A Fearful Asymmetry: The Rising Threat of Irregular Warfare

By Dee Smith

Beginning in November 2023, following the attack by Hamas against Israel, groups of Houthi “pirates” in the Red Sea began to step up operations against ships in this crucial waterway that leads to the Suez Canal. The Houthis are a Shia Islamist group based in northern Yemen. Such pirate attacks have been happening in the Red Sea, the Gulf of Aden and the Arabian Sea for many decades, but the agenda now is as much political as piratical. Commercial shipping has been avoiding the region, including the Suez Canal, by making the much longer and more expensive journey around Africa and the Cape of Good Hope. The US has deployed a destroyer and other vessels to counter the Houthi. but has had trouble convincing other powers to join Operation Prosperity Guardian.

Consumers and industry will pay the price for the disruption in supply chains. Last week, 13 nations signed a “final warning” to the Houthi, noting: “Nearly 15 percent of global seaborne trade passes through the Red Sea, including 8 percent of global grain trade, 12 percent of seaborne-traded oil and 8 percent of the world’s liquefied natural gas trade.” The Houthi nevertheless continued their attacks. Last week, for the first time, they used ocean-going drones to attack US Navy and commercial ships.

Thus a relatively small group of operatives —albeit with financial and logistical support from a large nation-state, namely Iran — has managed to disrupt global shipping, create enhanced media awareness for itself, and force the most powerful nation in the world to deploy forces against it at significant financial and military cost.

The reason the Houthi are able to disrupt shipping affecting the entire globe is that they are applying asymmetric warfare techniques to a key strategic location.

What is asymmetric warfare? The classic definition is conflict between forces that are vastly different in terms of military power. It is almost always “irregular” warfare in that the combatants involved on the “enemy” side (the enemy from the perspective of states under attack) are not part of regular national armed forces of nations (although it can also occur among irregular groups, as between the Islamic State and al-Qaida). The goals of asymmetric players are often more to cause shock and confusion than to cause large-scale harm. Bronwen Maddox, head of the British think tank Chatham House, recently recounted a remark that Hamas deputy leader Saleh al-Arouri, who was killed by an Israeli strike last week in Beirut, made to her in 2007: “‘Our job is to keep the Palestinians radicalized’, he said. ‘Most of them would settle in a moment for peace, some deal that will let them get on with their lives. We need to keep them angry.’” Asymmetric attacks happen at unexpected times and in unexpected places, hence the less used term asynchronous warfare and thus asymmetric and asynchronous warfare, as US military and intelligence agencies have long called it.

Asymmetric warfare has been around for centuries and encompasses not just terrorist attacks like that on 9/11 but also  insurgencies, guerrilla warfare, rebellions and so forth. The campaigns against the British that led to the birth of the United States would fall into the category of asymmetric warfare.

Asymmetric warfare has lasted because it can be effective, but two key changes, both products of advanced technology, have made it more so.

First, asymmetric players have been empowered through the increased capacities that new technologies afford to small groups in attacking large states. For example, weaponized drones can be simply repurposed civilian drones, costing at most a few thousand dollars each — while the US Navy might shoot them down with $2 million missiles. The Navy could ramp up existing directed-laser systems, which would be much less costly than missiles over time, but has been reluctant to make the large investments needed. This is an example of how asymmetric players can sometimes prevail against large opponents whose systemic complexity precludes quick and efficient action.

Cyber threats offer a textbook case of the complexity of the asymmetric environment. They can be perpetrated by small groups physically distant from their targets, but they are also used promiscuously by nation states and even sub-contracted to terrorist or criminal groups. It is a very tangled web, difficult to unravel and even more difficult to counter.

It is also well within the capabilities of some asymmetric actors to produce “dirty bombs,” conventional explosives surrounded by or laced with radioactive materials—if they can obtain the radioactive materials, which are difficult but by no means impossible to acquire.

Perhaps the most alarming asymmetric threat is bio-terror: the production and use of biological weapons that could devastate the populations of entire regions. Nation states mostly claim that they are not developing such weapons, but today the field is open to much smaller groups. CRISPR-Cas9 gene editing techniques have become so much more effective and affordable that genetic engineering to produce novel and lethal bio-agents can now, at least in theory, be conducted in a garage on a relatively small budget.

The rise of AI opens up an entirely new arsenal for asymmetric warriors. As those who study the field have noted, however, it has proved impossible to predict how technologies will be misused until they are.

The second major change is that technology has made targets softer. The highly interconnected and tightly coupled world that we have created is far more vulnerable than were simpler and more isolated systems. In other words, technology has to some extent leveled the playing field in favor of weaker asymmetrical players, just as it has made regular armed forces relatively less effective in an increasing range of circumstances. For example, an attack on 16 April 2013 that involved nothing more than AK-47 assault rifles and wire cutters used to cut fiber-optic cables managed to knock out 17 large transformers in 19 minutes, threatening the power supply to Silicon Valley. A blackout was avoided by quickly rerouting power and pulling it from other plants, but the damage was significant and the outcome could have been far worse. The perpetrators have never been found.

Our technologies of communication, such as social media, are so ubiquitous that we often fail to realize how much they have changed the equation. Asymmetric groups learn of one another’s techniques quickly, and they share goals by interacting to further them. For example, the perpetrator of the Christchurch mass shootings on 15 March 2019 said that he decided on a shooting attack specifically because of the effect it would have in the US. Those who study such “lone-wolf” attackers have noticed that they tend to find one another and band together, organizing asymmetric-warfare groups with shared aims and ideologies and becoming much more effective as they do so.

If you are reading this in your office, take a moment to look in your desk. You may have an effective asymmetric weapon at your disposal: a laser pointer of the kind used for PowerPoint presentations. If directed at someone’s eyes, it can be highly disorienting and even cause permanent damage. This is why shining lasers at or into the cockpit of commercial airliners is such a serious crime: it can endanger everyone on the plane by incapacitating the pilot’s vision. And it is a perfect example of how advanced but fairly mundane technology has empowered asymmetric players.

The proliferation of destructive technologies and the vulnerability of large technical systems to disruption have combined to make asymmetric attacks more common and more lethal. What the Houthi example shows is how the range of threats to international trade and investment has grown accordingly.

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A US Slowdown?

While most people were celebrating the holidays, economic pundits published some lengthy self-criticisms focused on why the early 2023 predictions of US recession proved exactly wrong. Understandably, they focused on the traditional recession indicators (like inverted short- and long-term yields) that had failed to indicate. But strong alternative modes of analysis were lacking, and the meek consensus that emerged over the holidays — forecasting some sort of mild slowdown for no particular reason — looked a lot like a punt. SIG’s slightly bolder forecast is for a definite and significant slowdown, based on factors that we believe have been underestimated.

The first and most important is consumer credit-card debt. One widely cited reason for the unexpected resilience of the US economy in 2023 was strong consumer demand. The thought had been that consumers shocked by significant inflation would respond by spending less. Instead, they responded by taking on debt. The average balance per consumer reached a ten-year high. (Canada also experienced a large consumer-credit increase in 2023.) This will have seemed reasonable enough even to poorer consumers because jobs were plentiful and wages rising. Consumer debt had plummeted during Covid, with household balance sheets improving due to thrift, fear, and government stimulus payments that often went into personal savings or to pay off household debt. Besides, inflation expectations can lead poorer consumers to buy now while they have a chance. US consumer inflation expectations were noticeably high — with growing numbers of Democrats adopting Republicans’ gloomy expectations — over 2023 even as their borrowing also grew. At the least, this all points to weakened consumer demand in 2024, removing a key buttress of 2023’s prosperity.

The second underestimated factor is the creation of blocs for foreign direct investment. Along with cross-border mergers and acquisitions, FDI again slowed in many parts of the world. Most famously, China’s inward FDI went negative in the third quarter. Somewhat less famously, inward FDI growth slowed way down in Southeast Asia and India. The reasons are many and vary greatly by country, but the weakening of the Chinese economy is certainly one. Chinese imports from ASEAN countries have been stagnant for years, while its intermediate-goods exports into ASEAN are endangered by the ongoing American-led effort to lessen the dependence of global supply chains on Chinese inputs. Southeast Asian and Indian investment, as well as Chinese, is in each case becoming more inward-focused. Meanwhile, the North American economy is itself becoming more regionalized in production terms as three of the four top inward FDI destinations in the first half of 2023 were Canada, the US and Mexico. (The fourth, at number two, was Brazil.) One reason for this is that US onshoring, near-shoring and friend-shoring — fueled by Biden-administration spending on high-tech and green industrial policy, as well as US defense contractors meeting Ukrainian demand as shaped by US domestic-provider policies and practices — are creating an Americas production bloc that structures a large portion of global FDI. In many ways, this is a tribute to the strength and flexibility of the US economy. But, in the short term at least, the regionalization of investment, given that it is less efficient than globalized investment and production, means higher goods prices. It also means increased competition for US multinationals and exporters at ever higher points in the supply chain. With very high US government and US consumer debt and stable or rising wages alongside low unemployment, the regionalization of direct investment will fuel a US slowdown. US CEOs’ consistent expectations of low capital expenditure in 2024 both support and help ensure such an outcome.

As was proved last year, predictions are a dangerous business. Still, SIG’s argument for investors is that the US’s unexpected performance as a safe haven in 2023 will not be repeated in the new year. 

Preparing for a Dangerous Year

When we began SIG’s blog in June of this year, our goal was to provide original and timely analysis of trends that the mainstream consensus was missing. Clients told us they had much more information about global markets and political trends than they could possibly process. What they were missing was actionable and fresh information that was not merely canned trend-spotting followed by a company recommendation or two. They wanted to go beyond the obvious.

To address that need, we spent a lot of time on Asia this year — traditionally a strong region for SIG and one of enduring interest for our clients. The nature of Southeast Asia’s growing centrality, and the shifting strategic approaches of Japan and South Korea, kept our attention and helped us not get too stuck in the US-China struggle, crucial as it is.

In 2024, we expect both of these focuses to continue, both because US policy on China is unlikely to change much in an election year and because Chinese policy toward Chinese tech multinationals won’t change much either. American and Chinese experiments with varieties of economic nationalism will continue. They are in turn the main drivers of what we have described as Southeast Asian non-alignment, especially digital non-alignment, and of Korean-Japanese rapprochement.

China’s increasing nationalism is notable, although in the last half of 2024 its opposition to the U.S. was modulated by the dire economic conditions it was facing. Xi Jinping’s opposition to the U.S. eased. Nevertheless, China’s long-term goals and strategic opposition to the US in East Asia have not changed, nor have Xi’s designs on Taiwan. He has stated that reunifying China will be his legacy.

We have also looked closely this year at India. Narendra Modi’s extraordinary consolidation of policy power — combining a market orientation with strong state policies and a cultural nationalism of alarming strength — continued in 2023. Modi’s popular support remained very strong, and state elections earlier this month confirmed his BJP party as the political anchor of the 600-million-person Indian electorate. Most importantly, per capita GDP growth has stayed vigorous as the BJP has made massive transfers to low-income groups and steadily empowered the lower Hindu castes. The BJP has apparently succeeded in generating increased demand domestically by strengthening the lower classes through policy. How sustainable this progress is remains to be seen, but the BJP certainly is in pole position going into national elections next April.

In regional terms, our final major focus since June has been the Middle East. The set of initiatives known as the Abraham Accords, alongside a surge in successful Chinese diplomacy in the region, led many to think the Middle East would be stabilizing after the years of violence that followed the rise of Daesh/Islamic State and the suppression of the Arab Spring. Hamas had something else in mind, and mainstream commentary on the Middle East has swung from mildly optimistic to apocalyptic. But the strong drivers of normalization between Israel and key Arab states will not necessarily weaken in 2024 and might well grow stronger. The relatively subdued reaction of these states to Israel’s reaction to the Hamas attack continues to remain notable. Both the OIC/Arab League solidarity on Gaza and the petrostates’ reluctant acceptance at COP28 of a fossil-fuel phaseout suggest a relative political steadiness in Muslim interstate relations and even some sense of common purpose.

Common purpose is what we have looked for in Europe, without great success. True, hostility toward poorer immigrants has become one source of greater solidarity; so has opposition to Russian aggression in Ukraine. Yet both also contain seeds of disunion as political forces in individual states gain power by sharpening themselves against the European consensus. Given general European declines in both productivity and population, the relative power of Poland and other Central European countries has been expanding as they grow more quickly than the Western states. Germany has begun to imagine what a long-term estrangement of oil-rich Russia might mean for the European solidarity on which Germany bases its positioning of itself in the world. At the same time, Germany and, especially, France are trying to adjust to the continued rise in autarkic industrial policies in both the US (EV subsidies, semiconductor chips) and China. About half of the EU’s population is older than 45. In parts of Western and Northern Europe the median age is above 50. All of this puts European productivity under greater pressure and will increase tension between demographically older and younger parts of the continent. Age will be no guarantee of stability. It also creates a tension around immigration from Africa and the Middle East — the only means for many European countries to have an increased number of younger workers.

Since we launched in June, we have put great emphasis on various technology sectors because the peacetime capacity of economies to innovate in technology has become so wrapped up in major-state calculations about war and military competition. Borders are being erected across the Internet in a displaced strategic competition that is lacking in historical analogies to guide us (and that was predicted years ago by SIG’s Scott Malcomson in his book Splinternet). The level of popular and state-level anxiety about technologies that hardly exist yet is extraordinary. US policy now aims squarely at perpetual superiority to China in any technology that might prove to have strategic significance; Chinese policy aims just as squarely at achieving whatever advances it can on the basis of a military-technological-industrial complex bent to establishing breakneck progress if not primacy. The logic has become well established. In 2024 we will stay focused on identifying its effects.

Which brings us to the Americas. An elected right-wing leader had plunged Argentina into political chaos while an elected left-wing leader in Brazil is pushing through long-needed reforms of investment regulation. Mexico will have elections in 2024 and Canada might too, as large majorities of Canadians say Trudeau should move aside. The American superpower will definitely have an election, this time with a desperately low level of predictability. For almost a decade, mainstream analysis has consistently underestimated both Donald Trump and the level of popular alienation from the Democratic Party consensus. The results in November are impossible to predict with accuracy, but it seems certain that the road to get there will be very rocky indeed. Social unrest and violence in the U.S. cannot be ruled out.

There are national elections in 40 countries in 2024, representing more than 40 percent of the population of the world, many in countries where people have lost faith in institutions and incumbent leaders, resulting in a wide tendency to reject them and their parties, further increasing volatility. 

It has been said that 2023 was the year in which business accepted that politics could not be safely ignored, especially the multi-player geopolitics that we have focused on in our blog and our work. The liberal rules-based order sometimes continued in the letter in 2023 but the spirit was gone and won’t soon—if ever—be back. This leaves the world in a kind of systems vacuum, resulting in movement back toward a balance-of-power, sphere-of-influence geopolitics. The unstable and fracturing conditions within and among nations are still not really priced in to markets, as can be seen by how quickly they continue to bounce back from shocks that in the past would have had significantly more long-lasting negative effects, such as the Israel-Hamas war.

2024 will be a pivotal, perhaps decisive year. We look forward to helping our readers and our clients navigate ways to prosper in a very treacherous time. We will take a break next week and look forward to re-engaging with you in the New Year. 

Faith-based geopolitics: A Russian Example

Modern interstate relations are generally thought to have begun with the 17th-century treaties of Prague and Westphalia, which sought to remove religion from among the causes of interstate conflict: cuius regio, eius religio (“whose land, his religion”) was the legal principle, associating state sovereignty with a single dominant faith, and putting an end, however imperfectly, to wars of religion. Modern international relations were built on this segregation of religion from the struggles of states with each other. The resurgence of religion since the demise of aggressive Communist atheism in the 1980s has often been seen as anti-modern, or as a revival of the pre-modern — certainly as far as international relations are concerned. However that may be, religion cannot be ignored by international investors. Shariah compliance and acceptance of Hindutva priorities are two examples. Less obvious is the type of strategic calculation that has led the unlikely figure of Vladimir Putin to embrace Islam as part of his geopolitical practice.

Putin has been viewed as having a significant connection to the Russian Orthodox church since at least 2000, just after he assumed power, when he referred to Orthodoxy as having “largely determined the character of Russian civilization.” He expected the traditional church to speed “the spiritual and moral rebirth of the Fatherland.” After more than two decades in power, Putin has continued to partner with Russian Orthodoxy in his attempts to solidify Russian cultural nationalism, not least in anti-LGBTQ laws (framed as part of Putin’s struggle with a spiritually degraded West) and in his justifications for the invasion of Ukraine, which has been strongly backed by the Orthodox church. Cuius regio, eius religio.

Yet at the same time Putin has sought to leverage the fact that Russia has the largest Muslim population of any European country, assuming Turkey is not seen as European. On the strength of that fact, Russia acquired observer status at the Organization of the Islamic Conference (OIC) in 2005 and is still the only major non-Muslim-majority country to do so. (India was invited but declined.) As a petroleum exporter, Russia is also in constant communication with Middle East petrostates and shares strategic interests with them. These connections make it slightly less peculiar that Orthodox Russia has embarked this year on a two-year experiment with Islamic banking in four Muslim-majority regions: Bashkortostan, Chechnya, Daghestan and Tatarstan. The experiment is being managed by the Russian Central Bank.

Russia has multiple reasons to position itself as friendly to Islam. Russia’s hinterland from the Caucasus to Mongolia is majority-Muslim and its post-Soviet economy has depended on Muslim migrant labor to compensate for domestic demographic decline. In the Middle East, the Kremlin seeks to establish itself as a significant player in the Arab-Muslim world amid the Washington-Beijing confrontation and the Persian Gulf countries’ pursuit of an augmented role on the international stage. In this context, Russia’s stance on the Israeli-Palestinian conflict and its support for Palestinian refugees, many of whom resettled in the North Caucasus under a humanitarian program instituted by Russian authorities, contribute to bolstering Moscow’s image in the Middle East.

Putin frames the ongoing Palestine conflict as a manifestation of US diplomatic failure and proffers Russia as a potential mediator, leveraging its amicable relationships with both Israel and the Palestinians. Putin’s official visits to the United Arab Emirates and Saudi Arabia last week aimed to weaken the Western narrative of Russian isolation over Ukraine. The Islamic-banking initiative is similarly seen as in part a response to Ukraine-related financial sanctions. The visits themselves had ultimately to do with money as much as politics: the UAE and Saudi Arabia can withstand a drop in oil prices, but Putin faces a pressing need for revenue, given the costs of the Ukraine war and their impact on his domestic support.

Since the inception of the Ukraine conflict, the Kremlin has increased its efforts to strengthen relations with the Arab-Muslim world, orchestrating various events within the territorial confines of the Russian Federation, particularly in regions with significant Muslim populations. The Kazan Forum 2023 was a prominent event featuring Moscow’s ties to Arab-Muslim countries, particularly Gulf Cooperation Council members. The focus was on accentuating Russia's role in ensuring a harmonious, multi-confessional, and multicultural society. Moscow is likely to intensify its relations and collaborative initiatives with the Gulf Cooperation Council members in energy, defense and logistics.

The lesson for investors is that 21st century religious revivalism is both powerful and not simple. For many centuries, Russian Orthodoxy was animated by the dream of retaking Istanbul (Constantinople) from the infidel Muslim usurpers Much of the tsar’s 19th century imperial gains were at the cost of Central Asian Muslim rulers, and after the Bolshevik revolution Islamic culture was often suppressed. Yet now the Orthodox paragon Putin is strengthening Russia’s Muslim ties on multiple fronts, domestic as well as international, and at least some Muslim states are responding in kind.

In Southeast Asia, Non-Alignment Is Development Policy

India may have been the pioneer of political non-alignment in the 1960s — proposing that countries should align themselves neither with the West nor the Communist bloc — but 21st century non-alignment is more economic than political and its homeland is Southeast Asia.

Over the summer, Singapore decided to split its decision on who would build the next tranche of data centers on the island: Chinese companies got two contracts (with an assist from Australia’s AirTrunk) and US companies got two. While the US has been trying, with some success, to corral countries into a kind of digital alliance that keeps China out, states in the global economy’s fastest-growing region are refusing to choose. This will prove to be the non-aligned movement that matters for the near future.

Compared to other of the world’s regions, Southeast Asia has had far more experience of both China and the US in the role of major powers: the US since its defeat of Spain in 1898 and especially since 1942, when it entered World War II; China over two millennia, most recently following a policy of Maoist subversion in the 1950s-1970s and commercial expansion and influence from the 1990s to today. Southeast Asia has also had a unique experience of consistent inward investment from other highly developed economies with labor shortages such as Japan, Korea and Taiwan. Indian capital began to look more seriously at the region a few years ago, as has some European and Middle Eastern capital. The gradual redirection of US capital away from the Chinese mainland after 2016 and the slowing of China’s economy strengthened pre-existing trends favoring Southeast Asian growth.

One result is a regional political culture with a deep tradition of not taking sides. The elevation of Chinese-American strategic and economic competition into the digital realm — begun under Trump and greatly extended under Biden — has been met in Southeast Asia by a determination to maintain digital non-alignment. The term itself has been toyed with by Russia and has been more substantively explored by India since its initial banning of Chinese apps in 2020. But Russia has neither tradition nor credibility as a disinterested actor outside its borders and its declining IT sector is increasingly hostage to China, while India’s mini-hegemonic aspirations and hostility toward Islam hinder its acceptance by others as a leader. Southeast Asia walks the walk as well as talking the talk.

Ultimately the US and China have little choice but to go along, because in the digital realm their strategic positions are decisively shaped by their respective private sectors. The politically driven “techlashes” in both the US and China over the past five years were driven by state and popular (in the US) fears of overweening private-tech power, but the tech sector can only be reined in up to a point or it starts to lose its vitality, as may be happening already to some degree in China — and that leads to the sort of strategic weakening that is precisely what the American and Chinese states are most hoping to avoid. For the good of the state, they need their tech sectors to thrive in private markets. The most important of those, for a great many reasons, is Southeast Asia, which is why the 21st century’s distinctive form of non-alignment is being born there.

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Betting on Different Horse

Today, only the most ideologically committed, old-school liberal internationalist would hold that we have not moved out of the world of the “rules-based international order,” in which countries were all meant to obey a set of common rules — rules established by Western powers during the Cold War and thought to be triumphant after that war’s end.

As Julien Barnes-Dacey and Jeremy Shapiro, both of the European Council on Foreign Relations, wrote in Foreign Policy:

[T]he West has embraced a comforting illusion about a liberal rules-based order . . . International law could tame war, defend sovereignty, and protect human rights, all the same time.

It was a wonderful vision, but it never had a chance. The temptations of power meant that the West repeatedly violated its own rules. Western actors invaded countries when they felt the need (Iraq), hired fancy lawyers to exempt themselves from the laws they expected others to follow (Kosovo), preached human rights while cutting deals with authoritarian regimes (Saudi Arabia), and set up an International Criminal Court to try African leaders (including those from Sudan) while refusing to recognize its jurisdiction over themselves (the United States). For the less powerful countries, the rules-based order based was always little more than hypocrisy on a global scale . . . [and they] have become increasingly vocal in their frustration about the hypocrisy at the core of the global order.

They have taken particular issue with the West’s demand that they sacrifice core material interests in defense of this so-called order, a step that the West has always been wholly unwilling to do itself. So U.S. and European entreaties that global states cut financial and energy ties to Russia following the invasion of Ukraine have fallen on deaf ears, while Western attempts to rally international support behind Israel have faltered.

A key point that is now fully evident — as discussed in a recent post on the SIGnal blog (see “The Pulling Apart,” 1 November 2023) — is that we cannot even agree what the rules might be for a rules-based international order. And it has become clear that many of us do not really want to agree, because different rules reflect different identities. In effect, they say :“I am different from you, I don’t believe what you believe, and I don’t follow your rules.”

So if we have moved de facto if not yet entirely de jure out of the rules-based order, then what have we moved into?  

We now live in a multi-polar world, with two superpowers, possibly two other major powers (Russia and the EU), and many more middle powers — countries such as Turkey, India and Brazil, with powerful economies and sometimes powerful militaries. Most of these are in no mood, and see no need going forward, to kowtow to Western interests, policies or rules. We have moved into a world that is fragmented and continues to splinter, very probably with more transitory international alliances based on the practical or Realpolitik needs of the moment — a world, unfortunately, of more conflict  between states, among states and non-state actors, and within states themselves.

It is also a world in which economic factors will probably not move nearly as much in tandem. In a de-globalized world, what is sauce for the goose is not necessarily sauce for the gander. Events that significantly disadvantage one region or nation have always had the potential to significantly advantage another region or nation. The tightly coupled globalized order has to some extent dampened this effect. The dampening is now likely to decrease or even end.

Climate change and related resource challenges will exacerbate this “performance decoupling” and will do so in ways that are largely unpredictable. Expanded geopolitical conflict — related to all the factors mentioned above — will add fuel to the fire. Finally, these and other factors are rife with feedback loops that can intensify effects, again, in ways that are often not detectable until they are manifest in events.

All of this means that the performance of economies and of investments in different places — and in different sectors in different places — are likely to be far more variable, discontinuous and uncoupled than has been the norm during the past 30 years.

This brings both risk and opportunity. Investors who keep their eyes on the ball can take advantage of opportunities related to performance discontinuities, arbitrage and the like. In other words, they can bet on different horses. Nevertheless, we will not be living in the simpler environment of the past few decades, a time when stable trends could be projected to drive overall macro performance. Change closes off old possibilities and opens up new ones. We need to think differently to maximize them.

An Unexpected Unity at Riyadh Summit

An Unexpected Unity at Riyadh Summit

 

On Saturday, 57 Arab and Muslim nations called for a halt to military operations in Gaza, dismissing Israel's self-defense rationale for its actions against Palestinians. In an extraordinary joint summit in Riyadh, the 22-member Arab League and the 57-member Organization of the Islamic Conference (to which all Arab League members belong) unanimously called for the International Criminal Court to probe “war crimes and crimes against humanity” being perpetrated by Israel in the Palestinian territories. The summit also urged an arms embargo against Israel and the establishment of an Arab-Islamic committee to supervise diplomatic efforts aimed at securing a ceasefire in Gaza. The summit called for the immediate entry of humanitarian aid convoys to bring food, medicine and fuel into the Gaza Strip. Leaders including Iranian President Ebrahim Raisi, Turkish President Tayyip Erdogan, and Qatar's Emir Sheikh Tamim bin Hamad Al Thani attended: the Sunni and Shia worlds alike, and the newly welcomed-back Syrian President Bashar al-Assad. Raisi’s trip to Saudi Arabia is the first by an Iranian head of state in more than a decade. Saudi Arabia’s Muhammad bin Salman presented himself as leader of the Arab-Muslim world, inviting both allies and foes.

Led by Algeria, certain Arab nations advocated for a total severance of diplomatic ties with Israel. However, other Arab countries that have established diplomatic relations with Israel resisted this stance, emphasizing the importance of maintaining open channels with the government of Prime Minister Netanyahu. Just as interesting was the abrupt resurgence of the Palestinian cause in the awareness of Arab and Muslim nations. Deep divisions continue to impede the formulation of a shared vision to conclude the ongoing conflict and establish a diplomatic framework for what lies ahead. But what led to the merging of the Arab League and OIC conferences was precisely disagreement. The lack of unity created political pressure, and MBS and others responded with a move to show unity. The surprising thing is not that there are still sharp regional divisions but that the joint summit occurred at all.

Hamas’s action on 7 October, grotesque as it was, did have a rationale: To upset the emerging consensus, as the Abraham Accords continued to bring Israel and various Muslim states into a new and less hostile configuration, that the fate of Palestinians could safely be ignored. That message was sent not just to Israel but also, perhaps primarily, to Arab states like Saudi Arabia. The illusion that the Palestinians could be ignored indefinitely as the Abraham Accords process expanded has now been dispelled.

The global community is confronted with a radical Israeli government uninterested in compromise, an ineffectual Palestinian leadership further weakened by recent events, and a U.S. administration preoccupied with impending presidential elections. The conditions for a political initiative are unfavorable.Therapidly diminishing window for peace and regional integration signals a heightened risk for Israel of regression to the conditions of 1948. The swift reversal of the United States' role as a security provider has invited comparison in the region to the speed with which France in West Africa went from the center to near the margins of the regional security balance. What was really striking, then, about the Arab League-OIC joint summit was that it showed the regional players, large and small, willing to get together with some urgency and compromise on reaching a modest common platform. What that might mean for Palestinians is unclear but it does suggest a certain reflex for peaceful discussion and a minimal unity that have not been features of regional politics before.

Going Global Goes South

Going Global Goes South

 

Recently Joseph Nye, a venerable and influential Harvard professor and former government official, and the Financial Times’s senior trade writer, Alan Beattie, have taken against the popular political term Global South. They attack it as inaccurate, misleading, and “deeply unhelpful” (Beattie). They are not exactly wrong, but getting rid of the term will not make any difference. Another will replace it, because, like “less developed countries” and “developing countries” and “emerging markets” and “frontier markets” and the Third World, it serves a genuine need. Unlike globalization 1.0 (1830-1914), which concerned a world divided into imperial powers and colonies, globalization 2.0 (1960 -?) has taken place in a world of relatively stable sovereign states among poor as well as rich, and with much higher rates of capital mobility, common education, and intellectual-property transfer. Very crudely put, the colonized of the 19th century have enough power and shared experience in the 21st century to constitute a kind of collective. Banning the use of Global South won’t change that, and ignoring the realities that generated the term and its many ancestors will lead to bad analysis.

Nye and Beattie rightly point out that much of the Global South is in the North. China and the U.S. are at about the same latitude. China, India and most of Africa are above the Equator, as is most of the world, while prosperous countries like Australia, New Zealand and Chile are south of it. (Nye’s article is here. Beattie’s Trade Secrets columns are behind a paywall but appeared on 14 September and 5 October.) If you were to mark out the Global South on a map the result would be interesting but also a bit silly. On political-economic grounds, the attack on the Global South is less compelling. The inclusion of Russia, because Jim Neill put it in the BRICS in 2001 and Vladimir Putin has sought to exploit this position to harry his wealthy enemies, is scarcely credible, even to Russians. More plausibly, Nye and Beattie underline that the Global South’s aspiring champions, India and China, are at odds with each other and opportunistic in their support for other Southerners. China, indeed, is not looking very Southern any more along its prosperous eastern seaboard, where its world-beating high-technology companies gather. And its Belt and Road Initiative, useful as it was for off-loading excess heavy-industrial capacity a decade ago, no longer looks much like disinterested solidarity.

All this may be granted. However, Global South and its terminological ancestors did not come into being for geographical reasons or to satisfy the ambitions of the largest players. The Global South would still be a thing under whatever name even if China were to move on, which it well might as it pursues autarkic policies of self-sufficiency (zili gengsheng, a revived Maoist term) under Xi Jinping. Global South exists primarily because Global North exists. The U.S. under Trump and now Biden has been moving toward its own zili gengsheng, what Trump called “economic nationalism”, for seven years. One of the core reasons for the European Union was to create a common market that could rival the North American one is achieving economies of scale, growth through the refinement of internal comparative advantages, and efficiencies of regulation and distribution.  Intensification of anti-immigrant policies in Italy, Britain, Germany and Austria — the Netherlands might join in after 22 November elections — only increases the sense that the non-South wants to take its winnings and leave the table. Given the size and centrality of Northern markets, capital, and technology, their clear desire to withdraw inside themselves will only increase the importance of the Global South concept if not its current name.

But there is a twist. The Global South is not just about staring forlornly at a border wall or dying on a raft near Lampedusa. As Beattie acknowledges, in analyzing possible changes in voting shares at the International Monetary Fund, the Global South has a large and growing share of global production. He cites this as more evidence of its misleading nature. But the idea of the West didn’t weaken as its wealth increased. Neither, interestingly, has the idea of Asia. (See Parag Khanna’s The Future Is Asian.) Nor, in a global context of both splintering and forms of consolidation like large-market self-sufficiency, will the idea of a Global South. It should be able to generate its own credibility for some time to come.

https://nltimes.nl/2023/09/21/omtzigt-calls-firm-cap-many-forms-immigration-50000-people-per-year 

https://www.project-syndicate.org/commentary/global-south-is-a-misleading-term-by-joseph-s-nye-2023-11

The Pulling Apart

The Pulling Apart

By Dee Smith

We live in a singular moment in history: the world has been knitted together by technology and commerce, but it has become in the process an extraordinarily unhappy human family. And that brings a huge, largely unrecognized, problem.

From the 1940s onward, there was an assumption, particularly in the West, that trade and consumerism would bring convergence. The universal desire for washing machines and the like and the triumph of American popular culture would make life in Jakarta very similar to life in Miami.

After the fall of the Soviet Union in 1991, the true age of globalization arrived and with it the American unipolar moment. The US was the only superpower, militarily, economically and culturally. American-style market economics were ascendant. Production could be located where costs were lowest; products could be sold where prices were high. To make global markets work smoothly, rules were required and readily accepted as necessary for participation in global prosperity. Economic self-interest reigned and everyone would play nice because it was in their economic interest to do so. “People who trade don’t fight” became an article of faith. This was The End of History and the world was flat.

But a series of signal events—the dot-com bust, the 9-11 attacks, the global economic crash of 2007 and 2008, and the arrival of widespread social media—were harbingers of a sea change. For many sophisticated observers, such events had to be seen as anomalies, so strong was their faith in the economics-based and rules-based global system, and so convinced were they of its inevitability. Why was it thought to be inevitable? Because we believed that we had finally discovered and mastered the true drivers of human activity: economic need and desire. So, when trouble arrived, the tendency was to double down and keep going. The systems had to be right; they just needed to be tweaked. In the intelligence world, this is called confirmation bias. It is a failure of imagination.

But there is more than one kind of self-interest and more than one driver of meaning and purpose. Some are more compelling than economic self-interest. Perhaps the most important is the need for identity. The desire to gather into groups based on similar beliefs and passions (the latter often to redress past or current wrongs) can be more powerful as a driver of human action than the supposedly cooler forces of economic self-interest. Even some economists are now saying this.

The networking technologies that have become globally ubiquitous over the past 25 years — first visual telecommunications, then social media — have had the opposite of the effect they were meant to have. They have led people to compare, and then to celebrate and intensify their differences rather than their similarities. They have increased attachments to identity, rather than decreasing them. And they have provided just enough evidence to falsify the claims of politicians without providing the facts and discipline to counter and improve on them. Social media provide people with enough evidence to conclude they are being betrayed but no means to do anything about it except to create grievance communities. This has led to an immediacy of visual and visceral information about attacks, wars, political disturbances, and so forth, self-selected by adherents to these new groups to reinforce the beliefs they share. Such effects can and do have triggering and multiplying effects across the planet, literally in seconds.

We do not all believe in the same rules. We never did, actually, but now we are no longer prepared to pretend that we do, even for the sake of almighty trade.

How is it possible to have a rules-based order — international or domestic — when we can’t even agree on the rules under which we are to live and by which we are to be governed?

Simply put, it isn’t.

So where will this lead? It is hard to see how it leads to anything other than much more pronounced splintering and fragmentation, both within societies and between nations. Groups within countries may separate into smaller societies that internally share beliefs and rules. As with the USSR at the end of the past century, some nation-states and political units — even large ones — may collapse due to internal stresses. Resource depletion, especially of food and water, and climate change — addressing either of which would require global rules-based agreements — as well as vastly increased numbers of displaced and migrating people, plus a nostalgia for the old world and politicians who exploit this emotion by making impossible promises about restoring it, are adding to the feedback loops driving a political and social pulling apart. Because the problem is global as well as internal and often intensely local, it is hard to discern what possible countervailing forces there might be. We are moving from a largely centrifugal world to a largely centripetal world.

To survive this with an intact civilizational system of some kind — or at least without ubiquitous and utterly devastating conflict — will require us all to think far outside the proverbial box. The solutions to these problems have not yet been found. They are probably not to be found in the structures of the past.

Rising India and a Murder in Canada

Rising India and a Murder in Canada

Canada is embroiled in an increasingly bitter diplomatic argument with India. As Canadian Prime Minister Justin Trudeau has accused India of murdering a Canadian citizen on Canadian territory, this is hardly surprising. For many observers the most curious aspect of the scandal is a lack of support for the Canadian position, apparently due to the failure of Justin Trudeau to present convincing evidence. But there is more support than meets the eye, and Trudeau has moves yet to make.

The murder in question was the shooting of Hardip Singh Nijjar on 18 June in Surrey, a southern suburb of Vancouver, BC. The incident was recorded on security cameras that confirmed the involvement of at least 6 individuals and 2 vehicles. Nijjar died at the scene. The assassins, who were masked, drove away and have not been apprehended. The identity of the individuals or institutions behind the murder has not been revealed. The evidence is closely guarded, although the Canadian government claims to possess signals intelligence as well as human intelligence that confirm the involvement of Indian diplomats or agents in Canada.

Nijjar was a plumber. He was also the president of Surrey’s Guru Nanak Sikh Gurdwara, a “residence of the guru” that contains a copy of the Sikh scriptures known as the Guru Granth Sahib. Nijjar was not only the president of a gurdwara, he was also a Sikh nationalist who claimed to support a peaceful referendum in India but had been designated a “terrorist” by India.

More Sikhs live in Canada than in any country other than India and 82 gurdwaras have been built in British Columbia alone. The number of Sikhs in Vancouver is almost a quarter of a million, nearly 10 percent of the total population. They are there, in the main, as a response to persecution in India.

The Sikh community emerged in the Punjab at the end of the 15th century and follows the teachings of Guru Nanak and the nine Sikh gurus who succeeded him. As their beliefs were distinct from those of Hindus or Muslims, they have been subject to intense persecution throughout their history. They have responded by emphasizing military prowess, creating a Sikh ideal that embodies the virtues of soldier as well as saint. 

Hopes for a separate Sikhistan were discussed formally in 1944 while plans were being prepared for a post-colonial India. They were never ratified. Sikh aspirations were frustrated by official indifference and corruption, as well as by the narrow confessionalism of political parties such as the RSS and the inability of the Congress Party to counter it. Attempts by successive governments to suppress Sikh militants reached a bloody climax in 1984, when Indira Gandhi sent troops into the Golden Temple at Amritsar to remove fighters who had gathered around Sant Jarnail Singh Bhindranwale and turned the shrine into a military complex.

Two months later, Gandhi was assassinated by Sikh bodyguards, an event that provoked anti-Sikh riots across northern India. Sikhs sought refuge in Canada, where they retained their dreams of an independent Khalistan, or “Land of the Pure.” They brought the conflict with them. In June 1985, Air India Flight 182 from Montreal to London was destroyed by a bomb that caused the death of 329 passengers. The attack was often seen by Canadians as a foreign affair and is barely remembered, although the casualties were mostly Canadian and the atrocity was planned in British Columbia. It has not been forgotten in India.

Since 1985, Indian politics have changed dramatically, the ideals of an earlier generation of Indian politicians replaced by the more rigid ethnic and religious nationalism of Hindutva. Narendra Modi’s agenda offers citizens who are not Hindu – such as Muslims, Christians, and Sikhs – little more than a second-class status. But if the hopes of Sikhs in India for an independent Khalistan have been suppressed, they survive in British Columbia.

How important a question is Sikh political aspiration for Canada or India? Is it of any significance to anyone else? The Sikh community is undoubtedly a political force in Canada. The 33rd premier of British Columbia, Ujjal Dosanjh, was a Sikh who also served as a federal member of Parliament and cabinet minister. More important at the moment is the prominence of Jagmeet Singh, an MP from Burnaby, a Vancouver suburb. He is the national leader of the New Democratic Party, on whose support Trudeau’s minority government depends. Trudeau, no less than Modi, sees the Sikh community in terms of domestic political issues rather than international diplomacy.  

Elsewhere, however, interests vary. India is being courted because of its economic power, huge markets, its strategic position in Asia generally and its rivalry with China in particular. With so much at stake, there is little desire outside India and Canada to enter an argument over the death of a plumber in Surrey. Nevertheless, the US ambassador to Canada stated “there was shared intelligence among Five Eyes partners that helped lead Canada to making the statements that the prime minister made” and that US intelligence in particular had been sent to Ottawa.

This was an unusually explicit commitment that could make the case even more difficult to address. Would Modi be any more likely to admit culpability if detailed evidence were released? The activities of Sikh militants have been murky and may have included affiliation with Pakistan intelligence as well as international crime syndicates. The Indian position has been that the death of Nijjar involved enemies among the latter. What if this position were no longer tenable because the involvement of the Indian government was exposed?

The various parties involved have relatively weak motivations for fueling the controversy, India and Canada having now gone through some diplomatic tit-for-tats over the case. But releases of evidence could interrupt the desire to move on.

Beyond the US-China Thaw, a Deeper Game

Beyond the US-China Thaw, a Deeper GamE

The idea of a thaw in US-China relations has begun to take hold in recent weeks as administration officials and now a group of senators have visited China. Chinese media portray these visits quite differently — as embassies from a major foreign power that is slowly being brought to reason. SIG’s view is that the thaw is not likely to amount to much because the two sides are talking past each other.

Senator Schumer is hopeful about Chinese cooperation in suppressing the production and export of fentanyl. He also suggests that the delegation influenced the Chinese to stiffen their language in criticizing Hamas. And yet these topics barely registered in the Chinese media or official announcements, which are now much the same thing. Instead, they described the senators being instructed that US-China relations should be based on objectivity, accurate perceptions of China, rational management of differences, and an acceptance that China is following its own distinct model of development. Put differently, the Chinese media and official statements about the talks not only stressed that American policy has been unobjective, inaccurate, and irrational, but also claimed that American ideas of economic development are irrelevant. China welcomed future exchanges on this basis. (See the invaluable trackingpeoplesdaily substack for more.)

The senators’ visit coincided with the release of a Chinese government white paper on the 10th anniversary of the Belt and Road Initiative (BRI), President Xi Jinping’s global project to repurpose excess manufacturing capacity, particularly in state-owned smokestack industries, and to undermine Western power in the capitals of less affluent countries by offering affordable infrastructure development projects. The results in cities such as Addis Ababa and Nairobi have been remarkable. As the BRI grew, however, the Chinese economy weakened, the average age rose, and the workforce peaked. BRI borrowing led some foreign governments into debt traps, although the real problem from a Chinese perspective was the government wasting money overseas. The off-loading of excess capacity at BRI prices became steadily less economical. At the same time, overseas Chinese workers crowded out local workers, which in turn undermined China’s diplomatic goal. The BRI turned out to be not much of a win-win.

These developments help to explain why the white paper so glaringly contradicts itself. On one hand, we are told that “many developing countries have benefited little from economic globalization and even lost their capacity for independent development, making it hard for them to access the track of modernization.” A few paragraphs later, we read that “China has not only benefited from economic globalization but also contributed to it” and that “China has been a firm advocate and defender of economic globalization.” It isn’t much of a defense of globalization to argue that it has exacerbated poverty in developing countries.

In a heavily ideological culture like that of the CCP, this kind of clear contradiction is a sign of real political stress. China undoubtedly benefitted from old-school globalization and its prosperity today is unimaginable without it. But that process also created vulnerabilities to shifts in foreign demand and supply. Xi’s Made in China 2025 policy was a companion and counterbalance to BRI, replacing foreign demand and supply with Chinese demand and supply. It was an openly, although not explicitly, anti-globalization policy: a massive hedge against the potential failure of Chinese industrial internationalization.

So now China, like the US, is seeking a way out of its political stress by trying to reshape globalization to suit its new needs. China’s rhetoric has changed and it now insists that countries have unique developmental paths. This sounds welcoming and inclusive and is meant to as China maneuvers to present an alternative to Western leadership in the development sphere. The problem is that it is all too true of China itself, whose own development model would be impossible for anyone else to follow except perhaps India. China arguably benefitted more from the old globalization than any other country, but there were a thousand reasons why. As Chinese officials constantly insist in other contexts, China is unique. The successes of the Asian Tigers were replicable; China’s is not. The emphasis on multiple paths to success in international markets is really another indication that China is increasingly on its own in the global economy. Policies in the US, Europe, Japan, and elsewhere have increased this isolation but are not the basis for it. The basis is in the Party’s desperate need to increase economic growth and maintain tight social control.

Globalization is being transformed as global supply chains heal themselves by working around China. The process will feed the protective isolation that China’s government wants but cannot afford. It might not be a bad thing for developing and mid-level countries, however. They will miss Chinese demand and in some cases Chinese investment, but they can also aspire to take market share from Chinese manufacturing in a way that they cannot from Western economies. Although China did break the spell of the Washington Consensus, the benefits will increasingly be reaped at China’s expense. With the next APEC summit only a month away, these are some of the dynamics that we may want to keep in mind.

The Ukraine War and EU “Strategic Autonomy”

The Ukraine War and EU “Strategic Autonomy”

The European Union has not yet been a significant actor in the Ukraine crisis. The EU’s hard-power defense capacity is exceedingly weak and focused mainly on defense-industrial policy. To the degree that “European defense” has a strong operational meaning, it is due to NATO, which is dominated by a non-European power (the US) and has several militarily significant non-EU members (the US again, Canada, and Turkey). Understandably, the consensus view has been that the EU is close to being a non-actor in the defense of Europe. However, various developments — the waning of American support for Ukraine, the chaos of British foreign policy, the political desperation of Emmanuel Macron, the sacrifice of Nagorno-Karabakh’s Armenians — may contribute, however unwittingly, to a strengthening of the EU’s security purpose, if only because they render the status quo less and less tenable.

Not long ago, the key question for the EU was whether it was evolving into a “two-speed” configuration, with “core Europe” leading or ignoring its periphery as it saw fit. The core-Europe idea, not surprisingly, had been associated principally with Germany — as Kernereuropa — since the end of the Cold War. Kernereuropa was a concept for fiscal rectitude, rather than centralized defense, and was revived in response to the eurozone crisis of 2009 and 2010. But the Brexit referendum of 2016, which removed Europe’s first- or second-ranked military from the EU table — a quick comparison of the British and French militaries is here — notably weakened Europe’s defenses in the absence of NATO. This brought further rounds of EU defense-policy rethinking amid an increase in German interest stimulated by the Russian annexation of Crimea in 2014. German interest inevitably brings French interest. French interest inevitably brings a conceptual framework of resistance to American power — at least, it has since De Gaulle, if not Clemenceau. After Emmanuel Macron was elected in 2017 and faced the neo-isolationism and unreliability of Donald Trump, he began to speak of European “strategic autonomy.” This meant autonomy from the US, which also meant autonomy from NATO. By 2019, Macron was speaking of “the brain-death of NATO.” Given Trump’s open questioning of the alliance, this was understandable. However, Germany and others still preferred to wait on events, even if Angela Merkel once spoke of Europe taking its fate “into our own hands.”

The accession to power of Joe Biden made the questioning of NATO less urgent for a French president. Biden promised a policy of friendliness toward allies, and toward democracies in particular. Strategic autonomy begin to lead a quieter life, with the focus shifting somewhat to cyber autonomy. In this comparatively mild environment, Macron was even able, after Russia invaded Ukraine at the end of February 2022, to attempt the role of mediator, insisting that Russia had its own perspective and Putin might be reasoned with. The US, Germany, and Britain ignored him.

By December 2022, Macron was shifting to the opposite view. By May 2023, he had fully transitioned, signing off on weapons transfers to Ukraine. Faced with a European policy on Ukraine that was being dominated by the US, Germany, and Britain, France presumably wanted a place among the actual decision-makers. Under Russian pressure, NATO itself was undergoing a strategic revival less than three years after being declared brain-dead. By the autumn, the French military and intelligence services were being humiliated by revolts in the Sahel and by the French, and European, inability to oppose the Azerbaijani offensive against the Armenians in Nagorno-Karabakh.

The cliché has been that Europe requires crises to move forward. Another way to put it is that the EU only learns from failures. As it is certainly experiencing an abundance of failures now, will they herald a period of learning and change? The growing American reluctance to spend on Ukrainian defense might well help force some strategic unity on aKernereuropathat has long resisted it. In a peculiarly European dynamic, the need for greater unity is being expressed, in part, by moves toward EU enlargement, which Germany’s defense minister has called “a necessary geopolitical consequence of Russia’s war.” Macron has also switched from opposing enlargement to backing it. When the Nobel Peace Prize committee gave the 2012 prize to the EU, it emphasized the union’s enlargement policy as a strategy for peace. It appears now to be part of a strategy for fighting a war, and a conflict on the periphery might give core Europe a security purpose it has always lacked.

Deliberate Speed: Morocco’s Earthquake Response

Deliberate Speed: Morocco’s Earthquake Response

 

Shortly after 11.00 pm on 8 September, a massive earthquake struck the High Atlas of Morocco, some 45 miles southwest of Marrakech. Its tremors were felt far to the north, in cities such as Fès and Taza, where people fled into the streets. In Marrakech, close to the epicenter, the impact was terrifying. In the villages of the High Atlas, however, it was devastating. Within ten days, official estimates were suggesting almost 3,000 dead and more than 5,500 injured.

Accusations and recriminations appeared almost immediately in the international press. The scale of death and suffering was due, it was claimed, to King Mohammed VI waiting at his residence in Paris before returning to his people, to his failure to issue an immediate statement, to the hesitation of the prime minister Aziz Akhannouch to respond without delay because protocol forbade him to act before the king had spoken, to a reluctance to accept international aid – especially from France – without hesitation, and to the inability of government rescue teams to reach mountain villages with the necessary speed.

But did the allegations acknowledge the fundamental problem? The period for saving the lives of anyone buried after buildings collapse during an earthquake is very short. Early reports from rescuers stated that many residents had extricated themselves or been rescued by their families or neighbours. At least where possible, the injured had been taken to seek medical assistance, but roads were often blocked, transport unavailable, and hospitals or clinics distant and soon overwhelmed. Remaining in a village without shelter could itself prove fatal. Nights in the High Atlas were already cold.

While the earthquake itself was a disaster, it occurred in a region that was not only remote but also impoverished and marginalized. Most of the inhabitants are not Arab but Amazigh, the indigenous “free people” who were pushed into the Rif and the Atlas by the arrival of Arab armies at the end of the seventh century. They were often known as “Berber,” because their speech was unintelligible to the conquerors, and they still possess a distinct culture, language, and alphabet. Although Mohammed VI has made a concerted attempt to reduce differences in status among the peoples of Morocco, and Tamazight is now widely seen alongside Arabic and French in official documents and public notices, life in regions such as the Rif or the Atlas remains difficult. The villages of the High Atlas have been described as “another Morocco” of which most foreign visitors and even many Moroccans have little knowledge.

News cycles are very short. Two days after the earthquake, massive floods in Libya provided an even more compelling version of a theme that many journalists find irresistible: desperate suffering in Africa where a state was failing to address a crisis and victims were in need of urgent help from the West to have any hope of surviving. Morocco is quite different from Libya, however. The state might have been slower than its critics might have liked, but it did exist and it did act.

It also had its own concerns. The government was clearly thinking of the political implications of accepting international aid. While the influence of France remains ubiquitous more than fifty years after independence in what was French North Africa and French West Africa, it is increasingly seen in the region as intrusive, arrogant, and not always effective. Official announcements from Rabat were clear about the sources from which assistance would be welcome. The countries that were chosen – Spain, the United Kingdom, Qatar, and the United Arab Emirates – have all favored Moroccan views about the status of the former Spanish colony in the Western Sahara and their involvement is not seen as compromising Moroccan sovereignty on this or other issues. Statements in the French press in particular suggest that Moroccan suspicion is not exaggerated.

Beyond the immediate concerns of the government itself, Moroccan society is still remarkably robust. Even before the machinery of state applied itself to the crisis, citizens and community organizations throughout the country were collecting food, medical supplies, clothing, and money and delivering them to the affected region. The scale of public involvement continues to be impressive. While foreign assistance will undoubtedly be important, Moroccans were in a very real sense saving themselves.

But will anyone be able to save the Amazigh villages of the High Atlas? Some villages have been completely destroyed, the cost of rebuilding is almost certain to exceed even the large amounts of money that are being promised, and younger Amazigh men in particular had already begun to leave the village in the hope of finding work in cities. A rich and distinctive culture is at risk of being lost.

This is not a problem unique to the High Atlas, of course, or to Morocco. Distinctive rural cultures with ancient ways of life are vanishing just as urban elites become more aware of the importance of preserving them. This “other Morocco” is far removed from the gleaming world of high-speed rail projects, international airports, digital technology, and renewable energy. Its value may be more difficult to calculate in purely economic terms, but its marginalization has meant that much of Morocco has never seen it and has not yet begun to consider its significance for the life of the nation. It has been suggested that Moroccan authorities might have moved slowly at first because the High Atlas seems so different from Morocco’s new identity as a bridge between Europe, Africa, and the Middle East.

The real task will therefore lie not so much in rebuilding but in ensuring a way of life that can be viable without compromising the traditions of local communities. If the people of the High Atlas leave their villages, what of importance will remain to be saved?

For corporations and investors, the attraction of Morocco remains undiminished by the earthquake. The resilience and ingenuity of the people and the diplomatic acumen of its leaders should be reassuring. The deliberation in selecting the countries from which Morocco would receive international aid can be seen as evidence of a sophisticated and measured approach to questions of sovereignty and international relations. In a part of Africa where military coups in the Sahel, the withdrawal of the French military, and the arrival of Russian mercenaries are unsettling, such careful calculation is not just impressive but essential.

Japan's Power Play

Japan’s Power Plays

 

Coverage of the US-China agon has become ubiquitous, especially in the United States, where politicians turn to China policy with relief as the only major area of bipartisan accord. Military and economic threats are always news, and China and the US are both generating plenty of them. Coverage of Japan, by contrast, is comparatively rare. This is a mistake, because Japan — the third-largest economy in the world by one measure — is undergoing a strategic transformation of great significance. And it is much more than a sideshow to the US-China drama.

There is a great deal going on in US-Japan relations right now — the Center for New American Security has an excellent report out this week on the subject — but in many ways the most interesting Japanese moves have to do with regional and European relations. Japan-Korea relations went into a deep freeze in 2018 after the Korean supreme court ruled that specific Japanese companies should compensate individuals who had endured forced labor during the Japanese occupation of the peninsula that ended in 1945. Only three of the original plaintiffs remain alive, but Japan reacted negatively, Korea responded, and the two nations nearly ceased to communicate. The conservative government of Yoon Suk-yeol broke the logjam earlier this year with a plan to have Korean companies pay the compensation. Japan responded positively, although the three plaintiffs refused to accept Korean money, and Japan-Korea relations have blossomed. Both countries have developed new security strategies — in response to China, in particular — based on the fundamental needs that they share, as trade-dependent economies with shrinking populations, for free navigation throughout the Indo-Pacific. The US encouraged the Japan-Korea rapprochement, including greater security roles for both countries and culminating in the trilateral meeting at Camp David in August. But greater strategic autonomy for both Asian nations means greater autonomy from the US.

Japan has also prioritized relations with the United Kingdom. The reciprocal defense agreement signed by prime ministers Kishida and Sunak in January was hailed by one British defense official as the most important British-Japanese agreement for “more than a century,” presumably referring to the Anglo-Japanese alliance of 1902. (Japan had earlier signed a similar agreement with Australia, which more than a century ago was the sworn enemy of the Anglo-Japanese pact.) Just as important was the announcement on 12 September of closer cooperation between Japan, Britain, and Italy on the Global Combat Air Programme (GCAP) to produce “sixth-generation” fighter planes. The project is at once a way for the United Kingdom and Italy to address their own non-participation in the Eurofighter program, while also evading dependence on the Americans’ Next Generation Air Dominance platform (NGAD).  GCAP is the largest defense project that Japan has ever undertaken with European partners.

It is worth noting that GCAP is an example of what might be called strategic software autonomy. The fifth-generation F-35 fighter tied the buyer to the manufacturer (Lockheed Martin), who kept the code proprietary along with necessary software updates. The Pentagon itself didn’t like this level of dependence and is determined to avoid it with NGAD. The F-35 software approach did have the advantage for the US of bringing F-35 buyers into dependence on the US, creating a form of digital alliance in the name of interoperability. It will be interesting to see how the GCAP fighter, which is meant for export as well as for the British, Italian, and Japanese air forces, will handle the question of software and data. What seems clear is that US policy and Lockheed Martin’s contracts pushed some major US allies into developing defense technology that will reduce their dependence on the US. Japan now intends to build its own missiles to arm the GCAP fighter. 

Japan has also emphasized better military relations with India. Kishida unveiled Japan’s Free and Open Indo-Pacific strategy in India earlier this year and returned to the theme on 10 September at the G-20 meeting in New Delhi. The Quad (India-Japan-Australia-US) may always look curious from a diplomatic perspective, but it is having real results. Historians will appreciate, as the British defense official did, that Japan is revisiting its period of collaboration with the British Empire from the 1890s to the 1920s. There has even been talk over the past two years of Japan joining the Five Eyes intelligence-sharing group (US, UK, Australia, New Zealand, and Canada), another body created in the long shadow of empire.

Japan still has a constitution that limits its military to self-defense. Japan (after 1945) and South Korea are therefore relative newcomers to this kind of global jockeying. Their prosperity, their front-line status against not only China but also North Korea and Russia, and their world-class tech sectors combine to make them instant major players — if they continue to want to be.  

For global investors, this means that the policies and foreign-relations strategies of Japan, in particular, are now significant for investment decisions and will remain so for the foreseeable future. This had previously not been the case when investors were assessing participation in the world’s third-largest economy. Japan is creating more space for itself under the American umbrella. This has consequences; the GCAP program is only one example.

Great Industrial Power Rivalry: Jake Sullivan’s Security Dilemma (I&W)

Great Industrial Power Rivalry: Jake Sullivan’s Security Dilemma

When scholars analyze the relative power of states, they tend to look first at military and economic power, especially industrial power, and perhaps adding resource endowments, demographics, and features such as warm-water ports at a later stage. The non-military aspects tend to be subordinated to the military ones: industrial production of warplanes is more important than production of toys; resources such as oil and iron are more important than timber now that warships are not made from wood; warm-water ports are important not for winter fishing but for the projection of naval power. This analytical tilt toward military power makes a rough sense. When great powers clash, the hard-power victory will come first, before the soft-power one.

But the US-China rivalry is upending the typical modern ways of understanding major-power conflict that emerged after 1800. The definition of “strategic” industry is expanding daily. In just a few years, it has come to include pretty much anything having to do with micro-electronics and digital communication. The crucial change has been that states no longer worry just about industries or technologies that have clear military applications. They now worry about industries that might possibly be relevant to military power and therefore to national security. The classic “security dilemma” taught at universities — that actions taken by a state to increase its own security cause reactions from other states, which in turn lead to a decrease rather than an increase in the original state’s security — is now being applied, in practical terms, to a growing share of certain national economies. More and more resources, from human capital to video apps to venture capital, are becoming “strategic.”

This is a new world, one that multinational businesses have begun to notice but are hardly ready to face.

If one wanted to ascribe this gradual “securitization” or “militarization” of major economies to the actions of individuals, two come to mind. The most obvious and the most important is the President of China, Xi Jinping. However, the National Security Advisor of the United States, Jake Sullivan, has also played a key role in shaping this fundamental change. 

Xi Jinping’s “Made in China 2025” program, which was launched in 2016, was and is an attempt to make China as self-sufficient as possible. The alliance-building of the “Belt and Road” Initiative, the weaponization of Chinese ethnicity outside China, the opportunistic use of non-Chinese intellectual property and foreign investment, the “nine-dash line” drawn to encompass resource-rich seas, and much else all point toward the same goal: a China self-sufficient enough that it can say no to the rest of the world if it likes, especially to the United States. Chinese autarky makes little sense in terms of the social science of economics, but then mainstream economics since Adam Smith has never known quite what to make of security-driven economies, except to say that they are inefficient and probably lead to war. Furthermore, China is run by Marxists, for whom mainstream economics is seen as at most a useful tool-kit for struggle rather than a gospel of human development.

China’s weaponization of its own economy under Xi Jinping has made the security dilemma economy-first rather than military-first. That choice has caused a security reaction from the United States, one that certainly does seem to be causing a decrease rather than an increase in the original state’s security.

The US reaction is where Jake Sullivan comes in. It is true that the hardening of US economic policy toward China began during the Trump years, mainly because of the Trump administration’s focus on national economic greatness. The theory of great-power conflict, rescued from history books by Trump’s security team as a framework to constrain an inexperienced and mercurial Commander in Chief, also preceded Biden’s presidency. But the Biden administration has developed its own theoretical framework for foreign policy that reconfigures, refines, and solidifies the tendencies first seen in the Trump years.

Jake Sullivan was the young and well-liked Director of Policy Planning at the State Department under Hillary Clinton and President Obama. In the Trump years he was head of a program at the Carnegie Endowment for International Peace that aimed at developing a “foreign policy for the middle class.”  

American political culture — for good reasons and with great success — has tended to see anything that benefits the middle class as positive. The nurturing of a middle class has been among the greatest achievements of American democracy. Nonetheless, the deliberate rooting of national security policy in the fortunes of a particular social and economic class is something rather new for a non-Marxist and non-aristocratic society.

The reasons for this shift are many. Probably the most important has been the perception that liberal or neoliberal policies, grounded in a theory of market fundamentalism and globalization, led to a hollowing out of the American middle class accompanied by the expansion of a global middle class, mainly in Asia. This in turn has led to an erosion in working-class and middle-class support for the Democratic Party, something that the Biden administration naturally hoped to reverse. A foreign policy for the middle class is part of that effort.

The results have been onshoring and friend-shoring and the leveraging of US market access and security guarantees in the service of creating a US-centered global economy that serves US interests first, but without the traditional prop of free trade. It is “Make America Great Again” in a Democratic key.

This is the context in which electric-vehicle manufacture, to mention just one example, with all the supply chains that feed into it, has become a national-security policy priority.

Whether this choice will, in the emerging logic of our 21st-century economic security dilemma, ultimately make the United States less secure is not an easy question to answer. What is clear is that multinational enterprises, or any enterprises dependent on globalized supply chains and open markets, need to look not only at policy manifestations — the Inflation Reduction Act or the Chips and Science Act — but also at the deeper political logic that drives them.

“Gradually, then Suddenly”: Why Change Has Become So Quick (Part Two)

“Gradually, then Suddenly”:

Why Change Has Become So Quick (Part Two)

by Dee Smith, CEO

[part two of two]

If you ask a room full of people what color the sky is, those who answer will almost always say “blue.” But is the sky really blue? About half of the time, it is black sprinkled with stars. At other times it can be grey, orange, yellow, red, all these colors at once, or even green or purple.

The sky is blue much less than half of the time. So why do almost all of us say it is “blue”?

We do it because it is a practical shorthand, or “heuristic,” that might not be perfect or rational but will enable us to keep moving forward. Heuristics let us categorize things and move through life without expending too much thought. If you see a coil on a stove that is orange in color, you will assume that it must be hot before you assume that someone painted it with orange glow paint.

We are entering a time in which such rules of thumb, developed for an earlier era, are becoming unreliable and deceptive. They can be serious impediments to our success and even to our survival. For the reasons discussed in the first instalment of this article, the near future is becoming less and less predictable. Specifically, it is becoming less like the immediate past and less like anything that we might expect on the basis of previous experience—what we think we “know.” And so the rules of thumb that come from that experience—the heuristics—are increasingly likely to lead us astray and threaten us.

How do we deal with this?

First, if it looks like a duck, walks like a duck, and quacks like a duck, do not assume that it actually is a duck!

Second, avoid thinking fast—which relies on assumptions, biases, and heuristics—and focus on thinking slow, as Daniel Khaneman and Amos Tversky described in the famous book Thinking, Fast and Slow, a distillation of work for which they both won a Nobel Prize. And as you change your way of thinking, you might want to remove a few words from your working business vocabulary. These include “always,” “never,” and “I’ve seen this before.” Today, it is always better to believe you have not seen it before.

Expectations have a great deal to do with what we see and understand. If you expect to see the same things that you have seen in the past, your mind will often filter out any elements that are different. In a situation of rapid change, this ingrained mental process is guaranteed to lead you to the wrong conclusions. So you need to train your mind to expect different patterns and at the same time not to expect a repeat of what you know. In other words, avoid getting comfortable.

Third, inculcate some new mental models. For example, look at the data—the indicators—that are before you. If you jettison preconceived ideas, then what do they really tell you? Think about “what-ifs.” What might you see if a situation began to emerge that was very different from anything that you had learned to expect? Imagination is your friend in understanding divergent situations, which is why intelligence failures are often called “failures of imagination.” A useful thought trick is to suppose that a situation you encounter is the opposite of what it seems to be, and then go from there.

Mental agility is an equally critical skill. Be prepared for eventualities—but in a general way—because these days you don’t know what is going to happen, or where, or how, or when. Be prepared to turn on a dime, and then turn on a dime again.

Monitoring elements of interest to detect early warnings—subtle signals that can tell you if change is coming—can be very valuable, but it needs to be ongoing. And you also need to be attuned to paying attention to conflicting or “abnormal” signals. Major changes often announce their arrival through subtle and contradictory indicators, also called anomalous indicators because they violate expected patterns.

The single most important tool, however, is an analytical mindset. To deal with complexity and emerging risk, be objective and systematically investigative. Don’t be political, polemical, or emotional. You might not like what you are forced to confront—you will almost certainly not like some of it—but flying blind because you refuse to accept what the evidence is telling you would be even worse. “That can’t be the case” is another phrase to remove from your vocabulary.

None of this is easy or “natural.” It is more work—it requires more energy—to think through things instead of choosing the “automatic pilot” that heuristics provide. The autopilot can fly you straight into a mountain. 

In a time of pervasive change, if you continue to employ existing and preconceived ideas, frameworks, or mental models, you will miss the signals, misinterpret or misunderstand them, and make profound mistakes.

The near future will not be easy to navigate. There are no fixed or “right” answers, only what is effective in circumstances that are constantly changing but does not contradict or betray your values. If you open your mind to seeing new patterns and finding new approaches, a course can be charted much more effectively.

As a very wise CEO once told me, “All conditions are temporary.”

Turkey’s Autocrat Shifts the Balance (I&W)

Turkey’s Autocrat Shifts the Balance

During the NATO summit in July 2023, a sudden change in policy was announced: Turkey would not veto the application by Sweden for admission. In apparent exchange, Turkey would receive F-16s from the United States along with access to advanced upgrades for its existing F-16s. As part of a “general normalization and improvement” of relations with the EU as well as with the United States, Sweden would work closely with Turkey on “counter-terrorism.” Turkish accession talks with the EU would resume, along with discussions about the Turkish role in the European Customs Union and the possibility of visa-free travel for Turks to the 27 countries of the Schengen Area.

The news was generally received in the Western press with a mixture of delight, incredulity, and suspicion, especially as Erdoğan had repeatedly denounced the behavior of the West during his campaign to win the presidential election of May 2023. How could a country, or at least a president, alter his course so suddenly and so dramatically?  

One point to bear in mind is that capriciousness is part of Erdoğan’s autocratic style.  The persona that he affects as a political leader is often volatile and irascible. He frequently berates Turkey’s citizens, shouting at them as a disappointed and exasperated father while he castigates other nations and their leaders for their failure to treat Turkey, Turks, or Muslims in general with the respect he believes they deserve.

As second point is that autocratic caprice has been part of modern Turkish political tradition.  Since the founding of the republic in 1923, Turkish politicians have rarely hesitated to embark on ambitious programs of social engineering. The first president, Kemal Atatürk, transformed the subjects of the sultan into citizens of a new secular society, changing their clothing, their names, their alphabet, and their language. Erdoğan was intent on promoting a revolution in attitudes toward the history of the Turkish nation and especially the Ottoman Empire, the last and greatest of the Muslim empires, which collapsed in the aftermath of the First World War. He was determined that it would no longer be seen as an embarrassment.

This affected foreign policy. Under Erdoğan, Turkish strategists became increasingly interested in extending their reach into lands that the Ottomans had lost, or into regions they had not controlled but were nonetheless seen as part of the wider Turkic world of Central Asia. Since the 19th century, of course, Central Asia had been under the control of the Russian Empire and then the Soviet Union. Indeed, Russia still assumes that the Central Asian republics remain within its sphere of influence. But, many Uzbeks, Kazakhs, and other inhabitants of the region are increasingly inclined to disagree, seeing Russia as an imperial power to be resisted.

As Russia weakens, strategists in Ankara have become aware that the opportunity to realize the Pan-Turkic dream of the late 19th and early 20th century is growing, especially if it is understood in terms of the “soft power” implied by closer cultural and economic ties. Even when relations with Russia seem relatively cordial, therefore, it is not seen in Turkey as an ally. Although it is not really an enemy, at least at the moment, it will definitely be seen as a rival and an obstacle.

It should be emphasized that a pan-Turkic Central Asia is not just a romantic fantasy. A region in which Chinese, Iranian, and Russian areas of influence meet is undoubtedly of strategic interest for the United States. America’s rivals possess far more extensive ties than its bureaucrats or corporate executives could hope to acquire by themselves; Turks, therefore, are ideally positioned to support American aspirations if they so choose. Turkish religious, linguistic, and cultural affinities have existed for many centuries and Turkey is not only an American ally but also a member of NATO. This gives it a status to exploit in the former Ottoman lands.

Erdoğan is sometimes misunderstood as merely an Islamist politician. It is more accurate to say he recalls the fusion of Islam and Turkish nationalism that was encouraged by Kenan Evren and the generals who led the coup in 1980 against the ineffective coalition of Süleyman Demirel. This is one of the reasons why his alliance with the MHP on the far right of the political spectrum has not diminished the support that he receives from more conservative or traditional Muslims. He offers something that very different sections of Turkish society can admire, or at least support in elections.

Turkish neo-Ottoman nationalism is enough to get Erdoğan his electoral majorities, however slim (just 4% in 2023). His reversal of position on Sweden and NATO in July was a sign of how much Erdoğan values Turkey’s membership in the alliance, not because of any shared values but because it could serve, in the moment, his strategic goal of neo-Ottoman revival. Erdoğan has long since proved he can provoke the West; that was always just one stage in a broader agenda.

Niger’s Anti-Foreign Coup (I&W)

Niger’s Anti-Foreign Coup

The coup in Niger on 26 July was rightly condemned by the United Nations, the European Union, the United States, and France. It was also denounced by the Economic Community of West African States (ECOWAS), which has been the main regional security actor since its intervention in Liberia in 1990. The African Union took the further step of issuing an ultimatum to the new government threatening to use “all measures” against the coup-makers if they did not back down after 15 days.

These immediate and threatening responses were due in part to fear. Since 2020, there has been a wave of military coups across the Sahel, including in Chad, Guinea, Sudan, Burkina Faso and Mali, and these have overturned an earlier trend toward democratization and presumed stability. Along with fear, however, there has been a sense of disappointment and loss. Niger had been a democratic standout until the coup, receiving thereby a great deal of foreign aid: more than half a billion US dollars from the EU alone between 2021 and 2024. The international system has been badly shaken by the chronic instability in South Sudan since its creation in 2011 as a very expensive experiment in internationally backed state formation. The trend since then had been to devolve international power to the African Union and regional bodies such as ECOWAS, while also allowing a greater role to Western powers, especially France, in providing lift capacity and firepower for fighting the numerous local insurgencies, many of which are Islamist. During the same period after 2011, Niger held three democratic elections and enjoyed a peaceful transfer of power in 2021 from Mahamadou Issoufou, who came up against a term limit, to Mohamed Bazoum. Niger could be and was seen as a rare example of success—right up to 26 July.

Then it became a nightmare. Burkina Faso, Guinea, Mali, Mauritania, and Algeria all issued statements saying they would oppose any military attempt by ECOWAS to unseat the new government of General Abdourahamane Tiani, the head of Bazoum’s presidential guard who feared he might be next in a military cleanup campaign initiated by Bazoum and backed by the US and France. The Wagner Group’s Yevgheny Prigozhin, who has been active in the region as both a mercenary leader and an investor (see SIGnal, “How Putin Goes,” 5 July 2023), endorsed the coup and offered his help in securing it. But the deeper problem was that Africans in the region did not all respond to the coup as a setback. As of this writing, ECOWAS did not seem to be following through on its threat of decisive action if the coup makers did not stand down; the deadline Sunday came and went. Many in Africa expressed their solidarity with the coup makers in rejecting outside interference, especially by France.

This should not have been quite such a surprise. When Emmanuel Macron took office in 2017, he gave a celebrated speech in Ouagadougou aimed at burying neocolonialism and entering a new era of partnership. The security part of that partnership did not go well, however, and Macron made a four-day tour of central Africa earlier this year, announcing a shift towards a greater appreciation and respect for local authority. Meant as an assurance that the condescension of earlier decades would be discarded, it was evidently seen by some as a sign of irresolution and withdrawal. Military forces in the Sahel seem to be moving toward a view that France is their primary adversary, adamantly opposing any foreign intervention in their internal affairs. What is most striking in the Nigerien case is that ECOWAS and the AU, whose own security capacities have been strengthening for a decade as a result of French and international support, are now being seen as “foreign,” or at least as inimical to the independence of African states, despite their being African themselves.

Russia, meanwhile, has been gaining influence. By appearing to treat African states as equals and giving their leaders a grandiose reception at the Russia-Africa Summit, Russia has appealed to African leaders weary of their low status in the global arena. Russia’s actions—including the cancellation of a substantial African debt of USD 23 billion and the exploration of mutually beneficial partnerships—align with the aspirations of African states, as have somewhat similar Chinese initiatives. The refusal of many African states to condemn the Russian invasion of Ukraine is to some degree a reward for Russia’s Africa policy.

The overarching concern among the people of Niger is that the foreign military presence and bases, in cooperation with Bazoum’s elected government, have not effectively addressed the insurgent threats in the region. Consequently, there exists a growing belief that the Nigerien military, with support from Russia, might be better equipped to combat the insurgency and handle security challenges within the country.

ECOWAS and the African Union need to adopt a more proactive approach to curbing military power seizures, promoting instead the principles of democracy, good governance, and respect for constitutional order. Doing so might restore some confidence in the efficacy of these regional bodies and foster African stability.

However, a pattern of institutional weakness at the regional and continental levels, accompanied by the rejection of elected governments by Africans themselves in individual states, could also lead major players such as France, the US, the EU, and even the UN to back away from existing commitments and focus more narrowly on particular interests. In the case of the EU, this would mean taking an even harder line against African migrants, thousands of whom die every year as they attempt to reach Europe. France is likely to become less internationalist and more inward-looking, an ongoing trend alongside attempts by Macron to reconcile the traditional French pursuit of la gloire with the demands of internationalism. At the same time, the US and other powers are likely to become less reticent about fighting Russia and China on African soil for access to strategic minerals.

The result will be an increasing divide between African economies able to grow their own productive capacity and those that, like many today in the Sahel, will choose the appearance of independence and the likely reality of chronic under-development as authoritarian states such as Russia and China are allowed to set the prices. An entirely understandable revolt against foreign dominance could then introduce an era that will feature a version of neocolonialism different from its predecessor, but not nearly different enough.

“Gradually, then Suddenly”: Why Change Has Become So Quick

“Gradually, then Suddenly”:

Why Change Has Become So Quick

by Dee Smith, CEO

[part one of two]

We are suddenly confronted—on all sides, it seems—with abrupt and wrenching change, with transformations that few if any of us expected to see or can easily understand.

Why is this occurring? Or perhaps more to the point, why is it so surprising to so many of us? These are two distinct but nevertheless related questions.

In the late 20th century, new mathematical models and enhanced computational power fueled a real revolution in our understanding of complex systems. Much of this revolution remains poorly understood—if it is understood at all by the general public.

Why is it important? Because discoveries about complex systems revealed that they all exhibit a shared set of attributes. They have hidden links and feedback loops. They engender enormous unintended and unexpected consequences. They are inherently unstable and fragile under certain conditions. Furthermore, they are liable to abrupt change including “tipping points,” cascading phenomena, and amplification of events.

The rigorous mathematical study of what is known as non-linear dynamics has revealed key characteristics that such complex systems display. They are not complicated to explain, although some of them seem counterintuitive, or even contradictory.

One of the most intriguing is homeostasis, a dynamic process that is characteristic of complex systems that maintain stability, despite disturbances, as long as conditions stay within a certain range. And yet outside that range, even small changes can have dramatic consequences. Inputs of the “right” kind, at the “right” time, into a system that has been stable can cause massive changes in the system’s state.

In some cases, systems can generate dramatic change themselves when they approach a critical point of phase transition. More generally, however, systems remain vulnerable to massive changes in state caused by external agents. Think of the introduction of a small amount of cyanide or polonium-210 into a living human body. It will change its state from living to dead very quickly in most cases.

The key point of all this is that change often happens abruptly, not gradually. And there are many reasons why abrupt change happens. The more complex a system is, the more vectors—the more inputs—of change will impact all the elements within the system. So change can increase exponentially.

The nature of abrupt change has been demonstrated and modeled mathematically. A Danish physicist named Per Bak studied it through the seemingly unlikely medium of sand piles. As it turns out, if you drop grains of sand on a sand pile, one by one, the pile becomes larger and more unstable. But grains of sand do not fall off in sequence, one by one, as each additional grain is added. Instead, they build up until, at a moment that cannot be predicted with any precision, a large part of the sand pile suddenly collapses in a kind of tiny avalanche. It is a bit like how Ernest Hemingway answered the question of how he went bankrupt: “Gradually. Then suddenly.”

This may seem mundane, but ask yourself why you are so surprised by sudden change and you will see that it is not. Think of putting a glass of ice outside on one of the hot days we are now experiencing almost everywhere. Once it warms to 0°C (32°F), it quickly changes its phase state from solid to liquid—in other words, it melts. It doesn’t stay part water and part ice for long on a hot day. And no single molecule is ever half-frozen and half-melted. It changes abruptly from frozen to liquid.

Many unimportant as well as very important changes in our own lives happen suddenly. You don’t have a car wreck over a period of several weeks, or a heart attack over a period of months. Why then are we so surprised when we encounter sudden change?

There are various ideas about this—including the suggestion that it may be due to the human brain’s inbuilt need to conserve energy. After all, it takes less thinking to deal with continuity than with change. There is also an evolutionary argument. Homo sapiens and our progenitors adapted over millions of years to a world in which change was usually very slow and sudden change simply resulted in death. This is all speculation, but whatever the reason, it is a very old question, closely related to one known to philosophers as the “problem of induction”—simply put, that things stay the same until they don’t.

It is a real problem, however, and it skews our perception time and time again. In the run-up to the Russian invasion of Ukraine, for example, many highly informed experts were certain that Russia would not invade. Their rationale was primarily that there had been no major war in Europe for 70 years. This is the problem with induction—believing that the past is a reliable guide to the future—and it leads to what in the intelligence world is called “failure of imagination.”

Putin himself was apparently subject to a “failure of imagination” in making his decision to invade Ukraine. The various tepid responses of the West and of the United States in particular to his actions during the previous 2 decades—in Georgia, in Syria, and in Ukraine itself in 2014 —and the disastrous American withdrawal from Afghanistan, impressed the idea on Putin that the West would do little if he simply took Ukraine by force.

So, if we can’t use the past as a reliable guide to the future, what can we use? This is a good question.

If we step back, however, we should now be able to suggest at least provisional responses to the two questions that I asked in the opening paragraphs.

Why does it seem change is so much more sudden and wrenching today? Because it is! We have unquestionably created the most complex human society with the most multifarious and most interlocking systems that have ever existed. And its complexity is increasing daily—even hourly. Dynamic complex systems in which complexity is increasing are especially prone to rapid transformation and unpredictability. So it should not seem hard to understand that this is resulting in more accelerated change—of larger scope, across more domains, at greater speed, and with more unpredictability— than we have ever seen before. Simply because of the nature of complex systems, we have passed into a state where change is accelerating and becoming more non-linear, with more unforeseen—and sometimes unforeseeable—effects and outcomes. And again because of the nature of the system and because of where we are at this point in history—a point to which I will return in a later post—change is becoming more radical. It represents departures further and further away from what we have known in the very recent past and what we have assumed will exist in the near future.

So why are we so surprised all the time? We are simply not mentally suited—we are not evolved—to deal with the current pace and scope of change. We have created a world transforming—technologically, socially, and environmentally—more rapidly than we can accept as individuals, as societies, and in fact as a planetary biological system.

More complexity equals more change equals more unpredictability equals more and greater risk. This is the world we have engineered, like it or not. We have made our bed.

 

[part one of two]

NATO Finds Its War (I&W)

NATO FINDS ITS WAR

Did NATO miss an opportunity at its recent summit in Vilnius? Some critics have said as much, pointing to divisions within the alliance about the measures that it should adopt in offering assistance to Ukraine. But NATO is aiming at something much larger: the transformation of an old Cold War alliance into an institution fit for the new Cold War. It may in fact have achieved it at Vilnius.

Ukraine is the key that opened the door. Until Russia invaded Crimea in 2014, NATO had been organizing itself around the two challenges of terrorism and cybersecurity, finally adopting a Comprehensive Cyber Defense Policy in 2021. Since then, and at a quickening pace after the Biden administration found its feet and Russia invaded non-Crimean Ukraine on 24 February 2022, NATO has been focusing on democratic principles and the rule of law in order to shape a strategic approach. The emphasis on these values at Vilnius underscores their role in guiding NATO’s strategic evolution within the paradigm of the New Cold War.

What is often missed is that an emphasis on values – just the sort of approach that is often dismissed as mere piety – marks the transformation of NATO from a defensive alliance into an ideological alliance. Although attempts by the Biden administration to promote ideological initiatives such as the Summits for Democracy have gained little traction, NATO is different. It has been steadily expanding a conventional concept of security to encompass the global commons, including oceans, space, technology, and cyberspace. Departing from a conventional summit declaration, the Vilnius outcome document suggests a strategic roadmap, delineating NATO’s envisioned trajectory in a global order now characterized by constant transformation.

It makes no obvious sense that the North Atlantic Treaty Organization should have any responsibility for the global commons. However, the reality is that conflict between the United States on one side and Russia and China on the other leaves the global commons up for grabs. Due to technological shifts and innovations, the means for conflict and the platforms for conflict are in effect global, specifically the Internet, cyberspace, and space itself, where military command and control by major powers is dependent not only on satellites in fixed positions above national territory but also on a system of satellites in constant orbit around the planet. The global commons has become a zone of conflict because certain aspects of conflict have become globalized. An organization that includes the specifically geographical definition “North Atlantic” in its name and its mission is now embracing a more global role.

While post-summit commentary centered on NATO’s relationship with Ukraine, perhaps the most crucial immediate outcome lies in the adoption of new Regional Defense Plans. Devised for the protection of NATO’s northern, central, and southern flanks, they signify a new chapter in its strategy. Prepared by SACEUR General Cavoli and his team, and totaling over four thousand pages, the regional plans offer intricate and precise delineations of the alliance's intended actions in the event of an assault on any of its member states. This marks the first time since the Cold War that NATO has formulated such comprehensive and detailed plans, rendering the deterrence and defense capabilities of the alliance more credible than ever before. The impetus behind the completion of these regional defense plans has been the Russian aggression against Ukraine.

Looking to the next summit, which will be held at Washington in 2024, we anticipate the full emergence of Global NATO on the 75th anniversary of founding of the alliance. The North Atlantic Council has been assigned the task of producing a comprehensive threat assessment. The results will accelerate deliberations about the future of Ukraine, provide clarity on NATO’s relationship with China, and demonstrate the ways in which the alliance is preparing to confront the globalization of major-power national security. The Washington summit may well grapple with the same unresolved questions that linger after the Vilnius Summit: Does the Alliance’s door remain open? When will Ukraine find a place among its members? On the largest and most important questions, however, NATO will already have found its answers.

Strategic Insight Group is a licensed Private Security company with the Texas Department of Public Safety pursuant to the Texas Occupations Code 1702, license number A10774.