Global Politics in 2017

Welcome to 2017. If you thought 2016 was an interesting year just wait for what will unfold this year. We can look forward to fresh developments in the MIddle East, Russia, China, USA and Europe. Global politics is changing and under the surface so are economic developments. I’m sure some things will be quite a surprise. Saying that, I’m going to attempt to present what can happen based on current situations.

Syria: While Assad has broken the back of the opposition, with the determined backing of Russia and Iran, resistance is bound to continue in different areas of the country. It is safe to say that Assad has held onto power, for now. The fact that he was prepared to see the destruction of his country and displacement of millions of the population are of no consequence to him. He has sworn to take control of all Syrian territory, including Daesh and Kurdish held areas. This operation could continue for some time yet and may never come to a total conclusion. Winning the war is one thing, winning the peace and rebuilding the country is quite another. The only way to control ex rebel held areas is through an iron fist of military rule. As part of this, Russia has sent hundreds of military police to Aleppo. Then there is the economic situation, the country is in ruins, large parts of the infrastructure destroyed, roads, bridges, water and electricity supplies are out of action. It is going to cost billions to rebuild. Syria does not have the money to rebuild, Russia can’t afford to help rebuild the country and neither can Iran, their economies are not strong enough. Many wealthy Syrian business people moved to Gulf states such as Dubai, also Canada and the USA, it has been suggested to me that they will move back to Syria when things calm down and re-open their factories. Whether this happens by choice or through the threat of having their factories taken over by the government remains to be seen. Assuming factories can be brought back on line, the surrounding infrastructure they need, such as water and electricity is less than reliable. I can also see a strong possibility that a lot of forced labour will be used, mainly of the remaining Sunni population, to begin the enormous task of cleaning up the country. Assad now has a mandate from the global community to mistreat his people as he sees fit and you can be sure he will not disappoint. For the future, Syria will remain a broken country, violence will continue and oppression will increase. Assad himself could not have held onto Syria without the help of Russia and Iran, as a result he will be obliged to do as he is told when it suits his saviours. The only way therefore for Syria to rebuild is if Arab states take out their cheque books and that is not going to happen as long as Assad is in power. There will have to be a transition to a Syrian leader more acceptable to the Arab states before they consider handing over any money. Who the new leader will be is not clear yet but it will be someone from inside the existing power structure of Syria and most probably a Sunni, not an Alawhite, not from the first tier of government but most likely from the second tier of power. If relative calm can be brought back to Syria there would be massive investment potential. Before the war, Syria had the most diverse economy of any Arab state and it has natural resources for producing phosphates and cement, as well as agriculture and textiles. To bring its economy back can only happen if the country is rebuilt and that is not going to happen as long as Assad is in power, financial interests will see to that. How any power transition plays out will be watched very carefully by Iran, they do not want to lose their influence in Syria as part of the Shia crescent they have constructed which stretches all the way to the Mediterranean sea. Russia in its new role as power broker in the region will be looking to maintain its influence in Sunni Turkey and Shia Iran as it negotiates a new power structure in Syria. Failing this, Syria will never be rebuilt. Where this will leave the Kurds in their semi-autonomous region of Syria remains to be seen, particularly as the USA has been stepping away from the region for some time now. Its only real remaining interest in the region being Israel and Saudi Arabia.

Turkey: Turkey has had a terrible year with many bombings and shootings. Since the failed coup attempt last summer President Erdogan has clamped down hard. Not just clearing out the military and police but also lawyers, judges and teachers. The so called ‘parallel structure’ full of Gulanist supporters as he asserts. He has gone well beyond those who had anything to do with the coup attempt. As a result, the fractures in Turkey between those who support Erdogan and those who don’t have become a chasm. Erdogan has to now keep the pressure at a high level to stop any dissent. Personally I see the potential for civil war in Turkey and I am going to stick my neck out and say the foundations for civil war are being laid now. Also of note is the fact that it was Russia, Turkey and Iran that laid the framework for a ceasefire in Syria. The USA was nowhere to be seen and not invited. This is a clear demonstration that Turkey is no longer looking west as it had done in the past. At the same time, don’t imagine that all is rosy between Turkey and Russia, their’s is a business relationship only and there are still areas of conflicting interest between them. Erdogan will not tolerate any Kurdish semi-autonomous state inside Syria and it will act unilaterally if Assad and Russia don’t end it. But I want to keep the focus on Turkey’s internal stability, or lack of it. The number of attacks by Kurds and Daesh increase, Erdogan’s policies are alienating a large part of the population who were used to having power and influence in the country. I believe the fuse has been lit in Turkey.

Russia: Flush with a sense of victory, Russia is back on the world stage and projecting its geo-political influence and military strength. With the USA stepping away from involvement in the Middle East, Russia has stepped forward to fill the vacuum. From the outside, Russia looks strong but the projection of power masks internal weakness. Its economy is in bad shape, the middle class is shrinking rapidly and the price of oil and gas is nowhere near high enough to help the Russian economy recover, its economy is now about the size of Italy’s according to World Bank data. Despite military success in Syria, war is very expensive and has been sucking up money from other parts of the economy. There is also the question of what Russia will do next. Emboldened by victory, inaction of the West and a soon to be new President of the USA, will Russia be tempted to strike out elsewhere? Russia can’t afford two wars and now that its operation in Syria is being scaled back, maybe soon will be the time when it increases activity in Ukraine. Just because Ukraine is not in the news much these days does not mean the situation in the east of the country is quiet, there are daily shootings and bombings, but not on a level high enough to get on the news. Will Russia now look to expand operations again in Ukraine and capture more territory? It is a possibility and it can do so in the knowledge that nobody can stop it. The big question is if Russia will try and capture territory from Estonia and Latvia, which have a significant Russian speaking population, the same as in eastern Ukraine. Will Russia gamble on NATO/OTAN backing down in the face of an invasion of those two Baltic countries? With incoming President Donald Trump showing a lack of enthusiasm for Nato, as well as seeming to be more isolationist, could Russia get away with it? Certainly European members of NATO would not be able to stop Russia in its tracks and Turkey would refuse to get involved in any way, despite also being a member of NATO. I think Russia will wait a while to see what Donald Trump actually does as President, and if he shows no interest in the region, Russia will take it as signal and go ahead. Maybe not in direct invasion but will use tactics similar to those used in Ukraine.

Regarding the internal situation in Russia, it should be pointed out the increasing power of the Orthodox church. Working with the Kremlin, its role seems to be that of getting the message to the people, telling them to endure economic hardship as a part of their faith and that Vladimir Putin is something like a living saint, sent to save the country from the rest of the corrupt world. In so doing, the Orthodox church is coordinating a campaign against all who do not uphold ‘traditional values’, including those who do. For example, Jehovah’s Witnesses, who were persecuted and sent to gulags during Soviet times for their political neutrality and talking about their faith, are once again under attack, labelled as an ‘extremist’ organization and their website is now banned in Russia, the only other place it is banned is in North Korea. The Orthodox church is the main perpetrator of this attack on basic rights of freedom of worship. It wants to control the message and the message is that Putin is some sort of saviour on a religious level. In the meantime, the Orthodox church is increasing its wealth while the people suffer increasing financial hardship. The country is returning to how it was during the time of the czars, A small rich elite, almost no middle class and the uneducated peasants who are constantly being fed news of how great their country has once again become.

What should be understood about Russia, is that it always tries to put the blame for difficulties on external situations but in the end it always tears itself apart from the inside. The Orthodox church with its growing power and influence over the masses, could, when the time comes, be the factor to cause upheaval in the country, give it time as it consolidates its power and influence in the ruling structure and education system of Russia. Very similar in a way to the ‘parallel structure’ that was developed in Turkey and led to the coup attempt last year.

USA: With a new incoming President it is not easy to say what is going to happen but 2016 was a difficult year for the country. The divisions in its society are increasing, Black Lives Matter is a case in point. Many people are struggling to earn enough, pay for medical insurance, get a decent education. It is against this backdrop that many decided to vote for Donald Trump, if only just to try something new, as the existing political establishment tends to look down its nose at the working poor. Will Trump help them? Time will tell and I wont try to second guess what will happen regarding this. What I do think will be different is foreign policy. Trump is a business man, making money is what drives him and he has a reputation for being quite ruthless. However, his skills wont necessarily translate into effective diplomatic negotiation. An example would be his comments on the ‘One China’ policy, by which Taiwan is recognized as a part of China, even though it has a democratically elected government. Trump suggested this policy should be renegotiated, with China making economic concessions in return for continued acceptance of this policy. For China the ‘One China’ policy is a red line and will never be acceptable for use in any economic negotiations, China will react and react strongly if Trump decides to go down this road. Being known for the size of his fragile ego, he takes offense very easily and has a tendency to seek revenge. When he realizes that he is being played by Russia, the consequences could be dramatic to say the least. Unless there is an economic argument, I don’t see Trump taking much of an interest in Syria or Yemen or any other humanitarian crisis. When it comes to oil, as with all administrations in the USA, Trump will take keen interest. But I keep coming back to is his total lack of experience in dealing with foreign governments, there are only common interests in global politics, never friendship and Trump is the sort of person who hates getting the less profitable side of the deal and he takes these things very personally. So I think it is safe to say, when it comes to foreign policy, things could become rather volatile. On the other hand he might take a back seat, delegating foreign policy and concentrating on the domestic interests of his business friends in the USA. With regard to the USA economy, I think he will borrow to spend on rebuilding the infrastructure (roads, bridges, power grids etc) of the country, which is in a desperate state of disrepair and if something is not done about it soon will have a direct effect on the economy.

Europe: With Brexit, Europe is losing its second largest economy, some of its biggest banks are in a fragile state and in Italy many of its smaller banks are in very bad health, if one of these small Italian banks were to fail it could start a cascade effect and potentially take the country out of the EU. Austerity has not worked as planned, wages are stagnant and populist political parties are on the rise. There will also be a massive business scandal to come out of Europe, which I’m not at liberty to talk about at the moment but the fall-out will be immense. In the Balkans, tensions simmer between Serbia and Bosnia, that war can happen again, in fact it would take very little for the region to erupt in violence. Terrorism in Europe is a continuing threat and will probably increase. The use of trucks to run down innocents is, sad to say, much more effective than someone with a AK47 and easier to get hold of for use as a weapon. I expect to see more attacks like these. I hate to say this, but I would not be surprised to see high speed trains being derailed as a means of terrorism. It is very easy to do and extremely difficult, if not impossible, to prevent.

There you have it. I think we will have an interesting 2017 for many different reasons.

The global system – broken beyond repair

It is a little difficult to know where to start as so much is happening and the year has only just begun. The global system can be viewed as having four different elements: Economic, Political, Military and Religious. They are all linked together but all have unique facets in how they impact the world in which we live.

Economic System

While not unexpected, the speed with which the global economy has hit the brakes in the first days of the year has been surprising. China, which is trying to re-engineer its economy so as not to rely on exports for growth to one of internal consumption, has hit severe turbulence, the last days seeing huge drops in its stock markets. In China, many shares are bought by private individual investors and have been wiped out by the losses which began last year and accelerated to such a point that trading had to be suspended twice already this year. These are the people the Chinese authorities need if internal consumption is to be the new economic model, instead they are all feeling much poorer and hesitant about making new investments and spending. To be fair the problem is not only China’s, globally, the worlds economy has never recovered since the financial crash of 2007. The only thing that has propped up the economic system since then has been the vast amount of almost free money that central banks pumped into the system. While company stock valuations soared over the years since the crisis the fundamentals have not changed. Companies have not been making the profits to justify their stock market valuations, instead of improving profits through growth they were cutting costs. While improving the bottom line it was covering up the fact that businesses have not been growing. Now the time of essentially free money is coming to an end the fundamentals are coming back into view and is the reason why global stock markets are having such a turbulent time. The emperor has no clothes and the central banks and governments have very few options left open to them. With global share prices still having a way to go before they reflect the actual values of global businesses it is going to have a knock on effect. Pension funds and property are going to be the big losers. People are going to start feeling poorer. When people feel poorer they spend less and this impacts business growth. The system is so broken that there is no way out of this feedback loop unless something fundamental about the system is changed. Do the central banks and governments have a solution, I think not.

Political System

Something that should amaze people is that in all the time of human history we have tried all forms of government, apart from global government, and not one of them has been successful, in the long term, of bringing about peace and security, helping all its citizens to have a dignified life. Instead they have abdicated more and more responsibility to the banks, trusting them to create the conditions for economic stability and therefore political stability. I often wonder what use our governments serve. All around we see crumbling infrastructure, cuts to health-care, the education system being run into the ground, increase in social instability as well as far fewer opportunities for social improvement. In the past there were far more opportunities for people to improve their lives, these opportunities are rapidly disappearing. If governments can’t deal with these fundamentals then what is the point of their existence? This is without going into global politics, all of the major powers in competition with each other, wanting to be top dog, but this situation leads to proxy wars, global instability, power vacuums and international terrorism. As the global economy shrinks the pressure is on for these countries to work even harder to protect their interests, creating yet another feedback loop. We will see an increase in nationalism and growing popularity of more extreme political parties as they promise only they can protect the interests of the population. In reality all that happens is increased polarization of populations, minority groups being blamed for the ills of the country. We are seeing this happening in many countries around the world and it will only spread as global conditions deteriorate. It will also increase the risk of conflict as relationships between neighbouring countries break down.

guns_suit_planets_fire_earthMilitary System

The only area of real growth now is in military spending, as we all know instability is good for the military sector. War is good for business. Morals have nothing to do with it, all is for sale, often to reprehensible regimes. The conflicts these weapons are used to pursue create displaced people, refugees and untold suffering. As the global economy teeters, the risk of conflict grows as competition between nations for a greater slice of the shrinking economic pie increases. Add to this the growth of ideological and religious differences between certain countries and the count-down to increased and new conflicts grows rapidly. Countries who have major weapons industries will rely on this sector for a larger part of their economic stability while trying at the same time to keep the consequences of these conflicts where the weapons are used as far as possible away from home.

Religious System

I’m grouping all the main religions together here because they are all equally corrupt and are all equally responsible for the deaths of millions through the ages. Today, religion is used as an excuse to kill, to dominate and to keep the masses quiet in the face of increased hardship, all often in collaboration with various governments. The tension between Saudi Arabia and Iran is based on religion. Jews and Palestinians is religious conflict. The Russian Orthodox church telling ordinary Russians they should prepare for greater hardship while it is the greatest benefactor of grants from the Russian government. There is a link to this because it left me speechless russian-patriarch-kirill-does-not-see-tragedy-in-the-economic-crisis In India there is increasing Sikh extremism with the permission of the government. The Vatican, possibly the richest organization in the world sees itself as some sort of supranational government but instead of using its wealth and influence to help people is more concerned with getting richer, milking its followers and only offers prayers when people need real practical help. It consorts with political leaders around the world like a courtesan believing she is a queen who sits above her people. How long will it be until politicians around the world get tired of all religious meddling and trouble making. Particularly as the global economy gets worse and they see just how rich these religions have become. I am curious to see what will happen when the governments are broke and they then look at the religions and all their wealth and see the religious system acting as if it is untouchable.

This is the year when finally it will be understood the global system, in all its parts, is beyond repair. Maybe it is time people started thinking about the New System.

Ukraine: War is coming, part 3

It seemed that the talks in Geneva between Russian, Ukrainian and US counterparts had opened up a possibility for all those involved to step back from the brink, calm the situation down and work things out. To be honest, for a brief moment, I thought there could be some mature, adult behavior and things might be resolved. I was foolish to think this, since when have political leaders shown any sort of grown up pragmatism in dealing with serious problems? They are more interested in their petty power plays. They are lesser sons, ignoble offspring, unfit for purpose and certainly unfit to govern. I aim that at all politicians and rulers, everywhere.

So now we have an escalating situation in Ukraine, the number of small skirmishes seem to be increasing on a daily basis. How long will it be before we see a major assault take place, it appears to only be a matter of time, sooner rather than later! The opportunities to step back from the brink are becoming fewer by the day as tension mounts. As I said in Part 1 and Part 2 of this series; they are stumbling towards war, blind to the consequences which will befall them.

One of the areas of the Ukraine/Russia crisis that doesn’t get much attention at the moment is the role of the Orthodox church, its involvement in the political affairs of both countries. I first wrote about it in early March, you can find it here Further to this, at Easter you can see the involvement of the Orthodox church on both sides when you take notice of what was said when they addressed their followers. In Ukraine, Patriarch Filaret condemned Russian aggression, directly calling Russia an enemy. Meanwhile in Russia, Patriarch Kirill while he called for peace and cooperation between Ukraine and Russia he also called for, and I quote “end to the designs of those who want to destroy Holy Russia.”

To understand the full impact of this you need to know what he meant when he said “Holy Russia”, from a Russian nationalist point of view there is no difference between Russia and Ukraine, they are one and the same, the birth of Russia as we know it originates in Ukraine. Modern Russian nationalism sees Ukraine as a country to be fully united into Russia. The Russian Orthodox church is a key proponent of this, Patriarch Kirill is extremely nationalistic and also extremely close to Vladimir Putin. Kirill is a key Putin supporter, preaching from the pulpit that Putin is the man of the hour and there to save Russia and unite “Holy Russia” So we have the Orthodox church, Ukrainian and Russian, both supposedly Christian, using their enormous political power in their respective countries to foment war regarding an idea that goes against anything that is taught by the faith they proclaim to follow.

Besides strongly resurgent Russian nationalism, it also appears that there is another reason for Russia’s actions. Appealing to the Russian masses sense of nationalism is a very effective way of taking their minds away from other deeper, systemic problems. The Russian economy is very fragile, money is being drained out of its economy at a huge rate, the national bank is having to use its reserves to maintain liquidity, the banking sector is very fragile, it is facing a situation of sub-prime business loans similar to the sub-prime property loan crisis in the USA back in 2007/2008, the main difference is that the big Russian banks are owned by those who are personally close to Putin. The price of crude oil is falling, the Russian economy is based on oil/gas exports and depends on maintaining a certain price level. At the moment the price is about $110 per barrel. Russia or should I say Putin, needs the price to be about $115 per barrel in order to have enough money to keep paying the people the vast amounts he must for their continued support. Then we have to consider China, its shadow banking sector is in a huge speculative bubble which when it bursts will have implications for the wider Chinese economy, this will depress demand which will be reflected in the amount of energy it consumes and buys from Russian which will further depress oil/gas prices, reducing further the income Russia gets from its energy exports. Faced with these situations, a man such as Putin is going to be pressed into a corner, he will come out fighting, looking for ways to put the blame on others, a war with Ukraine would be a useful distraction, he is being left with little other choice. It is funny in an ironic way, the desire to hold on to power no matter what, will lead people into the most self destructive situations imaginable, and I aim this at the global political, business and religious system, not only Putin. When I look at the world today it reminds me of how the world was shortly before the outbreak of WW1. Watch this space.