Politics, et Cetera

A publication from The Political Forum, LLC

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Tuesday, January 13, 2015

They Said It:

The scale of the strategic U.S. failure is best seen in the statistics for total fatalities in the region the Bush administration called the “Greater Middle East” — essentially the swath of mainly Muslim countries stretching from Morocco to Pakistan.  In 2013, according to the International Institute of Strategic Studies, more than 75,000 people died as a result of armed conflict in this region or as a result of terrorism originating there, the highest number since the IISS Armed Conflict database began in 1998.  Back then, the Greater Middle East accounted for 38% of conflict-related deaths in the world; last year it was 78%.

Mr. Obama’s supporters like nothing better than to portray him as the peacemaker to George W. Bush’s warmonger.  But it is now almost certain that more people have died violent deaths in the Greater Middle East during this presidency than during the last one.

In a January interview with the New Yorker magazine, the president said something truly stunning.  “I don’t really even need George Kennan right now,” he asserted, referring to the late American diplomat and historian whose insights informed the foreign policy of presidents from Franklin Roosevelt on.  Yet what Mr. Obama went on to say about his self-assembled strategy for the Middle East makes it clear that a George Kennan is exactly what he needs: someone with the regional expertise and experience to craft a credible strategy for the U.S., as Kennan did when he proposed the “containment” of the Soviet Union in the late 1940s.

Niall Ferguson, “America’s Global Retreat,” The Wall Street Journal, Feb. 21, 2014.

 

FOREIGN POLICY 2015:  THE NEW WORLD ORDER, YEAR TWO.

Regular readers undoubtedly know that we’re not exactly shy about patting ourselves on the back when we’ve been right about something.  Rarely, though, do we get the chance to do so with respect to these forecast pieces.  As such luminaries as Yogi Berra and the Danish physicist Niels Bohr are reputed to have said, “It’s tough to make predictions, especially about the future.”  That’s why we usually start these pieces with a caveat about how we don’t really expect our predictions to play out precisely as we’ve forecast them, but rather feel that the exercise of making predictions is highly valuable because it gives us an opportunity to think about broad themes and a forum for discussing with you the issues that will most affect politics and the markets over the next year.

Today, we wish not only to offer that usual caveat, but to pat ourselves on the back a little bit at the same time.  Our predictions from last year’s foreign policy forecast piece actually held up pretty well.  We were right about Afghanistan.  We were right about Iraq.  We were right about Iran and Saudi Arabia.  We missed on our tongue-in-cheek, out-left-field prediction about Vladimir Putin winning the Nobel Peace Prize.  And of course, we were, for the seventh or eighth time in a row, right-but-too-early in our expectation that the Eurozone would collapse.  But mostly, we were spot on.

Perhaps the most accurate prediction of them all, though, was the general, overarching premise of the piece.  Recall that we wrote that 2014 would be the year that the contours of the “new world order” would finally become clear.  Moreover, this new order would be most notable by the absence of American leadership.  America – and especially its political and intellectual leaders – was exhausted from more than seven decades of being a global superpower.  The Obama administration, we argued, would therefore continue the nation’s retreat into rather risible semi-isolationism, much to the rest of the world’s chagrin.  Or, as we put it in final paragraph of last year’s piece:

The American far Left and far Right, along with much of the rest of world, have long talked about how they want the United States to mind its own business and to quit trying to play global policeman.  To paraphrase Mencken: They know what they want, and in 2014, they’re going to get it good and hard.

Interestingly and tellingly, the most prominent and ignominious embodiment of the New World Order and the American absence from it occurred recently, though not in 2014.  It happened, as you may have guessed, this past weekend in Paris when hundreds of thousands of people marched to protest the terrorist attacks on the satirical French newspaper Charlie Hebdo and to memorialize its victims.  It was reportedly the largest mass demonstration in French history.  Among the participants were leaders from all over the world, including French President Francois Hollande, German Chancellor Angela Merkel, British Prime Minister David Cameron, Spanish Prime Minister Mariano Rajoy, Israeli Prime Minister Benyamin Netanyahu, Palestinian Authority President Mahmoud Abbas, Russian Foreign Minister Sergey Lavrov, Ukrainian President Petro Poroshenko, Turkish Prime Minister Ahmet Davutoglu, and Jordan’s King Abdullah II.  The United States, by contrast, sent no one.  Not the President.  Not the Vice President.  Not the Secretary of State.  Not even the Attorney General, Eric Holder, who HAPPENED TO BE IN PARIS ALREADY, could be bothered to attend.

Think about that for a moment.  The Israelis AND the Palestinians were represented.  The Ukrainians AND the Russians were represented.  Friends, enemies, rivals, and invaders all put aside their differences to attend the rally.  Indeed, the whole world was there – with one exception, the United States.  Douglas Schoen, a Democratic pollster and political consultant with more than three decades of Washington experience, wrote that “Sunday, President Obama morally abdicated his place as the leader of the free world.”  We agree.  Our only quibbles are that it wasn’t just a moral abdication, but a practical one as well and that it was not a “mistake,” of any sort but a rational, premeditated decision.  Obama made it clear to anyone who hadn’t figured it out yet:  We’re OUT!  You’re on your own now.  (The funny thing is that if he actually said that in so many words, he would probably gain a following, rather than be viewed as a fool who had made a mistake.  But that’s another story.)

And with that in mind, we begin, as always, with . . . .

Forecast #1:  The Euro is done, kaput, fini.  Before the end of the year, the powers that be in Euroland will be forced to admit what the rest of the world already knows, namely that this attempt to forge EUtopia has been as unsuccessful as all previous attempts, with its only saving grace being the comparative lack of bloodshed, which unfortunately is likely due to the same spiritual ennui that makes the Europeans increasingly too demoralized to breed . . .

If this forecast sounds a little familiar, that’s because it is.  It is our perennial first prediction in the foreign policy forecast piece.  Eventually, it will be right.  And this may be the year.

In brief, the Eurozone has just tipped over into deflation.  Germany – which is still the only economy in Europe with anything positive to offer – has been growing at a reasonable pace since 2009 and actually saw its unemployment rate hit a 23-year low last month.  The Germans have resisted central bank stimulus stubbornly and angrily.  With deflation now a reality, the European Central Bank’s decision is easier, but not yet clear cut.  And while most observers believe that the ECB will, after its January 22 meeting, embark on its own version of Quantitative Easing through debt purchases, they also concede that this may be a case of “too little, too late.”  In other words, the proverbial merde is going to hit the fan for the weaker economies in the Eurozone, which is to say almost everybody but Germany.  In the South especially, deflation will hit hard.

Now, what makes all of this so potentially destabilizing is the fact that that the Greeks – once again, the Greeks! – will go to the polls only three days after the ECB meets to elect a new government.  Compounding the matter, the Greeks are all but certain to hand control of their country over to the radical leftist Syriza Party, led by Alexis Tsipras.  Tsipras has promised to abandon or to “tear up” the Greek “memorandum” with the EU and the IMF and thus to abandon the much-hated austerity imposed on Greece over the last couple of years.  If he follows through on this promise, all hell could break loose, as our old friend Ambrose Evans-Pritchard noted recently:

In Germany, Der Spiegel reports that Angela Merkel thinks Greece can be ejected safely from the euro, if the rebel Syriza party wins the elections on January 25 and carries out its pledge to tear up Greece’s hated “memorandum” with the EU-IMF “Troika”.  The German Chancellor’s team are blanketing the airwaves in what looks like a campaign to drive the threat home.

“We are past the days when we still have to rescue Greece,” said Michael Fuchs, the parliamentary leader of Mrs Merkel’s Christian Democrats.  “The situation has completely changed.  It is entirely different from three years ago when we didn’t have the backstop defences in place.  Greece is no longer ‘systemically relevant’ for the euro.”  He added wickedly that the single currency might actually be stronger without the Balkan troublemaker.

It was revealed last week that Germany offered Greece a “friendly” return to the drachma in 2011.  Months later, Mrs Merkel was prepared to eject Greece from EMU altogether.  Tim Geithner, the former US Treasury Secretary, said the Europeans seemed determined to teach Greece a lesson: “They lied to us, and we’re going to crush them,” was the gist of it.  Mrs Merkel retreated only after it became clear that Spain and Italy would be engulfed by contagion if Greece was thrown out.

This time, Berlin seems almost eager to finish the job.

So, Mrs. Merkel is confident that she and the euro can safely eject Greece and still keep the whole monetary union afloat.  Well, good for her.  But no one will know whether she’s right or wrong until it happens.  And if she turns out to be wrong, well . . . . Try not to think about it.  The Washington Post thought about it last week, and they had some very ugly thoughts:

Greece could probably face widespread bank failures and capital controls, while the rest of Europe could face financial stress as bondholders began speculating on which of Europe’s debtor countries would be next to go.  University of California economist Barry Eichengreen, an expert on the euro crisis, told a recent conference of the American Economic Association that the potential fallout of a “Grexit” from the euro could be as dire as the bankruptcy of Lehman Brothers in 2008 — except that Mr. Eichengreen says it “would be Lehman Brothers squared.”

Lehman Brothers squared.  Sounds fun, no?

Well . . . no!

Forecast #2:  The potential breakup of the Euro is just the start of Europe’s problems.  Over the next twelve months, the French especially – but also the Germans, the Brits, the Dutch, the Danes, and almost everyone else as well – will have to decide how they are going to deal with their growing and increasingly radicalized Islamic populations.  Irrespective of the decisions made or not made, Europe may well turn very ugly over the course of the year.

Obviously, France is on edge right now – and most of the rest of Europe along with it.  The Europeans have long played a very dangerous and potentially deadly immigration game, importing countless Muslim who are then not assimilated, not forced to adhere to European standards of behavior, and who thus pose a risk to the traditional Western culture, most notably its freedoms.  What we have seen over the past couple of weeks in France is this long-term policy preference finally backfiring on the continentals.  We should note here that this same policy backfired on “us” – which is to say on the United States – nearly 14 years ago.  The so-called “Hamburg Cell” of al Qaeda, which, naturally, was formed in Hamburg, Germany, included 9/11 operational leader Mohammed Atta and provided the pilots for three of the four airliners hijacked that day (including Atta).  France (and Germany and the rest. . .) now has a choice to make.  And whatever it chooses, the outcome will be bloody.

Several years ago, when we still worked for a company that had offices in France, we asked one of the directors of those offices if the Europeans would ever fight back, if they would ever wake up and smell the radicalization of their countries.  He was adamant that they would.

For our part, we were a great deal less sanguine – and remain so today.  The intellectual rot of postmodernism and political correctness has seeped deeply and broadly into the European soul.  Whether they still have the will to fight back is questionable.  With respect to France in particular, we are a skeptical, as are countless others.  The population of France is roughly 65 million, of which roughly 10% is Muslim (that’s six million Muslims, to those of you keeping score at home).  These Muslims have long and notoriously controlled some sections of certain cities, governing them under de facto sharia law and turning them into “no-go zones” for non-Muslims and especially police.  Any serious attempt to retake these no-go zones and thus to bring them back into the Western fold would require serious and harsh steps.  David Goldman, a.k.a. Spengler, put it this way last week:

French security clearly has been overwhelmed.  The use of assault rifles and (reportedly) a rocket launcher by highly-skilled gunmen in the center of Paris is a statement of contempt towards the authorities on the part of the terrorists.

The means by which France could defeat the terrorists are obvious: To compel the majority of French Muslims to turn against the terrorists, the French authorities would have to make them fear the French state more than they fear the terrorists.  That is a nasty business involving large numbers of deportations, revocation of French citizenship, and other threats that inevitably would affect many individuals with no direct connection to terrorism.  In the short term it would lead to more radicalization.  The whole project of integration as an antidote to radicalism would go down the drain.

Spengler thinks that the effort would “ultimately . . . succeed.”  He is not alone.  Others, including the erstwhile newspaper publisher Conrad Black, agree that the fight would be long and ugly but that would, in the long run, prove successful.  Black put it thusly:

France had to admit more than a million Algerian Muslims in the mid-sixties, who had been loyal to France in the savage war of independence in that country, as well as a million European Algerians.  It has been comparatively indulgent of Muslims since then, but this incident [at Charlie Hebo], or a few others like it, will motivate France to lead the Western counter-attack against militant Islam that should have been launched by our united civilization many years ago.  Just as the French periodically become bored with life in their legendarily rich country of fine weather, food and wine, and tear up paving stones and hurl them across barricades at the police until bourgeois fear of economic loss reasserts itself and reaction takes over; when French possession and enjoyment of their country is threatened, the national faith in liberty, equality and fraternity will give way to more systematic repression of violent Islamists than would be acceptable in an Anglo-Saxon democracy.

Again, we’re dubious.  We think that the fact that the French president declared – in typical Western, postmodern fashion – that the Charlie Hebdo attackers had “nothing to do with the Muslim religion,” suggests that even France, with its national of day mourning, its intense grief and anger, and its history of suspect adherence to basic human rights, is still not yet ready to deal with its Islamist problem.  We hope that we are wrong, but we readily acknowledge that either way, the streets of Paris will probably run with blood for some time.  The only question is whether it will be native French blood or Muslim immigrant blood.

We should note, with respect to Europe and its coming denouement with Islam, that there are several complicating factors.  For starters, it is important to remember that despite the fact that Europe today appears to be the epitome of civility, liberalism, and human rights, the continent – and Germany in particular – is a mere seven decades removed from the most heinous, most vicious, and most efficient mass slaughter in human history.  “Never again” is a fine slogan, but it’s no guarantee that it will, in fact, never happen again.

At the same time, the Anglo-American contingent of NATO appears to be worried about both an explosion of Muslim terrorism and possible retribution.  Last week, Britain’s MI5 Director, General Andrew Parker, warned that al Qaeda is planning mass-casualty attacks in the West, Britain, continental Europe, and the United States.  Concurrently, the American Army announced plans to shift some 3,000 troops, including an armored brigade, to Europe.  The Army is officially saying that the move is made possible by the drawdown in troops in Afghanistan and is intended to “reassure” allies in the face of Russian bellicosity.  All of that said, the Americans clearly expect unrest and Europe and want to be prepared for it.

Europe is just waking up to its Islamist problem.  The fact that it is waking up is a good sign, we suppose, but again, we suspect that it is another case of “too little, too late.”  There are no good solutions to the problem now, and whatever course is pursued will be ugly.

Meanwhile, on the other side of the Mediterranean, Islamists will be causing problems as well, although slightly different ones. . . .

Forecast #3:  Egyptian President Abdel Fattah el-Sisi will be assassinated, setting off a more serious civil conflict/war in Egypt and adding further complications and confrontations to the already complicated and confrontation-laden Middle East.

If you didn’t pay any attention at all to Egypt over the last year or so, you’re hardly alone.  After the military executed its coup against Mohammed Morsi and the Islamic Brotherhood in 2013, the American press, as well as the American government, also lost interest in the country.  They considered its military leaders unaccountable usurpers of legitimate democratic authority.  For whatever reason – and we’ll leave it to you to speculate – the Obama administration was excited about the Islamic Brotherhood finally getting its chance to rule Egypt and was likewise angry and disappointed when the Egyptian army ended that chance prematurely.  To the folks at Foggy Bottom and 1600 Pennsylvania Avenue, Egypt became just another “failed” state with a military junta, not especially worthy of respect or attention.

Of course, just as the Obama administration was writing off the Egyptian government, that government produced a rather fascinating and tremendously popular leader, Abdel Fattah el-Sisi.  El-Sisi resigned his post as head of the country’s military last spring and ran for president, earning an overwhelming victory.  He was inaugurated on June 8 of last year.

In his seven months in office, el-Sisi has led an expected crackdown on the Muslim Brotherhood.  At the same time, he has also led a crackdown on Hamas, has worked to keep the border between Egypt and Gaza closed, has used military force to destroy terrorist havens and smuggling tunnels along the border, has mended relations with Saudi Arabia, and has helped stem the Islamist spread in the region.  All of this comes with the usual caveats – i.e. the fact that “crackdowns” in this part of the world tend to be selfishly motivated and not especially respectful of human rights.

Above and beyond all of this, over the last couple of weeks, el-Sisi has done some rather remarkable things.  As CNN reported last week (and as PJ Media brought to our attention):

Egyptian President Abdel Fattah el-Sisi has called for a “religious revolution,” asking Muslim leaders to help in the fight against extremism.  In a speech celebrating the birthday of the Prophet Muḥammad, which coincided with New Year’s Day, he said they had no time to lose.

“I say and repeat, again, that we are in need of a religious revolution.  You imams are responsible before Allah.  The entire world is waiting on you.  The entire world is waiting for your word . . . because the Islamic world is being torn, it is being destroyed, it is being lost.  And it is being lost by our own hands,” el-Sisi said.

“We need a revolution of the self, a revolution of consciousness and ethics to rebuild the Egyptian person — a person that our country will need in the near future,” the President said. . . .

On Tuesday, the President visited the main Coptic cathedral in Cairo to attend a Christmas mass and make a short speech.  He is the first president to attend such a mass since the revolution.  “We will build our country together.  We will accommodate each other.  We will love each other,” el-Sisi said in that speech.

PJ Media’s Roger L. Simon called this “pretty radical stuff.”  Indeed it is.  And in return for this radically brave effort to rebuild his country, reform his religion, and rehabilitate his people’s global reputation, el-Sisi will all but certainly become a target for extremists – which is to say most of the rest of the people who live in his rather dangerous neighborhood.

None of this necessarily means that el-Sisi will be assassinated.  But it does mean that he has, in essence, painted a big, bright target on himself.  It doesn’t really matter how many of the Muslim Brothers he and his government arrest.  It doesn’t matter how many Islamist fighters are distracted by the civil war in Syria and the attendant attempt to form a “caliphate.”  It doesn’t matter how many infidels there are to be killed in France, or Great Britain, over even the United States.  It doesn’t even matter that el-Sisi is incredibly popular among the Egyptian people.  All that matters is that el-Sisi has crossed the radicals and they will not rest until they extract revenge for his ignominy.

It’s been more than three decades now, but recall what happened to last Egyptian president who crossed the radicals and led the country too far afield from the Islamists’ ends.  He – Anwar Sadat, that is – died in a hail of bullets fired by radicals from within the ranks of his own army.

We don’t know a whole lot about Abdel Fattah el-Sisi.  If past is prologue, then he’s likely a rather nasty and violent strongman.  That notwithstanding, he has done something very brave and very important.  In so doing, he has likely stirred up the proverbial hornets’ nest.  And again, if the past is any guide, he may well pay for it with his life.

Meanwhile, elsewhere in the Middle East . . . .

Forecast #4:  The Islamic State – or ISIS or ISIL or. . . whatever – will be defeated.  Or it will defeat itself.  Or it will just disappear.  As it does, though, a much greater threat will emerge.

Now, we know that this might sound a little nutty, given the events of the last few days – including both the attacks in Paris and the hacking of the U.S. military’s social media accounts by ISIS just yesterday.  But we feel rather confident that John McCain is, as usual, flat wrong and that ISIS is not going to win this particular war.  ISIS will, we believe, fall – and sooner rather than later.

This is not, we’ll confess, an original thought on our part.  Indeed, this very prediction was made – in the form of a prediction – by our old friend Daniel Pipes during a panel discussion hosted by David Horowitz’s Freedom Center this past November.  Pipes, you may recall, is one of the world’s foremost historians of the Middle East, the Director of the Middle East Forum, and the publisher of the Middle East Quarterly.  And in November, he put it this way:

I would predict to you, ladies and gentleman, that ISIS, which appeared so suddenly, will disappear suddenly as well because it has so many enemies, it is so overextended, it is trying to do so much at the same time that it is going to collapse before very long and it is going to disappear as a state . . . .

Again, think about this for a minute.  ISIS is currently fighting the Iraqi army, the Syrian army, and the Iranian army.  It is also opposed by the United States and its handful of military advisers, by the Turkish regime, by the various Kurdish entities, by the Saudis, and the list goes on and on. . . . Moreover, the Islamic State isn’t really a state.  It’s a ragtag bunch of radicals who happen to have won some military confrontations with some Arab armies, which are notoriously inept, and have managed to take some territory formerly held by those armies.  There is no indication whatsoever that ISIS can hold these territories in the long term.  Additionally, as Pipes suggests, the relatively small number of ISIS fighters are spread over a comparatively large area and are engaged with professional militaries that are NOT Arab, including the Iranian army and the Kurdish peshmerga.  Eventually, ISIS will collapse.

That is not, however, to suggest that the Middle East – or the world – will necessarily be a better place when ISIS is gone.  Indeed, the real trouble will begin when ISIS is defeated.

Barack Obama has made no secret of his desire to make nice with the Mad Mullahs of Iran.  He has spent the entirety of his presidency trying to engage the Iranian regime and negotiating delays that allow the so-called “Islamic Republic” to continue its work on developing nuclear weapons.  Iran has, for decades now, been the world’s most active and least apologetic state-sponsor of terrorism.  It has constantly and unremittingly threatened American interests and American lives.  And it has done everything within its power to undo the progress achieved through the spilling of American blood in Iraq.  And yet Obama has not only engaged the regime, but is now actively cooperating with the Mullahs in the fight against ISIS, having written a “secret” letter to Iranian Supreme Leader Ali Khamenei last fall spelling out their shared interests in the region.

All of this is, to put it mildly, a terrible mistake.  Or, again as Pipes put it in November:

Iran is a far greater threat than ISIS, and we are making an extraordinary mistake in joining with the Iranians against ISIS.  Need one point out that ISIS has perhaps $5 million a day in oil revenue and 15,000 troops and, granted, a dynamism, but that Iran is a powerful state of 75 million people, an oil revenue in the hundreds of millions of dollars, billions of dollars, and an army of hundreds of thousands and, of course, a terror network and is building up their weapons? . . .

[ISIS]  is going to collapse before very long and it is going to disappear as a state whereas Iran is going to be a longer lasting entity.

As we have noted a couple of times in these pages, the collapse in oil prices has hurt the Iranian regime tremendously, which is, of course, one of the reasons why the Saudis are not particularly anxious to cut production at all.  And while we generally believe that the Saudis are doing the world a favor by further damaging the Iranians’ already shaky fiscal balance, we are not foolish enough to expect that the Mullahs will passively and calmly accept this new reality.  Like the proverbial cornered rat, the Mullahs will respond viciously and aggressively.  And if they somehow also find themselves in the position of having just defeated the Islamic State and thus solidifying the regime of their ally Bashar Assad, then their viciousness and aggressiveness will take on a whole new dimension.

And speaking of cornered rats reacting violently to the collapse in oil prices. . . .

Forecast #5:  Vladimir Putin will continue to cause trouble in the Eurasian part of the world, threatening his neighbors, taking what he wants, and fearing no repercussions from the hapless West.

Obviously, Russia is struggling and struggling mightily with the collapse of oil prices.  The Saudis undoubtedly had the Russians – as well as the Iranians and the frackers of North Dakota – on their minds when they decided to let the price of oil tumble.  And while Putin’s regime has been hurt, Czar Vladimir is going nowhere soon.

Everyone knows – courtesy of the Wall Street Journal’s scoop on Obama’s secret letter to Khamenei – that the United States is actively colluding with Iran to bring down the Islamic State.  Few people realize that the United States is actively cooperating with Russia as well, in pursuit of the same end.  In a rather restrained announcement in October, Secretary of State John Kerry confirmed that the United States and Russia are cooperating and sharing intelligence in the battle against the Islamic State.  Not only does this mean that the Obama crowd has no idea how to play the Great Game, it also means that the Russians have, for all intents and purposes, taken Crimea without repercussion.  The United States, apparently, has bigger problems than Ukraine’s territorial sovereignty about which to worry.  And so . . . the Ukrainians are pretty much on their own.

The same can likely be said of the Baltic Republics, who are under perpetual threat from Russia and whom Putin may well choose to torment – either for fun or for profit.  You know who will stop him?  Nobody, that’s who.  The Europeans need his natural gas too much to raise a stink.  And the Obama administration really has no interest in foreign policy in general, and this is especially true as regards Russia.

Putin may be damaged by the collapse in oil prices, but he’s hardly been beaten.  And if you’re long on Estonia, Latvia, or Lithuania, right now might be a good time to liquidate that position.  Putin has, more or less, been told to do his best or his worst in his own sphere of influence.  No one will bother him about it.

Forecast 6:  Tensions in the Far East will reach new heights and war between China and one or more of her neighbors will begin to appear inevitable.

There is an old adage in politics that politicians who are in trouble at home often seek to stir up conflict abroad in order to distract their restive populations.  We are going to learn over the next twelve months if the old adage proves true with respect to the Communist Chinese.

The report this morning about China’s ongoing export strength is welcome news indeed.  But that’s not going to be enough to make all well again in the Chinese economy.  The Chinese banking system in particular is in for a very rough year, according to most observers, with the combination of slower growth and deflation all but certain to force debt defaults, bank closures, and possibly even a severe credit crisis.  The Chinese banking system has always been something of a riddle, wrapped in a mystery, inside an enigma.  It is notoriously secretive and just as notoriously overextended.  These problems will likely come to a head this year, causing no small amount of consternation both in China and among its neighbors.

China’s economic woes will be compounded by its social woes, which are also coming to a head at this rather inopportune moment.  About 16 or 17 years ago, we began writing about China’s great demographic issues and especially its pending bride shortage, a product of its shortsighted One-Child policy and its longstanding preference for male children.  At the time, we cited demographers like the inimitable Nicholas Eberstadt, who warned that the country’s bride crisis would begin to materialize and to cause civil unrest in 15 to 20 years.  Given this, a quick look at the calendar indicates that China’s bride-shortage-induced unrest should be beginning . . . right . . . abut . . . NOW!  And sure enough, as Adam Minter reported recently for Bloomberg, young Chinese men are beginning to get agitated by the lack of women.  To wit:

In the villages outside of Handan, China, a bachelor looking to marry a local girl needs to have as much as $64,000 — the price tag for a suitable home and obligatory gifts.  That’s a bit out of the price range of many of the farmers who live in the area.  So in recent years, according to the Beijing News, local men have been turning to a Vietnamese marriage broker, paying as much as $18,500 for an imported wife, complete with a money-back guarantee in case the bride fled.

But that fairy tale soon fell apart.  On the morning of November 21, sometime after breakfast, as many as 100 of Handan’s imported Vietnamese wives — together with the broker — disappeared without a trace.  It was a peculiarly Chinese instance of fraud.  The victims are a local subset of a fast-growing underclass: millions of poor, mostly rural men, who can’t meet familial and social expectations that a man marry and start a family because of the country’s skewed demographics.  In January, the director of China’s National Bureau of Statistics announced that China is home to 33.8 million more men than women out of a population exceeding 1.3 billion.

China’s vast population of unmarried men is sure to pose an array of challenges for China, and perhaps its neighbors, for decades to come.  What’s already clear is that fraudulent mail-order wives are only the start of a much larger problem. . . .

The social consequences of a world without women is hotly debated, with lines drawn over whether a population heavily tilted toward men necessarily leads to more violence.  A controversial 2007 study based on 16 years of province-level crime data claimed that rising sex ratios may account for one-seventh of China’s overall rise in crime, while a book from the same year suggests that an excess of male threatens both China’s domestic stability and the international order.

If we do our math right here, we add economic troubles to social unrest and wind up with . . . an aggressive and outward-looking China.  Everyone in the region, from North Korea to South Korea, from Japan to Vietnam has reason to fear a Chinese military desperately looking for an excuse – any excuse! – to start a war.

As we noted last year in our forecast piece, the Chinese have already had several territorial disputes with both Japan and Vietnam.  It remains likely, in our opinion, that the Japanese will continue to rebuild their military and will also prepare to become a nuclear power in the event that the Chinese become belligerent.  No one can say for certain where a conflict might erupt, but we can speculate that a conflict of some sort is indeed likely.  In a piece published just before Christmas, Kyle Mizokami reported that:

Over the last several months, Chinese leader Xi Jinping and the Chinese Communist Party have repeatedly exhorted the People’s Liberation Army to “be ready to win a war.”  Xi has repeatedly called for greater military modernization, increased training, and enhanced overall readiness of the Chinese army, navy, and air force.

Mizokami continued, noting that this type of talk has China’s neighbors very worried.  Good.  They should be.  China has pretty significant problems, and Xi Jinping may well choose to share them with the rest of the region.

Forecast #7, our out-of-left field prediction:  Argentina, apparently overcome by ‘80s nostalgia, will once again invade the Falkland Islands, provoking yet another war with Great Britain.

Just before the New Year, IHS Jane’s, one of the most respected global security journals, reported the following:

[T]he Daily Express newspaper [reports] that Russia is to lease 12 Su-24s to the Argentine Air Force (Fuerza Aérea Argentina – FAA) in return for foodstuffs.  According to the media report, the Su-24s would be delivered to the FAA ahead of the introduction into service of the first of the UK’s two Queen Elizabeth-class aircraft carriers in 2020 (full-operating capability for the Queen Elizabeth is currently slated for 2023).

The potential arrival of Su-24s into Argentine service ahead of the introduction into service of the UK’s new aircraft carriers could pose a “real window of vulnerability”, MoD officials reportedly told the Daily Express . . . .

For some years now, Argentina has been trying to replace its antiquated and increasingly unserviceable Dassault Mirage IIIEA, IAI Dagger, and McDonnell Douglas A-4 Skyhawk fighter fleets with a newer and more capable type.

Reported procurements of surplus Spanish Mirage F1s, Israeli Aerospace Industries (IAI) Kfirs, Chengdu Aircraft Corporation FC-1/JF-17, and Saab Gripen E/Fs all appear to have stalled for either economic or political reasons (the proposed buy of the Gripen E/F was effectively vetoed by the UK, which manufactures many of the aircraft’s systems).

What makes the Su-24 report so alarming for the UK government is that the proposed lease from Russia would not likely be affected by either economic or political reasons, and so is much more likely to progress.

As Walter Russell Meade noted in response, “There’s only one conceivable target on which Argentina would want to mount a supersonic, long-range attack, and that’s the Falkland Islands.”  The good news is that the Brits have a far superior military and should, in theory, be able to fend off the Argentinian attack.  The bad news is, as Jane’s reported, the fact that the British carriers will not be ready for several years, leaving a “window of vulnerability.”  The worse news is that the UK is led today by David Cameron, not the Iron Lady Margaret Thatcher.  Cameron may, technically, be a Tory, but he’s not half the man Lady Thatcher was.

Additionally, and perhaps most ominously, the Brits’ Western-Hemisphere ally is led today by Barack Obama, not Ronald Reagan.  Obama, recall, prefers to refer to the Falklands as the “Malvinas,” which, of course, is the name by which the Argentines refer to them.  One suspects that Obama would personally favor Argentina in a war between it and Great Britain.  Professionally, of course, he might be compelled to behave a little differently.  He may favor Argentina, but he won’t do anything about it.

After all, he’s done playing policeman.  He just wants to sit in his comfy chair and wish the world away.  And once again in 2015, the world will suffer for Obama’s indifference.

 

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