Three Points of View: The United States, Pakistan and India

30. April 2010 by admin.

Three Points of View: The United States, Pakistan and India

 

One of al Qaeda’s goals when it attacked the United States in 2001 was bringing about exactly what the United States most wants to avoid. The group hoped to provoke Washington into blundering into the region, enraging populations living under what al Qaeda saw as Western puppet regimes to the extent that they would rise up and unite into a single, continent-spanning Islamic power. The United States so blundered, but the people did not so rise. A transcontinental Islamic caliphate simply was never realistic, no matter how bad the U.S. provocation.

Subsequent military campaigns have since gutted al Qaeda’s ability to plot extraregional attacks. Al Qaeda’s franchises remain dangerous, but the core group is not particularly threatening beyond its hideouts in the Afghan-Pakistani border region.

 

As for the region, nine years of war have left it much disrupted. When the United States launched its military at the region, there were three balances of power that kept the place stable (or at least self-contained) from the American point of view. All these balances are now faltering. We have already addressed the Iran-Iraq balance of power, which was completely destroyed following the American invasion in 2003. We will address the Israeli-Arab balance of power in the future. This week, we shall dive into the region’s third balance, one that closely borders what will soon be the single largest contingent of U.S. military forces overseas: the Indo-Pakistani balance of power.

Pakistan and the Evolution of U.S. Strategy in Afghanistan

U.S. strategy in Afghanistan has changed dramatically since 2001. The war began in the early morning hours — Pakistan time — after the Sept. 11 attacks. Then-U.S. Secretary of State Colin Powell called up then-Pakistani President Gen. Pervez Musharraf to inform him that he would be assisting the United States against al Qaeda, and if necessary, the Taliban. The key word there is “inform.” The White House had already spoken with — and obtained buy-in from — the leaders of Russia, the United Kingdom, France, China, Israel and, most notably, India. Musharraf was not given a choice in the matter. It was made clear that if he refused assistance, the Americans would consider Pakistan part of the problem rather than part of the solution — all with the blessings of the international community.

 

Islamabad was terrified — and with good reason; comply or refuse, the demise of Pakistan was an all-too-real potential outcome. The geography of Pakistan is extremely hostile. It is a desert country. What rain the country benefits from falls in the northern Indo-Pakistani border region, where the Himalayas wring moisture out of the monsoons. Those rains form the five rivers of the Greater Indus Valley, and irrigation works from those rivers turn dry areas green.

 

Accordingly, Pakistan is geographically and geopolitically doomed to perpetual struggle with poverty, instability and authoritarianism. This is because irrigated agriculture is far more expensive and labor-intensive than rain-fed agriculture. Irrigation drains the Indus’ tributaries such that the river is not navigable above Hyderabad, near the coast — drastically raising transport costs and inhibiting economic development. Reasonably well-watered mountains in the northwest guarantee an ethnically distinct population in those regions (the Pashtun), a resilient people prone to resisting the political power of the Punjabis in the Indus Basin. This, combined with the overpowering Indian military, results in a country with remarkably few options for generating capital even as it has remarkably high capital demands.

 

Islamabad’s one means of acquiring breathing room has involved co-opting the Pashtun population living in the mountainous northwestern periphery of the country. Governments before Musharraf had used Islamism to forge a common identity for these people, which not only included them as part of the Pakistani state (and so reduced their likelihood of rebellion) but also employed many of them as tools of foreign and military policy. Indeed, managing relationships with these disparate and peripheral ethnic populations allowed Pakistan to stabilize its own peripheral territory and to become the dominant outside power in Afghanistan as the Taliban (trained and equipped by Pakistan) took power after the Soviet withdrawal.

 

Thus, the Americans were ordering the Pakistanis on Sept. 12, 2001, to throw out the one strategy that allowed Pakistan to function. Pakistan complied not just out of fears of the Americans, but also out of fears of a potentially devastating U.S.-Indian alignment against Pakistan over the issue of Islamist terrorism in the wake of the Kashmiri militant attacks on the Indian parliament that almost led India and Pakistan to war in mid-2002. The Musharraf government hence complied, but only as much as it dared, given its own delicate position.

 

From the Pakistani point of view, things went downhill from there. Musharraf faced mounting opposition to his relationship with the Americans from the Pakistani public at large, from the army and intelligence staff who had forged relations with the militants and, of course, from the militants themselves. Pakistan’s halfhearted assistance to the Americans meant militants of all stripes — Afghan, Pakistani, Arab and others — were able to seek succor on the Pakistani side of the border, and then launch attacks against U.S. forces on the Afghan side of the border. The result was even more intense American political pressure on Pakistan to police its own militants and foreign militants seeking shelter there. Meanwhile, what assistance Pakistan did provide to the Americans led to the rise of a new batch of homegrown militants — the Pakistani Taliban — who sought to wreck the U.S.-Pakistani relationship by bringing down the government in Islamabad.

The Indian Perspective

The period between the Soviet collapse and the rise of the Taliban — the 1990s — saw India at a historical ebb in the power balance with Pakistan. The American reaction to the Sept. 11, 2001, attacks changed all that. The U.S. military had eliminated Pakistan’s proxy government in Afghanistan, and ongoing American pressure was buckling the support structures that allowed Pakistan to function. So long as matters continued on this trajectory, New Delhi saw itself on track for a historically unprecedented dominance of the subcontinent.

 

But the American commitment to Afghanistan is not without its limits, and American pressure was not sustainable. At its heart, Afghanistan is a landlocked knot of arid mountains without the sort of sheltered, arable geography that is likely to give rise to a stable — much less economically viable — state. Any military reality that the Americans imposed would last only so long as U.S. forces remained in the country.

The alternative now being pursued is the current effort at Vietnamization of the conflict as a means of facilitating a full U.S. withdrawal. In order to keep the country from returning to the sort of anarchy that gave rise to al Qaeda, the United States needed a local power to oversee matters in Afghanistan. The only viable alternative — though the Americans had been berating it for years — was Pakistan.

 

If U.S. and Pakistan interests could be aligned, matters could fall into place rather quickly — and so they did once Islamabad realized the breadth and dangerous implications of its domestic insurgency. The five-year, $7.5 billion U.S. aid package to Pakistan approved in 2009 not only helped secure the arrangement, it likely reflects it. An unprecedented counterinsurgency and counterterrorism campaign conducted by the Pakistani military continues in the country’s tribal belt. While it has not focused on all the individuals and entities Washington might like, it has created real pressure on the Pakistani side of the border that has facilitated efforts on the Afghan side. For example, Islamabad has found a dramatic increase in American unmanned aerial vehicle strikes tolerable because at least some of those strikes are hitting Pakistani Taliban targets, as opposed to Afghan Taliban targets. The message is that certain rules cannot be broken without consequences.

 

Ultimately, with long experience bleeding the Soviets in Afghanistan, the United States was inherently wary of becoming involved in Afghanistan. In recent years, it has become all too clear how distant the prospect of a stable Afghanistan is. A tribal-ethnic balance of power overseen by Pakistan is another matter entirely, however. The great irony is that such a success could make the region look remarkably like it did on Sept. 10, 2001.

 

This would represent a reversal of India’s recent fortunes. In 10 years, India has gone from a historic low in the power balance with Pakistan to a historic high, watching U.S. support for Pakistan shift to pressure on Islamabad to do the kinds of things (if not the precise actions) India had long clamored for.

 

But now, U.S. and Pakistani interests not only appear aligned again, the two countries appear to be laying groundwork for the incorporation of elements of the Taliban into the Afghan state. The Indians are concerned that with American underwriting, the Pakistanis not only may be about to re-emerge as a major check on Indian ambitions, but in a form eerily familiar to the sort of state-militant partnership that so effectively limited Indian power in the past. They are right. The Indians also are concerned that Pakistani promises to the Americans about what sort of behavior militants in Afghanistan will be allowed to engage in will not sufficiently limit the militants’ activities — and in any event will do little to nothing to address the Kashmiri militant issue. Here, too, the Indians are probably right. The Americans want to leave — and if the price of departure is leaving behind an emboldened Pakistan supporting a militant structure that can target India, the Americans seem fine with making India pay that price.

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Tips to Safeguard Your Facebook Privacy

28. April 2010 by admin.

Tips to Safeguard Your Facebook Privacy

 

Facebook statistics show that it has 250 million active users each with an average 120 friends. More than 1 billion photos are uploaded every month by its users, over 70% of whom use applications like games and quizzes in Facebook. Unfortunately, most users don’t know the implications of entering personal information, making friends, and playing games on Facebook.

This guide will show what you can (and cannot) do to safeguard your Facebook privacy.

1. Organize Friends in Lists

What do you do when your boss, mother-in-law, or a casual web acquaintance sends you a friend request on Facebook? Use Friend Lists. Friend Lists are the foundation of your Facebook privacy settings. Select Friends from the top menu, and use the Create link to create friend lists like Co-workers, Family, College Friends, etc. Your friends can’t see your lists, so you can name them whatever you like.

 

 

Tip: On your left sidebar, all your friend lists may not show up by default. Click More to see all of them, and drag and drop those you want above the separator.

2. Customize Profile Privacy

Click Settings > Privacy Settings > Profile. Select which parts of your profile will be seen by whom.

 

If you choose Customize in the drop down, you can be more specific. This is where the Friend Lists you created before become really useful.

 

 

Also go to the Contact Information tab and choose how you want your contact information to be shared on the Internet.

3. Set Facebook Privacy Level of Photo Albums

On the Photos tab of your profile page, click Album Privacy. Here again, you can use your Friend Lists to set the privacy for each photo album.

 

 

Note that your profile pictures go into a special album that is always visible to ALL your friends.

4. Restrict Search Visibility

Click Privacy > Search to set your visibility when someone searches Facebook for people. This is an important way to safeguard your Facebook privacy.  You can also select what will be visible in the search results.

 

5. Control Automatic Wall Posts and News Feed Updates

Your actions in Facebook such as comments, likes, appear as highlights on ALL your friends’ home pages. You cannot use friend lists here, only turn them on or off.

Go to Privacy > News Feed and Wall and choose whether you want your boss or ex-girlfriend to know that you’re in a relationship.

6. Set Facebook Wall Privacy

Go to your profile page, click Options > Settings under the status box.

Here you can control whether your friends can post to your Wall, and who can see the posts made by your friends.

7. Avoid Appearing in Advertisements

Facebook has two types of advertisements: third-party and Facebook. Third-party advertisements are currently not allowed to use your pictures, but there is a setting to disallow it if it is allowed in the future. Go to Privacy > News Feed and Wall > Facebook Ads tab to turn this off.

 

 

The Facebook ads shown to your friends are about ‘social actions’ like becoming a fan of something. You can turn this off at the bottom of the page.

8. Protect Yourself from Friends’ Applications

Go to Privacy > Applications, and click the Settings tab and uncheck all the boxes. These settings control what information about you is visible to applications installed by your friends. By default, these are set to visible. This means that your religious, sexual, and political preferences, pictures, etc. are readily available to one of the million worldwide Facebook application developers, each time any of your friends takes a quiz, plays a game, or runs any other Facebook app. This is obviously a Facebook privacy issue.

 

 

This is the most commonly misunderstood aspect of Facebook privacy. These settings control what applications installed by your friends can see about you, even if you don’t install the application yourself.

Why is this important? Because these settings will not change anything about what you are sharing with the applications you install yourself. For that, go to the next step.

9. Privacy from Your Applications

There is no way to control what applications see about you; it is an all-or-nothing affair. Take this quiz developed by the American Civil Liberties Union to check what anonymous application developers can know about you and your friends each time you take a quiz.

 

The Burton Group’s Identity Blog features the Facebook Privacy Mirror, an application that you can use to find out what applications know about you and your friends. If you really want to see exactly what profile data of each of your friends is visible to application developers, Privacy Mirror shows it in detail.

 

The only thing you can do is to authorize only those applications you require and trust. Go toSettings > Application Settings from the top menu. Change the drop-down from Recently Usedto Authorized. Here you can see all the applications you have authorized to get access to ALL your profile information. Remove the ones you no longer need.

 

 

Also check the list of applications Allowed to Post and Granted Additional Permissions to remove unwanted ones.

10. Quitting Facebook? Delete, Don’t Just De-Activate Your Account

You can easily deactivate your account in Facebook from the Settings page. But deactivation will retain all your profile information within Facebook, including pictures, friends, etc. Note that:

1. There is an unspecified delay between submitting your delete request and actual deletion.
2. If you login to Facebook, your deletion request is automatically cancelled.
3. There doesn’t seem to be any way to confirm that your request was completed.
4. Even after permanent deletion, Facebook says that copies of your photos may remain on their servers for technical reasons.

Also, note that once in a while, there is news of a Facebook hack or leak that can expose your information on the Internet. It is better to be safe than sorry by avoiding using Facebook for anything that may embarrass you.

 

I hope this article gives you a better understanding and insight into Facebook’s privacy. 

Posted via web from Jay’s Blogs

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Dissecting The “Chinese Miracle”

27. April 2010 by admin.

Dissecting the ‘Chinese Miracle’

The “Chinese miracle” has been a leading economic story for several years now. The headlines are familiar: “China’s GDP Growth Fastest in Asia.” “China Overtakes United Kingdom as Fourth-Largest Economy.” “China Becomes World’s Second-Largest Energy Consumer.” “China Revises GDP Growth Rates Upward — Again.” Everywhere, one can find news articles about China, rising like a phoenix from the economic debris of its Maoist system to change and challenge the world in every way imaginable.

But just like the phoenix, the idea of an inevitable Chinese juggernaut is a myth.

Moreover, Western markets have been at least subconsciously aware of this for a decade. More than half of the $1.1 trillion in foreign direct investment that has flowed into China since 1995 has not been foreign at all, but money recirculated through tax havens by various local businessmen and governing officials looking to avoid taxation. Of the remainder, Western investment into China has remained startlingly constant at about $7 billion annually. Only Asian investors whose systems are often plagued (like Japan’s) by similar problems of profitability or (like Indonesia’s) outright collapse have been increasing their exposure in China.

Once the numbers are broken down, it’s clear that the reality of China does not live up to the hype. While it is true that growth rates have been extremely strong, growth does not necessarily equal health. China’s core problem, the inability to allocate capital efficiently, is embedded in its development model. The goals of that model — rapid urbanization, mass employment and maximization of capital flow — have been met, but to the detriment of profitability and return on capital. In time, China is likely to find itself undone not only by its failures, but also by its successes.

The Chinese Model

Until very recently, China’s economic system operated in this way:

State-owned banks held a monopoly on deposits in the country, allowing them to take advantage of Asians’ legendary savings rate and thus ensuring a massive pool of capital. The state banks then lent to state-owned enterprises (SOEs). This served two purposes. First, it kept the money in the family and assisted Beijing in maintaining control of the broader economic and political system. Second, because loans were disbursed frequently and at subsidized rates — and banks did not insist upon strict repayment — the state was able to guarantee ongoing employment to the Chinese masses.

 

This last point was — and remains — of critical importance to the Chinese Politburo: they know what can happen when the proletariat rises in anger. That is, after all, how they became the Politburo in the first place.

 

The cost of keeping the money circulating in this way, of course, is that China’s state firms are now so indebted as to make their balance sheets a joke, and the banks are swimming in bad debts — independent estimates peg the amount at around 35-50 percent of the country’s GDP. Yet so long as the economic system remains closed, the process can be kept up ad infinitum: After all, what does it matter if the banks are broke if they are state-backed and shielded from competition andenjoy exclusive access to all of the country’s depositors?

This system, initiated under Deng Xiaoping in 1979, served China well for years. It yielded unrestricted growth and rapid urbanization, and helped China emerge as a major economic power. And so long as China kept its financial system under wraps, it would remain invulnerable.

 

But the dawning problem is that China is not in its own little world: It is now a World Trade Organization member, and nearly half of its GDP is locked up in international trade. Its WTO commitments dictate that by December, Beijing must allow any interested foreign companies to compete in the Chinese banking market without restriction. But without some fairly severe adjustments, this shift would swiftly suck the capital out of the Chinese banking system. After all, if you are a Chinese depositor, who would you put your money with — a foreign bank offering 2 percent interest and a passbook that means something, or a local state bank that can (probably) be counted on to give your money back (without interest)?

 

The Chinese are well aware of their problems, and perhaps their greatest asset at this point is that — unlike the Soviets before them — they are hiding neither the nature nor the size of the problem. Chinese state media have been reporting on the bad loan issue for the better part of two years, and state officials regularly consult each other as well as academics and businesspeople on what precisely they should do to avert a catastrophe.

 

The result has been a series of stopgap measures to buy time. Among these, the most far-reaching initiative has been a partial reform of the financial sector. The government has founded a series of asset-management companies to take over the bad loans from the state banks, thus scrubbing them free of most of the nonperforming loans. The scrubbed banks are then opened up so that interested foreign investors can purchase shares.

 

So far as it goes, this is a win-win scenario: Foreign banks get access to assets in-country before the December jump-in date, and the state banks avoid meltdown. In addition, a measure of foreign management expertise is injected into the system that hopefully will teach the state banks how to lend appropriately and — if all goes well — lead to the formation of a healthy financial sector. At the same time, the deep-pocketed foreign companies come away with a vested interest in keeping their new partners — and by extension, the Chinese government — fully afloat.

The only downside is that central government, through its asset-management firms, assumes responsibility for financially supporting all of China’s loss-making state-owned enterprises.

But this rather ingenious banking shell game addresses only the immediate problem of a looming financial catastrophe. Left completely untouched is the existence of a few hundred billion dollars in dud loans — linked to tens of thousands of dud firms for which the central government is now directly responsible.

 

Which still leaves for China the unsettled question: “Now what do we do?”

 

Two Opposing “Solutions”

As can be expected from a country that just underwent a leadership change, there are two competing solutions.

 

The first solution belongs to the generation of leadership personified by Deng Xiaoping and Jiang Zemin, and could be summed up as a philosophy of “Grow faster and it will all work out.” It could be said that during Jiang’s presidency, while the leadership certainly perceived China’s debt problem, they — like their counterparts in Japan — felt that attacking the problem at its source — the banking system — would lead to an economic collapse (not to mention infuriate political supporters who benefited greatly from the system of cheap credit).

 

Jiang’s recommendation was that everyone should build everything imaginable in hopes that the resulting massive growth and development would help catapult China to “developed country” status — or, at the very least, raise overall wealth levels sufficiently that the population would not turn rebellious. In the minds of Jiang and his generation of leaders, the belief was that only rapid economic growth — defined as that in excess of 8 percent annually — could contain growing unemployment and urbanization pressures and thus hold social instability at bay.

 

The second solution comes from the current generation of leadership, represented by President Hu Jintao. This solution calls for rationalizing both development goals and credit allocation. The leadership wants to eliminate the “growth for its own sake” philosophy, consolidate inefficient producers and upgrade everything with a liberal dose of technology. Key to this strategy is a centrally planned effort to focus economic development on the inland areas that need it most — and this entails tighter control over credit. Hu wants loans to go only to enterprises that will use money efficiently or to projects that serve specific national development goals — narrowing the rich-poor, urban-rural and coastal-interior gaps in particular.

 

There are massive drawbacks to either solution.

 

Regional and local governors enthusiastically seized upon Jiang’s program to massively expand their own personal fiefdoms. And as corporate empires of these local leaders grew, so too did Chinese demand for every conceivable industrial commodity. One result was the massive increases in commodity prices of 2003 and 2004, but the results for the Chinese economy were negligible. China consumes 12 percent of global energy, 25 percent of aluminum, 28 percent of steel and 42 percent of cement — but is responsible for only 4.3 percent of total global economic output. Ultimately, while “solution” espoused by Jiang’s generation did forestall a civil breakdown, it also saddled China with thousands of new non-competitive projects, even more bad debt, and a culture of corruption so deep that cases of applied capital punishment for graft and embezzlement have soared into the thousands.

 

Yet the potential drawbacks of the solution offered by Hu’s generation are even worse. In attempting to consolidate, modernize and rationalize Jiang’s legacy, Hu’s government is butting heads with nearly all of the country’s local and regional leaderships. These people did quite well for themselves under Jiang and are not letting go of their wealth easily. Such resistance has forced the Hu government to reform by a thousand pinpricks, needling specific local leaders on specific projects while using control of the asset management firms as a financial hammer. After all, since the central government relieved the state banks of their bad loan burden, it now has the perfect tool to strip power from those local leaders who prove less-than-enthusiastic about the changes in government policy.

 

Or at least that is how it is supposed to work. Local government officials have become so entrenched in their economic and political fiefdoms that they are, at best, simply ignoring the central government or, at worst, actively impeding central government edicts.

 

Hu’s team is indeed making progress, but with the problem mammoth and the resistance both entrenched and stubborn, they can move only so fast for fear of risking a broader collapse or rebellion. And this does not take into consideration Beijing’s efforts to strengthen the Chinese interior — where the poorest Chinese actually live. Complicating matters even more, Hu’s strategy relies upon the central government’s ability to wring money out of the wealthy coastal regions to pay for the reconstruction of the interior.

 

That has made the coastal leaders even more disgruntled. However, they have come upon a fresh source of funding, replacing the traditional sources of capital that now are drying up as a result of the personnel changes in Beijing: the underground lending system, which was spurred by the official government monopoly over banks in years past. The central government now estimates that the underground banking sector is worth 800 billion yuan, or some 28 percent of the value of all loans granted in country.

 

Dealing with Failure — And Success

The question in our mind is which strategy will fail — or even succeed — first. If Jiang’s system prevails, then growth will continue, along with the attendant rise in commodity prices — but at the cost of growing income disparity and environmental degradation. The likely outcome of such “success” would be a broad rebellion by the country’s interior regions as money becomes increasingly concentrated in the coastal regions long favored by Jiang. And that is assuming the financial system does not collapse first under its own weight.

Local rebellions in China’s rural regions have already become common, but two of are particular note.

 

In March, the villagers of Huaxi in the Zhejiang region protested against a local official who had used his connections to build a chemical plant on the outskirts of town. When rumors of police brutality surfaced, some 20,000 villagers quite literally seized control of the town from 3,000 security personnel. Before all was said and done, the villagers invited regional press agencies in to chronicle events in the town that had told the Politburo to go to hell, and started burning police property and parading riot control equipment before anyone who would watch. They actually sold tickets to their rebellion. Huaxi marked the first time local officials actually lost control of a town.

 

Then, in December, protests erupted against a local official in Shanwei, who had similarly lined his pockets with the money that was supposed to have been made available to farmers displaced by his expanding wind-power farm. The local governor figured that since he was investing not just in an energy-generating project in energy-starved China, but a green energy project, that he would have carte blanche to run events as he saw fit. He was right. When the protests turned violent, government forces opened fire — the first authorized use of force by government troops against protesters since the Tiananmen Square incident in 1989.

 

Such events are, in part, evidence of a degree of success for the strategy espoused by Jiang’s generation. The grow-grow-grow policy results in massive demand for labor by tens of thousands of economically questionable — and typically state-owned — corporations. This, in turn, draws workers from the rural regions to the rapidly expanding urban centers by the tens of millions. The dominant sense among those who are left behind — or those who find their urban experiences less-than-savory — is that they have been exploited. This is particularly true in places like Shanwei, on the outskirts of urban regions, when urban governors begin confiscating agricultural land for their pet projects.

 

But for all the complications created by Jiang’s solution to China’s economic challenges, it is Hu’s counter-solution that could truly shatter the system. In addition to dealing with all the corrupt flotsam and high-priced jetsam of Jiang’s policies, Hu must rip down what Jiang set out to accomplish: thousands of fresh enterprises that are unencumbered by profit concerns. A steady culling of China’s non-competitive industry is perhaps a good idea from the central government’s point of view — and essential for the transformation of the Chinese economy into one that would actually be viable in the long term — but not if you happen to be one of the local officials who personally benefited from Jiang’s policies.

 

The approach of Hu’s generation is nothing less than an attempt to recast the country in a mold that is loosely based on Western economics and finance. Even in the best-case scenario, the central government not only needs to put thousands of mewling firms to the sword and deal with the massive unemployment that will result, it also needs to eliminate the businessmen and governing officials who did well under the previous system (which did not even begin to loosen its grip until 2003). And the only way Beijing can pay for its efforts to develop the interior is to tax the coast dry at the same time it is being gutted politically and economically.

 

The challenge is to keep this undeclared war at a tolerable level, even while ratcheting up pressure on the coastal lords in terms of both taxation and rationalization. But just as Jiang’s “solution” faces the doomsday possibility of a long rural march to rebellion, Hu’s strategy well might trigger a coastal revolution. As the central government gradually increases its pressure on the assets and power of China’s coastal lords, there is a danger that those in the coastal regions will do what anyone would in such a situation: reach out for whatever allies — economic and political — might become available. And if China’s history is any guide, they will not stop reaching simply because they reach the ocean.

 

The last time China’s coastal provinces rebelled, they achieved de facto independence — by helping foreign powers secure spheres of influence — during the Boxer Rebellion. This resulted, among things, in a near-total breakdown of central authority.

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Dirty Bombs Revisited: Combating the Hype

26. April 2010 by admin.

Media coverage of the threat posed by dirty bombs runs in a perceptible cycle with distinct spikes and lulls. We are currently in one of the periods of heightened awareness and media coverage. A number of factors appear to have sparked the current interest, including the recently concluded Nuclear Security Summit hosted by U.S. President Barack Obama. Other factors include the resurfacing rumors that al Qaeda militant Adnan El Shukrijumah may have returned to the United States and is planning to conduct an attack, as well as recent statements by members of the Obama administration regarding the threat of jihadist militants using weapons of mass destruction (WMD). A recent incident in India in which a number of people were sickened by radioactive metal at a scrap yard in a New Delhi slum also has received a great deal of media coverage.

In spite of the fact that dirty bombs have been discussed widely in the press for many years now — especially since the highly publicized arrest of Jose Padilla in May 2002 — much misinformation and disinformation continues to circulate regarding dirty bombs. The misinformation stems from long-held misconceptions and ignorance, while the disinformation comes from scaremongers hyping the threat for financial or political reasons. Frankly, many people have made a lot of money by promoting fear since 9/11.

Just last week, we read a newspaper article in which a purported expert interviewed by the reporter discussed how a dirty bomb would “immediately cause hundreds or even thousands of deaths.” This is simply not true. A number of radiological accidents have demonstrated that a dirty bomb will not cause this type of death toll. Indeed, the panic generated by a dirty bomb attack could very well result in more immediate deaths than the detonation of the device itself. Unfortunately, media stories hyping the threat of these devices may foster such panic, thus increasing the death toll. To counter this irrational fear, we feel it is time once again to discuss dirty bombs in detail and provide our readers with a realistic assessment of the threat they pose.

Dirty Bombs Defined

A dirty bomb is a type of radiological dispersal device (RDD), and RDDs are, as the name implies, devices that disperse a radiological isotope. Depending on the motives of those planning the attack, an RDD could be a low-key weapon that surreptitiously releases aerosolized radioactive material, dumps out a finely powdered radioactive material or dissolves a radioactive material in water. Such surreptitious dispersal methods would be intended to slowly expose as many people as possible to the radiation and to prolong their exposure. Unless large amounts of a very strong radioactive material are used, however, the effects of such an exposure will be limited. People are commonly exposed to heightened levels of radiation during activities such as air travel and mountain climbing. To cause adverse effects, radiation exposure must occur either in a very high dose over a short period or in smaller doses sustained over a longer period. This is not to say that radiation is not dangerous, but rather the idea that the slightest amount of exposure to radiation causes measurable harm is not accurate.

By its very nature, the RDD is contradictory. Maximizing the harmful effects of radiation involves maximizing the exposure of the victims to the highest possible concentration of a radioisotope. When dispersing the radioisotope, by definition and design the RDD dilutes the concentration of the radiation source, spreading smaller amounts of radiation over a larger area. Additionally, the use of an explosion to disperse the radioisotope alerts the intended victims, who can then evacuate the affected area and be decontaminated. These factors make it very difficult for an attacker to administer a deadly dose of radiation via a dirty bomb.

It is important to note that a dirty bomb is not a nuclear device, and no nuclear reaction occurs. A dirty bomb will not produce an effect like the nuclear devices dropped on Hiroshima or Nagasaki. A dirty bomb is quite simply an RDD that uses explosives as the means to disperse a radioactive isotope, and the only blast effect will be from the explosives used to disperse the radioisotope. In a dirty bomb attack, radioactive material not only is dispersed, but the dispersal is accomplished in an obvious manner, and the explosion immediately alerts the victims and authorities that an attack has taken place. The attackers hope that notice of their attack will cause mass panic — in other words, the RDD is a weapon of fear and terror.

The radioisotopes that can be used to construct an RDD are fairly common. Even those materials considered by many to be the most likely to be used in an RDD, such as cobalt-60 and cesium-137, have legitimate medical, commercial and industrial uses. Organizations such as the International Atomic Energy Agency warn that such radioisotopes are readily available to virtually any country in the world, and they are almost certainly not beyond the reach of even moderately capable non-state actors. Indeed, given the ease of obtaining radiological isotopes and the ease with which a dirty bomb can be constructed, we are surprised that we have not seen one successfully used in a terror attack. We continue to believe that it is only a matter of time before a dirty bomb is effectively employed somewhere. Because of this, let’s examine what effectively employing a dirty bomb means.

Dirty Bomb Effectiveness

Like a nonexplosive RDD, unless a dirty bomb contains a large amount of very strong radioactive material, the effects of the device are not likely to be immediate and dramatic. In fact, the explosive effect of the RDD is likely to kill more people than the device’s radiological effect. This need for a large quantity of a radioisotope not only creates the challenge of obtaining that much radioactive material, it also means that such a device would be large and unwieldy — and therefore difficult to smuggle into a target such as a subway or stadium.

In practical terms, a dirty bomb can produce a wide range of effects depending on the size of the improvised explosive device (IED) and the amount and type of radioactive material involved. (Powdered radioisotopes are easier to disperse than materials in solid form.) Environmental factors such as terrain, weather conditions and population density would also play an important role in determining the effects of such a device.

Significantly, while the radiological effects of a dirty bomb may not be instantly lethal, the radiological impact of an RDD will in all likelihood affect an area larger than the killing radius of the IED itself, and will persist for far longer. The explosion from a conventional IED is over in an instant, but radiation released by a RDD can persist for decades unless the area is decontaminated. While the radiation level may not be strong enough to affect people exposed briefly in the initial explosion, the radiation will persist in the contaminated area, and the cumulative effects of such radiation could prove very hazardous. (Here again, the area contaminated and the ease of decontamination will depend on the type and quantity of the radioactive material used. Materials in a fine powdered form are easier to disperse and harder to clean up than solid blocks of material.) In either case, it will be necessary to evacuate people from the contaminated area, and people will need to stay out of the area until it can be decontaminated, a process that could prove lengthy and expensive.

Therefore, while a dirty bomb is not truly a WMD like a nuclear device, we frequently refer to them as “weapons of mass disruption” or “weapons of mass dislocation” because they may temporarily render contaminated areas uninhabitable. The expense of decontaminating a large, densely populated area, such as a section of London or Washington, is potentially quite high. This cost would also make a dirty bomb a type of economic weapon.

Historical Precedents

The world has not yet witnessed a successful dirty bomb attack by a terrorist or militant group. That does not necessarily mean that militant groups have not been interested in radiological weapons, however. Chechen militants have perhaps been the most active in the realm of radioactive materials. In November 1995, Chechen militants under the command of Shamil Basayev placed a small quantity of cesium-137 in Moscow’s Izmailovsky Park. Rather than disperse the material, however, the Chechens used the material as a psychological weapon by directing a TV news crew to the location and thus creating a media storm and fostering public fear. The material in this incident was thought to have been obtained from a nuclear waste or isotope storage facility in the Chechen capital of Grozny.

In December 1998, the pro-Russian Chechen Security Service announced it had found a dirty bomb consisting of a land mine combined with radioactive materials next to a railway line frequently used to transport Russian troops. It is believed that Chechen militants planted the device. In September 1999, two Chechen militants who attempted to steal highly radioactive materials from a chemical plant in Grozny were incapacitated after carrying the container for only a few minutes each; one reportedly died. This highlights another difficulty with producing a really effective dirty bomb: The strongest radioactive material is dangerous to handle, and even a suicide operative might not be able to move and employ it before being overtaken by its effects.

Still, none of these Chechen incidents really provided a very good example of what a dirty bomb detonation would actually look like. To do this, we need to look at incidents where radiological isotopes were dispersed by accident. In 1987, in Goiania, Brazil, a tiny radiotherapy capsule of cesium chloride salt was accidentally broken open after being salvaged from a radiation therapy machine left at an abandoned health care facility. Over the course of 15 days, the capsule containing the radioisotope was handled by a number of people who were fascinated by the faint blue glow it gave off. Some victims reportedly even smeared the substance on their bodies. The radiation was then dispersed by these people to various parts of the surrounding neighborhood, and some of it was even taken to nearby towns. In all, more than 1,000 people were contaminated during the incident and some 244 were found to have significant radioactive material in or on their bodies. Still, only four people died from the incident, and most of those who died had sustained exposure to the contamination. In addition to the human toll, the cleanup operation in Goiania cost more than $100 million, as many houses had to be razed and substantial quantities of contaminated soil had to be removed from the area.

In a more recent case involving a scrap dealer, this time in a slum outside New Delhi, India, eight people were admitted to the hospital because of radiation exposure after a scrap dealer dismantled an object containing cobalt-60. The material apparently arrived at a scrap shop March 12, and the owner of the shop was admitted to the hospital April 4 suffering from radiation-poisoning symptoms (again another case involving prolonged exposure to a radiation source). The radiation source was found at the scrap yard April 5 and identified as cobalt-60. Indian authorities hauled away eight piles of contaminated scrap. The cleanup operation was easier in the Indian incident, since the radioactive material was in metallic form and found in larger pieces rather than in powdered form seen in the cesium in Goiania. Intriguingly, a nearby scrap shop also was found to be contaminated April 16, but it appears from initial reports that the second site was contaminated by a second radioactive source that contained a weaker form of cobalt-60. Though we are watching for additional details on this case, so far, despite the long-term exposure to a potent radioactive source, no deaths have been reported.

At the other end of the spectrum from the Goiania and New Delhi accidents is the 1986 Chernobyl nuclear disaster in northern Ukraine, when a 1-gigawatt power reactor exploded. It is estimated that more than one hundred times the radiation of the Hiroshima bomb was released during the accident — the equivalent of 50 million to 250 million grams of radium. More than 40 different radioisotopes were released, and there was a measurable rise in cesium-137 levels across the entire European continent. No RDD could ever aspire to anything close to such an effect.

Chernobyl wrought untold suffering, and estimates suggest that it may ultimately contribute to the deaths of 9,000 people. But many of those affected by the radiation are still alive more than 20 years after the accident. While STRATFOR by no means seeks to downplay the tragic human or environmental consequences of this disaster, the incident is instructive when contemplating the potential effects of a dirty bomb attack. In spite of the incredible amounts of radioactive material released at Chernobyl, only 31 people died in the explosion and immediate aftermath. Today, 5.5 million people live in the contaminated zone — many within or near the specified EU dosage limits for people living near operational nuclear power plants.

It is this type of historical example that causes us to be so skeptical regarding claims that a small dirty bomb will cause hundreds or even thousands of deaths. Instead, the most strategic consequences of this sort of destruction are economic. By some estimates, the Chernobyl disaster will ultimately cost well in excess of $100 billion. Again, in our opinion, a dirty bomb should be considered a weapon of disruption — one that will cause economic loss, but would not cause mass casualties or any real mass destruction.

Fighting Panic

Analytically, based upon the ease of manufacture and the historical interest by militants in dirty bombs — which ironically may in part be due to the way the RDD threat has been hyped — it is only a matter of time before militants successfully employ one. Since the contamination created by such a device can be long-lasting, more rational international actors probably would prefer to detonate such a device against a target outside their own country. In other words, they would lean toward attacking a target within the United States or United Kingdom rather than the U.S. or British embassies in their home country.

And since it is not likely to produce mass casualties, a dirty bomb attack would likely be directed against a highly symbolic target — such as one representing the economy or government — and designed to cause the maximum amount of disruption at the target site. Therefore, it is not out of the question to imagine such an attack aimed at a target such as Wall Street or the Pentagon. The device would not destroy these sites, but would limit access to them for as long as it took to decontaminate them.

As noted above, we believe it is possible that the panic caused by a dirty bomb attack could well kill more people than the device itself. People who understand the capabilities and limitations of dirty bombs are less likely to panic than those who do not, which is the reason for this analysis. Another important way to help avoid panic is to carefully think about such an incident in advance and to put in place a carefully crafted contingency plan for your family and business. Contingency plans are especially important for those who work in proximity to a potential dirty bomb target. But they are useful in any disaster, whether natural or man-made, and something that should be practiced by all families and businesses. Such knowledge and planning provide people with the ability to conduct an orderly and methodical evacuation of the affected area. This allows them to minimize their exposure to radioactivity while also minimizing their risk of injury or death due to mass hysteria. For while a dirty bomb attack could well be messy and disruptive, it does not have to be deadly.

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The Importance of Personal Contingency Plans for Emergencies

26. April 2010 by admin.

The alert raised in Washington, D.C., on May 10 when a light plane mistakenly flew into restricted airspace sent thousands of people fleeing from the U.S. Capitol and the White House. Once the buildings were evacuated, however, most people were unsure of where to go or what to do.

The confusion highlights the need for personal contingency plans in the event of a terrorist attack, accident or natural disaster. This is especially important for those living or working in major cities, such as New York, Los Angeles and Washington, D.C. The large numbers of people crowded into small areas and the limited escape routes make those in major cities vulnerable to panic and confusion during a mass evacuation or other emergency.

Government security agencies and private businesses have developed plans for evacuating public buildings, hotels and office buildings in the event of an emergency. Many buildings in New York City, for example, have assembled emergency kits — including a blanket, flashlight, whistle, non-perishable foodstuffs, water and, in some cases, smoke hoods — that they make available to occupants in the event of an evacuation. In most cases, however, the responsibility of building operators and security agencies ends once the buildings are evacuated. Indeed, little thought is given to what happens to the occupants once the buildings are empty.

At the very least, those who have developed a plan will be less panicked and confused than those who have left their fate to chance. Perhaps the best reason for having a personal plan, however, is to reduce one’s own endangerment. Jihadists who likely followed the May 10 event in Washington, D.C., could have gained information from this false alarm on points of vulnerability, and could use the knowledge in a possible future attempt to stage attacks in the D.C. area. For instance, a plane could be sent as a decoy to set in motion the mass evacuation. Then, when a large mass of people gathers in the streets, a bomb could be detonated, causing heavy casualties.

Personal protection details and others responsible for the security of executives and VIPs should develop contingency plans for the home office, and for occasions on which the executive is traveling. When designing such a plan, it is best to assume that communications will be interrupted or unavailable. In addition, similar considerations should be given to the potential lack of public transportation and electricity. If ground transportation is available, a nearby safe haven outside the city should be pre-arranged and equipped for a lengthy stay. Other people can make personal plans tailored to their particular situation.

It is important to recognize that even a good contingency plan can be worthless if protective measures taken by authorities during an emergency impede execution of the plan. For example, bridges and tunnels might be closed, and streets blocked off or jammed with traffic, meaning one might not be able to travel to safety or to pick up family members or coworkers. Those whose plan calls for a flight out of the city might be unable to get to the airport or helipad and, once there, find that air traffic has been grounded, as happened after the Sept. 11 attacks. For these reasons, it is best to have several alternate contingency plans that account for multiple scenarios and include various evacuation routes. Once the emergency is announced, it likely is too late to start devising a plan.

When an employee is traveling, the plan also should be coordinated with the home office, so executives will have a basic idea as to the location of that person and of what is being done in the affected city. Even if movement and communication are impossible, having a plan that has been coordinated with the home office will be better than reacting to events as they happen.

Coordinating these plans with coworkers and family members also will ease a great deal of stress, especially if the plan includes pre-arranged meeting points in the event that the office or home is affected by the emergency. The Department of Homeland Security maintains a Web site atwww.ready.gov that can assist private citizens and businesses in developing such a plan.

Should a real emergency arise, situational awareness is the first step in dealing with the threat or in making an escape. Those who want to make the best of an emergency will quickly assess the situation, determine which contingency plan will work best — and act.

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The Making of a Greek Tragedy

25. April 2010 by admin.

The Making of a Greek Tragedy

April 23, 2010 

GREECE HAS NOT HAD MANY GOOD DAYS in 2010, but Thursday was a particularly bad day. First, Europe’s statistical office (Eurostat) revised up the Greek 2009 budget deficit, which placed Athens’ accounting shenanigans in the spotlight again. The bottom line is that the situation is even worse than previously thought, and the budget deficit may very well be adjusted up as more Greek accounting malfeasance comes to light. Following the announcement, credit rating agency Moody’ s dropped Greece’s credit rating one notch, immediately prompting a rise in Greek government bond yields, thus increasing Athens’ borrowing costs.

The yield on a Greek 10-year bond shot above nine percent, while a two-year bond rose above 11 percent, both record highs since Greece joined the eurozone. Particularly daunting is the fact that short-term debt financing is now more expensive than long-term funding. This situation is referred to as an “inverted yield curve,” and it is generally considered a harbinger of financial doom. This means that investors are sensing that Athens is more likely to experience problems sooner rather than later.

Higher yields mean that Greece is facing increasingly larger interest payments on an increasingly larger stock of debt. This all but confirms that Athens’ claim that its stock of public debt will peak at 120 percent of gross domestic product (GDP) is simply wishful thinking. Worse still, Greece is also facing continued economic recession, induced in part by Athens’ austerity measures designed to reduce its budget deficit. Given this vicious dynamic, we cannot see how Greece’s debt level will stabilize at anything below 150 percent of GDP range.

The point is that the financial writing is now on the proverbial wall; some form of default is simply unavoidable. Exactly how the Greek default will unfold is unclear, but the bottom line is that the question now is not “if” but “when.” Under “normal” circumstances, when the IMF becomes involved with a country in a situation similar to Greece’s, the standard procedure is to devalue the local currency. By lowering the relative prices within the economy, the devaluation increases the competitiveness of the country’s export sector and helps to reorient the economy toward external demand. Devaluation is also politically expedient because regaining competitiveness does not require employers to slash employees’ wages, as the devaluation adjusts the relative costs silently and discreetly.

However, Greece does not have the option of devaluation because it is locked into a monetary union. The eurozone’s monetary policy is controlled by the Frankfurt-based European Central Bank. The fact that Greece is locked in the “euro straitjacket” raises two questions, the first being how the Greek debt crisis will play out.

Without the option of devaluation, the Greeks will have to implement and endure draconian austerity measures — in addition to the ones it has already enacted — similar to what Latvia and Argentina endured as part of their IMF programs. Argentina in 2000 and Latvia in 2008 also could not go the currency devaluation route because neither country controlled its monetary policy. In Argentina’ s case, the austerity measures were so severe that they caused considerable social unrest — including a brief period of outright anarchy in late 2001, which saw the country go through five heads of government in about two weeks — ultimately culminating in the country’s partial debt default in 2002. To this day, Argentina is still dealing with the fallout of that financial calamity.

An EU-IMF bailout of Greece would ultimately give Athens the choice of becoming either an Argentina or a Latvia. A financial assistance program that does not involve substantial structural reform on Greece’s part would lead to a default a la Argentina. A bailout that forces Greece to get serious about reforms would mean Greece becomes an IMF-ward like Latvia, with default still a serious possibility down the line. In either case, Greece will essentially lose control over its destiny.Latvia is a case of more recent vintage. In late 2008, Latvia agreed to what the IMF itself has called one of the most severe austerity programs since the 1970s. To accomplish it, Latvia has done everything from slashing public sector wages by 25 to 40 percent, increasing taxes, reducing unemployment and maternity benefits and cutting the defense budget. The crisis has already cost the Latvian prime minister his job and stoked social unrest. Despite all of that, the budget deficit has not budged much, remaining around eight percent of the GDP mark. Spending has been cut to the bone, but Latvia is simply too small of an economy to emerge from recession on its own. Since the broader European economic recovery remains moribund at best, less government spending has translated directly to less growth. Less growth means less tax income, and less tax income means that the country’ s budget deficit remains stubbornly high. Latvia has essentially become a ward of the IMF, and will remain so until either the broader European economic recovery is more robust or the Baltic state is fast-tracked into the eurozone itself.

The next question is what the rest of Europe will look like, and there is no shortage of impacts. Europe, and Germany in particular, must decide whether and to what extent it should “bail out” the Greeks. How that might happen is now the topic of the day in Europe. Driving the urgency is this simple fact: In the absence of substantial (and subsidized) financial assistance, Greece will inevitably default on its debts, thus generating write-downs for all those who hold Greek government debt (mostly European banks). The Greek default therefore is no longer an isolated problem, but a problem that threatens to aggravate an already weakened European banking sector. One of the most misunderstood facts of the international financial world is that even at the peak of the U.S. subprime crisis, in the dark hours when American hedge funds seemed to be snapping like matchsticks, Europe’s banks were in even worse shape. As the Americans stabilized, so did their banks. But Europe never cleaned house, and now a Greek tsunami is poised to wash over the whole mess.

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What Every American Needs To Know About Jihad & Terrorism

25. April 2010 by admin.

The LONG TERM goal of jihad is world domination – a global Islamic state under Islamic law.

Jihad is not, as some Western apologists claim, simply a striving for individual perfection. Rather, jihad is an expansionist totalitarian ideology that seeks to establish a global Islamic state ruled by Islamic law, or sharia. Dr. Ayman al-Zawahiri, Osama bin Laden’s chief henchman said in the summer of 2006: “Jihad seeks the liberation of Palestine, the entire country of Palestine and to liberate every land that used to be a territory of Islam, from Spain to Iraq.”

 

The jihad’s IMMEDIATE Objective is “Death to America.”America,” declared Al-Qaeda spokesman Suleiman Abu Gheith, “is the head of heresy in our modern world, and [as a result] . . . we have the right to kill 4 million Americans — 2 million of them children — and to exile twice as many and wound and cripple hundreds of thousands. Furthermore, it is our right to fight them with chemical and biological weapons.” The Saudi Sheikh Nasser ibn Hamed gives an even higher figure for appropriate American deaths: “If a bomb was dropped on them [i.e. the Americans] that would annihilate 10 million and burn their lands to the same extent that they burned the Muslim lands – this is permissible….” Jihad demands the killing of “infidels” or their subjugation under Islamic law.

Since the time of the Prophet Muhammad jihad has offered three choices to the non-Muslim: conversion to Islam, submission under Islamic rule, or death. One manual of Islamic law states that if “the infidels” do not convert, “it is then incumbent on the Muslims to call upon God for assistance, and to make war upon them.”

 

The jihad kills women.

Jihadis believe, among other things, that women are inferior to men, and must be ruled by them; that a son’s inheritance should be twice the size of that of a daughter; that a husband should beat a disobedient wife; that adulterous or lewd women can be eliminated in “honor killings.”.

 

Jihad calls for the extermination of the Jews.In a Friday sermon in Gaza that was broadcast live on official Palestinian Authority television, Sheikh Ahmad Abu Halabiya summed up jihadis’ attitudes toward the Jews: “Have no mercy on [them], no matter where they are, in any country. Fight them, wherever you are. Wherever you meet them, kill them. Wherever you are, kill those Jews and those Americans who are like them…”

Hassan Nasrallah, leader of Hizballah, takes the anti Semitism of jihad a step further, calling Jews “grandsons of apes and pigs” and cautioning that they are “a cancer which is liable to spread again at any moment.”

 

JIHAD KILLS GAYSJust before the 9/11 terrorist attacks, Afghanistan’s Taliban regime punished two men convicted of homosexuality. The Taliban’s Islamic jurists had no doubt that death was the proper punishment. The only question was how to carry out the execution. One group of scholars believed that the homosexuals should be taken to the top of the highest building in the city, and hurled to their deaths. The other recommended that a pit be dug near a wall somewhere, the two men put in it, and the wall toppled so that they were buried alive. The jihad is not about American policy towards Israel or about israel’s policy towards the palestinians.Many, particularly on the American Left, believe that if the U.S. decreases its support for Israel, and if Israel surrenders further territory, jihad violence will cease. This is as naïve as it is untrue. The Muslim Brotherhood, for instance, the first modern Islamic terrorist organization and the direct ancestor of Hamas and Al-Qaeda, was founded in 1928 – twenty years before the founding of the State of Israel. Mahmoud Zahar, the Hamas Foreign Minister, says: “Even if the U.S. gave us all its money in return for recognizing Israel and giving up one inch of Palestine, we would never do so even if this costs us our lives.” The jihad is not the result of Islamists’ current grievances about Afghanistan, Iraq or other hotspots in the Middle East.The international media focus on conflict in Israel, Iraq and Afghanistan, but the jihad continues in a lower key and largely out of sight on a daily basis in places such as Indonesia, the Philippines, Thailand, the Indian state of Jammu and Kashmir, Chechnya, the Balkans, and Nigeria, to say nothing of the “soft jihad“ being waged in Europe.

There is nowhere in the world where one can escape the jihad. Wherever Muslims are found, which is in almost every country on the planet, there are adherents of the ideology of jihad.

 

The jihad subverts democratic institutions.Jihadis in Europe have been forthright about their intentions. In England, for instance, Sheikh Omar Bakri Muhammad, has said that the transformation of Britain into an Islamic state could come about by means of an “invasion [from] without.” But if this doesn’t happen, Bakri says that jihadis will convert the West to Islam “through ideological invasion …”  

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Geopolitics of Russia: A Permanent Struggle

25. April 2010 by admin.

Geopolitics of Russia: A Permanent Struggle

 

Russia’s defining characteristic is its indefensibility. Unlike the core of most states that are relatively defensible, core Russia is limited to the region of the medieval Grand Principality of Muscovy. It counts no rivers, oceans, swamps or mountains marking its borders — it relies solely on the relatively inhospitable climate and its forests for defense. Russian history is a chronicle of the agony of surviving invasion after invasion.

Traditionally these invasions have come from two directions. The first is from the steppes — wide open grasslands that connect Russia to Central Asia and beyond — the path that the Mongols used. The second is from the North European Plain, which brought to Russia everything from the Teutonic Knights to the Nazi war machine.

 

 

To deal with these vulnerabilities, Russia expanded in three phases. In the first, Russia expanded not toward the invasion corridors to establish buffers but away from them to establish a redoubt. In the late 15th century, under Ivan III, Russia did creep westward somewhat, anchoring itself at the Pripet Marshes, which separated Russia from the Kiev region. But the bulk of Russia’s expansion during that period was north to the Arctic and northeast to the Urals. Very little of this territory can be categorized as useful — most was taiga or actual tundra and only lightly populated — but for Russia it was the only land easily up for grabs. It also marked a natural organic outgrowth of the original Muscovy — all cloaked in forest. It was as defensible a territory as Russia had access to and their only hope against the Mongols.

 

The Mongols were horsemen who dominated the grasslands with their fast-moving cavalry forces. Their power, although substantial, diminished when they entered the forests and the value of their horses, their force multipliers, declined. The Mongols had to fight infantry forces in the forests, where the advantage was on the defender’s side.

 

 

The second phase of expansion was far more aggressive — and risky. In the mid-16th century, Under Ivan IV, Russia finally moved to seal off the Mongol invasion route. Russia pushed south and east, deep into the steppes, and did not stop until it hit the Urals in the east and the Caspian Sea and Caucasus Mountains in the south. As part of this expansion, Russia captured several strategically critical locations, including Astrakhan on the Caspian, the land of the Tatars — a longtime horse-mounted foe — and Grozny, which was soon transformed into a military outpost at the foot of the Caucasus.

 

Also with this expansion, Ivan IV was transformed from Grand Prince of Moscow to Tsar of All Russia, suggesting the empire to come. Russia had finally achieved a measure of conventional security. Holding the northern slopes of the Caucasus would provide a reasonable defense from Asia Minor and Persia, while the millions of square kilometers of steppes gave birth to another defensive strategy: buffers.

Russia — modern, medieval or otherwise — cannot count on natural features to protect it. The Pripet Marshes were small and could in many cases simply be avoided. There is no one who might wish to attack from the Arctic. Forests slowed the Mongol horsemen, but as Muscovy’s predecessor — Kievan Rus — aptly demonstrated, the operative word was “slowed,” not “stopped.” The Mongols conquered and destroyed Kievan Rus in the 13th century.

 

That leaves buffers. So long as a country controls territory separating itself from its foes — even if it is territory that is easy for a hostile military to transit — it can bleed out any invasion via attrition and attacks on supply lines. Such buffers, however, contain a poison pill. They have populations not necessarily willing to serve as buffers. Maintaining control of such buffers requires not only a sizable standing military for defense but also a huge internal security and intelligence network to enforce central control. And any institution so key to the state’s survival must be very tightly controlled as well. Establishing and maintaining buffers not only makes Russia seem aggressive to its neighbors but also forces it to conduct purges and terrors against its own institutions in order to maintain the empire.

 

The third expansion phase dealt with the final invasion route: from the west. In the 18th century, under Peter and Catherine the Great, Russian power pushed westward, conquering Ukraine to the southwest and pushing on to the Carpathian Mountains. It also moved the Russian border to the west, incorporating the Baltic territories and securing a Russian flank on the Baltic Sea. Muscovy and the Tsardom of Russia were now known as the Russian Empire.

 

Yet aside from the anchor in the Carpathians, Russia did not achieve any truly defensible borders. Expansions to the Baltic and Black Seas did end the external threat from the Cossacks and Balts of ages past, but at the price of turning those external threats into internal ones. Russia also expanded so far and fast that holding the empire together socially and militarily became a monumental and ongoing challenge (today Russia is dealing with the fact that Russians are barely a majority in their own country). All this to achieve some semblance of security by establishing buffer regions.

 

But that is an issue of empire management. Ultimately the multi-directional threat defined Muscovy’s geopolitical problem. There was a constant threat from the steppes, but there was also a constant threat from the west, where the North European Plain allowed for few natural defenses and larger populations could deploy substantial infantry (and could, as the Swedes did, use naval power to land forces against the Muscovites). The forests provided a degree of protection, as did the sheer size of Russia’s holdings and its climate, but in the end the Russians faced threats from at least two directions. In managing these threats by establishing buffers, they were caught in a perpetual juggling act: east vs. west, internal vs. external.

 

The geography of the Russian Empire bequeathed it certain characteristics. Most important, the empire was (and remains) lightly settled. Even today, vast areas of Russia are unpopulated while in the rest of the country the population is widely distributed in small towns and cities and far less concentrated in large urban areas. Russia’s European part is the most densely populated, but in its expansion Russia both resettled Russian ethnics and assimilated large minorities along the way. So while Moscow and its surroundings are certainly critical, the predominance of the old Muscovy is not decisively ironclad.

 

 

The result is a constant, ingrained clash within the Russian Empire no matter the time frame, driven primarily by its size and the challenges of transport. The Russian empire, even excluding Siberia, is an enormous landmass located far to the north. Moscow is at the same latitude as Newfoundland while the Russian and Ukrainian breadbaskets are at the latitude of Maine, resulting in an extremely short growing season. Apart from limiting the size of the crop, the climate limits the efficiency of transport — getting the crop from farm to distant markets is a difficult matter and so is supporting large urban populations far from the farms. This is the root problem of the Russian economy. Russia can grow enough to feed itself, but it cannot efficiently transport what it grows from the farms to the cities and to the barren reaches of the empire before the food spoils. And even when it can transport it, the costs of transport make the foodstuffs unaffordable.

 

Population distribution also creates a political problem. One natural result of the transport problem is that the population tends to distribute itself nearer growing areas and in smaller towns so as not to tax the transport system. Yet these populations in Russia’s west and south tend to be conquered peoples. So the conquered peoples tend to distribute themselves to reflect economic rationalities, while need for food to be transported to the Russian core goes against such rationalities.

 

Faced with a choice of accepting urban starvation or the forcing of economic destitution upon the food-producing regions (by ordering the sale of food in urban centers at prices well below market prices), Russian leaders tend to select the latter option. Joseph Stalin certainly did in his efforts to forge and support an urban, industrialized population. Force-feeding such economic hardship to conquered minorities only doubled the need for a tightly controlled security apparatus.

 

The Russian geography meant that Russia either would have a centralized government — and economic system — or it would fly apart, torn by nationalist movements, peasant uprisings and urban starvation. Urbanization, much less industrialization, would have been impossible without a strong center. Indeed, the Russian Empire or Soviet Union would have been impossible. The natural tendency of the empire and Russia itself is to disintegrate. Therefore, to remain united it had to have a centralized bureaucracy responsive to autocratic rule in the capital and a vast security apparatus that compelled the country and empire to remain united. Russia’s history is one of controlling the inherently powerful centrifugal forces tearing at the country’s fabric.

 

Russia, then, has two core geopolitical problems. The first is holding the empire together. But the creation of that empire poses the second problem, maintaining internal security. It must hold together the empire and defend it at the same time, and the achievement of one goal tends to undermine efforts to achieve the other.

Geopolitical Imperatives

To secure the Russian core of Muscovy, Russia must:

• Expand north and east to secure a redoubt in climatically hostile territory that is protected in part by the Urals. This way, even in the worst-case scenario (i.e., Moscow falls), there is still a “Russia” from which to potentially resurge.
• Expand south to the Caucasus and southeast into the steppes in order to hamper invasions of Asian origin. As circumstances allow, push as deeply into Central Asia and Siberia as possible to deepen this bulwark.
• Expand as far west as possible. Do not stop in the southwest until the Carpathians are reached. On the North European Plain do not stop ever. Deeper penetration increases security not just in terms of buffers; the North European Plain narrows the further west one travels making its defense easier.
• Manage the empire with terror. Since the vast majority of Russian territory is not actually Russian, a very firm hand is required to prevent myriad minorities from asserting regional control or aligning with hostile forces.
• Expand to warm water ports that have open-ocean access so that the empire can begin to counter the economic problems that a purely land empire suffers.

Given the geography of the Russian heartland, we can see why the Russians would attempt to expand as they did. Vulnerable to attack on the North European Plain and from the Central Asian and European steppes simultaneously, Russia could not withstand an attack from one direction — much less two. Apart from the military problem, the ability of the state to retain control of the country under such pressure was dubious, as was the ability to feed the country under normal circumstances — much less during war. Securing the Caucasus, Central Asia and Siberia was the first — and easiest — part of dealing with this geographic imbroglio.

 

The western expansion was not nearly so “simple.” No matter how far west the Russians moved on the European plain, there was no point at which they could effectively anchor themselves. Ultimately, the last effective line of defense is the 400 mile gap (aka Poland) between the Baltic Sea and Carpathian Mountains. Beyond that the plains widen to such a degree that a conventional defense is impossible as there is simply too much open territory to defend. So the Soviet Union pressed on all the way to the Elbe.

 

At its height, the Soviet Union achieved all but its final imperative of securing ocean access. The USSR was anchored on the Carpathians, the Black Sea, the Caucasus and the Urals, all of which protected its southern and southwestern flanks. Siberia protected its eastern frontier with vast emptiness. Further to the south, Russia was anchored deeply in Central Asia. The Russians had defensible frontiers everywhere except the North European Plain, ergo the need to occupy Germany and Poland.

Strategy of the Russian Empire

The modern Russian empire faces three separate border regions: Asian Siberia, Central Asia and the Caucasus (now mostly independent states), and Western Europe.

 

First, Siberia. There is only one rail line connecting Siberia to the rest of the empire, and positioning a military force there is difficult if not impossible. In fact, risk in Russia’s far east is illusory. The Trans-Siberian Railroad (TSR) runs east-west, with the Baikal Amur Mainline forming a loop. The TSR is Russia’s main lifeline to Siberia and is, to some extent, vulnerable. But an attack against Siberia is difficult — there is not much to attack but the weather, while the terrain and sheer size of the region make holding it not only difficult but of questionable relevance. Besides, an attack beyond it is impossible because of the Urals.

 

East of Kazakhstan, the Russian frontier is mountainous to hilly, and there are almost no north-south roads running deep into Russia; those that do exist can be easily defended, and even then they dead-end in lightly populated regions. The period without mud or snow lasts less than three months out of the year. After that time, overland resupply of an army is impossible. It is impossible for an Asian power to attack Siberia. That is the prime reason the Japanese chose to attack the United States rather than the Soviet Union in 1941. The only way to attack Russia in this region is by sea, as the Japanese did in 1905. It might then be possible to achieve a lodgment in the maritime provinces (such as Primorsky Krai or Vladivostok). But exploiting the resources of deep Siberia, given the requisite infrastructure costs, is prohibitive to the point of being virtually impossible.

 

 

We begin with Siberia in order to dispose of it as a major strategic concern. The defense of the Russian Empire involves a different set of issues.

Second, Central Asia. The mature Russian Empire and the Soviet Union were anchored on a series of linked mountain ranges, deserts and bodies of water in this region that gave it a superb defensive position. Beginning on the northwestern Mongolian border and moving southwest on a line through Kyrgyzstan and Tajikistan, the empire was guarded by a north extension of the Himalayas, the Tien Shan Mountains. Swinging west along the Afghan and Iranian borders to the Caspian Sea, the empire occupied the lowlands along a mountainous border. But the lowlands, except for a small region on the frontier with Afghanistan, were harsh desert, impassable for large military forces. A section along the Afghan border was more permeable, leading to a long-term Russian unease with the threat in Afghanistan — foreign or indigenous. The Caspian Sea protected the border with Iran, and on its western shore the Caucasus Mountains began, which the empire shared with Iran and Turkey but which were hard to pass through in either direction. The Caucasus terminated on the Black Sea, totally protecting the empire’s southern border. These regions were of far greater utility to Russia than Siberia and so may have been worth taking, but for once geography actually helped Russia instead of working against it.

 

Finally, there is the western frontier that ran from west of Odessa north to the Baltic. This European frontier was the vulnerable point. Geographically, the southern portion of the border varied from time to time, and where the border was drawn was critical. The Carpathians form an arc from Romania through western Ukraine into Slovakia. Russia controlled the center of the arc in Ukraine. However, its frontier did not extend as far as the Carpathians in Romania, where a plain separated Russia from the mountains. This region is called Moldova or Bessarabia, and when the region belongs to Romania, it represents a threat to Russian national security. When it is in Russian hands, it allows the Russians to anchor on the Carpathians. And when it is independent, as it is today in the form of the state of Moldova, then it can serve either as a buffer or a flash point. During the alliance with the Germans in 1939-1941, the Russians seized this region as they did again after World War II. But there is always a danger of an attack out of Romania.

 

This is not Russia’s greatest danger point. That occurs further north, between the northern edge of the Carpathians and the Baltic Sea. This gap, at its narrowest point, is just under 300 miles, running west of Warsaw from the city of Elblag in northern Poland to Cracow in the south. This is the narrowest point in the North European Plain and roughly the location of the Russian imperial border prior to World War I. Behind this point, the Russians controlled eastern Poland and the three Baltic countries.

 

The danger to Russia is that the north German plain expands like a triangle east of this point. As the triangle widens, Russian forces get stretched thinner and thinner. So a force attacking from the west through the plain faces an expanding geography that thins out Russian forces. If invaders concentrate their forces, the attackers can break through to Moscow. That is the traditional Russian fear: Lacking natural barriers, the farther east the Russians move the broader the front and the greater the advantage for the attacker. The Russians faced three attackers along this axis following the formation of empire — Napoleon, Wilhelm II and Hitler. Wilhelm was focused on France so he did not drive hard into Russia, but Napoleon and Hitler did, both almost toppling Moscow in the process.

 

Along the North European Plain, Russia has three strategic options:

1. Use Russia’s geographical depth and climate to suck in an enemy force and then defeat it, as it did with Napoleon and Hitler. After the fact this appears the solution, except it is always a close run and the attackers devastate the countryside. It is interesting to speculate what would have happened in 1942 if Hitler had resumed his drive on the North European Plain toward Moscow, rather than shift to a southern attack toward Stalingrad.

2. Face an attacking force with large, immobile infantry forces at the frontier and bleed them to death, as they tried to do in 1914. On the surface this appears to be an attractive choice because of Russia’s greater manpower reserves than those of its European enemies. In practice, however, it is a dangerous choice because of the volatile social conditions of the empire, where the weakening of the security apparatus could cause the collapse of the regime in a soldiers’ revolt as happened in 1917.

3. Push the Russian/Soviet border as far west as possible to create yet another buffer against attack, as the Soviets did during the Cold War. This is obviously an attractive choice, since it creates strategic depth and increases economic opportunities. But it also diffuses Russian resources by extending security states into Central Europe and massively increasing defense costs, which ultimately broke the Soviet Union in 1992.

Contemporary Russia

The greatest extension of the Russian Empire occurred under the Soviets from 1945 to 1989. Paradoxically, this expansion preceded the collapse of the Soviet Union and the contraction of Russia to its current borders. When we look at the Russian Federation today, it is important to understand that it has essentially retreated to the borders the Russian Empire had in the 17th century. It holds old Muscovy plus the Tatar lands to the southeast as well as Siberia. It has lost its western buffers in Ukraine and the Baltics and its strong foothold in the Caucasus and in Central Asia.

 

To understand this spectacular expansion and contraction, we need to focus on Soviet strategy. The Soviet Union was a landlocked entity dominating the Eurasian heartland but without free access to the sea. Neither the Baltic nor Black seas allow Russia free oceangoing transport because they are blocked by the Skagerrak and the Turkish straits, respectively. So long as Denmark and Turkey remain in NATO, Russia’s positions in St. Petersburg, Kaliningrad, Sevastopol and Novorossiysk are militarily dubious.

 

There were many causes of the Soviet collapse. Some were:

• Overextending forces into Central Europe, which taxed the ability of the Soviet Union to control the region while economically exploiting it. It became a net loss. This overextension created costly logistical problems on top of the cost of the military establishment. Extension of the traditional Russian administrative structure both diffused Russia’s own administrative structure and turned a profitable empire into a massive economic burden.
• Creating an apparent threat to the rest of Europe that compelled the United States to deploy major forces and arm Germany. This in turn forced the Russians into a massive military buildup that undermined its economy, which was less productive than the American economy because of its inherent agricultural problem and because the cost of internal transport combined with the lack of ocean access made Soviet (and Russian) maritime trade impossible. Since maritime trade both is cheaper than land trade and allows access to global markets, the Soviet Union always operated at an extreme economic disadvantage to its Western and Asian competitors.
• Entering an arms race with much richer countries it could compete against only by diverting resources from the civilian economy — material and intellectual. The best minds went into the military-industrial complex, causing the administrative and economic structure of Russia to crumble.

In 1989 the Soviet Union lost control of Eastern Europe and in 1992 the Soviet Union itself collapsed. Russia then retreated essentially to its 17th century borders — except that it retained control of Siberia, which is either geopolitically irrelevant or a liability. Russia has lost all of Central Asia, and its position in the Caucasus has become tenuous. Had Russia lost Chechnya, its eastern flank would have been driven out of the Caucasus completely, leaving it without a geopolitical anchor.

 

 

The gap between Kazakhstan in the east and Ukraine in the west, like the narrowest point in the North European Plain, is only 300 miles wide. It also contains Russia’s industrial heartland. Russia has lost Ukraine, of course, and Moldova. But Russia’s most grievous geopolitical contraction has been on the North European Plain, where it has retreated from the Elbe in Germany to a point less than 100 miles from St. Petersburg. The distance from the border of an independent Belarus to Moscow is about 250 miles.

 

To understand the Russian situation, it is essential to understand that Russia has in many ways returned to the strategic position of late Muscovy. Its flank to the southeast is relatively secure, since China shows no inclination for adventures into the steppes, and no other power is in a position to challenge Russia from that direction. But in the west, in Ukraine and in the Caucasus, the Russian retreat has been stunning.

 

We need to remember why Muscovy expanded in the first place. Having dealt with the Mongols, the Russians had two strategic interests. Their most immediate was to secure their western borders by absorbing Lithuania and anchoring Russia as far west on the North European Plain as possible. Their second strategic interest was to secure Russia’s southeastern frontier against potential threats from the steppes by absorbing Central Asia as well as Ukraine. Without that, Muscovy could not withstand a thrust from either direction, let alone from both directions at once.

It can be said that no one intends to invade Russia. From the Russian point of view, history is filled with dramatic changes of intention, particularly in the West. The unthinkable occurs to Russia once or twice a century. In its current configuration, Russia cannot hope to survive whatever surprises are coming in the 21st century. Muscovy was offensive because it did not have a good defensive option. The same is true of Russia. Given the fact that a Western alliance, NATO, is speaking seriously of establishing a dominant presence in Ukraine and in the Caucasus — and has already established a presence in the Baltics, forcing Russia far back into the widening triangle, with its southern flank potentially exposed to Ukraine as a NATO member — the Russians must view their position as dire. As with Napoleon, Wilhelm and Hitler, the initiative is in the hands of others. For the Russians, the strategic imperative is to eliminate that initiative or, if that is impossible, anchor Russia as firmly as possible on geographical barriers, concentrating all available force on the North European Plain without overextension.

 

Unlike countries such as China, Iran and the United States, Russia has not achieved its strategic geopolitical imperatives. On the contrary, it has retreated from them:

• Russia does hold the northern Caucasus, but it no longer boasts a deep penetration of the mountains, including Georgia and Armenia. Without those territories Russia cannot consider this flank secure.
• Russia has lost its anchor in the mountains and deserts of Central Asia and so cannot actively block or disrupt — or even well monitor — any developments to its deep south that could threaten its security.
• Russia retains Siberia, but because of the climatic and geographic hostility of the region it is almost a wash in terms of security (it certainly is economically).
• Russia’s loss of Ukraine and Moldova allows both the intrusion of other powers and the potential rise of a Ukrainian rival on its very doorstep. Powers behind the Carpathians are especially positioned to take advantage of this political geography.
• The Baltic states have re-established their independence, and all three are east and north of the Baltic-Carpathian line (the final defensive line on the North European Plain). Their presence in a hostile alliance is unacceptable. Neither is an independent or even neutral Belarus (also on the wrong side of that line).

Broader goals, such as having a port not blocked by straits controlled by other countries, could have been pursued by the Soviets. Today such goals are far out of Russian reach. From the Russian point of view, creating a sphere of influence that would return Russia to its relatively defensible imperial boundaries is imperative.

 

Obviously, forces in the peripheral countries as well as great powers outside the region will resist. For them, a weak and vulnerable Russia is preferable, since a strong and secure one develops other appetites that could see Russia pushing along vectors such as through the Skagerrak toward the North Sea, through the Turkish Straits toward the Mediterranean and through La Perouse Strait toward Japan and beyond.

 

Russia’s essential strategic problem is this: It is geopolitically unstable. The Russian Empire and Soviet Union were never genuinely secure. One problem was theNorth European Plain. But another problem, very real and hard to solve, was access to the global trading system via oceans. And behind this was Russia’s essential economic weakness due to its size and lack of ability to transport agricultural produce throughout the country. No matter how much national will it has, Russia’s inherently insufficient infrastructure constantly weakens its internal cohesion.

 

Russia must dominate the Eurasian heartland. When it does, it must want more. The more it wants the more it must face its internal economic weakness and social instability, which cannot support its ambitions. Then the Russian Federation must contract. This cycle has nothing to do with Russian ideology or character. It has everything to do with geography, which in turn generates ideologies and shapes character. Russia is Russia and must face its permanent struggle.

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Geopolitics of Recession

25. April 2010 by admin.

The Geopolitics of Recession

Let’s begin with some simple numbers.The global recession is the biggest development in the global system in the year to date. In the United States, it has become almost dogma that the recession is the worst since the Great Depression. But this is only one of a wealth of misperceptions about whom the downturn is hurting most, and why.As one can see in the chart, the U.S. recession at this point is only the worst since 1982, not the 1930s, and it pales in comparison to what is occurring in the rest of the world. (Figures for China have not been included, in part because of the unreliability of Chinese statistics, but also because the country’s financial system is so radically different from the rest of the world as to make such comparisons misleading. For more, read the China section below.)

                     But didn’t the recession begin in the United States? That it did, but the American system is far more stable, durable and flexible than most of the other global economies, in large part thanks to the country’s geography. To understand how place shapes economics, we need to take a giant step back from the gloom and doom of the current moment and examine the long-term picture of why different regions follow different economic paths.

The United States and the Free Market

The most important aspect of the United States is not simply its sheer size, but the size of its usable land. Russia and China may both be similar-sized in absolute terms, but the vast majority of Russian and Chinese land is useless for agriculture, habitation or development. In contrast, courtesy of the Midwest, the United States boasts the world’s largest contiguous mass of arable land — and that mass does not include the hardly inconsequential chunks of usable territory on both the West and East coasts.Second is the American maritime transport system. The Mississippi River, linked as it is to the Red, Missouri, Ohio and Tennessee rivers, comprises the largest interconnected network of navigable rivers in the world. In the San Francisco Bay, Chesapeake Bay and Long Island Sound/New York Bay, the United States has three of the world’s largest and best natural harbors. The series of barrier islands a few miles off the shores of Texas and the East Coast form a water-based highway — an Intracoastal Waterway — that shields American coastal shipping from all but the worst that the elements can throw at ships and ports.

                            The real beauty is that the two overlap with near perfect symmetry. The Intracoastal Waterway and most of the bays link up with agricultural regions and their own local river systems (such as the series of rivers that descend from the Appalachians to the East Coast), while the Greater Mississippi river network is the circulatory system of the Midwest. Even without the addition of canals, it is possible for ships to reach nearly any part of the Midwest from nearly any part of the Gulf or East coasts. The result is not just a massive ability to grow a massive amount of crops — and not just the ability to easily and cheaply move the crops to local, regional and global markets — but also the ability to use that same transport network for any other economic purpose without having to worry about food supplies.The implications of such a confluence are deep and sustained. Where most countries need to scrape together capital to build roads and rail to establish the very foundation of an economy — transport capability — geography granted the United States a near-perfect system at no cost. That frees up U.S. capital for other pursuits and almost condemns the United States to be capital-rich. Any additional infrastructure the United States constructs is icing on the cake. (The cake itself is free — and, incidentally, the United States had so much free capital that it was able to go on to build one of the best road-and-rail networks anyway, resulting in even greater economic advantages over competitors.)Third, geography has also ensured that the United States has very little local competition. To the north, Canada is both much colder and much more mountainous than the United States. Canada’s only navigable maritime network — the Great Lakes-St. Lawrence Seaway —is shared with the United States, and most of its usable land is hard by the American border. Often this makes it more economically advantageous for Canadian provinces to integrate with their neighbor to the south than with their co-nationals to the east and west.Similarly, Mexico has only small chunks of land, separated by deserts and mountains, that are useful for much more than subsistence agriculture; most of Mexican territory is either too dry, too tropical or too mountainous. And Mexico completely lacks any meaningful river system for maritime transport. Add in a largely desert border, and Mexico as a country is not a meaningful threat to American security (which hardly means that there are not serious and ongoing concerns in the American-Mexican relationship).With geography empowering the United States and hindering Canada and Mexico, the United States does not need to maintain a large standing military force to counter either. The Canadian border is almost completely unguarded, and the Mexican border is no more than a fence in most locations — a far cry from the sort of military standoffs that have marked more adversarial borders in human history. Not only are Canada and Mexico not major threats, but the U.S. transport network allows the United States the luxury of being able to quickly move a smaller force to deal with occasional problems rather than requiring it to station large static forces on its borders.Like the transport network, this also helps the U.S. focus its resources on other things.Taken together, the integrated transport network, large tracts of usable land and lack of a need for a standing military have one critical implication: The U.S. government tends to take a hands-off approach to economic management, because geography has not cursed the United States with any endemic problems. This may mean that the United States — and especially its government — comes across as disorganized, but it shifts massive amounts of labor and capital to the private sector, which for the most part allows resources to flow to wherever they will achieve the most efficient and productive results.Laissez-faire capitalism has its flaws. Inequality and social stress are just two of many less-than-desirable side effects. The side effects most relevant to the current situation are, of course, the speculative bubbles that cause recessions when they pop. But in terms of long-term economic efficiency and growth, a free capital system is unrivaled. For the United States, the end result has proved clear: The United States has exited each decade since post-Civil War Reconstruction more powerful than it was when it entered it. While there are many forces in the modern world that threaten various aspects of U.S. economic standing, there is not one that actually threatens the U.S. base geographic advantages.Is the United States in recession? Of course. Will it be forever? Of course not. So long as U.S. geographic advantages remain intact, it takes no small amount of paranoia and pessimism to envision anything but long-term economic expansion for such a chunk of territory. In fact, there are a number of factors hinting that the United States may even be on the cusp of recovery.

Russia and the State

If in economic terms the United States has everything going for it geographically, then Russia is just the opposite. The Russian steppe lies deep in the interior of the Eurasian landmass, and as such is subject to climatic conditions much more hostile to human habitation and agriculture than is the American Midwest. Even in those blessed good years when crops are abundant in Russia, it has no river network to allow for easy transport of products.

                                                Russia has no good warm-water ports to facilitate international trade (and has spent much of its history seeking access to one). Russia does have long rivers, but they are not interconnected as the Mississippi is with its tributaries, instead flowing north to the Arctic Ocean, which can support no more than a token population. The one exception is the Volga, which is critical to Western Russian commerce but flows to the Caspian, a storm-wracked and landlocked sea whose delta freezes in the winter (along with the entire Volga itself). Developing such unforgiving lands requires a massive outlay of funds simply to build the road and rail networks necessary to achieve the most basic of economic development. The cost is so extreme that Russia’s first ever intercontinental road was not completed until the 21st century, and it is little more than a two-lane path for much of its length. Between the lack of ports and the relatively low population densities, little of Russia’s transport system beyond the St. Petersburg/Moscow corridor approaches anything that hints of economic rationality.Russia also has no meaningful external borders. It sits on the eastern end of the North European Plain, which stretches all the way to Normandy, France, and Russia’s connections to the Asian steppe flow deep into China. Because Russia lacks a decent internal transport network that can rapidly move armies from place to place, geography forces Russia to defend itself following two strategies. First, it requires massive standing armies on all of its borders. Second, it dictates that Russia continually push its boundaries outward to buffer its core against external threats.Both strategies compromise Russian economic development even further. The large standing armies are a continual drain on state coffers and the country’s labor pool; their cost was a critical economic factor in the Soviet fall. The expansionist strategy not only absorbs large populations that do not wish to be part of the Russian state and so must constantly be policed — the core rationale for Russia’s robust security services — but also inflates Russia’s infrastructure development costs by increasing the amount of relatively useless territory Moscow is responsible for.Russia’s labor and capital resources are woefully inadequate to overcome the state’s needs and vulnerabilities, which are legion. These endemic problems force Russia toward central planning; the full harnessing of all economic resources available is required if Russia is to achieve even a modicum of security and stability. One of the many results of this is severe economic inefficiency and a general dearth of an internal consumer market. Because capital and other resources can be flung forcefully at problems, however, active management can achieve specific national goals more readily than a hands-off, American-style model. This often gives the impression of significant progress in areas the Kremlin chooses to highlight.But such achievements are largely limited to wherever the state happens to be directing its attention. In all other sectors, the lack of attention results in atrophy or criminalization. This is particularly true in modern Russia, where the ruling elite comprises just a handful of people, starkly limiting the amount of planning and oversight possible. And unless management is perfect in perception and execution, any mistakes are quickly magnified into national catastrophes. It is therefore no surprise to STRATFOR that the Russian economy has now fallen the furthest of any major economy during the current recession.

China and Separatism

China also faces significant hurdles, albeit none as daunting as Russia’s challenges. China’s core is the farmland of the Yellow River basin in the north of the country, a river that is not readily navigable and is remarkably flood prone. Simply avoiding periodic starvation requires a high level of state planning and coordination. (Wrestling a large river is not the easiest thing one can do.) Additionally, the southern half of the country has a subtropical climate, riddling it with diseases that the southerners are resistant to but the northerners are not. This compromises the north’s political control of the south.Central control is also threatened by China’s maritime geography. China boasts two other rivers, but they do not link to each other or the Yellow naturally. And China’s best ports are at the mouths of these two rivers: Shanghai at the mouth of the Yangtze and Hong Kong/Macau/Guangzhou at the mouth of the Pearl. The Yellow boasts no significant ocean port. The end result is that other regional centers can and do develop economic means independent of Beijing.

                             With geography complicating northern rule and supporting southern economic independence, Beijing’s age-old problem has been trying to keep China in one piece. Beijing has to underwrite massive (and expensive) development programs to stitch the country together with a common infrastructure, the most visible of which is the Grand Canal that links the Yellow and Yangtze rivers. The cost of such linkages instantly guarantees that while China may have a shot at being unified, it will always be capital-poor.Beijing also has to provide its autonomy-minded regions with an economic incentive to remain part of Greater China, and “simple” infrastructure will not cut it. Modern China has turned to a state-centered finance model for this. Under the model, all of the scarce capital that is available is funneled to the state, which divvies it out via a handful of large state banks. These state banks then grant loans to various firms and local governments at below the cost of raising the capital. This provides a powerful economic stimulus that achieves maximum employment and growth — think of what you could do with a near-endless supply of loans at below 0 percent interest — but comes at the cost of encouraging projects that are loss-making, as no one is ever called to account for failures. (They can just get a new loan.) The resultant growth is rapid, but it is also unsustainable. It is no wonder, then, that the central government has chosen to keep its $2 trillion of currency reserves in dollar-based assets; the rate of return is greater, the value holds over a long period, and Beijing doesn’t have to worry about the United States seceding.Because the domestic market is considerably limited by the poor-capital nature of the country, most producers choose to tap export markets to generate income. In times of plenty this works fairly well, but when Chinese goods are not needed, the entire Chinese system can seize up. Lack of exports reduces capital availability, which constrains loan availability. This in turn not only damages the ability of firms to employ China’s legions of citizens, but it also removes the primary reason the disparate Chinese regions pay homage to Beijing. China’s geography hardwires in a series of economic challenges that weaken the coherence of the state and make China dependent upon uninterrupted access to foreign markets to maintain state unity. As a result, China has not been a unified entity for the vast majority of its history, but instead a cauldron of competing regions that cleave along many different fault lines: coastal versus interior, Han versus minority, north versus south.China’s survival technique for the current recession is simple. Because exports, which account for roughly half of China’s economic activity, have sunk by half, Beijing is throwing the equivalent of the financial kitchen sink at the problem. China has force-fed more loans through the banks in the first four months of 2009 than it did in the entirety of 2008. The long-term result could well bury China beneath a mountain of bad loans — a similar strategy resulted in Japan’s 1991 crash, from which Tokyo has yet to recover. But for now it is holding the country together. The bottom line remains, however: China’s recovery is completely dependent upon external demand for its production, and the most it can do on its own is tread water.

Discordant Europe

Europe faces an imbroglio somewhat similar to China’s.Europe has a number of rivers that are easily navigable, providing a wealth of trade and development opportunities. But none of them interlinks with the others, retarding political unification. Europe has even more good harbors than the United States, but they are not evenly spread throughout the Continent, making some states capital-rich and others capital-poor. Europe boasts one huge piece of arable land on the North European Plain, but it is long and thin, and so occupied by no fewer than seven distinct ethnic groups.These groups have constantly struggled — as have the various groups up and down Europe’s seemingly endless list of river valleys — but none has been able to emerge dominant, due to the webwork of mountains and peninsulas that make it nigh impossible to fully root out any particular group. And Europe’s wealth of islands close to the Continent, with Great Britain being only the most obvious, guarantee constant intervention to ensure that mainland Europe never unifies under a single power.Every part of Europe has a radically different geography than the other parts, and thus the economic models the Europeans have adopted have little in common. The United Kingdom, with few immediate security threats and decent rivers and ports, has an almost American-style laissez-faire system. France, with three unconnected rivers lying wholly in its own territory, is a somewhat self-contained world, making economic nationalism its credo. Not only do the rivers in Germany not connect, but Berlin has to share them with other states. The Jutland Peninsula interrupts the coastline of Germany, which finds its sea access limited by the Danes, the Swedes and the British. Germany must plan in great detail to maximize its resource use to build an infrastructure that can compensate for its geographic deficiencies and link together its good — but disparate — geographic blessings. The result is a state that somewhat favors free enterprise, but within the limits framed by national needs.And the list of differences goes on: Spain has long coasts and is arid; Austria is landlocked and quite wet; most of Greece is almost too mountainous to build on; it doesn’t get flatter than the Netherlands; tiny Estonia faces frozen seas in the winter; mammoth Italy has never even seen an icebreaker. Even if there were a supranational authority in Europe that could tax or regulate the banking sector or plan transnational responses, the propriety of any singular policy would be questionable at best.Such stark regional differences give rise to such variant policies that many European states have a severe (and understandable) trust deficit when it comes to any hint of anything supranational. We are not simply taking about the European Union here, but rather a general distrust of anything cross-border in nature. One of the many outcomes of this is a preference for using local banks rather than stock exchanges for raising capital. After all, local banks tend to use local capital and are subject to local regulations, while stock exchanges tend to be internationalized in all respects. Spain, Italy, Sweden, Greece and Austria get more than 90 percent of their financing from banks, the United Kingdom 84 percent and Germany 76 percent — while for the United States it is only 40 percent.And this has proved unfortunate in the extreme for today’s Europe. The current recession has its roots in a financial crisis that has most dramatically impacted banks, and European banks have proved far from immune. Until Europe’s banks recover, Europe will remain mired in recession. And since there cannot be a Pan-European solution, Europe’s recession could well prove to be the worst of all this time around.

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The Afghanistan Campaign, Part 4: The View from Kabul

25. April 2010 by admin.

 The Afghanistan Campaign, Part 4: The View from Kabul

April 20, 2010

 

Amid a surge of Western troops into Afghanistan, a raging Taliban insurgency and Pakistan’s attempts to consolidate its influence in the country, Kabul is being pulled in many directions. The government of Afghan President Hamid Karzai, now at the beginning of its second five-year term, is trying to secure its own future as well as balance the ambitions of other key players, all while preventing the already war-torn country from becoming a proxy battleground.

A growing Taliban insurgency and a surge of U.S. and allied forces into the country are shaking things up in Kabul, Afghanistan’s capital. There, Afghan President Hamid Karzai, now in his second five-year term, has been formally in power since 2002 and in elected office since 2004. After several years of being portrayed as an American lackey, perceived more as the mayor of Kabul than the president of Afghanistan, Karzai has tried to break out of this mold and secure his own political survival. This at a time when the Taliban have emerged as a major force and the United States has made it clear that its commitment to Afghanistan is limited.Karzai’s problems have only escalated since the Obama administration took office. Relations began to sour in the run-up to last year’s Afghan presidential election, when elements in Washington began searching for alternatives to Karzai, who was being criticized for corruption. But with years of experience in managing his country’s many regional warlords, Karzai was able to quickly align with all major ethnic groups and ensure his victory in the election, despite the entire process being marred by charges of fraud.Tensions with Washington throughout the election helped Karzai create his own political space within the country, space that he sought to expand even as U.S. Ambassador to Afghanistan Karl Eikenberry behind the scenes expressed doubts about Karzai’s viability as an effective American partner. In recent weeks, Karzai took his efforts to a different level by accusing the United States of engaging in fraud during the Afghan election, triggering a strong response from Washington. His move paid off. After a couple of weeks of high tensions, senior U.S. officials, including President Barack Obama, moved to ease the strain, calling the Afghan president an ally and partner. With almost all of a second five-year term still ahead of him, Karzai is as much a political reality in the country as the Taliban. 

Objectives and Problems

 The main objective of the current Karzai regime is to maintain as much of the existing political structure as possible and to maximize its position within that structure. This is a system that has been crafted and staffed in large part by Karzai and his inner circle, and thus it bolsters their position disproportionately. But because the Taliban are also a political reality, Kabul must work to achieve meaningful political accommodations that will serve to stabilize the security situation in the countryside.To maximize its leverage, Kabul must do this rapidly. The surge of U.S. forces into the country and the money, aid and advice that the Karzai regime receives will never be more abundant than it is right now, so with his power at its height, Karzai must reach these political accommodations as soon as possible.Meanwhile, Kabul has two main problems. The first is that it has limited means to compel the Taliban to negotiate on the requisite timetable while the Taliban have every incentive to hold out on any meaningful talks. The Karzai government is working with interlocutors (mostly former Taliban officials who still retain influence) to negotiate with the jihadist movement, but the question is the pace at which real progress can be made. At the heart of these negotiations is the question of who speaks for the Pashtuns, Afghanistan’s single largest demographic segment, accounting for more than 40 percent of the country’s population.Nor will political accommodation come cheaply. The Taliban will not be won over with a few Cabinet positions. The current discussions include the need for constitutional change that will allow more room for Islamic law and perhaps an extra-executive religious entity that controls the judiciary. Just how much of a stake the Taliban would have in the government and what shape that stake would take remains to be seen. In any case, it will likely require substantial concessions in Kabul.  

 

 The second problem is that Kabul’s efforts to negotiate with the Taliban are being pulled and manipulated from all sides. This is the real challenge for the current regime — balancing all the outside players who are trying to shape the negotiations. Kabul needs to prevent the already fractious and war-torn country from becoming a proxy battleground for the United States and Iran or Pakistan and India (among other countries). The difficulty of maintaining this balancing act — while also maintaining local support — is increasing by the day.Kabul’s closest allies are the United States and the NATO-led International Security Assistance Force (ISAF). Although Washington and Kabul do not always see eye to eye, and Karzai is trying to distance himself from the United States in order to downplay the puppet image, the United States and other coalition countries provide the foundational support for his government as well as security in the countryside. And while the United States likely views Karzai as a convenient scapegoat as well as an interchangeable political part, it is trying to demonstrate some confidence in the Afghan president. At a major tribal meeting in Kandahar on April 4, U.S. Gen. Stanley McChrystal, head of the ISAF, was notably silent, allowing Karzai to speak and lead the discussion.Aside from the United States, Pakistan is the next biggest player in Afghanistan, and because of its own links to the Taliban, it has far more practical leverage than the United States does in shaping the negotiations (of which it has every intention of being at the center). Pakistan’s arrest of senior Taliban figure Mullah Abdul Ghani Baradar is now believed to have been carried out to disrupt direct negotiations between the Taliban and Kabul in which Baradar is thought to have been engaged. A strong Pakistani hand in Afghanistan is a longstanding reality for Kabul, but Islamabad is maneuvering to consolidate its influence as a planned American drawdown in 2011 approaches.But Pakistan’s resurging role in Afghanistan places Karzai in a difficult place between his eastern neighbor and its regional rival India. New Delhi has invested a great deal in development and reconstruction work in Afghanistan since 2002, and Kabul will need to balance this aid with the need for Pakistani assistance with the Taliban. And complicating all this, of course, is India’s alignment with Russia on the Afghanistan issue.Perhaps more critical than the Indo-Pakistani struggle over Afghanistan is the U.S.-Iranian contest. Although Iraq is the main arena for Washington’s struggle with Tehran, the focus of the contest is shifting to Afghanistan, along with the U.S. military effort. Iran also has considerable influence to its east, with deep historical, ethno-linguistic and cultural ties that it has adroitly established and cultivated not only among its natural allies — ethno-political minorities opposed to the Taliban — but also among some elements of the Taliban themselves. Though this influence is not decisive (the Taliban have their own interests, and many groups opposed to the Taliban are close to Karzai and the West), Tehran has the ability to influence events on the ground in Afghanistan, and an eventual settlement of the war cannot happen without Iranian involvement. From Karzai’s point of view, he has to balance his alignment with the United States with the fact that Iran is always going to be Afghanistan’s western neighbor, long after U.S. and NATO forces have left his country.This is really the ultimate problem. On its best day, Afghanistan is poor, lacks basic infrastructure and is economically hobbled. With weak domestic security forces and little to offer the outside world, Kabul can only hope to continue to entice more international aid while playing all the various countries with vested interests in Afghanistan against each other. Incorporating the Taliban into the political framework will be especially important over the next few years, but when and if that happens, the balancing act will continue to be played by any central government in Kabul.

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