Two decades of geopolitical analysis

[UPDATED JULY 2018] I’ve been employed to analyze geopolitics and the world economy for about twenty years now, which means, alarmingly, I’ve got a track record. (Most of my publicly-available articles are now posted on this blog.) What did I get wrong, and what did I get right? The worst calls 1. Turkey My worst call has been Turkey. In a 2004 editorial, I contended that Turkey was on the path traveled by so many Eastern European states: convergence with Western Europe. I even invested in Turkey, I was so sure of this call. To be fair to myself, the problem arguably wasn’t with Turkey: to my surprise, the EU got cold feet. But even after that I doubled down on Turkey with another article predicting a turnaround. This is an example of what Daniel Kahneman would call irrational decision-making based on “loss aversion.” C’mon Turkey! This is your year! 2. China Starting with my 2003 book The Kimchi Matters, co-authored with Marvin Zonis and Dan Lefkovitz, I’ve continually been predicting trouble in China. But, China just keeps on booming. I did get some things right: in a 2004 editorial, I predicted that China would get into trouble by stimulating its economy too much if it faced a downturn. That is indeed what happened during the 2007-8 global slowdown, and China now faces a severe debt problem as a result. So I doubled down on this prediction as well. But there’s no denying that, blithely disregarding my sniping from the sidelines, China is still booming today. Good for you, China. The best calls 1. Venezuela In 2004, I wrote an...

A Turkish turnaround?

Most reasonable people would agree that the administration of Turkish President Recep Tayyip Erdoğan has been heading, alarmingly, towards authoritarianism. Erdoğan has been accused of imprisoning journalists, censoring the media, attempting to exert political influence over the courts, and using the security services for his own purposes. He has pushed through revisions to the country’s constitution, arguably in his favor. He served as Turkey’s prime minister for more than a decade before becoming president. But there is one fact that is difficult to reconcile with this chain of events. Included as part of Turkey’s recent agreement with the EU on Syrian refugees was a little-noticed, and even less-discussed, provision: resumption of Turkey’s EU accession negotiations. On the face of it, it is a paradox. If Turkey is becoming increasingly authoritarian, why on earth is Erdoğan attempting to re-open accession negotiations? After all, part and parcel of EU accession negotiations is an intrusive and meticulously verified set of requirements for democratic reforms. Is Erdoğan schizophrenic? Was the measure adopted by the Turkish government despite Erdoğan’s opposition? Or, just possibly, is Erdoğan misunderstood? I would argue the latter – and that there is a distinct possibility of a Turkish turnaround. It is undeniable that Erdoğan has shown authoritarian tendencies. But he has also been misunderstood, for two reasons. First, his rhetoric is worse than the reality; and second, he has been pushed by circumstances into his authoritarian role. On the topic of Erdoğan’s rhetoric, he suffers the problem of any politician who relies on pious supporters: he’s scary when playing to his base. Of course, it is not only Erdoğan who...

Could the crisis in Ukraine transform Russia?

Most of the commentary surrounding the extraordinary “euromaidan” demonstrations and fall of Ukraine’s government has focused on Russia’s influence on Ukraine, and in particular, the question of Russian intervention to support the now-deposed Yanukovich government. But we might find, in the final analysis, that Ukraine’s influence on Russia is far more profound. In the spring of 2013, the French export credit insurer Coface produced an intriguing risk index of “people power” movements. Such uprisings have become an epidemic in recent years. The most recent round of uprisings arguably began with the 2003 “Rose Revolution” that deposed the government of post-Soviet Georgia, followed by Ukraine’s 2004 “Orange Revolution”, a series of attempted “green revolutions” in Iran, and then, perhaps most unexpectedly, the “Arab Spring” that toppled the governments of Egypt and Tunisia in 2011. While very different in causes and results, these “people power” revolutions do have a few factors in common. Notably, they are the result of an increasingly educated middle-class taking to the streets, usually empowered by technology. The mobile phone (and particularly, the ability to broadcast text messages) played a large role in the Philippines, just as the photocopier had been crucial in Iran’s 1979 revolution and the fax machine played a role in the toppling of the USSR. In the Arab Spring, the Internet and even social media reportedly were crucial. These technologies, wielded by educated people, make it easier for popular movements to coordinate mass protest actions, and much harder for governments to control the flow of information (and the Blackberry-wielding London rioters are a further example). One implication of this analysis is that “people...

Will the Tsunami Bring a Wave of Instability to Asia?

The tsunami, which left as many as 160,000 dead, hit countries with a tenuous hold on political stability – a province of Indonesia that is home to a violent separatist movement, a region in Sri Lanka that is currently at peace but has fought a long-running civil war. Crises, whether natural or man-made, tend to beget political instability. Will the political aftershocks of the tsunami be even stronger than the initial quake? An earthquake of devastating magnitude struck, in 1976, not far from Beijing. As the survivors’ stories trickled out, the world rushed to China’s assistance. But the Chinese government refused all outside aid and claimed the situation was well in hand. Partly as a result, the casualty figures were, in the end, astronomical. At least 242,000 died – the official figure, released years later – and some reputable sources claim that over 700,000 perished. The problem was the timing. It has been a basic tenet of Chinese political philosophy for more than two millennia that governments rule with the “mandate of heaven,” and that natural disasters – including floods, droughts and earthquakes – are a heaven-sent signal that this mandate has been revoked and the leadership had failed. In 1976, Mao was on his deathbed, and the unsteady Chinese government feared the political consequences of the quake. Lest anyone conclude their mandate was up, the government tried to cover up the earthquake’s magnitude, at the expense of Chinese lives.But then, Confucian teachings aside, there is ample precedent that natural disasters beget instability. Simon Winchester popularized the argument that the volcanic explosion which destroyed the Indonesian island of Krakatoa...

Turkey Looks West, and Up

“For the Turk, freedom is life,” declared Mustafa Kemal Ataturk, Turkey’s founding father, in 1920. But he clearly had something in mind quite different from the democratic and market freedoms frequently praised by US President George W. Bush. For Ataturk, in the name of freedom, set about building a country in which the military had ultimate political authority and the economy was state-dominated. Indeed, Turkey became the first country to follow the USSR in adopting economic central planning. And not without reason. Because the freedom Ataturk had in mind was, specifically, freedom from foreign influence. The economy was state-dominated so it could never be foreign-dominated. The military was made strong to protect Turkey from the powerful European nation-states that had greedily dismembered the country’s geographic predecessor, the Ottoman Empire. And Ataturk was spectacularly successful, in a sense. Turkey indeed became strong and relatively stable. But – especially in economics – the country’s navel-gazing was a burden. The state-led, inward-looking economy became a politicized economy. A small, well-connected elite built immense business conglomerates straddling unrelated industries, thanks to favorable regulation and government-allocated capital. Ataturk’s great Business Bank was redubbed the “Bank of Politicians” for its cronyist lending, and the Turkish government itself came to be known as devlet baba, the “father state,” for its economic micromanagement. Over time, political overspending and interference caused Turkey’s economy to stagnate and then implode, surviving only with larger and larger bailouts from Western allies – reaching $7.5 billion in 2000, then $15 billion in 2001. A despairing Turkish pundit wrote, “it is evident [Turkish] politics in general has been reduced to a game of...