5 greatest risks to global stability looming ahead in 2016

By Anya Degtyarenko 

NEW YORK, Oct. 12 — With the end of the Cold War, the world entered the new era: multiple regional economic and political powers are about to reshape the world order. The startling trends had been much in evidence during 2015: complete breakdown in relations between the US and Russia with Putin’s aggressiveness; an escalating international crisis in the Middle East, a shattering economic and social state of the European Union, and the fearful economic effect of Chinese slowdown. While the world doesn’t seem close to “stable” today, the global stability implies the existing political status quo, allowing moderate and predictable international economic and social progress. Geopolitical factors that threaten the predictable order are, therefore, the risks causing global instability. Five of these top risks will be prominent in 2016. 

1. European Instability

European integrity and reputation of stability will continue to be challenged in 2016.  Eurozone economic weakness, coupled with the migration crisis and following political repercussions will be hitting European Union in its weak spots. The inflation rate has fallen again in 3rd quarter of 2015, to just 0.3 percent, and the unemployment rate is stuck at 11.5 percent — and prospects for 2016 might be worse. Economic weakness makes the EU reluctant to hurt Moscow; cutting it off from the global financial system would strike the EU too. Following the economic fragility, “Brexit”, the possibility of Britain quitting the EU, is the next risk sign of  European fragmenting. Economic stagnation and lack of political cooperation produced infirm responses to the Ukraine, Iraqi and Syrian crises. The bottom line of  the list is a migration crisis with no obvious solution. Migrant inflow from the African continent, dictated by demography and economic gaps, is going to increase and the EU must develop a common approach or risk further political and social challenges to its unity. 

2. China

While the world is focused on the situation in Middle East, ISIS and Putin, the problem with China will approach shortly. The growth targets for 2016 keep lowering, and it will affect China’s trade partners at first place. Commodities dependent countries booming on exports to China, like Japan, Brazil, Australia, Indonesia, Thailand, will continue to suffer, raising the risk of political unrest in the most unstable of them. GDP in the US and already the struggling and the Eurozone will decline. While the world is anticipating China’s economic slowdown, the Chinese Communist Party seeks to demonstrate its political and military power. It is building up its influence in the South Sea and closed the air space in Eastern China, which the US does not recognize. Its actions in Syria pose a major threat to the US-allies in the Middle East. Chinese hackers are believed to pose threat to the US cyber security. On top of the economic interdependence between the US and China, the political tension between powers will highly increase. 


3. The Middle East 

The expansion of the Islamic State, as well as Saudi Arabia and Iran, will continue to complicate the situation in the Middle East. ISIS ideology will continue to spread out, setting up new units and disrupting the status quo power of the Sunni countries like Saudi Arabia or the United Arab Emirates. Meanwhile, the conflict between Israel and the Palestinians is unresolved, Hamas in Gaza and Hezbollah in Lebanon will promote violent  clashes with Israel. With the US-Iran nuclear deal and impending lifting of sanctions, the struggle for dominance between Iran and Saudis will feed violent proxy wars in the region like those underway in Syria and Yemen. The threat of the Assad regime collapse and his successor will be on the agenda of 2016. With the US scheduled to withdraw from Afghanistan in 2016, there is a risk of the collapse of Afghanistan and possibly Pakistan into semi-failed states. Some of these conflicts may yield an actual oil supply disruption, as in 1973, 1979, and 1990, with the results reflected in risking prices. Weakened economies and civil wars in Lebanon, Jordan, Syria and Turkey, will turn millions of people into refugees and continue to destabilize Europe economically and socially. Furthermore, lasting hopelessness and growing unemployment will produce more anti-western jihadists among Arab Youth who will find their way to stage terrorist attacks in the US, Europe or Russia. 



4. Saudi Arabia

Saudi Arabia will contribute to global instability and already existing turmoil in the Middle East. Its importance as an oil exporting nation has made economic interdependence with the West inevitable, That, in turn, set up strong political and military relationships that at times have been a source of tension for both sides that will be tested in 2016. Saudi Arabia is facing multiple risks for its economy, succession and regional stability. With the trend favoring continued low oil prices, the Saudi budget deficit will increase, which was already $100 billion in 2015. This will produce risks for the Kingdom’s credit rating, capital outflows and negative responses on international markets. As the country will be close to running out of its financial and oil reserves, the region will be more destabilized. Besides this tight economic situation, the US-Iran nuclear deal shuttered the 70 year history of the American and Saudi relationships of the status quo powers. Russia’s dramatic intervention to the balance of power  in the Middle East will signal that the US is not responsible for defending its friends and allies anymore. With ongoing succession conspiracy inside the House of Saud, that  will leave the Saudis more vulnerable than ever, and cause more friction in the relations with Iran.  


5. Russia 

Russia is a tricky factor when calculating global destabilization factors in 2016. Against the backdrop of the weak Eurozone, the economic sanctions imposed after Crimea were not enough to mortally weaken Russia. Arguably, they made Putin even more aggressive and revisionist. As the Russian economy tumbles, Putin will increase its anti-Western economic policy, targeting the companies and investors inside of Russia. Its nuclear capability and intend on territorial and political expansion, especially in the region of the US-allies, continues to pose threat to the security of Western world and overall, global stability. With the Ukraine left in the “frozen conflict” state, Putin moved his attention to Syria. Putin’s intervention in Syria intends to insert Russia as a rival to the US-superpower role in the regional conflict. That clearly had implications for further extension beyond the region. Russia will continue its provocative behavior against NATO states (e.g. violating Turkey air space).  Further, China uniting with Russia against ISIS and US-backed allies will pose great risk of expelling NATO as a power organization and eventually shifting the US influence in the region. Failure to defend the NATO ally from Russia-China coalition will disrupt the whole balance of power and the attempt of the US to return to its primary power in the region will trigger the World War III. 

Double Feature! : A Cold Enterprise For “Kinjervinn”

Chinese businessman Huang Nubo, the chairman of the property-development company Zhongkun has made a bid of a billion krona ($8.8 million) for a sizable plot of land in Iceland. Mr. Huang proclaims a fondness for the country, and the intention of expanding his tourism business, but the deal is thus far unpopular in Iceland and his motives are seriously in question.

For one thing, the location of the land plot is conveniently located near several of Iceland’s “most remarkable natural sites”. For a nation with only two very viable natural resources, one of which is unable to be exported (geothermal energy; the other is fish), this could be more impacting upon Iceland than on a country more heavily endowed.

The land plot would constitute 0.3% of the Island’s land mass, 155 square miles, and a seemingly insignificant number, but of primary concern not only for its location in Iceland, but also the location of Iceland itself. Iceland holds a pivotal geographical position between North America and Europe, an area China thus far has no property in whatsoever. The strategic implications of this are enormous, especially considering the political ties “Kinjervinn” (the Chinaman) has in China, having formerly serviced in the Chinese Communist bureaucracy and reportedly enjoying various political business contacts. Although more extreme and hopefully implausible, there is also talk that China could capitalize on a navigable North-west passage if Arctic ice continues to melt.

Many Icelandic officials, including the Foreign Ministry, have welcomed the offer due to the plan to link up the Vatnajokull and Jokulsargljufur national parks without claiming water rights, and the possibilities of further investments stimulating the bruised and bloodied state of the economy after its grand 2008 catastrophe. Mr. Huang has been said to expect investments of over 20 billion krona in the future.

- Liana


http://www.economist.com/node/21530165

http://www.bbc.co.uk/news/world-europe-14714524

A Hushed Wave of Violence

By Eleanor Albert

The media was whipped into a frenzy after the tragedy of the Columbine shootings in the United States in 1999 – that was students-killing-students. In recent months, China has been home to a similarly shocking violence in an academic context, but in the Middle Kingdom children are the victims of teachers.

“There likely is no single explanation for the assaults in Fujian, Shandong, Jiangsu and, on Wednesday, in Guangdong Province, where a 33-year-old former teacher stabbed 15 fourth-and fifth-graders.”

“In Taixing, the city in Jiangsu Province where a knife-wielding man stabbed 28 kindergarten students and three adults on Thursday, critically wounding at least five children.”

“A crazed man who on Friday beat five toddlers with a hammer, then set himself on fire with two other children in his arms.”

“Students in four other schools and a day care center were attacked by knife-wielding men who stabbed dozens of children.”

The root of such violence? Most likely frustrations from an imbalanced society and rampant corruption at the local level. What is most horrific in the aftermath in China is that these issues are being suppressed and thrown into a box and sealed shut. From an analytical perspective, the Chinese government and state controlled media are “ignoring” the incidents because of the potential threat they pose to the credibility and legitimacy of the authoritarian party-rule that the CCP enjoys.

For now, the CCP can still get away with this. However, it is not a sustainable policy. The continued growth of the Chinese economy will lead to further engagement with the world and the Chinese will want reform and the means to make the CCP accountable. This is not to say that the Chinese people desire radical regime change—they are still extremely nationalistic and proud of the successes of China in the last 30 years under CCP leadership and will continue to look to that leadership in the future.

Recommendations for Sino-US Rapprochment

By Eleanor Albert

Read the news. Any news sources, whether liberal or conservative, writes about China within a critical framework. The New York Times alone had the following headlines in the past few days: “China Bars Noted Scholar From Planned Trip to U.S.,” “China Said to Execute Thousands in ‘09,” “Chinese Court Hands Down Stiff Sentences to Four Mining Company Employees,” “Chinese Activist Surfaces After a Year in Custody,” “Rescuers in China Struggle to Free 153 Trapped Miners.”

Search a little deeper through the China related articles in the NYT, weeding out the negative narrative Western media has developed for the East’s miracle economic nation, and you will find Charles A. Kupchan’s “Soothing US-China Tensions:” recommendations to pull both Beijing and Washington out of the rut and tensions that have recently plagued the “partnership” between two of the world’s major powers.

Toward the end of the Bush administration, China –in the eyes of the U.S. government—was to be a “responsible stakeholder” and “constructive cooperator.” Obama’s administration, upon entering office, recognized the relations between China and the United States as the most important partnership and sought to cultivate it. Progress has seemingly stagnated and Kupchan warns:

“With the anger on both sides intensifying, American and Chinese leaders urgently need to take steps to defuse the situation. Otherwise, China’s continuing rise may soon result in a classic rivalry between reigning hegemon and ascending challenger.”

By now, it is evident that the U.S. and China have an increasingly dependent relationship and must make compromises, but both governments are taking the wrong positions to alleviate tensions. Obama and the CCP leadership are facing tremendous political pressure domestically—but the administrations cannot neglect their commitment to the stability and security of the international community and prevent the exploitation of ideological differences that are widening the fissure in U.S.-China relations. The U.S. bullies China about the yuan and “urges” the CCP to revalue its currency when it should use multilateral dialogue platforms. Beijing continuously expresses the desire to play a larger role in the international community and should seize the opportunity to establish credibility as a major player by supporting stricter sanctions on Iran to stop nuclear proliferation.

International institutions and platforms for dialogue are key to resolving the current tensions between Beijing and Washington. The governments will continue to have differing opinions on Taiwan and human rights, but they can and need to compromise on economic issues (that have implications for the global economy) and international security issues.

(Photo courtesy of White House Photo Gallery)

A New Take on Nanjing 1937

By Eleanor Albert

Last week, a Foreign Policy article reflected on a new joint report from the Chinese and Japanese governments in regard to the Nanjing Massacre. In December of 1937, the Japanese Imperial Army, after invading China from the north in Manchuria, finally reached the southeastern capital of Nanjing. The Massacre is also known as the Rape of Nanjing (or Nanking whether one is using pinyin or the Wade Gilles translation spelling) and claimed the lives of hundreds of thousands of civilians. Soldiers of the Japanese army were also responsible for the rapes of an estimated 20,000 to 80,000 Chinese women. This historical event is often described as China’s Holocaust – for obvious reasons.

The Nanjing Massacre carries tremendous controversy with it, particularly due to Japan’s lack of recognition and even denial of the event. Despite Japan’s defeat in 1945 at the close of WWII, discrepancy continued. As a result, the Nanjing Massacre has long been a wrench in Sino-Japanese relations, as well as an obstacle in establishing stability in Southeast Asia.

Last week’s report does not clarify the number of total lives lost, nor did the Chinese and Japanese governments come any closer to agreeing on an estimate – a disappointment in historical terms. However, the report was not a lost cause. For the first time, Japan took full culpability for the extent of its violence and the tragedy inflicted on China – a political victory.

All former empires have had difficulty making concessions and taking responsibility for aggression, yet the joint report between China and Japan promotes new optimism for Southeast Asia.

With the economies of China and Japan ranking in the top two and three in the world, second only to the United States and Japan’s and China’s growing importance in the international community, the two nations play key roles in security and stability in Southeast Asia. Although the report shows a mere concession by the Japanese, the acceptance of guilt will hopefully be symbolic enough for China, as well as Taiwan, Korea, and other former Southeast Asian colonies of Japan, to push aside decades of controversy and look forward to partnership in the future.

(Iris Chang, a Chinese-American historian and journalist, published The Rape of Nanking in 1997 that provides an account and explores lost details of the massacre. A film, of the same title, was also made in 2007, inspired by Chang’s book.)

Boiling Tensions in Sino-US Relations, New Categories for Disputes

By Eleanor Albert

Anyone paying slight attention to the media coverage of Sino-US relations in the past month or two can recognize the increasing tensions between the two superpowers. In the midst of new US arms sale to Taiwan, Google threatening to pull out of China, the state-stabilized Chinese currency, the international community is the audience as US-China debates take the stage. John Lee wrote this week at Foreign Policy of the growing tensions and developed three classifications for the nature of the disagreements between the United States and China: Fundamental Disagreements, Serious Disagreements, and Manageable Disagreements.

I fully agree with Lee’s manageable disagreements: military competition and economic disputes. It is true that both countries now rely on interdependence economically in a world that is increasingly changed by globalization. Simultaneously, the United States and China find themselves to also be competitors in the international community: the US as the world’s largest super power and China as the prominent rising force that could potentially challenge the US. Economic disputes and military competition will surely be the source of tension between the two countries as the US tries to hold on to its place as a supreme power and as China breaks into the new position that it seeks as a key player in the international community.

As for Lee’s serious disagreements, he names Taiwan and rogue states. China, with the ambition to hold a stronger role in the world order, will have to modify or be more cautious in its interaction with rogue states if China hopes to prove its credibility to the rest of the world. Concerning Taiwan: Both the US and China accept the status quo with their respective policies towards Taiwan. Taiwan’s economy grows progressively dependent on the Mainland. Although the US maintains its arms sale with Taiwan and the US government is still bound by law to intervene in the event of a military attack on Taiwan, the US under the Obama administration has discussed at length the crucial importance of the positive and cooperative relationship between the US and China (or at least this held true before his sale of $6.4 billion dollars in arms sale to Taiwan at the end of January).

He refers to ‘climate change’ and ‘Tibet and Xinjiang’ the two primary fundamental disagreements between the US and China. While Tibet and Xinjiang are topics of irreconcilable differences – in regard to the management of domestic issues versus international human rights, I strongly disagree with Lee’s argument on climate change. After spending a summer in Beijing in 2008 and a semester in Shanghai in the fall of 2009, there is a strong movement toward the “green” movement. The Chinese do not ignore the damage of their rapid development and industrialization and they have begun to emphasize the importance of the environment and its protection. The Chinese government’s skepticism is a product of the US trying to impose carbon emissions restrictions, however the US already had its industrial age. Perhaps to make a difference, the US should impose certain restrictions on consumption domestically and be a model for the international community…

China’s Leaders Meet to Plan Tibet’s Stability

By Eleanor Albert

Last week, China’s leaders met at a conference to develop an economic strategy that will expand Tibet’s economy and as a result establish lasting stability in the region. Such efforts reflect the intentions of Chinese leadership turning to means other than physical intervention and crackdowns to bring stability to the volatile region.

Xinhua news agency, the media voice of the party, reported that the government said “more efforts must be made to greatly improve living standards of the people in Tibet, as well as ethnic unity and stability.”

The protests and violence that plague regionally autonomous Tibet persist (most recently the large uprising in 2008) and accordingly the international eye maintains its criticism of Chinese policy in the area, the United States leading the criticism on China’s approach to human rights.

The Chinese governance system has long relied on and placed tremendous importance on the concept of unity and stability within the nation’s borders. The primary concern in China’s national security interests is first and foremost the survival and stability of nation. Under the rule of Chinese Communist Party, the state, the party, and the regime function as one complete entity and thus, for the government to maintain the country’s core values and national stability, the security of the regime must be ingrained within security interests. One of the most widespread challenges to the China’s security is the fervent presence of separatist forces – particularly from Tibet.

While Tibetan ethnic nationalism is at the heart of the instability, economic opportunity takes precedence as the greatest concern for the Chinese people, Tibetan, Han, Uighurs, or otherwise. China developed at extraordinary rate. In spite of the government’s attempts at distributing the economic growth and technological development, the sheer size of the country, geographic diversity, and varying demographic severely impeded China’s ability to develop in a balanced and even manner.

The intent of further investing in Tibet’s economy has significant potential in easing tensions. By devoting capital and effort to economic development, the government seeks to provide Tibet with access to enhanced economic opportunity in hopes that Tibet will in turn diminish the separatist efforts. This strategy, if correctly implemented, could benefit both Tibet and the People’s Republic of China.

It is a common misinterpretation by the West – with many outspoken organizations and citizens that have liked to the cause of the Tibet – that Tibet seeks independence. The Dalai Lama himself has stated that Tibet does not want freedom from the PRC, but rather full autonomy without added sanctions and restrictions from Beijing.

Chinese military intervention for the suppression of protest and violence on a small level are naturally not the preferred policies in the eyes of the international community. From the Chinese perspective, Tibet and all tension and instability that may arise are strictly domestic issues and China alone determines the course of action in the autonomous region. Nevertheless, China finds itself under the scrutiny of the developed world as China takes a larger role in international community and to project their legitimacy as a major world power, alternative policy to establish stability are much desired. Thus, the pursuit of economic development programs to resolve instability in Tibet is a differing policy approach that has promise in alleviating tension in Tibet and will hopefully be respected and noted by the international community.