Posted by dblwyo at 08:16 PM | Permalink | Comments (0)

This is Part II of the Weekly Reader focused on International Affairs. Hopefully everybody now recognizes that we’re in a world under-going more profound structural changes than it’s seen, in some ways, in centuries. As has been pointed out, broadly speaking, never have so many countries and people done so well. The question is though how do we keep a lid on the turmoils, commit the major new actors to the emerging int’l system as stakeholders and nurture that progress. It’s in all our interests, if for no other reason to avoid major worldwide conflicts that this time around might really turn into Armageddon. But also because, in the nature of things, we all do better when some of us do better. That’s because as each grows the total pie gets much….much bigger and even if our share gets smaller proportionately it’s still a big slice of a much bigger pie. Notice we’re not mentioning morality here but simple self-interest J !

Think of the world if you look in terms of simple models. For four decades after WW2 it was a magnet with two poles where the “lines-of-force” organized themselves in relationship to the fields defined by Russia and the US. After the collapse of the wall the theory went that it was a single-pole world, rather like  planets in orbit around the sun. Which reflected the preponderance of US military and economic power, if not influence. It was never that simple nor the solar system model that accurate but there were large elements of truth in it. Which to some extent still apply but more and more this century we’ll be in a more of a molecular system with major players linked separately to other major players and minor ones as well and all together forming a more complex molecular structure. Think of it as a giant tinker toy !

That brave new world could have some really interesting, in a good sense, aspect. If we make it work. Below are two interesting articles on growing recognition of worldwide cultural diversity instead of the US dominated model that’s mistakenly had everybody in thrall. At the same time to make it work requires that economic growth and social stability continue and increase. A major influence on the future of the world will be the historical constraints and economic tendencies established by previous decisions. The links on the demise of the British aircraft industry post WW2 are interesting for their own sake but even more so when thinking about how this new world will be shaped by which industries get established in which countries. The role of socio-political institutions is critical in these decisions and a little history is provided.

Continue reading "Weekly Reader 9Sep07 II: International Affairs" »

Posted by dblwyo at 04:16 PM | Permalink | Comments (0)

George Forman of  StratFor (often  called the private person's  CIA)  lays out a  comprehensive ,  astute and insightful  assessment of  the  Iraq  situation, Iran's  strategic  policies and actions the likely impacts on  the success of US  policy  and strategy.  Well  worth your time. While it dates from Jan07  it still provides a  well-grounded baseline for  evaluating the current talks underway between the US and Iraq.

BtW - while you're reading this, or before even, may I suggest reviewing the strategic chessboard of consequences laid out in an earlier post: Big Question #1: What Happens if We Leave. If you'll pardon me, perhaps strongly recommend. So far none of the recent commentators, e.g. on Charlie Rose, have ticked thru the entire list laid out hear. That's the bad news. The good news is that the first few questions are NOW on the table for more public discussion.

Continue reading "Rhetoric and Reality: The View from Iran" »

Posted by dblwyo at 07:15 AM | Permalink | Comments (0)

Some years ago I had the pleasure of seeing the "adventure" movie, "The Wild Geese" about a mercenary force recuited by a London merchant banker to rescue a deposed African leader so as to restore decent government to his country and, oh by-the-way, give the banker's companies access to the vast copper and other mineral desposits. Any resemblance to the real world is entirely coincidental and the fact that a mysterious plane landed with a few remaing mercs and a dead African rumored to be Moise Tshombe is entirely besides the point. Nor that the history of the Congo (Zaire, Central African Republic, whatever) closely resembles the highlights of the fictional homeland. And strictly a technical matter is that Michael "Mad Mike" Hoare, commander of the white mercs during the early Congo troubles is the movie's technical adviser. As another sidepoint may I recommend W.E.B. Griffin's "Special Ops" - historical fiction about Communist insurrection in the Congo and the role of the Green Berets in dealing with same. The fact that it's highly entertaining, a fun read and embeds quite a lot of technical knowledge and historical information that's accurate as far as we can tell is also beside the point.

More recently a friend, who normally doesn't recommend adventure movies, suggested I see "Tears of the Sun" about an American SEAL team sent into a cauldron of civil war and a collapsed state in Central Africa to rescue a politicaly connected American medical missionary. Who of course refuses to leave and abandon her patients so the the Team Leader surrendars all normal discipline and shephards her and her charges thru miles of jungle to get across a border. Now the action is better, the special effects spectactularly and clearly they had better technical support becasue the tactics and weapons appear like they could have been used as a training film.

Continue reading "From Wild Geese to Tears of the Sun: Development & World Futures" »

Posted by dblwyo at 01:45 PM | Permalink | Comments (0)