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….

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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.

Reflections on U.S. policy, international affairs and the limitations of the Bush administration

Strategic Intelligentia

(The Henry Jackson Society) – In a candid conversation with Barak M. Seener, Richard Perle offers insightful observations and analyses ranging from the current administration’s recent departure from neo-conservatism, the failings of the Presidential bureaucracy, and the fundamentally flawed strategy pursued by the U.S. in Iraq. Perle delves into the principles of neo-conservatism and addresses the misconceptions surrounding it. He asserts that the promotion of alternative energy is central to national security. Perle goes on to construct an argument for the continued use of interventionism as a legitimate and justifiable policy option. He also delineates the threat of U.S. military primacy and the steps necessary to sustain it. Finally, he discusses his perception of the inevitable failure of any Israeli- Palestinian peace negotiations which ignore the aims of Palestinians, and considers the possibility of militarily engaging Iran and North Korea.

B.M.S. Do you not find it problematic that the Neo- Conservative movement was short-sighted in the fact that they promoted a coherent philosophy which stated that there exists a nexus between autocratic states which lack human rights and their attempt to provide logistical and financial support to terrorist groups around the world? These same regimes threaten international security by their promotion of nuclear proliferation which may find their way into sub-state actors. On the other hand, they did not conduct a rigorous quantitative study as to how the current troop capacity would be able to achieve the grand aims of macro-democratization in the region.

R.P. I would, firstly, like to say that there does not exist a Neo Conservative’Movement’.Neo-Conservatismisaninclination and what does exist is a group of like-minded individuals that share the same inclination on a number, but by no means all, issues. The people who advanced the need to promote democratization as a doctrine did not have in mind military force to facilitate this. To associate support for regime-change with the advocacy of military force is a common misconception. Amongst the many of articles I have written, testimony I’ve given to Congress, television appearance and the like, I have never advocated the use of force as the way to achieve the development of democratic institutions. Douglas Feith and Paul Wolfowitz have argued against the use of military force to achieve this end. Thus, there was no Neo- Conservative focus on the Revolution in Military Affairs in connection with the advancement of democratic institutions. They simply did not consider force. Rather, they saw the necessity in creating institutions such as the National
Endowment for Democracy which would offer political and moral support for subjugated people seeking democracy. Portugal under Salazar or Franco under Spain, as well as Serbia under Milosevic, were all democratized primarily through political action.

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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.