Xander Snyder: Hi and welcome to the Geopolitical Futures podcast. I’m Xander Snyder and today I am chatting with Jacob Shapiro, our director of analysis. How’s your week going so far Jacob?
Jacob L. Shapiro: Oh, it’s going alright. I feel like every time I get on with you Xander, it’s incredibly cold in Austin, Texas. There’s actually ice outside my window right now, which every time it’s this cold in Texas, I am worried the world is about to end but…
XS: You’re welcome, I am glad I can bring some cold weather to Austin.
JLS: I appreciate that.
XS: So today we have a treat for you. We’re doing another episode of Ask GPF, where we answer your questions. So a number of folks have submitted questions to the hashtag #askGPF on Twitter and we have a collection of them and we’re going to be answering as many as we can get through.
So the first one Jacob, I’ll ask this question of you and then we can chat about it as you’d like. And it’s from LeoCri which is their handle probably not their full name. What are the perspectives from India and can India become China’s main competitor overtaking Japan in this respect?
JLS: Yeah this is a question that we get a lot as our frequent listeners and readers will know. Our long-term forecast here is that Japan is really the dominant power in East Asia. And there’s gonna be conflict probably between China and Japan especially as China sort of descends into regionalism and loses centralized control over the country. But people always ask us about India because India is really the only country in terms of population size that’s in the same neighborhood as China and is projected to get bigger than China.
The issue with China excuse me, the issue with India is this, it’s not clear to me that India is really a unified country. India is made up of a bunch of different regions, it’s made up of a bunch of different ethnic groups, religions, castes, you name it. It’s just an incredibly diverse society. And it’s diverse not just in terms of its social makeup, but also in terms of the political rules in region to region. Business can operate you know in a particular way in one region and be in a different part of India and the language is completely different and the rules might be completely different and the taxes might be completely different. The current government is actually trying to change some of this, they’ve actually made some pretty ambitious moves to try and harmonize some of these moves that I’ve just talked about.
But at the end of the day, India is incredibly diverse. I don’t see that there’s a lot of potential for them to sort of rally around one view. And then besides that India is incredibly poor. We often talk about how China is so incredibly poor and there’s still hundreds of millions of people you know living on something like $5 dollars a day in China. India is even more poor than China. I mean India has a long way to go before it can even start thinking about projecting the kind of power that China does.
The last thing that I would say is the only way that India and China can really like encounter each other is at sea. The Himalayas really separate India and China and make it very difficult for there to be actual conflict between the two of them.
Now the countries there to watch for there are Nepal because if one or the other could, well it’s Nepal for China and then sort of Tibet for India. If China could develop a foothold in Nepal, suddenly it’s able to threaten India’s interests more directly. If India is able to develop a foothold in Tibet or it’s able to bring up or stir some unrest in Tibet. Suddenly that begins to challenge China’s viewpoint. But I really don’t see any of that happening and I think that both China and India have their own internal concerns. China has this major economic restructuring it needs to do. And India just has some basic things to do in terms of centralizing governance and becoming not such an incredibly poor country.
So when you put those two things together, you know sure long term you know 50, 100, 150 years from now we can talk about India emerging or even becoming an adversary of China. But the problem with that is that we’re not sure that China as we know it today is going to be around to even be a rival.
So overall no, I don’t at least you in the time horizon of the next up to 20-40 which is what we have forecast on the website up for. I don’t see India overtaking Japan. I do see India working with Japan. I do see India and Japan perhaps being part of the same coalition being part of the same ambitions to manage Chinese ambitions because I expect China to become more powerful in the interim before its internal problems lead it to real trouble. But no, I don’t see India overtaking it. What’s your view on that Xander?
XS: Well I mean I generally align with what you just described. The Himalayans really act as a big barrier for land-based conflict between the two countries. And some of our readers have asked the question, well what about the Indo-China war in 1962 that was going on about the same time that the Cuban missile crisis was. And the two countries didn’t engage one another directly. But it didn’t really escalate into a really significant, large-scale general war. And part of that reason is because of the terrain.
So some other folks will point to the Doklam crisis. Doklam I am almost certainly mispronouncing this, that occurred last year in the middle of the year and we wrote a bit on that. We had a special report that we published as well as a couple reality checks. And similar constraints were encountered there as well. While both sides had a number of troops stationed in these really high altitudes, they ran into issues supplying and getting the equipment up there just to even support the relatively small number of soldiers that were in the area. So if you’re interested, go check out our special report on Doklam last year.
But it does seem that in terms of China’s adversaries, Japan’s right there. They have a powerful Navy. They’re a well developed industrial country with one of the largest economies in the world. It really seems like Japan has been China’s historical adversary, in part because of proximity. And it’s going to continue to be.
JLS: Yeah that’s a fair answer. Well I’ll turn it around on you Xander and now we have a question from Jeremy Burkett. I hope I’m pronouncing your name correctly Jeremy, I apologize if not. Jeremy’s question is, is a multipolar world more or less inclined to conflict than a unipolar one? And before you answer that, Xander, maybe you could explain to our audience what is meant by these words multipolar and unipolar?
XS: Yeah, it’s a great idea. So a unipolar world is one that is dominated by a global hegemon is what they say or really just one country that is so incredibly powerful. It’s not omnipotent but it has a preponderance of power relative to other countries in the world that none can challenge its position, at least not directly. So the period that’s always cited to give an example of a unipolar world is the United States in the period of 1991 till you know basically today still.
A multipolar world on the other hand is one in which there are major powers of somewhat equivalent strength that exist at the same time and relatively same space. So you can look at Europe for example in the 19th century in the Great Game. So that’s sort of like a quick definition.
Now, I am not sure what you think of this Jacob, but my take on it is this. Sort of the general theory of the unipolar world or global hegemony is that because it is so powerful, that global hegemon can suppress conflict around the world. That’s kind of the classic theory of it. But if you actually look at the world from 1991 until today, while there’s not been any general wars like between major industrialized countries, there’s been plenty of war.
There was really pretty significant conflict in the Caucasus in the ‘90s where you know tens of thousands of people were killed which for you know the Caucasus, an area where there’s only 16 million people, I think some like a million were displaced. It was a really serious conflict. Then there was the Balkans throughout the ‘90s, a number of different wars that occurred in succession. Then in the early 2000s there’s been Afghanistan and Iraq and as time has gone of course Syria and all of the conflict that has grown out of what was initially a civil war.
So I’m not sure if I buy the thesis that a unipolar world is necessarily is more conflict-free. But it seems like at least in terms of major powers, it has been so far. And on the flipside, a multipolar world, so people will often point to World War I, World War II and say this is an example of what happens in a multipolar world, are we running into this risk? And I think that’s certainly the case that a multipolar world perhaps presents a greater risk of war between developed countries.
But at the same time, you know I mentioned the Great Game in the 19th century. I can point to the Congress of Vienna which was the European set of institutions agreed upon after the Napoleonic Wars set up by Metternich, that established a balance of power between basically all of Europe’s major nation-states. And for the most part, it was a peaceful century. There was the Crimean War but that didn’t really grow to be a really major conflict. It was fairly contained to one area in the Black Sea. And then there was a Russo-Turkish war in 1877-1878. And there was some conflicts between Prussia and its neighbors. But really nothing on the scale of World War I.
So you can argue that a multipolar world in a balance can bring about a certain degree of well not perpetual peace, at least not constant conflict. What’s your take on that Jacob?
JLS: It’s a difficult question to answer. First of all because we have to define what conflict we are talking about and you were sort of dancing in this in your answer. Are we talking about interstate war, are we talking about civil wars, are we talking about terrorism? You know, there’s a lot of different ways we can define conflict that is both related and not related to multipolarity and unipolarity.
Also to really do this question justice, we probably have to go back and pull a number of different examples from time and sort of look at well the world was multipolar at this point, was there violence? And it was multipolar at this point, was there violence?
I can say sort of you know just a little bit off the cuff here, that you know the first eras of multipolarity that pop into my mind were incredibly violent. World War II I think arose in part because of a multipolar world. You had Germany and France and the United Kingdom and Russia, all trying to figure out who was the most powerful country in Europe. You had both the United States and Japan rising as major Pacific powers. China’s role in there also with their internal strife and you the civil war that emerged there is also part of that story.
World War I is a similar picture where you have different countries coming to challenge the status quo and it seems to me that if you have you know countries of equal power, you’re probably gonna have more interstate war. I don’t however think we can say though that a unipolar world is going to have less conflict. I think both of these worlds will have plenty of conflict because unfortunately it’s just, that’s what humans do, they fight each other when they get into these political groups.
So I guess the sort of clever way to not answer Jeremy’s question here is to say well you know it’s just going to be a different kind of conflict. It’s not going to be necessarily more or less. I would say that you know if we’re in a multipolar world, that means that we have countries that are fighting each other and they can bring more force to bear.
If you’re in a unipolar world, that fighting is going to look a lot different and it’s probably going to be less destructive on the whole. It’s probably going to look more like you know al-Qaeda and terrorism or insurgency tactics or things like this. I would say the conflict’s going to be there either way, but my first sort of gut reaction is to say in a multipolar world, that violence might actually be more severe, just because you’re going to have larger and more powerful political entities clashing against each other and they’re gonna be using all the force they can bring to bear, which is not the case in the unipolar world.
XS: I think that makes sense. So maybe we can summarize sort of our overlap in the answers that we just gave is that conflict exists in both multipolar and unipolar worlds. But in a unipolar world, because nation-states have greater war-making capabilities, the probability of interstate warfare is greater.
JLS: I think that’s fair and I would also just tack on to the end of this answer, which is to say that I don’t know how many of our readers come across this phrase multipolar world often in their daily lives. I come across it in almost every conference or speaking engagement that I go to, especially when I’m around Russian analysts or Chinese analysts or people from any of those countries. They push multipolarity as sort of the future. They think they’re at a multipolar moment right now.
From where I sit and when I’m looking out at the world and analyzing the world, I still think this is very much a unipolar world and that the United States is by far the most powerful country in the world and that there’s nobody challenging the United States for that yet. I think we see that from the types of conflicts that the United States is facing. I don’t see that the United States is facing any knockdown, drag out battles from any rivals. It is facing little, tiny problems all over the world.
And the countries that want to push back against the United States are like a Russia, like a China, they use smaller conflicts like a North Korea, Iran, the Middle East, to try and nip at the U.S.’s heels. That to me says we’re in a unipolar world. I would say you know eventually the United States power will decline as all empires decline. But I think we’re still a long ways away from that.
XS: So the next question then is from Raymond Berlin and he asks what are your thoughts on Russia’s game plan? They spend over 5 percent of their GDP on military, what for? Internal politics, to use it or let it rust? By it, I’m presuming he means the military.
JLS: Well let’s start with the easy question first. They are not planning on letting it just rust. I can assure you that if they are spending that much money on military hardware and weapons, they are not just going to keep it in a garage for Putin to look at when he’s bored on the weekends. (laughter)
As far as Russia’s game plan goes, I think that Russia’s game plan is to try and more narrowly redefine its interest and to build a strong Russian nation-state. Now for Russia to do that, it has to be able to defend itself. And Russia knows that it’s not in a position to have the buffer zones that it has become accustomed to having in maybe like we should say in the last century or so. Eastern Europe is not open to Russian conquest and Russia’s ability to influence Eastern Europe has lessened.
Russia, I would still say, is the predominant power in Central Asia, but it doesn’t call the shots there like it used to. China is very active there. India and Japan are very active there. It’s not the same. Even in the Caucasus or in the Balkans, Russia faces challenges from other countries that are looking there.
So I think when Russia looks at its overall situation, it is trying to plan for a reality in which it has to have very flexible forces that can move and redeploy to a lot of different areas within Russia to defend against the threats that it needs to. At the same time, Russia is trying to bring some stability to its economic situation and this is going to be very hard. In terms of its demographic situation, Russia’s future doesn’t look particularly good. Russia has really not been able to transition away from an oil-dependent economy. So all of these things are working against Russia.
What I would say and I think we’re guilty of this in the West a lot. A lot of people look at Russia in the West and think well this is completely inefficient, this is completely corrupt, Putin is a dictator and there’s only so long that this can last. I would say that in the same way that the United States is a political experiment started in 1776, Russia is also a political experiment. And it’s political experiment of a different kind. The experiment is whether the massive amounts of power and wealth that are generated in Moscow can glue together this massive country. And that just creates a different set of circumstances for political leadership and for military development and things like this than in other countries.
And you know the Russian experiment, although it has definitely had some blips here and there if you talk about the fall of the Soviet Union or the Russian Revolution. Overall the Russian experiment has been going on for a long time and Russia has been able to manage it very well. So I think what you have here is you know Russia is trying to become a stronger military power and it is trying to reduce the spheres of influence that it has to protect but also protect its interest in those by forging different kinds of relationships and throwing money at different types of research and development for military hardware. And then Russia is always dancing along that fine line, just how far can you push the Russian people before they say enough’s enough we want a change. Do you have a different view of that Xander or does that about comport with what you would think?
XS: No I think that’s right. I mean when we talk about geopolitics at GPF, we say that is the intersection of politics, economics and defense. And that’s a bit of a simplification but ultimately, it’s true. And when you talk about a country’s military capabilities, it is in large part determined by their economic foundation. And like you said, Russia is still very dependent on its oil base. It is attempting to try and transition away from that into somewhat more of a dynamic economy but its running into a lot of issues including political issues having to do with pensions and only having so much money to deal with that.
If you’re interested in kind of getting in the weeds on this, we did do a Deep Dive on the Russian economy I think last November of 2017 that really gets into the weeds on this. But you can see how the lack of dynamism in its economy and its dependence on oil, oil prices are higher now but for a number of reasons we don’t think they’ll stay that high in perpetuity, limit the degree of military prowess that Russia can develop and therefore how far it can project its power. But it’s definitely not intending to let that military rust as you mentioned. I mean we’re already seeing that in Syria and to a lesser degree, in Ukraine using more proxies there on the ground. But Russia will use its military probably more in limited means to achieve more specific objectives in the future.
JLS: Yeah I’ll throw in there just at the end, you know Russia has a formidable military and it has for the last 100 years. The thing that’s more interesting about Russia and I was actually just there in December which is a lovely time to go to Russia if any of our listeners out there are thinking of visiting. Really wonderful.
But you know, I gave my usual spiel at a conference that I was speaking at and a colleague of mine came up to me and said you know you ask the right questions and it’s not clear where the economic dynamism is going to come from in Russia. But make sure you look around when you’re in Moscow and see the way the city is handling its problems and its infrastructure and its public transportation.
And I’ll tell you that Moscow is different than the rest of Russia. Moscow is beautiful. The public transportation is amazing. The infrastructure’s very good. They respond to different infrastructure problems. The issue is whether Russia can take that wealth, that stability, that efficiency that they’re able to bring to bear in Moscow in the capital and apply it throughout the rest of the country.
I say this because I think especially over the course of the next six months, Russia’s going to be on display to the world. The World Cup is coming there this summer and I know that Russia is prepping for that and hoping to use that to show, that it has really changed. That it does have this economic dynamism. That it belongs not just in the conversation about strongest militaries in the world. But also in terms of potential strongest economies in the world, if you can bring its resources to bear in an efficient way.
I personally am pessimistic about their ability to do this. But Moscow is the case for yes they can. The real question is can you go out to the countryside and start to see those same types of things. For now I don’t see it but if in 10 years, we’re still talking about Russia and the countryside is seeing the same kind of development as Moscow has, you know we’re going to have to revise some of our predictions.
XS: So the last question then is from Mudit Chordia, sorry if I’m mispronouncing that name. And the question is what leverage does China kind of have in the global transition to clean energy, with respect to their rare earth supplies?
JLS: So I don’t have a very clear read on the relationships between rare earths and clean energy technology. I assume that there’s a link there. I know a lot more about the way that rare earth metals are used in terms of military hardware, in terms of different types of electronics, things like this.
Rare earths, it’s kind of a misnomer because rare earth metals are not rare. I guess I should say rare earth elements not rare earth metals. Rare earth elements are not actually rare. They’re just very difficult to mine out of the ground. And the reason that China has such a monopoly, I think it’s something like, I think the latest date I have is 2016 and I think it’s something like 90 percent of the world’s total rare earth elements mined in 2016 came from China. But the reason they come from China is that China is willing to mine them in a cheaper way than other countries because you actually produce a lot of pollution if you are mining rare earth elements and it costs money to sort of put a cap on that pollution.
The U.S. has rare earth elements and there have been times in U.S. history where its produced all the rare earth elements that it needs. Actually even earlier, I think it was around 2014, they were domestic companies in the United States producing rare earth elements that were enough to satisfy most of the current rare element consumption in the United States.
So I don’t view this as a very strong lever for China. If China wants to do what it’s done in the past which is say ok we’re gonna withhold rare earth elements from market or we’re going to make the price shoot up, you’re going to have a period you know whether it’s months or maybe a year or two, where there are going to be shortages and the prices are going to go way up. But then you’re going to start to see, companies in different countries start to produce them themselves.
So this is one of those levers for China that appears very scary on the surface and China can use it for short-term benefit. But if it pushes too hard, it’s actually going to ruin its advantage in the first place. One thing to think about here also is as I mentioned the way China mines rare earth elements, I don’t know all the details. But I do know that it produces more pollution than when other people mine them and that China was willing to bear that cost. China is now cutting back on pollution.
And I don’t know the answer to this question but one of my questions about rare earth elements and I’m giving myself some homework now, is well is China going to move away from some of its mining practices in rare earth elements because it’s trying to cut down pollution? And is that going to increase prices or make it so that other countries or companies know that countries want to start mining the stuff themselves? I think that’s the interesting question to ask here and I honestly don’t know the answer and will have to do some research.
But overall this idea that China is able to control the rare earth element market and its monopoly, it’s true but it’s a very short-term truth. If China went through on its threats, other countries would eventually be able to fill in the gap.
XS: Yeah I don’t have a great read on how rare earths is related to the clean energy transition and that just might be lack of knowledge on my part there. But I have some anecdotal evidence at least on China’s interest in clean energy and you mentioned the political issue of pollution. So they definitely have a need to develop that sort of technology. And before I joined Geopolitical Futures, I co-founded and managed for several years, an energy efficiency company. And whenever we went to the market for fundraising, we were far more actively courted by Chinese venture capitalists than anyone else.
So the Chinese government is putting, and I don’t have the figures sort of on the tip of my fingers right now but when I looked into it then, the Chinese government is contributing quite a lot of capital towards investing both domestically and internationally in this technology. They want to have access to it and if it’s abroad, they want to find a way to bring it back and develop it and deploy it domestically. So that is a trend.
JLS: Alright, do we have any more questions Xander or was that the last one?
XS: That was the last one for today. So if you want to ask next time, just search out hashtag #askGPF and we’ll answer your questions on the podcast.
JLS: Thanks everyone.