A new bloc on the block

Sergey Karaganov

Sergey Karaganov

The day (in 2000) when Putin suggested that Russia would be willing to join NATO if it was treated as an equal partner seems like a very long time ago. Of course, the offer was never made, and NATO proceeded to expand eastward to within 100 miles of St Petersburg.

In retrospect, shutting Russia out of the Western alliance was a colossal mistake, possibly one of the great strategic blunders in all of history. Because now Russia is hellbent on forging an alliance with China:

Russia’s view of China has shifted significantly over the past five years. Moscow has abandoned any hope that the Chinese economy is an example it might emulate. Instead, foreign policy experts now talk of how Russia can use China to further its geopolitical goals.

There was no doubt at Valdai that China knows how to do economic growth, and that Russia does not. Russia’s elite — always so ready to resist any sign of Western hegemony — have no problem admitting China’s economic superiority. Their acceptance reminded me of the way Britain gave way to the United States as the world’s dominant economic power.

Seen from Moscow, there is no resistance left to a new alliance led by China. And now that Washington has imposed tariffs on Chinese exports, Russia hopes China will finally understand that its problem is Washington, not Moscow.

In the past, the possibility of an alliance between the two countries had been hampered by China’s reluctance to jeopardize its relations with the U.S. But now that it has already become a target, perhaps it will grow bolder. Every speaker at Valdai tried to push China in that direction.

Both Russia and China have obvious shortcomings, but the fact is that the US, Russia and China are the world’s foremost military powers; and an alliance of two of those powers against the third could prove to be a geopolitical game-changer.

This alliance, if it becomes concrete, would overturn how we do global politics. Imagine an international crisis in which Russia and China suddenly emerge as a single bloc. The impact would be considerable, and to some extent unpredictable: Psychologically, in the mind of the West, it would combine the fear associated with Russia with the apparent invulnerability of China. Washington would feel under attack; Europe, intimidated and unsettled.

The old Continent would also face the threat of a split between Western Europe and the nations of Central and Eastern Europe, which could turn their focus east under the influence of a cash-happy China ready to invest in the region.

The author, a former Europe minister for Portugal, describes a scary meeting between former Putin adviser Sergey Karaganov and some Chinese officials and think tank people:

There, a number of Chinese participants said they doubted Russia’s assertions that the world is in the midst of a new Cold War.

Karaganov dedicated himself to convincing them otherwise, arguing with increasing passion that China is deluding itself if it thinks issues between Beijing and Washington can be conveniently resolved to the benefit of both sides.

If Beijing places its bets on peace and cooperation, the great Chinese adventure will come to an end, and China will have to live in the shadow of the U.S. for another generation — perhaps forever, Karaganov said. Chinese authorities, he argued, have no more than five years to make a decision.

The clock is ticking.

The end of tourism?

International tourism arrivals grew by nearly 6% last year to 1.4 billion, according to figures from the United Nations World Tourism Organization.

Experts at the UNWTO predict that by 2100, the entire planet will be like a giant international airport, with a permanent floating population of billions of backpackers camping out in every Brazilian beach, Thai village and Mongolian yurt, turning the world into an extension of Instagram.

Backpackers

That is, of course, if current trends continue. But what if they don’t? We take it for granted, but the ease and safety of global travel today is really unbelievable, relying as it does not only on technology, but also the low cost of fuel, geopolitical stability, the openness of many countries to tourism, and a global middle class that can afford to vacation abroad. The problem is, none of the above conditions are set in stone. A large-scale war, economic depression, or energy shock, among other possible disruptions, could trigger a collapse in international travel, perhaps marking the end of the era of mass global tourism.

Consider this item from last week:

Americans traveling to Europe will soon have to add a new item to their packing lists.

Starting in 2021, the European Union will require US visitors to get a pre-approved, visa-like travel pass issued by the European Travel Information and Authorization System.

The permit will cost about $7.90 and will have to be requested at least four days before the journey—making romantic last-minute jaunts to Paris impossible.

The new requirement is described as a “security check.” It may be just a minor hassle for travelers, but a continued tightening of visa rules in Europe and elsewhere could put a serious damper on tourist flows. And as one blogger comments: “This throws a wrench into international travel, but the bigger wrench will come when the EU collapses.”

Nationalism is on the rise, and it’s possible that many countries will develop a sudden allergy to foreign backpackers, especially as concerns grow about “overtourism.” In this context it’s interesting to note that Thailand has closed Maya Bay, made famous by the Leonardo DiCaprio movie movie The Beach, indefinitely, while the Philippines shut down the popular island of Boracay for a six-month cleanup last year – it reopened with strict limits on tourist numbers.

Another factor is the state of the “rules-based international order,” which looks increasingly wobbly at the moment. The US State Department warns its citizens to “Exercise Increased Caution” when traveling to China owing to the latter’s coercive “exit ban” policy – thus international travel between the world’s two largest economies is officially fraught with risk. The situation could get far worse if geopolitical tensions continue to escalate, and it goes without saying that a world war would pretty much destroy the tourism industry. And global conflict is on the rise.

The takeaway? Enjoy Boracay while you still can!

The Mandela effect, Star Wars edition

How much do you trust your memory?

We all know the famous line. “Luke, I am your father.” Right?

Now I have probably seen this scene a dozen times over the years, but even so, I was mildly shocked to watch this video. Listen carefully:

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That’s right… “Luke, I am your father” is not spoken in the movie. The line does not exist in the film, although it lives in our pop culture and collective memory. Your memory lied!

The confusion over this line is an example of what is sometimes called the Mandela effect. I reckon the universe is a might peculiar. Enjoy!

Social credit system in action

China’s dystopian social credit system is in full swing, and the results are… sweeping:

Skipped paying a fine in China? Then forget about buying an airline ticket.

Would-be air travelers were blocked from buying tickets 17.5 million times last year for “social credit” offenses including unpaid taxes and fines under a controversial system the ruling Communist Party says will improve public behavior.

Others were barred 5.5 million times from buying train tickets, according to the National Public Credit Information Center. In an annual report, it said 128 people were blocked from leaving China due to unpaid taxes.

The ruling party says “social credit” penalties and rewards will improve order in a fast-changing society after three decades of economic reform have shaken up social structures. Markets are rife with counterfeit goods and fraud. The system is part of efforts by President Xi Jinping’s government to use technology ranging from data processing to genetic sequencing and facial recognition to tighten control.

How long before China adds social credit incentives to boost its lowest-in-the-world fertility rate? Have another baby, get “points” that you can redeem on Taobao!

And before you get complacent, the Western democracies are not far from implementing “social credit systems” of their own.

Fuzzy GDP math

It’s hardly a secret that China’s reported GDP growth figures are less than reliable; premier Li Keqiang actually acknowledged that the numbers are “man-made and therefore unreliable” more than a decade ago. A new study from economists at the Chinese University of Hong Kong and the University of Chicago estimates just how inaccurate those figures are:

China has overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016, with the miscalculation increasing each year, according to a new study published on Thursday.

The results indicate that the actual size of China’s economy at the end of 2018 was well below the government’s official estimate. […]

Using the study’s findings and applying them to government figures starting with the level of nominal gross domestic product (GDP) at the end of 2007 and the growth rate for 2008, calculations by the South China Morning Post show that the current nominal size of the Chinese economy is about 18 per cent lower than the official level of 90 trillion yuan (US$13.4 trillion) at the end of 2018. […]

SCMP calculations show the adjusted nominal GDP level in China is about US$11.5 trillion using current exchange rates, still more than twice the size of Japan’s economy at US$5.16 trillion, but well below the economy of the United States at US$20 trillion.

US to shrink aircraft carrier fleet from 11 to 10

Might as well. China’s deployment of carrier-killer missiles effectively turns our aircraft carriers into floating, $4 billion targets:

The Pentagon reportedly plans to send one of its Nimitz-class aircraft carriers into early retirement, shrinking the carrier fleet to save billions of dollars.

The US military is set to scrap plans for a midlife overhaul of one of its carriers, The Washington Post’s David Ignatius reported Tuesday. That carrier is the USS Harry S. Truman, which was scheduled to have its nuclear reactor core refueled in 2024, Breaking Defense’s Sydney Freedberg reported Wednesday.

The Truman, which entered service in 1998, was designed to serve for half a century, as is the case with all the Navy’s nuclear-powered aircraft carriers. In 2024, the ship was to sail to the shipyard in Newport News, Virginia, for a refueling and complex overhaul, or RCOH, to be completed in 2028, Breaking Defense reported.

The cancelation of the midlife overhaul and retirement of the aircraft carrier — reportedly part of the 2020-24 budget plan — would see the US carrier fleet shrink in size, to 10 from 11.

Failed coup

Juan Guaido Venezuela

Juan Guaido may remain interim president of Venezuela for a while

Looks like plans for a Venezuelan Spring are falling apart. According to Bloomberg, opposition leader Juan Guaido amassed a mini-army of 200 exiled soldiers to storm the Venezuelan border from Colombia… and was stopped by the Colombian government:

Late last month, as U.S. officials joined Venezuelan opposition leader Juan Guaido near a bridge in Colombia to send desperately needed aid to the masses and challenge the rule of Nicolas Maduro, some 200 exiled soldiers were checking their weapons and planning to clear the way for the convoy.

Led by retired General Cliver Alcala, who has been living in Colombia, they were going to drive back the Venezuelan national guardsmen blocking the aid on the other side. The plan was stopped by the Colombian government, which learned of it late and feared violent clashes at a highly public event it promised would be peaceful.

Almost no provisions got in that day and hopes that military commanders would abandon Maduro have so far been dashed. Even though Guaido is back in Caracas, recognized by 50 nations as the legitimate leader of Venezuela, the impromptu taking up of arms shows that the push to remove Maduro — hailed by the U.S. as inevitable — is growing increasingly chaotic and risky.

Bloomberg appears to suggest that Guaido is taking order from the US:

There have been other concerns. Guaido was planning to make a tour of European capitals this week to build international support, but the Americans told him he needed to return to Venezuela or he’d lose whatever momentum remained.

He’ll also need to be in Venezuela to serve as Maduro bait:

The Latin American diplomat, who has been in contact with Washington, said the U.S. strategy seems to be to continue to provoke instability in Venezuela in hopes that Maduro will make a move that could warrant more aggressive U.S. action. Bolton and Abrams have said that arresting Guaido would prompt a severe response.

Dunno, given its track record on regime change, maybe the US should sit this one out. Just a suggestion.

Some economic doom & gloom

David Stockman says it wouldn’t be prudent

A sobering assessment of America’s economic health by a former Director of the Office of Budget and Management (OBM). Whether you agree or disagree with his analysis, it’s worth a listen:

Listen to “Josh Jalinski Talks to David Stockman, Author & Former Budget Director” on Spreaker.

Quoth David Stockman:

The trade war with China is aimed at the wrong problem: it’s not bad trade deals or even nefarious activities by the Chinese state, the problem is bad money – this tremendous money-pumping that the Fed has done over the last 20 or 30 years, which has really undermined the Main Street economy and caused production and good jobs to shift offshore.

[…]

At the federal level, we now have [$]22 trillion of debt… If you take households that have 15 and a half trillion of debt, business that has about 14, you take the federal government, state and local, and then financial institutions, the total debt in our society today is $70 trillion, sitting up there on top of a GDP that’s barely 20 trillion. So we have three and a half times as much debt as we have income, and if you look at history… that is off the charts, that is a warning sign that this system is not sustainable. When we had a healthy economy, pre-1971, we had in fact a whole century of good economic prosperity and progress, from 1870 to 1970, the average debt-to-GDP ratio for the whole economy was 150%, not 350%.

Very old stories

This is intriguing:

In a new study published in the journal Royal Society Open Science, a folklorist and anthropologist say that stories like Rumpelstiltskin and Jack and the Beanstalk are much older than originally thought. Instead of dating from the 1500s, the researchers say that some of these classic stories are 4,000 and 5,000 years old, respectively. This contradicts previous speculation that story collectors like the Brothers Grimm were relaying tales that were only a few hundred years old.

It turns out that it’s pretty hard to figure out how old fairy tales are using simple historical data. Since the tales were passed down orally, they can be almost impossible to unwind using a historian or anthropologist’s traditional toolbox. So the team borrowed from biology, instead, using a technique called phylogenetic analysis. Usually, phylogenetic analysis is used to show how organisms evolved. In this case, researchers used strategies created by evolutionary biologists to trace the roots of 275 fairy tales through complex trees of language, population and culture. […]

As they tracked, they found evidence that some tales were actually based in other stories. More than a quarter of the stories turned out to have ancient roots—Jack and the Beanstalk was traced back to the split between Western and Eastern Indo-European languages more than 5,000 years ago and a tale called The Smith and the Devil appears to be more than 6,000 years old.

If true, this would mean that elements of present-day Western culture date back to before the Epic of Gilgamesh and before the first (legendary) dynasty of China. From the study:

Wilhelm Grimm argued that the traditional German tales that he and his brother Jacob had compiled were remnants of an ancient Indo-European cultural tradition that stretched from Scandinavia to South Asia…

In case you were wondering:

The Smith and the Devil is a European fairy tale. The story is of a smith who makes a pact with a malevolent being—commonly the Devil (in later times), Death or a genie—selling his soul for some power, then tricks the devil out of his prize. In one version, the smith gains the power to weld any material, he then uses this power to stick the devil to an immovable object, allowing the smith to renege on the bargain.

(Sound familiar?)

One nation under Kim

Kim Jong-un smoking

The US and South Korea have confirmed reports that they plan to end large-scale war games to ease tensions with North Korea, which views these exercises as preparations for an invasion. I commented yesterday:

This could also be seen as a step in the direction of reducing the US troop commitment in South Korea, which currently numbers 28,500 soldiers, and perhaps eventually a total withdrawal.

My comment may not have been far off the mark. From a blog post by Dongseo University’s Professor BR Myers, dated March 2018:

Hence also the confident hope of many that under the right sort of pressure, Washington will reduce USFK [Ed: United States Forces Korea] from bodyguard to chaperone: a force just high-tech and well-armed enough to reassure foreign investors, reward the US military-industrial complex, and discourage the North from doing anything crazy, but too small and averse to military exercises to frighten the neighbors. (Which may well be what is foreseen for the very first stage of a confederation, as a transition to US troop pullout.)

The rest of the post is interesting for its analysis of the astonishingly anti-American, pro-North-Korean orientation of South Korea’s current government, led by president Moon Jae-in:

It is therefore misleading of the New York Times to say that the Moon Jae-in administration is “hungry for a diplomatic rapprochement” with Pyongyang. There is no bad blood or grudge between the two parties that must now be laboriously reconciled. Besides, they have the exact same short term goal of bringing off a North-South summit that is PR-effective enough to get a) the international community to relax sanctions, and b) the South Korean public to sign off on confederation. Their longer term goals are different. The North wants unification under its own flag, while South Korean progressives want the two states to coalesce over decades of mutually beneficial economic cooperation.

Here’s more on that topic by North Korea expert Joshua Stanton (dated April 2018):

LAST DECEMBER, I PUBLISHED A SURPRISINGLY CONTROVERSIAL HYPOTHESIS that Korean War II would not be a conventional war, but is a hybrid war to alternately cajole and coerce South Korea into gradual submission to the North’s hegemony, aggressive implementation of a series of joint statements, and eventual digestion into a one-country, two-systems confederation. I argued that this plan would only work if a sufficiently submissive government in Seoul yielded to Pyongyang while going only so far and so fast as possible to avoid a domestic backlash among a population that was, at least until recently, deeply distrustful of Pyongyang. Rather than involving anything as implausible and dramatic as a North Korean occupation, this hegemony would be enforced by South Korean institutions, such as state media, the National Intelligence Service, and the riot police—with occasional assistance from the muscle of hard-left street thugs, like those who are blocking the THAAD sites now and preventing them from becoming fully operational. I argued that the historical conduct of both Pyongyang and Korea’s left also suggested that this plan was not only plausible, but no great secret. This is why I find the controversy to be surprising. […]

Again, I’m not oblivious to how conspiratorial it all must seem. But then, on what evidence do skeptics of this view believe that those who staff the top ranks of the Moon administration — men who are veterans of groups like Minbyun, People’s Solidarity for Participatory Democracy, and Chondaehyop, with deep ideological and financial links to Pyongyang and a lengthy pedigree of violent anti-Americanism — have moderated their views? At some point, status quo bias must yield to what’s right before our eyes.

To reiterate what I said before, the US needs to reassess its relationship with South Korea in the cold light of these facts. If the Moon administration wants to pursue a phased unification with North Korea, then, well, that is the sovereign decision of South Korea. But in that case, the US should not have any part in defending South Korea from its friendly nuclear-armed neighbor to the north.