Antoine van Agtmael is one of the most astute observers of trends in politics, society and economics. This Dutchman-turned-American coined the term “emerging markets” in 1981 and still retains a sharp radar. This time, he anticipated a Trump victory. Two weeks ago, he sat down with FO° Editor-in-Chief Atul Singh to record an episode of FO° Podcasts and share his thoughts on why Trump won and what happens now.

Agtmael did a probability analysis every month this year. In February, Agtmael thought Trump had an 80% chance of victory. After the Trump–Biden debate, he upped the figure to 90% and, once Trump survived the assassination attempt, Agtmael gave him a 95% chance of victory. A good convention and a decent performance at the debate helped Kamala Harris to make it a 50-50 contest, but Trump pulled away and won.

Agtmael thinks Trump won because he connected with the voters while Harris did not. In part, Trump connected because he used social media well, but he was also able to tap into voter sentiment. As a result, he broadened the Republican base, perhaps for decades to come. Trump also bet on men whose condition is best captured brilliantly in the book Of Boys and Men by Richard Reeves, while Harris bet on women. These men turned out to support Trump, while the women did not support Harris in a similar manner, which surprised Agtmael.

Furthermore, Agtmael points out that Democrats were out to lunch and failed to recognize that they were now perceived as elites. The irony, or rather tragedy, is that the demos — the Greek term for the common people — have achieved a Pyrrhic victory. The demos will suffer because a bunch of elite billionaires will get their tax cuts. Another irony is that the man who has promised to make America great again will make America small instead.

Why is populism rising in developed countries?

Trump is a developed-country phenomenon. In European countries too, populists have come to the fore. The working classes in these countries are voting for populists who offer quick fixes to complex problems. A large part of the population has lost faith in democracy. Many people now believe that policymakers do not listen to them or care about them.

In the case of the US, Democrats aided Trump’s victory. There were flaws in the candidate and the campaign. More importantly, the Democrats have lost their way. The woke culture in the party headquarters and the universities is out of sync with the country. The Democrats did not address voter concerns about inflation, food inflation and the cost-of-living crisis.

Food, gas, childcare, healthcare and universities cost a lot of money. Also, the children of elites find it easier to get into top universities than their counterparts with poorer parents. Democrats could justifiably point to statistics and argue that the economy was doing well but, to their misfortune, the people did not feel the benefits of better abstract economic figures. Too many Americans were barely keeping their head above water. Thus, inequality has undermined democracy.

Furthermore, diversity may be good, but it is a political problem. Democrats could not manage to appeal to Arab votes in Detroit and Jewish votes in Philadelphia at the same time. Similarly, conservative Muslim families definitely do not support Democrats’ fixation with trans issues. 

What happens now that Trump is back?

Trump’s picks are a mixed bag. Some, like the incoming Treasury secretary and his chief of staff, are clearly competent. Others might not be so competent. Still others are questionable. What is clear is that Trump 2.0 has been faster out of the starting gate. He has priorities and a plan. Trump will have far fewer brakes this time around in terms of people around him or the Congress or the Supreme Court. More of what he wants will get done.

It is also clear that press freedom will suffer. Some good may come of this. The woke excesses will be undone. Yet the risk of lower freedom is that unchallenged ideas tend to be bad ideas and make for bad policies.

Economically, the Trump phenomenon has happened partly because the American winners of globalization never compensated the losers across their country. That is why Trump opposed the Trans-Pacific Partnership (TPP) and abandoned it. Note that Clinton was unclear on the TPP during her campaign and that Biden never resuscitated it. The abandonment of the TPP signals the end of multilateralism.

The end comes as a reaction to the decline in US dominance of the global economy. Innovation is now becoming more widespread. Chinese carmaker BYD Auto makes better cars than Elon Musk’s Tesla. The Chinese have bet on the age of electricity, investing in solar energy, windmills and batteries. Tariffs are a sign of weakness, and Trump’s adoption of protectionism shows that the US lags behind in key industries and key technologies.

Biden instituted policies to make the US catch up. He brought back new types of jobs and revived manufacturing. Taiwanese company TSMC has started fabricating semiconductor chips in the US. In fact, the yield of its factory in Phoenix is higher than that of its factories in Taiwan. Biden has addressed the stupidity of past policy in allowing chips, the strategic technology of our time, to be fabricated next to China and in an earthquake zone even when margins were as high as 50%. 

This policy was beyond idiotic, but now TSMC makes chips in Germany and Japan in addition to the US. Dutch company ASML makes the machines that fabricate chips. German companies Trumpf and Zeiss make the lasers and lenses, respectively, that fabricate chips. While these are monopolies, the semiconductor supply chain is much more secure with TSMC operating in the US and Europe. Trump will take credit for the success of many of Biden’s policies and trends that were bringing smart manufacturing back to the US before he burst on the political scene.

Related Reading

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The end of an era but reason for hope

Mercantilism is back. Geopolitics is determining economics once again. Yet Agtmael cautions not only against protectionism but also against industrial policy. It has its place. John F. Kennedy triggered innovation in the American economy by deciding to put a man on the moon. At the country’s inception, the US employed protectionism to boost infant industries and ensure that it did not end up as a supplier of raw materials to Europe like Latin America. Yet such policies must be like a small garden with a high gate. In general, reliance on markets works better than reliance on the government.

Finally, Agtmael cautions against pessimism. We may not be better off compared to 10 years ago, but we are certainly much better off than a hundred years ago. Yes, there has been a populist backlash and democratic backsliding, but we do not have Joseph Stalin killing millions and Mao Zedong launching a Great Leap Forward today. 

Agtmael has benefited from globalization in terms of prosperity, contacts and democracy. Now, the first, second and third worlds are returning. The US and its allies are the first world. China and Russia form the second. Other countries form the third world. Two risks confront the world. First, the race to develop AI, the winner of which is not certain. Second, rising geopolitical tensions, which increase the possibility of miscalculations.

For all the risks, the world is still a lot better than the time when women did not have the vote and when third-world countries were colonies of European powers. So, there is good reason to be optimistic and retain hope.

[Peter Choi edited this podcast and wrote the first draft of this piece.]

The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Donald Trump Is Back. Why, and What Happens Now? appeared first on Fair Observer.

Plaut then goes on to explain the rise of the African National Congress (ANC) in 1912 as a unifying force for black South Africans against the increasingly oppressive white regime. Key figures like Nelson Mandela and Oliver Tambo emerged, advocating for more radical tactics and forming alliances with the South African Communist Party (SACP). 

The 1960 Sharpeville massacre in which police fired at unarmed protestors after a stray shot from the crowd fired up resistance to the apartheid regime. Many ANC leaders opted for armed resistance, which was utterly ineffectual but led to a crackdown by the apartheid regime. It banned the ANC and jailed its leaders.

After a few quiet years, the 1970s saw a resurgence of resistance, with white students, including Plaut, supporting the formation of labor unions and the United Democratic Front. These organizations, along with international pressure and the ANC’s armed struggle, contributed to the eventual downfall of apartheid. However, the ANC’s tendency to consolidate power and control other organizations came to the fore, raising concerns about its commitment to truly democratic principles.

To its credit, the ANC represented all ethnicities and stood for equality for all. It opposed discrimination and championed democracy. The post-apartheid South Africa has had many challenges, but the values of democracy, rule of law and freedom of expression run strong. The history of a prolonged independence struggle against colonialism makes South Africa resilient and gives us reason for optimism regarding the future.

[Peter Choi edited this podcast and wrote the first draft of this piece.]

The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Making Sense of South Africa’s Rich History appeared first on Fair Observer.

Atul highlights the troubling decline in education across advanced economies like the US and UK, which he believes is undermining public faith in democratic institutions. He scrutinizes the expansion of presidential powers in the US and the governance challenges in France, presenting a case for the rise of elected “monarchies” and unmanageable systems. Atul sees former US President and Republican candidate Donald Trump as a symptom of a broader set of underlying issues within democracies.

Atul stresses the importance of community building, local democracy discussions and envisioning the kind of society we wish to inhabit as essential steps toward addressing systemic problems. He created Fair Observer as one way of furthering these goals. Today’s journalists face an enormous workload that limits their ability to engage in thoughtful reporting. With the rise of self-publishing platforms, diverse perspectives are abundant, yet securing publication in mainstream outlets remains a challenge for new voices.

Atul also shares insightful glimpses into his upbringing in a multilingual, debating family that emphasized factual accuracy and logical consistency, despite its intense and rigorous atmosphere. He reflects on the pressures of academic success and his journey from disdain for rote learning to becoming a champion debater and an influential voice in global discourse.

Atul’s parting advice to young listeners is powerful: hope starts with oneself. He encourages critical thinking, learning from our elders, taking local action, and nurturing an optimistic yet skeptical outlook to improve our democratic systems.

Join us for this thought-provoking episode, where old truths meet new challenges, and personal stories illuminate the path toward a better community and society.

The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Atul Singh: Journalism’s Role in Addressing Democratic Decline and Propagating Diverse Perspectives appeared first on Fair Observer.

Back then, the airport was like a fortress. I was a young officer having my last thrill by riding around on the machine gun nests of military trucks and walking to posts on the Line of Control between India and Pakistan. Some of the fighters we had been facing were battle-hardened Pashtuns who would come swinging down from Afghanistan, which was then (as now) ruled by the Taliban.

After my flight reached its destination, I went to my parents’ home and unpacked my uniform. In a few days, I would leave for Oxford to read for a Philosophy, Politics and Economics degree that would change my life. My parents and I were having a late dinner when a fellow officer, now in India’s Intelligence Bureau, called on our landline. (In those days, we did not yet have mobile phones.) He told me that the Twin Towers of the World Trade Center in New York were crumbling after a spectacular terrorist attack.

The following is a piece about the man who engineered those attacks and changed the world as we knew it that day.

A story of a chap named Osama

Osama bin Muhammad bin Awad bin Laden, better known as Osama bin Laden, was the one of more than 50 children of Muhammad bin Laden, a self-made billionaire who made his fortune executing construction projects for the Saudi royal family. Osama’s mother, Hamida al-Attas, was Syrian whom good old Muhammad divorced promptly after the child’s birth. Muhammad recommended Hamida to an associate, Muhammad al-Attas, with whom she had four more children. Of his father’s $5 billion, Osama inherited $25–30 million.

Osama reportedly liked reading the works of Field Marshal Bernard Montgomery and French President and General Charles de Gaulle. Osama also played football — soccer for our American friends — as a center forward. He was an Arsenal fan.

For all his wealth and Western interests, Osama was discontented with the state of the world. As a devout Sunni Muslim, his main interests were the Quran and jihad. In 1979, when the Soviet Union invaded Afghanistan, Osama left for Pakistan and used his own money to fund the mujahideen fighting the Soviets. Soon, he was in bed with the Central Intelligence Agency (CIA) who were fighting Charlie Wilson’s War to give the Soviets a bloody nose.

The carousing and cavorting Congressman Wilson funded the mujahideen lavishly. Yet this did not endear Wilson’s beloved homeland to Osama. This pious Muslim (who left behind 20–26 children and probably had more sex than the playboy Wilson) founded al-Qaeda in 1988. As per the Federal Bureau of Investigation (FBI), the goal of this organization was a worldwide jihad. Osama was virulently opposed to American presence on Muslim lands, especially his native Saudi Arabia.

Osama began training young men in places like Afghanistan, Pakistan and Sudan to unleash a campaign of terror against the US. On February 26, 1993, two al-Qaeda operatives drove a van packed with explosives into the public parking garage beneath the World Trade Center and set off a big blast. Six people, including a pregnant woman, died, and over a thousand were injured. The FBI arrested five of the seven plotters promptly and found the mastermind Ramzi Yousef later in Pakistan.

Yousef’s plan was to topple North Tower with his bomb, and the collapsing debris of this tower was to knock down South Tower. This cunning plan failed, but his uncle, Khalid Sheikh Muhammad, succeeded in knocking the towers down more than eight years later.

The 9/11 attacks (known this way because unlike the British or the Europeans, Americans put the month before the day) involved 19 of Osama’s boys four hijacking planes and flying them to kamikaze-style suicide attacks on chosen targets. A third plane struck the Pentagon, and a fourth, which crashed in Pennsylvania, was apparently meant to hit the White House. Osama’s Pakistani henchman had pulled off a huge massacre on a shoestring budget, killing 2,997 people and injuring an estimated 25,000. Now, Osama had worldwide attention for his global jihad.

The US tilts at windmills

The 9/11 attacks led to mourning and shock in the US. Even the Japanese had only struck Pearl Harbor in distant Hawaii, which was not even a state yet. Osama had managed to strike the mainland US itself. This was a really big deal.

Later, the 9-11 Commission Report concluded that Osama’s al-Qaeda was “sophisticated, patient, disciplined, and lethal.” Osama had issued two fatwas, one in August 1996 and in February 1998, calling for a jihad against the US. He declared that it was more important for Muslims to kill Americans than to kill other infidels. This charming chap was inspired by Egyptian Islamist author Sayyid Qutb and rationalized “unprovoked mass murder as righteous defense of an embattled faith.”

The murderous ideology that had inflicted such spectacular 9/11 attacks was bound to provoke a response. Under George W. Bush, who was not as bright as his father George H. W. Bush, this came in the form of the War on Terror, later jargonized as the Global War on Terror (GWOT). The US rushed into Afghanistan to get rid of the Taliban and succeeded speedily. Then, they engaged in a quixotic endeavor to build democracy in this famously fractious, mountainous land.

The US installed one notoriously corrupt leader after another into office. These men stole hundreds of millions of American taxpayer dollars. In the end, US darlings Hamid Karzai and Ashraf Ghani became lackeys of the Taliban, who are now back in power despite the blood and treasure successive US administrations poured into Afghanistan.

More importantly, the GWOT morphed into an invasion of Iraq in 2003. This was both unwise and unnecessary. Certainly, Saddam Hussein was no lovey dovey cuddly teddy bear. He was a murderer fond of chemical weapons and had gassed both Shia Arabs and ethnic minority Kurds.

Hussein had invaded Iran (in 1980) and Kuwait (in 1990) as well. The latter provoked the 1990–1991 Gulf War, where US troops annihilated Iraqi forces spectacularly. By 2003, Hussein’s Iraq was a shell of its former self. Besides, Hussein was a Baathist — a political philosophy that advocates a single Arab socialist nation — and no friend to al-Qaeda. Yet deranged American neoconservatives — many of whom were the children of Trotskyites — argued that Hussein would collaborate with Osama to unleash weapons of mass destruction on the US. This argument was bunkum but, just like their fathers, neoconservatives did not let reality get in the way of ideology. As a result, more American blood and treasure were lost.

The Iraq War destroyed the goodwill the US had attracted after the 9/11 attacks. Few people around the world bought the neoconservative bullshit. Even old allies like France and Germany refused to go along. Tony Blair valiantly sided with Bush Junior but lost his reputation at home for doing so.

Worse, the US under Bush Junior justified torture. My co-author Glenn Carle, a White Anglo-Saxon Protestant (WASP) with nine ancestors on the Mayflower, resigned from the CIA and wrote The Interrogator, a riveting read that captures the madness of this era. Needless to say, this US recourse to torture damaged its reputation globally and caused a crisis of confidence in the idea of America at home.

The US takes its eye off the ball

Arguably, the US has been the greatest superpower in history. The 9/11 attacks were spectacular, but they were perpetrated by little men in the shadows. Crazy ideologies always come up from time to time, and Islamist fanaticism is not new. Muslim countries tend to have very few minorities for a reason. After all, believers have a religious duty to convert everyone to Islam. Fanatical Muslims have resorted to torture and murder in their aim to convert pagans and dissenters from truth with a capital T. The medieval Mughal emperor Aurangzeb and the more modern Ayatollah Ruhollah Khomeini are just two examples from a long line of crazy nutters. 

If the neoconservatives had read some history, they would have realized that the War on Terror was a bloody stupid idea. You can go to war against a state, but not against an idea, especially not if this idea has been around for a long time and just refuses to die. Plenty of disgruntled young men and even others need a villain whom they can blame for everything. When an ideology offers 72 virgins in heaven, it is an attractive proposition to many testosterone-filled fanatics.

The US got distracted by the War on Terror and ignored other key developments. Few remember that 2001 is not only the year of the 9/11 attacks but also the year in which China joined the World Trade Organization (WTO). Enter the Dragon was the blockbuster movie Americans somehow missed. The 2016 paper “The China Shock” explains how the entry of China into the global market deindustrialized many economies and depressed worker wages as well. The Rust Belt, where much of Donald Trump’s core support base lives, is a classic example of this shock.

Anyway, fast forward to today and a new Cold War, which includes a full-blown trade war, has broken out between the US and China. If the US had woken up to the Chinese challenge earlier, this would have been entirely avoidable.

There is also an argument to be made that the US was blind to Russian President Vladimir Putin’s tightening grip on power. For years, the US and its allies, especially the UK, were happy to enjoy Russian cash pilfered from oligarchs from Mother Russia. They never really used their leverage against Putin to contain him or, earlier, to help build a Russian economy that was less extractive or exploitative.

To this day, Russians blame Bush Junior for unilaterally pulling out of the 1972 Anti-Ballistic Missile (ABM) Treaty that prohibited both countries from “deploying nationwide defenses against strategic ballistic missiles.” Putin had promised the US full support after 9/11, and Russians still view the US abandonment of ABM as a stab in the back. Fueled by irrational fears post-9/11, it was entirely unnecessary and extremely unwise.

A weaker, more divided post-9/11 US

I am convinced that many neoconservatives were well-meaning. I met some of them during my time at Oxford. Some of them were Rhodes Scholars and were convinced that an American invasion would lead to democracy. By their logic, there would be rivers of milk and honey in the region, and everyone would sing kumbaya. This is exactly what many Bolsheviks believed in 1917. Yet what they got was lovely Joseph Stalin’s paranoid mass killings and secret police chief Lavrentiy Beria’s rampant raping.

Naive neoconservatives forgot that the road to Hell is paved with good intentions. The invasion of Iraq was followed by the rise of the Islamic State and a savage civil war that spilled out into Syria, where the Russians got involved. A former commandant of Sandhurst (the legendary British military academy) who came from a gloriously imperial family remarked to me in 2003 that the borders in the Middle East were all in the wrong place. Mark Sykes and François Georges-Picot had not quite got everything right. Yet the trouble is, where do you draw new lines in this famously volatile region? Neoconservatives shook the hornet’s nest, and the results will remain with us for decades to come.

Japan and Germany after World War II were relatively homogenous industrial societies. Neither Afghanistan nor Iraq was one. Both are multiethnic concoctions where the idea of a Westphalian state is still an alien import. The likes of Paul Wolfowitz and Paul Bremer were infernally arrogant and criminally ignorant in their policy prescriptions. De-Baathification in Iraq led to the disbanding of the military, the police, the firefighters, the teachers, the doctors and other employees of Hussein’s state. To survive, not just thrive, everyone joined the Baathist Party. Instead of creating a thriving democracy, neoconservatives unleashed chaos and civil war. We are still reaping the bitter harvests of the toxic seeds they sowed. 

Like the War on Drugs and the War on Crime, the War on Terror failed. Simplistic solutions to complex problems always fail, even when they may seem successful for decades. Neither Nazi Germany nor Soviet Russia were able to create the utopias they promised. Instead, both led to nightmares. So did the War on Terror.

Osama’s aim was to weaken the US. He succeeded. Trump won the presidency first by defenestrating Jeb Bush from the Republican Party and then by beating Hillary Clinton in the presidential election. The reality television star blamed both of them for the Iraq War. The neoconservatives’ chest-thumping form of American nationalism had paved the way for him. Trump offered a rawer version of patriotism to those on the Right who feared that America had become weak. To them, “Make America Great Again” proved to be an irresistible offer.

At the same time, the Left lost faith in the idea of America. American campuses started viewing the CIA and the FBI as sinister organizations. Many young Americans see their country as an unjust superpower dominated by the military-industrial complex. Osama had blamed the Great Satan — the term used in many Muslim countries for the US — for the sad plight of Palestine and Lebanon. Thousands of students camping in campuses seem to agree.

The Taliban is back in power in Afghanistan. Terrorism still persists even though we have avoided a repeat of 9/11-style spectacular attacks. Airport security is a pain in the wrong part of the anatomy because no one wants to be on a plane headed into a monument. No one trusts President Joe Biden’s democracy agenda because they have seen this American movie before. The soft power that Harvard Kennedy School’s Joseph Nye speaks of stands greatly damaged. Worst of all, a coarsened, far more divided US seems ill-prepared to lead a more fractious world.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Now It’s Clear, Osama bin Laden Won the War on Terror appeared first on Fair Observer.

In the decision, the majority stated, “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”

The decision to overturn Chevron was split down partisan lines. The Court’s three liberal justices dissented from the majority decision, calling it an act of judicial hubris.

The Court’s overturning of 40 years of legal precedent will have far-reaching effects. While Democrats and Republicans blame each other for the coming storm, it is clear that the polarization surrounding the decision will overwhelm the legal system and lead to high-cost consequences for many businesses.

The beginning and end of Chevron

The logic behind the Chevron deference doctrine was to make regulation more effective and efficient. When Congress passed the Clean Water Act of 1972 to control water pollution, they could not define every pollutant and set safe levels for every one. So, the Environmental Protection Agency (EPA) creates the standards, policies and detailed regulations to fill the gaps.

In 1984, the Natural Resources Defense Council, Inc. (NRDC) challenged the EPA’s standards in Chevron. The DC Court of Appeals ruled in favor of the NRDC, but the Supreme Court reversed that ruling, inaugurating the deference doctrine. If the 1972 act was silent or ambiguous with respect to a specific issue, the Supreme Court decided, judges should defer to the EPA’s interpretation of the statute. This precedent soon became a foundational principle, being cited thousands of times in the following years.

Later, however, the Supreme Court has been diluting the Chevron deference doctrine. As Chief Justice John Roberts wrote, “At this point, all that remains of Chevron is a decaying husk with bold pretensions.”

In 2022, the court created the “major questions” doctrine in West Virginia v. EPA. Agencies asserting new authority with economic and political significance required a higher standard of “clear congressional authorization.” This put limits on the power Chevron gave to administrative agencies. The major questions doctrine was also the basis for striking down US President Joe Biden’s policy to forgive $430 billion of student loan debt.

Loper Bright Enterprises v. Raimondo was the final nail in Chevron’s coffin. The National Marine Fisheries Service (NMFS), a branch of the Department of Commerce, required Loper Bright Enterprises, a herring fishery, to have a third-party monitor on every boat to prevent overfishing. The government paid the salaries of the monitors. However, when the money ran out, the NMFS told Loper Bright Enterprises to pay the monitors.

The employees of Loper Bright then sued Commerce Secretary Gina Raimondo, claiming that the NMFS’ requirement was unconstitutional. Due to Chevron, the case was dismissed because the court deferred to the agency’s interpretation. However, when Loper Bright appealed, the case made it to the Supreme Court where it found several conservative justices ready to overturn Chevron.

Businesses will be hit hard

Businesses operating in the US will be affected by the overturning of the Chevron doctrine, though the exact impact and timing are not yet clear. As judicial challenges to federal regulations proceed, compliance requirements for businesses will become less predictable.

Changes could occur in several areas, including in visa regulations, workplace health and safety, equal employment opportunities and the status of independent contractors. In the longer term, a patchwork of regulations may be upheld or canceled, leading to increased ambiguity and confusion for businesses. Most importantly, judges may rule in surprising ways and along partisan lines, causing a clash between ideologies.

A practical example illustrates why the 2024 judgment is extremely consequential for consumers, businesses and the economy. After the 1929 Wall Street Crash, Congress passed the Securities Exchange Act of 1934 and created the Securities and Exchange Commission (SEC). However, since the 1934 act, the economy and financial markets became increasingly complex. Standards that applied in 1934 may not apply in today’s modern market.

Thus, legislative delegation to the SEC must sometimes be implicit, not explicit, to avoid overwhelming legislators. Chevron deference made this easier by giving the SEC the power to interpret the original act of 1934 without judicial interference. A court was not to substitute its own interpretation of the 1934 statute for a reasonable interpretation made by the SEC. However, with power to interpret taken away from the SEC, rulings on financial standards will vary from court to court.

Chevron caused ideological strife

The Court’s three liberal judges argued giving courts the right to impose their judgment on the law was simply a power grab. Conservative judges, on the other hand, took the view that the Chevron deference doctrine gave administrators too much power and prevented judges from judging.

Republicans, conservative legal scholars and business leaders in the US also favor the new judgment. The right points to bureaucratic empire-building since the creation of the modern administrative state by Franklin D. Roosevelt in the 1930s. They also claim agencies expanded their power beyond what the original legislation permitted. In 1952, Supreme Court Justice Robert Jackson even called the bureaucracy the “veritable fourth branch” of government.

Republicans believe the new decision will check left-leaning bias in federal agencies. Republicans blame Democrats for deliberately passing vague laws to exercise federal power in the name of the Democratic agenda. Left-leaning, unelected bureaucrats impose unending red tape on businesses, causing costs and delays. As such, the US economy becomes less competitive. To Republicans, bureaucrats violate the principle of separation of powers. They act like the legislature by crafting regulations. They also act like the judiciary by interpreting those regulations in their favor.

Just as Republicans complain that Democrats dominate regulatory agencies, the latter complain about the former for politicizing the courts. Supreme Court conservatives adhere to conservative jurisprudence, which is fixated based on originalism and textualism. Originalism is the principle that the constitution should be interpreted to mean what it meant at the time it was written.

Textualism is the theory that the interpretation of the law is based exclusively on the ordinary meaning of the legal text. No consideration is given to non-textual influences. Democrats see the recent originalist and textualist judgments of the Supreme Court as a result of decades of disciplined work by their Republican rivals to put conservatives on the court.

Democrats agonize about the Republican capture of the Supreme Court. After stuffing the Supreme Court with their partisan nominees, Republicans achieved major agenda itmes such as overturning Roe v. Wade (1973), putting the legality of abortion back in the hands of the states, and dismantling the US administrative state, causing “havoc in society.”

Democrats believe the 2024 Loper Bright decision created legal chaos and a crisis in governance. Democrats, administrative lawyers and legal scholars at the top US schools state that the US legal system will soon experience spectacular fireworks. On July 1, the Supreme Court’s five-three judgment in Corner Post v. Federal Reserve eliminated the statute of limitations for many challenges to administrative rules.

In her dissenting opinion, Justice Kentaji Brown Jackson warned of a “tsunami of lawsuits.” Justice Elena Kagan thought similarly regarding the 2024 decision. In her dissenting opinion, she wrote, “In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law.”

The two decisions, Loper Bright and Corner Post, have the ability to come together to create a Brexit-style arrangement supporting conservative ideological fervor for rolling back the Rooseveltian state. The legal certainty that businesses enjoyed in the US is now threatened. Neither the bureaucracy nor the courts are prepared for the imminent tsunami of cases. In an extremely litigious society, the legal system could find itself overwhelmed.

[Cheyenne Torres and Joey McFadden edited this piece.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Chevron Overturn Signals Volatile Emerging Storm of Litigation appeared first on Fair Observer.

Jeremy Corbyn, the left-wing erstwhile Labour leader, is now no longer in the party. Under Starmer, Labour has moved resolutely to the center even as the Tories (as British Conservatives are called) have imploded into post-Brexit fratricidal bloodletting.

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The UK has a parliamentary, first-past-the-post system. The candidate with the most votes becomes the member of parliament (MP) in each constituency. The party leader who commands a majority in the House of Commons becomes prime minister and governs the UK from 10 Downing Street.

The first-past-the-post system can lead to strange results. For instance, the Liberal Democrats won a lower percentage of votes than Nigel Farage’s Reform UK, but the former won far more seats than the latter in these elections. However, the Tories and the Scottish Nationalists were the big losers in 2024 while smaller parties flourished, as the table below demonstrates.

Unusually for any British government, the new Labour government is led by former civil servants rather than professional politicians. Starmer is a centrist who aims to bring back stability to the UK. Before his political career, Starmer was the head of the Crown Prosecution Service. His new Chancellor of the Exchequer, Rachel Reeves, worked in the Bank of England. Both have a reputation for competence and prudence. Like previous prime ministers Rishi Sunak, Liz Truss, Boris Johnson, Teresa May and David Cameron, Starmer and Reeves went to the University of Oxford. However, they did not come from affluent backgrounds or go to elite schools. They beat the odds to rise to the top.

Unlike leaders of the Left in many other parts of the world, Reeves is not promising any increased government spending. Instead, she is advocating supply-side economics to boost growth. In her first major speech, Reeves promised to make economic growth the number-one priority for her government through increased private investment, labor participation and productivity. Both Starmer and Reeves are fiscally prudent, which should lead the British economy to stabilize after a rocky eight years following the 2016 Brexit referendum.

Fund managers and business leaders in New York and London say that the risk premium for UK assets will go down because of the Labour government’s reputation for responsibility. They believe that Starmer and Reeves will steer a closer relationship with Europe, reduce frictions in UK–EU trade and give a fillip to house-building. In contrast to most other democracies, this party of the Left has won a thumbs-up from markets and business leaders.

Conservative meltdown facilitated Labour victory, now what?

As this author predicted in 2016, Brexit turned out to be “a damn close-run thing,” and what followed was madness. Prime ministers came and went with alarming frequency; Truss enjoyed less than the shelf life of a head of lettuce. Post-Brexit Britain could not make up its mind whether to become Singapore-on-Thames or a revived manufacturing power with rejuvenated northern cities. Immigration continued to be a problem. Shipping migrants to Rwanda did not excite the public. Johnson’s parties during the COVID-19 pandemic turned public chafing against draconian government restrictions into open anger. Sunak had the charisma of a dead mouse and demonstrated a gift for fatal political gaffes such as leaving D-Day celebrations early for a meaningless television interview. In a nutshell, the Tories screwed up so badly that a Labour victory was obvious long before the elections.

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Labour’s victory is massive. Yet it is a shallow one. Only one in five Britons voted for the party. Importantly, voter turnout fell from 69% in 2019 to 60% in 2024. In 2017, nearly 12.9 million people voted Labour. In 2019, this figure fell below 10.3 million. This year, a little fewer than 9.7 million voters cast their ballots for Labour. A graph by FOI, a political and geopolitical risk advisory, tells an interesting tale of voting numbers and parliamentary seats over the last two British elections.

British politics have become extremely dynamic. New trends are worth noting. The significant vote shares of the right-wing populist Reform UK Party — second to Labour in 92 constituencies — and the Green Party — second to Labour in 41 constituencies — put pressure on Labour to improve immigration and environmental policies, respectively. Recent riots all across the UK show that voters are concerned about migrants flooding the UK. The Starmer government will have to restrict arrivals. In fact, immigration was a key reason why voters chose Brexit in 2016.

During the election campaign itself, Labour promised a more effective approach to tackling illegal immigration and unveiled a plan to bring net migration down by training British workers. Labour threatened to block non-compliant companies from sponsoring visas for their overseas employees. On his first full day as prime minister, Starmer canceled the outgoing Conservative government’s plan to deport illegal migrants to Rwanda, saying, “I’m not prepared to continue with gimmicks that don’t act as a deterrent.” Instead, his government aims to curb small boats crossing the English Channel by hiring investigators and using counter-terror powers to “smash” criminal people-smuggling gangs.

On the renewable energy front, Starmer’s government has promised to accelerate the development of large projects by assessing them nationally, not locally, and ending an effective ban on onshore wind farms. The rise of the Green Party, as mentioned earlier, and the resurgence of Liberal Democrats (the party for the nice Tories of the shires) will make Starmer’s Labour more environmentally friendly than Sunak’s Tories. (As an aside, the Liberal Democrats’ victory in Tory heartlands saw them win seats held by five former Tory prime ministers.)

Most political parties with such a large majority would enact a far more radical agenda. Starmer is determined to do no such thing. Those close to the prime minister reveal that he is playing the long game and aims to be in power for at least two terms. Starmer is determined to win back Labour’s credibility as the party of responsible government after 14 years in opposition and the damage suffered under Corbyn’s leadership.

The country is now led not by alumni of the famous public schools (the curious British name for expensive private schools) but by leaders who hail from the working and middle classes. They are more self-reflective, grounded and rigorous than their Conservative counterparts. To put it in English Civil War parlance, Starmer and Reeves are Roundheads, not Cavaliers. After years of posh public schoolboys from Eton and Winchester ruling the roost, no-nonsense commoners are on top.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post The Left Won Big in the UK — But Look Deeper appeared first on Fair Observer.

Even as I write this, Bangladesh is in turmoil. Mobs stormed the Prime Minister Sheikh Hasina’s palace, and she has fled to India after 15 years of increasingly autocratic rule. Pakistan is not doing much better. Economically, it is definitely doing worse. In 2023, Pakistan’s per capita income fell to $1,407, from $1,589.3 in 2022. Bangladesh’s per capita income fell too, but to $2,529.1 in 2023 from $2,687.9 in 2022. In 1971, Pakistan’s per capita income was $175.2 while Bangladesh’s was $128. Clearly, the darker cousin outstripped the fairer one over the decades.

Anwar Iqbal, writing in Pakistan’s flagship newspaper Dawn, tells the tale of Pakistan going with a begging bowl to the International Monetary Fund (IMF) a staggering 23 times. Even as IMF bailouts continue, a kleptocratic elite lives opulent lives as latter-day Mughals. The Pakistani Army holds the country together with the barrel of a gun and by whipping up the fear of its larger neighbor, India.

Yet there are schisms even within the military. Two days ago, the military arrested Lieutenant-General Faiz Hameed of the fabled Inter-Services Intelligence (ISI) in a historic first. The former ISI chief was close to cricketer-turned-politician Imran Khan, who became prime minister upending traditional parties but is now languishing in jail. Now, members of Pakistan’s traditional political families — lucky sperm club — hold elected offices after blatantly rigged polls. As Pakistani elites flee the country to safe havens like Dubai and London, this nuclear-armed country is becoming ever more Islamist.

India is doing much better but is in ferment

India’s per capita GDP has risen from $118.2 in 1971 to $2484.8 in 2023. India has avoided the instability of either of its Muslim-majority neighbors. Except for a brief two-year interlude in the 1970s, India has been a democracy with regular elections and a peaceful transfer of power.

Today, Indians are better-fed, taller and live longer than ever before. In 1947, when India won independence, an average Indian lifespan was a little over 32 years. Today, it is over 70. To be fair, life expectancy has also gone up in Pakistan and Bangladesh. If I go by numbers, independence has been a jolly good thing for the Indian subcontinent.

Yet for all the progress, Indians feel a sense of underachievement at the global stage. At the recently concluded Paris Olympics, 1.4 billion-strong India finished 71st, behind tiny Lithuania with a population of 2.8 million. Before independence, India had Nobel laureates like Rabindranath Tagore and C.V. Raman. Today, the country has none. 

Education has become a game of competitive examinations with private coaching companies making fortunes to train teenagers to crack exams for prestigious public universities generously funded by the state. Government hospitals are overcrowded and the country is currently up in arms after the rape and murder of a female doctor in Kolkata. Ironically, this state of West Bengal (population of over 100 million) is ruled by the Trinamool Congress’s Mamata Banerjee, one of the most prominent women leaders in the country. A day ago, a final-year engineering student was abducted, raped and dumped on the Agra–Delhi highway. This state is ruled by Yogi Adityanath, a Bharatiya Janata Party (BJP) leader who has made his reputation for being tough on crime.

Part of the reason for high crime is the lack of police reforms since 1947. Also, courts take an eternity to decide upon cases. The structure of the state is still colonial and corruption is a way of life. In many ways, Indian democracy is skin-deep. At the district level, unelected officers of the imperial-era Indian Administrative Service (IAS) rule like feudal lords from colonial bungalows. They are assisted by officers of the Indian Police Service (IPS). Both the IAS and the IPS answer directly to the chief minister of the state. Local mayors have no real power.

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Strong chief ministers from almost all parties rule their states with two to five IAS officers and one or two IPS officers imposing their will on the people. They are elected monarchs with vast powers of patronage. Prime Minister Narendra Modi has taken this IAS model of governance to the national level. His ministers are ciphers with no power or even status. Favored IAS officers are Modi’s feudal barons who ride roughshod even over BJP politicians. In other parties such as the historic Indian National Congress or the Samajwadi Party, dynasts rule the roost. Indian democracy is proving resilient but is not in rude health.

India is not alone in experiencing institutional and moral degradation. South Africa does not have a Nelson Mandela; France is not led by Charles de Gaulle, and the US is far cry from the days of Franklin Delano Roosevelt or Dwight David Eisenhower. Yet with 1.4 billion people, urban squalor, rising unemployment, unmet expectations and social divisions along caste, region and religion, the Indian republic faces immense challenges ahead.

My father was born in 1942, five years before India’s independence. In the 1971 India–Pakistan War, he operated for 72 consecutive hours. In his old age, he views India’s post-independence story wistfully. India is doing much better than Pakistan or Bangladesh, but that is not enough for him. He takes the view that hospitals safe for women doctors and trains where toilets are clean are not that hard to achieve. That is the minimum I have to achieve as a people to make the sacrifices of those who spent years and even decades in British jails worthwhile.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post How to View Independence Amidst Ferment, Rape and Dirty Toilets appeared first on Fair Observer.

A day after Christmas, prosecutors questioned the LDP’s former policy chief, Koichi Hagiuda. They have questioned four other top officials, who have all resigned. They are all loyalists of Shinzo Abe, the late Japanese prime minister who was in power from 2006 to 2007 and then again from 2012 to 2020. Abe was Japan’s longest-serving prime minister and was extremely powerful.

A very Japanese-style scandal

It turns out that the LDP made hay when Abe’s sun shone bright. The Abe faction, still the largest in the LDP, “systematically underreported about ¥500 million in ticket sales for fundraising events” over five years. This amounts to $3.51 million, which is mere piffle by Nigerian or Pakistani standards. However, Japan is a country that prizes probity, and this financial scandal is turning out to be a big deal.

The Abe faction allegedly gave the excess amount to lawmakers who sold more than their allotted quota of tickets. Kickbacks from fundraising events are not illegal, but failing to report these payments violates the law. That is why so many bigshots are in hot water.

Many in Japan are calling for reform. Prime Minister Fumio Kishida has promised “to do everything necessary to regain trust” for the LDP. He will set up a new party body. This will discuss reforms to the political funds law, cashless payments for fundraising party ticket sales and auditing of such fundraising events.

Despite his promises, Kishida is in trouble. Public anger is running high and his approval ratings have fallen to 17%. Analysts are calling this scandal a “once in a generation” political crisis. Yet it is important to remember that the LDP has been through many scandals before. The party has been in power almost all the time since 1955.

As a well-oiled political machine, the LDP needs off-the-books slush funds. Its leaders used these kickbacks to take care of their buddies in their political fiefdoms. This elaborate patronage machine is how the Japanese system works. In some ways, it is no different to the US or India. In both democracies, politicians have to watch out for the interests of their donors and reward loyalists who work on their campaigns. Yet money in politics evokes a whiff of disgust and, in the case of Japan, has led to outrage.

Prosecutors are probing not only the Abe faction but also the Nikai one. They are also investigating the prime minister’s faction, too. Kishida has been in power since October 2021, but scandals have dogged him since. This includes the LDP’s links to the controversial Unification Church and Kishida’s son’s use of the prime ministerial residence for a house party.

As pointed out earlier, these scandals are minuscule in comparison to most other countries. However, they have already caused heads to roll because they have come at a time of rising discontent.

Times are tough and people are hurting

Like many other first-world countries, Japan is experiencing a cost-of-living crisis. In January, Japan’s inflation rate jumped to a fresh 41-year high. Rent, food, fuel and almost everything cost more. Salaries have not risen accordingly. Increased military spending to counter China portends tax increases. A new invoice system is likely to lead to higher taxes for freelancers and self-employed people. Tellingly, the Japanese chose “tax” as the kanji character of the year. The last time they did so was in 2014 when the consumption (sales) tax rose from 5% to 8%.

Japan has long been known for being frightfully expensive. In part, this explains the low birth rate. In addition to many other reasons, young couples find high education costs daunting. Coming during a cost-of-living crisis, the LDP scandal has angered many Japanese who find politicians increasingly removed from their day-to-day realities.

In the past, scandals have damaged prime ministers.  In 1974, Kakuei Tanaka resigned as prime minister and was arrested two years later for taking bribes from Lockheed. In 1989, Noboru Takeshita lost his premiership after allegations of insider trading and a succession of prime ministers followed. Thanks to this instability, “the LDP lost its Diet [parliament] majority to a coalition of opposition parties, ending its 38-year rule.” In 2010, the Democratic Party of Japan was in power, and it turned out that its officials had underreported fundraising proceeds. As a result, Yukio Hatoyama had to resign from the prime ministership.

This time, things might be different. For now, Kishida has little to fear. The LDP leadership contest is only due in September 2024. Taro Kono and Shigeru Ishiba are popular with the public but lack support within the party. Kishida has reshuffled his cabinet twice, and the scandal weakens the Abe faction, strengthening the prime minister’s hand.

Kishida is also secure in the knowledge that national elections are only due in October 2025. The opposition Democratic Party of Japan still stands discredited. It was in power from 2009 to 2012, a time when the economy tanked and the Fukushima Daiichi nuclear power plant suffered a meltdown.

Given the lack of alternatives and entrenched interest groups, the status quo will continue. Kishida might introduce more stringent reporting measures on party fundraising, but he does not command enough support within the LDP to push through any fundamental reform.

No wonder young voters increasingly shun politics. Only 34% of 18- and 19-year-olds voted in 2022. This low turnout is not healthy for Japanese democracy, and the current scandal might increase political apathy further.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Japan’s New LDP Scandal Is Unlikely to Change Much appeared first on Fair Observer.

In 1991, the Soviet Union fell as well. Since then, Armenia and Azerbaijan have been at odds with each other over Nagorno-Karabakh and Nakhichevan. Until two months ago, Armenians lived in Nagorno-Karabakh, an area within Azerbaijan. Azeris still live in Nakhichevan, an area within Armenia that borders Iran and Turkey. Yes, this sounds complicated but so are most imperial hangovers.

On September 19, Azerbaijan launched a large-scale military offensive against Nagorno-Karabakh. This autonomous ethnic Armenian enclave called itself the Republic of Artsakh. Within 24 hours, this so-called republic ceased to exist. Now, Azerbaijani military forces control Nagorno-Karabakh. The Artsakh Defense Army stands disbanded and people who lived here for centuries, if not millennia, have fled to Armenia.

David J. Scheffer of the Council on Foreign Relations (CFR) states that Armenians are “experiencing ethnic cleansing at warp speed.” Others defend Azerbaijan and argue that its troops are only restoring sovereignty to territory that is rightfully theirs. Armenia had controlled Nagorno-Karabakh and surrounding areas, all legally Azerbaijani territory, until a few years ago.

Azerbaijanis claim that this Armenian exodus is voluntary. Azerbaijani President Ilham Aliyev promised to protect Armenian civil rights in Nagorno-Karabakh, but fleeing Armenians feared persecution and massacre “after years of mutual distrust and open hatred between Azerbaijan and Armenia.”

A complicated history that goes back centuries

Over time, various empires have conquered and controlled the South Caucasus. Generals like Cyrus, Alexander and Pompey swept through this mountainous region. In antiquity, winning in the South Caucasus was essential if you wanted to be called “the Great.”

Why is the South Caucasus so important for the likes of Cyrus or Alexander the Great? Geography provides us the answer.

The South Caucasus lies at the crossroads of empires. To its west, lies the Mediterranean Sea which was the locus of the Macedonian, Roman and Ottoman empires. To its north and east (beyond the Caspian Sea), lie the great Eurasian grasslands that were once dominated by the Mongols and now by the Russians. To the south of the South Caucasus lie the Tigris and Euphrates rivers — historically known as Mesopotamia — and the Iranian plateau that was the power base of the Persian Empire.

This mountainous region has been the meeting place for great empires and the battleground for great powers. Romans and Persians traded Armenia back and forth. Over the past five centuries, Safavid Persia, Ottoman Turkey and the Russian Empire have controlled different parts of this territory at different times. Their successor states still jostle over the South Caucasus today.

World War I was critical in forging modern South Caucasus. Tsarist Russia faced disastrous defeat. In 1917, a revolution erupted and Russian control of this region evaporated. Idealists forged the Transcaucasian Democratic Federative Republic, which disintegrated into Armenia, Azerbaijan and Georgia within five weeks. In this age of ethnic nationalism, a multiethnic state proved a bridge too far, especially for the fractious South Caucasus.

Like the Russians, the Ottomans fared poorly in World War I. Armenia took advantage of Ottoman weakness to take control over Nakhchivan. Rebellions by the local Muslim population followed but Armenia managed to retain control. In the case of Zangezur and Karabakh, Azerbaijan stood in Armenia’s way and both these young countries fought inconclusively. 

When World War I ended, the Ottoman Empire collapsed as well. Mustafa Kemal Atatürk set out to create a modern Turkish nation state. Out went a multiethnic empire, in came a more ethnically homogeneous nation. The Turks expelled the Greeks and the Armenians from this new state. Modern Turkey was built through ethnic cleansing, although the Ottomans had set the ball rolling with the Armenian Genocide in 1915.

Atatürk was rebelling against the peace settlement imposed by the victorious allies in 1920. The Treaty of Sèvres wrested the Arab and Greek portions of the Ottoman empire from Turkish control. The British and the French divvied up the Arab lands between themselves. Along with Italy, they also carved Turkey into spheres of influence. Atatürk defeated the occupying forces, scrapped the old treaty and negotiated the far more favorable 1923 Treaty of Lausanne.

The now largely forgotten Treaty of Sèvres provided for an independent Armenia. The idealistic Woodrow Wilson proposed that the US be the protector of this new Armenia. The 1920 treaty envisioned an Armenia four and a half times larger than the one today. Sadly for Wilson and Armenia, the US turned isolationist at the end of the war. The US Senate withdrew from the League of Nations and torpedoed Wilson’s plans for Armenia.

While the US turned inward, the newly formed Union of Soviet Socialist Republics (USSR), now better known as the Soviet Union, went back to its expansionist imperial Russian roots. As one of the authors explained in his earlier piece, the Soviet 11th Army took over the South Caucasus, including Armenia and Azerbaijan, in 1920 itself. The Treaty of Sèvres was stillborn.

For the next seven decades, Armenia and Azerbaijan were Soviet republics. Moscow drew their borders largely on ethnic lines. The USSR granted Zangezur to Armenia, Nakhchivan became an Azerbaijani exclave and Karabakh became an autonomous province within Azerbaijan. The Soviets dubbed Karabakh the Nagorno-Karabakh Autonomous Oblast (NKAO) because Nagorny Karabakh in Russian simply means the highlands of Karabakh.

The dormant Nagorno-Karabakh volcano explodes

By the late 1980s, the Soviet empire began disintegrating. The Berlin Wall fell on November 9, 1989. On December 31, 1991, the Soviet Union itself dissolved. Ethnic tensions held in check by communist repression erupted like a dormant volcano. 

In 1988, ethnic Armenians living in the NKAO demanded their region be transferred from Soviet Azerbaijan to Soviet Armenia. Conflict exploded into all-out war when the Soviet Union collapsed. Fighting only ceased in 1994 and Armenia emerged as the winner. Armenian troops took control over Nagorno-Karabakh and seven adjacent districts. Armenia now controlled 20% of Azerbaijan. An estimated one million Azerbaijanis became refugees and internally displaced persons. Armenia did not have it all its own way though. About 300,000–500,000 Armenians from Azerbaijan, Nagorno-Karabakh and Nakhchivan made their way to Armenia.

The end to war in 1994 did not lead to peace. Deadly incidents continued. Both sides used troops, special operations forces, artillery, other heavy weaponry and, more recently, drones. In April 2016, fighting broke out but stopped after just four days. Yet hundreds died on both sides. On the whole, an uneasy peace persisted until 2020.

During this uneasy peace, Armenia forged a security partnership with Russia while Azerbaijan developed a close relationship with Turkey. A shared Muslim faith and a common Turkic ethnic identity helped. Even though Armenia and Russia are part of the Oriental Orthodox Christian traditions, Moscow still sold weapons to Azerbaijan and played both sides.

Starting 2007, things changed dramatically. BP discovered gas at “a Caspian-record depth of more than 7,300 meters” about 70 kilometers southeast of Baku. Flush with gas wealth, the balance of power began to shift in Azerbaijan’s favor in the 2010s. Under President Recep Tayyip Erdoğan, Turkey rejected Atatürk’s secular European identity and embraced a neo-Ottoman foreign policy. Erdoğan’s political Islam led to greater military support for Azerbaijan and Baku’s geostrategic position improved. More gas money and Turkish military support gave Azerbaijan the edge over Armenia in the latest edition of South Caucasus geopolitical chess.

In late 2020, Azerbaijan made its decisive move and succeeded in reclaiming much of the territory Armenia had occupied since 1994. The Second Nagorno-Karabakh War lasted 44 days and left at least 6,500 dead. Azerbaijan was unable to break through the defenses of Artsakh and Russia brokered an uneasy truce. Nearly 2,000 Russian peacekeepers were to enforce the peace. These troops were deployed along the three-mile-wide Lachin corridor, the sole overland route connecting Nagorno-Karabakh to Armenia.

The ceasefire agreement granted Azerbaijan control of Nagorno-Karabakh’s cultural capital, Shusha, which Armenians refer to as Shushi, and several other towns. Azerbaijan also gained surrounding Azeri territories that Armenians had held since 1994. Local Armenians got to retain control of the northern half of the region, along with Stepanakert, the capital of Artsakh. Future peace talks were to decide the final political status of Nagorno-Karabakh.

Azerbaijan grabs a historic opportunity with both hands

Needless to say, the peace did not hold. In December 2022, Azerbaijan closed off the Lachin corridor. The Russia-Ukraine War had broken out on February 24, 2022. The 2018 Velvet Revolution had ousted the Russia-friendly Republican Party that had been in power since 1999. After the revolution, Prime Minister Nikol Pashinyan took charge. Armenia began to extricate itself from the arms of Russia and started flirting with the US. This poked the Russian bear and earned Pashinyan’s Putin’s ire.

Azerbaijan had a once-in-many-generations opportunity and Baku seized it with glee. In December 2022, Azerbaijan violated the 2020 ceasefire agreement and closed off the Lachin corridor. This ten-month blockade denied 120,000 Armenians in Nagorno-Karabakh food, fuel and medicine. Putin’s peacekeepers stood idly by and Artsakh’s fate hung in the balance.

By April, Armenians found themselves in a dire situation. Pashinyan dramatically relinquished Armenia’s claim to Nagorno-Karabakh in an effort to stop the long-running conflict. This failed to bring peace. On April 23, set up a checkpoint on the Lachin corridor, which was called “the road of life” for Artsakh. Neither Russian peacekeepers nor Western powers did much to help. By September, it was all over. Azerbaijan controlled all of Nagorno-Karabakh, Artsakh evaporated and Armenians fled to Armenia.

A little more than two weeks before Azerbaijan’s decisive move, Pashinyan had declared that “solely relying on Russia to guarantee its security was a strategic mistake.” History may judge his ill-judged statement as a historic blunder. Pashinyan turned to the West in general and the US in particular to guarantee Armenia’s safety. However, to paraphrase a Chinese proverb, the mountains were high and the emperor was faraway. The US had far too many pots on the boil to worry about Armenia.

Pashinyan forgot one simple fact: realpolitik is a rough game. The EU needs Azerbaijani gas after putting sanctions on Russia. In 2021, Europe imported 8 billion cubic meters (bcm) of gas from Azerbaijan. This year, gas imports are expected to be 12 bcm and are on track to double by next year. Clearly, gas supplies trump the unity of Christendom for the EU. Post-Brexit UK is in the money because of BP. So, Armenia can expect little help from a land that was once the realm of Richard the Lionheart.

Azerbaijan has also been able to win over Israel to its side. According to the Stockholm International Peace Research Institute (SIPRI), 13% of Israel’s arms exports were destined for Azerbaijan in the 2017-2021 period. They comprised more than 60% of Azerbaijani arms imports and included drones, missiles, and mortars. Furthermore, the Observatory of Economic Complexity (OEC) reveals that 65% of Israel’s 2021 crude oil imports came from Azerbaijan.

Much more discreet than SIPRI and OEC figures are the close strategic collaboration between Israel and Azerbaijan for realpolitik reasons. Intelligence Online claims that Israeli military and intelligence contributed to Azerbaijan’s victory in Nagorno-Karabakh. Naturally, Israel has an ax to grind. Azeris comprise 16% of Iran’s population, three times the population of Azerbaijan. Although they have yet to rebel against Tehran, Azeris report widespread discrimination despite being largely Shias. By backing Azerbaijan, Israel is winning over Azeris and could foment trouble in the future against Iran. More importantly, Israel’s elite organizations — Unit 8200, Mossad and Sayeret Matkal — reportedly use Azerbaijan as a base of operations against Iran. For Israel, Armenia is eminently expendable in the pursuit of its national security goals.

For the US, Azerbaijan is of vital national interest because it borders both Russia and Iran, two key enemies. Washington cannot displease Baku too much and push it into the arms of Russia. Despite a powerful Armenian American diaspora that has historically backed the Democrats, the Biden administration turned the Nelson’s eye to Azerbaijan’s actions and did not back Armenia.

In contrast, Turkey is backing Azerbaijan to the hilt. Less than a week after Azerbaijan’s victory in Nagorno-Karabakh, Aliyev hosted Erdoğan in Nakhchivan. The two hailed this victory and signed a deal for a gas pipeline. Erdoğan was “very pleased” to “connect Nakhchivan with the Turkish world.” Turkey’s support for Azerbaijan paralyzes NATO, which cannot support Armenia. Most Muslim countries in the nearby Arab world to the more distant Pakistan, support Azerbaijan.

Poor Pashinyan is isolated. He has found himself with two not-very-useful friends: neighboring Iran and faraway India. Both are not powerful enough to stave off disaster for landlocked Armenia. Besides, the Israel-Hamas war raging has cast Armenia further into the shadows. No one is likely to act against further Azerbaijani aggression.

What happens next?

Erdoğan and Aliyev have clearly signaled that Nakhchivan is next on the menu. They fear that Armenia could do this 460,000 strong Azeri enclave what Azerbaijan did to the Armenian enclave in Nagorno-Karabakh. Ethnic cleansing is a game two can play and Azerbaijan must press home its advantage before the tide turns.

Therefore, Baku seeks the Zangezur corridor, a transport link through Armenia’s southernmost province Syunik to Nakhchivan. This landlocked Azerbaijani territory has a small border with Turkey and a much larger one with Iran. The former backs the Zangezur corridor while the latter opposes it. The descendants of the Ottomans and Safavids are clashing again in the South Caucasus. 

Under Erdoğan, Turkey aims to breathe fire into the Organization of Turkic States, an attempt to bring together Turkic peoples all the way till Kazakhstan. Once Turkish horsemen dominated Central Asia. Today, Erdoğan is looking east and south, not west and north, to expand Turkey’s influence. Therefore, the Zangezur corridor is an opportunity to create a new trade route between Europe, the Middle East, Central Asia and China.

Despite academics like Anna Ohanyan calling the Zangezur corridor a violation of Armenian sovereignty and a challenge to the global rules-based order, Yerevan and Baku are engaged in peace talks. On December 7, they agreed to exchange prisoners of war. After failed mediation by the EU, the US and Russia, Armenia and Azerbaijan are engaged in direct bilateral discussions. Yet mutual distrust is high and both sides are unlikely to come up with a lasting peace deal.

So far, Armenia has played a weak hand badly. Pashinyan has lost much of the goodwill he gained during the Velvet Revolution. Even before Azerbaijan’s conquest of Nagorno-Karabakh, Pashinyan’s popularity was declining precipitously. Now, many Armenians revile him as a weak and ineffective leader who has led the country to disastrous defeat.

Pashinyan has continued to offend Moscow by refusing to allow Russian troops to conduct military exercises and declining to attend an alliance summit. Armenia has also joined the Treaty of Rome that established the International Criminal Court (ICC). The ICC has issued an arrest warrant for Putin. By joining such an organization, Pashinyan is spitting in the tsar’s face and inviting further Russian wrath.

Notably, Armenia is economically dependent on Russia. The country’s landlocked geography does not make things easy. Turkey lies west, Azerbaijan east, Georgia north and Iran south. Therefore, about 40% of Armenian exports make their way to Russia. Armenia depends on Russian grain, oil, gas and basic goods almost completely. Gazprom owns all of Armenia’s gas distribution infrastructure. The country depends on remittances from Armenians working in Russia. In 2022, $3.6 billion out of the total remittances of $5.1 billion came from Russia.

Armenia still remains a member of the Russia-led Collective Security Treaty Organization, Commonwealth of Independent States and Eurasian Economic Union. Since the beginning of the Russia-Ukraine War, the Armenian economy has become even more dependent on its Russian counterpart. Currently, Pashinyan is visiting Russia, promising greater economic bloc cooperation but Putin is unlikely to give his rebellious satrap much of a break. Russia is grinding down Armenia into submission and will only relent when Pashinyan is no longer prime minister.

With little external support or internal legitimacy, Pashinyan is in no position to make peace. With Turkey’s help, Azerbaijan will put Armenia under duress and drive a hard bargain. If Pashinyan does not capitulate, Azerbaijani troops can drive home their advantage. This time, the conflict might draw Turkey and Iran into the fight. Russia will wait and watch but eventually intervene. Israel, NATO, the UK and the US might also find themselves sucked into this conflict. Yet again, the South Caucasus has become a powder keg but few are paying this region the attention it deserves.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post How Azerbaijan Found Victory, and Armenia Defeat, in Nagorno-Karabakh appeared first on Fair Observer.

It is not just the Russia-Ukraine War that is causing inflation anymore. The Financial Times reports that, even excluding food and energy, inflation remains at 5.5% with higher wage pressures making it sticky, if not structural. Inflation is affecting all industries. In construction, costs are now 38.5% higher than the pre-pandemic early 2020.

An economy in deep crisis

New orders for construction companies have dried up. Note that these orders are canaries in the coal mine and indicate confidence in the future. They are a forward-looking indicator for the economy. In August, the lack of new orders rose to 44.2%, up from 40.3% in July and a lot more than 13.8% in 2022.

Germany’s prestigious ifo Institute informs us that cancellations in residential construction have reached a record high. In August, 20.7% of companies reported canceled projects. The building industry is in trouble. Rising interest rates, soaring costs and weaker demand threaten to force many firms out of business. Several real estate groups are filing for insolvency. Germany is facing a shortage of 700,000 homes, and its housing crisis is bound to intensify. Last year, 295,300 dwellings were built, well short of the 400,000 target, and this year the gap will be worse.

Industrial gloom is deepening too. The Federal Statistical Office’s September 7 press release reveals that industrial production “was down 0.8% in July 2023 month on month after seasonal and calendar adjustment.” Carmaking has declined dramatically. Rising energy prices have hit German industry hard, and Europe’s manufacturing superpower has shrunk or stagnated for the past three quarters.

Even before September, stories about the German economy have been pessimistic. On July 24, Reuters reported that “activity in Germany, Europe’s largest economy, contracted in July.” Investor confidence has been plummeting and foreign direct investment in Germany falling. The OECD expects the German economy to stagnate and be the worst performer among the major economies in 2023.

In August, the ifo Business Climate Index fell for the fourth consecutive time. Sentiment among German managers darkened in manufacturing, services, trade and construction. The index is at its lowest level since August 2020, and companies are increasingly pessimistic about the months ahead. 

The Hamburg Commercial Bank’s Purchasing Managers’ Index (HCOB PMI) shows that German factory output has deteriorated at a rate not seen since 2009, the pandemic years excepted. Given that manufacturing accounts for a quarter of the German GDP, the fall in HCOB PMI is rather alarming. 

On July 13, Matthew Karnitschnig in Berlin published a piece titled “Rust on the Rhine” in Politico. He described how “German companies are ditching the fatherland.” In Karnitschnig’s words, “Confronted by a toxic cocktail of high energy costs, worker shortages and reams of red tape, many of Germany’s biggest companies — from giants like Volkswagen and Siemens to a host of lesser-known, smaller ones — are experiencing a rude awakening and scrambling for greener pastures in North America and Asia.”

Politico has been grim about the German economy for a while. On November 10, 2022, Johanna Treeck published “Mittel-kaput? German industry stares into the abyss,” asking whether the prolonged energy crisis was causing “the beginning of the end for German industry.”

Not only manufacturing but also services are now declining. High inflation and rising interest rates are taking a toll on consumer confidence. Unemployment is rising. Once, the land of the Mittelstand — the small- and medium-sized industry that arose in the late 19th century and long powered the economy — was a world leader in innovation. That is no longer the case. In the World Intellectual Property Organization’s “Global Innovation Index 2022,” Germany only ranks eighth among world economies. Three European economies — Switzerland, the UK and the Netherlands — are ranked above it.

In a nutshell, Germany is in big trouble. Why?

Russia–Ukraine war spikes inflation

Since the collapse of the Soviet Union, German industry increasingly relied on cheap Russian gas. Nord Stream 1 was a lifeline for Germany and Nord Stream 2 was set to begin operations too. Then, the Russia–Ukraine War upended German industry. Post-Nazi peacenik Berlin had not expected war to break out in Europe again. Germany had not diversified its energy supplies and was caught with its pants down.

In fact, Gerhard Schröder, Germany’s former chancellor, became the head of the supervisory board of Rosneft, a Russian oil giant, and was nominated to join the board of Gazprom, Russia’s state-controlled gas exporter, in his post-political career. Schröder had led the Social Democratic Party (SPD), Chancellor Olaf Scholz’s party, and served as chancellor from 1998 to 2005. His reforms in the early 2000s transformed Germany from “the sick man of Europe” into the continent’s economic engine.

Schröder refused to support George W. Bush’s 2003 Iraq War and, in the words of The Economist, was a “vocal advocate of Ostpolitik, a policy of rapprochement with the eastern bloc, including the then Soviet Union, conceived in the late 1960s by Willy Brandt, another SPD chancellor.” Many damn Schröder as Putin’s lobbyist today, and it is true that he has made big money from Russian energy giants. However, Schröder and many other Germans genuinely wanted to tie Russia into “an energy partnership of mutual dependence with Europe.”

All of that came to an end on February 24, 2022. Fuel, food, fertilizer and other commodity prices shot up. In particular, this supply-side shock caused inflation to skyrocket in Europe, especially because, unlike Canada and the US, the continent does not have substantial oil and gas reserves.

Germany suffered more than others even in Europe. Postwar Germany has been an idealistic nation where a strong environmentalist movement became politically powerful. After all, the Greens are currently in a coalition government with the SPD. In fact, Germany attempted a green energy transformation, the so-called Energiewende. As the war was stopping the supply of Russian gas, Germany was switching off all nuclear power. 

Sadly for Germany, this move caused an energy scarcity. Germany simply did not produce enough renewable energy to take up the slack. This exacerbated the inflationary shock, and Germans ended up paying three times the international average for electricity.

Inflation increased input costs for manufacturing. In parallel, when central banks raised interest rates to combat inflation, the borrowing costs for industry shot up, as did the servicing costs on debt that was not locked in under old rates. For years, German industry had gotten used to low interest rates. Just like the Federal Reserve, the European Central Bank had followed a policy of quantitative easing, which really means printing more money. This meant that the cost of capital was really cheap for companies. That cheap money era is over, and companies are scrambling to adjust to the new higher cost of capital.

Furthermore, the double whammy of increasing inflation and rising interest rates has hit consumer confidence hard. Even in the best of times, culturally Protestant Germans are savers, not spenders. Now, they are spending even less. They have more incentive to keep the money in the bank instead of spending it. Naturally, demand for goods and services is falling, and the economy is stagnating.

Chinese economy crashes, demand for German imports crashes too

In recent years, Germany has profited greatly from trade with China. After Deng Xiaoping opened up the economy in 1978, the Middle Kingdom grew spectacularly. Even as China became the factory of the world, Germany provided the machines that kept this factory running. Naturally, German exports to China boomed.

When this author traveled around the eastern seaboard of China in 2004, he met German businessmen everywhere. Almost all of them were exporting their goods to the Middle Kingdom. By the 20th century, China was Germany’s most important trading partner. Bilateral trade volumes amounted to $237 billion (€204 billion) in 2018.

On October 24, 2019, DHL published a piece titled, “As China Sneezes, Will Germany Catch a Cold?” It posited that “China’s weakening domestic economy and the ongoing trade tensions simmering between Washington and Beijing” would take a toll on the German economy.

DHL’s piece turned out to be prescient. As the US–China trade war has heated up, Germany has found itself squeezed in the middle. Increasingly, China sees Germany as a US ally. So, Beijing has been discouraging German imports into China implicitly and explicitly. In the first four months of 2023, German exports fell by 11.3% as compared to last year.

German ardor for China has cooled too. The Bundesbank, Germany’s renowned central bank, has warned German companies to cut exposure to China, warning that “the country’s business model is in danger.” No fewer than 29% of German companies import essential materials and parts from China. Rising US–China geopolitical tensions could disrupt this trade, bringing the German economy to a grinding halt.

Earlier in July, Germany’s 64-page “Strategy on China” attempted to chart a new policy towards the Middle Kingdom. It states, “China has changed. As a result of this and China’s political decisions, we need to change our approach to China.” This document goes on to say, “China is Germany’s largest single trading partner, but whereas China’s dependencies on Europe are constantly declining, Germany’s dependencies on China have taken on greater significance in recent years.” The new German strategy deems China a “systemic” rival and “accepts competition with China.”

Yet it is not easy for the land of the Mittelstand to decouple from the Middle Kingdom. German industry is still expanding in China. In July, BASF broke ground on a polyethylene plant at its seventh Verbund site in Zhanjiang, China. Even as this German manufacturing giant is investing $10 billion (€9.4 billion) in China, it is cutting 2,600 jobs and reducing production in Germany. A slowing Chinese economy has hurt BASF this year, with the company’s second-quarter net income falling to $533.38 million (€499 million) from $2.24 billion (€2.1 billion) in the same quarter a year earlier. When China sneezes, Germany indeed catches a cold. 

Germany’s dependence on China made Scholz fly all the way from Berlin to Beijing on a state visit on November 4, 2022. The chancellor took along a gaggle of German CEOs to meet President Xi Jinping and Chinese authorities. Scholz’s visit was the first by a G7 leader to China in three years, and the chancellor flew back without even staying the night. Unfortunately for Germany, this visit has not yielded much in the way of results, and its new China policy has undercut Scholz’s pilgrimage to Xi. The German economy now faces a China dilemma, and there are no easy choices ahead.

US protectionism hurts Germany’s export-oriented economy

Since the 1980s, the champion of global free trade has suffered from deindustrialization. People in the rust belt are angry and hurt by the loss of manufacturing jobs. In part, this resentment fueled Donald Trump to the presidency. In office, Trump adopted protectionism as a means to revive American industry and repeatedly threatened tariffs on German cars. During Trump’s time at the White House, trade ties between the US and the EU remained tense.

Joe Biden’s presidency was supposed to change that. Instead, Biden’s Inflation Reduction Act (IRA) has upset America’s European allies. French President Emmanuel Macron sounded the bugle against the IRA, arguing that Europe needed an urgent response amounting to a whopping 2% of the EU’s GDP. Like China, the US is now subsidizing critical sectors of its economy. After decades, the US now has a full-blown industrial policy that subsidizes semiconductors, green energy and other technologies of the future. Posh think tanks in Washington are now breathlessly trumpeting the idea of GeoTech Wars.

After China, Germany is the country most hurt by the Biden administration’s new industrial policy. It has made timid Berlin ally with flamboyant Paris in calling for a joint EU response to the IRA. The Europeans argue that US subsidies tied to locally produced goods are worth $207 billion. This disadvantages European companies, contravenes World Trade Organization (WTO) rules and further erodes the world trade order.

As a result of the new American industrial policy, German companies are finding it increasingly difficult to export to the US. Note that exports matter a great deal to Germany. They comprise 50.3% of the GDP. In contrast, exports comprise only 10.9% of the US GDP. Last year, a German CEO and a member of the Bundestag, the German parliament, complained bitterly to the author about American protectionism in two separate conversations. Both remarked that the US was kicking Germany when this loyal ally was not on its knees but on its back.

A key reason for German economic troubles is that the post-1991 order is now dead. The US championed free trade and globalization for the last three decades. After the initially painful adjustment after reunification, the German economy boomed. Fueled by cheap Russian energy, Germany became a manufacturing powerhouse and an exporting superpower. In 2012, the BBC celebrated “a country whose inhabitants work fewer hours than almost any others, whose workforce is not particularly productive and whose children spend less time at school than most of its neighbors.”

What a difference a decade makes. Today, Germany is once again “the sick man of Europe” and The Financial Times reports a German manufacturer complaining, “everything is tired here.” In this post-globalization world, reshoring, nearshoring and friendshoring are the new buzzwords in the US. Washington, the architect of free trade and globalization, is turning its back on those ideas. Germany, which profited immensely from that system, is struggling to adapt.

Germany has its own self-inflicted wounds too

Like India and France, Germany is infamous for its red tape. There are innumerable forms to fill and boxes to tick before starting and while running any business. Approvals take too long. Environmental, labor and governance standards are unrealistically high, making entrepreneurship and business activity in Germany notoriously difficult.

Unlike India and France, the German political leadership is more candid about its economic problems. In an uncharacteristically bold speech, the mild-mannered Scholz declared in the Bundestag, his intention to “shake off the mildew of bureaucracy, risk aversion and despondency that has settled on our country over years and decades.” The trick for Scholz is to emulate Schröder and implement far-reaching reforms.

Is the Dollar’s Top Dog Status Now About to End?

Unlike Schröder, Scholz does not command a majority in the Bundestag and is in charge of a fractious coalition, comprising the SPD, the Greens and the liberal Free Democrats. This traffic light coalition named after the colors of the three parties —  red, green and yellow — has been plagued by infighting and has found it difficult to get anything done.

Meanwhile, Germany has many other problems that need to be addressed quickly. Manufacturers complain taxes and labor costs are too high. They are not only moving production to other EU members and Asia but also to the US and even the Brexit-afflicted UK. High taxation is also the reason talent hesitates from moving to Germany. In 2018, Deutsche Welle, Germany’s reputable state-owned international broadcaster, reported that if “you’re single with no kids and thinking about working in Germany” then “your tax burden will be 15 percentage points higher than the average among rich-income countries.”

In part, labor costs are high because Germany faces an acute shortage of workers. In June, the Federal Labor Agency’s annual analysis found that 200 out of about 1,200 professions surveyed had labor shortages in 2022, up from 148 in 2021. Germany is struggling to fill jobs “in nursing care, child care, the construction industry and automotive technology, along with truck drivers, architects, pharmacists and information technology specialists.” Improving labor immigration is high on the government’s agenda, but little progress has been made so far.

Germans work 1,341 hours per year, the least in the OECD. In contrast, Americans work 1,811 hours annually. Managers complain of a decline in Germany’s fabled work ethic. Many have confided to the author that the quality of candidates for Germany’s impressive apprenticeship programs has fallen significantly from even a decade ago. The Financial Times has also heard similar complaints.

For decades, much of the world has admired Germany’s dual education system. It combines vocational training with apprenticeships. This has made German labor highly skilled and its industry competitive. Now, fewer people are enrolling in vocational training and apprenticeships. In 2022, 469,000 people took up apprenticeships, approximately 100,000 fewer than in 2011.

Germany’s declining demography amplifies its labor shortages. As per the Federal Statistical Office, deaths exceeded births by 327,000 in 2022 and there were just 1.53 births per woman in 2020, well short of the replacement level fertility of 2.1 births per woman. This means that Germany’s population is shrinking and it simply does not have enough people to work in the various sectors of its economy. In May, Deutsche Welle published a story titled, “Germany’s labor crisis is an economic time bomb.” The government has admitted that it will lack seven million workers by 2035. 

FO° Exclusive: Germany in Spotlight as Russia-Ukraine War Intensifies

An aging population causes a rising pension burden as well potentially higher taxation on a shrinking labor force to support Germany’s rather generous welfare state. This means that most skilled workers are likely to prefer to immigrate to countries like the US, Canada and Australia, which have the English language advantage as well.

Fair Observer’s economist author Alex Gloy also points out how Germany has missed the boat in software and digitalization. In an email, he said that “the only German software company to speak of is SAP, which was founded 1972. Germany has no social media company. The only dynamic sector is delivery startups. But you have 30 of them in Berlin, right next to each other. This makes absolutely no sense.”

Germany’s weakness in the digital economy and digital infrastructure has made it rely on Huawei for 5G. That is an apple of discord with Uncle Sam, which wants Germany to use more expensive American infrastructure instead. The US has also pressured Germany to increase its defense expenditure for years. Germany finally agreed to do so in the light of the Russia-Ukraine War. Yet this increased expenditure will make the tax burden even heavier for Germans unless the government makes some cuts to its overly generous welfare measures.

The German economy needs to make major reforms and painful decisions. To steal a word from Scholz’s February 27, 2022 speech to the Bundestag, the economy faces a Zeitenwende — a historic turning point — because business as usual in the post-2022 world simply will not suffice. Sadly, Scholz’s weak traffic light coalition has little appetite for tough decisions and the German economy faces a few painful years ahead.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Is the German Economy Now Destined to Decline? appeared first on Fair Observer.

Increasingly, Indians are asking themselves why their cities look and feel like slums. Buildings are in disrepair, city roads have potholes, sewage overflows, tap water is far from clean and waste is everywhere. Cody Daniel, an entrepreneur, MIT alumnus and great lover of India, once remarked during his visit to Gujarat, “The tragedy of India is trash.”

Even ten years ago, Indians might not have felt the same way as Daniel. Today, many of them do. Indians have achieved success in cities like Singapore, Sydney and London. They have run global institutions and even other nations. Middle-class Indians are often world-class. They want their own cities to be world-class, not trash towns that seem war-ravaged and shell-shocked.

Ironically, as India’s economy has grown and the middle class has increased, its cities have deteriorated. Older citizens in Bengaluru (once Bangalore) speak of how their beloved garden city has now become a garbage city. Pune, the historic city of the Peshwas, is another casualty. Urban populations have outgrown the cities they live in and put tremendous pressure on infrastructure. Urban authorities have simply failed to deliver.

Urban cash cows fund redistribution

India’s politicians have long taxed cities and redistributed the revenue to rural areas. Despite significant improvement in tax revenues by the current government, India’s tax base remains frightfully narrow. The urban middle class shoulders much of the tax burden but gets very little in terms of return.

Historically, neglect of urban areas did not hurt political parties in elections. India was a largely agrarian society. In the early days of India’s independence, the rural population was 82%. This figure has been declining consistently and, in 2022, only around 64% of Indians lived in villages. As they did during British colonial rule, cities have spearheaded social and political movements. The Indian National Congress (INC) was an urban organization until Mahatma Gandhi made it a mass movement.

After independence, Jawaharlal Nehru became prime minister. He embraced socialism, which meant heavy taxation of India’s small urban population. His daughter Indira Gandhi doubled down on socialism; so did the opposition that unseated her in the 1977 elections. Socialism, not Hinduism, led to the infamous Hindu rate of growth.

Liberalization in 1991 freed up the economy and Indian growth rates improved, but urban areas have still disproportionately borne the burden of taxes.

Historically, it is this disaffected voter base that has seeded new parties. Initially, the core base of the Bharatiya Janata Party (BJP) was small traders in urban areas. Most recently, the Aam Aadmi Party (AAP) has targeted the urban vote, promising better public services to this section of the population. Both are following in the footsteps of the INC that began in Mumbai in 1885.

Today, urban Indians are disaffected again. They do not expect their cities to turn into Singapore or London, but they want water supply, electricity, public transport, schools, basic healthcare, basic law and order and some public spaces such as parks and playgrounds. These Indians feel they have no representation. During a cross-country tour, one of the authors met business leaders, executives, engineers, doctors and many other urban Indians. Invariably, they complained that they had no real representation. Politicians were milking them for taxes and redistributing them to rural areas or, worse still, doling out freebies whilst neglecting cities. Above all, these urban voters want more livable cities and a better quality of life.

The current situation is reminiscent of the Nehru family-led INC pre-2014. The grand old party of India thought that the Hindu vote could never consolidate and ignored the growing threat from the BJP. Today, it is coming from the opposite direction. The BJP has been taking its urban voter base for granted. The party has imposed unpopular tax policies with the assumption that urban voters have nowhere to turn to. Besides, some BJP leaders seem to think that these voters do not have the numbers to matter.

India’s seemingly dominant party might be in for a surprise. The success of AAP is based on targeting urban voters. The party has solidified its support by improving schools and promising primary healthcare centers as well as providing free water and electricity. In the 2022 Gujarat elections, the BJP won 52.52% of the vote in Prime Minister Narendra Modi’s home state. Yet it is important to note that young AAP got 12.91% of the vote, almost all of it in urban areas.

Urban middle-class voters were once loyal to the BJP, but that loyalty is increasingly being tested. A crisis is brewing. After months of internecine warfare, the opposition seems to be coming together to take on the Modi-led BJP. Should urban voters switch to other parties, the government might lose valuable and much-needed support. The BJP will have to act speedily before next year’s 2024 national elections to retain its urban support.

No real local democracy or competent urban government

India is a vibrant democracy, but most people do not realize that the unit of power is the national government in New Delhi and the state government in capitals like Chennai, Lucknow, Kolkata, Mumbai and Guwahati. The prime minister, known often as PM, rules the country largely through the heaven-born Indian Administrative Service (IAS). Chief ministers (CMs) of states also use IAS officers to enforce their writ.

Rural districts and urban areas are ruled by IAS officers who are modern-day mansabdars— feudatories sent by the Mughal emperor to collect revenue and do his bidding. They are called district collectors (because the job of ICS officers was to collect revenue for the British Empire) or district magistrates (because the ICS officers were responsible for the maintenance of law and order in the district). A district magistrate is popularly referred to as the DM. In India, it is a running joke that only three positions matter: PM, CM and DM. Everyone else has to serve these three regardless of whether they are surgeons, scientists or software engineers.

The IAS DMs are responsible to the CMs in state capitals and not to the population in their jurisdiction. Descendants of the imperial Indian Civil Service (ICS), they still suffer from the hangover of the British Raj. Too many IAS officers invariably behave like rulers instead of public servants. Some things have changed, though, and not for the better. Unlike ICS officers who had secure tenures, IAS officers are transferred at the drop of a hat. They know that they enjoy their position thanks to the patronage of the chief minister. They answer upwards, not downwards.

Simply put, Indian cities are run not by elected officials, but by IAS satraps. Unlike Chinese Communist Party bosses who spend a lifetime in their fiefdom and move up the hierarchy on the condition that they deliver economic growth and build infrastructure, IAS officers rarely look back at the districts or cities they run. They settle around the national capital New Delhi or various state capitals and tell tall tales of how they “civilized” Nagapattinam or East Champaran. Truth be told, what IAS officers do is immaterial. Loyalty to their political bosses matters much more than their performance.

This means that most IAS officers do not care two hoots about the concerns of local citizens. In the words of a senior IAS officer who would only speak on condition of anonymity, the so-called steel frame of India has become a “steal frame” instead. On July 20, airport authorities stopped an IAS officer with assets worth over $12 million (100 crore rupees) and a prime suspect in a Covid scam from fleeing the country. Ironically, this officer is also the CEO of the Maharashtra Housing and Area Development Authority (MHADA), responsible for providing affordable housing in the state. Needless to say, MHADA has done an awful job of providing housing in any of the state’s cities.

In Noida, where the parents of one of the authors live, politicians and IAS officers were involved in an over $6 billion (50,000 crore rupees) scam. While Chief Minister Yogi Adityanath has taken action against minor forest officials, he has spared the IAS officers who engaged in this grand heist that would have done Robert Clive proud. Unsurprisingly, Noida is not exactly a pleasant place to stay. Other cities have also been victims of such scams and are not doing much better.

In rural areas, citizens are more forgiving of IAS officers engaging in the loot. In India’s cities, the times they are a-changin’, and citizens expect more. As stated earlier, they return from cities abroad wondering why their urban areas cannot be cleaner, greener and better run. Most political parties, including the ruling BJP, are increasingly out of touch with this changed zeitgeist. IAS officers clear one exam in their 20s to become feudal barons for life. Politicians, especially in the ruling BJP, do not have that luxury. In particular, overtaxed urban voters will weigh, measure and find them wanting if Modi’s promise of achhe din (good days) rings false.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post India’s Urban Middle Class Craves Better Quality of Life appeared first on Fair Observer.

In the process, Atatürk  introduced reforms such as a ban on polygamy, adoption of the Roman script and the introduction of a Western-style constitution. Yet for all its modernizing tendencies, the Turkish state remained authoritarian and Atatürk dealt with separatist Kurds brutally. A secular Kemalist elite came to dominate Turkey and the military repeatedly interfered in politics. Coups were commonplace. In the 1980s, the secular government intensified restrictions on religious expression, causing much resentment among the more religious rising middle classes, especially in Anatolia.

A few decades later, Erdoğan emerged. As a devout Muslim, he brought back religion into politics. His brand of political Islam was once held to be the model for the Middle East. Erdoğan  was seemingly reconciling Islam and democracy. He reversed the ban on headscarves, harked back repeatedly to Turkey’s Ottoman days and made Hagia Sophia a mosque again. Despite the secular opposition’s efforts to unseat him, Erdoğan has remained strong.

In the latest elections, Erdoğan defied the expectations of many Western liberal observers. He has won yet again with the same comfortable majority that he enjoyed in the previous two presidential elections. Erdoğan decisively beat the opposition candidate Kemal Kılıçdaroğlu by more than four percentage points, a result one would expect from a successful democratic politician, not a dictator. The Turkish leader won a respectable 52%, which is far short of the over 90% figure autocrats regularly win in eyewash elections. Ultimately, Erdoğan won because, for whatever reason, the Turkish people really did want him in charge.

However, observers are troubled because Turkish voters seem impervious to concerns about Erdoğan’s poor track record in power. Specifically, his disastrous handling of the economy is causing grave concern. Erdoğan has forced the Turkish central bank to keep interest rates low despite soaring inflation. He diluted building codes and implemented them poorly, causing deaths of thousands in recent earthquakes. Like the Kemalist elite, Erdoğan also runs patronage networks that have throttled economic growth. Yet Turkey seems to have no other viable alternative to Erdoğan as yet.

Our signature discussion FO° Live examines the complex situation in Turkey. Tülin Daloğlu and Ali Demirdas spar over the causes of Kılıçdaroğlu’s failure. Was it a question of personality, or of policy? Did Kılıçdaroğlu lose people because his traditional Kemalist party jumped into bed with its former enemies: the Kurdish parties? Or did Kılıçdaroğlu lose because of his lackluster record, lack of charisma and a paucity of authority as a compromise candidate of hugely disparate parties? 

There are many other questions that our speakers explore in this FO° Live. For instance, the popular mayor of Istanbul, Ekrem İmamoğlu, could have done any better? What happens now that Erdoğan is back as a modern day sultan? Nathaniel Handy, a scholar on Turkey and the author of several insightful articles for Fair Observer, takes the view that Erdoğan represents strong social forces and has a solid base. He is likely to behave more pragmatically after being tested in the polls. Time will tell.

Like any democracy, the Turkish one is messy. To make sense of it, listen to this FO° Live. 

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Live: Making Sense of the Turkish Elections appeared first on Fair Observer.

For years, doomsdayers have been trumpeting the dollar’s demise. Once the Japanese yen was deemed a rival. Then, it was the euro. Now, it is the Chinese renminbi, also known as the yuan. Yet these fears are exaggerated. The reason is simple. People invest in the dollar because the American economic model is still the most dynamic in the world. The US has top universities, great laboratories, ease of setting up businesses, investors, depth of markets and culture of innovation are still unparalleled. 

Yet the dollar is unlikely to have the same dominance as in the past for a very simple reason. The hegemony of the US was historically unprecedented. Sir Arthur Harris, known as “Bomber” Harris, had bombed Germany into oblivion. The US had dropped two nuclear bombs on Japan. France had been occupied by Germany, and the UK was victorious but exhausted. Russia was still under Joseph Stalin and had been decimated by Nazi Germany.

After World War II, the US was the only game in town, the American economy was 50% of the global GDP, the US was the factory of the world and the dollar replaced the pound to emerge as the top dog. Since then, no other economy has held a candle to the American one. Yet others are on the up, and the dollar’s status is not as dominant as before.

Rivals Emerge but Still Lag Behind

China has risen like a phoenix after two centuries of ignominy. It, and not the US, is now the workshop of the world. As a result, China is the biggest importer of commodities. Russian gas, Saudi oil and Brazilian soybeans all make their way to this giant Asian market. So, it is only natural that some trade is denominated in renminbi/yuan. As a trade currency, the yuan is picking up. In China’s cross-border transactions, the yuan reached 48.4% and the dollar declined to 46.7% from 48.6% a month earlier.

Yet there is no challenge to the status of the dollar as the reserve currency. There is nothing today that can replace it. For one thing, the yuan is not freely convertible. Under President Xi Jinping, China has tightened currency and capital controls. Even Jack Ma, the richest Chinese entrepreneur, has been brought to heel. Yet convertibility is only one of many shortcomings the currency has, and wealthy Chinese still go to great lengths to take their money out of the country and invest it in real estate in Vancouver, shares in Western companies and plain simple dollars. No American billionaire or millionaire thinks of storing wealth in yuan.

To put it bluntly, China lacks investor protections, institutional quality and capital market openness. The Middle Kingdom also has an opaque banking system with a mountain of non-performing loans, a gigantic real estate bubble, poor enforcement of contracts, and arbitrary and draconian regulations. Yes, China is the top global factory now but it still has not figured out how to create a financial system that is efficient, transparent and trustworthy.

The euro has problems too. The jury is still out on whether the euro will survive in the long term. At the heart of the matter is the fundamental difference between the north and the south. The Greek debt crisis threw the eurozone into disarray. Italy’s burgeoning debt, sclerotic growth and aging population threatens to sink the euro ship. 

Furthermore, Europe lacks US-style deep capital markets, banking, fiscal and political union. Will German taxpayers bail out Italian banks? Also, European bond markets are more fragmented and shallower than their American counterparts. There are simply not enough high-quality euro-denominated assets for investors to buy and sell.

Other currencies cannot be challengers. The pound fell from grace many decades ago. Post-Brexit, the British economy is caught in a low-wage, low-productivity and low-growth spiral. Cool Britannia is distinctly uncool these days. India, a fast rising former British colony, is growing impressively fast, but it has a very long way to go before its currency becomes a medium of exchange internationally.

Dreams of a BRICS currency will remain dreams. These economies have little in common with each other. Russia, Brazil and South Africa remain exporters of commodities. China is the global industrial superpower, and India is striving to boost manufacturing after decades of focus on services. Jim O’Neill, the former Goldman Sachs banker who coined the term BRICS for these five countries, has concluded that this proposed currency means little for the US-centered global financial system.

Dreams of gold replacing the dollar run into liquidity issues. The crypto mirage has now well and truly crashed. Other ideas of using a basket of currencies are simply too unwieldy. As yet, there is no alternative in sight to the dollar, flawed though it may be.

As geopolitical analyst Ian Bremmer wrote, “the dollar continues to be widely used for funding, pricing, trade invoicing and settlement, and cross-border borrowing and lending even when the US is not involved.”  A brief look at the graph below tells us all that we need to know about the global importance of the dollar.

There is also another important statistic that Bremmer touts. Central banks hold $12 trillion in dollars as foreign exchange reserves. This figure has declined since 1999 but “it is still nearly twice that of the euro, yen, pound, and yuan combined – the same as it was a decade ago.” The Chinese yuan comprises a measly 3% of foreign exchange reserves. 

Despite the US Federal Reserve following a policy of quantitative easing that dramatically devalues the dollar, China has felt compelled to keep purchasing dollar-denominated assets. Even the weaponization of the dollar against Russia has not forced a change in Chinese policy when it comes to keeping these assets. 

The graph below captures the dominance of the dollar as the world’s reserve currency. For all the chatter by analysts, geopolitical gurus and media pundits, this domination is not yet under threat.

The dollar dominates because it is stable, liquid, safe and convertible. As stated earlier, the US is still the largest and most innovative economy in the world. American financial markets are the largest, deepest and most liquid in the world. Assets around the world are denominated in dollars, giving many investment options to those who hold the currency. The dollar also continues to be a safe haven for non-Americans, including people from the BRICS economies. 

Top Dog Status Secure but Not Eternal

As stated earlier, the US economy is the largest and most dynamic in the world. American educational, economic and political institutions inspire global credibility and confidence. India’s blue-blooded Indian Administrative Service (IAS) officers who rule the country are willing to give their right arm to send their children to Harvard or MIT, and even Emperor Xi himself sent his daughter to Harvard.

The inherent strength of the US is a cliché that everyone parrots. The US has everything to be top dog from the most powerful military to a robust economy. Innovative companies such as Google, Apple and Tesla sprout up ceaselessly in the US and become dominant global players. Ultimately, people trust the US. They buy into the myth of Harvard and Hollywood, giving the US not only hard power but also what Joseph Nye calls soft power.

Yet all of this trust is also fragile. As we think about the dollar, Americans are playing political football yet again with its debt ceiling. Democrats want to spend like no tomorrow. Republicans cannot countenance any increase in taxes. And the American citizenry has gotten used to pain-free goodies racked up on Uncle Sam’s credit card. Thus, fiscal deficits continue to grow. Quantitative easing, the de facto printing of money, has fueled asset bubbles that are deflating as the Federal Reserve raises interest rates to combat inflation.

Smaller banks are going under and big banks are buying them up. Too big to fail has become even bigger to fail, amplifying moral hazard and systemic risk. The US financial sector is a world leader, but it is not as stable or resilient as it once was. The military-industrial complex demands ever increasing investment, while higher education costs an arm and a leg. Healthcare is stratospherically expensive and yields worse outcomes than economies that spend far less on it. In fact, American life expectancy recently declined and so, too, did social mobility. For too many, the great American dream has turned into the terrible American nightmare, straining the very fabric of society.

If the US continues to fragment, if American democracy keeps becoming even more dysfunctional and if Americans lose faith in their institutions—as many did on January 6, 2021—then the dollar may not remain top dog. Nothing lasts forever. For now though, reports of the dollar’s death are greatly exaggerated.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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As many as 13 NATO allied and partner nations with more than 20 ships, and 35 aircraft, including the F-35 fighter, and 4,000 personnel are participating in this exercise. As per the Pentagon “encompasses live-fire rehearsal events in a multidomain environment against subsonic, supersonic and ballistic targets.” In effect, this exercise is a shot across the bow of Russia.

Moscow has been active in the Arctic for decades. In 2007, two mini submarines (mini-subs)  planted a one meter-high titanium Russian flag more than two and a half miles beneath the North Pole. In a record-breaking dive, the mini-subs Mir-1 and Mir-2 descended to 4,300 meters. In Moscow’s words, this was “a serious, risky and heroic mission.” 

Riches Under the Sea and Across it too

It is an open secret that global warming is accelerating and climate change is already upon us. NASA tells us that polar ice is melting dramatically and Greenland is losing about 270 billion tons per year. This is leading to sea level rise, which will be catastrophic for the likes of Bangladesh, Maldives and New Orleans but offers polar powers access to natural resources and new trade routes.

The Arctic has major reserves of oil and natural gas. Large quantities of minerals, including iron ore, copper, nickel, zinc phosphates and diamonds, are also on offer. In 2008, the United States Geological Survey estimated “90 billion barrels of undiscovered, technically recoverable oil, 1,670 trillion cubic feet of technically recoverable natural gas, and 44 billion barrels of technically recoverable natural gas liquids in 25 geologically defined areas” in the Arctic.

The melting of the Arctic is also opening up new trans-Arctic routes, including the Northern Sea Route (NSR) and the Northwest Passage (NWP). The NSR and NWP are shorter maritime routes. They offer an economic boost to Arctic economies. New ports, both hydrocarbon and military, are opening in the region. With such riches on offer, the US, Russia, Canada, Denmark, Norway, Sweden, Finland and Iceland stand to gain. 

Russia Ahead in Great Arctic Race

A great Arctic race is now on. As a resource-based economy that exports commodities, Moscow is taking the lead in the militarization and resource grab in the region. Elizabeth Buchanan, the author of Red Arctic, chronicles how Russia has cannily used “international rules for over two decades to secure its rights in the North Pole seabed.”

Russia ratified the United Nations Convention on the Law of the Sea (UNCLOS) in 1997. Since then, Moscow has worked ceaselessly for the recognition of its claims to the extended continental shelf. The Commission on the Limits of the Continental Shelf (CLCS) has deemed the majority of Russia’s claims in the Arctic to be valid. This February, Moscow gained rights to an approximately 1.7 million square kilometers of seabed.

Russia has used international law to its advantage because UNCLOS allows coastal states to establish the outer limits of their continental shelves beyond the limits of 200 nautical miles. The CLCS seeks scientific data and Russia has been diligent in providing this evidence. It also made its claims to the CLCS first. Danish (thanks to control of Greenland) and Canadian claims came later and might be a decade away from recognition. The US does not recognize UNCLOS and thus cannot make claims to the extended continental shelf.

While bolstering its legal claims, Russia has been building military strength in the Arctic. Last September, Reuters reported that “Russia has reopened tens of Arctic Soviet-era military bases, modernized its navy, and developed new hypersonic missiles designed to evade US sensors and defenses” since 2005. Russia’s bases inside the Arctic Circle outnumber NATO’s by about a third and the West is at least ten years behind.

Russia has seven nuclear-powered icebreakers and around 30 diesel-powered ones. The US and China have just two diesel-powered icebreakers each in operation. The US is the global superpower but Russia is the Arctic superpower.

Apart from resources and sea routes, the Arctic offers some of the best places to station ground stations for satellites. One such place is the island of Svalbard off the Norwegian mainland. SvalSat in Svalbard downloads time-sensitive data from most of the world’s commercial and scientific satellites.  In 2021 and 2022, fiber-optic cables on the Arctic seabed connecting the island and the mainland were severed. Norwegians suspect the Russians of sabotage. 

Norway is not alone in worrying about Russia. In the 1939-40 war, Finland lost 11% of its territory to the Soviet Union, which was then led by Joseph Stalin. Finns view Russian President Vladimir Putin as a grave threat to national security. In their eyes, he has reverted to expansionism that characterized both Stalin and the Tsars. In November 2022, Putin launched two nuclear-powered icebreakers capable of year-round navigation in the Western Arctic. Russian “Arctic power” is making its neighbors nervous. Exercises like Formidable Shield demonstrate that the US-led NATO can act in the Arctic.

New START Out: Is Nuclear War Back in Fashion?

The West Also Worries About China

China also has Arctic ambitions and claims to be a near-Arctic state. The United States Naval Institute tells us that “China is subtly installing a larger presence in the Arctic through an extensive partnership with Russia in areas ranging from multi-use ports and airfields to energy extraction.”

A Brookings paper tells us that Chinese President Xi Jinping and officials responsible for Arctic policy want their country to be a top polar power by 2030. They see this region as one of the “new strategic frontiers” where China can quench its thirst for energy and minerals. Some concerns about the future Chinese play for the Arctic seem overblown. What makes sense is that Chinese demand might fuel Russian supply.

The two countries are inching closer together even though China has not fully backed Russia on Ukraine. They have conducted naval exercises together in the Arctic. In 2021, Russian and Chinese ships circumnavigated Japan’s main island Honshu in a naval exercise of immense significance. China is the workshop of the world. Its demand for oil, natural gas and all the minerals under the Arctic is immense. It has the money to invest into Russian polar infrastructure from ports and naval vessels to pipelines and other infrastructure.

The opening up of trans-Arctic routes would allow these to be transported to Chinese ports at much cheaper rates than today. So, China has a stake in the Arctic and is therefore making a strategic bet by cozying up with Russia. Talk of polar silk roads is rife. Together, Russia and China could make a formidable Eurasian alliance, especially in the Arctic, despite their rivalry in Central Asia and elsewhere.

What Lies Ahead?

In August 2017, the Russian tanker sailed from Norway to South Korea in 19 days without needing an icebreaker. This Arctic passage along the conventional route through the Suez Canal would have taken over 50 days. In 2018, The Economist opined that “the Arctic route has drawbacks: a navigation season of three to four months each year, unpredictable ice conditions, high insurance fees, costly specialised vessels, and a lack of search-and-rescue teams and support infrastructure.”

The increasing rate of the melting of the poles might mitigate these drawbacks. Furthermore, instability and piracy along the traditional routes, especially in the Middle East and the Horn of Africa, might add costs to traditional shipping. The Suez Canal and the Straits of Malacca could clog up. For China, they are trade arteries that could be cut off. The Arctic passage is far better for Chinese national security.

With the Russians beefing up their military in the region and the Chinese bankrolling them, the Arctic is set to change. The other Arctic powers will not stand idly by. They will inevitably respond both diplomatically and militarily. The mood in Washington is already increasingly belligerent. In December 2022, Kenneth R. Rosen argued in Politico that a battle for the Arctic was already underway and the US was behind. As the US gears up and its allies join in, the Arctic will heat up further and become a new theater for potential conflict.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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Donald Trump’s Court Troubles

The former president has been charged and had to appear in court. The charges are not quite straightforward. Trump and his supporters claim the trial is a witch hunt. His opponents think he deserves to be tried on every charge imaginable. Many political analysts believe that court troubles might fire up the flagging Trump campaign. They are the equivalent of Twitter for the publicity-seeking former president.

Prima facie, it seems that an ambitious prosecutor has brought the court action against Trump. It might have unintended consequences. This attention on Trump is bad news for Florida Governor Ron DeSantis. He was emerging as the leading Republican candidate but Trump’s court troubles have thrust the governor in the shadows. It is too early to tell what will transpire but Trump’s troubles will have enormous consequences.

Taiwan’s President Visits the US

On March 30, Taiwanese President Tsai Ing-wen visited the US and met US Speaker of the House of Representatives Kevin McCarthy at the Ronald Reagan Presidential Library. This upset China and increased US-China tensions over Taiwan.

Tawan, China and the US are caught in an unusually precarious balancing act. Taiwan’s leaders are trying to defend their autonomy without provoking Mainland China. Chinese leaders are asserting ownership without triggering catastrophic war. American leaders are attempting to deter Chinese invasion of Taiwan without provoking that very act. Each country is caught between these two opposing imperatives, making for a very tricky situation.

OPEC+ Cuts Oil Production

On April 2, OPEC+ announced it would cut production by 1.18 million barrels of oil per day. The reduced production comes during a record-high demand for oil and mounting inflation for the global economy. This OPEC+ action spells trouble for poorer countries, which will struggle with inflation, interest rates and debt. It also marks a major realignment of OPEC away from the US after the Russia-Ukraine War.

The deal US President Franklin Delano Roosevelt made with Saudi King Abdul Aziz Ibn Saud in 1945 is now off. As per this deal, the US guaranteed security for the House of Saud while the Saudis promised uninterrupted supply of oil. Now, the US is energy independent and China is the largest importer of Saudi oil. It has managed to broker resumption of diplomatic ties between Sunni Saudi Arabia and revolutionary Shia Iran. A new era has emerged.

The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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Since 1978, China has almost defied the economic laws of gravity. The loosening of state regulations have allowed the economy to thrive. Deng’s 1978 reforms allowed the Chinese dragon to soar into the skies. China hid its strength and bided its time. Deng doubled down on reforms in 1992 and China entered the World Trade Organization (WTO) in 2001.

The same year, 9/11 attacks on New York and Washington, DC caused the US to fixate on the so-called global war on terror. Uncle Sam spent two decades chasing shadows in the deserts of the Middle East and the rocks of Afghanistan. The blood and treasure it spent in both misadventures came to naught, and weakened the superpower.

Now, the Middle Kingdom is refashioning the world that the US created in 1945 and that emerged triumphant in 1991 when the Soviet Union collapsed. Russian President Vladimir Putin challenged that world over the years and ended it by invading Ukraine in 2022. Large-scale war is now back in Europe after 1945. The US involvement in the Russia-Ukraine War has given China the opportunity to cultivate many non-European powers.

Recently, Beijing has brokered the restoration of diplomatic ties between Sunni Saudi Arabia and Shia Iran, challenging American domination of the region for the first time since World War II. Notably, China is now the biggest importer of Saudi oil and is the largest trade partner of Iran. For many countries in Africa and Latin America, China is now their biggest export market and the greatest source of investment and debt. During the heyday of European imperialism, trade followed the flag. In this new era of Chinese ascendance, the flag is following trade.

Singh and Carle address three questions in their podcast:

1. If we are speaking about a new world order, we have to define the old world order. What was that old postwar world order?
2. What is this new world order that China is championing?
3. What are the implications of this new world order for the US, for China, for Europe, for major powers like Japan and India, and for the so-called “Global South”?

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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Nevertheless, my brilliant students also informed me that cosmetic surgery in general and nose jobs in particular were the rage in Iran. Like South Korea and Brazil, Iran is one of the great centers of cosmetic surgery. Rhinoplasty, the technical term for nasal surgery or “nose job,” is extremely popular in Iran. In fact, so fixated are many Iranians with this surgery that the Persian “nose job” has entered the surgical lexicon.

A culture obsessed with beauty

Iran, also known as Persia in the past, is a culture that has long prized sophistication, courtesy and beauty. In fact, Encyclopedia Britannica tells us that Iran literally means the “Land of the Aryans” and the country adopted this name in 1935. This ideal of Aryan beauty—large eyes, symmetrical faces and beautifully shaped noses—runs strong in the culture.

Even though Iran is ruled by puritanical mullahs who do not allow women to reveal even their hair, the Iranian veneration for beauty continues. Those of us who grow up in India are sometimes indoctrinated from an early age about the legendary beauty of Iranian women. Shah Jahan, the Mughal emperor who ruled India from 1628 to 1658, built the Taj Mahal for Mumtaz Mahal. 

Like many high fliers in the Mughal court, Mumtaz came from a family of Iranian/Persian origins. Note that Persian (Farsi) was the official language of North India from 1192 to 1858 when the British finally replaced it with English. In the heyday of Mughal rule, the icons of beauty were Persians like Nur Jahan and Mumtaz Mahal. Unsurprisingly, the Taj Mahal has been called “a marble tribute to a Persian princess.” 

The Taj Mahal may be a thing of the past but Iranians still prize beauty. In 2013, The Guardian on Iran’s beauty obsession that feeds its voracious cosmetic surgery industry. Apparently, “a desire to gain a husband, western looks, or even clients are a few reasons why Iran has the world’s highest nose surgery rate.” Even men are getting nose jobs and plastic surgery now.

In a nutshell, nose jobs and cosmetic surgery thrives in Iran because people want it. In Keynesian terms, there is demand for this sort of surgery.

A track record of surgical intervention

I grew up in India as the son of an eminent plastic and reconstructive surgeon. My father was in the Indian Army. His patients were often soldiers who had been shot or injured by shrapnel. He did the whole gamut of reconstructive work. He often told me that the sort of surgery he did was born on the battlefield.

Iran is no exception. The 1980-88 Iran-Iraq War kicked off the cosmetic surgery industry. Thousands of soldiers were wounded in those eight years of war. Iranian plastic and reconstructive surgeons stitched them up on a regular basis. With so much practice, many of them became stunningly good at their jobs.

When the war ended, many of these military surgeons transitioned to cosmetic work. Two pioneers are remembered to this day. Dr. Mohammad Esmail Akbari and Dr. Hamid Karimi blazed new paths that others follow to this day. Akbari developed new techniques in rhinoplasty (nose jobs) while Karimi focused on facial cosmetic surgery, including facelifts, eyelid surgery and brow lifts. Along with other military surgeons, they triggered the boom in cosmetic surgery that lasts to this day.

Since 1988, the Iranian cosmetic surgery industry has grown rapidly. In fact, Iran is one of the leading destinations for cosmetic surgery. Patients can get top-level surgical procedures at a fraction of the cost in richer economies like the US, the UK or Switzerland.

In a nutshell, Iran has the supply of skilled cosmetic surgeons to satisfy both internal and international demand. Say’s law—the law of the markets that holds that supply creates its own demand à la iPhone—applies as well.

Some key problems

Cosmetic surgery in Iran is not without its problems. There have been reports of botched surgeries. Some people have suffered from complications and even died. Some blame this on the lack of regulation. Iran’s mullahs are keen to regulate what their women wear but have largely turned a Nelson’s eye to their decisions to go under the scalpel.

When foreigners who get their treatment in Iran suffer complications, they find themselves up a shit creek without a paddle. A simple cosmetic procedure leads to a lifetime of trouble. They cannot exactly sue for damages or go back to their surgeons for redressal.

Apart from these tangible issues, there is the deeper question about a cultural fixation with beauty and the social standardization of beauty. Just as the mullahs have imposed religious conformity on the country, so have arbitrary standards of beauty. Why is one type of nose superior to all others? Why is it so important to look a certain way? Are there racial prejudices that underpin Iranian ideals of beauty? Are women and, now even men, objectified in modern society? Is cosmetic surgery yet another rebellion against repressive mullah rule?

Iran and other modern societies will have to wrestle with questions like these. In 1820, the young British poet John Keats penned, “Beauty is truth, truth (is) beauty. that is all ye know on earth and all ye need to know.” Perhaps the time has come to think again as to what exactly is beauty itself.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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Joe Biden’s State of the Union 

President Joe Biden’s State of the Union address set the stage for the rest of his term. He vowed to finish the job, called for bipartisanship, and defended social security from budget cuts. Biden touted his past two years as a success. Commentators saw this speech as preparation for a 2024 presidential run. At 80 years, his age has caused consternation among Democrats and voters over his ability to win a second term. The COVID pandemic, energy crises and the never-ending argument over how to rein in rampant spending has taken a toll on Biden. The ever-rising debt ceiling has brought social benefits in the cross hairs of many lawmakers who are looking to cut deficits and contain debts.

US-China Tensions Escalate 

US-China relations have deteriorated even further after a Chinese spy balloon was shot down over North America. In response, US Secretary of State Anthony Blinken canceled a high-level meeting with the Chinese government.

China still maintains its innocence, claiming it was a civilian weather balloon that had blown off course. This comes as China pushes an increasingly ultranationalist view of its place in the international order, with little moderation. 

As top dog, the US naturally does not like Chinese aggression and is responding vigorously. Tensions are set to rise in the days ahead.

Destabilizing Energy Supply Ukraine’s Defense

Russia announced it would reduce oil production by 500,00 barrels per day. Clearly, Western sanctions are taking a toll. This reduction in supply comes at a time of record global demand in 2023. This will put upward pressure on the price of oil, which will cause inflationary pressures on the global economy.

Inflation is causing tensions in many economies. So far, the US, the UK and other NATO powers have poured billions to bolster Ukraine’s defense. However, support for Ukraine might be weakening. In the US, some Republican politicians are calling for reduced funding or ceasing aid altogether. In other European countries, war weariness is starting to set in. As costs rise, how long will nations and citizens put up with worsening economic conditions with no end in sight?

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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So far, the US has counted on its position of domination in the Middle East. Its military bases dot the region and oil is still denominated in dollars. Money from this region has long flowed into American stock markets, startups, universities and foundations. In particular, the US-Saudi relationship has been special. This deal signals that this relationship has soured. China might just have seduced the Saudis from US arms.

The US-Saudi Back Story

Appropriately, the US-Saudi romance began on Valentine’s Day (February 14) in 1945. President Franklin Delano Roosevelt hosted King Abdul Aziz Al Saud on the battleship USS Quincy and the rest is history. Since then, Americans have provided the Saudi royal family with protection in return for access to their oil.

The fabled US-Saudi romance has been fading in recent years. The US is now energy independent and the Middle Kingdom has replaced Uncle Sam as the biggest importer of Saudi oil. It is only natural that the economic center of gravity for the Saudis has moved east. Note that Chinese President Xi Jinping arrived in Saudi Arabia on a historic visit three months ago. For the Saudis, China is now their “number one trade partner, a major tech supplier, a long-term energy customer, and a comprehensive strategic partner with a permanent seat on the United Nations Security Council.” Both economically and geopolitically, Saudi Arabia no longer finds the US reliable.

Since 2018, a number of Americans have turned against Crown Prince Mohammed bin Salman (MBS) when his operatives allegedly killed journalist Jamal Khashoggi in 2018. To add insult to injury, this killing took place in the Saudi Arabian consulate in Istanbul, scandalizing international opinion. On his campaign trail, US President Joe Biden promised to make Saudi Arabia a “pariah” state. This infuriated MBS. When Russian President Vladimir Putin invaded Ukraine and sent oil prices skyrocketing, Biden humiliatingly ate his words and visited Saudi Arabia for a famous fist bump. MBS turned a deaf ear to the president’s requests to increase oil production. Instead, he cut production, much to Biden’s chagrin.

There were earlier pinpricks that irked MBS. He did not like Barack Obama’s 2016 Iran Deal—Joint Comprehensive Plan of Action (JCPOA)—or the president’s support for the so-called 2010 Arab Spring (it kicked off in December). For MBS, the US could no longer be relied upon to protect the House of Saud (meaning, he himself) any longer. As it would to many an absolute monarch or all-controlling autocrat, Biden’s democracy agenda also sounds dangerous to MBS’s ears.

The Saudi-Iran Back Story

Sunni Saudi Arabia and Shia Iran have a checkered past. They have both jockeyed for influence in the Islamic world. The Saudis are the custodian of the holy sites of Mecca and Medina. They have used their oil money to fund Wahhabi Islam around the world from Bosnia to Indonesia.  In contrast, Iran is a revolutionary power run by mullahs. They have won brownie points for standing up to imperial Uncle Sam and remained steadfast in their support of the Palestinian cause. Israel’s constant fist-shaking at Iran boosts their street cred among Muslims around the world.

As long as Iran was a monarchy, both Saudi Arabia and Iran were American allies. They exported oil to the West and made vast fortunes. In 1979, revolution erupted in Iran. Few remember that that same year gunmen took over the Grand Mosque at Mecca in Saudi Arabia, an event that has come to be known as “the siege of Mecca.” Several hundred armed jihadis—Arabs as well as American and Canadian converts—overpowered the guards, shut down the gates, took 100,000 hostage and proclaimed that the savior Mahdi had arrived to cleanse the Muslim world from the corruption of the West. Troops overpowered the jihadis but the specter of an Iran-style Islamic revolution has haunted the House of Saud since.

Saudi Arabia backed the Sunni-ruled Iraq under Saddam Hussein against Iran in their 1980-88 war. Relations remained tense until 1998. The reformist Mohammad Khatami became president.  Both countries signed a general cooperation agreement in 1998 and a security cooperation agreement in 2001.

Al Jazeera reminds us that Saudi security chief Ali Shamkhani signed a significant agreement with Iran. In 2001, he was defense minister and played a major role in bringing Iran and Saudi Arabia closer. The Saudis awarded him “the Order of Abdulaziz medal, the highest award offered by the kingdom, in the early 2000s.”

In 2016, all these efforts were washed away. Saudi-Iran relations were already strained because of a Hajj tragedy that killed thousands. Then, the Saudis executed Ayatollah Sheikh Nimr al-Nimr, a towering Shia leader. Mobs attacked Saudi diplomatic missions. In response, Saudi Arabia broke off relations with Iran.

Note that Saudi-Iran interests clash in many theaters. Both countries have been at loggerheads in Yemen, Lebanon, Syria and Iraq for many years. There is also visceral mutual dislike. With its memory of an empire, Iran sneers at the Saudis as uncouth upstarts. With its suspicion of revolution, the Saudis see Iranian mullahs as scheming plotters. 

Economically, Saudi-Iran interests clash as well. Saudi oil giant Aramco announced a record profits of $161.1 billion for 2022. Iran has the world’s fourth-largest oil reserves but sanctions prevent it from selling on the global market. If sanctions ended, Iranian oil would depress prices and reduce earnings for Saudi Arabia. No Saudi leader would like that to happen, especially MBS.

Enter the Dragon

Yet heightened tensions are not in the interests of either country, so the Saudis and Iranians have made up for now. They are both increasingly aligned to China, which relies on its energy on the Persian Gulf. In case of any war, the US will be fine but Xi’s “great wall of steel” would rust quite quickly. With no energy resources, the Chinese military might simply not have the fuel to sustain a major war. Hence, China is keen to calm the waters in this part of the world.

Under Xi, China is keen to play a bigger role in the world. It sees the US-led postwar order as unjust and against its interests. Therefore, it has launched the Belt and Road Initiative (BRI), the Global Development Initiative (GDI) and the Global Security Initiative (GSI). Unlike the US postwar order, Chinese ideas are inchoate. Beijing relies on cliches far too much but they are certainly playing the realpolitik game.

The Russia-Ukraine War has demonstrated that US interests are not aligned with either Saudi or Iranian interests. The Saudis want to keep the price of oil high and are nervous about Biden’s talk of democracy. The Iranians feel scorned after Donald Trump scuppered JCPOA and Biden’s lack of ability to reinstate it. They are supplying drones to the Russians and rumors persist that some of these flying machines are really made in China but smuggled through Iran. Both the Saudis and Iranians now need the Chinese, giving them leverage. Xi’s diplomats have exercised that leverage and emerged as the biggest winners from the Saudi-Iran deal. The US is still top dog by a long way, but there is a new dog in the Persian Gulf and it is likely to stay.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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Putin’s February speech echoed his earlier speeches. It is part of a narrative he has crafted over the years and the long game he is playing. Putin’s article on the Kremlin website dated July 12, 2021 covers much of the same ground. Both reveal the depth of Russian resentment and the strength of Putin’s paranoia.

In February, the Russian president yet again complained about “NATO’s expansion to our borders” and hundreds of American military bases around the world. He accused the US-led West of seeking “unlimited power,” and, as per American experts, killing “almost 900,000 people” and creating 38 million refugees since 2001.

Putin claimed that Western elites have embarked on an “anti-Russia project” and have “already spent over $150 billion on helping and arming the Kiev regime.” In contrast, the G7 countries have “earmarked about $60 billion in 2020–2021 to help the world’s poorest countries.” The Russian strongman accused the West of being warmongering, hypocritical and hegemonic. According to Putin, Western elites care about domination, not poverty alleviation, sustainable development or environmental protection. He claimed that the “West is using Ukraine as a battering ram against Russia and as a testing range” because Moscow is too proud to kowtow to Washington.

Ominously, Putin announced in his speech that “Russia [was] suspending its membership in the New START Treaty” that aims at reducing nuclear warheads and the missiles and bombers capable of delivering them.

What is the New START Treaty?

The US State Department tells us that the New START Treaty is the “Treaty between the United States of America and the Russian Federation on Measures for the Further Reduction and Limitation of Strategic Offensive Arms.” It came “into force on February 5, 2011,” and both parties had “agreed to extend the treaty through February 4, 2026.”

This treaty placed “verifiable limits on all Russian deployed intercontinental-range nuclear weapons.” The New START Treaty also set limits for nuclear weapons, which are as follows:

• 700 deployed intercontinental ballistic missiles (ICBMs), deployed submarine-launched ballistic missiles (SLBMs), and deployed heavy bombers equipped for nuclear armaments;
• 1,550 nuclear warheads on deployed ICBMs, deployed SLBMs, and deployed heavy bombers equipped for nuclear armaments (each such heavy bomber is counted as one warhead toward this limit);
• 800 deployed and non-deployed ICBM launchers, SLBM launchers, and heavy bombers equipped for nuclear armaments.

It is important to note that START negotiations began in 1982 and continued for decades. The START I Treaty was signed by George H.W. Bush and Mikhail Gorbachev on July 31, 1991. The Soviet Union collapsed by the end of that year but START I survived. Russia under Boris Yeltsin continued to adhere to it. When Dmitry Medvedev was president, Russia signed the New START Treaty that has persisted since.

To be clear, Russia has not withdrawn from the New START Treaty. In Putin’s words, Russia is “suspending [its] participation.” He has put a precondition to returning to “discussing this issue” — the nuclear arsenals of NATO powers, France and the UK are now on the table. Simply put, this treaty is on hold: Russia could reinstate it speedily unlike the Anti-Ballistic Missile (ABM) Treaty, which stands abandoned and would have to be renegotiated. Even suspension of the New START is dangerous and has upped the ante in what the US Army War College first called a volatile, uncertain, complex and ambiguous (VUCA) world.

Putin claims that the times have changed radically since 1991 when Bush Senior and Gorbachev signed the first START agreement. He referred to George W. Bush’s withdrawal from the ABM Treaty as proof of American perfidy. In return for Russian support for the US after the 9/11 attacks, Moscow got stabbed in the back by Washington. The Russian president is not alone in remembering this US decision. In December 2021, James M. Acton of the Carnegie Endowment for International Peace called Bush Junior’s decision to withdraw from the ABM Treaty “an epic mistake.” Other analysts, especially from the so-called Global South, remember this withdrawal vividly. Acton rightly argued that Bush Junior’s unilateral action “fueled a new arms race.” Putin’s decision might have just poured oil and blown gas on that race.

Why Putin’s decision matters

In the Cold War, many people around the world feared a nuclear war. A key fact sheet by the Union of Concerned Scientists tells us that there have been a number of “close calls with nuclear weapons.” In the 1950s and 1960s, both the US and the Soviet Union kept bombers armed with nuclear weapons on “airborne alert.” To mitigate risks of an accidental nuclear war, the Soviet Union and the US began Strategic Arms Limitation Talks of the 1970s. Eventually, they led to START and the New START Treaty.

In recent years, geopolitical temperatures have been rising. The Russia-Ukraine War has not only brought back large-scale conflict to Europe after World War II but also heightened the risk of the use of nuclear weapons. Everyone assumes that nuclear war is far too destructive and no one could reasonably countenance it. Yet the fact sheet tells us that we came close to war on numerous occasions.

Three examples are noteworthy. On October 5, 1960, the US early warning system at Thule, Greenland detected that dozens of Soviet missiles had been launched against the US. Luckily, Nikita Kruschev was visiting New York at that time. So, Americans decided that must have been a false alarm. Indeed, it was. It turns out that “the radar had been fooled by moonrise over Norway.” Another false alarm “happened during the Cuban Missile Crisis” on October 28, 1962. 

A third false alarm occurred on September 26, 1983 when an early warning satellite detected that five US missiles had been launched at the Soviet Union. This was a time of high US-Soviet tensions. Earlier in the month, the Soviets had shot down a Korean Airlines plane that had strayed into their airspace, killing almost 300 people. The officer on duty believed this was a false alarm and took the bold decision of not following the set procedures, averting nuclear war. We now know that the satellite had been fooled by the sun’s reflection on the top of the clouds. With heightened tensions today, no officer on duty, American or Russia, would dare to overrule any warning system. Human errors, technical problems and procedural mistakes have occurred in the past. There is no reason to assume that these could not happen again. The end of the New START Treaty has ratcheted up tensions in our VUCA world. Putin does not really have to press the nuclear button or use tactical nuclear weapons for matters to get out of hand. Any false alarm could set off an accidental nuclear war.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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American capitalism has further reinforced Puritan tendencies. In France, employees get six to ten weeks off every year. Paris empties out and beaches fill up in July and August. France also has a 35-hour workweek. Employees in Spain, Italy and Austria also have many weeks off. So do the famously hardworking German employees. Even the Anglo-Saxon British get four weeks off every year.

Working ourselves to death

The puritanically capitalist US is different. Employees get two weeks off—one of those weeks can be compulsory because factories shut down for a week—and many feel guilty when they do not show up for work. Goldman Sachs got into trouble for 100-hour workweeks. Some New York lawyers have been in the news and the subject of talk shows for 100-hour workweeks.

Of course, even the US pales in comparison to Japan. This is the country that gave birth to karoshi—death by overwork—that has since spread to other countries. Many Japanese salarymen working in big companies worked so hard that they literally dropped dead. When these stories emerged in the 1990s, most people dismissed it as a peculiar Japanese cultural phenomenon. 

It turns out that karoshi is not peculiar to Japan. It has spread worldwide like cancer. In May 2021, the World Health Organisation (WHO) and the International Labour Organisation (ILO) published a pathbreaking report. They estimated that “long working hours led to 745 000 deaths from stroke and ischemic heart disease in 2016, a 29 per cent increase since 2000.” The WHO and the ILO estimate that long hours at work might be responsible for about one-third of all deaths.

Apart from this report, news headlines about the perils of overwork abound. In China, workers at Foxconn facilities making iPhones for Apple were inconveniently killing themselves. Apparently, their profit-making masters were squeezing them to the point of suicide. Qatar was in hot water during the 2022 FIFA World Cup for its migrant worker deaths. Apparently, the country that has founded Al Jazeera was unable to turn the spotlight on migrants working under the blazing sun in its backyard. In Qatar’s defense, stories of terrible working conditions abound worldwide.

Rebellion from work itself

In 2021, a “lying flat” movement emerged in China. It was triggered by a post on Baidu in April. Titled “Lying Flat Is Justice,” this post went viral and discussions about tang ping—the Chinese term for lying flat—picked up pace in May, “as young Chinese, over-worked and over-stressed, weighed the merits of relinquishing ambition, spurning effort, and refusing to bear hardship.”

In fact, China’s Gen Z and its youngest millennials reportedly find increasing solace in tang ping. There is now a collective “antipathy toward working themselves to the bone.” The matter became so serious that Chinese President Xi Jinping was forced to condemn it. If China is to become the innovative superpower Xi envisions, then its youngsters cannot aspire to “living a low-desire, zero-pressure lifestyle without stable employment, while staying with [their] parents.”

This rejection of working long hours is not confined to China. Several young people in many countries are questioning the value of putting their noses to the grind. Even the land of Puritans has a new guru who champions less work. In 2007, Timothy Ferris published The 4-Hour Workweek: Escape 9–5, Live Anywhere, and Join the New Rich. Unlike the once opium-smoking Chinese, aspirational Americans want not only to work less but also to get rich in the process.

Out go the 100-hour workweeks for suckers who go into banking and law, in comes leisure as a means of ideation and wealth generation. Ferris is now a cult guru for both dropouts and Harvard MBAs. After burnout thanks to 14-hour workdays, Ferris came up with a system in which he checked email once a day and outsourced small daily tasks to virtual assistants.

As the global success of his book demonstrates, Ferris might have a point. He has certainly hit upon a lifestyle of travel, reading, tango-dancing, secular preaching and global gurudom. Most of his followers and virtual assistants have been unable to achieve the same nirvana though.

What about a shorter workweek?

In recent years, a shorter workweek has been gaining attention. In 2017, Time published an iconic story based on the findings of the Organization for Economic Cooperation and Development (OECD). The organization studied productivity in 38 countries. With the longest workweek, Mexico was the least productive while Luxembourg with a workweek of just 29 hours was the most productive. Many studies have since revealed long workweeks to be counterproductive in the long run. They lead to lower productivity, employee burnout and less innovation.

In 2019, Microsoft Japan revealed astonishing results of a summer experiment. In the country of karoshi, the Seattle-headquartered company tried a four-day workweek over the summer. Worker productivity shot up by 40% and, unsurprisingly, Microsoft’s electricity costs dropped by 23%. Surprisingly, printing dropped by nearly 60%, lessening paper wastage dramatically.

Perpetual Guardian, a financial services company in New Zealand, has gone a step further. Founder Andrew Barnes has declared the four-day workweek is here to stay. Barnes believes that a shorter workweek delivers better productivity. His company’s employees found stress levels drop and missed fewer days at work. No surprise that Perpetual Guardian says “employees sufficient time to think about how they can work differently” is important. Just as New Zealand was the first country to give women the right to vote in 1893, it might be pioneering a work revolution for the 21st century.while their stress levels and absenteeism decreased.

Change has come not only to a small idyllic island nation in the Southern Hemisphere but also a Protestant land close to the North Pole. Brath, a Swedish company, has shifted to a six-hour workday. It has helped them to hire and retain talent. Their employees are better rested and more productive. Furthermore, Brath’s profits have gone up too.

Iceland went a step further than Sweden and the government conducted trials of the four-day workweek from 2015 to 2019. More than 2,500 workers—about 1% of Iceland’s working population—were involved. In 2021, the government declared it to be an “overwhelming success.” Work-life balance improved, stress decreased and productivity increased. Now, Iceland has implemented the four-hour workweek. Even the much-maligned World Economic Forum (WEF) has come around to the idea of the four-hour workweek. At its 2022 annual gathering of the high and mighty in Davos, the WEF declared this idea to be “feasible and likely to be beneficial.” As Nobel laureate Bob Dylan once sang, The Times They Are A-Changin’.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Shorter Workweek Better than Death by Overwork or Lying Flat appeared first on Fair Observer.

Lebanon currently faces numerous challenges to its stability. The two that fall on top of the agenda currently are the economic crisis and vacant presidency. The World Bank describes its economic crisis as possibly the worst the world has seen since the mid-19th century. Last April, Lebanon reached a staff level agreement with the International Monetary Fund to rehabilitate its economy. However, the government and parliament have been unable to implement the mandated reforms to unlock such assistance. In October 2022, Lebanon’s presidency fell vacant. Since then, Lebanese parliamentarians have been unable to agree on a consensus candidate to elect to the presidency.

Amidst these and other challenges, Daou travelled to the US for meetings with the US government, Congress, international organizations, and the Lebanese American diaspora. On February 1, the American Task Force on Lebanon hosted him at their headquarters in Washington, DC where this interview was recorded.

The views expressed in this video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Talks: Make Sense of the Future of Lebanese Democracy appeared first on Fair Observer.

Nagorno-Karabakh is internationally recognized as part of Azerbaijan, but its 120,000 inhabitants are predominantly ethnic Armenians. They broke away from Baku in the early 1990s and Yerevan supported their fellow Armenians. This led to a war in which Armenia emerged on top. By 1993, Armenia not only gained control of Nagorno-Karabakh but also occupied 20% of Azerbaijan.

In 2020, war broke out again. Thanks to Turkish drones and large-scale military operations, Azerbaijan regained much of the territory it lost in the early 1990s. Now, its blockade of the Lachin Corridor is inflaming passions yet again.

US Secretary of State Antony Blinken got Armenian Prime Minister Nikol Pashinyan and Azeri President Ilham Aliyev to meet in Munich. The post-Davos Munich Security Conference was a convenient excuse for the leaders to get together. Both sides claimed that they had made progress towards a peace deal. Yet a war of words broke out. Aliyev “accused Armenia of occupying Azerbaijan’s lands for almost 30 years.” Pashinyan claimed that “Azerbaijan has adopted a revenge policy” and was using the meeting for “enflaming intolerance, hate, aggressive rhetoric.”

A Tortured Past: Christianity, Islam and Communism

Both Encyclopedia Britannica and Wikipedia tell us that Armenia became the first country to establish Christianity as its state religion. Apparently, in 300 CE as per the former and 301 AD as per the latter, Saint Gregory the Illuminator convinced King Tiridates III to convert to Christianity. The Armenian Apostolic Church is an independent Oriental Orthodox Christian church and has many similarities to the Russian Orthodox Church.

If Armenia is Christian, Azerbaijan is Muslim. In the early 16th century, Ismail I, the founder of the Safavid Dynasty conquered Azerbaijan. Ismail I proclaimed the Twelver denomination of Shia Islam as the official religion of the Persian Empire. While Iran is almost entirely Shia and Sunnis are persecuted, Azerbaijan follows a more syncretic version of Islam. The US State Department’s 2021 Report on International Religious Freedom tells us that Azerbaijan’s “constitution stipulates the separation of religion and state and the equality of all religions before the law.” It also tells us that of the 96% Muslim population, 65% are Shia and 35% Sunni. There is little internecine Muslim conflict, though non-Muslims still have a hard time in the country.

In the 19th century, Russia started gobbling up Azerbaijan as the Persian Empire weakened under the Qajar dynasty. Sunnis fled from Russian-controlled territory to Azerbaijan. As Russia took over, a modern Azeri nationalism arose. It emphasized a common Turkic heritage. Ties with Ottoman Turkey deepened while those with Qajar Persia weakened. To this day, Azerbaijan remains closer to Turkey than to Iran.

Azerbaijan also retains close ties with Moscow. It has spent much of the last two centuries under Moscow’s thumb. After the 1917 Russian Revolution, Azerbaijan declared independence in 1918. This did not last long. Under Moscow’s rather heavy hand, the Azerbaijan Soviet Socialist Republic was formed.

Armenia too is closely intertwined with Moscow. Until World War I, Armenia was part of the Ottoman Empire. Yet war inflamed suspicions about the loyalty of Amenians to Istanbul. Some Armenian volunteers were serving in the Imperial Russian Army. The  infamous 1915 Tehcir Law ordered the forced relocation of the Ottoman Empire’s Armenian population to the Ottoman provinces of Syria and Iraq. Death marches into the desert and massacres led to the deaths of 800,000 to 1.5 million people. Forced Islamization of women and children sought to erase Armenian cultural identity and make them loyal subjects of the Ottoman sultan who was then the caliph of the entire Islamic world. This mass murder and cultural destruction has come to be known as the Armenian genocide.

World War I went badly for both Ottoman Turkey and Tsarist Russia. The 1920 Treaty of Sèvres “provided for an independent Armenia, for an autonomous Kurdistan, and for a Greek presence in eastern Thrace and on the Anatolian west coast, as well as Greek control over the Aegean islands commanding the Dardanelles.” The Turks rejected this unfair treaty and fought back. Peace only came with the 1923 Treaty of Lausanne that established the boundaries of modern Turkey. A year earlier, the Soviet Red Army had annexed Armenia along with Azerbaijan and Georgia. Universalist communism snuffed out nationalism in this part of the world.

Communism Collapses, Nationalism Rises

In 1923, the Soviet Union established the Nagorno-Karabakh Autonomous Oblast within Azerbaijan. About 95% of its population was Armenian. For the next 60 years, the region was peaceful thanks to the heavy-handed Soviet rule. During the disastrous 1979-1989 Soviet-Afghanistan War, Moscow’s authority weakened significantly. In 1988, Nagorno-Karabakh’s regional legislature passed a resolution to join Armenia. Tensions rose, but the Soviets kept things under control.

When the Soviet Union collapsed, all hell broke loose. Armenia and Azerbaijan achieved independent statehood, and went to war over Nagorno-Karabakh. Armenians in this region declared a breakaway state of Artsakh. This was unacceptable to Azerbaijan. Like the collapse of Yugoslavia, the results were tragic. The war caused over 30,000 casualties and created hundreds of thousands of refugees. As stated earlier, Armenia held the upper hand. 

By 1993, Armenia had gained control of Nagorno-Karabakh and occupied 20% of Azerbaijan’s geographic area. Peace only came in 1994 when Russia brokered a ceasefire that has come to be known as the Bishkek Protocol. This left Nagorno-Karabakh with de facto independence with a self-proclaimed government in Stepanakert. However, this enclave was still heavily reliant on close economic, political and military ties with Armenia.

Both Armenia and Azerbaijan were economic backwaters under Soviet rule. In 2011, Azerbaijan struck gold in the form of gas. Baku launched what has come to be known as the Southern Gas Corridor. Azerbaijan wrangled a deal with the European Commission to supply gas as far away as Italy. The country used gas proceeds to buy arms from both Turkey and Russia as well as modernize its military.

In early 2016, a four-day war broke out in Nagorno-Karabakh. Most analysts say that Azerbaijan triggered this conflict with the tacit, if not overt, acquiescence of Moscow. For many years, Baku had “been promising to liberate the territories occupied by the Armenians.” Neither were the Azerbaijani troops able to break through Armenian defenses in Nagorno-Karabakh, nor were the Armenians able to launch a counteroffensive. The truce reestablished the status quo.

In 2018, #MerzhirSerzhin—anti-government protests that have come to be known as the Velvet Revolution—broke out in Armenia and swept the old elites out of power. Serzh Sargsyan reluctantly stepped down as prime minister and Pashinyan took over. The new government sought to loosen ties with Russia without antagonizing Moscow, strengthen relations with Europe, and improve relations with neighboring countries, including Iran and Georgia.

Democracy in Armenia did not lead to peace in the region. As stated earlier, conflict broke out again in 2020. Azerbaijani forces crossed not only into the unrecognized Republic of Artsakh of Nagorno-Karabakh, but also into Armenia. Azerbaijani artillery strikes hit cities and villages deep within Armenian territory. More than 7,000 people died and hundreds, if not thousands, were wounded. Azerbaijan recaptured most of the territory it had lost in the 1990s. Three ceasefires brokered by Russia, France and the US failed. 

Eventually, Russia pushed through a ceasefire and sent 2,000 of its troops as peacekeepers. Armenia had to guarantee “the security of transport links” between the western regions of Azerbaijan and its exclave of Nakhichevan that lies within Armenia.

A Strange String Quartet: Russia, Armenia, Turkey and Azerbaijan

Since 1991, Russia had been Armenia’s main security and energy provider. The shared Orthodox Christian tradition has long made Yerevan Moscow’s most reliable partner in the region. Armenia is “the sole Russian ally in the region, the only host of a Russian military base, and “the only South Caucasus country to belong to the Russian-led Collective Security Treaty Organisation.”

Yet it seems that street protests for democracy sent alarm bells ringing in the Kremlin. Russian giant Gazprom hiked gas prices in 2019, forcing Armenia to make overtures to its southern neighbor Iran. Worse, Russia turned into a primary weapons supplier to Azerbaijan. This led to “a rather surprising crisis in Armenian-Russian relations.” Intelligence sources speak about a deal between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdoğan to back Azerbaijan because the former wanted to teach Armenia a lesson. Putin did not want Armenia to follow the Ukraine example and form the so-called wave of democracy that would sweep him out of office.

Turkey declared the 2020 ceasefire deal to be a “sacred success” for its ally Azerbaijan. In his characteristically colorful language, Erdoğan described Ankara’s support for Azerbaijan as part of Turkey’s quest for its “deserved place in the world order.” In a nutshell, Armenia-Azerbaijan has become a theater where big powers are yet again playing another version of the great game. Once, the Ottoman Empire, the Persian Empire and the Russian Empire met here in the Caucasus, and jostled for dominance. Another jostling has now begun with Turkey, Iran and Russia—successors to the three empires—playing key roles.

Others have got involved. Unsurprisingly, one of them is the US. On September 11, 2022, Mikael Zolyan of the Carnegie Endowment for International Peace explained how the West had sidelined Russia in mediating the Nagorno-Karabakh conflict. In reality, the EU is playing a distant second fiddle. As the post-Davos Blinken-led negotiations in Munich have just demonstrated, the US is calling the shots, at least as of now. Naturally, Russia is not too pleased.

Other actors are involved too. Azerbaijan is allowing Ukraine’s military to obtain fuel from its gas stations at no cost. Furthermore, Ukraine has always supported “the integrity of Azerbaijan’s internationally recognized territory throughout the Nagorno-Karabakh conflict” despite having the fifth largest Armenian diaspora in the world. Georgia is in Ukraine’s camp and is pursuing both EU and NATO membership. Armenia is home to a major Russian military base that has ground forces, tanks, air defense, missiles, helicopters and Mig-29 multi-role fighters. These are Armenia’s insurance against total Turkish-Azerbaijani domination. Despite heartburn over Russia’s betrayal in 2020, Armenian public opinion still favors Russia over Ukraine in the current ongoing conflict. The waters in the Caucasus are becoming very muddy.

A Truly International Fight Club

Involvement of distant powers is muddying the waters further. Over the last few years, Pakistan has been self-consciously looking up to Turkey to craft its Islamic identity. The northern part of the Indian subcontinent was conquered by mamluk (i.e. manumitted slave) Turks in 1192. In recent years, Pakistan has been turning to these distant Turkish roots and Erdoğan is even more popular than the Turkish soap operas that are enthralling Pakistan. The Turkish leader is seen as a true representative of the Muslim world just as historical television drama Dirilis Ertugrul is viewed as glorifying “the Muslim value system and the Ottoman Empire.” 

It is important to remember that Muslims in British India, modern day India, Pakistan and Bangladesh, launched the 1919 Khilafat movement to restore the caliph to his throne in Turkey. They considered the Ottoman sultan to be their spiritual leader. Erdoğan has emerged as a new caliph for Pakistanis, many of whom are willing to fight and die for him.

The Fair Observer Intelligence (FOI) Threat Monitor concluded that Turkey and Pakistan were institutionalizing strategic relations and developing the characteristics of a military alliance. With the continuing deterioration of Pakistan’s economic and political situation, the supply and willingness of young men to volunteer for jihadi causes is increasing too.

Sadly for Armenia, Pakistan has the capability to support Turkey and Azerbaijan with large numbers of well-trained regular or irregular troops in any future conflict. Pakistani regular military personnel already supplement local forces in Saudi Arabia and other Arab countries. The Pakistani state has rich experience of training jihadi volunteers in unconventional warfare and then sending them to fight in support of Islamic causes around the world. These irregular forces have appeared in Afghanistan, India, and Yemen, sometimes working with Pakistani special forces. With appropriate incentives, these fighters could be deployed against Armenia to support Azerbaijani and Turkish objectives, possibly in combination with elements of the Pakistani Army.

Luckily for Armenia, India has decided to support this beleaguered Christian nation. In September 2022, the two countries signed a $245 million worth of Indian artillery systems, anti-tank rockets and ammunition to the Armenian military. Two months later, Armenia signed a $155 million order for 155-millimeter artillery gun systems. Aliyev, who succeeded his father to become the strongman president of Azerbaijan in 2003, declared India’s supply of weapons to Armenia as an “unfriendly move.” India made this move only after years of provocation by Erdoğan who has sided with Pakistan on Kashmir. According to Glenn Carle, FOI senior partner and retired CIA officer, India’s sale to Armenia makes strategic sense and is a play for great power status.

In a nutshell, the Armenia-Azerbaijan conflict over Nagorno-Karabakh has ramifications far beyond the region. The US wants Armenia to emulate Georgia and Ukraine, and join the ranks of free democracies. The EU wants peace in the Caucasus and cheap Azerbaijani gas to replace disrupted Russian supplies. Russia wants the Pashinyan government, which is increasingly unpopular after defeat in 2020, to fall. Yet it cannot and will not allow Armenia, an Orthodox Christian nation, to be completely subjugated by its Muslim neighbors.

Thanks to religion and ethnicity, Turkey and Azerbaijan see Armenia as a historic enemy. Both want to teach Yerevan a lesson. So does Ukraine and perhaps even Georgia. Curiously, mullah-run Iran wants to counter the growing influence of fellow Muslims—largely Sunni Turkey and majority Shia Azerbaijan—in the region. It fears that a powerful Azerbaijan could strive for the integration of Nakhchivan, the Azeri enclave in Armenia, and Azeri-majority areas in Iran. Therefore, Tehran is selling gas to energy-hungry Armenia. Thanks to Pavlovian cultural deference to Turkey, Pakistan sees the Armenia-Azerbaijan conflict as jihad and its madrassa-trained young men might provide cannon fodder for this conflict. Meanwhile, India is responding to the pan-Islamism threat of Turkey and Pakistan by supporting a potentially valuable ally. 

The die is cast for a riveting saga, which promises to have more twists and turns than Dirilis Ertugrul.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Make Sense of the Old and New Armenia-Azerbaijan Conflict appeared first on Fair Observer.

In a viral video, Carragher argued that Messi has a better goal record than Ronaldo. Furthermore, Messi is a playmaker who can run a game. He “can take you to a place where you can’t actually believe what you are seeing.” The affable and insightful Lineker believes that Messi “is the greatest player to have ever played the game.”

In Maradona’s Shadow

Until recently though, Messi was never quite loved in his native Argentina. He was seen as a Barcelona man who never gave his heart and soul for the national team. Messi was always compared unfavorably to another diminutive left-footed player who was the love of the nation: Diego Maradona. In the 1986 World Cup, Lineker scored six goals and won the Golden Boot, the award for the top scorer. Yet this was Maradona’s tournament. He scored five goals and made five assists. Argentina beat Germany 3-2 in the final.

One match from that 1986 World Cup defines Maradona. He was both devil and god in the space of a few minutes. England faced Argentina in the quarter finals on June 22 at the Estadio Azteca in Mexico City. Maradona knocked the first goal in with his hand. It has come to be known as the “hand of God” goal and still infuriates many in England. In their eyes, Maradona cheated, which he most certainly did.

Four minutes later, he would go on to score the “goal of the century.” Maradona collected the ball in his own half, spun around and left multiple English players trailing in his wake. He dribbled past world class players and dummied one of the great goalkeepers to knock the ball into the empty net. That moment still lives on as a moment of pure footballing genius. Messi was expected to provide such moments of magic for Argentina and deliver the World Cup, which he failed to do until Sunday, December 18, 2022.

Maradona: A Devilish Argentine Saint

The two goals of Maradona capture not only the man but also his nation. Argentines have long treated football both as love and war, and, as we know, all is fair in love and war. Argentines play football with precisely this spirit. 

In 1978, Argentina hosted the World Cup. To this date, there are suspicions that the military dictatorship then ruling the country played dirty. At the time, the best player in the world was Johan Cryuff and the best team was arguably the Netherlands. Cryuff never showed up because a 1977 kidnap attempt shook him up. Spain had just become a democracy after General Francisco Franco’s death and some insinuate that this incident might have been engineered by the Argentine military junta’s dirty tricks department. 

At the time, this regime was rounding up people by the thousands and killing them. A documentary titled Power, Corruption & Lies recounts how the Argentine government manipulated the 1978 World Cup in every way possible to ensure that the home nation won. It is for good reason that Esquire called this tournament “the dirtiest World Cup of all time.”

Eight years later, Argentines celebrated Maradona’s 1986 hand of God moment as revenge for defeat in the 1982 Falklands War. This war began when Argentina’s military junta invaded what they called Islas Malvinas. The British controlled these islands in the South Atlantic and called them the Falkland Islands. Argentine generals launched this invasion to divert attention from a terrible economy and mass unrest. Capturing these islands from the imperialists who had seized them would have boosted the regime. This was supposed to win the military kudos for their patriotism and revive their sagging fortunes. Instead, this 1982 misadventure led to bitter defeat and national disgrace. Maradona’s two goals, one deceitful and the other sublime, were seen as sweet Argentine revenge.

Ghosts of the Past

Like many other countries, Argentina is deeply tortured by its past. Once Argentina was the promised land. Waves of immigrants flocked to this New World nation. As in Canada and the US, European immigrants slaughtered indigenous peoples. Very few of them are left in the country. Even more than the US, Argentina practiced ethnic cleansing of the indigenous population.

Argentina was similarly ruthless with Africans. About 200,000 arrived on the shores of the Río de la Plata in the early colonial days. By the end of the 18th century, one-third of the population was black. Today, hardly any of them remain. Argentines got rid of blacks, packing many of them off to neighboring Brazil.

Jorge Luis Borges is called the nation’s greatest writer and, in the eyes of many, its soulkeeper. In 1975, he famously commented, “This country has no tradition of its own.” He went on to say: “There’s no native tradition of any kind since the Indians here were mere barbarians. We have to fall back on the European tradition, why not? It’s a very fine tradition.” Note that his grandmother, Frances Anne Haslam, had come from Staffordshire, England. In 1920 Borges turned 21. By then “over half the population of his native Buenos Aires had been born in Europe, the result of a vast wave of late nineteenth-century and early twentieth-century immigration.”

Argentina’s self-conscious European identity puts them in a strange position. They look down on other South American nations, which are far more mixed race, with contempt. However, they are not exactly Europeans either. An Argentine friend once remarked, “We are an odd people. We have a superiority complex vis-à-vis other South Americans and an inferiority complex vis-à-vis the Europeans.”

The Rosy Future Turned Into a Nightmare

For all the slaughter of the natives and the elimination of Africans, Argentines did not become rich like the Americans. In 1913, Argentina was the world’s 10th richest country. The future seemed bright. After all, European immigrants in a fertile land were bound to create el paradiso.

With the fertile Pampas, the majestic Andes and the beautiful Buenos Aires, Argentina has few excuses for failure. An October 2019 Australian government note observes that Argentina can produce food for 400 million people (its population is just over 46 million). It has the world’s second largest shale gas reserves and fourth largest shale oil reserves. Argentina also has the third largest reserves of lithium and large quantities of gold, silver and copper. 

Instead, Argentina has become the biggest borrower of the International Monetary Fund (IMF). Pakistan negotiated a $6 billion bailout and is haggling with IMF officials over the release of the latest $1.1 billion tranche to pay for imports and service foreign debts. In contrast, Argentina got a $44 billion bailout and has just spent $1 billion for “bond buyback,” depleting its “scarce” foreign exchange reserves. The IMF has warned Argentina but the country has a history of defaulting on its international sovereign debt.

How Argentina Can Rebuild Its Economy

If there was a World Cup for a country that blew it, Argentina would be in the fray. Unlike Canada, Australia or New Zealand that started at similar levels of economic development in the early 20th century, Argentina imploded. The country was unable to develop industry or stable institutions. Military coups, tumultuous electoral fraud, erosion of checks and balances, and the rise of populists like Juan Perón condemned Argentina to chaos. Today, 17 million people—43% of Argentina’s population—are living below the poverty line. If the economic crisis continues, this percentage could rise to 50%. 

Just as Maradona’s drug abuse and dissolute lifestyle destroyed him, political incompetence and economic mismanagement have turned Argentina into a basket case. 

Football, a Religion: Saint Messi Floats Above Pope Francis

For a country that has spectacularly lost the plot for a century, football is a religion that offers salvation. Foreigners who visit the country are taken aback by the primal passion the game excites. Hollywood actor Matt Damon has been to many sporting events but he says, “the craziest thing I have ever seen without a doubt is a soccer game in Argentina.” Armed police, barbed wire and no-man’s land between warring fans of rival sides are all par for the course.

When Argentina won the World Cup last year, an estimated two million people celebrated in the city center. They gathered around the city’s iconic obelisk designed by Argentine modernist architect Alberto Prebisch. The sea of people around the 67.5 meters tall icon was heaving with joy and relief. After many bitter years of disappointment, Argentina had finally won the World Cup a third time. Unlike 1978, this one was not rigged by a murderous military regime. Unlike 1986, there was no hand of God dodginess on the way to victory.

Of course, the Dutch team might complain that the referees favored Argentina in an ill-tempered match. The French and many others did not like Argentine goalkeeper Emi Martínez’s gamesmanship in throwing the ball away during the penalty shootout. On the whole though, Argentina won this World Cup fair and square. Manager Lionel Saloni, unsung hero Ángel di María, late bloomer Martínez and magical Messi eventually scripted a fairy tale.
Pope Francis is an Argentine and a football fan. Unlike Brazil, Argentina has not fallen to evangelicals. Catholicism is still dominant. An Argentine pope is a matter of great pride to the country. Yet the favored son of this Europeanized New World Catholic paradise lost is Messi. He has delivered what the nation most wanted. With inflation hitting 99%, poverty rising and an already grim economic crisis worsening, Saint Messi and his loyal foot soldiers have given Argentina something to smile about.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Street Grit and Messi Magic Lead Argentina to Glory appeared first on Fair Observer.

A 2021 commentary by the Boston Consulting Group (BCG) tells us that the US is the leader in research and development. Thanks to its top-class universities, fantastic talent pool, vast capital, innovative culture and extraordinary ecosystem, the US dominates “electronic design automation (EDA), core intellectual property (IP), chip design, and advanced manufacturing equipment.”

When it comes to manufacturing, which is referred to as fabrication in the industry, East Asia is top dog. Gone are the days of Fairchild when a group of eight brilliant engineers could walk off to launch the modern semiconductor industry in Silicon Valley. Now, manufacturing semiconductors needs massive capital investments. New foundries can “cost between $10-$20 billion and can take three to five years to build.”

Why Semiconductors Are a Really Big Deal

To run such a capital-intensive industry, government backing helps. So does robust infrastructure and a skilled workforce. BCG rightly tells us that East Asia has all these ingredients to make its semiconductor industry thrive. China, South Korea, Japan and Taiwan have followed strong industrial policies, backing the semiconductor industry as a national priority. The US, where this industry began, now makes a mere 12% of the world’s semiconductors.

Taiwan’s Extraordinary Success in Semiconductors

In assembly, packaging and testing, China leads because of its cost advantage. Its neighbors make more advanced stuff. As per BCG, “all of the world’s most advanced semiconductor manufacturing capacity—in nodes below 10 nanometers—is currently located in South Korea (8%) and Taiwan (92%).” According to some, Taiwan is the Mecca of the semiconductor industry.

The biggest success story in the country is Taiwan Semiconductor Manufacturing Company (TSMC). It is the largest contract chipmaker in the world. In 2021, Kathrin Hille of The Financial Times reported about a TSMC plant that would make 3 nanometer semiconductor chips, which would be 70% faster and more power efficient than the most advanced in production at the time. TSMC has a history of making big investments that take a while to generate returns. In 2021, it budgeted $25-28 billion for capital investment. Competitors in the US have struggled to keep up because Wall Street forces them to focus on quarterly earnings and, until the 2022 CHIPS Act, the government offered few goodies.

TSMC has also invested wisely. It has plowed money into developing cutting-edge technology. The company has constructed giant fabrication plants, known as “fabs.” Hille’s 2021 reportage described a fab that measured 160,000 square meters, the equivalent of 22 football (soccer) fields. TSMC has not only focused on economy of scale but also efficiency of operations. The company achieves 95% yield in its factories. This means that 19 out of the 20 chips it makes are perfect. 

The success of TSMC and other Taiwanese semiconductor companies owes a great deal to the national culture. Taiwan’s rigorous education system churns out high-quality electrical engineers and excellent technicians. The proverbial East Asian work ethic also helps. Employees work extraordinarily hard to maintain high production standards. 

So far, location has helped too. Since Deng Xiaoping’s 1978 economic reforms, China has grown spectacularly. After joining the World Trade Organization in 2001, the Middle Kingdom has become the factory of the world. It is the largest manufacturer of electronics. As China’s next door neighbor, Taiwan’s location made the country an ideal location for semiconductor manufacturing and a strategic hub for the industry.

Geopolitical Typhoons Threaten Taiwan

Taiwan’s location and success are both a blessing and a curse. As mentioned above, location played a part in Taiwanese success. It has played a part in making the country integral to the semiconductor global supply chain. This global reliance on Taiwan might compel the US to support this breakaway island more robustly against China. Yet this threat comes precisely because Taiwan is next door to China and the legacy of a civil war that began in the 1930s divides the two. 

In 1949, the Chinese Communist Party (CCP) emerged triumphant. Its rival, the Kuomintang (KMT), fled Mainland China and took refuge in Taiwan, which they named as the Republic of China (ROC). The CCP-led People’s Republic of China (PRC) believes in the One-China principle and seeks eventual “unification” with ROC. In Beijing’s eyes, Taiwan is a renegade province that must return to the fold just as Hong Kong.

As US and China Clash, Taiwan Moves Closer to the Brink of Disaster

Increasingly, the Taiwanese do not find reunification a palatable idea. The 1992 Consensus that kept tempers under control is now fraying. This agreement allowed the CCP and KMT to kick into the long grass the tricky question of which of their two governments was the legitimate, exclusive representative of “China.” Instead, both of them focused on more immediate practical matters.

Unlike China, Taiwan is a rambunctious democracy of 23 million people. In 2016, President Tsai Ing-wen, led her Democratic Progressive Party (DPP) to victory. She has refused to endorse the 1992 Consensus. This has caused great offense to President Xi Jinping who has brought back a Mao-style personality cult to China. Under him, China has become ultranationalist and hyper-aggressive. In recent years, Beijing’s “wolf warrior” diplomacy has unleashed a torrent of online abuse, misinformation and disinformation. The temperature in the Taiwan Strait has been rising.

Top analysts in the US have been worrying about the superpower’s reliance on Taiwan. They argue this semiconductor superpower is a single point of failure. Therefore, the US must develop its semiconductor industry again. President Joe Biden and the Congress have taken note. As referred to earlier, the CHIPS Act was enacted last year. In the words of the White House, this legislation will “lower costs, create jobs, strengthen supply chains, and counter China.” 

It is not only the US that is spending tens of billions of dollars on semiconductor production. The EU is also getting into the act. Japan and South Korea are investing as well. The 800-pound gorilla in the room is China. Beijing is putting in hundreds of billions of dollars to move up the semiconductor industry value chain—make complex high-value chips, not just simpler low-value ones. Such massive investments by competitor nations could threaten Taiwan’s current top dog status in the semiconductor industry.

There is another wrinkle for Taiwanese industry. The US has instituted a series of measures to choke off China’s access to cutting-edge semiconductor chips, technology and manufacturing equipment. Historians have drawn parallels between this measure to the US 1939-41 sanctions on Japan. As per Niall Ferguson, these “sanctions so boxed in the imperial government that in the end there seemed no better option than to gamble on surprise attack.” Cutting off China from semiconductor capability “is a lot like cutting Japan off from oil in 1941.” Beijing’s incentives to attack its island neighbor for its semiconductor fab plants have just increased and so have Taiwan’s headaches.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post What You Need to Know About Taiwan and Semiconductors appeared first on Fair Observer.

Apparently, we need them for everything. These days, washing machines, refrigerators, cars and almost everything we use have semiconductors. So do more complicated things such as ships, planes and rockets for outer space.

The ongoing Russia-Ukraine War has demonstrated that semiconductors are essential for weaponry too. Precision-guided bombs, missiles, drones, fighter jets and naval vessels are all reliant on semiconductors. They have become the new magic technology that underpins almost everything.

What are semiconductors?

Simply put, semiconductors are integrated circuits (ICs), also known as microchips. A microchip “is a set of electronic circuits on a small flat piece of silicon.” Transistors on this chip act as electrical switches that turn electrical current on or off. These switches are tiny. Advanced manufacturing creates an intricate pattern of multilayered latticework of interconnected shapes on silicon wafer.

The Unbearable Shallowness of “Deep AI”

Semiconductors first became important back in the 1950s. Nobel laureate William Shockley brought a brilliant group of scientists and technologists to Mountain View in sunny California. By then, a perfect “convergence” of many factors was about to make the San Francisco Bay Area the ideal place for high technology manufacturing. 

To keep away from German spies, the military had been conducting research in this idyllic valley of orange groves close to the Pacific Ocean. In 1939, Stanford graduates Bill Hewlett and David Packard had started their iconic company in the latter’s garage. They soon moved to Stanford Industrial Park where other tenants included Eastman Kodak, General Electric and Lockheed.

Shockley pioneered the modern semiconductor. He was the genius who came up with the idea of using silicon to make the transistors.  These regulated or controlled current or voltage flow as well as amplifying and generating electrical signals and acting as a switch or gate for them. Shockley turned out to be a much better scientist and technologist than a manager or entrepreneur. His best brains left to create a new company. Shockley immortalized them as “the traitorous eight” and founded Fairchild. The modern semiconductor industry was born.

Don C. Hoefler’s term, “Silicon Valley,” has come to be the name for this part of the world south of the stunning city of San Francisco. Crystal Fire, an iconic book by Michael Riordan and Lillian Hoddeson, chronicles how semiconductors led to the birth of the information age. Today’s tech giants are located close to where Shockley set up shop. Google is headquartered in Mountain View, Apple is in Cupertino and Facebook is in Menlo Park.

Yet semiconductors are no longer manufactured in Silicon Valley. In fact, only 12% of the world’s semiconductors are now made in the US in Oregon, Arizona, Vermont, Massachusetts, Idaho and Utah. In 2022, the average export price per chip was $2.16 for the US in contrast to $0.19 for China. So, the US mainly makes complex, high-value chips. With cheaper cost bases, four other major global semiconductor producers—China, South Korea, Japan and Taiwan—have emerged. 

Some companies design, others fabricate (i.e. manufacture) semiconductors and semiconductor devices, such as transistors and integrated circuits, and still others do both. A few large companies such as Intel, TSMC and Samsung dominate the semiconductor industry.

The reason why big companies dominate this industry is because it now costs an arm and a leg to manufacture semiconductors. A foundry can “cost between $10-$20 billion and can take three to five years to build.” A semiconductor fabrication foundry, also known as a semiconductor fab, is a specialized factory that needs expensive high-precision equipment. It has to be maintained and updated regularly to perform complex processes such as photolithography, etching, doping and deposition.

Why are semiconductors important?

In the age of computers, smartphones and smart appliances, demand for semiconductors has shot up. The Semiconductor Industry Association (SIA) tells us that the industry “shipped a record 1.15 trillion semiconductor units in 2021.” The dollar value of these units was $555.9 billion. Yet their importance goes far beyond their dollar value.

Semiconductors have been rightly called the “brains of modern electronics.” During the last half-century, they have made “electronic devices smaller, faster, and more reliable.” Today, there are more than 100 billion semiconductors—the same number as the stars in the Milky Way. The SIA tells us that “in 1984, mobile phones weighed about 2 lbs., cost around $4,000, and held a charge for only about 30 minutes of talk time.” The reason you are reading this on a laptop or a smartphone is because of the semiconductors powering your device.

As mentioned earlier, everything from dishwashers to missiles uses semiconductors. The future might involve even more of the same. The age of artificial intelligence (AI) and smart manufacturing depends on humble semiconductors that enable cheap computing power. Investor and philanthropist Antoine van Agtmael has repeatedly argued that brainbelts are the future, a smart new economy is around the corner and semiconductors are fundamental to both.

Smart Brainbelts, Not Donald Trump, Are Making America Great Again

It is for this reason that the Biden administration launched a new policy to choke off Chinese access to AI and semiconductor technologies. Starting October 7, 2022, leading designers such as Nvidia and AMD can no longer sell their high-end semiconductor chips to China. In addition to cutting out China, the US is boosting semiconductor production at thome. The July 2022 CHIPS Act strengthens research, design and manufacturing of semiconductor chips in the US. The SIA informs us that this legislation would “fortify the economy and national security, and reinforce America’s chip supply chains.”

National security has come into question because most cheap chips come from China and a significant percentage of high-quality ones come from Taiwan. If war broke out between China and Taiwan, the US could be in trouble. Unsurprisingly, even fractious Washington, DC had to respond and it has done so decisively.

CNN tells us that the US “is pulling out all the stops to boost domestic semiconductor manufacturing.” Gone are the days of free trade. US President Joe Biden has launched a full scale industrial policy to dominate a critical technology. In the 1960s, the Soviet Union and the US embarked upon a space race. Now, a full on semiconductor fight has begun.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Why Semiconductors Are a Really Big Deal appeared first on Fair Observer.

Divided US Congress

The election of the speaker of the House of Representatives turned out to be a bitter and protracted affair. Republicans just could not agree to back Kevin McCarthy and it took him many rounds of voting to finally get elected. The extreme elements of the Republican Party can now turf out McCarthy in a jiffy. In fact, just one Congressman can defenestrate the speaker.

German Tanks

Germany has finally agreed to send tanks to Ukraine. Clearly, the zeitenwende (epochal tectonic shift) that Chancellor Olaf Scholz announced had not quite transpired. Germany’s traffic light coalition of the Social Democratic Party, the Free Democrats and the Greens is naturally pacifist. Their colors are red, yellow and green, earning them the name of the traffic-light coalition. This coalition is keen not to escalate the conflict and Scholz has to tread carefully to retain their support. Furthermore, Germany has had a deeply anti-war culture since the end of World War II. It is finding it very difficult to adopt a more robust foreign and defense policy.

China’s COVID Catastrophe

Chinese President Xi Jinping has made a U-turn on his zero-COVID policy. All restrictions were dropped overnight. Officials admit that 80% of China’s 1.41 billion people have caught COVID. This means a whopping 1.2 billion have COVID. China’s vaccination program has been found wanting. Antiretroviral drugs have been in short supply. Fundamentally, Xi and the Chinese Communist Party (CCP) had more than two years to prepare for this surge of cases but have been caught with their pants down. This will hurt Xi’s legitimacy and the CCP’s hegemony.

The views expressed in this podcast/article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post The Hot Mic: Divided US Congress, German Tanks and China’s COVID Catastrophe appeared first on Fair Observer.

Rising inflation means an end to the Goldilocks economy of low interest rates that began in 1991. Then, the Soviet Union fell. In 1992, Deng Xiaoping’s Nanxun tour, the historic tour of South China, put China firmly on the market reforms path. As a result, China became the factory of the world. This entry of hundreds of millions of workers from the former communist and socialist economies dampened labor costs. Inflation declined dramatically, allowing low interest rates to prevail. Central banks failed to calibrate this dramatic shift in the new realities regarding inflation.

After the 2007-08 financial crisis, central banks did not only lower interest rates but also practiced quantitative easing. This policy is a modern way of printing money. This monetary easing, the unleashing of liquidity in the economy, led to asset market bubbles. This has parallels with the Spanish and Portuguese finding silver in modern day Latin America, a third of which found its way into China and led to the collapse of the Ming Dynasty.

That La La Land era of low inflation and low interest rates is now over. The Soviet collapse in 1991 caused a benign supply side shock. The Russian invasion of Ukraine in 2022 has caused a malign supply side shock. Now, interest rates have to rise to keep the price of milk, bread, eggs and butter, if you can afford it, in check. However, rising interest rates will make life difficult for businesses and households with mortgages.

Debt has become more expensive and servicing the debt has become more difficult. Indebted households, companies and countries will now be in trouble. During the COVID era, fiscal loosening, i.e. spending more than earning, increased debts dramatically. Servicing these debts has just got more difficult.

On June 28, the World Bank observed that 58% of the world’s poorest countries are in debt distress. The danger is spreading to some middle-income countries too. In the words of the World Bank: “High inflation, rising interest rates, and slowing growth have set the stage for financial crises of the type that engulfed a series of developing economies in the early 1980s.”

China’s economic decline has lowered Chinese demand for commodities from suppliers from places like Latin America and Africa. These economies now have to pay higher bills at the same time as many face an earnings crisis. Their current account deficits are rising and so are their debts. Countries like Argentina, Turkey. Ghana and Sri Lanka are being called submerging economies.

Rising inflation, interest rates and debt are causing a massive squeeze on the global economy. After the heady days of fiscal loosening and quantitative easing, a prolonged global recession and a decade of low growth, if not stagnation, loom ahead. The chickens have come home to roost.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Explainers: Is a Global Recession Coming? appeared first on Fair Observer.

Mass protests are highly uncommon in China. The Chinese Communist Party (CCP) keeps a tight lid on society, using mass surveillance, incarceration and economic pressure on recalcitrant individuals. Hence, people are too cowed down to protest.

The current protests reveal the scale of disaffection in China. Xi’s zero-COVID policy has clearly failed. It has imposed economic setbacks and social suffering on millions of Chinese families. The CCP’s reputation for competence has taken a beating and so has Xi’s prestige.

Xi’s failed zero-COVID policy has implications for the rest of the world. It shows that supply chains reliant on China face major risks and vulnerabilities. Unsurprisingly, countries are now decreasing investment in China, sourcing imports from other countries and making their supply chains more resilient.

Atul Singh and Glenn Carle make sense of protests in China and what this means for Xi, the CCP and the country.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Exclusive: China’s Zero-COVID Policy Comes to Zero appeared first on Fair Observer.

This month, the gods have fallen to earth. None other than Mark Zuckerberg fired 11,000 employees, about 13% of his company’s workforce. Other tech companies have also been firing employees. The reason is simple: profitability has been decreasing and share prices have been falling.

Financial reports of many tech companies disappointed markets because of a combination of poor investments, bloated expenditure and iffy vanity projects. Zuckerberg’s fixation with the metaverse has not gone well. Neither has Elon Musk’s takeover of Twitter. Sam Bankman-Fried, the celebrated crypto billionaire is now under arrest.

Atul Singh and Glenn Carle make sense of this collapsing tech bubble, analyze the causes for this collapse and examine its potential consequences.

The views expressed in this video/article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Exclusive: Why Tech Collapsed and What Happens Now appeared first on Fair Observer.

Chinese newspaper Global Times claims that rising Indian nationalism and closer US-India cooperation are responsible for border tensions. A joint US-India military exercise in the border state of Uttarakhand has ruffled Chinese feathers. So has the building of roads and strengthening of Indian positions in border areas. Furthermore, Beijing sees New Delhi increasingly aligning with Washington’s Indo-Pacific strategy. It views the Quad, comprising India, Japan, Australia and the US, as an anti-China alliance.

Retired CIA officer Glenn Carle, one of Fair Observer’s regular authors and commentators, takes the view that Chinese transgressions are a part of a long term policy. Beijing pushes on all international issues where they have differences until they meet opposition. On Deutsche Welle, an Indian professor opined that Chinese transgression aims to keep India distracted and gain leverage in negotiations. Like many, he thinks that Beijing is signaling to New Delhi that Washington is far away. India should make peace with its more powerful northern neighbor, which is the top dog in Asia.

All these explanations are true but there is something more going on.

Chinese Communism v Tibetan Buddhism

It is important to note that the Chinese carried out this operation in the wee hours of a chilly winter morning at high altitude. This required detailed planning and effective execution, and was clearly not an accidental cross-border patrol, as some analysts have speculated. The aim was to occupy strategic heights near Tawang, one of the most sacred places in Tibetan Buddhism in India’s northeastern state of Arunachal Pradesh.

Nestled between China-occupied Tibet and Bhutan, Tawang is a district of about 2000 square kilometers (800 square miles) that is also home to the oldest and second biggest monastery in Asia. Tawang is one of the very few areas where there are thousands of Tibetan families in their traditional homeland outside China. The Sixth Dalai Lama, Tsangyang Gyatso, was born in this area in March 1683. 

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The current Dalai Lama is now 87 and the question of succession looms. Already, the Tibetans and the CCP are clashing over this question. Note though that no Dalai Lama has emerged outside the traditional Tibetan homeland. Tawang is the only important center of this homeland outside Chinese control. For many Tibetans, it is desirable that this tradition continues. As many lamas have mentioned to the authors, the next Dalai Lama could well emerge from the Tawang area. Beijing wants to avoid such a possibility. Control over Tawang would help. Hence, China claims this area along with other bits of Arunachal Pradesh as a part of South Tibet.

In 1949, the Chinese Communist Party (CCP) finally triumphed in its civil war and took over Mainland China. Within a year, the CCP sent the People’s Liberation Army (PLA) into Lhasa, the capital of Tibet. This imperial army of occupation posed as an army of liberation and has still not left.

In the early days, Beijing sought to avoid Tibetan unrest. Therefore, China signed a Seventeen Point Agreement with Tibet. It promised not to “alter the existing political system in Tibet” and “the established status, functions and powers of the Dalai Lama.” China did not make these promises in good faith. Under Chairman Mao Zedong, the CCP began shaping a deeply spiritual and Buddhist Tibet into its vision of an atheistic communist utopia. For most Tibetans, this utopia was a nightmare. In 1959, they rose up in revolt. The PLA brutally crushed the revolt and the Dalai Lama fled to India.

Just as the Pope is the spiritual leader of the Catholics, the Dalai Lama is a similar figure for the Tibetans. His presence in India angers China and, as long as the Dalai Lama lives, he remains a focal point of Tibetan resistance to Chinese colonization. Once the Dalai Lama dies, Beijing aims to pick his successor. Control over the historic Tawang monastery would snuff out a key center of future resistance.

China has been following this playbook for a while. In 1995, Beijing rejected the Panchen Lama chosen by the Dalai Lama. Instead, the CCP appointed a Manchurian candidate in his place. Today, a puppet Panchen Lama signs from Beijing’s hymn sheet, warning Tibetans to stay away from separatist forces. This Beijing-appointed leader argues that Tibetan Buddhism must adapt to “socialism and Chinese conditions.” No wonder, the CCP’s wet dream is to install a puppet Dalai Lama who pledges fealty to Beijing.

Why Tawang Matters

Many Chinese nationalists regret the loss of Tawang. This area could very well have been a part of China. Jawaharlal Nehru, India’s first prime minister  was wedded to the idea of India-China unity. He wanted the two Asian giants to stand up to Western imperialism. Against the wishes of his statesmanly home minister Sardar Vallabhbhai Patel, Nehru acquiesced to the 1950 Chinese takeover of Tibet.

As explained in a magnum opus on Fair Observer about India-China tensions, Nehru later realized that he had been duped by Mao. He kicked off the so-called “forward policy” as per which Indian troops took positions in territory that both India and China claimed as their own. In 1962, the PLA dealt India a devastating defeat. Chinese troops took over Tawang and advanced as far south as Bomdila. Although they later withdrew, India lost valuable territory and invaluable prestige.

Han and Hindu Nationalism Come Face to Face

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The fact that Tawang was in Indian hands is a historical accident. Nehru was a socialist and so were his top officials. They valued an anti-Western alliance with China. Major Ralengnao “Bob” Khathing did not have such Nehruvian delusions. He took matters in his own hands and marched to Tawang with merely two platoons. In 1951, this area, formerly under the control of the independent Tibetan government, was now in Indian hands. Except for a brief interlude in 1962, it has remained Indian territory since. The Chinese still lay claim to Tawang though.

The recent Chinese operation would have captured heights from where both the town and monastery in Tawang are clearly visible. They would have secured area domination and made a future move to capture Tawang easier. Artillery from the captured heights could have pummeled the monastery and the town. Also, once snow would have set in and weather turned inclement, Chinese troops would have dug into their new positions. Indian generals would have found it hard to move large numbers of troops to recapture these positions.

Note that the Chinese have tried to capture these heights before. They attempted in 2016 and, more recently, in October 2021. The Chinese have settled veterans in xiaokang (well-off) border defense villages. One such village is in the vicinity of the point of the latest clash. Intelligence officials tell officials that 600-700 such xiaokang encampments now exist along the Line of Actual Control (LAC), the de facto India-China border. They form part of the aggressive defense policy that President Xi Jinping has unleashed on nearly all of China’s neighbors.

If the PLA got hold of Tawang, the CCP would control a historic Tibetan monastery. Its choice of the Dalai Lama would be rubber stamped by this venerable institution.

Buddhist Dalai Lama v Communist Emperor Xi

Tibet is run per Mao’s dictum: “Political power grows out of the barrel of a gun.” Neighboring Arunachal Pradesh, which the CCP claims as South Tibet, is a rambunctious multiparty democracy. The state’s chief minister won 41 out of 60 seats in the 2019 elections. On December 16, he blamed Nehru for appeasing China and thanked Patel for taking over Tawang. Such a statement about recent history is impossible across the border. Unsurprisingly, Arunachal Pradesh has emerged as an imperfect but viable democratic model for China-occupied Tibet. This makes the CCP nervous.

China-India Clash Wakes Up Tibet’s Ghost of Independence

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This nervousness has worsened because of recent protests. Only in October, the 20th Central Committee of the CCP crowned Xi as de facto emperor. Despite his disastrous zero-COVID policy, Xi’s vice-like grip on power looked more secure than ever. The last few weeks have turned out to be a rather long time in Chinese politics. Xi’s zero-COVID policy has fallen apart and he has quietly made a U-turn. As per Nature, scientists worry Xi’s abrupt reversal could lead to a rise in infections and overwhelm hospitals. 

Winter is peak influenza season. Also, many people will be traveling across China for the Lunar New Year and spring festival, further increasing viral spread. Now that Xi is omnipotent, all blame would fall on him. The CCP is anxious that protests could even spread to Tibet, making the party and Xi lose face.

The CCP is also worried about recent developments in India. Earlier this year, the Indian prime minister called the Dalai Lama to wish him a happy birthday. Chinese irritation further increased when New Delhi released photos of the Dalai Lama visiting “a remote Himalayan village in the disputed border region of eastern Ladakh.” The fact that he had been flown there by a military helicopter particularly aggravated Beijing.

The Chinese have not forgotten that the previous Dalai Lama fled to Darjeeling when Qing troops marched into Lhasa. The 1911 revolution gave the 13th Dalai Lama the opportunity to return from exile, and expel Chinese troops and officials from Lhasa in 1912. He declared complete self-rule and Tibet achieved de facto independence that lasted nearly four decades. The CCP is terrified of Tibetans achieving independence again. As long as the Dalai Lama lives in India, they fear that what happened in 1912 could recur.

For the CCP, Tibet is a tributary of China and the Dalai Lama should kowtow to Emperor Xi. For Indians, Tibet is home to Kailash and Mansarovar, the abode of Lord Shiva. They respect Tibetans for preserving Buddhism and many of India’s most revered tantric traditions. For Tibetans themselves, India is the land of the Buddha and now home to the Dalai Lama. They prefer democracy to autocracy, Buddhism to communism and the Dalai Lama to Emperor Xi.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Tawang Is the India-China Battleground for Tibetan Buddhism appeared first on Fair Observer.

Western media have amplified these concerns. They think this conservative Muslim society is not welcoming to many vistors. In particular, women and LGBTQ+ visitors have voiced concerns. Qatar has less gender equality than many other countries. LGBTQ+ people point out that the country outlaws any non-heterosexual relations. In response, Qatari officials and international commentators have shot back, accusing the West of hypocrisy. They see Western countries practicing controversial politics themselves. They maintain that it is foolhardy to mix sports and politics. The question is simple: should foreigners, especially Westerners, have the right to judge a host country’s culture and practices? 

Sudden beer bans, censorship of LGBTQ+ activism and condemnations of outspoken commentators did not serve Qatar well. Discussion around the inclusiveness of the country is impossible to avoid, but the condemnation of Qatar is unfair. Fair Observer’s founder Atul Singh and author Glenn Carle as they pick apart the controversial World Cup’s critiques, the nuances of various arguments, and what this tournament means for a globalized world. 

The views expressed in this video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Exclusive: Why Qatar Hosting the FIFA World Cup is Controversial appeared first on Fair Observer.

What happens when democracy produces “bad” outcomes? Is democracy good because of its outcomes or despite them? This “democratic dilemma” is one of the most persistent, vexing problems for America abroad, particularly in the Middle East – we want democracy in theory but not necessarily in practice.

When Islamist parties rise to power through free elections, the US has too often been ambivalent or opposed, preferring instead pliable dictators. With this legacy of democratic disrespect in mind, and drawing on new interviews with top American officials, Shadi Hamid explores universal questions of morality, power, and hypocrisy. Why has the US failed so completely to live up to its own stated ideals in the Arab world? And is it possible for it to change?

The author and speaker offers an ambitious reimagining of this ongoing debate and argues for “democratic minimalism” as a path to resolving democratic dilemmas in the Middle East and beyond. In the seemingly eternal tension between democracy and liberalism, recognized by the ancient Greeks and the American founders alike, it may be time to prioritize one over the other, rather than acting as if the two are intertwined when increasingly they are not.

At the end of the Cold War, the democratic idea was victorious, so much so that it took on more meaning than it could bear. Democracy became a means to other ends, whether it was liberalism, economic development, or cultural progress. What if, instead, democracy was reconceptualized as its own end? What if the people are right even when they’re wrong?

The views expressed in this video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Talks: Problem of democracy appeared first on Fair Observer.

Washington, DC sees this as betrayal. Since the days of President Franklin Delano Roosevelt, the US has guaranteed Saudi security. In those days, the US imported a lot of Saudi oil. Over the years, the US has become largely energy independent. It has massive oil and gas reserves. Its gas production has shot up dramatically, giving it a great economic advantage.

Today, Saudi Arabia is exporting its oil not to the West but the East. China and India are the two biggest importers of Saudi oil. Given this trend, the Saudis have been moving away from the US. Under Crown Prince Mohammed bin Salman (MBS), Saudi-US relations have declined. President Joe Biden’s visit to Saudi Arabia and his infamous fist bump with MBS did not quite work. The Saudis did not increase oil production to drive down oil prices before the US midterm elections.

The OPEC+ oil production cut will lead to a revaluation of US-Saudi relations. The glue binding them together has just become thinner. Currently, Iran is siding with Russia as well but this OPEC+ action might stir talk of reviving the now-dead Iran nuclear deal.

In what the Pentagon calls this new volatile, uncertain, complex and ambiguous (VUCA) world, we will see the edge of the wedge between Saudi Arabia and the US will get sharper. OPEC+ and the US are now on a collision course in a modern rerun of the 1973 crisis when oil producers wanted a higher price. This time, the crisis will be both geopolitical and economic.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Explainers: Implications of OPEC+ Cutting Oil Production appeared first on Fair Observer.

Singh agrees with Bruton about his prognostication. Rising energy and, in particular, gas prices has led to record postwar inflation. Both households and industry are in trouble. Germany and Italy, the two European manufacturing strongholds, are suffering most.

Germany might face a winter of discontent. Italy has already elected Giorgia Meloni, a fiery populist politician, as its first woman prime minister. Meloni and her counterparts in Greece, Spain and Portugal face a grim challenge. Their economies are stagnant with high debts, aging populations and few jobs. High inflation is leading to higher interest rates. This makes debt more expensive and these southern economies might need another bailout.

So far, Germany has largely bailed out Southern Europe. That might be difficult given the state of the German economy. The economic trouble triggered by the Russia-Ukraine War will deepen divisions in Europe. The EU and its Euro project will face unprecedented strains in the pivotal winter ahead.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post FO° Explainers: Why Europe Faces a Tough Winter appeared first on Fair Observer.

Like many foreign scholars before me, I debated at the Oxford Union. I met fiendishly clever debaters such as Ewan Smith, Sarah Munby (then Monroe) and Tom Hay. I also ran into knaves who are best left unnamed. In conversations with both the clever and the cads, a name came up repeatedly in discussion: Boris Johnson.

As a foreigner, I failed to see the charm of Johnson. To me, he seemed a pathological liar. Johnson was so transparently dishonest that it was surprising, if not shocking, to find clever people dance to his tune. Even then, he was truly a Pied Piper, especially for young Tories. They swore by The Spectator, used his phrases in debates and waxed lyrical about Boris’s brilliance.

Over time, I began to understand Johnson’s appeal. As I wrote on July 24, 2019, “this Old Etonian is a lovable Falstaffian rogue.” He is Lord Flashheart of the comedy classic Blackadder, a modern Henry VIII and even a portly James Bond known for derring-do and top-level shagging. Johnson breezes through life as the ultimate smooth-talking amateur, cool as a cucumber under pressure. In brief, Johnson or BoJo, as he is often called, is a British cultural archetype. It is for this reason that, in the words of fellow Old Etonian Cameron, Johnson “defies all forms of gravity.”

A Supremely English Cad

Ken Clarke was once known as the big beast in British politics. Today, the big beast is Boris. Persistent lies, numerous scandals and even illegitimate children have failed to sink BoJo. Like a phoenix, he has repeatedly risen from the ashes.

Yet it would be churlish to deny that BoJo has managed historic achievements. He made Brexit possible. Nigel Farage alone could not have led the Brexiteers to victory. As inflation, rising interest rates and mounting debt increase strains within the EU, Boris might emerge as the modern day Henry VIII who paved the way for the great escape from Europe.

Henry’s reasons for creating the Church of England were not quite honorable but, arguably, the breach with Rome led to the British Empire. Brexit might not lead to Empire II but it could save the UK from a disaster-headed EU. Many equanimous Brits see the current turbulence as a passing phase. After all, German cars, French cheeses and Italian wines are still sold in the UK. In Ukraine, Brits are playing a role second only to Americans in taking on Vladimir Putin. And they can thank BoJo for it. There is life in the canny old dog yet.

Arise King Boris, Father of Brexit and Foe of Brussels

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BoJo has proved to be a winner. In 2019, the Conservatives won 365 seats out of 650 in the House of Commons.  Under Boris, the Tories smashed the “red wall” of solid Labour seats in northern England. Not since Margaret Thatcher has anyone led the Tories to such a victory. Scandal and the loss of two key by-elections led to a palace coup. Conservative MPs ousted Johnson in much the same way as their predecessors defenestrated Thatcher. 

After a protracted leadership election, Truss won. Her government proved to have “the shelf-life of a lettuce.” Unfunded tax cuts and energy-price guarantees spooked markets, put the pound in freefall and caused bond yields to rise. The Bank of England was forced to intervene twice. Truss resigned after 45 days, becoming the shortest-serving prime minister ever. Some would argue that, like Thatcher and Theresa May, Truss was a Roundhead. Cameron and Johnson are Cavaliers. The English Civil War of the 17^th century continues within the Conservative Party with full-on blue-on-blue conflict. Now that a doctrinaire low-tax, high-growth Roundhead is out, Big Boris might be dreaming of returning à la the Glorious Revolution of 1688.

Dishy Rishi Stands in the Way

Even as Johnson is cutting short his holiday and flying back from the Dominican Republic, Sunak has already managed to get 93 MPs lined up behind him. Unlike Truss, Sunak is a Cavalier. He might be the son of immigrants but he went to Winchester College, a boarding school even older than Eton. Founded by William of Wykeham in 1382, the school’s former pupils are called Wykehamists or, as a wag remarked, the special ones. So special is Sunak that he confessed to not having any working class friends, causing some controversy during his campaign.

Sunak is not only a Wykehamist but he is also a PPEist. He worked at Goldman Sachs, did an MBA at Stanford and became a partner at The Children’s Investment (TCI) Fund Management, a top-level hedge fund. At Stanford, Sunak met Akshata Murty, the daughter of an Indian software billionaire, and went on to marry her. Unlike Johnson, Sunak is a family man. There is not even any rumor of an affair. As a mutual friend remarked, Sunak is smart and can count. An affair would be far too expensive a proposition. He has a taste for fine things in life and his natty suits have won him the nickname Dishy Rishi.

In the leadership election debate, Sunak was on the money when he declared that the most pressing priority for the new government was inflation. He opposed any “unfunded spree of borrowing and more debt,” which he predicted would make things worse. When Truss said that inflation was because of loose monetary policy, Sunak declared, “borrowing your way out of inflation is a fairytale.” Sunak has been proved right. Many are convinced that this Goldman Sachs golden boy is the best man for the top job.

Big and beefy Boris faces slim and sexy Sunak on his return to 10 Downing Street. Some hold that BoJo will back out, let Dishy Rishi deal with the mess he has created, let Labour win the next election, screw it up and then ride back to power on a triumphal chariot as the savior of the Tories. Others argue that he will never let Sunak, the snake he picked out of obscurity, slither into 10 Downing Street. Dishy Rishi’s resignation led to Big Boris’s downfall. Now, BoJo is plotting revenge.

Like last time, most MPs will back Sunak. They want a safe pair of hands on the tiller. However, the 172,000 members of the Conservative Party have the final say. They tend to be older and whiter in comparison to today’s multicultural and multiracial Britain. As a friend remarked, it is hard to get grannies in Dorset or Somerset to vote for a brownie fuzzy wuzzy even if he is rich and posh. The fact that Sunak’s wife had claimed non-domicile status, saving millions of pounds in tax, also makes many old school Tories suspicious. They have doubts about Dishy Rishi being entirely British.

Despite all his sins, the Tory rank and file adore Boris. They are likely to vote for him, not Sunak. If he can squeak through the parliamentary vote. Big Boris could well be back.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post Will Boris the Big Beast be Back? appeared first on Fair Observer.

About Us- Fair Observer is an independent nonprofit media organization that has published over 2,500 voices from over 90 countries, including statesmen, retired military officers, former diplomats, and leading professors, along with some of the brightest young public intellectuals from around the world.

The post Turkey is headed to a real disaster | Turkish Economy | Hyperinflation | FO° Explainers appeared first on Fair Observer.

The new leader of Colombia was once a member of M-19, leftwing guerrilla group. Petro has promised to change the social and political landscape of the country. Petro’s victory is part of a broader trend. Chile voted for a new leftwing president earlier this year. A constitutional convention has been discussing a new constitution to replace the one imposed by military dictator General Augusto Pinochet in 1980. In the rest of Latin America, a new pink tide has seen a number of leftwing governments elected to power. In September, Brazil, the biggest country in the region, is likely to reelect the former president Luiz Inácio Lula da Silva. The former trade union leader Lula’s convictions for corruption have been overruled and he could be president again. Clearly, the times are a-changin’.

Our panel will examine what that change really means. What does the election of Petro and other leftwing leaders mean for Latin America and the world? Why is the pink tide back? Has the left learned from its previous excesses and electoral defeats.

Speakers: 1. Leonardo Vivas, Professor at Emerson College
2. Maria Isabel Puerta, Professor at Valencia College
3. Christoph Sponsel, PhD student at Oxford University
4. Glenn Ojeda, Latin America analyst

Fair Observer is an independent nonprofit media organization that has published more than 2,500 voices from over 90 countries, including statesmen, retired military officers, former diplomats and leading professors, along with some of the brightest young public intellectuals from around the world.

The post The Historic Colombian Elections and the Pink Tide in Latin America | FO° Live appeared first on Fair Observer.

The post A recession in America is coming soon? Who will become the next world superpower? | FO° Exclusive appeared first on Fair Observer.

James will be speaking about the forthcoming FIFA World Cup. Many see 2022 as Qatar’s year to put its best foot forward. A major producer of natural gas, the tiny Gulf state is under the magnifying glass as it enters the final phase of hosting the World Cup. At the same time, Qatar is integral to European efforts to reduce dependence on Russian energy. All in all, Qatar has, in many ways, already put its best foot forward.

This Gulf state, home to Al Jazeera, has already weathered a Saudi-Emirati economic and diplomatic boycott. Qatar has also played a key role in helping the US withdraw from Afghanistan. Nevertheless, human rights groups view the World Cup as an opportunity to increase pressure on Qatar to address their concerns.

The World Cup is an opportunity not only for activists but also for Qatar. If it avoid the pitfalls, the country can present itself in a positive light on a range of issues and project itself as a force for good to the world.

The post The 2022 #FIFA World Cup in Qatar| FO° Talks appeared first on Fair Observer.

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Early in 2022, the BBC North America reporter Anthony Zurcher published an important story: “Kamala Harris one year: Where did it go wrong for her?”

In a well-crafted story, Zurcher argued that a tough portfolio — tackling undocumented migration and enacting national voting reform — made her an easy target as vice president. Yet this canny BBC reporter observed how Harris began her presidential campaign with a bang in January 2019 only to crash spectacularly. She failed to debate or interview well, her staff left and, for all the money she raised, Harris was unable to craft a clear message or harness a constituency. The same failings have dogged her time in office since January 2020.

If the left-leaning BBC has been critical of Harris, so has the right-leaning The Economist. As early as May 29, 2021, it argued that she was “a gift to the Republicans.” This year, on June 23, the 1843-vintage British paper argued that Democrats should not opt for either President Joe Biden or Harris as their presidential candidate in 2024. Apparently, Biden is too old for a second run. Besides, it appears as if age is catching up with him. In contrast, Harris looks healthy, vigorous and relatively youthful but the paper deemed her “too flawed.”

The flaws of Kamala Harris

On November 18, 2021, Abigail Tracy of Vanity Fair reported: “Vice President Kamala Harris’s communications chief Ashley Etienne [has left] the White House.” Etienne is a seasoned old hand in Washington who served Barack Obama, Nancy Pelosi and Biden in the past. Tracy reports that Etienne is leaving early “after a raft of stories on infighting and low morale in the vice president’s office.”

Per rumor, morale in Harris’ office further plummeted after Biden and his aides told allies that he was running for a second term in 2024. In 2020, Biden was seen as a one-term president and Harris as the heir apparent. It is now an open secret that this is no longer the case.

Will American Democracy Perish Like Rome’s?

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Champions of Harris say she is a woman of color who is being set up to fail. Her boss has given her thankless messy jobs such as solving the migrant crisis. Leaks about “dysfunction and infighting” at the Harris office have been labeled as an attempt to “sabotage” her.

For admirers, Harris combines Barack Obama and Hillary Clinton. An African American woman in the top job would be terrific for America’s soul. Harris would smash the final glass ceiling in a country with a dark legacy of slavery and misogyny.

For others, Harris represents the worst type of politician who has no principle and resorts to identity politics to make her way to the top. They point to her record in California as a “cop,” which caused many young black American men to end up in prison. Unsurprisingly, The Sacramento Bee called Harris a “polarizing figure” last year. 

Indians who dislike Harris constantly point out that her Tamil Brahmin grandfather belonged to the elite Indian Administrative Service (IAS) and was an acolyte of Jawaharlal Nehru, the first prime minister of India. For them, good old Kamala is being disingenuous when claiming to suffer from discrimination because she is a card-holding member of the elite.

Left-leaning Democrats find Harris a bit too close to Silicon Valley. They are also suspicious of the fact that she married a heavy-hitting corporate lawyer. At a time when these Young Turks are aligning with the economic philosophies of Bernie Sanders and Elizabeth Warren, Harris seems a bit too Clintonesque for their taste.

Many Republicans take a view of Harris that is best left unsaid. She has the same effect on them as a full moon on werewolves. In essence, Republicans do not trust Harris and view her with profound disgust.

What lies in store for 2024?

Harris is an ambitious woman. She has broken many glass ceilings to get this far. Her ambition is to occupy Biden’s chair. In the primaries, she gave the old man a hard time. Before one of the debates, Biden was heard remarking to Harris: “Go easy on me, kid.” Now, the kid is eyeing pop’s chair in the White House. Politico reports that Harris is “staffing up” and has hired a top operative. Harris intends to use the 2022 midterms to propel herself into the limelight and then into the top job in 2024.

The trouble with Harris is not that she is ambitious; she is seen as too ambitious. Many Americans saw her attacks on Biden’s race record as insincere and cynical. For someone who had locked black American men in prison, she sounded a touch holier-than-thou in accusing Biden. Many moderates and most Republicans saw Harris opportunistically playing the race card.

Even as ruthless a place as Washington is awash with murmurings about Harris’s excessive ambition. These have been going on soon after she assumed office. Detractors insinuate that Harris is looking to put a pillow over Uncle Joe’s face and ascend to the throne. They paint her as a modern Lady Macbeth who will stop at nothing to grasp the scepter.

It could well be the case that Harris is no more ambitious than Obama or Biden or Warren. However, she has forgotten a cardinal rule in politics: “Caesar’s wife must be above suspicion.” Too many people suspect Harris of being unprincipled, dishonest and scheming. After two years in office, the vice president is now damaged goods. She has been weighed, measured and found wanting. Harris is extremely unlikely to become president in 2024 or later.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post The Future of US Vice President Kamala Harris appeared first on Fair Observer.

Russia invaded Ukraine on February 24, 2022. In the early days of the Russia-Ukraine War, Ukrainians held off the attack on Kyiv. The tanks at the front of the column were blown off by drones and anti-tank missiles, causing a giant traffic jam.

Russia has since recalibrated and is focusing on taking over Eastern Ukraine. They are securing their land bridge to Crimea, which has come under drone strikes in the third week of August. Under Catherine the Great, the Russian Empire seized Crimea in 1783. It had been under Ottoman control earlier. In 1954, Nikita Kruschev gifted Crimea to Ukraine at a time when both Russia and Ukraine were a part of the Soviet Union.

Russians like President Vladimir Putin have never reconciled themselves to the collapse of the Soviet Union and see Ukraine as a part of their “near abroad.” Crimea is Russia’s only warm water port. Russian ships can sail the Black Sea from Crimea and enter the Mediterranean Sea. Eastern Ukraine offers a land bridge to Crimea. It is also the industrial region of Ukraine and offers Russia manufacturing heft.

The Russia-Ukraine War has caused a massive supply shock to the global economy. Natural gas, coal, uranium, nickel, aluminum, and copper supplies have been hit hard. Russia and Ukraine supplied much of the world’s wheat, corn, and sunflower oil. Now large parts of the world, especially Sub-Saharan Africa and the Middle East, find themselves in a food crisis. About 250 million people are at risk of starvation.

As inflation bites and food shortages kick in, will Europe have the will to hold together? Will Russia be able to overcome its initial setbacks as in World War II and win the battle of attrition with Ukraine? Will Ukraine have the manpower, resources, and weapons to turn the tide against Russia?

To dive deeper into this issue, read the article by Atul Singh and retired CIA officer Glenn Carle dated December 24, 2021, on Vladimir Putin’s long game: https://www.fairobserver.com/region/europe/making-sense-of-vladimir-putins-long-game/

The post [ENGLISH] The Russia-Ukraine War Updates | FO° Explainers appeared first on Fair Observer.

Russia invaded Ukraine on February 24, 2022. In the early days of the Russia-Ukraine War, Ukrainians held off the attack on Kyiv. The tanks at the front of the column were blown off by drones and anti-tank missiles, causing a giant traffic jam.

Russia has since recalibrated and is focusing on taking over Eastern Ukraine. They are securing their land bridge to Crimea, which has come under drone strikes in the third week of August. Under Catherine the Great, the Russian Empire seized Crimea in 1783. It had been under Ottoman control earlier. In 1954, Nikita Kruschev gifted Crimea to Ukraine at a time when both Russia and Ukraine were a part of the Soviet Union.

Russians like President Vladimir Putin have never reconciled themselves to the collapse of the Soviet Union and see Ukraine as a part of their “near abroad.” Crimea is Russia’s only warm water port. Russian ships can sail the Black Sea from Crimea and enter the Mediterranean Sea. Eastern Ukraine offers a land bridge to Crimea. It is also the industrial region of Ukraine and offers Russia manufacturing heft.

The Russia-Ukraine War has caused a massive supply shock to the global economy. Natural gas, coal, uranium, nickel, aluminum, and copper supplies have been hit hard. Russia and Ukraine supplied much of the world’s wheat, corn, and sunflower oil. Now large parts of the world, especially Sub-Saharan Africa and the Middle East, find themselves in a food crisis. About 250 million people are at risk of starvation.

As inflation bites and food shortages kick in, will Europe have the will to hold together? Will Russia be able to overcome its initial setbacks as in World War II and win the battle of attrition with Ukraine? Will Ukraine have the manpower, resources, and weapons to turn the tide against Russia?

To dive deeper into this issue, read the article by Atul Singh and retired CIA officer Glenn Carle dated December 24, 2021, on Vladimir Putin’s long game: https://www.fairobserver.com/region/europe/making-sense-of-vladimir-putins-long-game/

The post [HINDI] The Russia-Ukraine War Updates | FO° Explainers appeared first on Fair Observer.

Even in 2022, Bond is the personification of British soft power. In essence, this British superhero saves the world from baddies. Bond has irked the Chinese so badly that they tried to mock him. Humor is not a Chinese strong point, and they ended up mocking themselves instead, and the MI6 chief thanked them for “free publicity.”

On a serious note, any power, ruling or rising, needs effective defense, diplomacy, and intelligence to protect and project itself. The British managed to create an empire, in part because they had great soldiers, spies, and envoys. The Americans have 800 military bases, the CIA, and, until recently, a pretty decent State Department.

The James Bond business is about narratives, mystique, and soft power. It is also about intelligence, statecraft, and power projection. Good old Chanakya knew all about it and wrote about it. Great powers invariably have good spies. The British have MI6, Israel has Mossad, and the US has the CIA. Russia has FSB, the successor to the KGB. China has been investing heavily into MSS.

To make sense of it all, we will examine what the James Bond business actually means, how different powers go about it and what India can do to step up.

The post FO° Talks: The James Bond Business appeared first on Fair Observer.

Nancy Pelosi’s recent visit to Taiwan has ignited tensions between China and the United States, with China enraged at foreign intervention in what they perceive as an internal affair. Atul Singh, founder of Fair Observer, and Glenn Carle, a former CIA Deputy National Intelligence Officer, examine the controversy surrounding Pelosi’s trip and the implications it holds.

The US’s longstanding policy of “strategic ambiguity” regarding Taiwan’s status has become increasingly uncertain. President Biden’s (ostensibly unintentional) messaging has implied a greater willingness for military intervention in defense of the island than overt policy would officially commit to.

China relies heavily on international shipping lanes that could easily be choked in the event of war. It perceives itself as encircled by adversaries, with the US aligning with Taiwan and several other neighbors against its interests. The rise of Taiwan’s Democratic Progressive Party, which openly questions the One China Principle, adds to Beijing’s anxiety. Meanwhile, China’s nationalist sentiment and growing military capabilities enable an assertive posturing in the Taiwan Straits.

Pelosi’s visit, with the stated goal of reinforcing global norms and supporting Taiwan, made global headlines. However, as Glenn suggests, the timing may have been ill-advised: the US’s position is clear enough, and is not aided by an unnecessary public insult to the Chinese leader. Neither should the US put so much pressure on China that it is induced to cooperate with Russia. So far, China has been more or less indifferent to Putin’s pleas for help in Ukraine, and we should aim to keep things that way.

Atul and Glenn wrap up with a discussion of President Xi’s place in Chinese history, comparing him with his more prudent predecessor Deng Xiaoping. Xi’s imperial ambitions may be leading him on a collision course with the US, with disastrous results for either or both of the great nations. The country has very little experience in extending itself as far as it is doing now, and it will need to proceed carefully.

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/podcast are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

The post As US and China Clash, Taiwan Moves Closer to the Brink of Disaster appeared first on Fair Observer.