Opinion

Ian Bremmer

Fallout is just beginning in North Korea

Ian Bremmer
Dec 21, 2011 17:31 UTC

By Ian Bremmer
The opinions expressed are his own.

There are many surprising things about Kim Jong-il’s sudden death, not the least of which is that it took two days for the rest of the world to hear about it. Yet most surprising is the sanguine reaction of the global and especially the Asian markets. On Monday, or actually Sunday as we now know, the world woke up to its first leaderless nuclear power. Coming as close as anyone could to filling his seat was his youngest son, who is in his late twenties. There’s no way these facts were accurately priced into markets that took just a relatively minor dip as a first response. The news from North Korea appears to have been taken far too lightly, and just a few days out, it’s disappearing from the front pages.

While Kim Jong-un’s status as heir apparent seems to tie a nice bow around the situation, let’s get real for a moment. The son of the elder Kim only appeared on the North Korean stage after a stroke necessitated succession planning in Kim Jong-il’s regime in 2008. Consider that founder of the country Kim Il-sung put his son, Kim Jong-il, in front of the citizenry as his heir for more than a decade before his 1994 death. That decade was precious time; time Kim Jong-il spent consolidating power and putting his own people into high government office— and he was over 50 years old when his father passed away. Kim Jong-un has been deprived of that head start; he’s got to rely on whatever ground his dead father managed to clear for him since his 2008 stroke. A couple of years at his father’s side — and a promotion to four star general — is scant time for the younger Kim to have developed a real plan for ruling, or real allies in government.

That said, don’t expect Kim Jong-un to be deposed. There won’t be a North Korean spring — for real or for show — anytime soon. The country is too backward and too brainwashed to mount any sort of populist opposition to the ruling regime, and its people have little if any knowledge of the outside world. Even if Kim Jong-un proves unable to consolidate and retain power, all that would replace him as the head of state is a military junta or strongman; there’s no democracy on the horizon, given the country’s current sorry state of affairs.

The important relationship to watch going forward will be between North Korea and China. Kim will want to impress his people by letting more food into the markets and increasing their terrible standard of living in whatever marginal way he can. He’ll need cash to do so, and will probably call upon China to help. China is North Korea’s last substantial benefactor in the world. In a classic diplomatic sense, because North Korea is America’s enemy and South Korea is America’s friend, China has little choice but to keep propping up the North. If China changes its tack now, it could find North Korea inching towards reunification with the South, putting a firm American ally right on its border. The question is, will China support Kim Jong-un wholeheartedly, or will it too take a step back and see what emerges from the power struggles sure to be playing out behind the scenes at this very moment?

Meanwhile, the U.S. has taken the right approach to this complicated situation: the White House has decided to sit back, watch and wait. It could, and likely already is, offering behind-the-scenes humanitarian relief to the North Korean people. It should continue to offer any such assistance that it thinks will be accepted. The Obama administration should not by any means be applying diplomatic pressure to restart six party talks or anything else of the sort. In essence, the free world should be rooting for Kim Jong-un to stabilize the country so that it can again try to bring North Korea out of the dark ages in an orderly fashion.

Prokhorov’s presidential chances are not the point

Ian Bremmer
Dec 13, 2011 14:15 UTC

By Ian Bremmer
The opinions expressed are his own.

After a week full of anti-government and pro-government protests, Russians woke up on Monday to big news. Mikhail Prokhorov, a political novice with billions of dollars—and the New Jersey Nets— to his name, announced his Presidential bid.  Alexei Kudrin, a longtime bureaucratic infighter, also declared his plans to re-enter the political arena. These developments were even more significant considering both were ousted in rather public quarrels with the powers that be just months ago. Kudrin said he would support and aid a pro-reform liberal party that would stand as a counterweight to the incumbent United Russia. Prokhorov intends to challenge Putin for the presidency in March 2012 on a platform that would appeal to Russia’s “disenchanted middle class.”

No matter what Kudrin and Prokhorov say in public, they both represent the same thing to Russia and the world: Vladimir Putin’s iron grip on power. As I’ve written before, Putin is the most powerful individual on the planet. To think that either man would risk his freedom or his fortune to oppose Putin’s Kremlin, no matter what their stated reasons are, is just wrong. That said, there are reasons to watch this “race” as it will give some insight into Putin’s inevitable third term as president.

Putin has had to deal with a growing sense of dissatisfaction in Russia as of late.  Growth and living standards are stagnating, while economic inequality persists. It is unclear whose pockets are being lined with the wealth generated by Russia’s massive natural resources. The lack of freedom of the press, centralized control over economic opportunity, and pervasive corruption that makes a mockery of the justice and security systems and other institutions, are Putin’s levers of power– and also the focal points for protesters. The protestors’ complaints crystallized last week over United Russia, Putin’s party, winning a smaller but still strong majority in the parliamentary elections. Accusations of election fraud were widespread and tens of thousands took to the streets in protest over the course of last week. Putin has not been in a position to crack down on these protests — they’re too visible and too widespread — but be sure that the oligarchs and ruling classes in Russia are on Putin’s side. While his tactics for retaining power have had to change, the outcome is the same.

Euro zone pain: hurts so good

Ian Bremmer
Dec 8, 2011 19:02 UTC

By Ian Bremmer
The opinions expressed are his own.


It seems every Monday morning, the U.S. newspapers greet their readers with the latest news of the euro zone’s painful sovereign debt negotiations, not to mention all the politics, institutions and personalities wrapped therein. The tick-tock accounts of every phone call and meeting are important and fascinating reading, but they’re not as important as the real news coming out of this crisis: Europe is changing — painfully and haltingly, but for the better.

The Continent is moving to a point where increased fiscal coordination will redefine the nature of sovereignty for euro zone member states. Economists have long been saying that it’s going to take an extraordinary amount of pain to right the wrongs of the euro zone’s finances. Europe has already suffered through a lot: liquidity crunches in the banks (see today’s ECB rate drop), recession, riots and technocratic governments taking over the peripheral states. But what must be noted is that Europe would never be where it is today — on the verge of a sounder fiscal path forward — but for all this pain. It has all been necessary, in order to right the course of a euro zone that was, like the U.S., on an unsustainable path.

This may sound like strong medicine, so strong that it may cure the disease but kill the patient, but ask yourself this: Would any of the austerity and return to fiscal sanity have happened in Europe if Germany had simply cut the debtor nations a fat check one and a half years ago, when this crisis came to light? Would the problems of Europe have been solved? The answers to both are, of course, no.

Why is Hillary Clinton in Myanmar?

Ian Bremmer
Dec 1, 2011 19:50 UTC

By Ian Bremmer
The opinions expressed are his own.

As Syria’s Assad faces civil war, Egypt struggles to elect a new government, Iranian students storm the British embassy, and Israel’s Netanyahu worries over what it all means, it’s remarkable that U.S. Secretary of State Hillary Clinton just touched down in Myanmar. Rather than sending his chief diplomat off to the Middle East to fight fires and broker deals, President Obama appears intent on minimizing US exposure there and concentrating his attention elsewhere.

Clinton becomes just the second U.S. official of her rank to visit Myanmar, once known as Burma, a country run by an isolated, paranoid military regime that represses its people from a fortified enclave in the middle of the jungle. Clinton made the trip knowing that the Obama administration and her State Department might face accusations at home, from both left and right, that she is endorsing that country’s leaders. But in fact, Clinton’s boldness has proven to be a strength for the administration. And Obama’s foreign policy savvy benefits him politically relative the lack of a coherent Republican view of US foreign policy. (See Herman Cain’s newly published map of the world or my recent column on the lack of serious foreign policy in the GOP debates.)

The visit is all the more noteworthy because, following President Obama’s recent Pacific tour, it highlights just how much time the Obama team is devoting to Asia.

Why the U.S. is not—and never will be—Japan

Ian Bremmer
Nov 18, 2011 20:23 UTC

By Ian Bremmer
The opinions expressed are his own.

Though I’ve already written about the recent Munk debate in Toronto elsewhere, it’s worth taking some space to expand on my position, and why the U.S. truly is not going to experience a Japan-style lost decade of economic stagnation.

(The debate was on this resolution: Be it resolved North America faces a Japan-style era of economic stagnation. I joined Larry Summers in arguing the Con side against Paul Krugman and David Rosenberg.)

Let’s start with the political realities: Japan experienced 50 years of single-party rule. In the last 22 years, the country has had 17 prime ministers. Recently, the Democratic party there defeated the long-time incumbents, the Liberal Democrats, only to find that they had no idea how to govern the nation. They had no idea how the ministries worked, no relationships with industrialists or financial institutions, no grasp on the levers of power in society, and no strong policy apparatus. If the U.S.’s political situation looks bleak, consider that alternative.

Europe’s necessary creative destruction

Ian Bremmer
Nov 11, 2011 18:44 UTC

By Ian Bremmer
The opinions expressed are his own.

What we’re seeing in Europe — in rising Italian borrowing costs and the felling of two prime ministers — is the growing impatience of the markets for a resolution to the euro zone crisis. To put a finer point on it, the hive mind of the markets has decided it is not going to give Europe enough time to get its act together. The big institutions that drive the world’s economies are sitting on huge amounts of cash — enough to solve many of these problems overnight. But they have lost confidence in the ability of the European political system to deliver solutions that will work.

In a G-Zero world, where there is no strong global leader to direct the course of events, no one is interested in taking a flier on helping the Europeans get out of their mess. As the abortive G-20 conference showed last week, there is no backstop for any country or institution that makes an error in today’s environment, whether it’s tiny MF Global or the Chinese sovereign debt fund. In the postwar era, the Marshall Plan was the very definition of global security — it was a huge commitment by the U.S. to rebuild Europe into the economic force (and not incidentally, trading partner) that the world needed. Today, there is no Marshall plan for Europe, from within or without.

That’s the high-level view of the Europe situation. The question everyone wants answered is this: what happens next? Start with Greece: the best possible outcome for that country has happened with Papandreou’s resignation and the selection of economist Lucas Papademos as Prime Minister of an emergency government. Papademos is committed to remaining in the euro and accepting the terms of the Greek bailout package. Despite the roller coaster ride Papandreou took his country and the euro zone on, Greece has now moved closer to the Spanish and Portuguese models for avoiding the debt crisis drama. In Greece, a resolution is starting to be reached. It’s not the beginning of the end, but maybe this is the end of the beginning.

The secret to China’s boom: state capitalism

Ian Bremmer
Nov 4, 2011 18:45 UTC

By Ian Bremmer
The views expressed are his own.

One of the biggest changes we’ve seen in the world since the 2008 financial crisis can be summed up in one sentence: Security is no longer the primary driver of geopolitical developments; economics is. Think about this in terms of the United States and its shifting place as the superpower of the world. Since World War II, the U.S.’s highly developed Department of Defense has ensured the security of the country and indeed, much of the free world. The private sector was, well, the private sector. In a free market economy, companies manage their own affairs, perhaps with government regulation, but not with government direction. More than sixty years on, perhaps that’s why our military is the most technologically advanced in the world while our domestic economy fails to create enough jobs and opportunities for the U.S. population.

Contrast the U.S. and its free market economy with China’s system.  For years now, that country has experienced double digit growth. Many observers would say that China’s embrace of capitalism since 1978, and especially since joining the World Trade Organization in 2001, has been responsible for its boom. They would be mostly wrong. In fact, a new study prepared for the U.S. government says it’s not capitalism that’s powering China, but state capitalism — China’s massive, centrally directed industrial policy, where the government positions huge amounts of capital and labor in economic sectors it intends to nurture. The study, prepared by consultants Capital Trade for the U.S.-China Economic and Security Review Commission, reads in part:

In a world in which central planning has been so utterly discredited, it would be natural to conclude that the Chinese government and, by extension, the Chinese Communist Party have been abandoning the institutions associated with the communist economic system, such as reliance on state‐owned enterprises (SOEs), as fast as possible. Such conclusion would be wrong.

New world, new rules

Oct 26, 2011 20:27 UTC

By Paul Smalera

Welcome to the new world of volatility, globalization and a host of emerging markets. Merrill Lynch Chief Investment Officer Lisa Shalett and Eurasia Group President Ian Bremmer tell me, Reuters’ Deputy Opinion editor Paul Smalera, their views on how best to navigate today’s economy. To learn more about the report, including Bremmer’s analysis of debtor nations and creditor nations, and the tremendous GDP growth among developing world nations in recent years, watch the video below. To read the entire report, check out ML.com.

Romney’s foreign policy: Reagan redux

Ian Bremmer
Oct 13, 2011 15:55 UTC

By Ian Bremmer
The views expressed are his own.

After yet another GOP debate where foreign policy took a near-total backseat to economic and domestic policy, Mitt Romney is in the catbird seat for the nomination. He even locked up the endorsement of Tea Party AND Republican machine favorite, New Jersey Governor Chris Christie. Romney’s only problem: it’s October 2011. Not one primary has yet taken place. Romney will have to return to his foreign policy platform to expand it, should he be fortunate enough to make it to the general election. And based on the speech he gave at The Citadel, we can already see that Mitt Romney intends to return to the American exceptionalism of the Ronald Reagan and George W. Bush eras.

For Romney, as for many politicians of both parties in decades past, the United States is not just a big and powerful country. Rather, it is the only country in the world that deserves superpower status. What’s unfortunate for Mitt and his all-star, Bush-heavy foreign policy team is that, these days, that line of thinking is more nostalgic than realistic. (By the way, though Romney was almost bombastic at times, calling Iran’s leaders “suicidal fanatics,” his actual policies are unlikely to reflect or adopt that tone — at least not with his foreign policy team as constituted now.) The idea of the U.S. as the leader of the free world is at a post-WWII nadir. However, that’s not because some other country, like China, has risen to fill the vacuum. No, the fault is wholly our own.

In fact, right now there’s a global debate about whether the U.S. really deserves its superpower mantle, given the political and economic issues of recent years that have unquestionably eroded its leadership position. It’s helpful to compare the two camps:

Why the GOP is punting on foreign policy

Ian Bremmer
Oct 5, 2011 21:05 UTC

By Ian Bremmer
The opinions expressed are his own.

Three years ago in the presidential primary debates, it would’ve been stunning if practically the only mention of foreign policy had come when a candidate suggested sending troops to Mexico to help fight the drug war. Yet in this year’s contentious Republican debate season, that’s exactly what’s happened, with Texas Governor Rick Perry being the one to float the lead trial balloon.

The surprise here isn’t that Republican candidates’ views on foreign policy are both underdeveloped and unimportant to their base — more on both of those points later — but how dramatically our world has changed in the past three years, largely due to the global financial crisis and recession.

Let’s think back even further, to 2000, when another Texas Governor, George W. Bush, promised America that he wouldn’t engage in Clintonian “nation-building” if elected. Needless to say, the shock of 9/11 changed the international calculus, forcing the Bush administration to develop a response that involved two wars and intense diplomacy with nearly every global power and international institution in existence. But the tenth anniversary of the 9/11 attacks has provided a symbolic moment of closure. More importantly, President Obama has largely kept his promise to withdraw troops from Iraq and Afghanistan, outlining a plan more in line with opinion polls than General Petraeus’ guidance.   (Sadly, the withdrawal doesn’t mean Afghanistan won’t face quagmire — it just means U.S. forces won’t be the ones bogged down.)

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