When Giants Fall

Not the Only Region

While all eyes are currently on the disruptive forces swirling through the Middle East, that is not the only region where people are beginning to anticipate big changes ahead. In "Business Leaders See Eurozone Break-Up," the Financial Times highlights a surprisingly lopsided poll about the future of the world's largest economy.

More than four out of five senior executives, or 85 per cent, said there was a chance of this happening, while two in three, or 60 per cent, said there was a chance the eurozone would break-up over the next three years.

The survey of 461 senior executives from leading companies, investment banks, hedge funds and sovereign wealth funds in Europe, the US and Asia highlights the grave concerns over the future of the eurozone, as policymakers consider reforms to tackle the problems of the indebted countries on the currency club’s periphery.

The poll, commissioned by RBC Capital markets and conducted by the Economist Intelligence Unit, singled out rising concerns over the build up of public debt in Europe and the US.

Unraveling Fast

Uh-oh. Looks like things are unraveling fast in a country that many have viewed as a lynchpin to stability in the Middle East since it signed a peace treaty with Israel in 1979.

Taste of Clashes to Come

One key theme of When Giants Fall is that the world is going to witness more instability and conflict -- both within and across borders -- than has been seen during the past 60 years or so. In fact, the book's third chapter is entitled "A Future of Violence." One factor contributing to the change in circumstances will be increasing competition for resources. In "The War Over Ivory Coast's Cocoa Heats Up," the Christian Science Monitor provides us with a taste of the clashes that oil, foodstuffs, strategic minerals, and many other commodities will likely inspire in the years ahead.

Some day or another, the tug-of-war for control of Ivory Coast had to come down to chocolate, or more specifically, cocoa: the cash crop that bankrolled forty years of economic boom, mass immigration, and eventually war across this tropical garden, West Africa’s lushest agricultural zone.

The former French colony is the world’s top contributor to the global chocolate supply, and the vagaries of its climate – especially its political climate – sway the going rate for Mr. Goodbars and Butterfingers more than any single other variable.

Now, eight weeks after the country’s incumbent President Laurent Gbagbo barricaded his opponent in an Abidjan hotel – and two weeks before Valentine’s Day – the treats Americans savor, crave, and wrap in ribbons are primed to become bargaining chips in a power struggle that has already cost at least 260 lives by United Nations figures.

On Monday, Alassane Ouattara, recognized by the UN and Ivory Coast’s electoral commission as the winner of the nation’s Nov. 28 presidential election, asked the world’s cocoa movers to stop buying his country’s cash crop for the month to come.

The Gbagbo administration’s proceeds from the cocoa trade, Mr. Ouattara says – from taxes stamped at the Abidjan port to bribes extorted by gun-brandishing roadside soldiers – are being used to pay the motley of uniformed troops and unruly pro-Gbagbo militias that Human Rights Watch has accused of organized “rape, torture, extra-judicial killings, and forced disappearances.”

By begging the ocean’s container ships to scoop their cocoa from ports in Ghana or Guatemala instead of Ivory Coast, Ouattara is hoping to financially asphyxiate Gbagbo out of his presidential palace – one underpaid, disillusioned soldier at a time.

Most of Ivory Coast cocoa flows through European ports, and with the backing of the European Union, analysts say Outtara is likely to have success.

A Shaky Foundation

Last September, the World Economic Forum revealed that the United States had dropped to fourth place in its 2010 Global Competitiveness Index, down two positions from a year earlier.

Among the factors that contributed to the relatively poor showing was the nation's mediocre ranking in the Primary Education sub-category, where it placed 42nd (out of 139 countries).

It's probably no surprise to learn that things haven't changed much since then. As the Washington Times reports in "U.S. Students Still Lag in Science, Math," the country that sees itself at the top of the global ladder is resting on a shaky educational foundation.

In 2005, a report by the National Academies said disinvestment in science education and research could diminish America’s standing on the competitive global stage. At the start of the current school year, the National Academies warned that “the nation’s education system has shown little sign of improvement, particularly in math and science.”

On Tuesday morning, results on the national standardized test underscored the point.

In a report titled “Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5,” the National Academies pointed out that American students still rank only in the middle of the pack when compared with their peers abroad and do poorly in applying science and math concepts.

The results were released just hours before President Obama was set to deliver his State of the Union speech before Congress, which will include a focus on education spending.

The reports’ wake-up calls prodded Mr. Obama to push initiatives on STEM, which is shorthand for science, technology, engineering and math learning programs.

But the new national report released Tuesday shows that while some bright spots reflected student progress, students continue to stumble.

The science component of the National Assessment of Educational Progress test (NAEP), which was given to 318,700 fourth-, eighth- and 12th-graders in 47 states, rated students’ competence as basic, proficient or advanced.

The standouts were eighth-graders attending public schools with large military student populations, who tied with students in Montana and North Dakota as the highest-scoring in the nation. Black and Hispanic students in Defense Department schools also were high performers.

But in schools overall, only 1 percent of fourth-graders and 12th-graders and 2 percent of eighth-graders performed at the advanced achievement level.

Click here to read the rest.

No Surprise Here

Given the troubles brewing in Tunisia, Lebanon, Yemen, Algeria, Jordan, Kuwait, Egypt, and maybe even Saudi Arabia, the following UPI report, "Mideast Arms Market to Grow by 14 Percent," probably shouldn't be a surprise to anyone:

Military procurement by Middle Eastern states, primarily Saudi Arabia, the United Arab Emirates, Iraq and Israel, is expected to grow by 14 percent over the next five years, a new industry analysis concludes.

Only One Way

Despite this week's talks between Iran and leading global powers (and other similar efforts), reports like the following from Russia Today, "'Iran Will Never Stop Its Nuclear Program,'" suggest that there is only one way the situation will be resolved (hint: there will be weapons involved).

A 'Dangerous' Situation

For a country which has at least as much at stake as others nearby in preserving regional peace, news that Saudi Arabia is exiting peacekeeping talks in Lebanon, as detailed by Reuters in "Saudi Ends Lebanon Mediation, Says Country at Risk," is anything but encouraging.

Saudi Arabia said on Wednesday it had abandoned mediation efforts in Lebanon between Shi'ite Hezbollah and Sunni leader Saad al-Hariri over the killing of his father and warned that the country's future was at stake.

Regional power Saudi Arabia and Syria had worked for months to resolve a dispute between Hezbollah and Hariri over indictments in the 2005 killing of former prime minister Rafik al-Hariri, which are widely expected to accuse Hezbollah members.

Saudi Foreign Minister Prince Saud al-Faisal said the kingdom had abandoned its efforts and that the situation in Lebanon was "dangerous."

"If the situation reaches separation or partition of Lebanon, this means the end of Lebanon as a state that has this model of peaceful cohabitation between religions and ethnicities and different groups," he told Al Arabiya television.

"It would be a loss for the whole Arab nation."

Despite the declared withdrawal by Saudi Arabia, a powerful regional player and close supporter of Hariri, other countries were continuing efforts to find compromise.

Analysts however say no compromise or breakthrough could happen without backing from Saudi Arabia, a close U.S. ally.

To be sure, the move by the world's largest oil producer may well represent posturing of sorts or an attempt to overcome a seemingly unbreakable impasse. But given other recent developments in and around the region, the risk that things might suddenly get out of hand must be fairly high.

Temperature's Rising

In "Self-Immolation Reports Spread Through North Africa," CNN reports on a rare and disturbing form of protest that is suddenly gaining ground in one region of the world.

The popular protests in Tunisia that have caused upheaval in the government were sparked by Mohamed Bouazizi, a 26-year-old unemployed college graduate, who set himself on fire in protest. He later died. Now, reports are coming in from other countries in the region -- Egypt, Algeria, and Mauritania -- that other demonstrators are turning to self-immolation.

...

"The Arab world's horrific new trend: self-immolation," wrote Blake Hounshell of the foreignpolicy.com blog on Monday.

"There is something horrifying and, in a way, moving about these suicide attempts. It's a shocking, desperate tactic that instantly attracts attention, revulsion, but also sympathy," Hounshell, Foreign Policy's managing editor, wrote.

One reason for the trend, notes global intelligence firm Stratfor in a YouTube video report, "Dispatch: Self-Immolation as a Political Tool," is that it allows protestors' message "to spread in a way the government can't really control."

Let's hope it doesn't catch on here.

Near a Turning Point?

In his latest Inside the Ring column, the Washington Times' Bill Gertz points to a potential trouble spot in the relationship between the U.S. and its Asian rival:

Taiwan showdown

A new showdown is looming between China and the United States over arms sales to Taiwan. The Obama administration privately has decided to sell a new arms package to the island but is keeping details secret until after next week's visit by Chinese President Hu Jintao.

A senior Obama administration official told Inside the Ring that the latest multibillion-dollar arms package is expected to trigger new outrage from China's military. It includes much-needed equipment to upgrade Taiwan's aging arsenal of 145 U.S.-made F-16 jet fighters with new electronics, engines and missiles.

The new arms package could be worth up to $4 billion for defense contractors and will be the first test of Defense Secretary Robert M. Gates' efforts in Beijing this week to restart stalled military-to-military relations with China.

Beijing cut off ties with the Pentagon last year in January after Congress was notified about plans to sell $6.4 billion worth of arms to Taiwan, the island nation Beijing insists is part of its territory. In 2008, China halted the military exchange program over an earlier arms sale.

Chinese Defense Minister Gen. Liang Guanglie said after meeting with Mr. Gates on Monday that China has been "clear and consistent" in opposing arms sales to Taiwan, claiming they "seriously damaged China's core interests, and we do not want to see that happen again." He also added that "neither do we hope that the U.S. arms sales to Taiwan will again and further disrupt our bilateral and military-to-military relationship."

This comes at a time when the relationship between the two powers is already under strain, as China Military Power Mashup reports in "The Perils of Mutual Miscalculation":

The obstacles [to compromise] were underscored during Robert Gates's visit to Beijing this week. The US defence secretary had intended a confidence-building trip in the wake of last year's spats about Taiwan, North Korea and the two countries' maritime rights in the South China Sea.

The response of the People's Liberation Army was to stage-manage the maiden flight of its new stealth fighter jet only hours before Mr Gates's meeting with Mr Hu. The test of the hitherto secret J-20 inevitably fanned speculation about a power grab by China's military chiefs. Mr Gates remarked that even the Chinese president seemed surprised by the timing of the PLA's latest show of military prowess.

Chinese foreign policy experts acknowledge the rising influence of the PLA. Some of them worry about it. China's economic rise, they say, has made the case for a rapid expansion of military capabilities to match the country's burgeoning interests and vulnerabilities. The booming economy has provided the PLA with the wherewithal, while its leadership has proved adept at harnessing popular nationalism.

The risks of misunderstanding and miscalculation reach beyond the particular ambitions of the PLA. Washington, too, has its hawks. What's worrying is that the political leaderships of the two countries have thus far failed to provide an alternative narrative.

...

In any event, you do not have to take sides to see where the present standoff is leading. China builds new weapons systems designed to push US forces farther from its coastline; the US develops countermeasures. The hawks' prediction of inevitable confrontation then becomes self-fulfilling as mistrust feeds miscalculation.

There is no easy way out of this loop. China will continue to build its military and to stake its claim to a pre-eminent role in its own backyard. That is what rising powers do. The US is not about to abandon its role as the guardian of east Asian security. Great powers do not readily hand over to new ones. Anyway, most of the countries in the neighbourhood want the US to stay.

Many analysts have long warned that a misstep with regard to Taiwan could be a geopolitical game-changer. Are we nearing such a point?

A Great Deal of Sense?

In a world of sound bites and short attention spans, controversial and complex topics are frequently transformed into scare-mongering or caricatures. But if you take the time to dig a little deeper, many seemingly silly ideas turn out to have at least some merit. I reckon, for example, that those who dismiss the idea of preparing for major disaster would probably be the first to plead for somebody to "do something" if and when things do go wrong. Given some of the unusually traumatic developments we've seen in recent years, perhaps the shift in perspectives detailed by Popular Mechanics in "Rise of the Preppers: Survivalists Get a Makeover" makes a great deal of sense?

Can disaster preparedness become a lifestyle without turning into survivalism?

As a truck driver hauling produce and food up and down the West Coast, Tom Martin knows first-hand how vulnerable the U.S. food supply is to disruption. "I know what our supply chains are like," he says. "I know grocery stores rely on just in time services; they only have three days worth of food in any grocery store."

In a disaster, that food will be gone in less than a day, and if you don't have food stored up, you'll be stuck, says Martin, who is one of a growing number of "preppers," or people who are prepping for large-scale disaster. The American Preppers Network, an online forum Martin started in 2009 that quickly grew to 4000 members in nearly all 50 states.

Are preppers just another group of paranoid doomsdayers? Not at all. Many of the scenarios they prepare for, like hurricanes, are quite real, unlike some of the outlandish scenarios (like a United Nations takeover, religious cleansing or government despotism) that drive more extreme members of the fringe. Jerry Young, a longtime prepper in Reno, Nevada, says he has list of 137 scenarios he's preparing for, though "only a handful of those" are things he's seriously worried about. "Mostly of my preparations are for natural disasters," he says. "But the basic preparations apply to all of them."

Preppers call themselves Preppers, in part, to distinguish themselves from survivalists, a term that conjures up images of a paranoid loner hiding out in a cabin. (For example, this missing person in Canada.) The Preppers focus on reaching out to other people, and they are avid social networkers. They share tips on things like canning, Port-a-Potties, and other useful skills to have for natural disasters. And they say the effort does not stem from fear. "It's encouraging, uplifting," insists Janet Liebsch, a dedicated prepper, who, along with her husband, publishes guides like It's a Disaster. "Once you start learning, you get addicted."

Preppers draw on the growing concerns about manmade and natural disasters, but also channel a mix of traditional American views of self-reliance and individuality. They can also feed off of popular culture; some forum members, for example, make references to "zombies," which they describe as a metaphor that covers any sort of doomsday scenario—not a real zombie invasion.

It's not that Preppers are necessarily expecting the apocalypse, Liebsch says, but they want to make sure that when trouble comes, they will not have to turn anywhere else for help. Given recent events, including disasters as ferocious as Hurricane Katrina and as humdrum as New York City's 2010 snowstorm, this attitude makes sense. And being ready may not mean building a fallout shelter, but can which may involve something as simple as buying extra groceries or water. "It's a lifestyle," Liebsch says.

A Strong Link

In When Giants Fall, I highlighted remarks by the Financial Times' chief economics commentator about what I and others see as a key driver of prosperity:

According to Martin Wolf, cheap and abundant energy has played a major role over the past two centuries in creating a “positive-sum world economy,” where everybody “can become better off.” This, he believes, “is why democracy has become a political norm, empires have largely vanished, legal slavery and serfdom have disappeared, and measures of well-being have risen almost everywhere....Consistent rises in real incomes per head have transformed our economic lives,” Wolf added, but they have also “transformed politics.”

By the same token, he writes, “a zero-sum economy leads, inevitably, to repression at home and plunder abroad. In traditional agrarian societies the surpluses extracted from the vast majority of peasants supported the relatively luxurious lifestyles of military, bureaucratic, and noble elites. The only way to increase the prosperity of an entire people was to steal from another one....In a world of stagnant living standards the gains of one group came at the expense of equal, if not still bigger, losses for others. This, then, was a world of savage repression and brutal predation”—and of empire building and war.

For Wolf, “the biggest point about debates on climate change and energy supply is that they bring back the question of limits....If there are limits to emissions, there may also be limits to growth. But if there are indeed limits to growth, the political underpinnings of our world fall apart. Intense distributional conflicts must then re-emerge—indeed, they are already emerging—within and among countries.” In such an environment, it is only natural that the prospective and, to some great extent, hypothetical gains from greater integration with nations that are competing for a share of a shrinking pie are called into question. Rather, the natural tendency will be toward protectionism, isolationism, xenophobia, and conflict.

As it happens, a recent article in the American Institute of Biological Sciences peer-reviewed journal, BioScience, "Study Finds Energy Limits Global Economic Growth," details the strong link between energy and economic activity.

A study that relates global energy use to economic growth, published in the January issue of BioScience, finds strong correlations between these two measures both among countries and within countries over time. The research leads the study's authors to infer that energy use limits economic activity directly. They conclude that an "enormous" increase in energy supply will be required to meet the demands of projected world population growth and lift the developing world out of poverty without jeopardizing standards of living in most developed countries.

The study, which used a macroecological approach, was based on data from the International Energy Agency and the World Resources Institute. It was conducted by a team of ecologists led by James H. Brown of the University of New Mexico. The team found the same sort of relationship between energy consumption per person and gross domestic product per person as is found between metabolism and body weight in animals. Brown's group suggests the similarity is real: Cities and countries, like animals, have metabolisms that must burn fuel to sustain themselves and grow. This analogy, together with the data and theory, persuades the BioScience authors that the linkage between energy use and economic activity is causal, although other factors must also be in play to explain the variability in the data.

The study goes on to show that variables relating to standard of living, such as the proportion of doctors in a population, the number of televisions per person, and infant mortality rate, are also correlated with both energy consumption per person and gross domestic product per person. These correlations lead the authors to their conclusions about the increases in energy production necessary to sustain a still-growing world population without drops in living standards. To support the expected world population in 2050 in the current US lifestyle would require 16 times the current global energy use, for example. Noting that 85 percent of humankind's energy now comes from fossil fuels, the BioScience authors point out that efforts to develop alternative energy sources face economic problems of diminishing returns, and reject the view of many economists that technological innovation can circumvent resource shortages.

Click here to read the full article (in PDF form).

'If There's a Ground War Anywhere, It's Going to Have Cyber Dimensions Associated With It'

If you want to know why cyberspace has been declared "the fifth domain of warfare" outside the traditional battlefields of land, sea, air and space, NBC News provides an interesting overview in "Breached: A Cyber Attack in America."

How Times Have Changed

It wasn't all that long ago when President Obama stood before the Turkish parliament in Ankara and waxed on about one of our most enduring geopolitical relationships.

Turkey is a critical ally. Turkey is an important part of Europe. And Turkey and the United States must stand together -- and work together -- to overcome the challenges of our time.

My, how times have changed:

"Turkey: USA and Israel Turkey's Main Enemies, Poll" (ANSAmed)

ANKARA - According to a poll carried out by the Turkish institute Metropoll and published today, the main enemies of the Turks are the USA and Israel. A total of 1,504 people were interviewed in December. Of these, 43% indicated that the USA poses the most serious foreign threat to their country, a Muslim but laic country, an ally of Washington and NATO members since 1952. The US threat, according to 23% of the interviewed, is followed by Israel, and 63% said that the Turkish government should freeze its ties with the Jewish State, while 28% want closer ties. Iran, which according to many Western countries is equipping itself with nuclear weapons, is considered a threat by just 3% of the interviewed, and Turkey's traditional ''enemy'', Greece, only by 2%. (ANSAmed).

(Hat tip to Gates of Vienna.)

Remember the Last Time?

What's this -- CNBC is reporting bad news?

Global food prices rose in December, with the FAO Food Price Index at a record high, the U.N Food and Agriculture Organisation said on Wednesday, past 2008 highs when rising food prices sparked riots in a number of countries.

 

Up for the sixth month in a row and fuelled by surging sugar prices and rises in cereals and oils, the index was the highest since records began in 1990, in nominal terms, and topped the high of 213.5 in June 2008, during the food crisis of 2007/08.

The index, which measures monthly price changes for a food basket composed of cereals, oilseeds, dairy, meat and sugar, averaged 214.7 points last month, up from 206.0 points in November.

Of course, we should all remember what happened the last time that food prices reached such lofty levels:

Uh-oh.

More Than Just a Serious Threat

In a Pajamas Media commentary, "Failed State Watch: How Much Longer for Mexico? (Part One)," Alberto de la Cruz talks about how the ugliness south of our border has moved beyond the drug wars on the streets to the hearts and minds of ordinary citizens.

Nothing illustrates the societal shift away from the rule of law that appears to be taking place south of the border better than the latest trend among Mexican children. Instead of emulating superheroes and sports stars during playtime, children are now emulating drug cartel assassins.

In another report from Blog del Narco, we learn that Mexican children have given up playing typical children’s games such as soccer, and have traded in their soccer balls for toy weapons in order to play “assassins”:

It may seem incredible to some that the children no longer play soccer on the streets as before. Now they pretend to be assassins. They form teams, just as before, but now they arm their mini commando units to engage in imaginary battles that perhaps in the future will be their reality.

The girls too form part of this game, leaving their dolls to the side to turn themselves into assassins. Some are even the commanders in these play groups of children.

The situation with the Mexican children has gotten so out of hand that parents have begun prohibiting their children from having plastic guns and weapons. Even the Mexican government’s consumer protection agency, PROFECO, launched a campaign during the Christmas season exhorting retailers to remove plastic guns, rifles, and machine guns from their toy shelves.

The drug war taking place in Mexico deserves the coverage it has received, but the corruption within the Mexican government and its inability to effectively combat the drug cartels merits as much or more of that coverage. It is a deadly combination that threatens to destabilize a nation with 112 million inhabitants to the point of anarchy. A nation bordering the U.S. with an out-of-control drug war is a serious threat. A nation bordering the U.S. in a state of anarchy, with the only authority being well-funded and well-armed drug kingpins, is a clear and present danger.

Pretty scary. Click here to read the rest.