Fwd: Decade Forecast: 2000-2010

Macdonald Stainsby mstainsby at SPAMdojo.tao.ca
Mon Dec 20 00:08:56 MST 1999

Forwarded From: "alert at stratfor.com" <alert at stratfor.com>
> Part I: The Uneasy Crackdown
> Part II: The Unstable Economy
> Part III: The Uncertain Future
> __________________________________________
> Australia's Future Role in Asia
> http://www.stratfor.com/asia/commentary/m9912172125.htm
> Russian Army Pressed to Resolve Chechen Conflict
> http://www.stratfor.com/CIS/commentary/c9912170100.htm
> __________________________________________
> STRATFOR.COM Global Intelligence Update
> December 20, 1999
> Stratfor's Decade Forecast
> 2000-2010: A New Era In A Traditional World
> For the last 500 years, since European imperialism began the
> process of creating a single, global system of international
> relations, the international system has maintained a certain
> predictable rhythm and pattern. During each successive era, at
> least two and frequently more powers have competed against one
> another for preeminence.
> >From the Portuguese and Spaniards in the 16th century to the
> Americans, Russians and Chinese toward the end of the 20th century,
> the world arena has seen an unchanging pattern of great power
> competition. In this competition, all nations eventually became
> players, prizes or victims. Each competition was global not only in
> the sense that it covered the entire world, but also in the sense
> that it involved all arenas of competition: economic, military,
> political, cultural and ideological. Each epoch came to an end,
> usually in a cataclysmic war, often with the implosion of one or
> more of the competitors.
> As each epoch ended, a short interregnum occurred in which it
> appeared that the victorious powers would enjoy permanent,
> unfettered dominion. From the Congress of Vienna in 1815, to
> Versailles in 1919 to the United Nations in 1945, it always
> appeared the end of an epoch would permanently change the
> underlying pattern of the international system. The victors always
> harbored the hope that victory would remain permanent and
> unchallenged, the interests of the victors effortlessly
> perpetuated. Yet the dream always proved an illusion. Victory was
> never so absolute as to preclude the emergence of new powers or
> coalitions of old ones dedicated to limiting the power of the
> victors or even overthrowing the order they created. Sometimes
> entirely new competitors emerged. Sometimes the same competition
> re-emerged. Whatever the particular circumstances, competition
> among great powers was permanent.
> The end of the Cold War is no different than the end of any other
> epoch. The coalition formed by the United States became victorious
> when the Soviet Union collapsed. The institutions that the anti-
> Soviet coalition created seemed to have inherited the world. The
> distinction between NATO, the IMF and the United Nations, for
> example, seemed to become irrelevant, as all were equally bent to
> tasks set for them by the United States and its allies. Even more
> important, the cultural and ideological victory of the anti-Soviet
> coalition appeared to be absolute. Liberal capitalism became the
> universally accepted doctrine. Even China's official communism
> appeared to be irrelevant, as it was swept into the single,
> integrated system of relationships dominated by American power.
> Apart from a handful of "rogue" nations like Iraq or Serbia, the
> world appeared finally at peace, integrating rapidly into a single
> global system where everyone shared in the benefits of free trade,
> human rights and prosperity.
> Yet the last ten years did not constitute the end of history. They
> were simply an interregnum, like so many others before it, in which
> the victory of a single power or coalition could appear to be so
> complete that the emergence of a new challenge to that power was
> unthinkable. America's victory over the Soviet Union was so
> stunning, unexpected and absolute that it seemed that American
> values were now global values and that American power was now
> absolute. However, no set of values is ever global, and no nation's
> power, no matter how great, is ever absolute.
> Beneath the surface of the last ten years, the shape of the next
> epoch has been quietly emerging. Its shape is not yet fully
> revealed, but can be seen well enough to describe. Most important,
> the next epoch will look much like the last five hundred years. The
> details will change, the dynamics will shift, but the essence will
> remain the same. The game of nations is not over.
> The United States remains at the center of the international
> system. It is the preeminent global military, economic and
> political power. Militarily, the U.S. Navy controls the world's
> oceans more completely than any empire in history. As important,
> the United States exercises almost complete control of space,
> enabling its intelligence apparatus to see deep and its military to
> shoot deep and with precision. Economically, the United States is
> experiencing an unprecedented boom, surging past all other regions
> of the world. This military and economic power yields unprecedented
> political influence. This is complemented by geography. As the only
> great power native to both the Atlantic and Pacific oceans, it can
> influence events globally with an ease that magnifies its inherent
> power.
> Thus, the fundamental question of the next decade - for both
> individual countries and the international system as a whole - will
> revolve around the United States. The question, increasingly, will
> be this: How can other countries limit American power and control
> American behavior?
> There are two processes that will shape the manner in which this
> question is answered. One is the permanent process whereby the
> international system seeks equilibrium. The second is a process
> that we feel will drive the early stages of the next epoch. We call
> this process the de-synchronization of the international economic
> system. The former process will drive nations to form coalitions to
> block the power of the United States. The second process will
> generate intensifying friction between not only the United States
> and the anti-American coalition, but between all regions and within
> regions as well. It points to a decade of increasing political and
> economic tension - both between great powers and within the spheres
> of influence created by the great powers.
> The Search for Equilibrium
> The international system has been in a state of disequilibrium
> since the fall of the Soviet Union. The unipolar world in which the
> United States is the only power with global economic, political and
> military influence, creates certain inevitable responses that tend
> to move the world toward equilibrium. Less powerful nations see
> themselves as being placed in a disadvantageous position by
> American power. Some experience the disadvantage militarily, some
> politically, some economically. Some experience it across a broad
> spectrum. None of these nations, by themselves, have the ability to
> resist the process.
> This leaves them with three options. The first is to directly
> resist American power and influence. This is always a dangerous
> option. By definition, the United States possesses a series of
> counters to resistance that can devastate any isolated nation,
> should the United States choose to act. The second option is to
> seek to accommodate one's own policies to those of the United
> States. To most nations, this appears the optimal course. It, too,
> is extremely dangerous. The United States, like any other nation,
> tries to generate relationships that are advantageous to it.
> Decisions that are extremely limited and focused, from the American
> point of view, can have devastating effects on partners. A decision
> to ban the import of bananas from a small country is a microscopic
> decision from the American point of view, but has macro-economic
> consequences of epic proportions for small banana exporters.
> The very size and scope of American interests creates a situation
> in which a vast number of microscopic decisions are made which have
> enormous effects on other nations. The sheer size of American
> interests creates a management problem in which avoiding
> devastating outcomes for other nations is impossible - even if this
> was the American goal, which it is frequently not. Policy makers at
> the center can't possibly oversee the range of issues being dealt
> with. The opportunity for interests inside and outside the United
> States to manipulate the decision-making process at the microscopic
> level is enormous. While the central thrust of policy is
> manageable, the micro level is easily manipulated. The result is a
> seemingly random set of policies that make it impossible for many
> countries to find a stable, safe standpoint in their relations with
> the United States.
> With isolated resistance and accommodation being difficult for many
> to exercise, the natural result is coalition-building, designed to
> constrain the United States. This is not a simple process and
> doesn't operate in a straight line. As the optimal outcome, most
> nations want a shift in U.S. policy. It is difficult to even get
> American attention on most policy issues relevant to weaker
> nations, let alone to generate sufficient threats to motivate the
> United States to shift its policies. The virtue of anti-American
> coalition-building is not that it builds a coalition, but that it
> increases the probability of attracting American attention and
> generating sufficient threats to force favorable policy shifts in
> Washington.
> Thus, most countries move into anti-U.S. coalitions less out of a
> desire to confront the United States than out of a desire to reach
> accommodation with it. For example, the Russians and Chinese both
> engaged in anti-American coalition building with each other less
> out of a desire to confront the United States than out of a desire
> to extract concessions. To some extent this process works. But the
> range of demands placed on the United States makes universal, or
> even frequent, accommodation impossible.
> Thus, the coalitions that are formed to extract concessions from
> the United States transform themselves over time into fixed
> relationships designed to both resist the United States and create
> alternative systems of relationships to allow nations to function
> insulated from American power. Some of these relationships have
> already formed, particularly on the economic level. Others will
> form over time. They will increasingly create a fragmented global
> system in which American unipolar power confronts a complex of
> opposition coalitions.
> Global Economic De-Synchronization
> The geography of this confrontation will be driven by global
> economic de-synchronization. The fundamental assumption of liberal
> capitalism is that, freed from the constraints of military force
> and domestic tyrannies, the attractiveness of liberal human rights
> doctrines and the tremendous efficiencies of capitalism would draw
> all nations together into a single system in which war and conflict
> would be irrational. The foundation of this theory was that the
> emergence of a single, integrated global economy would erode
> nationalism on every level, including cultural differences. The de-
> nationalized corporation would become more important than national
> institutions. International institutions would supplant national
> institutions in managing what were, after all, international
> issues.
> For everyone to accept the primacy of international institutions,
> it was presupposed that everyone would have the same basic
> interests. To be more precise, it was assumed that the decisions of
> the international system would leave no one at a fundamental and
> unrecoverable disadvantage. Given the diversity of the world, this
> seems an unreasonable expectation. Those who believed this to be
> not only possible but inevitable rested their argument on what
> appeared to them as a reasonable assumption: the increased mobility
> of capital across borders would create an integrated global
> economy.
> There was another vital assumption behind this vision of a global
> economy. People assumed that the global economy would be, on the
> whole, synchronized. The logic and necessity of the business cycle
> is well understood. Recessions are needed in order to enforce
> efficiencies against businesses whose rates of return on capital
> are below norms. It is also understood that different monetary,
> fiscal and trade policies are mandated by different stages of the
> business cycle. The assumption behind economic globalism was that
> increased international economic integration would also lead to
> increased synchronization among the world's leading economies.
> Japan, the United States and Europe would be synchronized,
> requiring compatible economic policies. Therefore, the
> internationalization of economic policy-making would increase
> rather than decrease economic harmony.
> In 1997, the foundations of this theory were falsified. Asia went
> into the worst recession it had seen since the end of World War II.
> It was generally expected that the Asian meltdown would generate a
> global crisis. The exact opposite happened. Asia's meltdown led to
> a massive flow of capital out of Asia and into the United States.
> That, coupled with the general state of the American economy,
> intensified a boom already underway. The world experienced de-
> synchronization as one region sank into depression while another
> region boomed. The very process that was supposed to harmonize the
> global economy into a single business cycle, actually worked to
> intensify the de-synchronization. This de-synchronization violated
> most expectations of the world's conventional observers. It also
> created an extraordinarily dangerous situation that persists today.
> As the year 2000 approaches, two overwhelming forces are shaping
> the international system. The first is the process of coalition-
> building in which weaker powers seek to gain leverage against the
> overwhelming power of the United States by joining together in
> loose coalitions with complex motives. The second process, economic
> de-synchronization, erodes the power authority of the international
> organizations used by the United States and its coalition during
> the Cold War and the interregnum. More important, de-sychronization
> creates a generalized friction throughout the world, as the
> economic interests of regions and nations diverge.
> The search for geopolitical equilibrium and global de-
> synchronization combine to create an international system that is
> both increasingly restless and resistant to the United States.
> Indeed, de-synchronization decreases the power of the United States
> substantially. During the Cold War and the 1990s, the United States
> could control the behavior of nations with the inducement of
> economic cooperation. As the international system de-synchronizes,
> economic cooperation with the United states becomes not only less
> attractive, but also genuinely harmful to many nations.
> For example, economic cooperation with the United States can
> threaten a country like Japan. As the American economy matures
> during this business cycle, there will be a natural tendency to
> raise interest rates. As interest rates rise, capital will flow out
> of Japan to the United States. Japan, badly in need of investment
> capital and at a totally different place in its business cycle,
> will seek to protect itself from U.S. fiscal and monetary policy,
> rather than to participate in it. Economics become a disincentive
> for cooperation rather than an incentive. It follows that if
> economic collaboration becomes less interesting to the Japanese, an
> American lever for political and military cooperation dissolves as
> well.
> De-synchronization removes incentives for economic cooperation with
> the United States and reduces the economic penalties for
> resistance. Nations are freed to resist. Indeed, they are given
> added incentive. This will particularly be the case if and when the
> economic cycles shift, as they always do, and the U.S. economy
> becomes weak while others grow strong.
> Forecasts
> Let us consider some particular forecasts that we can make if the
> basic model we are working from is correct.
> * De-synchronization will undermine the integrated global economic
> system, replacing it with regional economic groupings. This will be
> particularly visible in Asia and in the former Soviet Union as well
> as Europe. De-synchronization will diverge national interests
> within the regions, leading to intra-regional stress and poaching
> within the regions. Anti-American coalitions will emerge within
> regions and between regions.
> * The United States will continue to lead the world economically, in
> spite of the probability of a recession some time in the first half
> of the decade. However, structural problems, including an aging
> population liquidating capital holdings in retirement and severe
> labor shortage indicate serious problems later in the decade.
> * Except for a few countries with relatively healthy banking
> systems, Asia will not recover during this decade. Asia's economic
> problems cannot be solved without a wrenching remake of its
> financial system. Lacking the will and political capacity to carry
> this out, most Asian countries, including Japan and China, will
> remain in a long-term stagnation mode. Intermittent upturns will be
> mistaken for recovery, but the basic pattern remains flat to
> negative. The most important issue in the region will be the
> political consequences of this economic deterioration. Both China
> and Japan will experience profound political repercussions from
> their inability to solve underlying economic problems.
> * Russia, essentially cut off from Western capital and unable to
> compete in Western markets, will be forced by circumstances to
> regain the components of the former Soviet Union. The general
> inability of the former republics to participate in Western
> economic activities will make the prospect of some form of re-
> federation attractive to many outside of Russia. Nationalism will
> compete with economic reality, creating a complex and dangerous
> situation. Russia will spend most of the next decade in the painful
> process of reconstructing its empire. It will seek to cooperate
> with China to block U.S. interference in the reconstruction
> process.
> * Since German reunification in 1989, the fundamental question in
> Europe has been whether Germany will represent a challenge to
> European stability, as Germany did in 1871, 1914 and 1939. The
> basic assumption has been that the existence of the European Union
> has changed the dynamics of German nationalism, by abolishing
> Germany's sense of geopolitical insecurity while creating an
> economic framework too valuable for Germany to abandon. Two tests
> face Europe. The first is whether the European Union's monetary
> union can survive de-synchronization, in which some regions of
> Europe are booming, while others are in recession. The second test
> will be whether the rest of Europe is prepared to join Germany in
> defending the eastern frontiers of Poland in the face of resurgent
> Russian power. We remain pessimistic about the long-term prospects
> of a united Europe.
> * We remain optimistic about an Arab-Israeli peace, so long as it is
> understood that this peace will be about as friendly as is normally
> the case in the region. The absence of massive bloodshed is the
> most that can be hoped for. With the long-term decline of oil and
> commodity prices over, a floor has been placed under many Arab
> economies for the first time in a generation. This opens the door
> for the return of a degree of prosperity in some parts of the
> region.
> * South Africa is returning slowly to its natural role of hegemon in
> southern Africa. No longer limited by Apartheid, South Africa's
> ability to manipulate and guide affairs in sub-Saharan Africa is
> substantial, assuming that it can maintain its internal stability.
> * Latin America is beginning to experience a division into two
> parts. There are growing signs of instability in the northern tier,
> running from Panama and Ecuador to Venezuela. While the rest of the
> continent remains stable, deterioration of the northern tier can
> spread and destabilize the continent. The central question is
> whether Venezuela's President Hugo Chavez will be able to maintain
> a reformist strategy or whether the process will get away from him
> and turn into revolution. If so, the revival of the left in Latin
> America, colliding with the technocrats who manage ministries and
> governments, could create a volatile political situation.
> (c) 1999, Stratfor, Inc. http://www.stratfor.com/

Macdonald Stainsby

check the "ten point platform" of Tao at: http://new.tao.ca

"We believe that socialism is the fairest system and we
are devoting our lives to it, but we have to demonstrate its
viability. It has always been a complex process, even though we
thought it would be easy. We have lived under pressure from the
start, and more so today, but we are not going to give up. That would
be crazy."
-Raul Castro, General of the Cuban Army, 1999.

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