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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject2/22/2002 8:41:53 AM
From: tradermike_1999  Read Replies (2) of 74559
 
The Intensification of Global Instability

Summary

With the outbreak of civil war in Colombia, another country has fallen deeper into the ranks of the unstable. This has been a week of destabilizations. Iran appears to be moving toward internal crisis, Venezuela's political problems are deepening and conflict between Israelis and Palestinians is entering a new era. This troubling spread of instability is rooted in the current structure of the international system. As the world's only superpower, the United States' inevitable obsession with al Qaeda has contributed to this process of destabilization.

Analysis

Late Feb. 20, the Colombian government announced that it was
abandoning its truce with the Revolutionary Armed Forces of
Colombia (FARC) and launched what appears to be a coordinated and substantial attack on FARC-held territory. With that, another small portion of the world went from the brink of instability directly into war and potentially into chaos. Clearly, this situation has its roots in uniquely Colombian circumstances and, though it has some regional significance, is of limited global significance in and of itself.

What is important about Colombia is that it represents another small destabilization of a country in a global system that is undergoing numerous small destabilizations at roughly the same time. When we step back, we see a pattern of intensifying destabilization around the world. Taken together, we see the emergence of a pattern of instability that is interesting precisely because it appears to lack any coherent pattern, model or cause. It varies geographically. It varies in the nature of the crises. It varies by causes. Only two things are constant: there is a dramatic increase in instability, and the unstable areas appear to have only the most tenuous connections with each other.

Consider the events of the past week, in no particular order:

* Colombia has plunged into civil war.
* Venezuela, a major oil producer, is experiencing a major
political crisis over its president, Hugo Chavez.
* In Afghanistan, the CIA has issued a report (published on the front page of the New York Times) warning that internal chaos is looming.
* In the Middle East, Palestinians have shifted tactics toward waging guerrilla war, and Israel is contemplating a major shift in its own strategy.
* In Iran, a majority of the Majlis has signed a petition
demanding an investigation of U.S. charges that elements in Iran have aided al Qaeda members in escaping Afghanistan. This action creates a massive internal confrontation between forces around the Ayatollah Ali Khameni and those around President Mohammad Khatami, with a very uncertain outcome.
* What has emerged from U.S. President George W. Bush's meeting with the Japanese prime minister is that Japan has no idea how to manage its intensifying financial crisis. One of the world's major economies appears to be inching toward meltdown.

Add these to the U.S. war on al Qaeda, the India-Pakistan
confrontation, the Iraqi crisis, the ongoing Balkans puzzle and the Argentine default and the rest. Clearly, the destabilization process is intensifying and spreading. The instability can be found on each continent (even the United States is gripped by a destabilizing fear of al Qaeda) and in all possible areas, from political crises to military confrontations to economic turmoil.

The world has always been a dangerous place. The 1990s
represented an interregnum in which it appeared that the end of the Cold War had ushered in a new, more stable world. In a very few years, we have moved from a world in which it appeared that most crises were marginal to the international system and easily containable, to a situation where marginal crises cannot be contained and not all crises are marginal.

Nothing moves in a straight line, and nothing moves in tandem. Nevertheless, if we were envision all these issues continuing to deteriorate, we could easily imagine that six months from now, Japan would be in economic and political chaos, an Indo-Pakistani war would be raging, Afghanistan would be experiencing a civil war of epic proportions, Iran would be fragmenting under internal pressures, the United States would be at war with Iraq, Israel and the Palestinians would be locked in a guerrilla war, the
northern tier of Latin America would be in bloody chaos and U.S. forces would still be mired in a global struggle against al Qaeda. Meanwhile, other regions would be falling into chaos.

It is therefore comforting to know that simple extrapolation is useless in predicting the future. At the same time, it is hard to locate the countervailing, stabilizing forces. It is difficult to see what force will save Japan from its fate or Colombia from its conflict. The problem with the current wave of instability is that its lack of a coherent pattern or organizing force makes it difficult to perceive the force that will limit the destabilizing process.

During the Cold War and prior great power confrontations, the confrontation itself helped order emergent conflicts. Since any conflict potentially affected the interests of major players or the stability of the international system as a whole, conflicts that were inherently local and idiosyncratic were absorbed into the general confrontation. The downside was that any local issue, like Cuba, could be a friction point that would lead to war between the great powers, such as the United States and the Soviet Union. The upside was that fear of such a war caused the great powers to suppress the local issue. The threat of general war and the existence of great powers tended to stabilize local
conflicts for extended periods.

We are in a period in which there is only one global power, or superpower, and a series of regional powers, or great powers. The superpower has become absorbed in a confrontation with a non-national force, al Qaeda, which has shown that it can strike directly at the American homeland. Therefore, the threat from al Qaeda has become a unique focus of U.S. foreign policy, around which all other policies are subsidiary.

Al Qaeda is a sparse but global network. This makes its members difficult to identify. It also makes it necessary for the United States to act globally, inevitably intruding on local powers. The United States has shaped its relations with other great powers around this issue. This has put three processes into place:

* The United States is intruding in a wide range of countries on an unpredictable basis, built around al Qaeda's behavior. This is creating unintended tensions and consequences.
* Countries and issues that are not directly tied to the war are receiving limited attention, regardless of potential
consequences.
* Great powers are either recoiling from cooperation with the United States out of fear of being drawn into conflicts in which they have no interest, or they are using the coalition as a cover for pursuing their own interests.

The solution to instability is the imposition of order by a great power in competition with other great powers. However, the United States today does not compete with any great power but is at war with an international network. Unconstrained by other powers and driven by its war, the United States inevitably destabilizes some countries, lacks the interest or resources to stabilize other countries and creates opportunities for destabilization by other great powers. At the same time, it provides few incentives for
other great powers to take risks in stabilizing the situation.

Thus, if we look at the list of recent crises, the most important issue is Japan. Japan does not intersect al Qaeda, and therefore the United States does not have the focus to manage that crisis. Similarly, Washington has a set policy regarding Colombia, but no bandwidth to definitively reevaluate that against the backdrop of Venezuela. The policy is on automatic. In contrast, the question of Afghanistan, Iran or Iraq is of fundamental interest to the
United States, with the net result that each of them is being destabilized.

The instability we are seeing, therefore, has no common root, but neither is its intensification accidental. The United States dominates the international system, and since Sept. 11 the United States has been focused on al Qaeda. That focus has not caused local instability. It has, however, created the conditions in which local instability can intensify and in which there are few external forces to manage that instability. It therefore follows that local instability is intensifying on a global basis.

In terms of policymaking, there is little that can be done. The United States cannot avoid its obsession with al Qaeda. Certain things follow from that: Europe has no appetite for the global war that the United States must wage, and Russia and China cannot help but use the war as an occasion to improve their own relative positions. Therefore, the United States will intrude and destabilize where it needs to, and ignore other issues. This will create unstable situations as well as situations in which instability will grow because of inattention.

No other power can bring order. The United States is protecting its own cities from devastation. The list of crises will grow.

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