Opinion

Ian Bremmer

The world’s year of reckoning

Ian Bremmer
Jan 30, 2012 17:11 UTC

DAVOS–If 2011 was the year of the protestor, 2012, at least where the World Economic Forum is concerned, is the year of the reckoning. Through the events of the Arab Spring, major power vacuums have been created in countries all over the Middle East. More governments, such as Syria’s, are likely to topple. But the time to start thinking about what’s next for countries like Egypt is already here.

The thing is, it’s coming at an inconvenient time for Western democracy. Having long held themselves as the global models for governance and economic structure, Western Europe and the U.S. have in recent years shown their warts as never before. That has opened the door for state capitalist models — like China’s — to take the stage. And the simple fact that new models for how countries and economies should work are even being considered is a blow to the Western world’s power and prestige. Obviously, well before the G-7 system broke down, China was already on a path of state capitalism, and that has turned out to be a successful course for that country to chart. But here’s the problem: While it has led to wealth and a rise in living standards for the Chinese, it hasn’t led to more democracy.

Here at Davos, and in capitals around the world, the paths countries should chart for themselves in the future is always topic A, and what we’ve learned over these last years is that transforming those countries and indeed the world is about a lot more than simply swapping out the players who legislate and lead. Look at the precarious situation in Egypt. Consider Putin’s long hold on power in Russia. For that matter, look at the situations in many countries on the euro zone periphery. Going down that list, nations that have simply replaced one power-grabbing leader with another are in trouble. (In Russia’s case, that leader has simply replaced himself.) Countries that have revolved leadership without addressing deeper institutional weaknesses are not setting themselves up for success in the long run.

That’s why changing not just the leaders at the table but the system by which the country is governed is such a real and important goal — it reconfigures the country’s “end result” trajectory. When countries like China and Russia become economically important, they of course support the models that made them powerful: strong authoritarianism and state capitalism. Specifically as China gains more and more economic power, it continues to improve its bargaining position with the West — that is, it can get away with bargaining less and less. And China’s ability to eschew compromise will only grow as its position in the world continues to get stronger — so why would the Chinese negotiate about anything? When their growth starts to level off or their cost structures begin to match the West’s — a change that will be measured in decades, not years — they’ll be willing to cooperate more. But not before.

If you believe in the values of Western democracy — equality, fairness, opportunity and freedom — that’s precisely why the West must rise to the occasion and continue to challenge state capitalism and press Arab Spring countries to fight for democratic institutions in their new national orders. Otherwise the fate of the West will be to represent an important but diminishing subset of the global economy — and to have almost no sway over a group of countries whose economic fortunes are on the rise. And that’s not just about prestige — those are the countries with weaker values. For example, the New York Times has published a devastating series on the Foxconn factories that assemble Apple products, highlighting worker abuses, deaths and practices that would have been outdated in the U.S. even a century ago. Those workers might be making state-of-the-art products, but they live as though they are indentured servants, or worse. It would be naive to think Foxconn is an isolated incident. In China, Foxconn is a success story of state-directed capitalism. Will the West tolerate Foxconn? And if so, how many more Foxconns will it tolerate?

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.

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.

from The Great Debate:

What is the best strategy against Chinese cyberattacks?

Ian Bremmer
Jun 9, 2011 17:20 UTC

By Ian Bremmer
The views expressed are his own.

All eyes should be peeled on China, but not for the reason you think. While the biggest structural risk right now is global rebalancing, especially between China and the U.S., there is another important threat from China: cyberwars. Cyberattacks are one of the biggest fat tails (along with climate and North Korea).

It’s no surprise that the latest Google hack attack came from China. The presumption is that the vast majority of cyber attacks hitting the U.S. are coming from the Chinese government. It’s very hard to know where threats are originating – country-wise and/or person-wise -- because it’s very difficult to go back and figure out the paper trail. But at a minimum, there is an environment in China that tolerates cyber attacks.

Proprietary information around technologies – gaining profit shares, increasing revenues – allows a country to be much more economically competitive. China has leverage because everyone wants to get into China. If you want to make something in their country, you have to share the technology.

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