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  • State of The World-Friedman

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    State of the World-Friedman

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    State of The World-Friedman

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    a19952083
    Social Science

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    2015 ‘The Stale of the World: A Framework | Stratfor BAL INTELLIGENCE The State of the World: A Framework Geopolitical Weekly FEBRUARY 21, 2012 | 09:59 GMT ®Print | © Text Size @ (ieleiee te tps Editor's Note: Thisis the fis installment of @ new series on the national strategies of today’s global power and other regional powers. This instalment establishes a framework for understanding the current state ofthe word, By George Friedman ‘The evolution of geopoltics is cycical. Powers rise, fal and shit. Changes occur in every generation in an unending ballet. However, the period between 1989 and 1991 was unique in that a long cycle of human history spanning hundreds of years ended, and with it @ shorter cycle also came toa close. The word is sil reverberating from the events of that petiod. (On Dec. 26, 1991, an epoch ended. On that day the Soviet Union colapsed, and forthe frst ime in almost 600 yeers no European power was a ‘global power, meaning no European state integrated economic, miltary and poitical power on a global scale. What began in 1492 with Europe ‘mashing its way into the world end creating a global imperial system had ended. For fve centuries, one European power or another had dominated the world, whether Portugal, Spain, France, England or the Soviet Union. Even the lesser European powers at the time had some degree of global influence, ‘After 1991 the only global power left was the United States, which produced about 25 percent ofthe worl's gross domestic product (GDP) each year and dominated the oceans. Never before had the United States been the dominant global power. Prior to Word War Il, American power had ‘been growing from its place atthe margins ofthe international system, but it was emerging on a mutipolar stage. After World War I, it found itself in «a bipolat world, facing off with the Soviet Union in a struggle in which American victory was hardly @ foregone conclusion. nipsvn stratfor comfveckiitat- world remework ue ‘ue2015 ‘The State ofthe World A Framework | Sratior ‘The United States has been the unchallenged global power for 20 years, but its ascendancy has left off-balance for most ofthis time, and Imbalance has been the fundamental characteristic ofthe global system in the past generation. Unprepared institutionally or psychologically forts Position, the United States has swung from an excessive optimism inthe 1990s that held that significant confct was at an end to the wars against militant islam after 9/11, wars thatthe United States could not avoid but also could not integrate into a multilayered global strategy. When the only lobal power becomes obsessed with a single region, the entire world is unbalanced. Imbalance remains the defining characteristic ofthe global system today. While the colapse of the Soviet Union ended the European epoch, it also was the end of the era that began in 1945, and it was accompanied by a luster of events that tend to accompany generational shits. The 1989-1901 period marked the end of the Japanese economic miracle, the fst ime the world had marveled at an Asian powers sustained grown rate as the same power's financial system crumbled. The end of the Japanese miracle {and the economic problem of integrating East and West Germany both changed the way the globel economy worked, The 1991 Maastricht Treaty set the stage for Europe's attempt at integration and was the framework for Europe in the post-Cold War world. Tiananmen Square set the course for China inthe next 20 years and was the Chinese answer to a collapsing Soviet empire. It created a structure that allowed for economic development but assured the dominance of the Communist Party. Saddam Hussein's invasion of Kuwall was designed to change the balance of power in the Persian Gulf after the Iaq-iran war and tested the United States wilingness to go to war after the Gold War. In 1989-1901 the world changed the way it worked, whether measured in centuries or generations. It was an extraordinary period whose significance 's only now emerging, Itlocked into place a long-term changing of the guard, where North America replaced Europe as the center of the Intemational system. But generations come and go, and we are now inthe middle ofthe frst generational shift sine the colapse of the European powers, a shift that began in 2008 but is only now working itself out in detail, Wat happened in 2008 was one of the financial panics that the global capitalist system periodically suffers. As Is frequently the case, these panics first generate poltical crises within nations, folowed by changes inthe relations among nations, Of these changes, three in particular are of Importance, two of which are directly inked to the 2008 crisis, The fists the European financial crisis and its transformation into a politcal crisis. ‘The second isthe Chinese export crisis and its consequences. The third, indirectly finked to 2008, isthe shit inthe balance of power in the Middle Eastin favor of Iran, ‘The European Crisis ‘The European crisis represents the single most significant event that followed from the financial collapse of 2008. The vision of the European Union ‘was that an institution that would bind France and Germany together would make the wars that had raged in Europe since 1871 impossible. The vision also assumed that economic integration would both join France and Germany together and create the foundations of a prosperous Europe. ‘Within the context of Maastricht as lt evolved, the European vislon assumed that the European Union would become a way to demooratize and Integrate the former Communist counties of Eastern Europe into a single framework. However, embedded in the idea of the European Union was the idea thal Europe could at some point transcend nationalism and emerge as a United States of Europe, a single poltical federation with a constitution and a unified foreign and domestic policy. It would move from a free trade zone to & Unified economic system to a single currency and then to further potical integration bull around the European Parliament, allowing Europe to ‘emerge as a single county. Long before this happened, of course, people began to speak of Europe as i it were a single ently, Regardless of the modesty of formal proposal, there was a powerful vision of an integrated European polly. There were two foundations for il. One was the apparent economic and social benefits of a united Europe. The other was that this was the only way thet Europe could make is influence fel inthe international system. Individually, the European states were not global players, but collectively they had the ability to become jus that. In the post-Cold Wer world, where the United States ‘was the sole and unfettered global power, this was an attracve opportunity The European vision was smashed in the aftermath of 2008, when the fundamental instabilty of the European experiment revealed itsell. That vision ‘was bult around Germany, the work's secon¢-largest exporter, but Europe's periphery remained too weak to weather the crisis, It was not so much this particular crisis; Europe was not built to withstand any financial crisis. Sooner or later one would come and the unlly of Europe would be severely strained as each nation, driven by different economic and social realities, maneuvered In ts own interest rather than inthe interest of Europe. ‘There is no question that the Europe of 2012 operates in a very diferent way than it dd in 2007. There ls an expectation in some parts that Europe vl, in due course, return to its old post-Cold War state, but that is unikely. The undertying contradictions of the European enterprise are now revealed, and while some European entity wil fkely survive it probably vill not resemble the Europe envisioned by Maastricht, lt alone the grander Visions of a United States of Europe. Thus, the only potential counterweight to the United States will not emerge inthis generation China and the Asian Model China was similarly struck by the 2008 crisis. Apart from the inevitably cyclical nature ofall economies, the Asian model, as seen in Japan and then in 1997 in East and Southeast Asia, provides for prolonged growth followed by profound financial dislocation. Indeed, growth rates do not indicate ‘economic health Just as it was for Europe, the 2008 financial crisis was the tigger for China China's core problem is that more than a billon people lve in households earning less than $6 a day, and the majorly of those eam lass than $3 a day. Social tensions aside, the economic consequence is that China's large Industrial plant outstips Chinese consumer demand, As a result, China hips srator.comMeekyfsst- word ramework 24 ‘e12016 ‘The Sia ofthe World A Framework | Strafor ‘must export. However, the recessions after 2008 cut heavily into China's exports, severely affecting GDP growth and threatening the stabilty of the Poltical system. China confronted the problem with a massive surge in bank lending, diving new investment and supporting GDP growth but also fueling rampant inflaton. Inflation created upward pressure on labor costs until China began to lose is main competitive advantage over other countries, For a generation, Chinese grovah has been the engine ofthe global economic system, just as Japan was inthe previous generation. China is not collapsing any more than Japan did. However, It's changing its behavior, and with lt the behavior ofthe international system. Looking Ahead It we look at the international system as having three major economic engines, two of them — Europe and China — are changing their behavior to be less assertive and less influential in the international system. The events of 2008 did nat create these changes; they merely triggered processes that revealed the underlying weaknesses ofthese two entities, ‘Somewhat outside the main processes ofthe international system, the Middle East is undergoing a fundamental shift in its balance of power. The

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