According to this article from The Washington Post (which I mentioned before in connection with a different point), it is not just the United States – and Europe – that is in economic trouble. It is the whole world. 2009 could be the first time since World War II that the GNP of the world (is that GWP?) goes down. The point of this post, however, is not economic. Instead, it relates to the things countries, or perhaps I should say governments, will sometimes do when economic and political troubles hit. When a country’s economy is down, the government’s popularity will go down, too. When their popularity goes down far enough, governments start to look for ways to get the peoples’ minds off their troubles. And sometimes, something patriotic, like a foreign diversion or a dispute with another country, is seen as a solution. Which is what happened in 1982. The Argentine military government had been in power since 1976, and it was in deep trouble. Argentina’s economy was a mess; the government’s popularity was worse. A president had resigned in March of 1981. Another was forced out in December of that same year. A new economics minister imposed harsh economic policies. Protests were growing. There were even calls for Nuremberg-like trials for those allegedly involved in the disappearances of people during the military’s rule. So, in an effort to distract the people’s attention from all of these problems, the military government decided to invade the Falklands, known to the Argentines as the Malvinas. For over a hundred fifty years the United Kingdom and Argentina had argued over who the Falklands belonged to. Argentina said they had claimed the islands first, in 1820. The British came later, in 1833, but they had remained in control since then and the 2000 people on the islands were British and wanted to stay that way. The Argentine leaders figured the invasion would be easy; it would provide some inexpensive bread and circuses to boost the government’s popularity (by taking peoples’ minds off their troubles). The Falklands were only several hundred miles from Argentina; they were 8,000 miles from England. Argentina would claim that they were getting rid of a colonial power. The British would protest at the United Nations, but ultimately they would not do anything about it. Argentina thought they had it all planned out. And they did – except, of course, for one thing – or, more accurately, one person: Margaret Thatcher. But the point of this post is not Margaret Thatcher, either. It is, as I said, what economic problems, and the unpopularity that comes with economic problems, can, if the economic problems are especially severe or are combined with other problems, lead governments to do. In Argentina’s case it was severe economic problems, growing protests against a military dictatorship, and a real worry about the military rulers’ ability to stay in power. In situations such as that, government leaders may be tempted take risks – because from their point of view, the risk of doing something is less than the risk of doing nothing. There are often three factors in these situations. First, there are economic problems. Second, there are usually other problems, too, though in some cases, the economic problems are enough by themselves. In any case, either a combination of the economic problems with the other problems or the economic problems alone become so bad that a third factor arises: a fear by the government that they will not be able to survive in power. That is what happened in Argentina in 1982. Looking at these factors today, which countries or situations should we be worrying about? Where might things be so bad that a government could decide that the risks of some potentially dangerous course of action are less than the risks of doing nothing? What about North Korea? We definitely need to worry about North Korea, though probably not for this reason. The concern with North Korea is not that its economic problems will make the government fear for its survival. (North Korea's economic problems are, in any case, independent of those of the rest of the world.) In North Korea’s case the concern is that the leadership is so isolated that it is difficult to predict what they will do in any situation. I also do not see China as a concern as a result of economic problems leading to popular unrest. Certainly, China has economic problems because of the global economic slowdown, but it seems unlikely those problems could generate enough popular unrest to threaten the government. China might increase its aggressiveness in foreign policy, but I don’t think it would be in response to domestic unrest. Tiananmen Square in 1989 and what has happened in the last year in Tibet show the ability, and willingness, of the Chinese leadership to crack down on domestic unrest. I don’t see the Chinese government needing to start some foreign adventure to maintain itself in power because I don’t see their hold on power being endangered.* A comment: I said that China might increase its aggressiveness in foreign policy, but I also said I did not think it would be in response to domestic unrest. What’s the difference, you might ask. Well, I think there is an important difference. Foreign policy aggressiveness that is a result of domestic unpopularity has an element of risk or even desperation to it that "regular" foreign policy aggressiveness does not have. A government that decides that the risk of a foreign policy adventure is less than the risk of continued domestic unrest could easily wind up doing something that is riskier or more reckless than a government that is weighing the pluses and minuses of a policy on a regular basis. It is a different calculation, one that leans more to the more reckless side of risk, than one sees in normal foreign policy considerations. One other point. For a situation such as this to be a significant problem for the world community, it has to happen in a relatively important part of the world, or at least not in an unimportant part of the world. Which means we can pretty much scratch anything that might happen in Africa off our list. Atrocities, maybe even genocide, have been going on in Darfur for the last five years, and they have not had much of an effect on the rest of the world. Similarly, the biggest war in the world in the last 60 years has recently ended in the eastern Congo (at least we hope it has finally ended). Estimates are that more than five million people died in more than a decade of fighting (see here), and nobody cared, if they even knew about it. Note: When I say these problems don’t matter, I am not saying they shouldn’t matter; I am just saying they don’t. It is sad and unfortunate, but it is true. The rest of the world just doesn’t seem to care. So where might problems develop? It is impossible to know for sure, and predictions about such a question are notoriously inaccurate. Also, sometimes danger areas can develop on short notice. Would Argentina’s invasion of the Falklands have been on anybody’s list of potential concerns at the end of 1981? Probably not. In fact, the whole question of when a government might decide that the risks of a foreign adventure are less than the risks of continued unpopularity at home is inherently difficult to predict. But with that said, let me suggest three potential areas of concern. First, Venezuela. There has already been political unrest in Venezuela as a result of what some see as President Hugo Chavez’ anti-democratic tendencies. In December 2007 President Chavez lost a referendum which would have allowed him to continue in office basically forever. In February of this year, however, he won a second referendum to allow him to do the same thing. But with Venezuela’s oil revenues down dramatically, and some of his policies creating unpopularity at home, you have to wonder if he might decide some foreign adventure might be helpful. One can hope he will conclude that just shaking, or continuing to shake, his fist at the United States is good enough. But if his unpopularity worsens, he might feel he needs something more. Second, Iran. Once again, the problem is declining oil revenues. It is particularly difficult to read the situation in Iran because the interactions of the theocratic side of the government, with Ayatollah Ali Khameneni, and the secular side, with President Mahmoud Ahmadinejador, create confusion as to who has what authority and how much. Also, a presidential election is coming up on June 12, which adds to the uncertainty. It could be that Iran’s continuing nuclear program will give any new government enough benefits, in terms of appealing to the people, that they do not need to do anything else. It is hard to know. In any case, given that Iran is in a part of the world where foreign adventures could be particularly dangerous, we have to be watchful. Finally, and perhaps most worrisome, is Russia. Declining oil and gas prices have hit Russia particularly hard. Until recently the government has been able to use high public spending, funded by oil and gas revenues, to maintain its popularity. But with oil prices down, the money isn’t there to continue this spending. What is that going to do to the popularity of President Dmitriy Medvedev (and Prime Minister Vladimir Putin)? Combine these economic problems with the psychological effects, for at least some Russians, of the loss of the Soviet Union (and their place in the world)**, and you have a dangerous situation. We have already seen foreign adventures, such as the invasion last year of Georgia. Just recently Russia reasserted its influence in central Asia by promising Kyrgyzstan $2 billion in economic aid to get them to deny the United States the use of a Kyrgyzstani airbase to supply Afghanistan. (Chicago Tribune, March 15, 2009) The Russian Foreign Affairs minister told a group in Brussels a week ago that Russia can always sell its gas in the Far East if its European customers become too big of a problem. President Medvedev has talked about improvements in the Russian army, saying "[w]e have never had such favorable conditions to create a modern, efficient army." With Russian spending programs having to be cut, will Medvedev/Putin try to fan nationalistic grievances to maintain support? That was what Slobodan Milosevic did in Yugoslavia/Serbia in the late 1980s and early 1990s to stay in power when communism was no longer a viable political philosophy. What should we be worried about with respect to Russia? Further moves in countries of the former Soviet Union? Attempts to blackmail western or central European countries over energy use? Efforts to block proposed new pipelines that would deliver natural gas to western Europe through countries other than Russia? The possibilities are numerous and concerning.
As to what will happen, whether in Venezuela, Iran or Russia, or someplace else we cannot predict, we can only wait and see. And remember that one should always expect the unexpected.
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* A somewhat different view is seen in this excerpt from a Stratfor Global Intelligence report on China:
"China is more severely affected by the ongoing financial crisis than it would like the world to register. The Chinese need sustained international demand to maintain their export industries and, consequently, their high employment levels. Espousing rhetoric [in this case suggesting the U.S. dollar be replaced by a new global reserve currency] that makes it appear that you have more options than you do, while redirecting attention toward a foreign power, always plays well at home."
** In 2005 then-President Putin said the collapse of the Soviet Union was "the greatest geopolitical catastrophe of the century."
Note: Sources for the discussion on the Falkland War included Max Hastings and Simon Jenkins, The Battle for the Falklands, 1983, and "Why men die," The Economist, May 29, 1982.
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