Where the Military Goes, the Government Follows

West Point (7238241484)

United States Military Academy at West Point, by Peretz Partensky [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

I recently had the pleasure of reading the transcript of General McRaven’s address to the cadets at the United States Military Academy at West Point. A copy can be found here.

Early in his speech, while reciting a Plutarchian litany of the great generals of our age, McRaven said of General Martin Dempsey, “…he presides over the greatest change in our military since World War Two and he does so… with a song in his heart.” I immediately found myself confused. Hadn’t the biggest change since World War Two been the transition from a draft army to a post-Vietnam all-volunteer force? Or the technological revolution that took place during the Global War on Terror? What was happening in the second decade of the Twenty First Century that could dwarf these other critical shifts?

I called my personal military expert, my Dad (who is a Captain in the United States Navy) and he explained to me the shifts presently underway. I will summarize as succinctly as possible. Before the First and Second World Wars, the US military was essentially a homeland defense force with slight capability to conduct foreign expeditions (as the Spanish-American War and following decades of imperialism illustrate.) But the great pressures of the World Wars, and accompanying geopolitical shifts, forced the United States to project immensely more power in Eurasia, and the infrastructure of the military was forced to change and expand to accompany this new mission. Indeed, the early Cold War saw an institutionalization of the various commands and programs which had been borne out of World War Two. The United States military was now a global, balancing, interventionist force, and its organization supported it in its mission.

It should come as no surprise that the federal government expanded dramatically in this time as well, the so-called golden age of the Progressive Era. A large part of this growth was due to domestic politics, internal pressures,  and chains of thought endemic to the United States stateside. But part of it, too, came as a corollary to the expansion and growing complexity of the military. More troops require more services; more bases require more oversight, and so on. More importantly, some of the basic social trends and methods of bureaucratic organization, at the widest level, seem to have had their historic roots in military organization before they entered the political mainstream of debate.

For example, the desegregation of the US Military preceded meaningful desegregation of American society by a decade. Similarly, the formal recognition of “Don’t Ask, Don’t Tell,” a policy which discouraged active discrimination against homosexuals in the military, preceded by several years the massive national debates on gay marriage and other sexuality issues. On the bureaucratic side, the transition to an all-volunteer force in the 1970s and 1980s came alongside the conservative movement and its massive pushback against stagnating government services, and the reinvigoration of both institutions seems to spring from a similar root. Likewise, the American military expanded more during the Civil War than it ever had before, and after the war, the first components of the modern American welfare state were established. It seems that as a state’s war fighting ability is required to increase, so grows its military and government.

What we are seeing today, then, is simply shocking and almost completely unexpected. Encumbered by sequestration, and overextended after two long counterinsurgencies that drained the energies of the American people, the US military is entering a period of dramatic downsizing and reform. The world has changed, as has the domestic situation. Going forward, the United States must continue to play its pre-eminent role in protecting the global system, but as new powers arise, it must increasingly work with and against them, managing a tenuous balance of power through conventional and unconventional means while pursuing agents of disorder in this increasingly fragmented world. In the meantime, the old blue model of the welfare state is decaying and needs a rethinking and rejuvenation.

Amidst all this, the military’s new mission lies in agility and flexibility. It must have the capacity to project force as powerfully as it has in the past seven decades. But now, it must project this force as an agile ninja, rather than a cumbersome knight. It cannot afford to have merely the most firepower in the room; the US must be able to direct that firepower in the smartest manner. So with its own budgetary downsizing, the military is making the best of its resources to accomplish its mission. Rather than shutting down any of its regional commands, it is reducing their staffs. Instead of downsizing its plethora of bases, it is combining redundant ones and expanding the capabilities of each. It is protesting vigorously against technology deals that it does not need, and that only serve the interests of the constituents of certain politicians (as the case of the F-22 so vociferously demonstrates.) The military is taking seriously the notion that it has to get leaner.

A couple weeks ago I had the dubious pleasure of sitting in on a talk, on the horrors of sequestration, by an outgoing Republican congressman. When he finished, I raised my hand and remarked: “I have heard that of all the departments, agencies, and programs in the federal government, none will be able to conduct its mission after sequestration as well as the United States military. None will adapt to new fiscal constraints better.” “I’ve never heard that,” came his gruff reply. He seemed to be more a security hawk and nationalist than a prudent thinker on military and foreign affairs.

But as other government agencies react poorly to diminished budgets, as the wages of fiscal irresponsibility plague our government, as the affairs of the world march on without caring, it is increasingly apparent that the most certain victories our government is winning at present are those emerging from the Defense Department and the military chain of command. Perhaps the model the military now exhibits will become the general model the government will emulate, as was the case in 1865 and 1945, only now it sees a contraction rather than an expansion. Perhaps in light of fiscal constraints, bureaucratic malaise, and general governmental stagnation, the US government will look to the military model of efficiency and consolidate redundant programs, decentralize regional command, and encourage efficiency and innovation so far as is possible. Perhaps a new era of smart government is upon us, as the era of smart military certainly is.

France’s “Day of Rage”

Front National posters pasted onto the trees that line the Avenue Bosquet in the 7° Arrondissement of Paris, France, January 2014 (Alessandro Marazzi Sassoon).

Front National posters pasted onto the trees that line the Avenue Bosquet near the author’s home in the 7° Arrondissement of Paris, France, January 2014 (Alessandro Marazzi Sassoon).

Following international headlines as of late, it would appear that the top story coming out of France concerns President François Hollande’s personal (read: intimate) life. Interestingly, none of the major American and British news agencies or papers mentioned France’s Jour de Colère (Day of Rage) demonstration that took place on January 26 in Paris. Numbering 17,000 according to the French police, and upwards of 120,000 according to other reports, the demonstration called primarily for the resignation of President Hollande. And the unrest had nothing to do with his personal life. Anger over unemployment, taxation, and a perceived infringement on civil liberties were just a few of the complaints levied by the demonstrators. The French media reported on the demonstrations, but the only substantial English-language news to be found was by VICE and consisted of a report by two eyewitnesses who left before the protests became violent.

The apparent media blackout surrounding this protest makes it hard to determine what the impact of the protest was and who the protesters were. According to the protest organizers, the demonstration does not endorse any particular political party or figure, but upon closer examination their poster design suggests alignment with the far-right Front National (FN) party. A YouTube report of the protest revealed that among the demonstrators were neo-Nazis, members of the FN, members of the right wing student group Union pour la Démocratie Française (Union for French Democracy) dressed in all black, and a large contingent of Catholic-royalists. Some protesters called for a putsch or military coup, claiming the French army was the only institution that has not been “corrupted.” Corrupted by what? It is not clear, but anti-Semitism, anti-gay, anti-European Union, and anti-Finance sentiments were strongly expressed.

The demonstrators, reminiscent of Tea Party activists, claim a deep love for their country as well as being defenders of “French identity.” It is unclear what that identity constitutes, but demonstrators made clear what it did not include. In addition to wanting to expel France’s Jews and immigrants – the government is already taking care of the Roma – demonstrators appeared to reject France’s democratic institutions. Cries of phony elections and a dictator president were just some of the sentiments expressed.

Aside from statements by Manuel Valls, the Jewish Minister of the Interior who is often the target of anti-Semitic hate speech, noteworthy is the lack of condemnation from the French government. Valls condemned the violence and hate speech before the national assembly in a two-minute statement. He noted that a far-right rally of these proportions has not occurred in recent memory and the level of hatred expressed towards Jews was concerning. Valls condemned those who felt his deployment of law enforcement was excessive. He also passionately called for a unified rejection of the hate, anti-Semitism, and defamation of the French Republic the demonstrators represented. This message of unity is one seldom heard from French politicians. If the members of the National Assembly had any courage, they would do well to echo Valls’ condemnation of the protests. Instead, far-right deputies interrupted Valls thirty seconds into his speech and order had to be restored.

France is a vital country in the EU and the Eurozone; its depressed economy remains the 5th largest in the world. A protest of tens of thousands of citizens on the far right in Paris does not mean that France will go the way of Greece. Nevertheless, the trend towards nationalism and xenophobia coupled with economic downturn is not new – it led to the rise of Fascism in Europe and should not be taken lightly by anyone. If you can hear the people sing, you may want to listen, especially in a country that has a propensity for violent revolutions.

Blessed by Resources, Cursed by Politicians

The Iglesia de la Compania de Jesus, built in 1671 is Argentina's oldest church; Argentina's oldest university is on the same block. (Jacob W. Roberts)

The Iglesia de la Compania de Jesus, built in 1671 is Argentina’s oldest church; Argentina’s oldest university is on the same block. (Jacob W. Roberts)

President Cristina Kirchner’s health concerns last year are emblematic of the issues that have enshrouded Argentina’s economy and political scene for the past half-century. Over the past few decades Argentina has suffered economic crises, political scandals, and national tragedies. From a failed invasion of the Falkland Islands to the La Guerra Sucia (The Dirty War), in which the Argentinian military killed thousands of its own citizens and kidnapped thousands more infant children, the land of silver has had its share of national embarrassments. More recently in 2001, an attempt to peg the Argentinian peso to the US dollar resulted in default, runs on banks, and an enduring distrust in their financial system.

This distrust continues to manifest itself today. So much as stroll down Florida Street in Buenos Aires and shout, ‘Yo tengo dólares’ and you will be attacked by swarms of porteños (people of Buenos Aires) desperate to buy American currency for many pesos above the government-regulated exchange rate. Even a decade after the economic crash, there remains tremendous distrust in banks. Many Argentinians choose to stash loose cash under their mattresses rather than confront the risk of entrusting it in a financial institution.

Cristina’s leadership has hardly put her citizens’ fears to rest. Over a year ago, she expropriated YPF, a Spanish-owned oil company that her husband sold the rights to decades earlier while governor of Santa Fe. Curiously enough, the money from this deal has never resurfaced. As if encroaching on international law isn’t enough, Cristina has sought to alter the constitution to eliminate the term limits that prohibit her from seeking re-election. While she did not hesitate to dole out welfare benefits to the poor prior during the 2011 election, she was quick to scrap these pay outs following her successful re-election.

In spite of the billions of dollars in agricultural products and commodities being exported to China and other nations in recent years, little of this money has led to domestic development. Driving from San Isidro into the capital, one will pass by thousands of impoverished Argentinians squatting in sevillas, shack-like dwellings constructed out of discarded metal, wood, and concrete. Critics of Cristina are quick to point out that when Cristina entered office there were only one-story shacks in this shantytown, but now it is hard to find a single shack under three-stories high.

These failures as both a nation and as an economy are difficult for many Argentinians to face. Their sense of national pride is nothing to scoff at. In the 1980’s there was a common saying in Europe that one should buy an Argentinian for what he is worth and sell him for what he thinks he’s worth. Even a century after Argentina’s position as the hegemon of the Americas was usurped, many still feel as though their nation is destined to regain its past glory. What few Argentinians will deny is that their country is a land blessed by resources and cursed by politicians. From Peron to Cristina, there have been many crises of leadership. Only time will tell if Cristina’s inevitable downfall will lead to a century of progress and internal development or continued stagnation and corruption. Until then it would be unwise to make any large deposits into El Banco de La Nación.

America Won and Lost the War on Terror

The World Trade Center on September 11, 2001 by “Marc AuMarc” via flickr (creative commons)

As the horrific events of September 11, 2001 fade ever-further into the recesses of public memory, it would be prudent to analyze where we find ourselves today in the intractable conflict – known as the “Global War on Terror”– borne out of 9/11. Two analyses, from Stratfor and the Foreign Policy Research Institute, respectively, have done this admirably well, and provided the backdrop for this article’s analysis.

Stratfor: Gauging the Jihadist Movement, Part 4: Franchises and Grassroots (Part of a Series)

Foreign Policy Research Institute: The Three Versions of Al-Qaeda- A Primer

During the Bush years, the United States effectively neutralized the trans-national threat posed by al-Qaeda, and the Obama Administration delivered the symbolic final blow with the Abbottabad raid, leading to Osama bin Laden’s death.

By the end of the Bush Presidency, it was clear that the al-Qaeda core was decimated and unable to coordinate even its own communications, not to speak of spectacular, large-scale attacks that could pose threats to the lives of civilians in Western countries. By this measure – the destruction of al-Qaeda’s C4 (command, control, communications, computers) – the United States won the War on Terror. President Bush, having learned the fate of premature declarations of victory after the famous speech aboard the USS Abraham Lincoln in 2003, wisely chose not to declare victory over al-Qaeda in his Farewell Address. But by all realistic and meaningful measures concerning domestic security and the fate of the al-Qaeda core, the American intelligence and military machine had achieved strategic dominance over its foe. President Obama’s expansion of the drone war was often seen as an overextension of the War on Terror past its critical objectives, which is an inaccurate critique when considering the broader picture in that it served the purpose of pursuing al-Qaeda’s remnants further rather than dealing knockout blows. But for strategic purposes, the war had already been won.

But in another sense, it is evident that the United States lost the War on Terror. Many in the young, untested Obama Administration assumed that President Obama’s chief purpose in continuing America’s newly-renamed “Overseas Contingency Initiative” was to mop up the remaining hives of terrorist activity, particularly in Afghanistan and Pakistan but also in new areas, such as Yemen and Somalia.

It turned out, however, that al-Qaeda as a movement was far more resilient than al-Qaeda as an organization. As the central command nucleus dwindled away, more local, practical offshoots were rising up in various regions of the world. When the media uses the name “al-Qaeda” today, they really mean one of al-Qaeda’s splinter or affiliate groups, chief among them the Afghan and Pakistani Taliban, al-Qaeda in the Arabian Peninsula, al-Qaeda in the Islamic Maghreb, the Islamic State of Iraq and the Levant, and their Sub-Saharan counterparts al-Shabaab and Boko Haram. These are not all necessarily former al-Qaeda commands that split off; some are jihadist groups which have worked with al-Qaeda in the past and now carry on the war.

The function and purpose of these groups is all very clear: to bring about the establishment of Emirates in their local regions, be that through de facto rule during chaotic times (as the Islamic State of Iraq and the Levant has done very well) or through the overthrow of local governments (as most splinter groups have been attempting). This is exactly in line with al-Qaeda’s mission statement as expressed so many years ago in Osama bin Laden’s Letter to America: “The removal of these [American-backed, non-sharia] governments is an obligation upon us, and a necessary step to free the Umma, to make the Sharia the supreme law…” and it reveals a new phase of America’s War on Terror. Today, rather than facing a single, silent, unified foe whose cells and operations stretched across nations, whose capacity was to bring world-shattering destruction upon the West, the United States now faces a broad, loose ideological movement composed of dozens of independent groups, each with the purpose of local disruption and ascension in mind. The only apparent counterattack is a broad mix of the failed counterinsurgency doctrines of the last decade, and a total deprivation of liberty in afflicted areas to neutralize all possible threats.

None of these groups can threaten the American homeland in the way the old al-Qaeda did, yet all of them can threaten American interests in ways the old al-Qaeda never could. Moreover, it is not our fight; it is the struggle of the peoples among whom the new jihadists fight to determine the destiny of each corner of the Muslim world. No matter how much America has done in the past, there is only so much she can do today and into the future. At some point, local communities must figure out what they want on their own accord.

The present US-jihadist war will not end until the historical forces presently bringing about the decay of the Greater Middle East have run their course or have been contained. It should be the purpose of US policy to adapt to this new reality, without, as was the Bush folly, elevating it to primacy as America’s primary foreign policy arena. The age-old American imperatives of maintaining a liberal world order and managing regional balances of power are as important today as they ever were, and those benchmarks are unlikely to change anytime soon. The War on Terror should be viewed as an integral part of US policy towards the Greater Indian Ocean region, completely coherent within US diplomacy, and development politics. To that end, US policies and planning should be redesigned with a more unified vision in mind.

The views expressed by the author do not necessarily reflect those of the Glimpse from the Globe staff and editorial board.

The Amazon on Life Support?

Deforestation in the Amazon as seen by satellite (by NASA, via Wikimedia Commons).

Every minute, an area the size of 50 soccer fields is destroyed in the Amazon Rainforest.  Over the past 40 years, nearly 20% of the forest has been destroyed – an area roughly the size of Alaska. Simply put, in less than half of a century more of the rainforest was destroyed than in the previous 450 years – combined.  High-resolution satellite images tell a story of devastating deforestation in the planet’s largest and most diverse rainforest. Many areas that were once a sea of lush greenery have been transformed into a barren, muddy landscape.

The Amazon represents more than half the remaining rainforest on the planet.  Humans depend on these ecosystems as a source for the planet’s carbon, water, and climate systems. Thus, it isn’t surprising that losing 2.3 million square kilometers of forest in a mere 13 years, as new research indicates, is of great concern to both environmental groups and national governments. While the majority of the Amazon is located in Brazil, the forest expands across nine countries making deforestation an international crisis.

With 20% of the forest already cut down and another 20%, as expected by scientists, to be on the chopping block over the next two decades, it is only a matter of time until the Amazon’s ecology will begin to collapse. Adding global warming to the mix makes the outlook seem worse. Over 100,000 miles of illegal roads, forged by loggers who aim to reach the prime hardwood trees deep in the forest, snake through the labyrinth of vegetation. Consequences of these new roads turn out to be equally as destructive as the actual logging. Land sharks slide in unnoticed and claim the land making land thievery a common crime. As is the case with many lucrative businesses, with high profits comes violence and corruption. Armed guards, hired gunmen, and corrupt government officials all help to facilitate these illegal activities.

It isn’t all bad news for the Amazon, however. Since the devastating revelation in the early 2000s, Brazil and other South American countries have committed to reversing the damage. New data shows that while Brazil still suffers from very high rates of forest clearing, the country has cut the annual rate of forest loss to half of what it once was. In turn, many of the strategies that Brazil has implemented as a deterrent to deforestation will help policymakers in other countries respond to the troubling rates of forest decline.

Nonetheless, the deforestation rates of 2013 were far from encouraging. It is clear that changes have to be made, as deforestation is threatening the local populations’ basic needs. In the most recent Amazonia Security Agenda, it was reported  “compromising Amazonia’s ecosystems, deforestation is now threatening not only the wellbeing and rights of the region’s people, but also the economic sustainability of the very industries that it has enabled.” Scarcity of food, water, and even energy are all threatened by exploitation of the Amazon.

Escalations in forest clearing are primarily being blamed on the weakening of legal protections in the Brazilian Forest Code that were passed under Brazilian President Dilma Rousseff. The reform was riddled with controversy, and was heavily supported by members of the farmer’s lobby known as the ruralists. In Brazil, where agriculture accounts for 5% of the country’s GDP, lobbyist influence has indirectly led to increased deforestation by loggers and farmers. At the United Nation’s Summit on Climate Change, the environment minister, Izabella Teixeira, chose to focus on Brazil’s triumphs, noting the overall trend was has been positive. She attributed the elevation in deforestation to organized crime and acknowledged that the government had taken steps to fight back, saying: “What is happening are crimes, we have 3,921 police investigations, some of them involving civil servants. We are cutting into our own flesh.” Teixeira strongly emphasized that eliminating illegal deforestation remained the goal in the eyes of the government and the crimes of loggers would not be tolerated. Going forward, it is up to the Brazilian government and their counterparts, as well as the global community, to secure the future of the world’s most important forest.

No Pakistanis Allowed

A police sign in Islamabad, Pakistan. (ayerscolleen via Flickr)

A police sign in Islamabad, Pakistan. (ayerscolleen via Flickr)

In Islamabad, Pakistan, people clamored for a reservation to sample the new and exclusive French restaurant in the heart of the city. The city is a hotbed for different cultures and people, where wealthy Pakistanis mingle with foreign diplomats and ex-pats, blurring lines and creating an international environment. ‘La Maison,’ a new hit with ex-pats, was being talked about around town. Excited at the prospect of sampling authentic French cuisine, the restaurant had reservations booked up to several days in advance. There was only one condition that had to be satisfied in order to gain entrance to the fashionable restaurant – proof that you weren’t Pakistani.

Philippe Lafforgue opened ‘La Maison’ in October 2013 with the idea of serving food for ex-pats working in the capitol city of Islamabad. Claiming that his foreigner-only policy was not discriminatory but rather culturally sensitive, Lafforgue argued that he did not want to be arrested for serving a Muslim customer an alcoholic beverage or a pork dish. Additionally, he claimed his dishes were not prepared in a halal manner with many menu items requiring the use of alcohol and that changing the ingredients of the recipes would compromise the authenticity of his French food. Like many Islamic nations, Pakistan has dietary laws imposed on its Muslim citizens, mainly, the ban of pork and alcohol. Although Lafforgue has a right to refuse serving Muslims alcohol, a policy found in many hotels throughout Islamic nations in the Middle East and Asia, he has gone farther than others by denying entrance into his restaurant despite hiring a Pakistani chef, bartender, kitchen and service staff.

In Pakistan, The restaurant has been met with criticism from both Muslims and non-Muslims alike. Journalist Cyril Alemida, who initially brought the restaurant’s discriminatory policy to light when he was rejected due to his possession of a Pakistani passport asked, “How does a foreigner run this money-spinning business out of the heart of the Pakistani capital, and not let Pakistanis in… And how does he get to ask me to produce my passport? He’s not an airport. He’s not an international authority. He’s not an embassy. How can he do this? Reserving the right to admission doesn’t mean an entire category of people [can be] written off.”

Many locals are crying foul and have reported the establishment to the police. “It’s absolutely ridiculous,” says Pakistani-American Bushra Mateen. “My family left their home, the country of their ancestors, and the home of all of their history, to start a new life free from oppression. We left, so that no one could reject us for our skin color or religion. And now this guy comes along and tells me I can’t eat in my own country. I am not a dog, I am not an Indian, I am supposed to be in my home.” Ms. Mateen refers to the “No Dogs and Indians” rule that was prominent in the region during the rule of the British Raj, which for Pakistanis, is reminiscent of the British Apartheid and the subsequent partition that forced many families to leave their homes.

Eventually, talk of the restaurant’s policy reached the ears of Yasir Afridi, an assistant to the superintendent of the Islamabad Police. Afridi attempted to make a reservation and found that, true to the talk of the town, he would be unable to dine at ‘La Maison.’ Following his rejection, he led a raid on ‘La Maison’ and discovered over 300 bottles of un-registered liquor. Although Lafforgue claims that as a foreigner he is allowed to serve liquor to other foreigners, he is not under any diplomatic mission and is not operating a diplomat’s exclusive club, and therefore did not have the necessary licenses for his liquor cache. As of now, the restaurant has been shut down. However, Lafforgue has not given up yet, claiming that he will find a way to operate once again.

What’s Eating Brazil’s Rapid Growth Rates?

A demonstrator tries to stop the riot police during one of many protests around Brazil's major cities in Rio de Janeiro June 20, 2013. Tens of thousands of demonstrators marched through the streets of Brazil's biggest cities on Thursday in a growing protest that is tapping into widespread anger at poor public services, police violence and government corruption. REUTERS/Sergio Moraes

A demonstrator tries to stop the riot police during one of many protests around Brazil’s major cities in Rio de Janeiro June 20, 2013. Tens of thousands of demonstrators marched through the streets of Brazil’s biggest cities on Thursday in a growing protest that is tapping into widespread anger at poor public services, police violence and government corruption. REUTERS/Sergio Moraes

Only a few years ago Brazil was on the rise. Both a BRIC country and economic the superstar of Latin America, Brazil enjoyed fantastic growth rates as it rode the wave of a commodity boom. With a young population and many untapped growth opportunities, Brazil seemed poised for continued growth and prosperity.

Unfortunately, even the commodity king of Latin America is not immune to an economic malaise. In contrast to its impressive 7.5% growth rate in 2010, Brazil puttered along at a meager 0.9% in 2012. While growth rates are forecast to rise in 2014, social unrest abounds. Just last year, protesters took to the streets in response to hikes on bus fares and corruption scandals in addition to a general outrage for exuberant government spending on stadiums for the upcoming World Cup and Summer Olympics.

The protestors’ indignation is understandable but would be better directed at failed policies and excessive government spending than at publicized scandals. A whopping 11.3% of Brazil’s GDP is spent on public pension plans, comparable to OECD European nations with much older populations. Its public spending, which amounts to 38.5% of GDP, rivals that of many developed countries.

Opponents of austerity will counter that the anti-poverty policies embraced by former President Luiz Inácio Lula da Silva, or “Lula” for short, lifted nearly 25 million Brazilians out of poverty. Now close to half of Brazil’s population lives in the middle class, and while real income has increased by only 20% for the 10% wealthiest Brazilians, its poorest 10% have seen their real wages double in the last decade. So long as Brazil finds other paths to economic growth, such expensive state intervention can be sustained.

Brazil’s best shot at stimulating growth rates lies in meaningful reform. A disproportionate amount of Brazil’s education spending is lavished upon institutions of higher learning. More of this money should be spent on primary and secondary schooling, and less of it should go to teacher’s pensions, which are unsustainably high.

Reallocation of money from its inflated pension system to investments in infrastructure could pay enormous dividends to Brazil’s economy. While Brazil’s agricultural and commodity production is globally competitive, it is stymied by exorbitant transportation costs that eat up as much as 22% of the costs of production. Improved roads and developed transportation systems could work to alleviate this inefficiency.

Policy makers should also work to streamline its onerous tax code and customs procedures. Doing so would sharply curtail exportation and production costs, in turn bringing Brazilian products to a higher echelon of competitiveness. At the moment, manufacturing costs are continuing to rise while technological advances in production are stagnant. A concerted effort by policy makers to cut manufacturing costs does not need to be a priority, but should be on the backburner as a way of diversifying Brazil’s national income.

These barriers to economic growth are easily remedied. If President Dilma Rousseff or her successors adequately respond with sound economic policies in the coming decade, Brazil will be well on its way to solidifying its place as a world economic power. With a high national birth rate, copious amounts of land and resources, and countless opportunities for reform and infrastructure development, Brazil’s prospects are excellent. In the end, it is not a question of whether Brazil’s economy will continue to grow, but whether its government will allow it to.

Hooray for Hollywood? – Where Hollywood Meets the PRC

Grauman's Chinese Theater Panorama

Grauman’s Chinese Theater. Samantha Decker (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

As more people move into the middle class in China, disposable income spent on goods and services will only increase. But disposable income extends far beyond goods and services, and to date some 300 million more people in the world are ready to start spending money on entertainment. In a 2013 study by Ernst & Young, the firm noted “spending on entertainment and recreation [in China] jumped from $350 billion in 2010 to $547 billion last year.” Because American content – whether television, film, or music – is universally revered, huge opportunities await US Media and Entertainment (M&E) companies in a region capable of hauling in more than $10 billion in value by 2017. Hollywood’s most successful films are reliably hitting the $100 million revenue mark at the Chinese box offices.

Well aware of these opportunities, American film studios have made China a top priority marking a dramatic shift in perceived foreign markets only a few years ago. Notably, Bank of America-Merrill Lynch Global Research released a study this year detailing these opportunities and reaffirmed that “from 2007-12, China’s box office has improved at a compound annual rate of 47% to $2.7 billion […] fueled by a 30% CAGR in screens […] The top 10 Hollywood films in China generated a steady 30% share of the 2012 box office.” Breaking down these statistics, 26% of the China box office goes to local films – roughly 560 Chinese domestic films get made every year – and 150 of those are released theatrically with only 70 becoming notable box office contributors. These statistics not only reflect the expanding local production industry in China, but also their preferential regulatory treatments standing as a major entry barrier for US film studios.

Along with preferential treatments, an import quota on Hollywood films makes for fierce competition among US studios. Before 2012, China capped the number of US films to be released in mainland cinemas at 20; only last year was President Obama able to get China to increase their quota to 34.

Looking to 2030, however, it is unlikely that China’s film quotas will disappear all together. With the Hollywood quota already maxed out for 2013, China’s domestic films have been able to flourish. As of November 25, 2013, Chinese films hit the $3 billion revenue mark with prospects of another late boost as cinemas rush for a photo year end finish marking a remarkable shift from a considerably more lackluster balance sheet just over a decade ago with FY2002 revenues below $164 million.

While still a burgeoning industry in China – America’s $385B industry dwarf’s the PRC’s $73.2b – Ernst & Young predicts Chinese M&E will grow 17% annually for the next five years. En masse injections of private capital have been the major driver, truly enabling the industry to soar. In 2013 alone, China built over 4,500 new movie theaters (over 10 per day) increasing their countrywide total to over 17,600.

A major bankroller in the industry has been Wang Jianlin who is Chairman of property giant Dalian Wanda Group Corp. along with being China’s richest man. Earlier this year he bought America’s second largest movie theater chain, AMC, for $2.4 billion. Following that, in November Wanda announced their plans to build China’s own version of Hollywood with a $4.9 billion to $8.2 billion investment in a mega-entertainment center. The Qingdao Oriental Movie Metropolis, or “Chollywood” as it is being called, will include 20 massive studio lots and is being supported by A-list stars such as John Travolta, Catherine Zeta-Jones, Nicole Kidman and Leonardo DiCaprio. With signing agreements with four top global talent agencies, by 2030 we could see a substantial “brain drain” from Hollywood into China. Because the US is unquestionable global hegemon in the entertainment world, the demand for American expertise in content, storytelling, marketing and distribution is very high in China. Yet, there is a great deal of doubt surrounding Wanda’s project.

China’s politicians have made clear that conceptual films portraying China in a negative light will have no market on the mainland, as highlighted in World War Z’s recent debacle with the PRC. In one of the first cuts of Brad Pitt’s zombie movie, there was a scene where his character concluded the zombie apocalypse originated in China. Fearing governmental backlash, Paramount producers changed the origin to South Korea. In sum, China wants non-controversial films that pay tribute to Chinese life and culture. However, even if Wanda’s “Chollywood” project is completed, and in 2030 China’s film industry becomes large enough that China no longer needs import quotas to achieve their growth objectives, the government’s intense and seemingly unrelenting relationship with censorship will become an impediment to future growth.

As stated above, out of the 560 films made per year in China, only 70 make it to the box office. Much of this is due to strict government examination. All 34 Hollywood films allowed in China also go through close inspections to ensure alignment with government principles. To mitigate potential issues with their films, US studios are increasingly re-editing content, and with some going so far as to shoot entirely different versions for a PRC release.

A recent example is Relativity Media’s 21 & Over, a story about a Chinese-American medical student besieged by parental-induced anxiety who chooses to alleviate exam stress by partying at a fraternity house. Before production began, Relativity Media told producers there would be two movies made, one for an American audience and one for a Chinese audience. With a vastly different storyline from the original plot, the movie’s director Jon Lucas said in an interview: “21 & Over, in China, is sort of a story about a boy who leaves China, gets corrupted by our wayward, Western partying ways, and goes back to China a better person […]” Hollywood is an industry where the realm of creative possibilities is endless. Studios have always strived to balance creativity with profits; movies like Gravity prove that you can have both, no matter how expensive. However, this question of balance is taken to new heights when looking ahead to 2030 and the inevitable interconnectedness that will define the China-Hollywood relationship.

At what point is the creative process impacted by geopolitical constraints that define China’s film market? The multi-billion dollar question facing Hollywood today is whether film studios can fully tap into the China market without marginalizing the creative process that should, and hopefully will continue to, define the industry.

Unlocking America’s Potential Energy

United States Shale gas plays, May 2011

Map of U.S. shale gas plays. May 2011, U.S. Energy Information Administration (Wikimedia Commons).

America is in the midst of one of the most significant energy revolutions in modern history. Due to the recent discoveries of vast reserves of shale oil and natural gas, the U.S. is in a position to become the world’s largest energy producer by 2015, surpassing both Saudi Arabia and Russia – combined. This momentum, however, can only continue if U.S. firms are allowed proper flexibility to explore, extract, and export shale oil and natural gas from U.S. territories. Government regulations covering drilling practices, such as fracking, must be re-examined and equitably altered such that energy companies may pursue their energy interests while satisfying environmental concerns. The energy revolution has critical implications for U.S. domestic and foreign policy with the potential to transform America’s economic prowess and energy self-sufficiency for years to come.

Current estimates for America’s resource endowment and extraction rates are very promising. Natural gas production is experiencing a momentous boom due to recent breakthroughs in unlocking natural gas trapped in shale. With these advances, shale gas production is forecast to increase from 42% of total U.S. gas production in 2007 to 64% in 2020. This level of growth is unprecedented, with the U.S. Government estimating there will be a 44% increase in total shale natural gas production from 2011 to 2040. With regards to oil production, the International Energy Agency predicts that U.S. oil production will rise to 11.6 million barrels per day in 2020, up from 9.2 million just a few years ago. This increase in oil production is orthogonal to trends in Saudi Arabia and Russia, which will see their production levels decline from 11.7 million to 10.6 million barrels and from 10.7 million to 10.4 million barrels, respectively. Leonardo Maugeri at Harvard has estimated that shale oil production alone could reach 5 million barrels per day by 2017. These statistics stand as a dramatic reversal from discussions in the energy community even 5 years ago when talk focused on declining fossil fuel reserves and the need to explore alternative forms of energy. Fossil fuels now dominate the energy game, and rightfully so.

Natural Gas Production from US Shales 2000-2013

Graph of natural gas production for U.S. shale plays. September 16, 2013 (Wikimedia Commons).

While sound environmental concerns do exist regarding shale oil and natural gas extraction, such as pollution of groundwater and the effect of mining towns on surrounding communities, they are often overblown. For example, in Pennsylvania only 3% of all wells were cited for flawed construction from 2008-2013. Fracking has been a successful extraction method since 1940, and new technologies – waterless fracking is a good example – have only made the process safer and more efficient. The most legitimate environmental concern associated with fracking has to do with the well casings that surround the fracking apparatus. Since fracking pumps water and sand into the ground at a high pressure, improperly made well casings and other sealants can crack causing leaks which pollute the surrounding environment. This problem could be solved by using stronger and properly fitted well casings. Simple environmental regulations at the state level requiring proper well construction, specifically emphasizing casings, could ameliorate many of the environmental concerns associated with fracking. There is also a surprising lack of publicly available data regarding the effects of fracking operations on the surrounding environment. Increasing the availability of this data by setting mandatory reporting requirements would fully inform nearby communities and government authorities. Fracking to extract shale oil and natural gas can be done safely; such has been the trend thus far. If a more relevant, simple, and fair regulatory regime were to be established by state governments, and perhaps the federal government, to address issues such as well casing construction and reporting requirements, fracking’s safety and efficacy would only be further reinforced. Regardless, fracking – as it stands today – is a no-brainer.

Fracking Site in Warren Center, PA 08

Fracking Site in Warren Center, Pennsylvania. August 23, 2013 (Wikimedia Commons).

Why is fracking already a no-brainer? Because the shale boom, which has been enabled by fracking methods, is having tremendous economic benefits for the U.S. Natural gas prices in the U.S. are some of the lowest in the world – half the price of gas in Europe and less than one-third the price of gas in Asian countries. Surging shale oil extraction has overloaded Gulf refineries and revived East Coast refineries. This increased supply is so shocking that domestic oil prices have lately fallen out of sync with global oil prices, and experts predict a U.S. oil “glut” if U.S. firms are not allowed to export crude oil. This abundance has critical implications for manufacturing in the U.S. Indeed, The Economist claims that the energy revolution is resulting in a “Factory North America.” This “Factory” is resulting in more domestic jobs across all industries, especially in the growing energy industry. Energy jobs in nearly every state have doubled since 2005. Some equate the fracking boom as being similar to a gold rush, with energy jobs offering high salaries for basic work in rural areas. David Petraeus seems to be on track when he claims we are about to enter the “North American Decades” powered by our new-found energy endowments.

While the macroeconomic benefits of America’s increased energy output are clearly tremendous, expectations for the average American consumer should be tempered. Though the price of natural gas has fallen in recent years due to our ability to tap into previously inaccessible shale reserves, the cocktail of booming transportation, a recovering economy, and rising exports have raised prices in the past year. In addition, the need for further fracking R&D is likely to drive costs up in the coming years. Shale oil is experiencing a similar phenomenon. Although the price of gasoline has fallen beyond global pricing levels in the U.S. for the short-term due to surging supply, the price of oil is determined on a global energy market and is projected to increase for the long-term as global demand continues to increase. The increased supply of natural gas and oil certainly has lowered costs for the American consumer for the time being, and will continue to do so when contrasted to an America without new-found energy reserves. However, Americans should not be expecting $2.00 per gallon gasoline prices anytime soon.

So what does this energy revolution mean for U.S. foreign policy? Many good things. America’s increased self-sufficiency will change the U.S.’ relationship with many other countries. Because of surging domestic supply, the U.S. will be less dependent on other nations for energy; in turn, this freedom will afford the U.S. greater flexibility in pursuing foreign policy interests because it will not be as constrained to secure energy resources abroad. Strategic relationships with nations such as Saudi Arabia and the United Arab Emirates are likely to change because there will be less of a need for their oil imports. Perhaps the U.S. will now be more forceful in advocating for democratic reforms within these non-democratic states now that it has greater autonomy on the energy front. In addition, the decreasing need to secure energy resources abroad may prevent the U.S. from becoming involved in regional disputes and conflicts to secure those interests.

America’s surplus of energy could also be an excuse for a more active role in foreign policy. America could gain more influence over other nations if U.S. firms are allowed to export energy resources. As we have seen in Europe, Russia’s domination of energy resources in Eastern Europe has enabled it to turn build new allegiances at the EU’s loss and expense. Consider the notable cases of Armenia and the Ukraine becoming part of Russian-led Eurasian Union. Please note that this author is not advocating for the U.S. to pursue an overbearing approach to energy exports like Russia, but rather a stable level of influence to help the U.S. realize its foreign policy objectives. If, for example, the U.S. could export to Central Asian states, it could gain more influence in the region and build a relationship that could allow these states to become closer to the West rather then being forced into a Eurasian Customs Union led by Russia. In a state like Japan, where natural gas sells for $17 compared to $3 in the U.S., greater exports from the U.S. could enhance a trade relationship with a major partner. Unfortunately, the U.S. is not reaping the benefits of energy exports because antiquated laws are in place that prohibit U.S. firms from exporting crude oil. In addition, the EPA has been very slow to grant export license requests for liquefied natural gas. These regulations are contrary to free market principles and concepts of free trade that America has advocated for since its inception. The U.S. government needs to allow U.S. firms to export and pursue their global energy interests more freely. The potential results of this policy change would provide more flexibility in U.S. foreign policy and would afford the U.S. even greater influence on the international stage.

Natural Gas Price Comparison

Comparison of natural gas prices in the United States, Japan, and the United Kingdom. September 30, 2011, U.S. Energy Information Administration (Wikimedia Commons).

This energy revolution will change America’s game, and for the better. Domestically, the U.S. will be more self-sufficient and experience the growth of an industry while boosting employment numbers (and therefore jobs) and observing lower energy prices. Internationally, America’s influence will extend to the importers of our energy, and there will be less dependency on other states for energy. These benefits, however, cannot be fully experienced under the current structure. State governments, and perhaps the federal government, need to formulate a simple and fair regulatory regime that will allow U.S. energy firms flexibility in fracking to unlock shale oil and natural gas while addressing legitimate environmental concerns such as well casing construction. The U.S. must also break its own barriers to exporting energy, such as the obsolete laws that currently prohibit U.S. firms from exporting crude oil from U.S. territory and the slow process of obtaining export licenses for natural gas. Only if these policy measures are implemented can America’s full energy potential be unlocked.

The Bear and the Dragon

An hour outside of Mandalay in upper Burma (Myanmar), construction of the Sino-Burma pipeline tears through the thick jungle. The pipeline is a joint venture between China National Petroleum Corporation (CNPC) and Myanmar Oil and Gas Enterprises (MOGE) and is designed to ease China’s dependence on oil/gas transfers through the Strait of Malacca. (Photo Credit: Reid Lidow, All Rights Reserved 2012).

An hour outside of Mandalay in upper Burma (Myanmar), construction of the Sino-Burma pipeline tears through the thick jungle. The pipeline is a joint venture between China National Petroleum Corporation (CNPC) and Myanmar Oil and Gas Enterprises (MOGE) and is designed to ease China’s dependence on oil/gas transfers through the Strait of Malacca. (Photo Credit: Reid Lidow, All Rights Reserved 2012).

In recent months, international news has focused intensely on ominous developments in the East and South China Seas, along with the bloody sectarian dramas engulfing the Middle East. Conflicts across Africa, from Somalia to Nigeria to the Central African Republic, have also captured attention, though they remain largely under-reported in the Western press. Major political shifts between Iran, its neighbors, and the West, along with the confusion and unrest in the Ukraine as it seeks to define its relationship with its Eastern (i.e. Russia) and Western neighbors, rightly command the bulk of our attention as of late.

But in the midst of all this, beneath the eyes of a world preoccupied with clashes worthy of box office films, far subtler power plays are at work that will likely matter far more to the course of history than the flashpoints in Syria, Egypt, Somalia, and Ukraine. Consider foreign policy developments in Moscow and Beijing – though both states are plagued by internal unrest and beset by international humanitarian pressure, both states are clearly ascendant in their respective, and overlapping, neighborhoods. Their maneuvers in Asia will increasingly bring them into tension, and perhaps conflict, in the years to come. This is a development Americans should watch closely.

The tense relationship between the Bear and the Dragon in Russia’s Far East and China’s Northeast is legendary, from the days when exhausted Cossacks dealt with (and stole from) the Qing Dynasty. The Soviet Union propped up Communist states in Xinjiang and Mongolia while warlords, Nationalists, and Communists all squabbled over the ruins of China. When a Communist victory became apparent, the Soviets sought to make Red China essentially an arm of their global strategy, a relationship which Mao and his followers deeply resented. As the People’s Republic came into its own, it grew increasingly autonomous vis-à-vis patrons in Moscow, which would precipitate a series of violent border clashes in the late 1960s. Nixon and Kissinger’s skillful manipulation of this rivalry has been recorded in the history books. So fraught has been the relationship between the authoritarian giants that they only resolved their border disputes along the Ussuri River in late 2008.

The start of the 21st Century has seen a cooler, and on the surface more cooperative, Sino-Russian relationship. While the United States was distracted in Iraq and Afghanistan prior to 2011, both Beijing and Moscow began asserting themselves in their historic borderlands and defending each other’s positions. Their mutual condemnation of international interference in internal affairs, as seen with respect to Syria and Iran, seems to have pushed them closer together. Additionally, their alignment in the Shanghai Cooperation Association grants them at least hollow Eurasian authoritarian solidarity. Xi Jinping’s first foreign trip as President of the PRC was to Moscow; the diplomatic import of this visit should not be lost on us.

But the story does not end there. Important fractures continue to underlie the relationship, though they are far less tense in their present iteration. Russia and China remain powerful states with rising ambitions. Chinese-born workers and contractors take up a large share of the labor market within the Russian Far East province, and analysts estimate that the population of China’s border provinces is at least four or five times that of Russia’s border provinces. The immense resources of Russian territory are assuredly a powerful strategic draw for Chinese planners, and wary Russian policymakers strive to develop these resources without surrendering a total monopoly to the Chinese. What happens in this strategically critical region matters to Beijing and Moscow’s relationship.

Looking further afield, the Chinese and Russians are looking to balance their resources in the region to offset the other’s gains, though not explicitly. Russia has been working to improve its relations with South Korea, signing arms deals and free trade agreements far more generous than those it shares with its client states in Eurasia. To the South, Russia extended an invitation Vietnam, an old Soviet ally, to join its Eurasian Customs Union. To sweeten the pot, Russia has sold Vietnam refitted Soviet submarines. Looking West from Vietnam, the Kremlin is increasingly engaging with India, continuing to supply much of its military hardware while simultaneously negotiating bilateral energy deals. It is important to note that each of these three countries fought savage wars with China in the 21st Century and continue to engage in strategic competition with the dragon.

Russia’s grand strategy looks like a classic case of power politics. The ancient Indian strategist Kautilya argued that border states would always be enemies, and therefore states separated by a buffer would be natural allies. A brief glance at the map shows that China separates Vietnam and India from Russia, while South Korea borders China through North Korea, long China’s client state. Russia’s strategy is not necessarily bellicose, however as prudent statesmen have long recognized, when the time comes to exert pressure on another nation, it helps to have friends on that nation’s borders who fear and envy it.

Meanwhile, China continues its economic expansion and integration of the Asian continent. As has been widely reported, it initiated oil drilling in Afghanistan last year, making it the first energy investor in the war-torn state. Its pipelines crisscross Russia’s sphere of influence in Central Asia, traversing Kazakhstan, Uzbekistan, and Turkmenistan. China’s pipeline and highway projects in Myanmar stand poised to modernize that nation, while connecting the Indian Ocean’s trade directly to the Chinese heartland. Beijing also continues to provide security assistance to a Pakistan increasingly distrustful of the United States, and Pakistan hosts a Chinese port at Gwadar.

It is clear that the Chinese are concerned with boosting international economic development; foreign trade, especially in energy sectors, will be essential in sustaining China’s remarkable economic growth story as it seeks to pivot away from unhealthy domestic infrastructure spending sprees that have defined the last decade. But aside from being a mere cash cow, these foreign assets provide China with leverage in the host countries. That’s the power of the purse.

The new great game in Asia is not a particularly violent one, but it is an important one. As Russia and China rise and balance against each other, not unlike two scorpions in a jar, their interests are bound to clash. Policymakers in the US should continue to monitor these developments carefully as such problems will surely present challenges and opportunities. It is not hard to imagine American policymakers working with their Russian counterparts to contain a rising China while simultaneously working against an advancing Russia in contested regions such as Eastern Europe and the Middle East. American policymakers may even find themselves working more closely alongside their Chinese colleagues if the Xi Jinping era presents such an opportunity. The shifting geopolitical fortunes of Russia and China demand our statesmens’ most vigilant attention.