After Afghanistan, Biden Needs to Re-Engage Central Asia

After Afghanistan, Biden Needs to Re-Engage Central Asia

(National Interest) – In the aftermath of the ill-prepared and poorly executed exit from Afghanistan, the West must maintain a regional strategy that does not concede Central Asia’s critical trade routes and dynamic markets to foreign powers.

President Joe Biden’s Tuesday speech was supposed to restore confidence amongst allies who have witnessed America’s rapid retreat from the global stage. Biden spoke of a new “relentless diplomacy,” arguing that the United States—now “free” from Afghanistan—can finally prioritize the existential global threats of climate change, Covid-19, and terrorism. As if it was so easy.

But it is actions, not words, that carry weight in foreign affairs. A dedicated U.S. policy to rebuild its credibility and counterterrorism deterrence is needed. For those strategic goals, the United States needs to boost cooperation with our long-time partners in Central Asia to engender faith among friends and caution among adversaries.

However, after criticizing the previous U.S. administration for shirking its global responsibilities, Biden illogically justified the debacle of the U.S. withdrawal from Afghanistan and empowerment of the Taliban. In an August address, he stated that “our true strategic competitors—China and Russia—would love nothing more than the United States to continue to funnel billions of dollars in resources and attention into stabilizing Afghanistan indefinitely.” Nothing could be further from the truth, as Russia and China believe that by engaging Afghanistan in a bid to dominate Eurasia, they are better positioned to oppose U.S. primacy in global affairs, including Europe.

After Afghanistan, Biden Needs to Re-Engage Central Asia

The European Union and the United States alike are seeking to mitigate this by setting the stage for the revival of the nineteenth-century “Great Game” between the British and Russian empires over Afghanistan. The competition over Central Asia’s geoeconomic and geostrategic potential is just beginning.

Countries do not have friends, only interests, Lord Palmerston observed. Historically, China and Russia opposed the Taliban. Today their strategy is to engage the Taliban to develop economic corridors in Afghanistan such as the China-Pakistan Economic Corridor (CPEC) as part of Beijing’s Belt and Road Initiative (BRI), which are aimed at denying Western states access to Central and South Asia’s coveted transportation routes and markets. To this end, Beijing has offered the Taliban investments in energy and infrastructure projects, who in turn have never attacked Chinese infrastructure projects.

Read Full Article: National Interest

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

La débâcle en Afghanistan menace l’Asie centrale

Barak Seener Strategic Intelligentia

(Le Globe France) – La Russie et la Chine ancrent leur partenariat stratégique en s’opposant conjointement à la primauté des États-Unis dans les affaires mondiales. Leur conviction mutuelle est que l’Asie centrale appartient à leurs sphères d’influence respectives. Le Pakistan, l’Iran et l’Inde ont leurs propres conceptions concurrentes en Afghanistan.

Mais ce sont les nations d’Asie centrale – Kazakhstan, Turkménistan, Ouzbékistan, Tadjikistan et Kirghizistan – qui pourraient détenir la clé de l’avenir de l’Afghanistan. En raison de leur proximité géographique, culturelle et économique, ces pays peuvent également s’attendre à être au centre du nouveau Grand Jeu entre la Chine, la Russie et l’Occident. Les États-Unis et l’Europe devraient élaborer une stratégie d’engagement moderne et flexible avec l’Asie centrale pour tenir les extrémistes à distance et garantir que leurs rivaux ne dominent pas le cœur critique de l’Eurasie.

Barak Seener Strategic Intelligentia

Nursultan Nazarbayev s’exprimant lors de la réunion de l’Assemblée générale des Nations Unies sur l’extrémisme violent à New York, 2015
Le Kazakhstan doit constituer l’épine dorsale d’une telle stratégie.

Abritant le plus grand territoire, militaire et économique de la région, Nur-Sultan détient la clé pour toutes les puissances rivales cherchant à libérer le potentiel géoéconomique et géostratégique de l’Eurasie. Le premier président Noursoultan Nazarbaïev a lancé une stratégie de libéralisation du marché au début de l’indépendance en 1991. En 2020, le total des investissements étrangers directs du Kazakhstan s’élevait à 161 milliards de dollars, dont 30 milliards en provenance des États-Unis. Le Kazakhstan est classé par la Banque mondiale au 25e rang des 150 pays indexés où il est facile de faire des affaires. Cela est dû au fait que le Kazakhstan développe une économie post-industrielle basée sur les énergies renouvelables, l’agriculture à haute valeur ajoutée et les services, et que sa nouvelle classe managériale développe un secteur financier sophistiqué basé sur le Centre financier international d’Astana.

En raison de son enclavement, le Kazakhstan a mené une politique étrangère « multivectorielle » réussie à égale distance de la Chine, des États-Unis, de la Russie et de l’UE. Cette politique a été formulée par Nazarbayev dès les années 1990. À cette fin, le Kazakhstan cherche à participer à la fois à la BRI de la Chine et à l’Union économique eurasienne (EAEU) dominée par Moscou qui comprend l’Arménie, la Biélorussie, le Kazakhstan et le Kirghizistan.

La Russie, pour sa part, poursuit une politique étrangère d’irrédentisme vis-à-vis de ses anciennes républiques. Moscou maintient des intérêts de sécurité en Asie centrale avec des bases militaires au Kazakhstan, au Kirghizistan et au Tadjikistan. L’initiative impérialiste économique de la Ceinture de la Chine (BRI) se poursuit à un rythme soutenu. Et les USA ? Malgré sa stratégie de défense nationale de 2018, passant de la contre-insurrection à la concurrence des grandes puissances, Washington a perdu sa présence en Afghanistan et limite les investissements régionaux. Une stratégie de « business as usual » cédera d’importantes routes commerciales riches en ressources naturelles aux hégémons de l’Eurasie.

Read Full Article: Le Globe France

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

Afghanistan debacle threatens central Asia

Barak Seener Strategic Intelligentia

(Eureporter) – As the dust settles behind America’s hasty retreat from Afghanistan, the Taliban now controls the country. The Afghan National Army (ANA) has collapsed. Former president Ashraf Ghani has fled. In a strategic failure, few could have anticipated the speed and ease with which Taliban forces entered Kabul, and fewer still will be able to predict what the future hold for Afghanistan, the region, and the world. For Europe, the U.S., and the great and regional powers: China, Russia, Pakistan, Iran, India, – the implications of this shift are enormous: Afghanistan has always been a critical piece of the Eurasian geopolitical puzzle, and now enters a new era of the Great Game

Both Russia and China anchor their strategic partnership by jointly opposing the US’s primacy in global affairs. Their mutual belief is that Central Asia belong to their respective spheres of influence. Pakistan, Iran, and India have their own competing designs in Afghanistan.

But it is the nations of Central Asia – Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, and Kyrgyzstan – that may hold the key to Afghanistan’s future. Due to their geographic, cultural, and economic proximity, these countries can also expect to be the focus of the new Great Game between China, Russia, and the West. The United States and Europe should craft a modern and flexible strategy of engagement with Central Asia to keep extremists at bay and ensure that their rivals do not dominate the critical heartland of Eurasia.

Kazakhstan must form the backbone of any such strategy.

Home to the region’s largest territory, military, and economy, Nur-Sultan holds the key for all rivalling powers seeking to unlock Eurasia’s geoeconomic and geostrategic potential. First President Nursultan Nazarbayev began a market liberalization strategy at the outset of independence in 1991. By 2020, Kazakhstan’s total foreign direct investment stood at $161 billion, with $30 billion coming from the US. Kazakhstan is ranked by the World Bank as 25 out of 150 indexed countries that is easy to do business. This is due to Kazakhstan developing a post-industrial economy based on renewable energy, high value-added agriculture, and services, and its new managerial class is developing a sophisticated financial sector based on Astana International Financial Centre.

Barak Seener Strategic Intelligentia

Due to being landlocked, Kazakhstan has pursued a successful ‘multi-vector’ foreign policy that is equidistant towards China, US, Russia, and the EU. This policy was formulated by Nazarbayev as early as the 1990s. To this end, Kazakhstan seeks to participate in both China’s BRI and the Moscow dominated Eurasian Economic Union (EAEU) that includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan.

Russia, for its part, continues a foreign policy of irredentism vis-à-vis its former republics. Moscow maintains security interests in Central Asia with military bases in Kazakhstan, Kyrgyzstan and Tajikistan. China’s economic imperialist Belt Road Initiative (BRI) continues apace. And the US? Despite its 2018 National Defense Strategy shifting emphasis from counterinsurgency to great power competition, Washington has forfeited its presence in Afghanistan and limits regional investment. A ‘business as usual’ strategy will cede important trade routes rich in natural resources to Eurasia’s hegemons.

Read Full Article: Eureporter

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

Afghanistan-Debakel bedroht Zentralasien

Barak Seener Strategic Intelligentia

(Der Globus Deutschland) – Sowohl Russland als auch China verankern ihre strategische Partnerschaft, indem sie sich gemeinsam dem Vorrang der USA in globalen Angelegenheiten widersetzen. Ihre gemeinsame Überzeugung ist, dass Zentralasien zu ihrem jeweiligen Einflussbereich gehört. Pakistan, Iran und Indien haben ihre eigenen konkurrierenden Designs in Afghanistan.

Aber es sind die Nationen Zentralasiens – Kasachstan, Turkmenistan, Usbekistan, Tadschikistan und Kirgisistan – die möglicherweise den Schlüssel zur Zukunft Afghanistans in sich tragen. Aufgrund ihrer geografischen, kulturellen und wirtschaftlichen Nähe können diese Länder auch im Mittelpunkt des neuen Großen Spiels zwischen China, Russland und dem Westen stehen. Die Vereinigten Staaten und Europa sollten eine moderne und flexible Strategie für das Engagement in Zentralasien entwickeln, um Extremisten in Schach zu halten und sicherzustellen, dass ihre Rivalen das kritische Kernland Eurasiens nicht dominieren.

Kasachstan muss das Rückgrat einer solchen Strategie bilden.

Barak Seener Strategic Intelligentia

Als Heimat des größten Territoriums, Militärs und der größten Wirtschaft der Region hält Nur-Sultan den Schlüssel für alle rivalisierenden Mächte, die das geoökonomische und geostrategische Potenzial Eurasiens erschließen wollen. Der erste Präsident Nursultan Nasarbajew begann zu Beginn der Unabhängigkeit 1991 eine Marktliberalisierungsstrategie. Bis 2020 beliefen sich die gesamten ausländischen Direktinvestitionen Kasachstans auf 161 Milliarden US-Dollar, 30 Milliarden US-Dollar kamen aus den USA. Kasachstan wird von der Weltbank als 25 von 150 indizierten Ländern eingestuft, die einfach Geschäfte machen. Dies ist darauf zurückzuführen, dass Kasachstan eine postindustrielle Wirtschaft entwickelt, die auf erneuerbaren Energien, hochwertiger Landwirtschaft und Dienstleistungen basiert, und seine neue Führungsklasse einen hoch entwickelten Finanzsektor entwickelt, der auf Astana International Financial Centre.

Da Kasachstan ein Binnenland ist, hat es eine erfolgreiche „Multi-Vektor“-Außenpolitik verfolgt, die gleich weit von China, den USA, Russland und der EU entfernt ist. Diese Politik wurde bereits in den 1990er Jahren von Nasarbajew formuliert. Zu diesem Zweck möchte Kasachstan sowohl an Chinas BRI als auch an der von Moskau dominierten Eurasischen Wirtschaftsunion (EAEU) teilnehmen, die Armenien, Weißrussland, Kasachstan und Kirgisistan umfasst.

Russland seinerseits führt gegenüber seinen ehemaligen Republiken eine Außenpolitik des Irredentismus fort. Moskau behält Sicherheitsinteressen in Zentralasien mit Militärstützpunkten in Kasachstan, Kirgisistan und Tadschikistan. Chinas wirtschaftsimperialistische Belt Road Initiative (BRI) geht weiter. Und die USA? Trotz seiner Nationale Verteidigungsstrategie 2018 Durch die Verlagerung des Schwerpunkts von der Aufstandsbekämpfung auf den Großmachtwettbewerb hat Washington seine Präsenz in Afghanistan eingebüßt und schränkt regionale Investitionen ein. Eine „Business-as-usual“-Strategie wird den Hegemonen Eurasiens wichtige Handelsrouten, die reich an natürlichen Ressourcen sind, abtreten.

Read Full Article: Der Globus Deutschland

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

Afganistán: el Gran Juego, otra vez

Barak Seener - Strategic Intelligentia

(La Razón) – Mientras se moldea el polvo tras la precipitada retirada de Estados Unidos del territorio, los talibanes controlan ahora el país.

Mientras se moldea el polvo tras la precipitada retirada de Estados Unidos de Afganistán, los talibanes controlan ahora el país. El Ejército Nacional Afgano (ANA) se ha derrumbado. El ex presidente Ashraf Ghani ha huido. En un fracaso estratégico, pocos podrían haber previsto la rapidez y la facilidad con la que las fuerzas talibanes entraron en Kabul, y menos aún podrán predecir lo que depara el futuro para Afganistán, la región y el mundo. Para Europa, Estados Unidos y las grandes potencias regionales (China, Rusia, Pakistán, Irán, India), las implicaciones de este cambio son enormes. Afganistán siempre ha sido una pieza fundamental del rompecabezas geopolítico euroasiático, y ahora entra en una nueva era del Gran Juego.
Tanto Rusia como China afianzan su asociación estratégica oponiéndose conjuntamente a la primacía de Estados Unidos en los asuntos mundiales. Su creencia mutua es que Asia Central pertenece a sus respectivas esferas de influencia. Pakistán, Irán e India tienen sus propios designios competitivos en Afganistán.

Barak Seener - Strategic IntelligentiaPero son las naciones de Asia Central -Kazajistán, Turkmenistán, Uzbekistán, Tayikistán y Kirguistán- las que pueden tener la clave del futuro de Afganistán. Debido a su proximidad geográfica, cultural y económica, estos países también pueden esperar ser el centro del nuevo Gran Juego entre China, Rusia y Occidente. Estados Unidos y Europa deben elaborar una estrategia moderna y flexible de compromiso con Asia Central para mantener a raya a los extremistas y garantizar que sus rivales no dominen el corazón crítico de Eurasia.

Kazajistán, columna vertebral de dicha estrategia. Hogar del mayor territorio, ejército y economía de la región, Nur-Sultan tiene la llave para todas las potencias rivales que buscan liberar el potencial geoeconómico y geoestratégico de Eurasia. El primer presidente, Nursultan Nazarbayev, inició una estrategia de liberalización del mercado al inicio de la independencia en 1991. En 2020, la inversión extranjera directa total de Kazajistán ascendía a 161.000 millones de dólares, de los cuales 30.000 millones procedían de Estados Unidos. El Banco Mundial sitúa a Kazajistán en el puesto 25 de los 150 países del índice de facilidad para hacer negocios. Esto se debe a que Kazajistán está desarrollando una economía postindustrial basada en las energías renovables, la agricultura de alto valor añadido y los servicios, y su nueva clase directiva está desarrollando un sofisticado sector financiero basado en el Centro Financiero Internacional de Astana.

Al no tener salida al mar, Kazajistán ha aplicado con éxito una política exterior “multivectorial” equidistante hacia China, Estados Unidos, Rusia y la UE. Esta política fue formulada por Nazarbayev ya en la década de los noventa. Para ello, Kazajistán pretende participar tanto en la BRI de China como en la Unión Económica Euroasiática (UEE), dominada por Moscú, que incluye a Armenia, Bielorrusia, Kazajistán y Kirguistán.

Read Full Article: La Razón

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

Joe Biden’s Middle East Strategy of Alienating Allies

After Afghanistan, Biden Needs to Re-Engage Central Asia

(National Interest) – The United States’ hands-off approach towards Iran is directly contributing to the Iranian regime’s belief that it will not suffer any consequences for violating U.S. sanctions and advancing its destabilizing regional strategy.

At Vienna, the Biden administration is attempting to silo nuclear negotiations with Iran from escalating tensions between Iran and U.S. allies. To this end, the United States is treating the security concerns of its allies—Israel, UAE and Saudi Arabia as a separate parallel sphere from Iran’s nuclear ambitions and terrorist sponsorship. This has led the Biden administration to omit Iran from the State Department’s Annual Human Rights Report in March that listed the world’s human-rights violators. Similarly, the Biden administration has refrained from mentioning Iran’s involvement in the recent conflict between Israel and Hamas. Thus, the Biden administration is repeating the Obama administration’s approach towards the JCPOA that sought to compartmentalize Iran’s nuclear program from its sponsorship of regional instability. This appeasement towards Iran serves to embolden its strategy of regional destabilization while undermining the security of U.S. regional allies.

After Afghanistan, Biden Needs to Re-Engage Central Asia

The Office for the Director of National Intelligence’s Annual Threat Assessment that was published on April 9, 2021, asserts that government officials  “expect that Iran will take risks that could escalate tensions and threaten U.S. and allied interests in the coming year.”  Iran’s maximalist strategy to heighten regional instability aims to leverage the United States to lift Iranian sanctions at the Vienna nuclear talks as a prerequisite for Tehran to resume compliance with the 2015 Joint Comprehensive Plan of Action (JCPOA).

This strategy has encouraged the Iranian regime to confront U.S. regional allies as was witnessed in the recent conflagration between Israel and Hamas.

Iran provides Hamas with the blueprint and technical capability for Hamas to manufacture rockets. Iranian military leaders recently praised Hamas’s strikes on Israel and pledged to continue arming and funding Hamas in its bid to destroy the Jewish state. To this end, Iran transfers finances, technological know-how to produce weapons to Hamas and Islamic Jihad. On May 15, 2021, Islamic Revolutionary Guard Corps Commander Maj. Gen. Esmail Ghaani contacted Qatar-based Hamas leader Ismail Haniyeh and Islamic Jihad leader Ziyad al-Nakhalah. Ghaani expressed Iran’s support for Palestinian “resistance”. Similarly, Nasir al-Shammari, deputy leader of Hezbollah al-Nujaba in Iraq offered a willingness to transfer weapons to Hamas and participate in the fighting against Israel. Both Hamas’s Qassam Brigades and Islamic Jihad have noted the use of Iranian ordnance, including the Kornet ATGMs, Sejjil and Badr-3 missiles, in their bombardments of Israeli towns. Islamic Jihad leader Ziad al-Nakhala told the pro-Iran al-Mayadeen channel on Dec. 1, 2020, “All the conventional weapons reached Gaza via al-Hajj Qassem Soleimani, Hezbollah and Syria, and the entire resistance axis played a part in transporting them . . . There are training camps in Syria where our brothers in Hamas received special training to produce the rockets.”

Iranian defense minister Brig. Gen. Amir Hatami said Iran’s support for Hamas’s missile arsenal has created a “nightmare for the Zionists.” Thus, in the aftermath of the cessation of the recent conflict between Hamas and Israel, Fathi Hamad, a member of Hamas’s politburo, declared, “With the end of the Israeli regime’s latest aggression, the Palestinian resistance has resumed the process of rocket production.”

Read Full Article: National Interest

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

The U.S.’s Strategic Re-Pivot to the Middle Eastern Quagmire

(Newsweek) – The U.S. has not fully woken to the rising Chinese dragon’s aggressive forays into the Middle East. In December 2019, China participated in its first three-way naval exercise with Iran and Russia in the Indian Ocean and the Gulf of Oman. More recently, in response to Iran’s economic and military alliance with China, Secretary of State Mike Pompeo asserted in the beginning of August that “China’s entry into Iran will destabilize the Middle East. It’ll put Israel at risk. It’ll put the Kingdom of Saudi Arabia and the Emirates at risk as well.”

But the Trump administration has not formulated a comprehensive regional strategy to keep China at bay, while also maintaining a light footprint in the Middle East and pivoting toward Asia. So for now, the U.S. is doomed to continually be sucked into the quagmire of the Middle East.

The U.S.’s regional allies questioned the Obama administration’s withdrawal from Iraq and pivot away from the Middle East toward Asia. This subsequently led to increased Russian involvement in Syria and the rise of ISIS, which once again drew the U.S. into the region. A U.S. in retreat will increase regional instability, as an assertive Russia, a nuclear-aspiring Iran committed to destabilizing the region, a rivaling Saudi nuclear aspirant and mercantilist China seek to extend their spheres of influence across the vacuum of governance spanning the region.

U.S. strategic allies in the region are not convinced by the level of the U.S.’s commitment to their security vis-à-vis Iran. James Dorsey, a senior fellow at the S. Rajaratnam School of International Studies, has identified that Saudi Arabia fears that the U.S. will seek to renegotiate the JCPOA with Iran, which may contain loopholes and ambiguities that Iran could exploit. Iran could then be allowed to develop nuclear weapons, enhanced its ballistic missile capabilities and increase its support for terrorist proxies across the region. And the Gulf Cooperation Council (GCC) states have lauded the UAE’s recent peace agreement with Israel, which they believe will bolster their security in the event of a regional U.S. drawback.

China will seek to increase its maritime presence in the region to protect its energy imports. The Iranian attack on the Saudi petroleum processing facilities in 2019 saw oil prices spike by 20 percent. This affected China’s purchase of 60 percent of its oil that comes from the Middle East, with Saudi Arabia being China’s top supplier of oil.

Dorsey notes that Sun Degang and Wu Sike, scholars with close links to the Chinese regime, asserted that the Middle East was a “key region in big power diplomacy with Chinese characteristics in a new era.” China perceives the U.S.’s reticence to commit to the Middle East as an opportunity to destabilize the region. For example, in 2017, China agreed to cooperate with Saudi Arabia on nuclear energy. Although this was guaranteed to heighten tensions with Iran, it was not met with a U.S. response. Similarly, in 2018, China’s comprehensive strategic partnerships with Saudi Arabia and the UAE was met with a muted response. All the while, GCC states are increasingly hedging from fully committing to the U.S. underpinning its security architecture and are simultaneously cultivating ties with China, Russia, Iran the U.S. and Israel.

Despite the U.S. providing weapons sales to GCC states, those GCC states will take the opportunity of increased ties with Israel to diversify their weapons supplies away from sole reliance upon the U.S.—especially in light of criticism by U.S. lawmakers on weapons sales to Saudi Arabia and the UAE. This will reduce the U.S.’s leverage with them, which is and will continue to be exploited by China and Russia. In 2019, Russia advanced a collective security concept for the Gulf. In July 2020, at the ninth ministerial meeting of the China-Arab States Cooperation Forum, Chinese and Arab League foreign ministers adopted the Amman Declaration, which seeks to build a joint China-Arab community by deepening ties.

Read Full Article: Newsweek

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

The Godfather Wars

(The American Interest) – Don Vito Corleone, Don Licio Lucchesi, Hyman Roth, and the coming international realignment.

In the aftermath of World War II, the U.S.-led Western hemisphere decided that economic interdependence between Western democracies would underpin political harmony. The trauma of two world wars prompted the Europeans to establish the Coal and Steel Community in 1951, the progenitor of the European Union. This trend was cemented by the end of the Cold War, with the triumph of capitalism over communism, to the point that the free world became defined by open markets and democracy. Despite being underwritten by the U.S. security guarantee, the Western order distinguished between political security and economic prosperity, to the point that the former concept was consigned to the dustbin of history (this despite historical precedents establishing that economic ties do not necessarily strengthen political ties). The Unipolar Moment came to be identified with the End of History, to the point that President Clinton in 1997 dismissed the Chinese government as being on the “wrong side of history.” Little did the West suspect that it might be on the wrong side of history, or that its primacy would become a source of its vulnerability in the international system.

Liberal internationalists certainly did not anticipate China’s military assertiveness, or its economic decoupling with the United States. They embodied a tendency to idealistically project the West’s unique historical circumstances, and especially the triumph of democratic capitalism over Soviet communism, onto China’s totalitarian political system. This tendency was complemented by the West’s eagerness to access China’s large consumer market and natural resources. In the process, the West discarded realpolitik, and the bell rang forth, extolling the virtues of U.S.-Chinese financial interdependence. The World Trade Organization learned the wrong historical precedent that, “The key lesson drawn from the inter-war experience was that international political cooperation—and an enduring peace—depended fundamentally on international economic cooperation.” In 2002, the Bush Administration’s National Security Strategy advanced the idea that the United States and China would enhance cooperation on global challenges. This was echoed by the Obama Administration’s National Security Strategy in 2010. Tony Blair echoed this approach when he argued that the European Union should extend to China, along with the United States, a new global partnership. As such he took a page from The Godfather’s Peter Clemenza, who orders Rocco Lampone, “Leave the gun. Take the canoli.”

In the liberal internationalist order, which stresses interconnectedness, Western manufacturers have followed suit by preferring access to China’s vast markets. In the process, they were willing to overlook issues like the trade deficit, theft of intellectual property, the forced transfer of U.S. technology to China, and ongoing attempts to prevent China from selling at below-market levels in order to drive out competitors….

Read Full Article: The American Interest

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

Welcome to the Coronavirus – Inspired Supply Chain Security Showdown

(The National Interest) – German chancellor Angela Merkel and France’s President Emmanuel Macron have expressed their commitment to make strategically important products such as medical and pharmaceutical products in France and Germany. In a similar vein, the European Union Chamber of Commerce has asked its members to wean themselves off being reliant on China’s supply chains. Japan and India appear to be following suit.

Strategic decoupling from China is likely to lead to governments to increase national security regulations on foreign investments and expand their definition of strategic sectors from being information technology (IT), telecommunications and dual-use technologies with civil and military applications, to include food security, biotech, and pharmaceuticals. In turn, governments will demand that strategic sectors conduct domestic manufacturing.

The United States, EU, Russian and Chinese governments will have greater oversight and screen foreign direct investment (FDI) in these strategic sectors to prevent foreign investors from accessing sensitive data and technologies in a bid to protect their respective technological bases. As businesses are increasingly vulnerable to buyouts due to the economic downturn, governments are wary of foreign investments of their national companies. In late May, the U.S. Senate passed a bill that would bar foreign companies from U.S. exchanges if they are unable to prove that they are not controlled by a foreign government and refuse greater U.S. oversight of company financials. Similarly, the British government is considering legislation to prevent significant investment and foreign takeovers of UK companies.

Already prior to the pandemic, higher wages and increased shipping costs had led companies to shift supply chains away from China. Yet, the coronavirus has created severe disruptions in a complex web of international supply chains due to quarantines, factory closings, travel restrictions imposed by China and other countries. This increased the momentum of companies seeking to relocate as part of a growing trend of attempting to build resilience into their supply chains and mitigate against future shocks. A recent Bank of America survey of three thousand firms reported that companies in ten out of twelve global industries, including medical equipment along with semiconductors are in the process of shifting part of their supply chains from current locations.

In a bid to accelerate the trend to regionalize supply chains, Western states are likely to increase taxation on goods that were not made onshore or near shore. U.S. Commerce Secretary, Wilbur Ross exclaimed, “Globalization had gotten out of control. It takes two hundred suppliers in forty-three countries on six continents to make an iPhone.” The United States is exploring increasing tariffs on Chinese goods, tax incentives and potential re-shoring subsidies. The United States is also engaging with states across the international community and companies as part of an “Economic Prosperity Network” to standardize an approach towards regionalizing supply chains, trade, energy and infrastructure.

Read Full Article: The National Interest

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.

The World is Round: Shifting Supply Chains and a Fragmented World Order

Barak Seener

(The National Interest) – Since the 1990s, nationalism in the West was deemed passé as supply chains spanned the globe and international travel along with financial flows became more frequent. We thought that the digital-information age had led us to transcend nature and history respectively. These delusions were abruptly ended by the Coronavirus pandemic that has proven that the world is indeed round. Yet we are destined to repeat the mistakes of history.

In light of global lockdown brought about by coronavirus, Thomas Friedman’s famous aphorism that “the world is flat” due to ever-increasing interconnectivity sounds anachronistic. The ever-increasing interconnectedness associated with the latest phase of globalization was believed inevitable. Since the 1990s, nationalism in the West was deemed passé as supply chains spanned the globe and international travel along with financial flows became more frequent. We thought that the digital-information age had led us to transcend nature and history respectively. These delusions were abruptly ended by the Coronavirus pandemic that has proven that the world is indeed round. Yet we are destined to repeat the mistakes of history.

The West’s economic prosperity was artificial and predicated upon an artificial standard of living by outsourcing labor to frontier and emerging markets where it was cheaper to manufacture. The rationale for our throwaway society was that it was cheaper to outsource production to areas where health or environmental regulations were poor or non-existent. As a result, we would be raising their standard of living by the service economies’ supply chains extending to impoverished production economies. As these countries’ GDP grew, we would cause them to evolve from production to service economies. We had reached a phase in history where self-interest and altruism were synonymous. Yet within the strength of this proposition lay its vulnerability. It is precisely in areas with weak regulations that makes them attractive and cost-effective to manufacture and ultimately cheaper to purchase, where there is a heightened risk for localized epidemics to become global pandemics.

Currently companies are seeking to resource their manufacturing away from China and relocate supply chains to smaller southeast Asian states such as Vietnam. Apple announced plans last year to diversify its manufacturing from being reliant upon China. Kearney, an international manufacturing consulting firm, released its seventh annual Reshoring Index that identified that in 2013, China maintained 67 percent of U.S.-bound Asian sourced goods. By the second quarter of 2019, China’s share collapsed by 56 percent, a decrease of more than a thousand basis points. Kearney predicts companies “will be compelled to go much further in rethinking their sourcing strategies, (and) their entire supply chains.”

As fostering a sense of security will be associated with controlling supply chains, there will be an increasing trend away from diversifying supply chains that have been disrupted in neighboring countries such as South Korea and Japan due to coronavirus, towards localized supply chains within national borders. The momentum is increasing as the Trump administration fearful of China weaponizing critical supply chains attempts to reduce U.S. dependence on China for drugs and medical products such as antibiotics and pain medicines used across the globe, as well as surgical masks and medical devices. In turn, the Trump administration is encouraging greater American manufacturing of pharmaceuticals, which will lead to them being more costly. This is likely to extend to industries such as semiconductors and technology. Yet the United States. will be unable to build a manufacturing base overnight. Echoing U.S. concerns, German economic affairs and energy minister Peter Altmaier has even raised the option of nationalizing strategically important companies that have suffered because of coronavirus.

Barak Seener

The undermining of global supply chains endemic to international trade will be followed by great power contestation between the United States and China, schisms between nations, and the breakdown of multilateral projects, which in turn sets the stage for future inter-state conflict. These trends coupled with coronavirus’ disruption of global markets are likely to lead to a fragmented global order, which will detrimentally affect the export economies of Europe.

Coronavirus has already begun to undermine the legitimacy of the European project in a greater manner that nationalist movements had hoped to achieve. European finance ministers have clashed over all EU nations sharing “corona bonds” debt, while France and Germany responded to Italy’s request for ventilators with a refusal accompanied by closing their borders with Italy. At around the same time, the United States imposed a unilateral ban on commercial flights with the EU.

China’s economic growth strategy and foreign policy aspirations are being frustrated in the wake of Coronavirus, as developing countries are likely to scrutinize China’s Belt Road Initiative. Among Western policymakers anti-China sentiment is increasing. In the UK, there is mounting opposition to Huawei building its fifth-generation mobile networks. In late March, the United States abandoned its long-standing policy of maintaining a status quo vis a vis Taiwan. President Donald Trump signed into law The Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) Act, which increases U.S. support for Taiwan and “alters” engagement with nations that undermine Taiwan’s security or prosperity. Beijing responded that it would respond forcefully if the law was implemented, all the while China increases its military drills around Taiwan. This is increasingly likely to occur while the United States increasingly supports Hong Kong’s independence movement and demonstrates willingness to confront China in the South China Seas. Similarly, Washington is likely to be drawn into a confrontation with North Korea as the collapse of North Korea’s health system may threaten Kim Jong-un’s regime leading him to militarily lash out.

 

The latest phase of globalization spearheaded by the West entailed that service economies were not responsible for the manufacture of the products they consumed. Instead, they depended upon outsourcing production of cheap goods in distant shores creating unprecedented levels of economic prosperity, which at its root was artificial. Liberal democracies did not reach “the end of history,” where conflict was to be consigned to the dustbin of history, but could easily be unraveled by a virus emanating from a society it was reliant upon that did not share its norms. In a similar vein, the Roman Empire’s apex contained the seeds of its decay as it had become overstretched and difficult to manage. The historian Edward Gibbon, in his 1776 book The Decline and Fall of the Roman Empire, notes that Romans had become weak and responded to the challenges of hyperinflation, civil wars and revolts by outsourcing their duties to defend their empire in far flung regions to “barbarian” mercenaries such as the Visigoths. Blowback occurred as these barbarians’ increased economic production and their ability to conduct warfare, which led them, ultimately, to turn against their benefactors and sack the Roman Empire. Similarly, the West increased the prosperity of faraway nations and ironically, as a result their military assertiveness by being beholden to extended global supply chains. This along with the risk of globalization unravelling increases the prospects of inter-state and great power conflict. All it took was a virus to detonate the fuse that was shorter than anyone expected.

Article published on: The National Interest

Barak Seener is the CEO of Strategic Intelligentia and a former Middle East Fellow at the Royal United Services Institute (RUSI). He is on Twitter at @BarakSeener.