Globalization vs. Regionalization

T.X. Hammes, of the Center for Strategic Research at the National Defense University, just did something spectacular: he has provided us with an intellectual ‘algorithm’ for understanding multiple global trends; the ‘Donald Trump’ phenomenon, Brexit, the slowdown of energy markets, China’s production woes and its perceived ‘regional’ belligerence, the gradual irrelevance of the Western foreign policy elite, and the future of jihadism.

In an article titled ‘The End of Globalization?’ (War on the Rocks blog, August 2, 2016), itself derived from a long paper published by NDU (‘Will Technological Convergence Reverse Globalization?’ July 2016), Hammes’ revelatory thesis suggests that manufacturing is about to undertake a technological leap, one that will leave ‘rust belts’ across China, among other places.

A review of the author’s biography suggests a long track record of mischievous free thinking. I, for one, find his latest argument compelling, and convincing. It suddenly tied together many trends that I had been looking at, especially as they relate to the Middle East. If it turns out that he is right in describing this harbinger of massive change—a disruption of global trade patterns half a century in the making—then we need to think through its implications for specific locales such as Eurasia, of which the Middle East is a component.

end of globalization pic

But before we do that, I would just like to say that Donald Trump is, maybe unwittingly, the truest validation of Hammes’ line of thinking. Irrespective of what one thinks of the candidate, somethings he said over the past year must have resonated with voters. Trump’s brand of rethinking global trade and military alliances, protectionism, isolationism, and nativism, actually complements the patterns that Hammes is describing, and does so positively for the American stakeholder—voters may sense these patterns without fully understanding them (…so too with a candidate). And it may be his best defense against the charge of being less prepared for office than his challenger, Hillary Clinton. After all, how prepared can one be if one’s expertise is based on old norms that are breaking apart? I don’t know how Trump arrived at his message, but he may argue that his background in business has prepared him to spot big changes as they begin, and to adapt quickly to them for gain and leverage.

This suggests that the message espoused by Trump is only the beginning of a wider trend. It also suggests that a status quo candidate like Clinton—touting her true and tested steady hand at the helm—may not have much success in keeping the status quo afloat. The foreign policy establishment, whose consensus usually leans to the status quo, may diminish further as their policy prescriptions continue to falter in the face of a fast changing global reality, and a public that is less convinced that it should pay for such policies.

That American conversation, reflected in the worldviews of Trump and Clinton, will have a tremendous impact on the Middle East. In fact, it is likely to entrench what President Obama began, yet for a different set of motivations: disentangling the United States from the future of the region because the region is on fire.

The Middle East in the Era of De-Globalization

Last month, I described the multiple trends currently at play in the region, and why they contributed to Obama’s decision to back away from the ‘fire pit.’ I was hoping for a new conversation among the foreign policy elite as to what American retrenchment may mean in the medium to long terms, and what can be done within the confines of a contracted bandwidth of attention that a new administration may have for the Middle East as a whole.

Now, let’s imagine that Hammes is right, and ask ourselves, ‘What will the Middle East look like in thirty years?’

Globalization would have come and gone, with the Middle East, generally speaking, only contributing very little to world trade: primarily energy commodities, and maritime accessibility.

Hammes suggests that both energy and shipping are going to change drastically. For twenty years, commodity markets have been trying to figure out how to replenish China so that its workers can make stuff. Let’s imagine that Chinese, and more broadly South East Asian and South Asian, manufacturing and services output, per its current numbers, halves. What happens then? Does this mean they need half the amount of oil they currently use? Half the ships that set out to sail through the Suez Canal?

This is simplistic, I know. But whatever the numbers and dynamics turn out to be, then de-globalization would mean more scarcity in the Middle East, just at a time when huge numbers would be joining the work force. A work force that for the most part did not accrue the skill sets of globalization, and is consequently even less prepared for a transition to a new global trade paradigm. As Trump would say: ‘Not good’.

Middle Eastern strategists should also consider the fact that the story of an ‘emerging’ China is only forty years old. Two hundred years previous to that, China’s story was one cycle after another of hair-raising disorder, and much human suffering and loss. India’s success story, too, is very recent, and history tells us that its past challenges may still have the potential to hobble it. Therefore, the Middle East cannot afford to look East for creative, post-globalist ‘solutions’.

Actually, less ‘globalist’ penetration in Eurasia may turn out to be a good thing, compared to what China and India may experience after the old order they were so heavily invested in withers away.

The Middle East can’t look West either, though, not with the United States receding behind 3-D printer-built walls, and a Europe increasingly wary of its close proximity to the ‘fire pit’ and adopting many of the inclinations of an isolationist America.

So, what can the Middle East make, what can it contribute, to a world economy that is no longer ‘worldly’? How will it divert its current crop of youth, and the bigger one to follow, to constructive, ‘stable’ pursuits?

I have so many scenarios running through my mind now (thank you, Hammes, for scaring me even more) but I will keep it brief.

The Middle East needs to append itself to a market that is less likely to break down as an after-effect of globalization, and one that can actually be integrated geographically and culturally. Let’s call it ‘regionalization’, and let’s curtail its bounds to Eurasia; being the land mass that incorporates the Middle East, Central Asia, the less ‘European’ parts of Eastern Europe, and Russia. For a variety of reasons, that few in the region will be much happy about, Russia will probably act as the hegemon.

I don’t know whether Russia wants to play this role. But the yearning for empire may come on the cheap in this case: there’s just a void to fill, and not many options left for those left behind after the reversal or even demise of globalization.

Sure, some ‘globalizing’ trade functions will persist even in the worst-case scenario: Israel and probably a few city-states, across Eurasia and in the Persian Gulf and Anatolia especially, may form a globalized archipelago in the ocean of data, providing refuge for programmers escaping the fire pit who may still be of use to software and technical development. But the rest of the land mass has very few options. Western technology may turn nativist too, with copyright access to it curtailed. So one should not expect a flowering of home-grown technological ‘relevance’. The best that can be hoped for is that tomatoes grown in Anatolia, using what may become increasingly defunct agricultural methods, would be available for sale in St. Petersburg.

Then again, technological breakthroughs could empower and enable the types of revolutionaries that thrive during troubled and changing times: jihadists could print out a future aerial drone prototype that takes down an F-16. What will we do then? How much can Russia do?

Russia may try to manage its new Eurasian sphere of influence by cobbling together an alliance of minorities. Or, it could push for a rapprochement with Sunni Islam that inoculates it from its own ‘troubling’ demographics (think migrant Tajiks, and native Tatars and Daghestanis). I don’t know how Iran would take to take. Either way, the bill could be too high for a worn-out Russia, and it too may turn nativist and closed.

But if Russia chooses to engage and ‘expand’, maybe some weird, hybrid Islamic-Russian Orthodox culture will emerge from this interplay. Unfortunately, autocratic models of rule may resonate.

And since so much fossil fuel energy is produced in Eurasia, maybe a new ‘OPEC’-like body will arise to coordinate internal competition.

Or maybe Syria and Iraq would confederate to protect themselves from other ‘toughs’ in the neighborhood, and figure out a way to protect pluralistic, somewhat free political models that would necessary emerge to manage a tense communal peace after years of strife. [Yeah, I hear you cynics out there with your “dream on” repartees!]

There is so much to consider. But the elite of the region need to think through what’s coming if Hammes is onto something. Or, alternatively, they can hop onto the last boats towards Canadian nationality before the barriers harden.

Alas, this sort of a conversation is difficult to imagine in Washington. There is even a reluctance to acknowledge the magnitude of the changes that Obama had begun with regard to America’s relationship to the Middle East (see my aforementioned essay, ‘Managing the Fire Pit’). The DC foreign policy establishment is understandably beholden to the ‘old gods’. To think that they will be replaced soon by a new set of idols, rapidly churned out by 3D printers, is too jarring of a thought if all one has done for decades is to look at the world from a particular, cushioned perch.

I’m neither a pessimist or an optimist when it comes to futurism. I believe that human irrationality will always play a big role in disrupting best-laid plans, or mucking up the best-designed means of production. [For example, are jihadists simply going to let a self-segregating West ‘be’ without trying to prove something by hitting at it?]. But what Hammes is talking about makes a lot of sense, and whereas consumer spending habits can be marvelously irrational, manufacturing and investment are less so. Adaptive businessmen will look at their numbers and their options to propel the trends that Hammes describes. We saw what the internet did over the last 15 years. Leaps in manufacturing make plenty of sense, and so do their foreseeable implications.

That said, I better start learning Russian. Da?

One comment

  1. hashimz · August 5, 2016

    The GWOT is practically over with no strategic victory for the US in sight. Hence the withdrawal. Also, automation, 3D printing, & AI are not technologies that are exclusive to the West.

    For example, the Saudi’s are already shifting their economic policy & investing billions all over the world. Part of that will likely be spent on gobbling up established tech companies & promising startups. If anything, the transition might be easier for them than for more established economies as you point out.

    Additionally, Brexit just cemented the fact that Europe is not a monolith. France especially can’t keep up with the likes of Germany without looting former African colonies. Dynamics like this plus Russian aggression enable Middle Eastern nations—Turkey is the best positioned—to have a say in European affairs if they’re so inclined.

    The Middle East is having its 1848 Spring of Nations. This is too big for a second rate power like Russia to fully exploit. At least not without help from China or the US, which doesn’t appear to be forthcoming. The Chinese consider Central Asia their backyard & are already jostling the Russians out. Of course, the US loses no sleep over Russian decline either.

    I believe the actual dynamic will return to being a Mediterranean one. It was like that for millenniums before the New World was colonized & the northern Mediterraneans—i.e. Europe—broke the cycle.

    Like

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