Global Power Shift

This is just a series of observations that support my idea that we are living in what, in a few decades, will be seen as tumultous times.

Recently, there was a news item that stated that by 2020, China will become a larger economy than the US; and by 2050, India will top even China, leaving the US a distant third. This is not someone's wishful thinking, but just the magic of compounding – of economic growth, rather than of your money in a bank.

Today, we are all living at the crossroads of history. A subtle power shift, significantly visible in time frames of decades, but barely perceptible at the time frame level of a day or a week, is happening all the time. Witness the following:

• The Arab Spring happened over a period of months and still seems dramatic. I doubt if the spring has completely spent itself. It is not yet all cool in Syria and Egypt, and it may yet erupt again in some other nation(s).
• Technology laughs at national and geographic borders. Accountability and clean governance pressures were earlier driven within each nation's power centres, laterally. However, now there are vertical pressures that cross national borders earily – thanks to telecom, internet, satellite broadcasting and global moneychangers (both, traders and speculators).
• Unregulated or unpoliced space soon becomes populated with groups that thrive on chaos and absence of regulation. Witness Somalia, Sudan, South Sudan, etc. to see the truth of this.
• Unregulated pockets in otherwise regulated economies also give birth to chaos. While this is not to be taken as an approval of the concept of a police state, it is sobering to hear Paddy Ashdown cite a fact that 60% of the $4M that funded the 9/11 bombings passed through the WTC itself!
• Now, the enemy is within each country. Thus, for properly defending a country, the defence ministry may need to speak to the Health ministry (to protect against pandemics); Ministry of Commerce and Industry (the hi-tech infrastructure of the country is sensitive and vulnerable to attack), Home Affairs (to track infiltrators), and Transportation (Air/ ship/ road security). Defending our borders is just not enough.
• The maximum vulnerability is at all “interconnection points” (airports, docks, bus and train terminals). So defending at such points necessarily means overlap in responsibilities and powers. Hence, working with others efficiently is a capability all need to develop.
• Defence co-operation is not enough. Nations and people living in them need to realize that war is an immensely expensive zero-sum game that can go on infintely to their collective detriment. Only then can long-festering disputes cool down sufficiently to permit normal life.
• In 1945, when WW-II ended, there were about 100 countries. Today, there are nearly 200. We are adding almost 1.5 new  countries a year on an average over the last 67 years.  At the same, time, we have witnessed European countries lowering the borders and becoming a single currency area (that initiative is arguably in the endgame stage already).
• Siberia has such inclement weather that in the Far East province of Russia (area double of India) less than 60 Lakh people live. Greater Mumbai has double that population! However, it is a source of power for Russia – most of its natural gas and oil is sourced from this vast area. Surprisingly, this is a source of power for China too! Global warming has given rise to vast wheat fields in Siberia – but there is no one in Russia to feed. Russia's population is shrinking. But we see that some 600,000 Chinese migrate to Siberia, cultivate wheat during the summer on vast leased farm tracts, and come back home every year. This wheat feeds a good proportion of the Chinese population.
• China is controlling a larger and larger part of the world – without firing a shot. They are, quite literally, either buying them up, or colonizing through sheer numbers of immigrants. They are “partnering for prosperity” with several poorer countries, notably in Africa. Thereby, it is creating a China-centric circle of influence that rivals that of the US already. China has trade relationships with Korea, Japan and other countries in the neighborhood, and lower tariffs for poorer countries. In Singapore, Vietnam and Malaysia, the ethnic Chinese population is a significant, loosely united power bloc. In BRICS and in the Asian Free Trade Zone, China is assuming an increasingly dominant role. For example, on Iran, both China and Russia have vetoed UN Resolutions sponsored by the US for increased sanctions. China is still the largest customer of Iranian oil, with India being second.
• Chinese yuan is threatens to emerge as an alternative reserve currency in addition to the dollar and euro, which (when, not if, China can get away with it) will deflate the US balloon much faster than one can imagine. When that happens, the US will be awash (not overnight, but over a finite period of, say, 3 years) with inflation of  the trillion dollars of bonds that China won't need. Thus, the US seems poised to deteriorate as a global power. Inflation robs from the poor, and shifts even more economic power to the rich, so it will exacerbate social tensions in the US, as the feeling is already rife that the US bends backwards to accommodate the rich, at the cost of the poor. The recent BRICS meet discussed this concept, but shied away from pushing immediately for it. If, and when, yuan gets adopted as an alternative reserve currency, the power shift will accelerate.

I intend to develop this line of thinking further in coming days and weeks. I welcome inputs in the form of comments from anyone who has more to contribute to this line of thinking.

Afghanistan: Strategic Options before the US

In my last blog entry, I had outlined how Russia is playing a high-stakes, long-term, strategic poker to regain its former dominance and glory. Today, I examine a few history lessons relating to war; and in the light of Russia's game, and also because of lack of a coherent long term US foreign policy, now that US involvement in Iraq and Libya has ended, I attempt to explain how America is painting itself into a strategic corner, as far as the major remaining theatre of war, Afghanistan, is concerned.

History has always shown that supply lines are at the root of war strategy. If supply lines are closed, the army that has advanced becomes isolated and vulnerable. For this same reason, access to sea ports that make possible cheap logistics via sea have always been considered strategically important. Also, physical features like lakes, seas, rivers and mountain ranges often form national borders that act as natural fortifications or buffer zones.

History is replete with instances where supply lines, ports and geographic features like narrow straits that control access, have played a big role. Control of the narrow Strait of Istanbul (aka Bosphorus Strait), connecting the Black Sea to the Mediterranean Sea has been the prize at stake in more than one war (including WW-1's Battle of Gallipoli), as the Suez Canal has been in the 1960s. At Dunkirk in WW-2, breaking the isolation and seige was at the heart of the evacuation by Allied forces. Again, the German army was repulsed in Russia towards the end of WW-2 by the “scorched earth” strategy–the retreating Russians left behind nothing that the enemy could use–no buildings (burnt/ razed), no crops (burnt), and no food or water (poisoned wells). The long, thin supply line was constantly broken by Russian guerillas, and to make matters worse, the winter of '41-42 was the severest in a long time. Soldiers froze to death in their sleep; diesel froze in fuel tanks; there were severe food shortages due to the scorched earth policy. This put such a severe strain on the logistics of supporting an advancing army that the Nazis eventually capitulated.


The above references to supply lines brings us to why Russia's strategic gameplan has attained even more serious geo-political overtones: supply lines to Afghanistan, an important theatre of war, where the US and NATO forces are deeply involved, have become vulnerable. Pakistan, in anger over killing of 24 of its soldiers at an Afghan border checkpost, has closed two US supply lines to Afghanistan: via Torkham (Khyber Pass) in the north, and via Chaman in the south. These were the cheapest and easiest supply lines, though risky because of risks of ambushes to the convoys. A few years back, to reduce dependence on the route through Pakistan, the US developed the so-called Northern Distribution Network (NDN) project. It was hoped that the NDN would be less subject to armed attacks, delays, and pilferage that have hampered movement of goods along the Karachi-Peshawar route. In setting up the NDN, the US must have expended considerable diplomatic capital in nudging and getting co-operation from several CIS states involved, and above all, from Russia. An attempt to get China and India to partly fund the NDN because of potential benefits to their economies was a non-starter. This eventually allowed multiple alternative supply lines to be established, albeit a bit costlier (about 250% of the Karachi-Peshawar route), into Afghanistan from the North. Why multiple? Because the sole customer of these routes was the US/NATO, and having multiple options was thought to offer better bargaining leverge to the US. But as we will see in detail below, each NDN route is an uneasy option for the US, especially after Pakistan has shut its doors to NATO and US.

• The best route for NATO/ US forces to send supplies to Afghanistan is the route from the Arabian Sea (Karachi, Pakistan) to Afghanistan via Peshawar, Chaman and Torkham on the Af-Pak border. This is short, relatively easily motorable, and access to Pakistan via Arabian Sea is relatively easy for the US and its allies, thanks to its military bases in Iraq, Kuwait, and Saudi Arabia. Even this route has pushed the cost of gasoline from $3 per gallon in the US to $400 per gallon delivered at the forward positions in Afghanistan. When convoys are ambushed, the costs are said to go up to $800 per gallon!
  
• The second route (called NDN North), is the next most viable route (because a large portion uses Soviet-era railway lines), starts in Riga, Latvia along the Baltic Sea, and goes through Russia, Kazakhstan, and Uzbekistan before entering Afghanistan. While Latvia, Uzbekistan and Kazakhstan may sympathise with the US rather than with Russia, it is of no avail, because Russia can shut that route overnight. Moreover, Latvia is 100% dependent on Russia for gas; and the other two have signed long term gas exploration and supply treaties with Russia. Hence, if Russia is angered, this route will close.
  
• The third route (bypassing Russia, called NDN South) is from Poti, Georgia, along the Black Sea via Baku, Azerbaijan, crossing the Caspian Sea by ferries, to Aqtau in Kazakhstan and thereafter, through Uzbekistan, on to Afghanistan. Turkmenistan is not yet an option as its Government has not granted overland transit permission for non-lethal supplies, but only for humanitarian aid supplies headed for Afghanistan. This too is uncomfortable strategically, because Russia, if angered, can easily block access to Poti, Georgia in a war-like scenario. It can also lean on Kazakhstan and create trouble for its Government through multiple levers (not discussed here). So this route too, like the second route, is feasible only when Russia is in good humour, though it bypasses Russia entirely. It is uncomfortable logistically, because it means that consignments change over from ship to road to ferries and back to road transport. Plus, it goes through two CIS countries (Uzbekistan and Azerbaijan) where the overhang of Russian influence is still heavy. We cannot also ignore the frequent water-sharing disputes between Uzbekistan and Tajikistan resulting in Uzbek blockades of traffic into Tajikistan lasting for weeks on end, sometimes.
  

• The fourth route (called the KKT route), bypasses Georgia, Uzbekistan and Azerbaijan but goes through Russia, ( :-) Russia keeps popping up like a bad coin!), Kazakhstan, Kyrgyzstan and Tajikistan.
• The final route, and the most expensive, to be utilised only if other routes are not sufficient, or in case of life and death, is by air costing approximately $7 per pound of supplies – either over Russian and multiple CIS countries' airspace from Europe over the Black Sea or through Pakistani airspace. Now, any of these countries could deny access to US supply airplanes. Cheapest would be over Pakistani airspace, but this route is currently closed. The US's air base in Manas, Kyrgyzstan is also subject to Russian influence.  

So the conclusion is that the US has very few options in Afghanistan, and a great deal of hope that Pakistan will eventually be prevailed upon to swallow their anger against the US. Just a few days after Pakistan closed US and NATO supply lines to Afghanistan, Russia also threatened to close the NDN North in partial retaliation of the US's attempts to place ballistic missiles in Poland and other countries bordering Russia. They have also threatened to place short range missiles in Kaliningrad, aimed at specific targets in Europe. This is aimed at the most vulnerable spot in the US's Afghan strategy, at the worst possible time for the US. It is thus clear that Russia is more than willing to use the NDN as a diplomatic bargaining chip. Putin has signalled this loud and clear by lowering the diplomatic temper with the US several notches by accusing them of meddling in Russia's internal politics, in the context of post-election anti-Putin protests in Russia (some papers have called this Russia's “Tahrir” moment). If the US is actually doing what Putin is alleging, they are playing dangerous, high-stakes diplomatic poker. Russia, however, knows that if Pakistan changes its mind, or if the US retreats from Afghanistan, the NDN card will no longer work.
While it is some more time before things turn dire, if Pakistan does not make a U-turn from its current diplomatic position vis-à-vis the US and NATO, the options before the US are basically two; and both are “lame-duck” options that can diminish the US standing in the world considerably:

• Eat diplomatic crow dished out by Russia to keep the most viable NDN routes open as long as they remain involved in Afghanistan; or
• Completely retreat from Afghanistan well before the US Presidential election in Dec, 2012, like they have done recently in Iraq under cover of darkness and surprise. This is the most likely scenario. While the Obama administration spin doctors may project it politically as a decision to withdraw voluntarily (like they are projecting the Iraqi withdrawal), this will actually be projected by Pakistan and the Taliban, and seen and believed by much of the Arab/ Muslim world as a humiliating forced retreat arising out of defeat.

Currently no one in the US administration is talking about what happens if Pakistan sticks to its guns long enough. Everyone is cynical enough to believe that Pakistan will change its tune. But to understand the probability of this happening, note that for the first time, in Pakistan, the fundamentalists, the army and the politicians (even the opposition) are on one side. It will take great courage for any of these groupings to change their tune vis-a-vis the US radically. Expecting this to happen in some time is the equivalent of running a war and putting the lives of 140,000 armed forces personnel plus those of countless contract employees working in Afghanistan, to support the US and NATO fight against the Taliban, at stake on the basis of blind hope and faith, not hard-headed strategy and tactics. Putin's recent uncharacteristically belligerent diatribe against Hillary Clinton, John McCain and the US's meddling in internal politics of Russia (meaning the protests about the recent elections being unfair etc.) is as clear an indication as any that Russia is gearing up to extract a heavy diplomatic and political price from the US for keeping the NDN open. Come winter, and Russia dons its hardest negotiating hat in Ukraine; now they will do it with the US too. 

(Maps are from Google Earth (TM))

Russia's Strategic Geo-Political Game

Russia, after the break-up of USSR into 15 CIS countries, has been reduced to a country with long, flat borders that are difficult to patrol and defend, with most of its neighbouring CIS countries, and precious little access to the sea except to the icy Barents and Kara Seas.; and through Kaliningrad, an outpost cut off from the contiguous land mass of the rest of Russia, to the Baltic Sea. Russia also has a narrow window to the Black Sea southwest of Volgograd.

Commercially, it has much of Europe by the short hairs, because of its stranglehold over supply of natural gas. At least 18 CIS and European countries are between 25% and 100% dependent on Russian natural gas, and have almost fully converted to gas for internal heating. So, every winter since 2005, when large parts of Europe are difficult to live in without gas heating, Russia turns on the diplomatic pressure using Ukraine (through which its gas pipeline passes) as the whipping boy. Over the last 6 years, Russia has played hardball and negotiated hard with Ukraine. This year's negotiations may begin any time now. 

Russia under Vladimir Putin (and now Medvedev with Putin breathing down his neck) has been playing a very smart and patient strategic game for the last over 15 years, where it uses all its strategic advantages to gain and extend its power and influence. In particular, it is keen on expanding till it gets access to a natural bulwark against invasion, in the form of sea, river, lake or mountain range; and rebuild Russia to its former glory. This intent is borne out by Putin's recent regret that leaders of the erstwhile USSR did not fight to prevent its collapse. In 2005, he had described the described the demise of the USSR as the "greatest geopolitical catastrophe" of the 20^th century. For example,

CIS Countries Map taken from Google Maps.

• Russian troops have recently (in April, 2010), ostensibly at the invitation of the Kyrgyzstan Government, bivouacked in Kyrghyzstan, thus making Tajikistan, Kazakhstan and Uzbekistan, the three CIS countries bordering that tiny, poor country, very uncomfortable. Kyrgyzstan is mostly mountains and highlands, giving this country strategic vantage points to peer into their neighbours' backyards.
  • At the south-east, Russian troops can look down from the Tien Shan mountains almost into Tashkent, capital of Uzbekistan.
  • At the north, from Bishkek, the capital of Kyrgyzstan, if you shout, you can be heard in Kazakhstan. Indeed, Almaty, the largest town in, and the former capital of, Kazakhstan, with 9% of this thinly populated country's population, is less than 250 kms away. I had predicted in this blog in April, 2010, that there will be trouble in Kazakhstan in the next 2-3 years, covertly fomented by Russia. This seems to have begun, if this report is to be believed. A state of emergency is currently in force, and curfew imposed, in an oil-producing town. Kazakhstan is an important exporter of crude, and interruption of supplies are a possibility, leading to upward pressure on global oil prices.
  • The third country, Tajikistan, large parts of which are mountainous and inhospitable, borders Afghanistan, a geo-politically important state. Besides, Tajikistan is currently locked in a dispute with Uzbekistan about sharing of waters of a river which is being dammed in Tajikistan.
  • Kyrgyzstan also has a long border on the east with China, and from the mountains there, you can peer into China's Uighur (muslim) province, which Al Qaeda cells have reportedly infiltrated. Further, the US has an air base called Manas in Kyrgyzstan which is a supply line to Afghanistan. Since the new Kyrgyzstan Government owes its existence and continuance in power to Russia. This air supply base for US operations in Afghanistan is in danger, if Russia is angered by US foreign policy.
• Kaliningrad gives Russia a shared border with Lithuania and Poland, and easy access to North Europe. As Lithuania is 100% dependent on Russia for its natural gas, like Latvia and Estonia, Lithuania has not much choice but to allow Russia land and airspace access to Kaliningrad, which is at the forefront of Russia's objection to US missile bases in CIS countries or other East European economies: Russia threatens retaliatory placement of nuclear warheads and missiles in Kaliningrad, virtually on the doorsteps of several Europe-facing CIS countries and all major EU countries. Thus, being NATO member-countries is a cold relief for Lativa, Lithuania and Estonia.
• Russia's friendship with Venezuela and Bolivia through Chavez and Pablo Morales respectively raises the spectre of a “gas-OPEC” which can control gas pricing and distribution throughout the world. Even Iran and Kazakhstan have explicitly supported such an idea. Simultaneously, by offering sweeteners to Iran to lay a new pipeline for gas to Europe through its territories, it is moving forward to make Europe even more dependent on Russia for gas, far into the future. Note that Bolivia, Venezuela, Iran and Russia together account for 45% of proven gas reserves in the world. Add Turkmenistan, Kazakhstan and Uzbekistan, with whom Russia has signed long term exploration and supply agreements for gas (read: buys all its present and future gas output), and this figure crosses 50%. Throw in Equatorial Guinea, Trinidad and Tobago, Algeria, Argentina, Brunei, Nigeria, Oman and Qatar, all of whom are members of the Gas Exporting Countries Forum (GECF) of which a Russian is the Secretary General, and this formidable multilateral group controls more of the gas production and reserves of the world than OPEC did for oil. Besides, international companies have by now been pushed out of Russia, more or less, and Russian oil and gas is now consolidated in, and controlled by state-owned entities.
• Russia, along with 5 or 6 other UN member countries, notably including Venezuela, headed by Hugo Chavez, a known US-baiter, has recognized two breakaway provinces of Georgia (South Ossetia and Abkhazia) as separate countries in 2008. Russia has set up military presence in both these provinces, cocking a snook at the US and Europe, by drawing parallels to what they did by recognizing Kosovo earlier the same year over the objections of Russia. Thus, it breathes down the neck of the Georgian leadership, with South Ossetia being within shouting distance of Tbilisi, the capital. Abkhazia gives Russia much broader Black Sea coastline access, and cuts Georgia's access to it by half. When Georgia appealed for help, Europe did not budge because of its fear of angering Russia that supplies so much of Europe's natural gas. The US could not even think of coming to Georgia's rescue in these two theatres – because Russia patrolled access to Georgia via the Black Sea, and absent reliable supply lines, other than diplomatic support, it could do little else.
• Russia is so huge that it is easy to forget that in the south-east, Vladivostok, the last stop on the Great Trans-Siberian Railway at Russia's south-east tip, is very near the northern tip of North Korea, US's great bugbear. With the death of Kim-Jong Il, this geographic proximity has potential to invite international interest. I won't be surprised that with a young, untested leader in the saddle in N Korea holding a nuclear button, Russia and China attempt get friendly with N Korea. Revival of old proposals like a train from Russia through N Korea and onwards to S Korea; an oil pipeline through a similar route; and so on can be expected. In the north, the eastern-most point of Asia, that is almost permanently ice-bound, the Bering Strait separates US territory (Diomedes Islands, Alaska) from Russian by less than 50 kms, though a day apart on the calendar. (You may be able to spot Sarah Palin's kitchen from this part of Russia!) It is possible to ski across a frozen Bering Strait from Russia to the US (or vice versa) at this point (skiing to yesterday or tomorrow!). A time will soon come when Russia will begin to leverage these geographical quirks too.