Two views on Globalization, America, and China

Coming Anarchy:

What’s more, the Chinese National Bureau of Statistics recently reported that the Chinese economy’s dependency rate on foreign economies exceeded 60 percent. For the first time, Beijing officially admitted for the first time that China’s more than 10 percent annual economic expansion is heavily dependent on the West. How the US goes, so goes the world. A lot of countries are going to start to discover that very shortly.

The China Explat:

That’s not to say that malinvestment has not occurred thanks to false demand from America (or more accurately, false supply from the very non-free market central banks of China and the US – there are very few individual Chinese investors stupid enough to throw a bunch of money into US treasuries). But this malinvestment only creates the illusion of wealth – an illusion that is now being pierced and would be shattered if China suddenly tried to exchange all of their US IOU’s for real goods.

The moment China gives up this illusion of wealth in the form of paper IOU’s, China will be better off, even if it means a painful restructuring of Chinese industry.

When China does this, they will have even more real savings to plunge back into the Chinese economy. And that means that China’s days of growth are far from over.

The reality: the economies of China and America are intertwined to the extent that disinvestment of one from the other is economically unthinkable.

Is there any God but God? Is Muhammed not His Prophet?

It is days like today when allies like Saudi Arabia, the United Arab Emirates, and even Pakistan become useful. These are nations that fear God, in foreign policy, in very concrete ways. With Russia’s latest attack on the peace, where Moscow recognizes their allies in Georgia as independent countries, the question for our Islamist friends is: why may Russia be able to create new states, but Muslims may not?

Russia Backs Independence of Breakaway Georgian Areas – NYTimes.com
MOSCOW — Russia on Tuesday formally recognized the independence of South Ossetia and Abkhazia, the two enclaves in Georgia whose separatist aspirations stirred the fierce conflict this month.
It drew immediate condemnation from the United States and its allies.

Acting a day after Russia’s Parliament unanimously supported the enclaves’ request to secede, President Dmitri A. Medvedev announced that he had signed decrees recognizing the two territories’ independence. He blamed the Georgian president, Mikheil Saakashvili, for causing the bloodshed and forcing Moscow’s hand.

He said it was clear that the warring sides could never again live together, and South Ossetia and Abkhazia had to be independent.

“This is not an easy choice, but it is the only way to save the lives of people,” Mr. Medvedev said in a nationally televised address.

Speaking on a trip to the Middle East, Secretary of State Condoleezza Rice called the move “regrettable,” The Associated Press reported. France, which holds the presidency of the European Union, said it “strongly condemns this decision.”

French President Nicolas Sarkozy’s office said in a statement: “This is contrary to the principles of the independence, the sovereignty and the territorial integrity of Georgia.”

An entity already exists for our Islamist friends to recognize, and for us to tacitly support: The Emirate of the Caucasus (currently in exile, but with language and cultural abilities that we could tap).

Indeed, encouraging states like Pakistan, Saudi Arabia, and the United Arab Emirates to recognize the Caucasian Emirate may help us in the war against terrorism. The War in Afghanistan has degenerated into an Afghani-Pakistani Civil War, where “victory” will come by incorporating the Pashtuns in both countries into the political system while not allowing them to dominate non-Puthu regions of Afghanistan. The easiest way for this to happen is for the Taliban to be split from al Qaeda, which would allow cooler heads to prevail (as the Anbar Awakening split the Sunni tribes from al Qaeda in Iraq). Recognizing the grievances of Islamists — including their oppression by the Russians the right of Muslims everywhere to defend the Caucasian Emirate — legitimizes managable and expected intra-Gap fighting between Muslims and Russia helping the Core’s interests both in Afghanistan and in Russia.

Russia’s stock market, which had already dropped in response to the conflict in Georgia, fell sharply after Mr. Medvedev’s announcement, with the benchmark RTS Index falling nearly 6 percent.

Few countries are likely to join Russia in extending recognition to the two regions and the move is expected to increase strains between Russia and the West.

The Caucasian Emirate has been hinted at before…

Refocusing

Is there any reason (aside from politics, obviously) why Cuba is on the list of state sponsors of terrorism but Russia is not?

It seems that Cuba does not publicly sponsor terrorists, but Russia does. Most recently, Russia has been arming and funding the ethnic cleansing of Georgians from South Ossetia by non-state actors who use organized violence against civilians as a means of achieving political objectives.

Another EU Member State Recognizes Kosovo

Russia’s invasion of Georgia was in response to Europe’s recognition of Kosovo. Kosovo was used to part to Serbia, a Russian client in the middle of Europe. Thus, it is heartening that recognition by Kosovo by European countries — which had been stalled since the Czech Republic’s recognition of Kosovo in May — is on the move again.

B92 – News – Politics – Malta recognizes Kosovo
PRIÅ TINA — The Kosovo foreign ministry says it has received official information that Malta has recognized its unilateral independence declaration.

“The Kosovo foreign ministry has just received official information that the Republic of Malta has recognized Kosovo as an independent and sovereign country,” read a statement.

It added that the Maltese foreign ministry’s declaration of recognition had been submitted to Skender Hyseni, the man appointed by the Kosovo provincial authorities as its foreign policy chief.

Most European Union member states (21 out of 27) now recognize Kosovo.

Those who wish to slow down this process effectively want to encourage Russia’s acts of war. Those who believe that interstate war is not a legitimate tool of diplomacy must work to increase Kosovo’s recognition around the world, and its eventual accession to the European Union.

Not Cold, just processing a politically bankrupt state

Courtesy of Tom, this great news on US outreach to see what Muslim troubles Saudi Arabia can stir up within the decaying Russian Federation. Really, this is great news, and one of the countermeasures I suggested earlier. It seems that the Bush Administration is ably playing a double game, on one hand saying crazy things in an attempt for the Russians to save their own face, while at the same time decoupling our efforts from Putin’s petrothugs.

U.S., Saudi Arabia: Holding the Chechen Card | Stratfor
But after watching Russia’s recent power surge in Georgdia, the Saudis now share a common interest with Washington in keeping the Russians at bay. And with the Saudis now making roughly $1 billion a day on oil revenues, Riyadh has ample cash to spare to revive its links with Islamist militants in the Russian Federation.

Saudi support is not only limited to Chechnya, however. The republic of Tatarstan also is a prime candidate for a covert strategy that aims to inflame Russia’s Muslim minorities. This Muslim belt is key because it separates the ethnically Russian portions of Russia from sparsely populated Siberia and runs through all of Russia’s transport networks (road, rail and pipeline). If Tatarstan, which has become more independent in developing its vast oil wealth, revved up a resistance movement against Moscow, Russia would have no choice but to focus its efforts on quashing the rebellion at home rather than spreading its influence abroad.

There is no chance of a renewed Cold War with Russia, simply because Russia is unable to sustain a Cold War. People who believe in a new Cold War with Russia are guilty of legacy thinking. We are not dealing with the politically bankrupt Empire built on the blood of peasants on workers: rather, we are dealing with a politically bankrupt state that reminds us of nothing so much as a nuclear version of Saddam Hussein’s Iraq.

Some may object to helping Chechen, Dagestani, and Tartari “freedom fighters” because of the trouble it may cause in our war against terrorism in Afghanistan-Pakistan. However, we cannot let Pakistan’s civil war dictate our foreign policy. To do so would be to put the Pakistani ISI in charge of the State Department. The battle for the leadership of Pakistan between the army, the ISI, Islamists, socialists, and al Qaedais of no concern for us, except for making sure that al Qaeda loses.

Indeed, supporting Islamists parties in Chechnya, Dagestan, Tartarstan, and elsewhere in Russia may well help is in our battle to punish + destroy al Qaeda, by allowing us to more convincingly partner with “moderate” Islamists elsewhere in the world.

Russia v. the New Core

While a lot of chaos strikes the Old Core (Europe, the United States, and Japan) as an optional problem of discipline, it hits the New Core (Eastern Europe, China, India, and so on) as a mandatory problem of survival. In our rich and developed economies, the marginal price of energy can cause a great deal of political pain while not being enough to cause a true recession (even when coupled with the subprime-mortgage mess!). However, for new countries that need cheap energy to rapidly expand their economy, chaos is dangerous.

Russia’s invasion of Georgia increased that chaos. It was an attempt by a resource-extracting gap state to strike at the New Core. It attemmpts to drive Europe away from the New Core states of Eastern Europe, and attempts to drive the China’s energy suppliers away from her. By increasing political tensions and threatening states that deliver energy directly to the New Core, Russia is harming globalizaton and threatening the fates of Eastern Europe, China, India, and other New Core regions.

Of course, this is no new “Cold War.” The Soviet Empire long since declared bankruptcy, and Putin destroyed the soft power that Russia once enjoyed. Russia combines the military ferocity of North Korea with the economy swagger of Portugal. The threat Russia poses to the New Core is real, and should not be underestimated. But at the same time, it is only an annoyance to us, meaning that we can fight back against Russia without putting globalization at risk.

Unless you want to lose India, China, and other New Core states to the 19th century world of great power politics, it is vital that America works to save the peace and roll back Russia’s policy of using war as a tool of diplomacy.

Anything else is just old thinking.

Biden is an acceptable Choice

I agree with Tom completely on Biden:

No harm done (Thomas P.M. Barnett :: Weblog)
Biden will be a good campaigner and brings a lot of nice foreign policy credentials. Plus he’s very establishment-looking, so Obama’s riskiness factor is somewhat addressed.

Difference maker?

Better said: no harm done.

I made a similar point (if with someone more pointed verbage) a while ago:

Barack Obama is the candidate of the Establishment, “Dr. No-Change,” who will flip and flop with the views of the Establishment of the government and the Democratic Party. This might be a good thing. Having a smart, intelligent, and ambitiousness President would lead to changes, some of which may be harmful. As it is, Obama’s plan to coast on our greatness isn’t half bad.

Obama’s selection of Joe Biden, one of the top Democratic establishment politicians with regards to foreign policy, is good news. It effectively repudiates most of his rhetoric during the campaign, and instead promises an administration which is right out of the cookie-cutter left-of-center mold.

Neither liberal nor conservative, an Obama administration would bring a Brookings Institution nirvana of foreign policy. That is not half bad.

The Global Ruleset for Processing Poltically Bankrupt Empires

Empires have fallen before. The British, French, and Portuguese empires all fell in the second-half of the 20th century. Our “global ruleset for processing politically bankrupt empires” has been to encourage the center of the old empire to act as a responsible country, and forget its imperial ambitions. So we purposefully went out of our way to encourage Britain, France, and Portugal to lose their imperial positions. This process was occasionally painful, for instance during the Suez Crisis which caused the collapse of the British government. However, because the center of the old empire was esentially “Core” in nature, the process was eventually successful.

When the Soviet Empire fell, the same “global ruleset for processing politically bankrupt empires” was run on Russia. This encouraged the center of the old Soviet Empire to act responsibly, while encouraging Russia to forget its old empire. This process was occasionally painful, for instance during the Kosovo War, when their client lost some territory. However, because Russia was essentially “Gap” in its nature the process failed, and we are left with a belligerent successor state — an angry version of Portugal after her empire.

Russia against the Shanghai Cooperation Organization, and against Open Government

I just wanted to pass on this post my Registan. Much of it discusses the Core/Gap divide, but the perhaps the most interesting paragraph notes that Georgia was the best reformer in the world and that Kazakhstan and the UAE were ready to make a big investment on the Georgian Black Sea:

Registan.net
Meanwhile, Barnett’s Non-Integrating Gap Georgia must now contemplate exactly how Russia’s invasion will shatter it’s growing success story. Ras al-Khaimah’s $100m plan to turn Poti into the “Dubai of the Black Sea” is almost certainly off the table, as is future investment from Kazakhstan. And it is unclear how Georgia’s rather stunning advances in economic reform and anti-corruption will fare with Russian troops trampling all over Gori.

Russia’s actions hurt the things that would have supported Russia as a new core state. By violently attacking neighbors, Moscow is violently asserting hegemony in the Shanghai Cooperation Organization, which is properly a way of China to organize her resource suppliers (including Russia). By attacking a reforming neighbor, Russia is helping to make her own government more obscure. By attacking sources of investment, Russia is helping to disconnect her own economy from the world.

Russia is a rogue state, a Gap dictatorship whose parasitic attacks on the Core not only endanger the peace, but whose destruction of a stable investment opportunities hurt the attempts of Seam states to invest wisely and build themselves up.

Russia is a Gap state. Russia is not a friend or a partner. Russia is a gap dictatorship that whose that slows down globalization and destroy wealth. The misery Russia causes is proportional to the power we give her.

U.S.: Interstate War is an Acceptable form of Diplomacy

Really disturbing news, courtesy of Duck of Minerva:

MOSCOW: The U.S. ambassador to Russia has told a Russian daily that Washington strongly urged Georgia not to invade its breakaway province of South Ossetia.

John Beyrle also told the Kommersant Friday that Russia “gave a well-grounded response” to a Georgian attack on Russian peacekeepers, but exceeded its authority by invading Georgia proper.

Beyrle was quoted as saying that Russia should respect a cease-fire deal and withdraw its troops from the ex-Soviet neighbor to positions they held before the fighting erupted.

Ambassador: US warned Georgia about invasion – International Herald Tribune.

Of course, it’s not easy to know exactly what is meant by cheap talk, but the implications are troubling.  The US has (verbally, at least) retreated from its post-Cold-War committment to keep the peace.

Some support actions such as this, by claiming (for no good reason, as far as I can tell) that Russia is a Core state.  Hardly: Russian is an central asian dictatorship, a bigger version of Kazakhstan.

Supporters of Russia invasion speak of indirection, a 5GW effort to manipulate Russian actions into serving the Core’s instancese.  Perhaps.  Such a policy is similar to regulating crime on a domestic level, and is analogou to China’s “guanxi” system.  Of course, this teaches the wrong lessons, and encourages more wars, whetheter they are part of a manipulation or not.

If the US Ambassador’s words are to be believed, we have suffered a serious blow to our power.  There is little point in paying someone to provide a security function when the provider has lousy quality-of-service.  We can expect a new birth of regional military alliances, an increase in terrorism secretly supported by states, reduced trust for US promises, a decline in Central Asian security, and so on.