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10 Geopolitical Predictions for 2010 & Short Term Strategic Outlook

By Gregory R. Copley | Sun, 31 January 2010 00:38 | 15

A great - and still growing - divergence appeared in 2009 between public statements by leaders and their public performance. The politicized, romanticized theater of increasingly populist “democratic” leaders and media seemed to be of a different planet from activities taking place in the real world.

While a large part of the global population appears still transfixed by words, there is a growing perception that great fissures already rend the global strategic architecture.

This is a trend which will compound during 2010.

There is a widespread belief that the world has “ducked the strategic bullet” of global economic collapse, but this is merely the delusionary euphoria of the severely wounded patient. Severe structural damage has occurred to the key driver of global economic stability, the United States. Most major economies of Western Europe and Asia, although in plight, have been protected in their fall by a complex web of structures and the fact that they were not, in many respects, as leveraged as the US. Britain and Japan, however, remain leveraged in their debt-to-asset ratio, to a death-defying degree.

All of this has been long in coming, and brought to a speedy climax by the unprecedented recklessness of inflationary spending by US Pres. Barack Obama, and, in the UK by Prime Minister Gordon Brown. The modern world (East and West, but prompted by the West) is at a junction point in a long process of constantly growing — but poorly-defined — obsession with “rights” (entitlements). This had its origins with the halting, but consistent, rise in global prosperity which began with the early stages of the Second Industrial Revolution (1700-1900).

Thus, a butterfly flutters its wings in 18th Century Britain and a tsunami engulfs the world in the early 21st Century.

Managing the now-overwhelming sense of entitlement in what we call modern democracies has become, because of the power of a comprehensive, but ill-informed electorate, an exercise in mob control, and an opportunity for populist demagoguery.

Pres. Obama’s statement of January 25, 2010, that he would now curb US Government spending was, like most of the statements of the past year, self-serving and had nothing to do with reality. His plan to push through a State-dominated healthcare system at a reputed cost in excess of $1-trillion (quite apart from other discussions about a new “stimulus package” of spending) makes a mockery of the pre-election posturing of fiscal moderation (that is, his posturing before the 2008 and the 2010 elections). In any event, a review of the statistics of the US shows that his proposed “freeze” on a small part of US Government spending would be, compared with his profligacy and reduction of private sector productivity and capital formation ability, a derisory diversion.

Without dwelling, for the purposes of this estimate, on the cumulative impact of ever-broadening the electoral franchise — which creates an automatic disposition of an electorate to demand increasing benefits without attendant increases in productivity — the Western economies are probably at a point where they must attempt to create fairly draconian, centralized power structures to rule more by diktat than by “democracy”. That is the only recourse to stem the growing dysfunction of government brought about by the “democratic” necessity to pander to a restive populace.

In a report on March 20, 2009, I noted: “the ‘professional politician’ will morph into new forms of Cæsarism or Bonapartism. This is already underway, as ‘leaders’ with no practical experience of the world increasingly fear the uncertainties of markets and the confidence of those who can actually create, manage, and build. Thus, the ‘new socialism’ is a system built by leaders who demand central control of societies and who genuinely fear freedom.”

The new circus includes the pandering to newly-created pseudo-scientific religions, such as “climate change”, which have so greatly distracted governments, the media, and populations from their daily work as to have already hampered the chances for economic viability in the near future. Those, however, who live by the sword of populism — mob rule — must ultimately answer to that same fickle crowd, which, as Elias Canetti noted in Crowds & Power, has no mind, only wants.

Pres. Obama is already facing the turning crowd, which is why, on January 25, 2010, he began his studied portraiture of reasonableness and fiscal moderation, a process to continue in his January 27, 2010, State of the Union address to the US Congress. The policy analyst, however, must look to actions, and the feasibility and context of those actions, and not to the words which attend them.

Let me highlight some of the cautions which I have made over recent years, without merely repeating the ground of the March 20, 2009, report.

1. The decline in Western asset values will likely continue in the broad sense through 2010, which will automatically lead to a compounded reduction in the asset-based credit available. In other words, Western economies will be forcibly “de-levered”, quite apart from the fiscal prudence which will cause a reduction in risk investment;

2. The West will demonstrably not contest dominance of the major oil and gas fields of Iraq, Iran, Nigeria (and elsewhere in the Gulf of Guinea) against competition from the People’s Republic of China (PRC) and, to a lesser extent, India. This will force moves in the US toward natural gas exploitation and — as Obama and the “green left” depart — possible exploitation of US oilfields and new nuclear energy approaches. This would in turn imply a renewed look at nuclear waste disposal. But none of this Western search for alternatives will occur in 2010.

3. The conflict in Afghanistan will become increasingly strained as the US sends out, literally, signals of surrender to the Taliban, who take all calls from the US for a “negotiated settlement” in the wake of a pronouncement of US imminent withdrawal as a sign of weakness and defeat. It is, in fact, such a signal. And while senior US military and security officials “reassure” regional states, such as Pakistan, that the US would, in fact, remain in the area beyond the Obama withdrawal deadline of 2011, the reality is that — absent the removal of Obama from office — this will not happen. Once again, the “long-timers” in the US bureaucracy, including those in Defense and State, believe that they can outwait and outwit the “short-timers”. But the determined short-timer, such as Pres. Obama, can and will wreak havoc and destroy the pillars of the system before he leaves. And when Obama leaves, the money, in any event, will be also gone, and with it the capability and viability for the US to remain in or near Afghanistan. Indeed, the destruction of key elements of the US economic and political framework has already occurred.

4. Quite apart from the US ability to sustain South Asian operations in the manner which the Washington insiders have assured the Pakistanis (and others, such as the Australians), the reality is that India — which the US has been courting as a strategic partner — will of necessity have to re-align with Russia if it is to gain any access to the Eurasian heartland. If it does not, it will never be able to compete strategically in the near future with the PRC, which is pushing ahead with the construction of more efficient overland links to the Indian Ocean through Myanmar and through Pakistan (from the Karakoram Highway down to the Baluchistan Arabian Sea port of Gwadar, which had been offered twice by Pakistan to the US, which refused it).

5. A strategic opportunity is emerging for the West — and possibly for India — in the transformation now occurring in Myanmar as the ruling military leaders take very seriously their approach to elections later in 2010. This could — could, not necessarily will — mean that Myanmar opens to a more Western orientation to the detriment of the PRC, but only if the US can support the notion of providing some measure of post-election security, ideally within Myanmar, for the retiring military leaders. The US lost massive credibility in this kind of undertaking when it lured Liberian Pres. Charles Taylor into exile in Nigeria in 2003 and then broke promises of safe-haven for him, and organized his subsequent extradition to the UN’s International Criminal Court (ICC), to which the US does not even subscribe.

6. As global productivity fades during 2010 (albeit with some pockets of resilience), many Western leaders will turn to sophistry and intellectual distractions, such as an attempt to assert or blame “international law” as the mechanism for remedying their situations. There is, in reality, no such thing as “international law”, but there is an attempt to create it, even absent global acceptance of such a concept. There are norms of international behavior, but, strictly speaking, the United Nations (around which much of the proposed “international law” is being built) specifies the right of nations and peoples to self-determination, free from external interference. But what we are seeing is the creation of a minority-controlled set of structures — such as the “International Criminal Court” and its derivatives — creating laws without any valid legal framework. The ICC derivative judging “war crimes” in the former Yugoslavia, for example, has been making up laws and case law to validate its position. In any event, 2010 will see a stark removal of the media-perpetuated view that “international law” exists. The PRC and India have already indicated that they will not comply with so-called climate change measures; they will not commit their populations to starvation by forcing emission reduction measures on their industries, making them unaffordable or uncompetitive. This, as I have often said, is part of the trend which sees nations moving back toward nationalistic stances and protectionism. “International law”, and the United Nations itself, is heading toward irrelevancy. The feel-good gatherings, such as the World Economic Forum, at Davos, Switzerland and even the Copenhagen conference on “climate change”, become mere distractions from the real issues facing the world.

7. The unease and conflict in the Arabian Peninsula will continue apace, with strong Iranian support and some Russian interest, merely because there is nothing to stop it. Only a total compromise of Yemen Pres. ‘Ali ‘Abdullah Saleh to Iran — something which would greatly antagonize Saudi Arabia — can bring the fighting in the area to a more contained level, and even that would signify an Iranian victory. Inter-governmental talks on the security and stability of Yemen, held in London on January 27, 2010, were essentially cosmetic, and signified the lack of Western commitment to addressing the problem in the Arabian Peninsula and the Red Sea. The most significant unknown factor is the degree to which Oman can stop the spread of unrest into its country, which controls the southern littoral of the Strait of Hormuz. Equally, Oman’s unique culture, and the strength of its leader, Sultan Qaboos bin Sa’id al-Said, is its best safeguard, as well as the West’s best hope for security at the Strait.

8. It is in a climate of profound international distrust in any Western support or ability to protect that we will see the transition of power occurring in places such as Egypt and Nigeria in 2010. Both states are critical to the West, both geopolitically and in energy terms. France has offered a strong degree of support for a stable Egyptian transition, but the rest of the West has been fairly impotent. Similarly, Pakistan is undergoing a constitutional crisis which may see Pres. Asif Ali Zardari removed by the Supreme Court which he, essentially, helped reinstate after the end of the Musharraf Administration. Even if Pres. Zardari can circumvent the mounting constitutional legal case being mounted against him, his powers are being eroded by the National Assembly.

9. It is profoundly unlikely that Israel will militarily attack Iran in 2010, or in the foreseeable future. As a result, the clerical leadership in Iran will move inexorably toward greater consolidation, a process which will occur in diametric contrast to the rising shrillness of US condemnation of Iran’s nuclear position. The reality is that (a) international embargoes against Iran have already failed, and new embargoes cannot be implemented as long as Russia and the PRC guarantee Iranian trade, (b) the US (and Israel) cannot militarily attack Iran with any hope of a positive strategic outcome because the nuclear and National Command Authority targets are too diffuse and there is no capability of a ground-force follow-up, and (c) the Iranian population would, as they have always done, react with great hostility to any foreign attack, rallying around the government of the day, even if they have despised it. The only hope of what the US calls “regime change” in Iran can come if it is at the hands of the Iranian population, and Russian and PRC support for the Administration of Pres. Mahmud Ahmadi-Nejad’s security services has ensured that the Iranian public cannot effectively combine to remove him. Still, mounting internal frustration in Iran could result in a coup by the Iranian Revolutionary Guard Corps (IRGC: Pasdaran).

10. The People’s Republic of China will continue to manage the great internal disparities through 2010, but there is no guarantee that Beijing will not face major hurdles in the year. Moreover, the continuing poor economic performance in Japan and the US will continue to constrain PRC exports and dampen PRC economic options given the extent of Chinese holdings of US securities which grow less attractive by the day.

Written By Gregory R. Copley, Editor GIS/ISSA for OilPrice.com - The no.1 source for oil prices

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  • Anonymous on February 03 2010 said:
    Interesting comments. Point 10 needs a bit of balance.

    It reinforces the point that China’s economy is completely dependent on exporting stuff to the West. Something has been happening the last few years --- the domestic component of the economy is grabbing the attention of Beijing. They are working now to boost the spending power of domestic consumers. Little known to alot of Western commentators is that China has more than 800 million rural folks and farmers who did not benefit / have been left out of the first phase of China’s economic lift-off of the past 30 years.

    The government is just starting to empower and enrich the villages. The second wave of the Chinese economic boom will focus on the rural folks. If the first wave of 200 million urbanites getting rich is shaking the world, imagine the impact of the second wave. This wave will easily last more than 30 years.
  • Anonymous on February 06 2010 said:
    The EU is a bigger customer for China than is the US,so while it may make us feel good, it is no longer accurate to say "China needs the US,or they'll go broke!".
    Also,you could take away electricity from most of China's population and they would resume their morning activities while burning used paper to cook their breakfast.
    If you took away cable TV from Americans,they would riot and fall into disarray.
    A blind man can see that the US is rapidy collapsing and our military/national policy of stealing oil is proof of our need to secure energy when our currency becomes that which can be burned in a fire to cook our breakfast!
  • Anonymous on February 06 2010 said:
    I hope you are right about iran. It is complete insanity to think that bombing iran would solve anything.The US is toast and it must break the stanglehold of zionist-jewish influence over her foreign policy.they the americans must change course at once and become a purely defensive military,not the offensive policeman of the world.If that would happen there could be healthcare,jobs,respect for them not hate,a cleaner planet(f--- you and your depleted uranium),and most important peace,for it is the US and her zionist masters(read james petras,about zionist control of america and how they do it) that is provoking EVERY regaional conflict around the globe(iraq,pakistan,afghanistan,somalia,yemen,venezuala,cuba,dammit everywhere!
  • Anonymous on February 06 2010 said:
    No question that the US is in irreversible decline and the situation will on get worse and the American population will really feel the pain in this decade. A war with a powerhouse like Iran supported by China, the world's only superpower left is even beyond the realm of possibilities. It would be sheer suicide and a swan song for the dying US economy.
  • Anonymous on February 06 2010 said:
    THE WORLD ECONOMY IS INTERCONNECTED. CHINA IS PLAYING A DOUBLE GAME INTERNALLY THEY USE COMMUNISTIC ECONOMICS EXTERNALLY CAPITALISTIC. U.S.A WILL SOON INTERNALLY IN THE USA IPLEMENT AMERICAN STYLE COMMUNISM. THE FEDERAL RESERVE WILL CONTINUALLY PRINT MONEY BASED ON THE WORLDS WEALTH CAN THE WORLD COLLAPSE NO IT CAN BE A GREATER DEBTOR THEREFORE THE FEDERAL RESERVE ALONG WITH BIS WILL CONTROL CHINA EUROPE ECONOMICALLY. GO AND WATCH THE GOOD THE BAD AND THE UGLY. THE SPAGHETTI WESTERN YOU'LL UNDERSTAND WHATS GOING ON.
  • Anonymous on February 06 2010 said:
    you are way too sensible. elites are quite public on thier desire to depopulate the planet. iran/israel war will cause every bit of stupid actions you may imagine. You figure that will be the reason it WONT happen, but alas, this is our last viable opportunity to have ww3, and we SHALL have it. total disruption will get the blame for ensuing starvations, and terrorist reactions will continue unabated till we have our game changing events that give us the nwo. what makes you think we shall get to a population of 30 billion? Or more? inertia? planet managers have no intention of letting inertia rule.
  • Anonymous on February 06 2010 said:
    America like it's people has become bloated and innefectual, what we are witnessing are the death throes of the american abilty to be the moral judge of the world.

    The USA needs to focus internally for at least the next 50 years and get their own house in order before telling the rest of the world how to manage theirs. The chinese ascendency appears to be unstoppable and it will be interesting to see how the Zionist's attempt to gain control of china.

  • Anonymous on February 07 2010 said:
    HO!HUM!

    *BBG IS THE ONLY ANSWER FOR ALL!





    *..... BETTER BUY GOLD!
  • Anonymous on February 07 2010 said:
    The West will "not contest dominance of the major oil and gas fields". Disagree. Are you saying that natural instinct will abate? Are you denying all previous historical examples that show changes from one power to the next only happen after an historical battle of sorts?
    I am inclined to believe the comment by 'Bleak' as being a more realistic assessment.
  • Anonymous on February 19 2010 said:
    Another issue to consider. If stagflationary pressures do emerge in the US and world economies generally then the real value of oil will fall. This will heighten tensions between oil producers and the west.
  • Anonymous on March 01 2010 said:
    nice articles,your assesment about president zardari, of pakistan,is partially wrong,he is neither weak,nor going to quit before his full term of five years.problems are being faced by almost all the heads of states and governments,in the developing world.president zardari,s fight against terrorism,is a plus for the west,moreover,he is fearless and dependent ally,who has to be recognised and rewarded,particularly by the western countries,EU,EC and others.
  • Anonymous on May 17 2010 said:
    Agree with most of the 10 predictions... but NOT Israel. When pushed into the corner of destruction from Iran, they will attack, in 2010.
  • Anonymous on August 23 2010 said:
    [quote name="weng"]Interesting comments. Point 10 needs a bit of balance.It reinforces the point that China’s economy is completely dependent on exporting stuff to the West. Something has been happening the last few years --- the domestic component of the economy is grabbing the attention of Beijing. They are working now to boost the spending power of domestic consumers. Little known to alot of Western commentators is that China has more than 800 million rural folks and farmers who did not benefit / have been left out of the first phase of China’s economic lift-off of the past 30 years.The government is just starting to empower and enrich the villages. The second wave of the Chinese economic boom will focus on the rural folks. If the first wave of 200 million urbanites getting rich is shaking the world, imagine the impact of the second wave. This wave will easily last more than 30 years. [/quote]the east is red...china's east is america
  • Anonymous on August 24 2010 said:
    The author is a dangerous climate change denier and is thus guilty of participating in the largest on going mas murder in human history of people and nature at large.Moving away from fossil fuel addiction and toward renewable energy, conservation and smartgrid reduces future damage and leaves more energy savings to be spent on cleaner non energy consumption.
  • Anonymous on February 10 2011 said:
    No one knows for sure who is behind what! This whole economy recession thing must have been planned a calculated by the people who are in control. The western Elite. China is the Laborer and USA&Europe are the masters who are in control. However with time the Laborer is learning the master tricks therefore if the master wants to stay a step ahead of the laborer he must outsmart him if he wants to remain a master or else the Slave will become the master.Peace.LONG LIVE THE WEST.

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