Posted By Daniel W. Drezner

FP's own Steve LeVine has an essay at The New Republic that notes the Obama administration's efforts to dial down U.S. intervention in Central Asia. LeVine is clearly ambivalent about this policy shift: 

President Obama's public rationale for this shift is clear. He wants arms control agreements, victory in Afghanistan, and the denuclearization of Iran -- and Russia has a role to play in all three. Reset has lubricated new agreements with Russia that enable, for example, the speedy overflight of U.S. military planes across the North Pole and on to Kyrgyzstan, in support of the war in Afghanistan; the sale of Russian military helicopters, to be paid for by the Pentagon, to the Afghan government; and a tighter financial squeeze on Iran. Meanwhile, on the domestic front, absent any other fulfillment of Obama’s campaign vow to win hearts and minds abroad through civility, the "reset" is Exhibit Number One that good manners work.

In addition, Obama officials believe that, while the great-power-rivalry strain of geopolitics in the region may have been necessary in the 1990s, it is now obsolete. When Heslin's policy was initially drawn up, its concrete objective was to provide the Caucasian and Central Asian states with a financial channel independent of Moscow's grip. That meant the construction of energy pipelines to alternative markets, especially the Baku-Ceyhan oil pipeline from the Caucasus to Turkey. But that policy has largely succeeded: The full flow of oil Baku-Ceyhan began in 2006. The Central Asian states of Kazakhstan and Turkmenistan are not linked in -- and given their cautious nature, they are unlikely to risk Russia’s ire by agreeing to be connected by pipeline with the West -- but they have also developed alternate export routes through China, which has constructed its own pipelines that serve precisely the same function....

President Obama must realize that his new policy ultimately represents a trade-off. While the geopolitical gains from deemphasizing the Great Game have been substantial, the local costs of America's hands-off approach have been quite high. In Kyrgyzstan, which is still embroiled in ethnic strife, deferring to Russia has meant leaving a largely powerless government to its own devices. Azerbaijan has nervously struck up negotiations over natural-gas with Russia’s Gazprom in order to forestall any possible trouble of its own with Moscow. And the United States has adopted a far different approach toward local leaders, swallowing Kazakhstan's backsliding on what they believed was the country's private commitment to release imprisoned opposition political activist Yevgeny Zhovtis, and deepening relations with Uzbekistan's President Islam Karimov, probably the most brutal leader in the former Soviet Union. In other words, the reset has a serious downside: By deciding that the politics of Central Asia are what they are, Washington risks losing its justly earned reputation as the region's protector of political and economic independence.

From a U.S. perspective, this is fine. Let Russia and China jockey for influence. Geographic proximity and the 'stans' own geopolitical interests will prevent either great power from establishing hegemony over the region. This will allow them to maintain as much political autonomy as possible when bordering two civilizational entities. 

I can't get too worked up about this. First, Central Asia is about as far away from the United States as one can get -- if there was any region in which a low U.S. profile was called for, this is the region. 

Second, Central Asia is not being left to Russian hegemony. Indeed, my official U.S. sources tell me that the Russians don't care about the U.S. influence in the region. What freaks them out is China's growing regional influence. That's understandable. With a rapidly growing and energy-thirsty economy, China has a compelling interest in the 'stans.   

Third, I'm not sure that the U.S. is sacrificing all that much. LeVine argues that the U.S. has played a constructive role by fostering human rights and political autonomy. I don't think the latter is going away. As for the former, to be  blunt, the U.S. doesn't have all that shiny a track record. With the partial exception of Kyrgyzstan, the countries in this region have ranged from mildly authoritarian (Kazakstan) to wacky totalitarian (Turkmenistan). U.S. human rights interventions accomplished little in the 1990s, and have been even less effective since 9/11 -- indeed, Kyrgyzstan has backslid pretty dramatically. 

There are a lot of regions in the world where I think a robust U.S. presence is a good idea. Central Asia is no longer one of them. 

Scott Olson/Getty Images

Posted By Daniel W. Drezner

My reaction to Robert D. Kaplan's Foreign Policy cover story, "The Revenge of Geography," can be summed up in the following joke:

Question:  Why will Robert Kaplan never do well at Guitar Hero?

Answer:  Because you can only go so far playing just one note. 

Kaplan has been saying the same thing for fifteen years now.  This paragraph from his FP essay encapsulates this point: 

The ability of states to control events will be diluted, in some cases destroyed. Artificial borders will crumble and become more fissiparous, leaving only rivers, deserts, mountains, and other enduring facts of geography. Indeed, the physical features of the landscape may be the only reliable guides left to understanding the shape of future conflict. Like rifts in the Earth’s crust that produce physical instability, there are areas in Eurasia that are more prone to conflict than others. These “shatter zones” threaten to implode, explode, or maintain a fragile equilibrium. And not surprisingly, they fall within that unstable inner core of Eurasia: the greater Middle East, the vast way station between the Mediterranean world and the Indian subcontinent that registers all the primary shifts in global power politics.

Look, this is a good and important note, as anyone paying attention to Pakistan recently would attest. But let me dust off something I wrote about one of Kaplan's earlier books oh-so-many-years ago: 

Kaplan discovers that countries with corrupt governments, stagnant economies, and short histories of statehood are falling apart.  In other words, Kaplan looks only at failed states and concludes that all states are failing.  He believes these trends can be generalized to the rest of the world, yet his own descriptions [in The Coming Anarchy] contradict him.  In the countries where statehood has a longer tradition, such as Turkey, Iran, and Thailand, Kaplan finds a stronger state and a less fragmented populace.  This observation severs the contagion effect Kaplan wants to ascribe to events in West Africa and Central Asia. 

Kaplan believes in the power of geography to disrupt man-made institutions.  He's right some of the time, and some of these cases are pretty important.  In general, however, the state -- even supposedly weak states -- have proven to be remarkably resilient institutions.   

A surprising number of people are curious to know my thoughts about the political implications of the global financial crisis -- a sure sign that Martin Wolf, Niall Ferguson, and Nouriel Roubini and about 50 other people on the geopolitics "A list" are just too damn busy. 

Until recently, I had been busy thinking furiously about how the crisis affected skirt lengths, so only know am I trying to look at The Big Picture.  Which, of course, means I'm starting out by reading what other people are writing.

Quentin Peel provides a nice overview in the Financial Times of the emerging conventional wisdom -- power shifting to the East, yadda, yadda yadda.  And in The Washington Quarterly, Matthew Burrows and Jennifer Harris update the National Intelligence Council's Global Trends 2025 report to incorporate the effects of the crisis (they should know how to do that, since Burrows was the principal drafter of the original report). 

Here's where I keep bumping my head.  I by-and-large agree that a long-term implication of the crisis is that America's relative market power should shrink vis-a-vis China and India.  The thing is, an awful lot of the short-term crisis steps are not moving in that direction.  The United States is trying to boost its consumption spending. China appears to be boosting pursuing fiscal expansion as well, except a closer look at what they are doing shows that they're doubling down on an investment strategy that increases their export dependence.  Furthermore, the head of China's central bank doesn't think that Chinese consumption is going to rise anytime soon, because Confucian cultures value, "thrift, self-discipline, zhong yong or Middle Ground (low-key), and anti-extravagancy."

After a certain point, short-term trends can congeal into long-term trajectories.  So, my question to readers:  will the short-term moves actually throw off long-term projections about power trends? 

Posted By Daniel W. Drezner

Zbigniew Brzezinski scares me.  He's a really smart guy, possesses loads of policy experience, is a distinguished academic, and when he tangles with people who do not know that much, the results are not pretty. 

Nevertheless, I'm going to screw up my courage and suggest that Brzezinski's op-ed in today's Financial Times about the Sino-American relationship is.. how to put it... misguided. 

Here's how he prioritizes the dimensions of the relationship: 

China is needed as a direct participant in the dialogue with Iran, for China will also be affected if the effort to negotiate ends in failure. US-China consultations regarding India and Pakistan can perhaps lead to more effective even if informal mediation, for a conflict between the two would be a regional calamity. China should become actively involved in helping to resolve the Israeli-Palestinian conflict, which increasingly poses the risk of a radicalised and unstable Middle East.

We need to develop a shared view on how to cope with the global risks posed by climate change. We should explore the possibility of creating a larger standby UN peacekeeping force for deployment in failed states. We should discuss how an international initiative towards a global adoption of the zero-nuclear weapons option might be helpful in stemming wider nuclear weapons proliferation. We certainly need to collaborate closely in expanding the current Group of Eight leading industrial nations to a G14 or G16, in order to widen the global circle of decision-makers and to develop a more inclusive response to the economic crisis.

But to promote all that we need an informal G2.

Here's the thing:  while Iran, Israel/Palestine, peacekeeping, etc. are all important topics, the bilateral economic relationship should be the top issue on the agenda.  It should also be second (exchange rate policy), third (fiscal policy), fourth (trade policy) and fifth (regulatory coordination) on the agenda, by the way. 

So it would have been nice if Brzezinski had said, well, anything about the Strategic Economic Dialogue, for example.  Especially since that is the likely launching point for any comprehensive G2 dialogue. 

I confess that this is a topic that makes me cranky.  Brzezinski has stumbled onto small bugaboo I have with those who write about geopollitics on a regular basis -- economics always comes last.  Particularly during crisis times like the current moment, the economics need to go first. 

And second, third, fourth and fifth. 

So there. 

Posted By Daniel W. Drezner

I was less impressed than Steve Walt with Roger Altman's Foreign Affairs essay on the geopolitics of the financial crisis. 

Altman's tick-tock on the whys of the crisis is fine.  Saying that China will benefit and the free market model is in peril is, as Walt points out, "obvious."  It's the non-obvious stuff that we need to puzzle out. 

To be fair to Altman, I suspect that he handed in his essay in early November; the extent to which the crisis would affect the BRIC economies was still to be determined.  Still, this paragraph seems way off:

Beijing will be in a position to assist other nations financially and make key investments in, for example, natural resources at a time when the West cannot. At the same time, this crisis may lead to a closer relationship between the United States and China. Trade-related flashpoints are diminishing, which may soften protectionist stances in the U.S. Congress. And it is likely that, with Washington less distracted by the war in Iraq, the new administration of President Obama will see more clearly than its predecessor that the U.S.-Chinese relationship is becoming the United States' most important bilateral relationship. The Obama administration could lead efforts to bring China into the G-8 (the group of highly industrialized states) and expand China's shareholding position in the International Monetary Fund. China, in turn, could lead an effort to enlarge the capital base of the IMF.

Where to begin.  First, China has taken a pass on bailing out key allies. 

Second, trade-related flashpoints are not diminishing.  The crisis has prompted China increase its export tax rebates and let the yuan fall against the dollar.  This will increase rather than decrease bilateral trade tensions.  On the U.S. side, there are many reasons to be pessimistic of the trade-friendliness of the Obama administration.  And none of this mentions the toxic combination of fiscal stimuli and protectionism

Third, the problem for the past few years has not been getting the U.S. on board with bringing China into the G-8 -- it's been China's reluctance to join

So, what are the non-obvious geopolitical implications of the global financial crisis?  I suspect the biggest one will be that the "decoupling" of the global economy will begin in earnest.   

The tight coupling of the global economy caused export-dependent economies to face significant downturns because of the collapse in demand from the OECD nations.  These governments will respond to the current crisis by creating the trade equivalent of currency reserves - that is to say, creating a protected space of demand for national champions.  The most direct way to do this will be to boost domestic demand while restricting competition from foreign producers.  As states plan to expand their fiscal policy, it should be relatively easy - via procurement rules and concentrating expenditures on non-tradable goods - to target new government spending towards domestic firms.

This kind of decoupling would contribute to the unwinding of the macroeconomic imbalances caused by the Bretton Woods II arrangements.  It would also, however, be sure to reduce overall economic growth even further.  It would also reduce whatever constraints economic interdependence has placed on aggressive action in world politics. 

Beyond that, perhaps the best way to think about this is to consider the "known unknowns" of the current situation:

  • Which great power will recover more quickly?  Altman thinks it's China, and he may well be correct.  Still, in the past, the United States has rebounded more quickly than other countries in response to marco shocks like this one.  On the other hand, today's employment report makes it clear that the U.S. is still on the downward slope. 
  • Which weak state will implode?  Consider the past month or two.  Pakistan looks like it will crack up (of course, this isn't anything new for Pakistan).  There are riots in Greece, and cholera in Zimbabwe.  Which government will collapse -- and who will be expected to intervene?
  • Which petrostate will get desperate?  As I wrote in November, a sharp fall in oil prices will have dramatic effects on Iran, Russia and Venezuela.  How will they respond?  Will they try to engage in diversionary conflicts to deflect domestic discontent? 

This just scratches the surface.  Readers are warmly encouraged to submit other possible "known unknowns" in the comments. 

Posted By Daniel W. Drezner

As part of this blog's continuing series exploring the geopolitical ramifications of the current financial meltdown, we now turn to Pakistan.  The Washington Post's Anthony Faiola and Karen DeYoung explain
Pakistan has reached a critical new phase in its long-deteriorating financial situation, as investor flight and bleeding of national reserves force the country to scramble for international funds to shore up its economy. With the global financial crisis draining coffers in the United States and Europe, the key U.S. ally in the war on terrorism is seeking help from an old friend newly flush with cash: China. President Asif Ali Zardari arrived in Beijing on Tuesday for a four-day state visit as concern has surged over a possible debt default by Pakistan that could cripple its economy and spark more civil unrest. While the amount of money Pakistan needs in the short term is relatively small -- $4 billion to $6 billion -- analysts say the climate of crisis and public anger over domestic bailouts in the United States and Western Europe have made even a modest infusion from its Western allies politically difficult.... Pakistan is going to the Chinese now "because you go to the guys with the money," a senior International Monetary Fund official said. "And right now, the Chinese are the ones with the money."
Hat tip to Kevin Drum, who observes: 
[T]his is the kind of thing that's a canary in the coal mine. Global power generally flows to "the ones with the money," and to the extent that this is China, not the United States, our influence in the world inevitably wanes.
The thing is (and Kevin acknowledges this), Pakistan and China have a longstanding alliance, so this kind of move is not as surprising as the Reykjavik-to-Moscow box step.  Furthermore, from a U.S. perspective, this is disconcerting only if the trip to Beijing undercuts Western institutions like, say, the IMF.  Which this move by Pakistan does not seem to be doing:
A last option might be seeking a lifeline from the IMF, though such an agreement is seen as politically difficult for the new government. Pakistan paid off the last of several IMF loans in 2005, with Musharraf hailing the accomplishment as a breaking of the nation's beggar's bowl. By seeking IMF help now, analysts say, the new government may find itself in the difficult position of explaining to the population why it needs to glue that bowl back together. Pakistani officials, however, are meeting with IMF officials in Washington now, seeking their "seal of approval" on the plan to rein in runaway spending threatening to bankrupt the government. Although IMF officials say the Pakistanis are not seeking a loan, IMF approval of their economic plans could pave the way for other institutions, including the World Bank and Asian Development Banks, to offer lending. It could also make approval of an IMF loan at a later date happen faster. "What they want is an endorsement in principle," a senior IMF official said, "something that would make financial support go more smoothly if they decide they do need to ask for it."
Conclusion:  as a harbinger of change, this is a very small canary.  UPDATE:  The Financial Times reports that Hungary and Ukraine are going to the IMF for emergency lending to stabilize their financial systems.  What's telling here is that Ukraine went to the IMF rather than Russia. 

Daniel W. Drezner is professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.

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