Among the things Trump got right during his first residency in the White House was slapping Congress and the American public upside the head with a two-by-four to finally wake them up and realize that the Communist Party of China (CCP) is not a benign force in the world. This time around, Trump has the advantage of a Congress and an American public nearly unified in their opposition to the CCP, which should make it easier to ramp up the pressure on Beijing, particularly given the Republicans’ clean sweep of the Executive and Legislative branches.

Trump’s “subtlety of a Mack truck”-driven approach to foreign policy stands a good chance of backfiring vis-à-vis American businesses, however, as many of them continue to feed from the Chinese teat. Tens of thousands of American businesses continue to manufacture, import from and/or export to China despite the many hardships associated with COVID-19, the downturn in the Chinese economy and the crackdown on foreign businesses in recent years. Their voices will undoubtedly be heard at the White House as Trump attempts to tighten the noose on Beijing.

Trump’s cabinet and other nominations to date provide ample evidence that he is intent on burning the place down — so why stop at America’s borders? The foreign policy patch-up job Biden attempted to complete over the last four years — during which, many European governments, in particular, silently wondered whether an agreement with Washington was worth the paper it is printed upon — will be quickly eviscerated. An unvarnished foreign policy whose core is nationalism, protectionism and a zero-sum approach to engagement is sure to delight friend and foe alike.

Is China ready for four more years of Trump?

Beijing is certainly ready, with a list of countermeasures aimed at the American government and American businesses. US businesses in China are going to find operating there even more unpleasant for the next four years. The CCP may also be expected to attempt to strengthen its bilateral relationships around the world as America retreats and will undoubtedly find heightened levels of interest, especially in the Middle East, Africa and Latin America. The newly inaugurated mega-port in Peru is emblematic of how Beijing continues to use its Belt-and-Road infrastructure projects to strengthen its economic and diplomatic relationships. Trump’s re-election meshes nicely, also, with Beijing’s policy of self-reliance and the Made in China 2025 policy.

But the degree of economic, political and diplomatic malaise in China will also be impacted by Trump’s second term. The Chinese economy could be significantly smaller than official statistics suggest. It is spending more and more to produce less and less. Most of its natural resources are in decline, its workforce is shrinking, Xi’s dictatorial rule has prompted increasing domestic uneasiness, its economy is under growing pressure, and its Asian neighbors are ever ore alarmed by China’s aggressive actions in the region — and they are reacting to it. 

China is exhibiting classic signs of a peaking power. Xi’s crackdowns at home and increasing aggression abroad. The military buildup during peacetime is unprecedented. And China is much more willing to extend its security perimeter and to strengthen its alliances with some of the world’s most detestable regimes.

The Chinese word for crisis (wēijī) contains characters that signify danger (危) and opportunity (机), and Trump 2.0 represents both. Xi will want to use the next four years to de-emphasize China’s many domestic challenges and re-emphasize its growing stature in the world. If one envisions a cessation of the Ukraine and Israel/Gaza/Lebanon/Iran wars in 2025, Xi will feel he has more latitude to further strengthen China’s relationships with Russia, Iran, and Israel. Similarly, he is likely to feel more emboldened to introduce new initiatives to ingratiate China with a broader array of governments in areas where progress has been less pronounced, such as regarding climate change and natural disaster relief.

It seems doubtful that Trump will choose to embrace areas of possible collaboration with China, but we can expect a heightened degree of generalized competition, with an increased potential for conflict. Trump’s presidency will coincide with 2027 — the year Xi has targeted for the Chinese military to be ready to invade Taiwan. Trump will likely be tempted to cut some sort of deal with Xi (as he is so transaction-oriented) to essentially cede Taiwan to Beijing in return for something of substance for America. One can only speculate what that might be, but what seemed impossible only a few years ago seems increasingly possible, if not likely, now.

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

The post The View From China on Trump 2.0 appeared first on Fair Observer.

Xi has cleverly cast China as a defender of the status quo, pledging support for “true multilateralism” guided by the UN Charter. Ultimately, however, the Chinese Communist Party (CCP) wants to preserve only those elements of the existing order that helped China to rise over the past two generations — such as the world trade rules that enabled it to become the manufacturing epicenter of the world by encouraging inflows of foreign capital and technology.

Beijing instead shuns or undermines those principles that do not directly benefit China or that stand in the way of its rise. Xi’s declarations for a “global security initiative” or a “community of shared future for mankind” are really more of a call for the continued rise of the CCP and China. “Shared future” is another way of saying ‘“development first” while rejecting any order guided by universal values.

Rejecting the West’s moral high ground

Defenders of Chinese ambition would argue that communist leaders have a justifiable right to reject or reshape global rules written decades ago when they were not part of the discussion. Other analysts question just how disruptive China could actually be. But China does not need to replace every current rule in order to make its mark. What is important is that China is undermining the legitimacy upon which those rules are based. According to Chinese rhetoric, the international rules-based order touted by the United States is nothing more than power politics, a bid to replace commonly accepted international laws and norms with the rules of a few countries.

Xi rejects the premise that World War II granted liberal democracies a mandate to create the world in their image. arguing that Western advocacy of universal human rights — in Xinjiang and elsewhere — is a new form of colonialism.

In 2022, Xi gave Western leaders an insight into China’s human rights outlook. President of the European Council Charles Michel had argued that Europe’s dark past, notably the Holocaust, obliges its leaders to call out human rights abuses across the world, including, of course, in China. Xi retorted that the Chinese have even stronger memories of suffering at the hands of colonial powers. He cited treaties forcing China to open its markets and cede territory in the nineteenth and early twentieth centuries, and racist bylaws banning Chinese people and dogs from parks in European-run enclaves. Xi recalled the massacre of civilians at Nanjing by Japanese invaders in 1937. He claimed that such aggression left the Chinese people with strong feelings about human rights and foreigners who employ double standards to criticize other countries. The Chinese government seeks to reopen old arguments about how to balance sovereignty with individual freedoms.

That is an important aspect of the human rights debate — China has indeed suffered at the hands of foreign powers. And the US government is indeed in the habit of lecturing to other governments about human rights when it has its own litany of human rights abuses, from the slaughter of American Indians and slavery to racism, alleged war crimes, and the treatment of immigrants under Trump.

A Machiavellian strategy

Xi believes in the inexorable decline of the American-led world order, with its professed concern for rules and human rights. He would like to see world order become a more transactional system of bilateral agreements between great powers.

We can see how this outlook plays out in practice by looking at China’s response to the Russia–Ukraine war. There, China has played an awkward hand ruthlessly. In short, its goals are to ensure that Russia is subordinate to China, but not so weak that Putin’s regime implodes; burnish its own credentials as a peacemaker in the eyes of the Global South; and undermine the perceived legitimacy of Western sanctions and military support as a tool of foreign policy. 

Xi’s campaign extends to the Middle East as well. In 2023, China skillfully brokered a detente between Iran and Saudi Arabia that served to emphasize the West’s reduced clout in the region over the past two decades. Xi unveiled the Global Civilization Initiative, which argues that countries should “refrain from imposing their own values or models on others and from stoking ideological confrontation.”

Xi’s slogans seek to subvert the normative language of the twentieth century so that multilateralism becomes synonymous with a world that rejects universal values and is run by balancing great-power interests. By doing so, China is pushing back against efforts to contain the perceived military threat it poses as well as promoting an economic growth model which embraces autocratic states without imposing conditions on them.

Of course, the real point of Xi’s approach to foreign policy is to ensure the supremacy and permanence of the CCP. Yet the agglomeration of China’s bilateral relationships with some of the world’s most reprehensible regimes creates contradictions. For example, China supports Iran but chooses to ignore its ongoing nuclear escalation which threatens China’s other client states in the region.

China sees itself as superpower that can attain influence without winning affection, obtain power without trust, and have a global vision without universal human rights. Most of the world’s people do not identify with such a vision, but that has not prevented the Chinese government from proceeding apace with its warped orientation to the rest of the world.

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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America Gets Rid of Trump, But Not Trumpism

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Does anyone really think that the vast majority of Republican legislators who could not bring themselves to object to the attempted coup at the Capitol — or any of the other outrageous antics Trump has unleashed on America for the past four years — will suddenly experience sleepless nights and pangs of conscience now that he is gone? Au contraire. This band of spineless, morally bankrupt congresspeople and senators are far more likely to follow Trump and carry Trumpism into the 2024 presidential election.

That presents something of a dilemma for the Democratic Party, which seems to be far more inclined to believe that it can “turn” enough Republicans to vote Democrat next time to make a difference. Instead, we should expect an ongoing slugfest between the two parties for decades to come.

What has occurred over the past four years in the country’s political landscape is a transformation from simple political differences that prevented bipartisanship to a battle for cultural identity and the soul of America. That shining city on a hill has descended into Dante’s inferno — in a torrent of racist, bigoted, sexist and xenophobic impulses among such a large segment of the population, that it could prevent the country from ever being what it was before.

A recent survey of Europeans revealed that the majority believe that America’s political system is hopelessly broken, that President Biden will be unable to halt its decline on the world stage, and that China will become the world’s leading power within a decade. What if they are right? America’s Trump-inspired death spiral has practically ensured any real recovery will likely take decades — and multiple terms with a Democratic president and Congress at the helm — to achieve.

The European view acknowledges the depths that America has sunk to and that, in the process, Trump has rolled out the red carpet for China to rise to great new heights on the global stage, which it has been doing particularly well over the past four years. It took generations of leadership to create America’s well-earned reputation as a beacon of freedom and liberty but just one presidential term to shred it.

America must now make a choice. Given how closely contested the 2020 presidential election was and that the Democrats have a razor-thin margin of a Congressional voting majority, it would be folly for the Democrats to believe that Trumpism is, or will soon be, buried. It could easily be the case that in four years, it is the Republicans — fully armed with Trumpists and QAnon radicals — who again take the legislative helm. Given that more than 70 million Americans voted for Trump after four years of his outrageous behavior, and given that he may not be constrained in his behavior in any way in the coming four years, the Democrats may have just four years to turn this ship around.

An important priority must be to repair America’s fractured alliances and to restore faith and hope in what America can and needs to be again. There is a better than even chance that the Democrats will fail at this task. If the Europeans are right, and if the Republicans take the mantle of power again in four years, America may lose its ability to recover. That would imply a host of bad things for the country and the world in the near future. A second term of Trump — or someone even worse — could return the world to a very dark period, reminiscent of the Nazi era. That is why President Biden and the Democrats must succeed.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post What If America Doesn’t Recover From Trump? appeared first on Fair Observer.

Mind you, when the Black Lives Matter movement came to town some months ago, legions of police and national guardsmen dressed in full battle gear lined the streets and monuments of Washington. This time, for some unknown reason (perhaps because of the skin color of most Trump supporters?), all the guardsmen seemed prepared to do was direct traffic, as they were purposely left unarmed. If the Black Lives Matter protesters had attempted to do what the Trump mob did, no doubt many of them would have been shot on sight. Instead, most of Trump’s supporters walked casually back to their hotels without being touched by law enforcement, even though their assault on American democracy is unprecedented in our modern history.

America Gets Rid of Trump, But Not Trumpism

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It should therefore come as no surprise that much of the rest of the world has reacted with a combination of shock, horror and laughter. Indeed, such things are not supposed to happen in America. Could anyone blame the rest of the world for now referring to the United States as a banana republic? Over the past four years, US polity has exhibited many of the behavioral qualities of such a republic, including blatant tribalism, extreme partisanship and unbridled corruption. Trump has ensured that its electoral process has been reduced to a litany of lies, name-calling, finger-pointing and endless spinning. He has proven that he will literally do anything to remain in power — a true sign of a dictator in the making.

Such behavior has for many years been within the cone of possibility, given the depths of partisanship that has come to define the American political process. It just never descended to the levels it has during the Trump era. Now that most Americans have been well and truly shocked at the result and realize that it really can — and now does — happen here, it is time to put some guardrails in place to help ensure that nothing like this ever happens again. That will, however, require meaningful action on the part of lawmakers. Fortunately, since the Democrats now control the White House and the Congress, it may actually be possible.

It is up to them to do something about it. As a start, pass laws making it illegal for any member of the US government to brazenly lie, publicly incite agitation or promote violence. When it happens in the future, prosecute them. Approve laws that require every presidential candidate to disclose their tax returns and strip presidents of immunity from prosecution while they are in office. Place greater limits on what lobbyists and special interest groups can do in the halls of Congress. Only time will tell whether the Democrats have the courage to pass and enforce laws that prevent those promoting the enabling environment to continue to run amok without penalty.

America has dug itself into a very deep hole that will take many years, perhaps decades, to get out of. The question is, is it actually capable of doing so? One can now envision two terms to pass with a Democrat in the White House, but because the new Congress may squander the opportunity to do something truly meaningful, any good intentions may get lost in the ambitious legislative agenda Biden has in store.

But is there anything more important than preserving American nobility in the face of a crisis of confidence? The world needs an America it can believe in. America needs to invest real time, energy and resources in reestablishing the preeminence of truth and trust. It took generations to build it but just four years to destroy it.

Donald Trump’s tenure has proven just how low America can go, but it has also awakened the nation to the fact that if it veers just a little bit off course, the margins of error permit it to become just like so many other countries that never had the ability to proclaim exceptionalism in any form. If it can happen in America, it can certainly happen anywhere else. America must now prove to the world that it can pick itself up, dust itself off and stay on a path so many people in the world aspire to be on. It will take a Herculean effort on the part of President-elect Biden and the Democrats to do so. If they fail, it is arguable whether America can ever again claim to be exceptional.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post It’s Time to Put Guardrails in Place in Washington appeared first on Fair Observer.

360˚ Context: The 2020 US Election Explained

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I published an article in July 2016 stating that I believed that Donald Trump had narcissistic personality disorder, and tried to warn America what would be in store for it if we elected him president. Exactly four years ago, on the eve of the US presidential election, I wrote an article predicting that Trump would win. My view was based largely on the belief that Hillary Clinton’s intended “coronation” was premature, that she was a flawed candidate, and that Trump had succeeded in tapping into an important vein in American political culture — the neglected blue-collar voter. I published that article at 3:00 the morning after the election, one of the very first to have acknowledged the birth of Trumpism.

In that piece, I wrote:

“It is doubtful that Mr. Trump will be able to heal our terribly divided nation, which he so handily and successfully contributed to. Now that the battle lines are drawn — between those who cling to an ‘Ozzie and Harriet’ vision of America, in which everyone is white, conservative, straight and Christian, and those who recognize and accept the multi-racial, ethnic, religious and sexual orientation of this great land — there is no putting Humpty Dumpty back together again, certainly not with a leader hell bent on fanning tendencies toward divisiveness, rather than unity. While we are certainly not all going to be joining hands together and singing kumbaya, no matter who is president, we are not going to get there by having a Divider-in-Chief at the helm.”

We have seen the result of four years under his thumb. America has rarely been more partisan or divided. Those who yearned for an Ozzie-and-Harriet vision of America have become more emboldened four years later, apparently believing that America can once again become a bastion of white conservatism, replete with racism, bigotry and misogyny. That is unlikely to happen. America has become too diverse, and sufficient progress has been made toward equality to revert to that sad vision. The partisanship will surely only continue to get worse in the coming four years. The question is, can we ever return to a time when bipartisanship reigns?

It was of course just a generation ago when that was the norm. I’d like to believe that Joe Biden can take us some ways in that direction, but what will probably be required to return to that era is sustained leadership by someone who has not spent decades with their snout in the trough inside the Beltway. Biden is not that man, but neither are the majority of politicians in Congress who have made being a politician a way of life rather than a temporary service to their community, state or nation.

To achieve that, America will need a wholesale change in how it is governed in Washington, complete with cleaning house, term limits, mandatory accountability pledges and an end to special interests, lobbyists and corruption, among other things. There’s little chance that will be happening any time soon. It appears that we will have to settle for just heading down that road, which would be a victory in itself, knowing that America has saved itself from perhaps insurmountable damage of a second Trump term.

As for Trump, he will surely not be going quietly into the night. We can expect that he will challenge the results of the election for days and weeks, if not months, to come, his fragile ego refusing to acknowledge that he is the ultimate “loser.” While he toils and writhes in egomaniac agony, he will be planning his next act, which may be some combination of reality television or radio show, creation of a media empire or planning his own political comeback in 2024. Donald Trump has made an undeniable, indelible mark on the American political landscape, for better or worse, and his ego will not allow him to simply walk away as George W. Bush did.

As for his followers, surely they will not be changing their political stripes or beliefs any time soon, nor should they be expected to. From their perspective, they have found a political voice, so Trump will have a loyal legion of fans supporting him no matter what he decides to do. That ensures that America will be in for many more years of Trumpism, and his legacy will of course live on in the Supreme Court for decades.

America got the leader it deserved for the past four years, but for the first time since 1992, it has decided to reverse course after Trump has served a single term. Let us hope that Joe Biden can at least start down the road of healing this fractured nation and that whatever he is able to achieve in the coming four years serves as a useful counterpunch to Trumpism. While America can endure Donald Trump’s legacy bubbling beneath the surface, it cannot afford another four years of a Trump presidency. We have to believe that, having said no to another Trump term, America has decided that another four years of him is a price that is just too high to pay. The question is, will the answer be the same when Trump runs again in 2024?

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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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360˚ Context: The 2020 US Election Explained

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Since the 1800s, the Electoral College system has not functioned as the framers of the Constitution had intended. It was designed to be representational by district, but since Thomas Jefferson instituted the winner-take-all approach, the regimen has morphed into a muddled, skewed, corrupt mess, leaving many Americans feeling like the system is rigged.

Perpetuating Inequality

Consider this: By 2040, 30% of Americans from smaller, more rural states will elect 70 of the 100 US senators. By then, 70% of Americans will live in just 15 states and 50% of them will live in just eight of those states. Rather than help ensure equal representation under the law, the Electoral College has merely become a means of perpetuating inequality and unfairness, and is not representative of the country’s diversity. And since each state governing body can decide how the electors will vote, it is rife with partisanship and amenable to corruption.

It is only because the college exists that any candidate who may not have won the most votes can become a victor in an election. Electing leaders who do not have a majority of the popular vote is becoming more commonplace. The first time an election was lost to the candidate with the most votes was in 2000, when Al Gore won by about 500,000 votes. In 2016, Hillary Clinton won by nearly 3 million votes. On November 3, Trump could lose by 6 or 8 million this time and still conceivably win an electoral victory. Americans increasingly believe that their votes do not count and see the system as illegitimate. That must change.

The US House of Representatives hasn’t been enlarged since 1929. It is time to have a constitutional amendment to expand it to be more representative of population dispersion and the diversity of the country. Beyond that, the entire structure of the electoral system badly needs to be reformed and modernized to better reflect the composition of American society and remove some of its impurities. America needs meaningful systemic change that truly shakes up the system, not more business as usual. It is time for the American people to take back their government from career politicians, lobbyists, special interests and an elite who have all gamed the system to their own advantage.

While around one in four Americans identify as independent — more than either Democrats or Republicans — the vast majority vote for Democrat or Republican candidates rather than independents. Independent parties have historically performed poorly in state and national elections because independent voters do not vote for them, part of the issue being that independent parties and candidates sometimes represent the “looney left” or the radical right. But a bigger contributor is the absence of a meaningful independent party platform.

Meaningful Change

Going forward, candidates for any party should agree in advance to serve only one term. The immediate effect would be to strip the lobbyists and special interests of their ability to influence the way lawmakers from any party voted because those lawmakers would not need their money to get reelected. Such an approach would permit lawmakers to focus on what they were sent to Washington or the state house to do: govern, rather than spend 80% (or more) of their time raising money for their reelection and perpetuating a corrupt political system.

Meaningful, significant change is not going to occur from within mainstream political parties in America — it will only come from outside them. The party platform I would propose is based on all elected representatives subscribing to honesty, integrity, transparency and, more importantly, accountability for their action or inaction. If any elected representative in such a party fails to deliver what they say they will deliver, they would need to agree in advance to be removed from office before their term is finished.

All such elected representatives would need to agree to adhere to the laws which they pass — that such laws also apply to them, with no health plans for themselves or their families that are different than what they pass into law for everyone else. The idea would be to bring fairness, honor and dignity back to their offices and to the people they serve.

Too many of our elected officials have forgotten who sent them to Washington, who they work for and why they are there. The Democratic and Republican parties have been hijacked by extremists. The electoral system does not function as it was intended. That is why it is time for radical reform, and the American people should demand it from their government and parties.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post It’s Time to Change America’s Electoral System appeared first on Fair Observer.

The US presidential election is certainly no exception. At least part of the reason that matters to Washington is because, for the first time since America became a global superpower, it now has a proper peer. The former Soviet Union may have been a military peer, but it was not a peer on any other level. That is not true with China, which now rivals the US in some arenas or is on its way to doing so. In some aspects of science, technology, the global economy, diplomacy and political influence, Beijing is already more consequential to much of the rest of the world than America is.

360˚ Context: The 2020 US Election Explained

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Given its single-minded focus on creating an alternative world order crafted in Beijing’s image, as well as the tremendous resources it is devoting to that task, there is little reason to believe that China’s trajectory will change in the coming decade and beyond. One could argue, in fact, that the outcome of the election matters almost as much to Beijing as it does to America, for it will define the type and scope of headwind Beijing faces for at least the next four years.

A second Trump term of course implies more of the same: trade war, challenging Beijing at every opportunity, the war of words, and not giving an inch on anything. But it also implies four more years of discord and disarray between America and its many allies. Both America and China have paid a serious price for having Donald Trump in the White House, but Beijing has certainly benefitted while Washington has suffered from the fractious nature of America’s relationship with its allies.

Under a Biden presidency, that is likely to be greatly reduced, which should concern Beijing a lot, for it has enabled the Communist Party of China (CPP) to act with virtual impunity on the global stage while America and its allies passively look on. That is what has enabled Beijing to expropriate and militarize the Spratly and Paracel Islands, bulldoze its way into more than 70 countries without opposition via the Belt and Road Initiative, and significantly increase its influence in the world’s multilateral organizations, among other things. That damage has already been done and, in truth, there is relatively little Joe Biden or any subsequent US administration may be able to do about it.

What Biden can do in response is repair those alliances and lead an effort to coordinate and unify the West’s future responses to Beijing’s actions. It is by acting in unison that the West will not only get Beijing’s attention, but begin to reverse the tide. Beijing has few real allies, and some of its “allies” have dual allegiances between Beijing and Washington. When push comes to shove in a time of crisis, Saudi Arabia, for example, is not likely to pivot in Beijing’s direction, despite China’s growing economic ties with the kingdom. The same is true with a variety of other allies that China believes are in its camp but which Washington has cultivated over the decades. Beijing is a new arrival to the party.

So, what is at stake for Beijing is an unfortunate choice: endure four more years of Trump’s tirades or (at least) four years of a US administration that values America’s alliances and intends to reinvigorate them. Biden is not likely to try to reverse the course Trump has embarked upon with Beijing. That ship has sailed. US Congress is on board with Trump’s contention that Xi Jinping and the CCP are bad actors and that the Chinese government is America’s greatest adversary. Biden’s foreign policy is unlikely to be substantively differently oriented.

In that regard, while this is undoubtedly the most important election of most Americans’ lifetimes, it is also crucially important for Beijing. The gloves are off on both sides and they are not going to be put back on. The question is, does Beijing prefer Trump or Biden? While the answer is probably neither, knowing that bilateral relations are not going to revert to where they were under Barack Obama, Beijing may actually prefer Trump over Biden in the hope that the damage done to America’s alliances may become permanent. In the meantime, the CCP will continue to use Trump to whip up nationalism at home, which of course suits its ultimate objective of strengthening Xi’s and the CCP’s grip on power.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post Does Beijing Prefer Biden or Trump? appeared first on Fair Observer.

Beijing Wants to Rewrite the Global Rulebook

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The unsexily named Digital Currency/Electronic Payments (DCEP) is intended to be used by anyone around the world to purchase anything. It has the potential to revolutionize the global payments system. Assuming it succeeds, many other countries will want to emulate it. Some other governments have already launched similar initiatives, but not on the scope or scale of the DCEP, which promises to be the first global digital currency.

Digital Wallets

What appears to have spurred the Chinese government to actively pursue the DCEP in 2019 was the birth of an organization that also has the potential to revolutionize the global payments system, the Libra Association. Libra is a grouping of more than two dozen organizations creating the world’s first Blockchain-derived global payment system, specifically founded on best practices in regulation and governance. Its stated objective is to transparently bring access to financial services to billions of people who either have limited or no access to the existing global banking system.

Given that it is an American-led initiative that will use the US dollar to determine its benchmark value, Beijing viewed Libra as an attempt to establish US dominance over the global cryptocurrency marketplace. It previously viewed other cryptocurrencies as a threat to its own hegemony over capital controls in China.

Although its motivations to counter the US are clear enough, much remains unknown about the DCEP. One has to wonder just how much focus it will have on transparency, governance or best practices. It will not be available on cryptocurrency exchanges, nor will it be available for speculative purposes. Embracing Blockchain and creating a DCEP ecosystem will give the Chinese Central Bank unprecedented power over capital movements — certainly in China, but also around the world.

Like Alipay and WeChat, the DCEP will require a digital wallet, but it will not require a bank account. Commercial banks will issue the digital wallets, but no internet connection will be required to conduct transactions via the DCEP. All that will be required is that a phone has battery power. While a certain degree of anonymity will be present with the DCEP, the Chinese Central Bank will still be able to track who spent or received funds, when, where and from whom. The Chinese government calls the concept “controllable anonymity” and will rely on Big Data to identify behavioral characteristics of the individuals and businesses using DCEP. Doing so will help the government identify money laundering, tax evasion and terrorist financing. It will, of course, also permit a higher degree and quality of state surveillance of Chinese citizens and citizens of any other country that may use it.

Since the Chinese government will be the first to launch a global digital currency, it will gain a considerable lead over the world’s nations and provide it with the ability to perfect its surveillance capabilities in China and around the world for any country that chooses to adopt the DCEP. It will also help to internationalize the yuan and simultaneously create less dependence on the US dollar. So, the Chinese government intends to stay a step ahead of the competition, enhance its ability to monitor its citizens, broaden its soft power and increase China’s appeal to other countries while countering the supremacy of the US dollar in the process.

Alternative System

By issuing the DCEP, the Chinese government hopes that demand for yuan reserves will follow, facilitating a digital version of the yuan as a global alternative to dollar reserves, especially in Belt and Road Initiative (BRI) member nations seeking to modernize their financial sectors. It could also help internationalize China’s e-payment systems, which are not used outside of China. In the absence of an American cryptocurrency, which seems to be a long way off, doing so could in theory make the DCEP the cryptocurrency of choice among BRI (and other) countries.

Such an alternative system may be particularly appealing for countries under US sanctions, which may wish to avoid using the US dollar entirely, or for countries or businesses engaged in trading, investment or lending with Chinese companies. But the yuan remains not fully convertible, with just 1% of international payments using it. That could have a significant impact on the government’s implementation strategy. In addition, the Chinese government is attempting to centralize what is a decentralized technology by requiring that all “nodes” using the Blockchain register with the government and provide information about their users.

While the Chinese people are accustomed to having their government pry into, and try to control, their private lives, most of the world’s population wants nothing of the sort. It remains to be seen just how broadly the DCEP will be adopted, or whether it will turn out to be a net positive for the nations that choose to use it, but having the first-mover advantage will surely serve Beijing well. Despite its apparent flaws, if it also helps to bring some of the world’s poorest nations with the least access to basic and global financial services on par with the world’s developed nations in that regard, Beijing will have done much of the world’s population a great service in the process.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post Will China’s Digital Currency Revolutionize Global Payments? appeared first on Fair Observer.

Interestingly, however, the American Enterprise Institute’s China Global Investment tracker recorded $420 billion worth of investment and construction in BRI countries versus $655 billion in other countries between 2013 and 2018. So China actually invested more in countries outside the BRI during the period, given that Chinese investment in developed countries tends to have larger market values, particularly for mergers and acquisitions.

Additional Pain

Based on other measures, however, Chinese investment in BRI nations was much larger as a percentage of its total investment for the period. For example, greenfield investment represented almost half of all investment in BRI countries, but only 13% in other markets. Chinese firms were awarded $268 billion worth of construction contracts in BRI countries versus $166 billion elsewhere. Greenfield investment and construction in BRI countries amounted to $340 billion versus $230 billion in non-BRI countries.

The subsidies that Beijing contributes to its state-owned enterprises implies that many of the BRI projects actually cost it far more than the face value of the construction and investment, meaning that loan defaults — a common occurrence — add that much more additional pain to Beijing’s coffers.

The BRI: Keeping the Plates Spinning on China’s Economy

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Asia attracted the majority of BRI-related investment and construction contracts between 2013 and 2018, receiving just over half of such activity, with Southeast Asia taking 46% of that amount. Africa received 23%, followed by the Middle East at 13%. Overall, approximately 38% of total investments and construction contracts were targeted at the energy sector in host nations, with 27% ending up in transport and 10% in real estate.

The largest BRI project as of 2018 was the China-Pakistan Economic Corridor, which links Kashgar in China’s Xinjiang province with the port of Gwadar in Pakistan. Investments and construction contracts worth nearly $40 billion had been devoted to the project, with total spending likely to reach in excess of $60 billion by the time it is finished, equivalent to about 20% of Pakistan’s nominal GDP. The country endured a large increase in imports of materials and capital as a result, which aggravated its trade imbalance. By 2018, its current account deficit had expanded to more than 6% of GDP from less than 2% in 2016.

Expensive Membership

While Pakistan’s economic challenges were not and are not entirely attributable to the BRI, the strains added to it by the BRI became highly problematic. That turned out to be a common byproduct of the initiative among the countries receiving the largest amounts of investment. Large debts in countries with limited financial resources and means of generating revenue often undermine governments’ ability to successfully manage their economies. Rather than benefiting from the infrastructure investments made by China, they sometimes end up perpetually treading water.

Rising debt service often increases a country’s borrowing costs, can raise doubt about its solvency, contribute to a depreciating currency and increase the local currency value of the external debt burden. Consequently, the macroeconomic fallout of being a recipient member of the BRI “club” can be severe, particularly for the smallest and poorest countries.

A 2018 study from the Center for Global Development has noted, for example, that in the case of Djibouti, home to China’s only overseas military base, public external debt had increased from 50% to 85% of GDP in just two years — the highest of any low-income country. Much of that debt consists of government-guaranteed public enterprise debt owed to China’s Export-Import Bank (EXIM).

In Laos, the $6-billion cost of the China-Laos railway represents almost half the country’s GDP. Debt to China, Tajikistan’s single largest creditor, accounted for almost 80% of the total increase in Tajikistan’s external debt between 2007 and 2016 period. And in Kyrgyzstan, China EXIM is the largest single creditor, with loans of $1.5 billion, or about 40% of the country’s total external debt.

It certainly does not appear that Beijing put sufficient effort into contemplating the likely economic impact of the BRI prior to commencing it, either upon host nations or upon itself, for all concerned have borne the consequences of excessive and imprudent lending. Could it be that that Communist Party of China did not care, and that all that mattered was rolling the Initiative out as quickly as possible once it decided to do so?

It is truly surprising that Beijing did not do a better job of envisioning the multiplicity of potential outcomes. That is undoubtedly the overriding reason why the Chinese government decided to pivot in 2018 and adopt a seemingly more rational, moderate and achievable approach to unleashing the remainder of the BRI upon the world. It now realizes that its reputation and legacy are at stake, never mind the hardship it has placed on scores of developing countries around the world in the process.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post The Unintended Economic Impacts of China’s Belt and Road Initiative appeared first on Fair Observer.

But it has, at the same time, hidden structural weaknesses and vulnerabilities in the economy that may otherwise have changed the thinking of many Belt and Road Initiative (BRI) host governments about the wisdom of wanting to emulate the Chinese model of development.

With the BRI, China Still Has a Long Road Ahead

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Over the past decade, some Chinese scholars and government officials have generated a consensus about the nine traditional industries in China most severely exposed to excess capacity: steel, cement, aluminum, coal, shipbuilding, solar energy, wind energy, petrochemicals and plate glass. All are related to energy, infrastructure construction and real estate development, reflecting the nature of the heavily investment-driven Chinese economy. This led to a significant decline in rates of return throughout the Chinese economy.

Throughout the 1980s and the first half of the 1990s, the capital return rate of the Chinese economy had been relatively stable, but since the mid-1990s, capital returns experienced variability, with the rate dropping since the onset of the Great Recession in 2008. China only survived the crisis by implementing a $586-billion stimulus package mostly directed toward local government borrowing to finance infrastructure projects. By the early 2010s, those stimulus funds had been spent, and many local governments were virtually bankrupt. Overcapacity exceeded 30% in the iron, steel, glass, cement, aluminum and power-generation industries.

Many state-owned enterprises (SOEs) faced a severe profitability crisis, with returns on domestic infrastructure moving into the negative. At the same time, Chinese banks faced their own over-accumulation crisis, with dwindling domestic lending prospects. Capital flight was in full swing, and by 2015, the outflow had become so large that China’s central bank was forced to spend more than $1 trillion of its foreign exchange reserves to defend the yuan.

The government became increasingly concerned as stresses on the economy grew. Domestic construction came under pressure, the number of unused buildings and underutilized factories was apparent for all to see, and there was a risk that the excess capacity in the nine traditional industries would trigger widespread defaults. Labor unrest and activism soared as salaries plummeted, and strikes became more common. That was when the government decided to pivot, and the BRI was born.

Rather than being the result of the supreme strength on the part of the Chinese economy, the BRI was actually created out of profound weakness that China’s official economic statistics not only did not reveal, but tried to hide. The BRI is the Chinese government’s attempt to keep the plates spinning while addressing the country’s overcapacity, declining trade opportunities, rising debt and falling rates of profit by expanding China’s economic activity abroad. That accounts for why so many BRI projects require the use of Chinese enterprises and workers, are financed by loans that host countries must repay, and result in direct Chinese ownership of strategic infrastructure.

While the BRI succeeded in propelling the Chinese economy forward for a time, it cannot delay the inevitable day of reckoning. Many of the initiative’s projects are not financially viable, and the Chinese government continues to subsidize loss-making SOEs. The amount of Chinese investment associated with the BRI may also be inflated and therefore misleading. Only a fraction is affiliated with infrastructure projects, and most of them are financed with concessional loans from Chinese policy banks. Given that these must (at least in theory) be repaid, it will remain an open question just how much economic benefit may have been achieved, either in China or the host nations of the BRI.

As a result of the trade war between China and the US and the fallout from COVID-19, it turned out that the CCP could not, in fact, keep the plates spinning, even with the BRI. Chinese GDP growth rates had already been steadily declining since 2017 to reach 6% at the end of 2019. By the first quarter of 2020, it had swung negative for the first time in generations, with widespread domestic and international impacts. Many BRI projects were temporarily suspended. When combined with the plethora of other challenges the BRI had come to experience, the initiative’s host governments have become even more skeptical about Beijing’s objectives and promises. For many of them, China’s ambitious push has resulted in a wide range of problems, not least of which is tens of billions of dollars of debt that cannot be repaid.

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

The post The BRI: Keeping the Plates Spinning on China’s Economy appeared first on Fair Observer.

Beijing’s BRI Hubris Comes at a Price

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President Xi Jinping and the Communist Party of China (CCP) have put some good-looking window dressing on the basic package, but so far, many BRI host country governments would say not all that much has changed since 2018, when Xi announced a pivot. Beijing is very good at saying one thing and doing another, as numerous governments around the world have learned. As a result, BRI host nations will inevitably believe that Beijing has had a real change of heart when they see it.

Deaf Ear

Part of Beijing’s problem is that it does not appear to be attuned to what the world is thinking. Perhaps it does not care. Reading Chinese media reports on the subject leaves one with the impression that the world is in unison and harmony with Beijing, its vision for the world and its performance thus far with the BRI. For example, according to  the CCP’s primary media outlet, the China Daily, a 2018 survey of 8,500 people in 17 BRI countries determined that “more than 70% agreed with the concepts of the “Chinese Dream,” the Belt and Road and “a community with a shared future for mankind.” But even this Chinese government-sponsored survey admitted that 64% of respondents believed that the BRI will confront many difficulties and challenges in the future.

That concern was echoed by a 2019 survey by Singapore’s ISEAS-Yusof Ishak Institute, which polled more than 1,000 respondents in the government sector, the business community, civil society, academia and the media from across all 10 member states of the Association of Southeast Asian Nations. It found that fewer than 10% of respondents viewed China as “a benign and benevolent power,” 64% had little or no confidence that Beijing’s revised approach to the BRI will result in a fairer deal for their respective countries, and nearly 50% responded that they believed that Beijing possessed an intent to turn Southeast Asia into its own sphere of influence. That does not sound like a particularly inspiring foundation from which to try to turn things around.

Beijing knows it has a long road ahead. To its credit, it has issued regulations intended to better monitor the conduct of state-owned enterprises and private Chinese businesses, mandating that they should pay more attention to environmental, social, integrity, financial and other risk factors. If a particular host nation’s laws are weak, these entities have been advised to ensure compliance with Chinese law, international treaties and conventions, and industry best practices. Reporting requirements, capital controls, and the regulation of overseas finance and investment have been tightened, which has contributed to the notable decline in new Chinese overseas loans and investments since 2017.

Outside the Norm

That said, Beijing has generally been reluctant to apply its laws to the activities of its entities overseas. In fact, State Council guidance requiring extensive disclosure of contracts for major construction projects expressly exempts overseas investment and foreign aid projects. Laws criminalizing the bribery of foreign officials have never been enforced. Although Chinese courts have heard cases related specifically to the BRI, unless a project contract contains explicit obligations for which performance is sought, enforcement of Chinese laws for overseas actions almost never occurs. Beijing appears to be banking on the fact that a great many of the BRI’s host governments have worse transparency and corruption ratings than China, which presumably makes their willingness to pursue Chinese entities engaged in corruption less likely in the first place.

As long as Beijing continues to insist that only Chinese entities will provide financing for BRI projects, there is no way for external organizations to monitor transparency, corruption or adherence to international standards. That will, by itself, ensure that tension remains between Beijing, BRI host nations and the West, and signals to the world that Beijing is not in fact serious about reforming fundamental aspects of the initiative. Greater emphasis can be placed on taking some care not to blatantly violate national laws and international norms, allowing Beijing to proclaim that progress is being made, but that will continue to be on a relative scale.

If practices were previously wholly outside the norm of internationally acceptable behavior but they are improved, they can remain outside the norm of acceptable behavior even though they have improved. More than minor tweaks are required to demonstrate that a true pivot has occurred. Beijing certainly has the ability to implement meaningful wholesale change to the BRI if it chooses to, but it has yet to do so. Based on its prior history of performance regarding its flagship initiative, such changes stand little chance of being implemented.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post With the BRI, China Still Has a Long Road Ahead appeared first on Fair Observer.

Is China’s Belt and Road Initiative Strategic Genius, Arrogant Overreach or Something Else?

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For all concerned, the BRI has in many ways been a leap in the dark, since such an ambitious undertaking had never before been attempted. The Chinese government, and many of the nation’s companies active in the initiative, were, and remain, on a learning curve. The enforceability of Chinese regulations on private sector Chinese companies operating overseas can be inconsistent, and Chinese-built infrastructure has, at times, been found to be substandard. Regulations governing the practices of Chinese firms are frequently revised, leaving many organizations scrambling to keep up in the public and private sectors. It then takes a while for new guidelines to translate into practice abroad.

BRI Financing

BRI financing is highly dependent on loans from the China Development Bank, China Export-Import Bank and other state-owned commercial banks. China’s foreign exchange reserves are important sources of capital for these institutions. Although Beijing maintains the world’s largest aggregation of foreign currency, its foreign reserves have declined in recent years, which, when combined with its dramatically slowing economy, raises questions about the sustainability of BRI financing in the medium term.

Under the presumption that foreign capital and support from multilateral financial institutions will be required to sustain BRI projects in the future, China’s Ministry of Finance established the Multilateral Cooperation Center for Development Financing with eight multilateral development banks and financial institutions. The center is expected to enhance the project financing process through a combination of better information sharing, improved project preparation and capacity building. The ministry has also developed the Debt Sustainability Framework for Participating Countries (DSF) of the BRI, collaborating with its counterparts from 28 partner countries. China’s DSF is virtually identical to the World Bank-International Monetary Fund DSF, which governs lending operations for the multilateral institutions and many bilateral lenders. That should increase its prospects for success.

China’s effort is a significant step forward in guarding against the debt challenges associated with the BRI. Debt sustainability can only grow in importance for Beijing. As the BRI progresses, China will have no choice but to take steps to improve reporting transparency vis-à-vis financing, transaction structures and debt repayment. As for host governments that have become saddled with tens of billions of dollars of debt as a result of debt-trap diplomacy, their concerns have been widely shared with Beijing. Many of these nations have already become more discriminating BRI consumers. Although the trail of debt-related issues will certainly not diminish going forward, they will hopefully become less severe in time.

The Chinese government has sought to integrate the BRI with its green growth agenda in an attempt to address criticism of its continued reliance on coal power and the lack of environmental oversight on Chinese infrastructure projects. Although Beijing has made great strides toward improving environmental and resource productivity, greater efficiency gains are vital to achieving a shift toward low-carbon, resource-efficient, competitive economies. Future progress will largely depend on the country’s capacity to integrate environmental aspects into the decision-making process for all its domestic and foreign policies to ensure that industrial and environmental policy objectives and measures are well aligned and mutually supportive.

Reputational Risk

At ongoing risk also is China’s reputation. The blowback it has experienced as a result of its rollout of the BRI from countries around the world has been unprecedented. The same may be said about its trade practices with the US and its response to COVID-19. Many of the world’s governments and people have simply lost confidence in Beijing, to the extent that they had confidence to begin with. The ball is squarely in Beijing’s court to raise the level of confidence the world may have in the future regarding what it says versus what it actually does. There is no better proving ground on that score than the BRI.

A combination of hubris, a bulldozer approach to getting things done and a complete lack of sensitivity had worked well for the Communist Party of China at home for 70 years, and Beijing apparently believed that doing the same would work well overseas. While some aspects of Beijing’s original approach ended up yielding some positive results, President Xi Jinping’s move toward “BRI lite” in 2018 had to be taken with a grain of salt. He deserves credit for acknowledging some of the initiative’s pitfalls, but the Chinese government’s pivot must ultimately be considered too little and too late.

If it wanted to more fully acknowledge the error of its ways, it would have offered to renegotiate every BRI contract that was clearly skewed in its favor rather than waiting to be asked to do so, award debt forgiveness on a broader basis and stop in its tracks any project under construction that is inconsistent with best environmental practices. That is clearly not going to happen.

*[Daniel Wagner is the author of “The Chinese Vortex: The Belt and Road Initiative and its Impact on the World.”]

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

The post Beijing’s BRI Hubris Comes at a Price appeared first on Fair Observer.

Beijing Wants to Rewrite the Global Rulebook

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For years, the Chinese government has argued that its “nine-dash line” of sovereignty over the entire sea is based on centuries of maritime history and that China’s claim is airtight. The Chinese Foreign Ministry has even asserted that ample historical documents and literature demonstrate that China was “the first country to discover, name, develop and exercise continuous and effective jurisdiction over the South China Sea islands.”

The truth is somewhat different, however. As veteran journalist Bill Hayton notes in the book, “The South China Sea,” the first Chinese official ever to set foot on one of the Spratly Islands was a nationalist naval officer in 1946, the year after Japan’s defeat in World War II and its own loss of control of the sea. He did so from an American ship crewed by Chinese sailors who were trained in Miami.

Nine-Dash Line

As for the story of the nine-dash line, it began a decade earlier through a Chinese government naming commission. China was not even the first to name the islands; the naming commission borrowed and translated wholesale from British charts and pilots. It is unclear how the Chinese government transformed all of this into a bill of goods it has sold to the Chinese people, but by now it is a source of national pride, however misplaced it may be.

Yet the Chinese government and its people have backed themselves into a corner. In 2016, an international tribunal in The Hague ruled that there is no legal basis for China’s claim over the islands. Meanwhile, Beijing has failed to produce evidence of its declaration to back up its version of the facts. Despite this, the Chinese have been drinking the nine-dash line Kool-Aid for so long that national pride will not allow them to admit that what the government is doing in the South China Sea is illegal under international maritime law — the UN Convention on the Law of the Seas. Ironically, China subscribed to the convention on the very day in 1982 when it first became a legal instrument.

The Chinese government has not personified the rule of law in this case — or in others related to maritime borders — and wants to be able to cherry-pick which provisions of international treaties it will comply with. That is behavior unbecoming of a rising global power and will make states which are signatories to treaties with China wonder if its signature is worth the paper it is printed on. This cannot be in China’s long-term interest.

The Chinese government views America’s recent naval exercises in the South China Sea as illegal and merely serving to aggravate tensions between the two countries. Washington has maintained for many years that China has no legal basis upon which to continue to assert its maritime claim over the islands, shoals or reefs of the South China Sea. The nations of Asia, and the rest of the world, agree with the US position. The question is: Will the world’s nations join America in publicly and consistently opposing Beijing’s continued illegal actions in the region?

Who Will Speak Up?

That seems unlikely. Given Beijing’s recent propensity to practice wolf diplomacy by swiftly and harshly responding to any criticism of its actions, most Asian countries are likely to remain silent. Australia, Japan and South Korea are possible exceptions to that from a military perspective, but given that they have been content to cede that role to America, not much is likely to change in the near future. Australia is already reeling from a healthy dose of wolf diplomacy, which has negatively impacted its bilateral trade with China.

Beijing has become accustomed to doing whatever it wants, with little consequence. The US, the countries of Asia and much of the rest of the world remained largely silent when Beijing was expropriating and militarizing the Spratly and Paracel Islands. That was a grave error. Now, most governments see little point in objecting to what is, in essence, a fait accompli. Now, short of going to war, China’s militarization of the South China Sea is a reality the world is simply going to have to live with.

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

The post China Is Flexing Its Muscles in the South China Sea appeared first on Fair Observer.

Countries the world over have gotten so many basic elements of the battle against the virus right. Why not America? The unfortunate politicization of COVID-19, the failure to implement mandatory and consistent rules nationwide, the absence of rule enforcement, selfishness, laziness and a culture of silence are all combining to doom us to the consequences of our shared failure. Our collective apathy, complacency and idiocy are killing us.

Should We All Have Been Wearing Masks From the Start?

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Not long ago I was in Whole Foods, in the produce section where foods are not packaged, and a perfectly healthy-looking woman in her 30s was the only one not wearing a mask. No one said a thing until I approached her and said she needed to wear a mask and that it had been the law in Connecticut since April. I was told to mind my own business. It is my business, of course, and everyone else’s business in that store, yet no one said or did a thing as she continued to breathe all over the produce. I even went to store management and said something. They had to let her in because she said she had an underlying medical condition that prevented her from wearing a mask. It just so happens that the law in Connecticut allows for that exception, but no doctor’s note is required.

There are plenty of reasons why America continues to lead the world in COVID-19 infections and deaths, but our own stupidity and selfishness have not been talked about much in the media. Every time we see someone not wearing a mask, or wearing it over one’s mouth but not the nose, or under the chin, we should be going up to that person and saying something. Every time. Our culture of silence is raging every bit as much as the virus in this country.

So is local, state and national authorities’ failure to make mask-wearing and social distancing mandatory in all public places throughout the country, backed up by enforcement, which is a critical ingredient that is missing. Many governments across the world have backed their policies with strict enforcement measures and fines. That is why countries such as China and South Korea have been able to successfully battle the virus, and why Morocco, which just started doing the same, now has a reasonable chance of beating down infection rates.

America is capable of doing all this, but the politicization of the virus and silly interpretations of what freedom of action means under the US Constitution have prevented us from following their example. Yes, you are free to take your own health and life into your own hands by being stupid and selfish, but you are not free to do the same with someone else’s health and life. And that is what the “Live Free or Die” movement and conspiracy theory believers among us fail to acknowledge.

Every one of us needs to remind ourselves that other peoples’ actions impact us, and start to act accordingly. Say something when you see someone not wearing a mask in public, or failing to wear it properly. If everyone did so, those who are failing to do so would stop. The majority of us who are now wearing masks and social distancing have the power, but our own complacency is preventing us from taking control of inconsiderate fellow citizens. We have a responsibility to ourselves and everyone else to say something. We should also be putting pressure on lawmakers to crack down on violators and enforce mandates.

Until America gets smarter about how to battle the coronavirus, we will continue to lead the world in infections and death, and we will deserve it. We have only ourselves to blame for being so dumb and failing to take corrective action. America has the resources to get COVID-19 under control, especially if we start treating this as a war and start acting like our collective survival depends on it — because it does.

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

The post The Price of America’s Complacency in the Face of COVID-19 Is Survival appeared first on Fair Observer.

For a sense of perspective, the fastest existing record for developing a vaccine occurred for mumps. The mumps virus was first isolated in 1945; by 1948, an inactivated vaccine had been developed, but with short-term effectiveness. It was not until 1967 that a long-term vaccine became available. The average amount of time required to discover, test and approve a vaccine is 10 to 20 years. Given this, why would anyone presume that a COVID-19 vaccine will not only be discovered, but tested, approved and mass-produced in billions of doses in the next year? That is not going to happen. Currently, levels of mass production of vaccines occur in millions of doses, not billions. The world’s drug manufacturers are not even capable of doing that.

There are presently 274 treatments — including 171 novel vaccines — being tested across the world to combat the coronavirus. Unfortunately, that may not improve the likelihood of success in a short time frame. Given the durability of the first wave of the virus and an impending second wave, achieving herd immunity may be the only realistic solution. The objective of herd immunity is to limit the ability of an infection to spread by making the majority of a population immune through exposure to it. In so doing, individuals with mild cases of an infectious disease mount an immune response that protects them from future infections by the same or related agents.

Epidemiology protocols require significant testing of a virus in a population to determine levels of reproduction accurately. In March of this year, scientists from Leicester University and the Chinese University of Hong Kong calculated that 70% of the population would need to be infected to achieve herd immunity against COVID-19. Implementing quarantines, practicing social distancing and regularly changing face masks alters the basic reproduction number by limiting transmission events, which can reduce the threshold for herd immunity.

The fact that some US states that were saturated with COVID-19 cases early on in the pandemic successfully flattened their curves for intensive care occupancy, and deaths implied that herd immunity may already have been in the process of becoming established. But America’s subsequent collective failure to institute widespread testing and contact tracing — as has been done in numerous other countries — has meant that its ability to more accurately determine true levels of infection remain extremely limited. Given current infection levels, contract tracing is now impossible.

The existence of multiple strains of COVID-19 in circulation further complicates America’s and the world’s ability to achieve herd immunity. The S strain is rapidly spreading, but with milder symptoms than the more widely spread G strain that has savaged Europe and the US. Whether productive immunity can be achieved in individuals exposed to milder strains, and whether immunity to any strain of the virus is permanent or temporary, are among the questions that remain to be answered.

The truth is, much remains unknown about this virus and will probably remain unknown for many months or even years to come. What is clear, however, is that six months after it began to spread around the world in earnest, this virus is out of control, in the US and globally. It is now completely unrealistic to imagine that America or the world will be able to successfully contain its spread, short of a total lockdown of the global economy, termination of all global travel, mandatory global stay-at-home orders and 100% compliance with wearing face masks and sterilizing hands multiple times per day. Even if that were possible, doing so would take many more months. That is obviously not going to happen.

So we are left with herd immunity and viable treatments as the world’s only realistic near-term solution. Sweden has been roundly criticized and shunned by its neighbors for embracing herd immunity at the outset of the pandemic. It has paid a price for having done so based on accelerated infection and death rates. But while the jury will remain out for some time to come about the wisdom of having done so, Sweden may prove to have been ahead of the curve in its approach. Herd immunity is an option that should be seriously considered by the world’s governments for a safe and effective vaccine could be many years away — and may not be achieved at all.

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

The post Herd Immunity May Be Our Best Hope appeared first on Fair Observer.

Consider, for example, China’s self-proclaimed leadership in the ongoing global climate change discussions. As the world’s largest polluter and consumer of coal to fuel its power plants, for many years China was a passive participant in these discussions. The US withdrawal from the Paris Climate Agreement provided an opening for Beijing to assume a more robust position in the talks. But it decided to step up to the plate while it remains the world’s biggest carbon emitter as its carbon emission levels continue to rise, and as it continues to export dirty power technology to much of the rest of the world via the Belt and Road Initiative.

The Chinese government wants to become the leading voice for developing countries on the subject of climate change and carbon emissions while promoting the concept of a dual set of standards for developed and developing countries — more stringent for the former and less so for the latter. So, which is China, a developed or a developing nation? Depending on the subject, Beijing would have the world’s nations believe that it is both.

The Chinese government is a virtuoso at getting away with whatever it can by virtue of the country’s size and importance. For decades, Beijing has gotten away with things that most nations would never even have attempted, such as its mass theft of intellectual property, brazen repeated cyber intrusions and cherry-picking which parts of its international treaties it actually adheres to. As Washington slept, Beijing expropriated the Spratly and Paracel Islands and stole critical military technology that enabled China to become a leading military power.

To Out-Think Beijing, Washington Will Need to Adopt Visionary Planning

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The Chinese government is in the process of superimposing its unique world view on the rest of the world. That vision is about more than mere competition on the global stage. It is about eviscerating Western-crafted norms in pursuit of its long-term objective of becoming the world’s leading economic, political, technological and military power. While Western nations are busy tripping over themselves regarding protocol, diplomacy and human rights, Beijing is busy bulldozing the landscape. The Chinese government has expertly identified the flaws and frailties of the Western model of politics and diplomacy to craft its own version based on its own values, rules and norms.

One could argue that China is really no different than any other leading nation in that it determines what matters, what its preferred rules of engagement are and who it prefers its allies to be. But Beijing sees how far it can go to realize its own ambitions in its own way. What makes China different is that it appears to know no boundaries in its quest for supremacy.

Beijing has become masterful at pushing right up to the boundary of internationally acceptable behavior, then crossing over the line, retreating and doing the same again until it establishes a new normal for what is deemed to be acceptable. It appears that Beijing is incapable of speaking the vernacular of international diplomacy in a manner commensurate with established international law and the expectations the global community has of responsible leading nations.

It is important that the world has its eyes wide open about what the Chinese government is, and is not. Beijing needs to be held responsible and taken to task whenever it recklessly breaches international standards, laws and norms of behavior. If the world fails to keep it in check, the Chinese government can only be expected to continue to do the same, while methodically implementing its own set of rules that it expects the world to abide by. It is incumbent on the rest of the world to ensure that Beijing’s vision does not become the de facto standard by which world order and new normal continues to evolve.

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

The post Beijing Wants to Rewrite the Global Rulebook appeared first on Fair Observer.

In 2004, the World Health Organization (WHO) determined that an outbreak of SARS had been caused by two separate leaks at the Chinese Institute of Virology in Beijing. The Chinese government said at the time that the leaks were a result of negligence. It is a remarkable coincidence that the Wuhan Institute of Virology was researching Ebola and SARS-associated coronaviruses in bats before the latest coronavirus outbreak, and when Wuhan doctors were treating the first patients of COVID-19 in November 2019, the institute had announced in a hiring notice that a large number of new bat viruses had been discovered and identified.

In November and December 2019, the Wuhan Institute for Virology posted job openings for scientists to research the relationship between the coronavirus and bats. A scientific paper published by the South China University of Technology in February 2020 stated that “the coronavirus probably originated from a laboratory in Wuhan” and that safety levels needed to be reinforced in high-risk biohazardous laboratories in China.

Speculation

There was much speculation at the outset about whether there was an animal link or whether the virus had been crafted and then escaped from China’s only biosafety level 4 lab (BSL-4), the Wuhan National Biosafety Laboratory, located very near the epicenter of the original outbreak. While maintaining that the source of the virus could not be determined, the Chinese government had since the beginning of the outbreak crafted a narrative that the virus had originated at the Wuhan seafood market.

However, the first documented cases of the virus had no direct link to the market. A February 2020 study in The Lancet showed that about a third of the first 41 confirmed infected patients had no direct exposure to the animal market. Among them was the first known patient, whose symptoms reportedly began appearing December 1.

The notion that it was a secretly developed biological weapon was quickly debunked. The New England Journal of Medicine noted at the time that the virus’s ribonucleic acid sequences closely resembled those of viruses that exist in bats and that “epidemiologic information implicates a bat-origin virus infecting unidentified animal species sold in China’s live-animal markets.” The Washington Post similarly reported that US intelligence found no evidence that the novel coronavirus was created in a laboratory as a potential bioweapon, and that scientific research demonstrated that the virus originated in bats.

However, based on scientific evidence, it is worth noting that Chinese government researchers had previously isolated more than 2,000 new viruses, including deadly bat coronaviruses, at the BSL-4 laboratory. A Chinese video, “Youth in the Wild — Invisible Defender,” records researchers engaged in the casual handling of bats containing deadly viruses. The film boasts that China had taken the lead in global virus research since the outbreak of the bat-originating virus that caused SARS.

In the months prior to the COVID-19 outbreak, several Chinese state media outlets had praised the virus research being done in Wuhan by Tian Junhua, a leader in bat virus research. Tian worked for the Office of Decontamination and Biological Disease Vector Prevention and Control within the Wuhan Center for Disease Control (CDC). He had gathered thousands of bats for research work on bat viruses since 2012. It was widely believed in 2002 that the SARS virus had jumped from a bat to an intermediate host that infected a person at a food market in China. But two studies since then since — from Nature magazine in 2013 and the National Institutes of Health in 2017 — strongly suggested that SARS may have transitioned directly from a bat to a human.

Obfuscation

Speaking to Bill Gertz of The Washington Times in March, Richard Ebright, a professor at the Waksman Institute of Microbiology at Rutgers University, noted that COVID-19 was 96.2% similar to a virus originating in bats that was first discovered by the Wuhan Institute of Virology in 2013 and analyzed at the Wuhan CDC. He believes that the virus could have jumped naturally from animal to human, but that it could also have escaped from a lab. Until the COVID-19 outbreak, all but two coronaviruses in China were studied at biosafety level-2 (BSL-2) facilities, with significantly lower levels of safeguards — not the high-security BSL-4 laboratory at the Wuhan Institute of Virology.

“Virus collection, culture, isolation or animal infection at BSL-2 laboratories with a virus having the transmission characteristics of the outbreak virus pose high risk of accidental infection of a lab worker, and from the lab worker to the public,” Ebright said. Horseshoe bats are believed to have been the source of the virus, but these bats are not native to the Wuhan area, nor were they sold at the Wuhan seafood market — but both the Wuhan Institute of Virology and that Wuhan Center for Disease Control and Prevention had conducted research on horseshoe bats.

All this lends credence to the theory that the SARS-CoV-2 virus that led to the COVID-19 pandemic may indeed have escaped from a laboratory in China, and that one of the many scientists experimenting with bat viruses in these laboratories became infected and was the initial source of the infection. The world may never learn the truth from the Chinese government, but this theory makes a good deal of sense, especially given the absence of horseshoe bats in the Wuhan area, the 2004 WHO revelation about the origin of SARS, the subsequent scientific research supporting bat-to-human transmission, all of the ongoing research occurring the BSL laboratories in China, and the Chinese government’s continuing obfuscation regarding accurate data related to this pandemic.

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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By 2000, China had already established a near-monopoly status on the manufacture of a whole range of products that the world rapidly consumes. Just a decade ago, 91% of all personal computers, 80% of all air conditioners, 74% of global solar cells, 71% of cell phones and 60% of all cement were being produced in China. The world was hooked on Chinese-made products, and the Chinese government had its way with foreign companies choosing to manufacture goods there, enforcing many draconian operating requirements in an environment that most companies would never have agreed to endure anywhere else.

Among them is the requirement that all foreign businesses must generate their own foreign exchange so that the Chinese Central Bank doesn’t need to deploy its mountain of foreign currency for foreign companies to utilize. As a result, in 2014, China has amassed an astronomical $4 trillion in foreign exchange reserves — more than 27 times that of the US at the time. In addition, managerial and technological knowledge has been stripped from many foreign companies, which have also been forced to install Chinese CEOs.

The Chinese government has continued to routinely implement increasingly restrictive operating procedures. That makes it difficult for foreign businesses to ever hope to achieve, much less retain, profitability, as does the government’s propensity to favor Chinese companies over foreign companies that produce similar products. The Chinese legal system is, in addition, riddled with corruption, crooked joint venture partners have become the norm, and retaining workers can be a real challenge.

China’s labor has not been cheap for a while now. Average hourly wages rose to $3.60 per hour in 2016, a 64% increase over 2011, and are now more on par with countries such as Portugal and South Africa. By 2016, China was already just 4% less expensive to operate in than the US. China’s increasing strident economic nationalism and protectionism have created a truly challenging operational environment. The Chinese government’s national security and cybersecurity laws have also resulted in the wholesale theft of American corporate intellectual property on a grand scale.

The Chinese government has brought the trade war upon itself and, unfortunately, also on the Chinese and American people, by raking the US over the coals for decades. America has itself to blame for enduring it for so long. Similarly, the government has earned the indignation of US companies by enforcing grossly unfair trade and investment practices for decades. American companies also have themselves to blame for enduring that for so long. The United States has made itself hostage to China because of the degree to which we have allowed ourselves to become so dependent on China for products ranging from electronics to machinery to medicine.

So why are so many American companies still there? The “potential” allure of the world’s largest middle-class population remains the biggest reason. But at what point will American companies say they have had enough? Will they ever reach a breaking point? Or will the fantasy that hundreds of millions of Chinese consumers will be lining up to purchase American products as the trade war rages on prevent them from realizing that their dream of ever becoming fantastically successful there is just that — a dream? Some companies have already arrived at that conclusion. Others are in the process of doing so. It is time to come home.

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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Messaging out of the White House has been an absolute disaster, starting with the president and trickling down to the various cabinet members, department heads and other official sources of information at the federal level. Delusion on the president’s part, misinformation — whether deliberate or otherwise — from other federal officials, a preoccupation with political correctness, and a predilection to pander to the president’s political base had combined to create a muddled, discombobulated mess in response to the coronavirus.

No Divine Guidance

It didn’t take long for many of America’s governors, mayors and corporate CEOs to realize that they would not be gaining any divine guidance from the Trump administration about what to do in response to the outbreak — or when to do it. While by March most of the nation’s governors had issued stay-at-home orders, an astonishing number have still failed to do so, three months after the first cases became apparent in the US. Yet in every case, those lockdown orders have been voluntary, since there is no way to actually enforce them. Unlike in China, the sanctity of governmental decrees is dependent upon citizens’ willingness to comply. Fortunately, most Americans understand what is at stake and have stayed at home.

As bad as the government’s messaging has been, its level of preparedness for a pandemic has been atrocious. Despite the fact that several prior administrations (from Bush to Obama and through to Trump) had plans in place to address a pandemic or bioterrorism event, based on its response to an actual pandemic, the American government appears to have never contemplated the issue prior to the arrival of COVID-19.

For example, in 2004, George W. Bush had signed into law Project BioShield, to protect Americans against biological, chemical, radiological or nuclear attacks. It had allocated $5.6 billion over 10 years for countermeasures against anthrax, smallpox and other chemical, biological, radiological and nuclear agents. Development of medical countermeasures had been accelerated by the National Institutes of Health (NIH), a national network of regional Centers of Excellence for Biodefense were established, and the Food and Drug Administration (FDA) was supposed to make treatments speedily available in emergency situations. Yet the NIH, the FDA, the Department of Homeland Security, the Department of Health and Human Services and a host of other government agencies failed to communicate, collaborate or respond effectively.

In 2015, government scientists estimated that a severe flu outbreak infecting 20% to 30% of the US population would require at least 1.7 billion N95 respirator masks. In 2006, Congress provided supplemental funds to add 104 million N95 masks and 52 million surgical masks in an effort to prepare for a flu pandemic. However, following the H1N1 influenza outbreak in 2009 under Barack Obama — which triggered a nationwide shortage of masks and caused a two to three-year backlog orders for the N95s — the stockpile distributed about three-quarters of its inventory but failed to rebuild the supply. The US continued to rely on imports of personal protective equipment for much of its needs, as well as an overreliance on overseas production of critical drugs.

Also in 2015, a Bipartisan Commission on Biodefense produced more than 30 recommendations for what the US government should do to become better prepared for biological threats. In 2016, the Commission received a grant of just $1.3 million from a non-governmental organization to continue its work and, in 2018, $2.5 million more from the same NGO. It did not receive official US government financial support, and the government failed to follow through on virtually any of the recommendations made by the commission, an indication of the continued lack of focus on the subject.

Collective Failure

Shortly after taking office in 2017, Trump disbanded the White House’s National Security Council Directorate for Global Health Security and Biodefense — an important link in the national preparedness chain. In 2018, the Trump administration did commence a National Biodefense Strategy designed to enhance national biodefense capabilities. It established a governance structure composed of federal agencies to collect and assess data on their biodefense activities and identify gaps. But the US Government Accountability Office found that there were no clear or detailed processes for joint decision-making, including how agencies would identify opportunities to leverage resources or who would make and enforce decisions.

It concluded that, in the absence of clearly documented methods for enterprise-wide decision-making, the effort ran the risk of failing to adopt a strategic approach that would meaningfully enhance national defense capabilities.

Contrary to the attempted launch of the strategy, the Trump administration’s repeated calls to cut the budgets for the Centers for Disease Control and Prevention, the NIH and other public health agencies made it evident that the ability to respond to pandemics was clearly not going to be a priority. The administration certainly contributed to the deficient American response to the virus, but, in truth, successive American administrations have failed in unison to adequately prepare for such a calamity.

One would presume that the government will do a better job of preparing for future pandemics, but if the actions taken following successive cyberattacks against the US government are any indication, the response is likely to be lackluster and underfunded. It appears that only when the American people demand a meaningful response from their elected representatives will this issue be given the attention, funding and resources 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 the US Government Failed to Prepare for a Pandemic appeared first on Fair Observer.

As a point of comparison, during the 2009 swine flu outbreak, initial death rate estimates were thought to be as much as 10 times higher than ordinary flu outbreaks (with a typical death rate of 0.2%), but after the passage of time, it was determined that death rates were actually no higher than ordinary flu. Much attention was paid in the media to the high infection rate among passengers of the Diamond Princess cruise ship in Japan earlier this year, but even in that case, the death rate among passengers turned out to be about 1%, with seven deaths among 700 positive (mostly elderly) individuals.

In Italy, COVID-19 has taken a particularly high toll from a percentage perspective, but doctors from the Istituto Superiore di Sanità in Rome noted in the Journal of the American Medical Association last week that a combination of Italy’s relatively elderly population — 23% are 65 or older — and the lethality of the coronavirus in that age group partly explains its high death rate, which stood at 7.2% as of March 17.

When stratified by age group, death rates of people under 70 in Italy and China look similar, but rates are higher in Italy among individuals aged 70 or older, and in particular among those aged 80 or older. Italy’s death rate as of March 31 has been about 11%, with many deaths hastily labeled as related to COVID-19 when in fact they may not have been.

That said, there is a very real risk that COVID-19 may turn out to be deadlier in its second or subsequent wave(s) of infection than has been the case as a result of its initial outbreak. This occurred in the case of the 1918 Spanish flu pandemic, during which a third of the world’s population was believed to have been infected, resulting in more than 50 million deaths. The mortality rate for the initial outbreak is believed to have been similar to that of ordinary flu (0.1%), while its second wave has been estimated to carry a death rate of approximately 2.5%. Mortality was high in those aged under 5, 20 to 40, and over 65s. Its high mortality in healthy people, including those in the 20 to 40 age group, was a unique feature of that pandemic. Let us hope history does not repeat itself.

We should resist jumping to conclusions about what the real rates of infection and death are, have been or will be as a result of COVID-19. It is simply too early to say. We have too few tests to do a proper job in many countries and globally, and the tests that are being conducted automatically imply being heavily skewed in the direction of symptomatic individuals. Governments around the world will continue to grapple with the best course of action to try to prevent more infections, but they, and the global medical community, should be similarly focused on getting the testing regimen and interpretation of the results of those tests right.

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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The Trump administration has proven itself to be inept, criminally so, by causing hundreds (and soon, thousands) of American citizens to die as a result of its bungled response. A combination of the president’s delusion, complicity by members of his cabinet and government, and blind, unrelenting loyalty by his supporters are causing a human catastrophe. Even now, weeks after it has become clear what this virus is and what is at stake, the Trump administration continues to lie, obfuscate and delay, swirling in a cauldron of denial and incapacity to act responsibly, swiftly and effectively.

Cities and states in the US are having to compete on the open market — often against the federal government — for critical medical supplies of which there should never have been a shortage had the government had an ounce of preparedness, foresight or managerial finesse. Like the world’s other governments, Washington had more than two months’ notice that this virus was on its way to American shores. The absence of effective federal oversight and management of the COVID-19 crisis will undoubtedly be judged by historians as the biggest US governmental calamity of all time.

Congress’ willingness to print trillions of dollars in an attempt to put a Band-Aid on the resulting gaping wound may, on one hand, be viewed as an act of bravery, but may otherwise be considered sheer madness. We live in a capitalist world: Companies fail all the time, for a hundred different reasons. Rich and poor alike are paying a heavy price. The need for trillion-dollar bailouts is the result of a failure to act on the part of governments with the capability and resources to do so.

Much of America’s bailout package is little more than pork-barrel politics, occurring during election season with a bright red bow wrapped around it. Having indicated that there are more such multitrillion-dollar bailouts to come sends the wrong signal to non-essential companies, encouraging them to continue to work the halls of Congress in the interim and merely delaying the day of reckoning. In the meantime, it is saddling future generations with more insurmountable debt.

This virus is likely to remain a permanent part of our natural ecosystem going forward. Until there is a vaccine (which is likely to be 12 to 18 months away) and until the world’s population can be inoculated against it (which is probably two to three years away), the battle against COVID-19 will endure. How much more money can or should be spent to keep 2% of the global population from dying or the remaining businesses from failing using taxpayer dollars? How many future generations will end up paying the debt incurred because of the largesse with which bailout packages are being dispersed? The US Congress is prepared to print and spend many trillions more.

This pandemic is now poised to take its most devastating toll on America in the coming weeks and months. It is an opportunity for us all to reflect on relative costs — of human lives, of businesses and of not acting with a good dose of common sense, which is often lost in translation during times of crisis. Sadly, too many lives will be lost, too many businesses will fail and too many people will not reflect upon this crisis with much-needed perspective. When historians review this period in world history, they are likely to come to the conclusion that many governments’ response was nothing short of insane. How many lessons will have been learned and remain in our collective psyche long after the fact? As previous crises have proved, too few.

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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Along the way, underlying totems of bullish faith have kept the party rolling. These include the assumption that the Federal Reserve will always do what it takes to alleviate profound market stress by cutting interest rates and, in the post-Great Recession years, providing monetary stimulus by means of quantitative easing, referred to as either the Greenspan, Bernanke, Yellen or Powell “put.”

Coronavirus Outbreak Puts the World’s Governments on Notice

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In short, their actions have comprised the belief that the Fed will come to the rescue during times of extreme market stress. For stock traders, the trope has been: No need to worry, the Fed will always be there to take the buck, so load up on risk because there is a floor to any downside. More to the point, the Fed will keep the bull market in stocks on its perpetual and seemingly never-ending upward trajectory.

Fall From Grace

Nothing could interrupt the perpetual bull market, stock investors apparently believed, until a confluence of events — a global pandemic, an oil price war, a delusional president and idiocy run amok combined to smack Americans up-side the head with a two-by-four. As the world’s financial barometer, will even that be enough to inspire America’s market-making stock traders and algorithms to change their ways?

As the global stock markets now endure their inevitable fall from grace, irresponsible and amoral money managers continue to tell their clients to hold their portfolios in place and ride the roller coaster down, beating the drum to continue investing in stocks that have a long way to go before they hit bottom. Greed and hubris are alive and well as the investment industry proves, yet again, that it has learned nothing from the Great Recession or the series of other global financial catastrophes that took place in the 20^th century.

The trajectory toward negative interest rates merely inspires the investment community to identify new ways to keep the plates spinning. For fast money traders, negative interest rates will be another sure-fire winner. They can make a lot on money in a negative interest rate environment thanks to the duration sensitivity of bond prices, as long as they treat bonds as a short-term upside play.

Meanwhile, the Trump administration has had three months’ notice to order tens of millions of test kits, educate the public and put mechanisms in place to address the inevitable spread of COVID-19 on America’s shores. Since the outbreak began in China in December last year, the Trump administration has mostly just sat on its hands in collective denial. This would be unforgivable in most other countries and would cause existing governments to collapse. In America, it merely serves to enhance the political divide.

It is often said that citizens get the leaders they deserve. In America, polling has proven multiple times that there is almost nothing the president can do that will prompt the average Trump supporter to abandon him at the ballot box. Whether selling America to the highest bidder or helping the country walk off a cliff, the only thing that appears to matter to at least half the country is whether the Republican Party can retain the White House and Senate. One has to wonder whether these voters have any comprehension of the state of play in America and how perilously close the US is coming to utter irrelevance on the global stage.

American Disaster Movie

As the coronavirus disaster movie plays out, America has a script that features a president who has a profound aversion to that which he cannot control. The preferred mechanism for Trump, when confronted with such a challenge, is to deny the underlying reality obvious to the crowd, labeling it fake news. But as the stretchers and body bags appear with greater frequency in the United States as the pandemic firmly takes hold, the inadequacy of the Trump administration’s response to the virus will appear to more and more Americans as a ludicrous, intelligence-insulting farce.

All the more so as his administration’s intransigence contrasts luridly with the hyper-efficient draconian response to COVID-19 seen in China, much of the rest of Asia and Italy. Trump’s embargo from the US of European travelers — with the bewildering exclusion of those from the United Kingdom, where the infection rate is gathering speed — smacks of grandiose back-of-an-envelope improvisation.

Meanwhile, the stench of a dying, deluded administration beckons alongside the moment of truth, one which will also see the death of America’s bull market and the arrival of a long-anticipated recession, which may well surpass the one prompted over a decade ago by the Great Recession in intensity, duration and attendant profound global hardship. In the face of what promises to be something worse this time, a scenario which waits stage left to enter as another Great Depression, the stewardship of America has never been so nakedly and egregiously deficient.

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

The post Will Coronavirus Break the Financial Market’s Hubris? appeared first on Fair Observer.

A decade ago, China had already established itself as having near-monopoly status on the manufacture of a whole range of products the world rapidly consumes. By 2011, 91% of all personal computers, 80% of all air conditioners, 74% of global solar cells, 71% of cell phones and 60% of all cement were manufactured in China. Today, the world’s largest 1,000 companies (or their suppliers) own more than 12,000 factories, warehouses and other facilities in quarantined areas of China, which means that they cannot operate these facilities and must find alternative means of supplying their businesses.

Some of these companies will have backup suppliers outside of China, but many do not, and many of those that do have backups will not have been incident-ready to seamlessly transition to an alternative supply chain. What the virus has made abundantly clear, by virtue of how quickly national and global economies have essentially shut down in short order, is that business interruption planning has largely been inadequate on local, national and global bases. Even the multilateral body charged with ensuring global health, the World Health Organization, has provided a lackluster response to the virus.

Despite being on business and government crisis planning radars for at least two decades now, plenty of organizations around the world have either not paid sufficient attention to pandemic planning, having apparently presumed that such a scenario would ultimately become someone else’s problem. Now, of course, it is too late to do something about it. But beyond that, COVID-19 is forcing many businesses to question the premise upon which they based their decision to so closely embrace China. When times were good, they profited handsomely. Now, the reverse is true.

It was never really a smart idea to devote so many critical resources to a single source. Having done so, many firms became blinded by their decision, perhaps recognizing too late that it could take a decade to become profitable in China, if they were to become profitable at all by operating there, given Beijing’s draconian approach to foreign trade and investor management. Many of them endured operational restrictions in China that they would never have endured at another investment destination, by virtue of China’s population size and importance. Beijing knew this and played them like a fiddle.

The compact made between Beijing and foreign businesses has all now come crashing down since China has, in essence, been closed for business for more than two months. At the very least, those businesses that were caught flat-footed will now ensure that they have alternative means of operation outside China, should they choose to continue to operate there. But many foreign businesses will now choose to either establish or enhance manufacturing operations outside of China. That may well change the very nature of how businesses think about China going forward and, with it, succeed in shifting global manufacturing toward multiple geographical “epicenters” of operation in the future.

Beijing has stolen enough intellectual property — from businesses and governments alike, and has the means to continue to do so regardless of whether businesses actually operate in China — that it may no longer matter to the Communist Party whether China remains the world’s manufacturing hub. That may actually fit neatly into the party’s narrative that it becomes more self-reliant and consumer-focused. In the same vein, perhaps the world’s manufacturers will have come to the conclusion that operating in China is no longer an economic imperative, particularly given the plethora of geographical options — many of which are actually lower in cost — than China now provides.

There will undoubtedly be many unanticipated consequences of this viral outbreak, economically, politically and from a global health response perspective. Surely, renewed emphasis on business continuity planning and questioning the basic premise upon which so many global businesses have continued to function will be among them.

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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In China, the potential political impacts have compounded the nature of the Chinese government’s reaction to the coronavirus outbreak, which is to not be transparent, fail to provide accurate information and punish individuals who try to share data about the outbreak. It wasn’t the likely economic impact of the virus on the Chinese economy that prompted the government to act in such a manner — which is wholly consistent with how it controls and manipulates information more generally — but the potential political impact which was the driver.

Will a Struggling Global Economy Survive the Coronavirus?

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As we know, Beijing fears instability more than anything else, yet its approach to this subject has succeeded in creating greater political and economic instability than may otherwise have been the case if it had provided transparent and accurate information, and had not punished those who dared to share it.

Backlash

The result has been a backlash against the government for, in essence, breaking the social contract it has with the Chinese people, which is to keep the economy strong, provide a better life for them than their parents had and to keep both the people and the nation safe. When events have great personal impact — as COVID-19 has had on the Chinese population, resulting in serious illness and thousands of deaths of loved ones and friends — many people feel they have no choice but to speak up and object to the way the government managed the outbreak.

Criticism of President Xi Jinping and the government has exploded on Chinese social media, faster than the government’s censors can eliminate it. The revulsion the Chinese people have for how this crisis has been managed will linger for years to come. Will it result in a political revolution? Unlikely, but few governments can withstand repeated bungling of consequential crises. The Chinese government has basically been put on notice.

In Japan, Prime Minister Shinzo Abe’s response to the virus has drawn comparisons with the government’s bungled response to the Fukushima crisis, which the Japanese people believe put them at great risk. The virus spread wildly for weeks on the Diamond Princess cruise ship and has been spreading for weeks now in the general population. It was only last week that Abe closed the country’s schools. His cabinet’s approval rating has slipped to 41%, imperiling his ability to pass additional economic reforms. The 2020 Olympics are likely to be canceled. The Japanese people appear to have lost confidence in his administration. How long will it be before they demand a change in government?

President Moon Jae-in was already on unsteady ground as the South Korean economy has been on the brink of recession for months. Protests against his administration were already growing before COVID-19 erupted in the country. More than a million Koreans have signed a petition seeking Moon’s ouster, stating that he has placed commercial relations with China ahead of public safety and that he waited too long to ban Chinese visitors. The South Korean people have lost confidence in his government and are demanding change.

Acceptable Performance

As the virus continues to spread, governments around the world are likely to experience a similar response from their people. How many governments are likely to prove to be proactive, ahead of the curve and provide a wholly acceptable performance? Very few, unfortunately, as most are ill-prepared either in terms of management style, resources or capabilities to address a crisis of this magnitude.

The United States is no exception. Major airports in the US still are not checking passengers arriving on flights from abroad for their temperature as they walk toward passport control. Only this week did the Centers for Disease Control agree to grant commercial and university laboratories permission to produce COVID-19 testing kits because of a severe shortage. Federal and state governments are not working together closely enough to craft a coordinated response to the virus.

COVID-19 will have profound impacts on polities and economies around the world. As this outbreak continues to slowly unfold, all types of governments — democracies, autocracies and military governments alike — will prove to their people just how unprepared they are to tackle this viral pandemic. Likewise, citizenries the world over will voice their displeasure with the lack of proper planning, devotion of resources or sheer incompetence in addressing the virus. In some cases, the net result will be a change of government. The world’s governments have now been put on notice.

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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The US contributed between 22% and 28% of the UN’s various agency budgets in 2018. By contrast, China contributed just 8% of the UN’s regular budget from 2016 to 2018, which will rise to approximately 12% by 2021. So why does China have more leadership roles and receive more recognition for its smaller contributions? Unlike China, US contributions have been large, consistent and taken for granted by other member states. Unlike the US, China rarely demands budgetary restraint or reforms that inconvenience the UN or member states, which may account for at least part of its appeal.

How Effective Is China’s Response to the Coronavirus Outbreak?

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It is also worth noting that China has not hesitated to use its veto power at the UN, even on issues that other nations find particularly sensitive. China has used its vote to block Security Council resolutions 12 times since 1971. All but three of those vetoes have occurred since 2007 and served to prevent Security Council action against such states as Myanmar, Syria, Venezuela and Zimbabwe.

Since 2013, China has become increasingly assertive in UN human rights institutions, promoting its own interpretation of international norms and mechanisms. Beijing appears to be interested in expanding its influence within the UN, not because it supports the organization’s founding principles, but rather to alter UN programs and policies in ways that will benefit Chinese priorities in the future.

Raising Eyebrows

The same appears to be true with the World Health Organization. Earlier this month, the WHO director general, Tedros Adhanom Ghebreyesus, sat next to President Xi Jinping in Beijing and offered effusive praise for Xi’s and the Chinese Communist Party’s (CCP) transparency and management of the COVID-19 outbreak. This is despite the fact that the Chinese government initially tried to hide the outbreak from its people and the rest of the world as the virus spiraled out of control, and criticized numerous other governments for trying to prevent its spread beyond China’s borders by cutting off travel to and from the country.

Quite apart from the many concerns that have been expressed about the wisdom and efficacy of the WHO following its poor response to the West African Ebola crisis in 2014-17, Ghebreyesus’ eyebrow-raising public statements about the Chinese government’s response to COVID-19 raise questions about both his and the organization’s own transparency and allegiances. According to the WHO’s website, its total funding is just over $6 billion. The US is the largest national contributor to the WHO’s budget, at approximately 15%. The next largest national contributor is the UK, at about 7%.

By contrast, Chinese funding of the WHO jumped 58% between 2014 and 2019, from $12 million to $19 million, which amounts to just 0.23% of the agency’s budget. That has not stopped Beijing from exerting influence and punching well above its weight at the WHO.

A Chatham House report has noted that the WHO is highly politicized and bureaucratic, and is dominated by medical staff seeking medical solutions to what are often social and economic problems, and are often too timid to approach controversial issues, too overstretched and too slow to adapt to change. If any multilateral body needs to be nimble and sure-footed, it is the WHO, which relies on its member states to provide the essential data necessary to make critical decisions impacting the lives of millions of people around the world. Given its current performance and that during the SARS outbreak in 2002-03, relying on Beijing to provide that information is a particularly dangerous proposition.

Tightrope Walking

The fact that the Ethiopian government is Marxist, that Ghebreyesus has served as its health minister, that China is Ethiopia’s largest foreign investor and that Beijing plans to build new headquarters for the African Centers for Disease Control and Prevention in Addis Ababa has apparently prompted Ghebreyesus to walk a tight rope between requesting accurate and timely information from Beijing versus upsetting Xi and the CCP. Doing so is potentially imperiling the lives of tens or hundreds of thousands of people around the world. Ethiopian Airways continues to fly to Beijing.

During the SARS epidemic, the Chinese government did not report the outbreak for months and refused to provide access to WHO experts. The WHO did not declare a global health emergency for COVID-19 until January 30, nearly two months after the outbreak began and 10 days after it had been confirmed that human-to-human contact was a source of infection. It still has not declared the virus a global health pandemic despite the fact that it has spread to more than two dozen countries, with serious recent spikes in South Korea, Japan and now Italy.

Beijing’s influence at the UN prevented Taiwan from becoming a UN member state, and its influence in the WHO has prevented Taipei from becoming a member of the organization. That not only potentially imperils the health of 23 million Taiwanese citizens, but also the more than 50 million foreigners who travel to or from Taiwan each year.

The Chinese government’s influence in a variety of multilateral organizations, whether the UN, the WHO or multilateral development banks, is putting at risk the concepts of good governance and the rule of law. Its influence at the WHO — and the WHO’s susceptibility to being influenced by Beijing — are ultimately putting many lives at risk around the globe. It is incumbent upon these organizations to recognize the gaps, inconsistencies and flaws that make them susceptible to such influence and to do something meaningful about it. Regrettably, at this time of great need, the world cannot rely on either China or the WHO to act based on transparency and accurate information. The world’s other governments will have to rely on themselves for that. 

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

The post China’s Influence Dampens International Response to Coronavirus Outbreak appeared first on Fair Observer.

The two countries did not create the world’s most important economic relationship easily or quickly. It was the result of painstaking diplomacy over many decades, a decision to proceed on the basis of mutual trust and a willingness to take a chance on each other.

At issue is a blurring of the lines between commercial and national interest, subsidies and protectionism, dual-use technologies, foreign policy, deal-making, political ideology, morality, and either disdain for, or an embrace of, the international rules-based order. The outcome of this pivot point in the two countries’ relationship will set the stage for which of them will dominate parts of the global economic and political landscape in the decades to come.

A Gift to China

In some ways, Donald Trump’s election in the US was a gift to the Chinese. Consider that by withdrawing America from the Trans-Pacific Partnership (TPP) in 2017, Trump opened the door for China to expand its trade relationship with the remaining TPP members — which it did. Similarly, the imposition of trade tariffs forced China to modify its supply chains and consumption patterns, find alternative markets for some of its goods, modify some of its own tariffs being applied to other countries, and reevaluate its trading relationships more generally. From a long-term perspective, that was a good thing for Beijing.

The truth is that the US has winked and nodded as China gradually stepped onto the world stage, pausing occasionally as distasteful events have blown over, such as Tiananmen Square in 1989, the Taiwan Strait crisis of 1996 and the spy plane standoff in 2001. Yet in doing so, America has been complicit in nurturing China’s rise and only has itself to blame for waiting until 2018 to say “enough.”

America vs. China: An Ideological Choice

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The trade war is the best thing that could have happened to China. In essence, it got away with its intellectual property theft, cyber intrusions and grossly unbalanced trading relationship with the US and a great many other countries for a couple of decades. It had enough time to build itself into an economic powerhouse and give most of its citizens time to graduate to middle-class status so that it could transition from being a poor nation that copied other countries’ technologies to a wealthier nation that is quickly becoming capable of beating much of the rest of the world at its own game.

While the US is busy focusing on the next quarter for business, the next year from an accounting or tax perspective, the next two years in anticipation of the coming state or national election, or the next four years for a presidential election, China is busy thinking about the next five, 10 or even 30 years down the road. Its Made in China 2025 strategy was created in 2015, its New Generation Artificial Intelligence Development Plan, targeting 2030, was launched in 2017, and President Xi Jinping’s plan to make China a superpower by 2050 was announced the same year. To China’s credit, it has had a forward-looking orientation for many decades, and it has paid off.

Positions of Strength

What the US is seeking via the imposition of such sweeping trade tariffs is fair and equal treatment — no more and no less. That should include access to the Chinese market more generally. Plenty of US companies — technology companies in particular — have either been barred or severely constrained from operating in China. America should apply the same restrictions to Chinese firms. Wherever restrictions have been placed on American firms, reciprocal treatment should be applied to Chinese firms in America.

To out-think Beijing, the US will need to adopt the same type of long-term, forward-leaning, visionary planning that the Communist Party conducts on a routine basis. To out-maneuver and out-partner Beijing, Washington will need to strengthen, and in some cases rebuild, its alliances (presumably after Trump leaves office). As it continues to strengthen and modernize its military, the US will need to revisit the extent to which it is willing to, and can actually deliver on, its security guarantees around the world.

To out-partner Beijing, the US will need to do a much better job at maintaining its existing alliances and begin to reengage in cooperative action on a mass scale. And to out-innovate Beijing, the US must determine a sensible, realistic policy direction, identify what is required to achieve it and devote the resources necessary to move swiftly.

While it may not generally be perceived as a responsible stakeholder in the system, China has demonstrated a willingness and ability to contribute meaningfully and responsibly to international initiatives — whether global peacekeeping or rescue operations or climate change diplomacy — where mutual interests converge. It is, if you will, a form of competitive cooperation.

Sino-US relations will remain the world’s most important bilateral relationship for many years to come, with implications for the entire world. The people of both nations have much more to gain by maintaining a friendly and cooperative relationship with each other rather than the other way around. It will clearly take a great degree of wisdom, an appreciation of history and a willingness by all sides to compromise to maintain mutual peace and prosperity.

With China the ascendant power and the US in gradual decline, Xi has little real incentive to change the Chinese playbook on a wholesale basis. That means that the US should reset its expectations about future Chinese behavior. The modern trading system does not and cannot prevent China’s state-owned enterprises from blurring the line between commercial interests and national interest. Chinese government funds subsidize and protect Chinese companies as they purchase dual-use technology or distort international markets.

To effectively counter more of the same from China in the future, the US needs a strategy, not merely tactics. When America competes with China as a guardian of a rules-based order, it starts from a position of strength. That is the only way Beijing may become incentivized to modify its behavior.

*[Daniel Wagner is CEO of Country Risk Solutions. This article is an excerpt from his new book, “The America-China Divide.”]

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

The post To Out-Think Beijing, Washington Will Need to Adopt Visionary Planning appeared first on Fair Observer.

In the decade that has just passed, its productivity gains faltered and credit-driven investment in low return capital propped up its growth. China must address its slowing productivity gains to produce a smooth rebalancing of the economy. Productivity growth will not come from textiles, steel or the property market, and the flourishing services sector will require cutting-edge technology to remain competitive. To pull it off, China will need to acquire and deploy advanced technology quickly and efficiently throughout its economy.

The Coming Chinese World Order

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China is diligently preparing to assume a seemingly preordained role as the world leader in a plethora of areas. It is driven. It is focused. And it will stop at nothing to ensure that it has all the advantages it can glean from the existing world order to create a world order in its own image. Technology is absolutely critical to achieving that objective, and there is little that is more important in that regard than cutting-edge telecommunications — specifically 5G technology.

The Huawei saga has served to illustrate this point. America’s issues with Huawei are as much about who has access to, and thus controls, the data of the future, as they are about superpower politics and the rule of law. Some Western intelligence sources believe the company is state-owned and has deep connections to China’s intelligence services. Its founder was an engineer with the People’s Liberation Army (PLA), and it is worth adding that no large Chinese company is fully independent of the government.

Although China spends more than $200 billion on research (second only to the US), generates close to 30,000 PhDs in science and engineering, and leads the world in patent applications each year, its record is mixed in terms of the actual impact of innovation, as measured by the success of companies in commercializing new ideas and competing in the global market. China has some unique strengths in innovation, which includes the rapid commercialization of new ideas by virtue of the size of its consumer base.

It also has the world’s most extensive manufacturing ecosystem, enabling continuous innovation in production processes that reduce costs and improve quality, and has created capacity for research with a growing number of universities and research institutions, as well as an expanding pool of talent. On the minus side of the ledger, China’s slow regulatory processes and weak intellectual property protections prevent foreign investors from wanting to bring their best and brightest researchers and innovations to the country.

Completing the journey from innovation sponge (absorbing and adapting existing technology and knowledge from around the world) to global innovation leader is not just a way to signal China’s progress as an economy and society. The boost to productivity that innovation provides is critically important for sustaining China’s growth.

Beijing has enacted some two dozen laws that have created a technology-siphoning machine. That apparatus maintains databases of foreign co-optees and distributes stipends, sinecures and cash to foreign donors of high-tech innovations. China has targeted all sources of American innovation, including universities, corporations and government labs, exploiting both their openness and naivete, with methods and tradecraft custom-tailored to each target.

The Chinese government’s current system for processing and reverse engineering stolen designs has grown significantly larger than it was during the Cold War and has developed from a strictly military operation into a system permeating the entire Chinese government. It is an elaborate, comprehensive system for identifying foreign technologies, acquiring them by every means imaginable and converting them into weapons and competitive goods. China could not have experienced the dramatic economic transformation it has experienced in the 21st century, nor have sustained its progress as it has, without inexpensive and unrestricted access to other countries’ technology.

Chinese firms have routinely become investors in American startups, particularly those working on cutting-edge technologies with potential military applications. These are companies that make rocket engines for spacecraft, sensors for autonomous navy ships and printers that make flexible screens that can be used in fighter-plane cockpits. Many of the Chinese firms are owned by state-owned companies or have direct connections to Chinese leaders.

According to the US Department of Defense, Beijing actively encourages Chinese companies with close government ties to invest in American startups specializing in critical technologies such as artificial intelligence (AI) and robots to advance China’s military capacity, as well as its economy.

US government controls intended to protect potentially critical technologies against countries like China have fallen short. It took a while, but such transactions eventually started ringing alarm bells in Washington. US lawmakers raised broad questions about the nature of China’s economic relationship with the US well before the Trump administration started applying tariffs on Chinese products, in an effort to reduce the inherent inequity in bilateral trade between the two nations.

China is extremely capable and driven. When it aims to be a leader in a particular sector or acquire a certain technology, it does so with precision. There is no question that Beijing aims to be a leader in AI, semiconductors and any number of other sub-sectors of the technology-driven 21st-century economy. It has the advantage of having a lot of money to spend and plenty of people and resources to devote to the issue.

Since it certainly appears that the US government will not be devoting similar resources to the tech sector any time soon, it is merely a question of time until China captures that title, too. In the battle for the future, the Chinese Communist Party understands very well what is at stake. It took the US and West too long to realize what China was doing, and by the time they did, Beijing was already approaching strongly from behind. Soon enough, the West will be looking at China in the tech space from the front window, rather than the rearview mirror.

*[Daniel Wagner is the CEO of Country Risk Solutions and author of the new book, “The America-China Divide.” This article is an excerpt from the book.]

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

The post China’s Race for Scientific and Technological Supremacy appeared first on Fair Observer.

The Coming Chinese World Order

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The world’s consumers, businesses and governments have a choice to make. That choice, which is increasingly between the products, brands, influence and policies of two great nations (China and the United States), will increasingly define how the world transitions from an American-led past and present to what could very well become a Chinese-led future.

The moral high ground that had been a hallmark of American supremacy over decades has largely disappeared during the presidency of Donald Trump. That high ground can now be claimed, at least on paper, by Beijing. China has become the world leader in providing foreign aid and is the second-largest contributor to the UN’s peacekeeping budget (after the US), and it is in the process of seizing the role of global leadership on climate change. If perception matters, then China has scored well in terms of the moral high ground, while the US has been floundering on that front in recent years.

China’s Model

How much more can the US drop in the court of global public opinion, and can China rise before Beijing’s approach to governance may be seen as a viable alternative model? Few Americans are likely to drop America’s version of democracy and capitalism in favor of China’s authoritarian model of state-dominated socialism. But that might not sound like a bad idea to hundreds of millions of people around the world who may be benefiting from Chinese aid, jobs and infrastructure projects. A 2019 survey by Pew concluded as much.

While at least some of China’s methods of doing things in the international arena might be considered objectionable to different people for different reasons, it has been successful in getting a great many things done, in places that some Western governments (notably, the US) are either in the process of ignoring or are doing an inadequate job of supporting.

China is heavily engaged in Africa at a time when the continent really needs such engagement and existing sources of aid are grossly inefficient to meet Africa’s growing infrastructure and other needs. Beijing has a habit of actually doing things while other countries may only talk about doing so. Its tactics may be objectionable on many levels, and the net result of some of its actions may prove to be largely negative over time, but it has stepped up to the plate when action was needed. Hundreds of millions of people around the world will not forget that, and they may even say that they would like their governments to be more like China as a result.

The challenge is to differentiate between benign types of cultural and political promotion versus more direct and potentially meddlesome influence-peddling and interference. While many Western intelligence agencies are focused on Russia’s information warfare, comparatively few of them may be devoting a similar scale of resources to understand China’s influence operations and how the country is projecting its soft power abroad. One could easily argue that Beijing’s influence operations are far more important, given that this is China’s century.

If President Xi Jinping has his way, there will be no distinct center of gravity for the foreseeable future. More likely, China, India, the European Union and the US will compete for supremacy. But, as with the case in the race for artificial intelligence supremacy, there may be no single victor, and any country that may hold the top spot in politics, economics, technology or as a military power may not stay there for long. As the US continues its downward trajectory and China maintains its inexorable rise, the world order will continue to be multipolar.

Checks and Balances

Yet the coming Chinese world order is likely to be devoid of the kinds of checks and balances the world has come to take for granted in the postwar order. Rather, it is more likely to be akin to a transaction-driven landscape where the strongest party rules and the weak are considered collateral damage. The Chinese order will likely see a break with the Western model by moving decisively away from the Enlightenment ideal of transparency in exchange for the opacity of power.

This transformation has already begun and, as it is occurring, the US and many other countries are asleep at the wheel. As domestic crisis upon crisis piles up, the world’s leading Western economies continue to turn their attention inward, preoccupied with political and economic crises at home and functioning with unipolar blinders on. Many of the world’s leaders fail to appreciate the implications that a world with Chinese characteristics may have on the future.

Not since the modern liberal order was born in the 1940s has the world had to grapple with the possibility of its demise, or at the hand of a rising China. Just at a time when the world is in need of the stability and governance it has had the luxury of relying upon for decades, it must contemplate transitioning to a world order that is not of the West’s choosing. Beijing’s realization of the Chinese century is sure to be infused with precepts and applications that are uniquely Chinese.

The world has yet to fully contemplate all that this portends, but Xi wants to ensure that his vision of world order achieves, at a minimum, the perpetuation of the Chinese Communist Party (CCP), its continued domination over the Chinese people and a pathway that guarantees the supremacy of China throughout this century and beyond. If the Chinese government is to be encouraged to modify the manner in which it engages with the rest of the world, it is up to the world’s nations to enhance the manner in which they challenge Beijing, for the CCP is unlikely to become incentivized to do so without some externally-derived inspiration.

This is China’s century, but that does not mean it should be able to thwart the law, create its own set of rules or avoid sanction when it acts in a manner contrary to established norms and legal standards. Beijing’s vision of the future could become a force for good and generally mutual benefit. It is entirely within China’s power to make that a reality. If it were to do so, that would make choosing a side in the China-America divide a much more difficult process.

*[Daniel Wagner is the author of “The America-China Divide.”]

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

The post America vs. China: An Ideological Choice appeared first on Fair Observer.

In 2016, for example, Google produced a video that provided a stunningly ambitious and unsettling look at how some people within the company envision using the information it collects in the future. Shared internally at the time within Google, the video imagines a future of total data collection, where Google subtly nudge users into alignment with the company’s own objectives, custom-prints personalized devices to collect more data, and even guides the behavior of entire populations to help solve global challenges such as poverty and disease.

Entitled “The Selfish Ledger,” the nine-minute film maintained that the way we use our smartphones creates a constantly evolving representation of who we are, which it terms a “ledger,” positing that these data profiles can be built up, used to modify behaviors and transferred from one user to another. This ledger of our device use — the data on our actions, decisions, preferences, movements and relationships — is something that can be passed on to other users, much as genetic information is passed on through the generations.

Building on the ledger notion, the video presents a conceptual Resolutions by Google system in which Google prompts users to select a life goal and then guides them toward it in every interaction they have with their phone. The ledger’s requirement for ever more data and the presumption that billions of individuals would be just fine with a Google-governed world are unnerving. The video envisions a future in which goal-driven automated ledgers become widely accepted. It is the ledger, rather than an end user, that makes decisions about what might be good for the user, seeking to fill gaps in its knowledge in a “Black Mirror”-type utopian reality.

Like other firms who are leading the pack in AI, Google is increasingly inquisitive about its users, assertive in how it wishes to interact them, and pressing existing limits about what is considered an acceptable level of intrusion into their lives. Much of this may be welcomed, based on how we have already been “programmed” to accept the company’s unsolicited overtures and now consider them to be perfectly normal and acceptable.

As the ethical deployment of emerging technologies — and AI specifically — continue to be subjects of public discourse, Google appears to be unfazed by the potential ethical implications of its current products, practices and vision of the future, or whether it is overstepping its bounds by proceeding apace to implement its vision. Google wants to understand and control the future before it occurs by, in essence, creating it and using AI and machine learning to help interpret and manage it. That is both an welcome and chilling proposition, but the truth is that our collective technological future is unfolding at lightning speed, and no single government or company can control it.

So, is Google to be commended for attempting to contain and craft the future, or should it be feared and resisted at every turn? Is there a middle ground? Will the fact that most consumers do not know the difference, or necessarily care, enable organizations like Google to basically do whatever they want? Is our great leap into the AI unknown meant to be purely exhilarating, or should we be intuitively cautious and approach it with care? The truth is that there is no single answer to these questions, nor is there one that is necessarily a right or wrong answer.

Artificial Intelligence Is Here

Artificial intelligence is already a fact of life and its potential will grow exponentially, along with its applicability and impact. Just as manned flight could only have occurred once combustion engines technically enabled it, the use of graphics cards, creation of custom hardware, the rise of cloud computing and the growth in computing capabilities — all occurring at the same time — have made AI a force to be reckoned with. Being able to rent cloud space or outsource computational resources means relative costs have come down to earth and will continue to do so. The widespread use of open-source, internet-based tools and the explosive growth in data generation have also made a big difference.

So much data is now generated on a daily basis globally that only gigantic infusions of data are likely to make a difference in the growth of artificial intelligence going forward. That implies that only the largest, most technically sophisticated firms with the capability to consumer and process such volumes of data will benefit from it in a meaningful way in the future.

Attempting to govern AI will not be an easy or pretty process, for there are overlapping frames of reference and many of the sectors in which AI will have the most impact are already heavily regulated. It will take a long time to work through the various questions that are being raised. Many are straightforward questions about technology, but many others are about what kind of societies we want to live in and what type of values we wish to adopt in the future.

If AI forces us to look ourselves in the mirror and tackle such questions with vigor, transparency and honesty, then its rise will be doing us a great favor. History would suggest, however, that the things that should really matter will either get lost in translation or be left by the side of the road in the process.

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

The post Google and Our Collective AI Future appeared first on Fair Observer.

China and the United States remain engaged in the most serious trade dispute the world has seen in generations. Today, English remains the world’s predominant language, the US is the world’s largest economy and the dollar its reserve currency, Google is the world’s primary search engine and Facebook the largest social media platform. But in 30 years, once China’s Belt and Road Initiative is completed, Beijing’s ability to project its soft and hard power will be greatly enhanced. If predictions prove correct, China will in a few years become the world’s largest economy, and parents around the world will ensure that their children speak Mandarin (if they do not already).

Once the Chinese government makes the yuan fully convertible, it could well become the world’s reserve currency, and given the growth in Chinese speakers, it could well be Baidu that becomes the world’s predominant search engine, and Weibo that supplants Facebook. The growth in the Chinese middle class, already larger than the US, will help ensure that China weans itself of overdependence on exports to sustain growth and becomes increasingly self-reliant for economic development.

If President Xi Jinping has his way, it will be China that is the world’s center of gravity. The coming Chinese world order is likely to be devoid of the kinds of checks and balances we take for granted in the post-World War II system. Rather, it is more likely to be akin to a transaction-driven landscape where the strongest party rules, and the weak are considered collateral damage. This transformation has already begun, and as it is occurring, the US and many other countries are essentially asleep at the wheel. As domestic crisis upon crisis piles up, the world’s leading Western economies continue to turn their attention inward, preoccupied with political and economic issues at home and functioning with unipolar blinders on. Many of the world’s leaders fail to see all that Beijing is doing and fail to appreciate the implications for the future.

Not since the modern liberal order was born in the 1940s has the world had to grapple with the possibility of its demise — at the hands of a rising China. Just at a time when the world is in need of the stability and good governance it has had the luxury of relying upon for decades, it must contemplate transitioning to a world order not of the West’s choosing. Clearly, the era of US hegemony is coming to an end. Will the global institutions it was so instrumental in creating become less relevant and influential with time? Will Beijing be successful in crafting new institutions derived from a Chinese footprint? If so, will good governance and rule of law be consistent with such organizations? Only time will tell, of course.

What is certain is that Beijing’s realization of the Chinese century is sure to be infused with precepts and applications that are uniquely Chinese. The world has yet to fully contemplate all that this portends, but President Xi wants to achieve a pathway that guarantees the supremacy of China throughout this century and beyond. He is likely to do just that, for he has a vision not only for how China reigns supreme in the economic, political, diplomatic, technological and, eventually, military arena, but also how it gets there.

That is certainly more than can be said for the United States at this juncture, much less of other Western powers that appear to be sitting on the sidelines as Beijing smashes barrier after barrier for how things get done. Xi deserves credit for having a vision of the future and for acting swiftly and decisively to achieve it — whether in the area of technology (where China is outspending Silicon Valley to achieve AI supremacy), building the world’s largest navy by number of ships (currently in second place behind North Korea), landing a probe on the dark side of the moon as evidence of its growing strength in the field of science, or seeking to influence the world’s media. China is engaged in a multi-pronged effort to become influential in a wide spectrum of areas of global importance.

Let us hope that Beijing’s tendency to elbow its way to the front of the line, find a way to get more or less whatever it wants from the world’s poorest and weakest nations, and at time ignore the rule of international law yields to a kinder, gentler China in the future that shows evidence of a respect for the established international order and well-worn rules of the road. The current international system did not come about quickly, or by accident. It was established as a result of a deliberate effort to be transparent and inclusive, placing a premium on governance and the rule of law.

If China really wants to achieve top-tier rankings in the areas it considers important — and do so in a manner that helps ensure its longevity — Beijing should seek to enhance, rather than supplant, the very world order that has enabled it to rise to become the global power it already is.

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

The post The Coming Chinese World Order appeared first on Fair Observer.

Cyberspace is the ideal platform for terrorists because, unlike conventional warfare, barriers to entry into cyberspace are much lower. The price of entry is an internet connection. The surreptitious use of the internet to advance terrorist group objectives has created a new brand of Holy War — “virtual jihad”— that gains thousands of new adherents each day. Long after the current terrorist groups have ceased to be a major threat from a physical perspective, they will remain omnipresent in cyberspace, promoting a virtual caliphate from their safe haven behind computer keyboards around the world. Islamic extremists are natural candidates to transition to a virtual world that offers them automatic citizenship beyond the nation-state.

Since the Islamic State (IS) was founded, its leaders have deftly and continually rewritten the narrative to claim that the group’s desired caliphate exists, has a specific location and maintains a defined group of adherents. Unconstrained by the absence of a definitive Quranic guideline for what constitutes a caliphate, IS created its own self-promoting doctrine. The group expanded its caliphate narrative to include a wide range of options for participation: Membership included everyone from the passive observer reading a blog or curiously following a Twitter feed to the keyboard jihadist editing Rumiyah or hacking a website to the real-world operators attacking a nightclub or running down holiday celebrants with a delivery truck.

IS has successfully exploited the sociopolitical environment and young adults’ obsession with technology to establish a growing community of devotees in the ungoverned territory of cyberspace, ensuring its ability to continue to coordinate and inspire violence well into the future. IS has found its own salvation via the internet, particularly since it has already passed the peak of its real-world power.

The Islamic State has also capitalized on the world’s evolving propensity to integrate online activities with real-world activities. Social media has had an incredible multiplying effect on radical messaging, and IS has had great success publishing online, which has resonated particularly well with disenfranchised Muslims and youths, causing some to act on inspiration and guidance received online. IS has exploited their search for meaningful identity by promising to restore their dignity so that they may find personal fulfillment and purpose.

Virtual World

The virtual world is in some ways more compelling than the real world, because storylines can be artfully crafted for maximum appeal, while omitting anything that may be perceived as negative. A promise is much easier to make online, as is the vision of fulfilling aspirations. IS has created virtual messaging that is wildly at odds with the reality of life as an IS fighter on the ground. Cyberspace has enabled the group to turn tactical defeats on the battlefield into glorious martyrdom operations that highlight the bravery and commitment of its fighters. The loss of territory and the deaths of key leaders have served to feed propaganda efforts that are used to prove the resiliency of the caliphate.

Since all that is required to be a virtual planner is an internet connection and good encryption, they can operate from anywhere, although being geographically dispersed carries heightened risk of detection in some nations. The virtual planner model has revolutionized jihadist external operations. IS has taken advantage of recent advances in online communications and encryption so that the group’s top operatives can directly guide lone attackers, playing a central role in the conceptualization, target selection, timing and execution of future attacks. Virtual planners offer operatives the same services once provided by strictly physical networks. They seamlessly execute the group’s guiding strategy and maximize the impact and propaganda value of attacks waged in its name, while avoiding many of the risks typically associated with physically training operatives, such as being tailed or getting caught returning to a home country.

Integrated into the group’s geographical command structure, virtual planners function much like theater commanders, but in the cyber realm. IS virtual planners are also assigned areas of responsibility according to their nationality and linguistic skills and are tasked with actively recruiting and handling attackers from these areas.

Global Brand

The advancement of internet-based communication and the explosion of social media have enabled the planner to reach a larger audience than ever before. By building an “intimate” relationship with a potential attacker, the virtual planner provides encouragement and validation, addressing the individual’s doubts and hesitations while generating confidence and a strong desire to carry out an attack. Virtual planners can replicate the same social pressures that exist with in-person cells. Individuals can simply wander into searchable online networks rather than identify with and be socialized by covert in-person networks. Unlike with physical networks, the virtual planner model does not risk the capture or punishment of the network’s key operatives.

Individuals inspired by IS can directly reach out to virtual planners for guidance and assistance in carrying out attacks. In addition to recruitment and operational guidance, virtual planners can bring disparate individuals and cells together to form larger attack networks. IS virtual planners allow the group to effectively seize ownership over what would previously have been considered lone-wolf attacks. Virtual planners transform these individuals into ambassadors for the IS global brand at relatively low cost. Virtual planners help maximize the psychological and reputational impact of violence committed in the IS name, further enticing other potential devotees to join its cause.

The success of the virtual-planner model underscores the ongoing process of organizational learning by jihadist groups. But the model also has disadvantages, such as the inability to provide in-person training or be optimally nimble during an attack to modify plans as circumstances change. Cells directed by virtual planners are also at greater risk of being detected by signals intelligence, despite advances in end-to-end encryption. Nonetheless, the virtual planner approach is a low-cost, high-reward strategy with enormous destructive potential, especially as IS and other terrorist groups continue to refine the model.

Adaptations to jihadists’ modes of operation have continually outpaced states’ ability to effectively counter them, and will likely continue to do so. Virtual jihad has not only gained prominence and credibility as an alternative to traditional conceptions of jihad but has also progressively outpaced physical jihad. Although physical jihad continues to appeal to a great many actors, its virtual incarnation has supplanted traditional notions of jihad for a new generation of adherents who are either unwilling or unable to engage in physical violence themselves. The rise of the virtual jihadist has assumed an important (perhaps irreplaceable) role in rejuvenating the concept of jihad and facilitating the dissemination of its “counterculture” narrative to new audiences for many years to come.

*[This article was originally published by Foreign Policy in Focus.] 

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

Photo Credit: Profit_Image / Shutterstock.com

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Despite Aung San Suu Kyi’s decades-old image as an embattled political prisoner and proponent of ardent reform as an opponent of the previous military government in Myanmar, her new role as state councilor has resulted in criticism from a variety of quarters domestically and internationally, as she juggles her predisposition toward humanitarianism with a pragmatic approach to governing. Suu Kyi and her National League for Democracy (NLD) have been roundly criticized for their presumed complicity in what many international observers have deemed a process of ethnic cleansing and genocide against the Rohingya minority residing in the country’s rural Rakhine State.

While advocacy on behalf of the Rohingya has come from predictable sources in the West, it has also come from Saudi Arabia. The kingdom started providing financial assistance to the Rohingya when the situation began deteriorating in 2012. With its valuable investments in Myanmar’s oil infrastructure, located largely within Rakhine, Riyadh has undoubtedly wished to hedge its bets and play both sides of the same coin. Since then, armed resistance from the Rohingya people toward the Burmese government, including a 2016 attack on security forces linked to funds from Saudi and Pakistani actors, has motivated an increased Burmese military presence in the region.

On numerous occasions, the United Nations as well as human rights organizations have documented abuses leveled against the Rohingya. Earlier this year, Human Rights Watch released a report that identified widespread and systematic human rights violations targeting Myanmar’s Muslim citizens in Rakhine State. The report has been disputed by the government. Suu Kyi disagrees with the findings and has denied that the government is guilty of ethnic cleansing.

The roots of the violence in Rakhine State are multifaceted and rooted in British colonial officials’ failure to include the word “Rohingya” in censuses taken of the then-British colony, which was subsequently used as a means of falsely characterizing the Rohingya as illegal immigrants from neighboring regions, with no historical legitimacy in Burma. The former military regime and the current democratically-elected government have both denied the Rohingya full citizenship, strictly limiting basic freedoms of movement and suffrage. Suu Kyi finds herself in a precarious position, reemphasizing her support for non-violent political change, while at the same time referring to the Rohingya’s disrespect for the “Rule of Law” as a justification for a strong military presence in Rakhine.

Prior to 2009, Saudi Arabia’s late King Abdullah recognized the plight of the Rohingya and offered permanent residency for in excess of 250,000 Burmese Muslims, but Saudi authorities segregated many Burmese upon arrival to the kingdom. Most Burmese expatriates in the Gulf have worked low-skilled/low-pay jobs and have faced challenges similar to those of other poor Southeast Asian migrants in Saudi Arabia. Following the death of King Abdullah, King Salman detained 3,000 Rohingya families in Jeddah prisons and planned to deport them back to Myanmar for reasons that remain unclear.

SAUDI ARABIA AND MYANMAR

Such reversals have further complicated Riyadh’s policy toward the Rohingya. This year, Saudi officials announced the kingdom would accept a total of 190,000 Rohingya refugees over a four-year period, in conjunction with providing limited financial assistance to the Rohingya. In 2013, the Saudi government publicly condemned the Burmese government’s treatment of the Rohingya at a UN meeting — something it has rarely done. Perhaps the ability to lecture other countries about human rights was one of Saudi Arabia’s original objectives for having first become embroiled in the Rohingya issue.

At the same time, Saudi Arabia has been working with the Burmese and Chinese governments to industrialize natural resource production and distribution within Rakhine State. Saudi Arabia and its smaller Persian Gulf neighbors became deeply involved in Myanmar’s oil industry in 2011, when Riyadh and Beijing signed a Memorandum of Understanding in which China pledged to provide 200,000 barrels of crude oil per day through the just-completed Sino-Burma oil pipeline. The United Arab Emirates has also built roads and hotels to supplement Rakhine State’s booming oil industry, and in 2014, Qatar began transporting methane to China via Myanmar, further emphasizing the critical role of Burma in connecting China and the Arab Gulf states. Although Saudi Arabia has maintained its support for the Rohingya, other Gulf Cooperation Council members, such as Qatar, appear willing to ignore the situation altogether if it counteracts their wider regional strategy — particularly if doing so creates tension with China.

The Burmese government is unlikely to reverse its position on the Rohingya in the future — with or without Suu Kyi at the helm. By the same token, Saudi Arabia’s support for the Rohingya may well continue, to the extent that it does not jeopardize the kingdom’s business, commercial and investment interests in Myanmar, particularly at a time when officials in Riyadh are increasingly focused on securing greater cooperation from members of the Association of Southeast Asian Nations (ASEAN) for advancing Saudi Arabia’s ambitious Vision 2030.

Can Saudi Arabia have its cake and it eat too by strengthening Riyadh’s ties with Beijing via their mutual interests in Myanmar, while having the luxury of maintaining the kingdom’s continued support for a repressed Muslim minority group?

The tangled web Saudi Arabia has weaved will in all likelihood become more complicated, yet the kingdom’s support for the Rohingya should be expected to continue for some time, given Saudi Arabia’s clearly demonstrated view that throwing its weight behind this Muslim minority group in Myanmar yields more net benefits than disadvantages in the forum of global public opinion.

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

Photo Credit: Jcarillet

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Under the pretext of sparing the world another genocide, France deployed 1,600 troops to the Central African Republic (CAR) late last year. Since Operation Sangaris was launched, however, the French military has proven powerless to stop the sectarian violence, which took more than a thousand lives in Bangui last month.

Since it has become clear that the humanitarian crisis is beyond French control, President Francois Hollande faces the question of whether Paris should have intervened in the CAR, where a significant percentage of the country’s citizens view France’s intervention as a form of 21st century neo-colonialism. France was clearly naïve to believe that deploying fewer than 2,000 troops to a destabilized nation bordering on anarchy and awash with arms would restore stability.

While the first French brigades to enter the CAR last month were greeted as liberators, not all of its citizens welcomed the former colonial ruler’s military presence — thousands of Séléka supporters protested the intervention. Surely French military commanders did not imagine that they would simply waltz in and be greeted with a shower of rose petals. But by the same token, it seems clear that the French failed to anticipate such vigorous opposition and were unprepared for what awaited them.

French military spokesman Colonel Gilles Jaron stated that France was acting with total “impartiality” in the CAR, yet this perception was not shared by the Muslim-dominated former rebel coalition — Séléka — which overthrew the Bozizé government last year. Given France’s identity and historical role in the region, many within the CAR’s Muslim community view France as an ally of the country’s Christian militias, rather than a neutral arbiter. The resulting tension has been underscored by Séléka-waged attacks against French troops over the past two months. In turn, certain Christian militias have targeted African Union troops (mainly from Chad), viewing these forces as defenders of the CAR’s Muslim militants.

Tough Decisions

Throughout 2014, France will have difficult decisions to make regarding its military campaign. There is no indication that sectarian violence in the CAR is decreasing, despite hopes that the transitional parliament’s election of Catherine Samba-Panza as interim-president will stem the carnage. In fact, daily acts of revenge killings that involve lynch mobs have become the new normal. Samba-Panza has a nearly impossible task on her hands.

The severity of the violence, including the beheading of children, is troubling. Experts warn, and last month we addressed, what may become genocide in the CAR. John Ging, director of operations for the UN Office for Coordination of Humanitarian Affairs (OCHA), stated that CAR “has all the elements that we have seen elsewhere, in places like Rwanda and Bosnia” and “the elements are there, the seeds are there, for a genocide.”

In addition to the CAR, France’s recent military involvement in other African states (including Chad, Cote d’Ivoire, Gabon, Mali and Niger) highlights Paris’ more assertive and activist role in some of its former African colonies. As Europe has many interests in Africa, France’s African foreign policy underscores how it remains the leading EU power on the continent. Given French demand for African oil and minerals, the presence of hundreds of thousands of French nationals across the continent, and entrenched French business interests throughout these countries, the stakes are indeed high for France in Africa.

However, the extent to which France will sacrifice its own blood in the CAR to defend such interests remains to be seen. It would not be hard to imagine President Hollande declaring victory and withdrawing French troops if the situation deteriorates much more. The French government’s admission that Paris “underestimated” the level of hatred between the CAR’s Christians and Muslims, and its assessment of the crisis as “nearly impossible” to handle, indicate that Hollande may not have fully contemplated his government’s options.

The CAR crisis poses a major challenge for the Hollande administration. If more French troops die in what appears to be a looming genocide, and the French military remains powerless to stem the growing violence, it would certainly be a major blow to the French government. It does not appear that under such circumstances the French government will have any good options on the table.

After deploying troops to the CAR for the stated purpose of sparing Africa from genocide, Paris will look weak on the international stage for failing to meet its objective. If so, it will not have been the first country to have experienced such an outcome. Neither Africa, nor the West, wants another Rwanda. Ultimately, the CAR crisis and Operation Sangaris’ failure may compel the French to pursue more realistic aims in Africa and abandon romantic dreams of exporting civility to Africa at the barrel of a gun.

*[This article was originally published by The Huffington Post.]

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

The post France’s 19th Century Foreign Policy Fails in 2014 appeared first on Fair Observer.

Recent geopolitical developments across the Middle East and Africa have added momentum to Iran and Sudan’s strategic partnership, an alliance driven primarily by an interest in weakening the power of Israel, and by extension the US, throughout East Africa. Other objectives include Sudan’s fight against other forces that constitute existential threats to the Khartoum regime, and Iran’s interest in establishing an alternative weapons corridor to Gaza and Lebanon, particularly given that Syria will likely remain destabilized for the near-to-medium term.

However, some of Sudan’s traditional Sunni Arab allies staunchly oppose further development of the Iran/Sudan partnership. It remains to be seen how far Khartoum can further entrench its ties with Tehran while maintaining its alliance with Saudi Arabia and other states in the region.

Background of Bilateral Ties

When President Omar al-Bashir and Hassan al-Turabi rose to power in the 1989 coup that established an Islamist state in Sudan, one of the new regime’s first diplomatic initiatives was to forge an alliance with Iran, whose own Islamic revolution a decade earlier inspired Sudan’s Islamists (despite the Sunni-Shia division). Five months after the coup, Bashir paid a visit to Iran and the two states’ intelligence agencies signed cooperative agreements.

In 1991, then-Iranian President Akbar Hashemi Rafsanjani visited Sudan pledging $17 million in financial aid, delivery of $300 million of Chinese weapons, and 1 million tons of oil per year. Some 2,000 members of the Iranian Revolutionary Guards Corps (IRGC) were reportedly sent to Sudan to train its Popular Defense Forces (PDF) during the second Sudanese Civil War. That same year, Khartoum hosted the infamous Popular Arab and Islamic Congress (PAIC), which brought together Osama bin Laden, Abu Nidal, Carlos the Jackal, and members of Jama’at al-Islamiyah, Hamas, Hezbollah and the IRGC.

Over the years, Iran and Sudan have maintained varying degrees of support for non-state actors, including Hezbollah, Hamas and the Islamic Jihad Movement in Palestine. In 2008, the two states officially signed a military cooperation agreement, and in May of this year, the pace and scope of the construction of Iranian naval and logistical bases in Port Sudan was enhanced remarkably. In short, over the past two decades, the two countries have significantly deepened their political ties, and in the process, Sudan has become a magnet for a variety of militant extremist and jihadist individuals and groups.

Proxy War in Africa

Sudan has at the same time become an extension of Iran’s proxy war against Israel. Historically, Sudan and Israel’s relationship has been hostile. In 2012, Israel bombed Sudan for the fourth time since 2009, striking the Yarmouk factory near Khartoum. Israel’s motivation for targeting Sudan was likely to punish Sudan for allowing Iran to use Sudanese territory as a staging ground for arms shipments to Gaza and Lebanon via the Red Sea and Egyptian Sinai, in addition to Khartoum’s alleged support for Hamas and other militant Palestinian groups.

Israel knows that Sudan is a failed state with a military that is preoccupied with South Sudan and Darfur, among other concerns, and that Khartoum is not capable of responding directly to Israel. Simply put, Bashir’s bluff has been called as a consequence of his inaction to Israel’s air raids. Part of Israel’s message to Sudan’s government appears to be to refrain from forging deeper ties with Iran and Hamas; the more important message relates to Iran: If Tehran uses East Africa as a launching pad for its Palestinian/Lebanese proxies, Israel will apparently strike against Iran’s interests in the region.

Moreover, Israel has used its ally, South Sudan, in an effort to further weaken Khartoum’s regional clout. This partnership far precedes Iran and Israel’s standoff. During the first Sudanese Civil War (1955-1972), Israel armed and trained the Southern Sudan Liberation Movement (SSLM), which was consistent with the “alliance on the periphery” pillar of Ben-Gurion’s foreign policy. After South Sudanese independence in 2011, Juba’s diplomatic gestures toward Israel established the world’s newest state as a staunch Israeli ally. In March 2012, an Iranian drone was shot down by Juba-backed rebels and the Israelis have sent security experts to South Sudan to train their troops to operate T-72 battle tanks. If Khartoum and Juba wage war over the disputed oil-rich region of Abyei, Iran and Israel may be expected to use their leverage to back their respective sides, further establishing the Sudans as a battleground for one of the Middle East’s most dangerous power struggles.

Eritrea is another important piece to this puzzle, as Asmara courts a military partnership with Iran and Israel. From Eritrea’s perspective, a potential Ethiopian invasion constitutes the gravest national security threat. To counter this menace, Eritrea signed an agreement with Iran in 2008 that provides the Iranian military a presence in Assab (which for official purposes is to safeguard an oil field).

However, for a number of reasons (the most important being to gain greater support from Washington, which holds strong influence over Addis Ababa), Eritrea appears to have sought balance in its partnership with Iran by forming a relationship with Israel. Israeli naval teams have set up in the Dablak Archipelago and Massawa, and have also reportedly established a listening post in Amba Soira to monitor Iran’s presence in the country. Israel has a difficult task, as deeper ties with Asmara threaten to undermine its relationship with Addis Ababa. Nonetheless, Israel will likely continue to nurture its partnership with Eritrea as long as it serves to weaken Iran’s capacity to use East Africa to expand Tehran’s strategic depth.

Sudan’s Gamble

Given that nearly three-quarters of Sudanese exports reach the Gulf Cooperation Council (GCC) countries, Khartoum is economically dependent on states that would view the growth of Iran’s footprint in East Africa as a significant geostrategic setback. As Saudi Arabia and Iran wage a proxy war in Yemen, the build-up of Iran’s military presence in the Red Sea is troublesome from the Saudi perspective. Voices within Sudan’s opposition have criticized Bashir for permitting Tehran to establish a greater military footprint in their country, on the grounds that Sudanese-GCC ties will suffer and it undermines prospects for any potential rapprochement with the United States.

From Bashir’s perspective, it is reasonable to assume that the most imminent threats to his regime’s survival are reduced as a result of the growing partnership with Iran. With Darfur rebels having struck major blows against the Sudanese state earlier this year, and as the conflict with South Sudan is likely to linger for years to come, the influx of more advanced weapons and training from Iran should strengthen Khartoum’s position.

Bashir has every reason to continue to deepen Sudan’s ties to Iran. He knows that Iran is determined to expand its influence in Africa, and that Sudan has a unique role to play in furthering that objective. Thus, with Iran’s ongoing battle of words with Israel and the US over Tehran’s nuclear program, the continuation of the Syrian crisis – which threatens to break-up the Middle East’s “axis of resistance” — and the tension between Sudan and South Sudan, Iran and Sudan have apparently come to view each other as indispensable strategic partners for the long haul.

The recent news that Zimbabwe has signed a Memorandum of Understanding to sell Iran uranium will certainly raise the stakes in Iran’s presumed pursuit of nuclear weapons, and will only serve as an incentive for Sudan to enhance the role it is playing in broadening Iran’s pursuit of power and influence in the Middle East and beyond. There is no real incentive for them to change course, nor any meaningful way for other countries to reduce the significance of the impact that relationship has had, and will presumably continue to have, on Africa and the Middle East. As a result, Sudan should be expected to continue to play an indirect and influential role in the unfolding landscape of Africa and the Middle East.

*[This article was originally published by the Institute for Near East & Gulf Military Analysis.]

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

Image: Copyright © Shutterstock. All Rights Reserved

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On August 15, a car bomb ripped through a Beirut suburb, killing 21 people. The explosion was but the latest in a wave of attacks across Lebanon throughout 2012 and 2013, that were linked to events inside Syria.

The ease with which violence in Iraq and Syria has negatively impacted surrounding countries, underscores the declining significance of borders throughout the Levant. Sectarian and ethnic identities, rather than citizenship, are proving increasingly influential in shaping the political orientation of communities throughout the region. From Beirut to Baghdad, conservative Sunni Islamists wish to rid the Arab world of Iranian influence, weaken Hezbollah’s position, and restore Sunni rule to Iraq and Syria. Naturally, the Levant’s Shi’a and Alawite communities are unified in opposition to this agenda.

Amid these deepening regional divisions, a new opening has emerged for one of the Middle East’s longest-suffering minority groups: the Kurds.

The shifting regional balance of power has enabled the Kurds to exercise greater control over their destiny. While the future is unpredictable, it is entirely plausible that Syria’s Kurds will maintain autonomy in northeastern Syria when the dust eventually settles.

However, the ongoing war between jihadist and Kurdish militias over control of northern Syria — a conflict far less well-known than the battle between Bashar al-Assad and the rest of the Syrian rebels — will likely lead to a major humanitarian catastrophe for Syria’s Kurds before any political gains can be consolidated.

Filling the Vacuum

After the Syrian crisis erupted, the Kurds — who comprise nine percent of Syria’s population — were faced with a challenging dilemma. Both joining revolutionary forces and allying with the regime posed grave risks given the conflict’s unpredictable nature. While some pundits have claimed that the Kurds ultimately sided with the regime, this assessment oversimplifies a complicated picture.

Syria’s “Kurdish Spring” preceded the Arab Spring and began in 2004, when anti-Assad Kurds were massacred in Qamishli for protesting against an Arab nationalist regime that had for decades dispossessed Kurdish farmers, confiscated Kurdish land, and outlawed the teaching of the Kurdish language. Yet the Kurds’ grievances against the Assad regime failed to yield an alliance between the Free Syrian Army (FSA) and the Kurdish minority. The FSA’s relationship with Turkey, combined with the Islamist and Arab nationalist identities of influential rebel factions, prompted many Kurds to fear a Muslim Brotherhood-led overthrow of the Ba’athist regime.

In July 2012, under pressure from a growing insurrection in the rest of the country, the Syrian government withdrew most of its security forces from the Kurdish-majority areas, leaving the Kurdish Democratic Union Party (PYD) as the de facto regional government. Assad’s withdrawal was driven by three strategic calculations.

First, the Syrian military sought to consolidate its resources toward the battles in Damascus and Aleppo. Second, given Turkey’s support for the FSA, Assad wanted to deliver Ankara a tit-for-tat response to Turkish support for the Syrian rebels. Given that the PYD is affiliated with the Kurdistan Workers’ Party (PKK), which waged attacks against the Turkish state from Syrian soil under the later years of Hafez al-Assad’s rule, the Ba’athist regime sent a clear message to Ankara by offering a PKK-affiliate group a safe haven on Turkey’s doorstep. Third, Damascus sought to further divide the opposition by seeking to enhance the allegiance of some Kurdish factions to the Ba’athist regime.

Since then, there has essentially been a truce between the Syrian military and the PYD. Instead, throughout 2013, the PYD has been the target of ongoing attacks from Salafi jihadists determined to overthrow the Assad regime and deny the politically secular Kurds any spoils of the conflict. As the battles between the PYD and al-Qaeda-affiliated militias intensify, ethnic lines are increasingly being blurred, and a power vacuum has indeed developed.

Throughout the first week of August, the al-Qaeda-affiliated Jabhat Al-Nusra reportedly killed 450 Kurdish civilians in the border town of Tal Abyad. Other jihadists, meanwhile, shelled the Kurdish town of Ras al-Ayn. The FSA has also waged attacks against the PYD on the grounds that the Kurdish militia is loyal to Assad’s regime. However, some Arab groups in Syrian Kurdistan have offered up their full support for the PYD, for fear that Islamist extremists may be gaining control over the territory. The brewing Islamist-Kurdish war in northeastern Syria pressured 35,000 Syrian refugees to flee to Iraqi Kurdistan in mid-August. Shortly thereafter, Masoud Barzani — leader of Iraq’s Kurdistan Regional Government (KRG) — declared that the KRG was “prepared to defend” Syria’s Kurds.

While many analysts doubt that the KRG’s well-trained peshmerga fighters would enter Syria to fight on behalf of the PYD, the KRG’s military training and financial support for the PYD underscores Barzani’s greater pan-Kurdish policies. Barzani’s likely motivation stems from his suspicion that a future war between central Iraq and the KRG could occur, and under such circumstances, Syrian Kurdistan could provide strategic depth. In the meantime, the PYD’s posture vis-à-vis the jihadist fighters is strengthened by the strategic depth provided by Iraqi Kurdistan. If violence continues to plague Syria’s northeast, the border between Syrian and Iraqi Kurdistan may ultimately dissolve.

The Kurdish Spring

While most Syrian Kurds are Sunni Muslims, their staunchly secular politics pit them against the al-Qaeda affiliated groups seeking the creation of an Islamic emirate in Syria. Ethnic concerns, including the rebels’ apparent hostility to Kurdish self-determination, exacerbate the division. Reports of al-Qaeda fighters beheading Kurds and issuing calls for their extermination will only further expand the PYD’s support base from secular Kurds.

As the majority of Syria’s oil and gas reserves exist in the country’s northeastern region, the stakes are high for both sides. The geopolitical ramifications of an established, autonomous Kurdish region — or independent Kurdish state — in northeastern Syria are complicated. From Turkey’s vantage point, a PKK-run Syrian Kurdistan would constitute a major setback given the likelihood that the PKK would utilize the territory to launch attacks against the Turkish state (especially if the ongoing Turkey-PKK peace talks fail and the ruling leaders in Damascus and Ankara remain in power for the near to medium term). Turkish officials are naturally concerned about the prospects of Turkey’s own Kurdish minority demanding greater autonomy from Ankara after being inspired by their Kurdish counterparts in Syria. That said, after the Gulf War, Turkey feared a semi-autonomous Kurdish state in northern Iraq, yet the KRG eventually became one of Turkey’s closest Middle Eastern allies.

For Turkey to form a similar alliance with any semi-autonomous Kurdish state in Syria, the ongoing peace talks with the PKK would need to succeed (an unlikely prospect in the near term), or a pro-Turkish rival of the PKK would need to assume power in northeastern Syria (also an unlikely outcome given that the PYD is more heavily armed than its Kurdish rivals). For the time being, Ankara has supported jihadist militias in northern Syria not only to weaken the Assad regime, but also to weaken the PKK/PYD. However, Turkey is playing a dangerous game, as the establishment of a PKK/PYD-run Kurdish state along its border may prove to be less hostile than an al-Qaeda-run Islamic emirate on the other side of the border. For now, Turkey has hedged its bets.

The ongoing battle between Kurdish forces and al-Qaeda’s Syria-based branches poses a difficult challenge for the United States. Wary of alienating its NATO ally Turkey, Washington has vested interests in the Syrian state’s survival in a post-Assad era, and thus opposes a semi-autonomous or independent Kurdish state in northeastern Syria. However, the United States also has no interest in al-Qaeda affiliate groups maintaining control of a strip of land on NATO’s Middle Eastern doorstep.

Washington could certainly benefit from gaining additional allies in the region. Given the pro-American orientation of Barzani’s KRG, the Obama administration would be wise to establish ties with Syria’s Kurds, given that the tide may continue to turn in the Kurds’ direction over the long-term. If Western states decide to provide the Islamist rebels with more advanced weaponry that ends up being used against the PYD, this could sour Washington’s relationship with an autonomous Syrian Kurdistan in the future. There is little evidence that this has been considered by the Western countries arming the rebels.

Like their Iraqi counterparts, Syria’s Kurds have sought to break free amid their country’s chaos and violence. From their perspective, an independent Kurdish state was promised, but not delivered, by the powers that won World War I. Almost a century later, they smell a genuine opportunity for greater autonomy, and possibly independence. For generations, the Kurds’ alliances have fluctuated given the region’s fluid geopolitical developments and their need to play off their host governments’ evolving tensions.

For now, Syria’s Kurds are enduring a little-reported humanitarian crisis amid grave human rights abuses from al-Qaeda after decades of tyranny under the Assad government. In the longer term, the Kurds may ultimately achieve their dream of greater autonomy or independence. If so, the “Arab Spring” may be remembered more accurately as the Kurdish Spring.

*[This article was originally published by Foreign Policy in Focus.]

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

Image: Copyright © Shutterstock. All Rights Reserved

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Calls for change have returned to Jordan, with large crowds demanding social, economic and political reform and objecting to the rising cost of living, high levels of unemployment, corruption and autocracy. As the Arab Awakening enters its third year, the resilience of King Abdullah’s regime is being tested as never before. Its ability to successfully exploit division among the political opposition, continue to receive economic assistance from the Gulf Cooperation Council (GCC) and sell its reform agenda to the Jordanian public will ultimately determine its fate.

The Overthrow of King Abdullah: A Possibility?

The Jordanian government has tolerated a “loyal opposition” for decades. The Jordanian Muslim Brotherhood — founded in 1945 by merchants committed to waging Jihad against Zionists in the British Mandate of Palestine —has for many years constituted the center of this opposition. The Jordanian Muslim Brotherhood’s political wing — the Islamic Action Front (IAF) — has called for a nullification of the peace treaty with Israel and transforming Jordan into a constitutional monarchy. Historically, the movement has worked within the system and cooperated with the monarch on a host of issues, such as oppressing communists and promoting literacy campaigns. However, the opposition has not previously staged protests deviating from a well-defined script. The size of such demonstrations have rarely exceeded several hundred, and no direct challenges to the king were made.

The nature of the protests that began last year suggest that the government may be losing control over what was once ‘confined’ opposition. The size and scope of recent protests, direct challenges to the king, and the regional context are all unprecedented. These new dynamics imply that King Abdullah’s regime is highly vulnerable to the forces that brought down the leaders of Egypt, Tunisia and Yemen. In absence of significant change – not only in terms of how the government represents the people and governs, but also how effective or ineffective it is in raising living standards going forward – King Abdullah faces the very real possibility of being overthrown.

The issue that united most protestors last November was the decision to cut fuel subsidies, which adversely affects low-income Jordanians who have suffered the most from the rise in living costs. The government defended the spending cut on the grounds that they were necessary to reduce the deficit, which has surpassed 10 percent of government spending, and in order to receive a loan from the IMF. Furthermore, since the natural gas pipeline in the Sinai – which Jordan depends on for the importation of inexpensive natural gas — has been attacked more than a dozen times following the Egyptian uprising, Jordan has been compelled to import more expensive sources of energy from Saudi Arabia, exacerbating its energy dilemma. Many recent protests have also focused on perceived corruption, with objections being raised in particular to the glamorous lifestyle of King Abdullah’s Palestinian wife, Queen Rania.

What has limited the impact of the rallies thus far is the opposition’s lack of unity. While some quarters advocate a constitutional monarchy and call for King Abdullah to step down, others would like the king to remain in power but do more to address the nation’s problems. The monarchy retains varying degrees of legitimacy within certain conservative opposition factions. Violent outbreaks between the king’s supporters and opponents in recent months highlight how loyal certain circles remain to the king. Tensions between trans-Jordanian nationalists (often referred to as “East Bankers”) and Islamist Palestinians further divide Jordan. Proposals that a more representative parliament be adopted are not popular with many trans-Jordanians, as such reform would further empower Jordanians of Palestinian origin, the Muslim Brotherhood’s largest base of support. The Brotherhood and other opposition groups frequently argue that a more representative system of government would rein in corruption and require greater accountability.

The Syrian Conflict

The Syrian crisis constitutes a major dilemma for King Abdullah. By training Syrian rebels inside Jordan, Amman’s interests appear to be aligned with Turkey, Saudi Arabia and Qatar vis-à-vis regime change in Damascus. But the prospect that radical Islamist factions may gain the upper-hand in the Syria conflict should also trouble King Abdullah. The Jordanian monarchy’s secularism, the Jordan-Israel peace treaty, and King Abdullah’s historical cooperation with the US military have made the king resented by many Islamic extremists.

The king must fear that his monarchy may be targeted next by militant jihadists if the Ba’athist regime in Syria falls. Moreover, the threat of chemical weapons being deployed by either side in the Syrian conflict is being taken seriously by Jordanian authorities, who have met with US, British and Israeli officials to discuss plans for responding to any chemical attack that threatens Jordan. Moreover, the Kingdom hosts more than a quarter million refugees from Syria, for which the financial burden will only worsen the nation’s plethora of economic problems.

That said, many of King Abdullah’s opponents fear Al-Qaeda affiliate groups more than they resent the palace. As Jordanians observe the influence of Salafi extremists in post-Gaddafi Libya, post-Hussein Iraq, and Al-Nusra’s rise within the ranks of the armed Syrian opposition, King Abdullah’s argument that his legitimacy has been earned by protecting Jordanians from the violence that surrounds the Kingdom is generally well received by many of his people. Last October, the regime foiled an Al Qaeda plot to attack several sites in Jordan. All eleven plotters were Jordanian nationals with connections to Al Qaeda in Iraq, who acquired their weapons in Syria. Clearly, the region’s conflicts have already had a spillover effect in Jordan. The king is positioned to effectively exploit these crises for political gains as his legitimacy is challenged.

Abdullah and the GCC

As a landlocked country without oil, Jordan’s economy has been foreign-aid dependent. Last year, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates each agreed to provide Jordan with $1.25 billion in aid. Without question, the GCC’s financial support for the Kingdom reflects Jordan’s strategic importance to the Gulf monarchies. While certain GCC states were quick to provide military, financial and diplomatic support for rebels in Libya and Syria, none of them — Saudi Arabia in particular — have any interest in King Abdullah falling from power.

The fall of the Hashemite Kingdom would further underscore Saudi Arabia’s geostrategic vulnerability in the Levant, especially if forces hostile to the Saudi royal family were to assume power in neighboring Jordan. It is within this context that Amman is likely to acquire more financial support from the GCC if deteriorating economic conditions continue to bring Jordanians into the streets. It is not certain that GCC aid would be an effective counter-weight to all of Jordan’s ills, and some assistance will likely come with strings attached.

On January 23, 2013, parliamentary elections will be held for the first time since the Arab Awakening began two years ago. Electoral law reform aimed at making Jordan appear to be on the path of democratization will take effect this month. However, the IAF’s boycott of the election, along with widespread skepticism regarding the king’s reform agenda, will underscore the monarchy’s preference to rein in the opposition within the scope of the existing system. Additionally, recently adopted anti-corruption measures have been dismissed by some opposition members as merely tactics of distraction. It is unlikely that the election or the regime’s top-down reforms will placate the Islamist opposition, or bring the king’s opponents over to his side following the election.

Many foreign governments are paying close attention to events in Jordan, as the stakes are high. King Abdullah’s regime has long served as a linchpin of US Middle East foreign policy, has cooperated closely with the US on military policy, and is one of only two Arab states at peace with Israel. The IAF’s approach to foreign policy implies that Amman’s relationship with Washington would change if the Muslim Brotherhood ran the country – similar to what has occurred in Egypt. The Muslim Brotherhood-led government in Cairo, the unknown future of a post-Assad order in Syria, and the possibility of civil war returning to Lebanon all constitute new security dilemmas for Jordan and Israel. In this context, Washington and Tel Aviv will face grave challenges if King Abdullah’s rule collapses.

The Jordanian regime has withstood many challenges to its rule since Jordan gained independence in 1946 — during the Arab-Israeli wars of 1948 and 1967, the Nasserists’ attempted coup in 1957, the events of Black September in 1970, and Al Qaeda’s attacks in recent years— but the Hashemite monarchy has proved resilient. The deep ethnic, tribal and ideological divisions in Jordanian society create wedges that the regime has managed effectively in the past and will perhaps continue to do so. The Syrian crisis threatens Jordan’s security, with the potential to distract Jordanians from widespread corruption, human rights violations and economic ills, thereby making stability the top priority. Thus, while it is still too early to determine that the winds of change blowing through the Middle East will topple King Abdullah from his throne, there seems every reason to believe that once the Syrian conflict reaches a conclusion, Jordan could be next in the crosshairs.

*[A version of this article was originally published by INEGMA.]

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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As was the case in Mali, recent events in the Central African Republic (CAR) have the potential to profoundly impact the dynamics of political change in Africa, where the plethora of failed or failing states provides a ripe breeding ground for extremists to assume power. The CAR’s location, being landlocked and surrounded by the failed states of Chad, the Democratic Republic of Congo, and Sudan, make it vulnerable and beholden to its neighbors. Being mineral rich makes it ripe for political change and a natural target for extremists.

A rebel coalition (Séléka) has taken over a dozen towns in the CAR over the past month — including four regional capitals. The country’s military, along with its regional allies in the Economic Community of Central African States (ECCAS), have secured a buffer zone north of the capital city, Bangui. As a result, the rebels decided not to assault Bangui and agree to negotiate with the government, being led by President Bozizé, in Gabon this week. Regardless of the outcome, democratic reforms are unlikely to be part of the CAR’s political landscape in the near future.

Four militant factions compromise Séléka — the Union of Democratic Forces for Unity (UFDR), the Convention of Patriots for Justice and Peace (CPJP), the Democratic Front of Central African People (FDPC) and the Wa Kodro Salute Patriotic Convention (CPSK). Their success, in such a short period of time, highlights the government’s inability to control the majority of its territory. Séléka is unlikely to compromise much, given its momentum and the country’s wealth of natural resources (gold, minerals, diamonds, uranium and timber). Bozizé has accused the Sudanese regime of sponsoring Séléka — which Khartoum denies. The CAR also claims that Sudanese, Nigerian and Chadian mercenaries have joined Séléka.

Séléka justifies its use of violence on the grounds that Bozizé has failed to live up to the terms of a 2007 peace agreement — which includes providing ex-rebels with employment and money. From their perspective, his presidency lacks legitimacy. The majority of the rebels come from the country’s northeast. Séléka accuses the central government of neglecting the northeast while showering Bozizé’s cronies with natural resource wealth as a means of securing loyalty. Séléka claims that its actions are driven by a “thirst for justice, peace, security and economic development of the people of Central African Republic.” Bozizé and many of his supporters believe that the rebels are manipulated by foreign powers (primarily Sudan), which are determined to deprive the CAR of its natural resource wealth.

Despite the international community’s support for a brokered political solution, the prospects for peaceful settlement are undermined by the two sides’ incompatible stances on Bozizé’s role in resolving the conflict. A spokesman for Bozizé’s ruling party stated that any proposition that the president step down would be “rejected systematically.” In 2011, the president was reelected to a second term (ending in 2016) in an election that many Central Africans and human rights organizations label as fraudulent. Although Bozizé promises not to seek a third term, he has said he must remain in power for the next three years. A representative of the CPSK stated that a peace deal is only possible if Bozizé exits the presidency. Whether either side will compromise remains to be seen, however, it is unlikely that much progress will be made at the bargaining table.

Sadly, violence and instability is nothing new for the CAR. Since achieving independence from France in 1960, the country has experienced numerous armed rebellions, bloody coups d’état, military revolts and oppressive leadership. Rebels from among its neighboring states have exploited the CAR’s weak geostrategic position for many years. Foreign governments — including France, Libya, Sudan and Chad — have historically allied themselves with various governments or rebel factions in the CAR to advance their own national interests. As a result, large flows of weapons are constantly moving across the country’s borders and outside the control of the government.

The political change that has been so prominent in the Middle East and North Africa over the past two years has been largely absent throughout sub-Saharan Africa (SSA). The key socioeconomic and political factors that have driven citizens of MENA into the streets — high unemployment, corruption and authoritarianism — are in some cases even worse in SSA. In Zimbabwe, Namibia, Senegal, Kenya, Swaziland and South Africa the unemployment rates range from 25 to 95 percent. Last year Transparency International ranked many countries in SSA among the worst in the world in terms of corruption. Few sub-Saharan leaders came to power through elections deemed free and fair by international observers, and six of the region’s leaders have ruled for more than a quarter century.

So why have sub-Saharan Africans not followed their MENA counterparts and launched an “African Spring”? We identify five primary reasons:

1. A fear of greater instability has likely led citizens of SSA to act more cautiously and refrain from public demands for democratization. Within the last two decades, SSA has been far more prone to produce failed states than MENA. Such a legacy has undoubtedly shaped perceptions about political reform.

2. The profound ethnic, linguistic and religious divisions in SSA tend to be stronger than a sense of national unity. This contrasts with Egypt, Libya and Tunisia, where deep tribal and ideological divisions exist, but more than 90 percent of citizens are Arab/Berber, speak Arabic, and practice Sunni Islam.

3. Whereas the Egyptian and Tunisian militaries maintained a sense of independence from the Mubarak and Ben Ali regimes, the militaries put pressure on their leaders to relinquish power in response to the unprecedented protests that erupted two years ago. In many sub-Saharan African states, the militaries are less prone to challenging their leaders.

4. Given the important role social media and the internet played in unifying citizens of MENA against authoritarian regimes, technological constraints, lower income levels and lower literacy rates in SSA have prevented citizens from utilizing social media for political mobilization.

5. The MENA movements were largely driven by increased levels of urbanization, while the majority of sub-Saharan Africans live outside urban areas and are less connected to urban dwellers than their North African counterparts.

All five of these factors bode poorly for Central Africans, who are deeply divided along ethnic and religious lines. The Baya, Banda, Mandjia, Sara, Mboum, M’Baka, and Yakoma ethnic groups each constitute between 4 percent and 33 percent of the population. Half of Central Africans practice Christianity, 35 percent hold indigenous religious beliefs and 15 percent are Muslim. Social media cannot be an influential force for political reform in the CAR — out of a population of approximately five million, fewer than 23,000 are Internet users, and the adult literacy rate is less than 60 percent. The nation’s urbanization rate is just 39 percent — only two percent higher than the SSA average — yet significantly lower than the North African average. Finally, since Bozizé came to power following a coup in 2003, his forces have fought mercilessly to keep him in power, which is not conducive to an uprising.

It is within this context — with the CAR being a weak state, divided by tribal, ethnic and religious divisions, with a historical legacy of authoritarianism, and with low levels of trust between the government and its opposition — that the latest rebellion has taken hold. Prospects for peace are not good. Given its momentum, and the nature of political change occurring elsewhere in Africa, it is likelier that Séléka will be victorious than not. But what is unlikely to change is the basic political composition of the country.

If we consider what has happened in countries such as Mali and Sudan, and what is now happening in the CAR, it appears that radical political change in the failed or failing states of SSA is the new normal. Given that the conflict in the CAR is reaching a crescendo at the same time that the UN intends to send a military force to attempt to wrest control from al-Qaeda affiliates in Mali, the CAR may unwittingly find itself in the middle of a higher stakes game of chess, as the West attempts to battle extremist forces and influence the nature of political change in Africa. Depending on the outcome, the CAR may come to serve as a spark for what may yet become the ‘African Spring.’

*[A version of this article was originally published by The Huffington Post.]

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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