The following is from a weekly newsletter I read. I think they do a wonderful job of taking the “spin” off of the media’s issue of the moment. They also provide possible strategic reasons for actions taken around the world. This article has nothing to do with trading. However, it does provide some context for my job as a commodity broker and the issues our next President is going to face.
By George Friedman
The United States has been fighting a war in the Islamic world since 2001.
Its main theaters of operation are in Afghanistan and Iraq, but its
politico-military focus spreads throughout the Islamic world, from Mindanao to
Morocco. The situation on Aug. 7, 2008, was as follows:
war in Iraq was moving toward an acceptable but not optimal solution.
The government in Baghdad was not pro-American, but neither was it an
Iranian puppet, and that was the best that could be hoped for. The United
States anticipated pulling out troops, but not in a disorderly fashion.
war in Afghanistan was deteriorating for the United States and NATO
forces. The Taliban was increasingly effective, and large areas of the
country were falling to its control. Force in Afghanistan was
insufficient, and any troops withdrawn from Iraq would have to be deployed
to Afghanistan to stabilize the situation. Political
conditions in neighboring Pakistan were deteriorating, and that
deterioration inevitably affected Afghanistan.
- The United
States had been locked in a confrontation with Iran over its nuclear
program, demanding that Tehran halt enrichment of uranium or face U.S.
action. The United States had assembled a group of six countries (the
permanent members of the U.N. Security Council plus Germany) that agreed
with the U.S. goal, was engaged in negotiations with Iran, and had agreed
at some point to impose sanctions on Iran if Tehran failed to comply. The
United States was also leaking stories about impending
air attacks on Iran by Israel or the United States if Tehran didn’t
abandon its enrichment program. The United States had the implicit
agreement of the group of six not to sell arms to Tehran, creating a real
sense of isolation in Iran.
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In short, the United States remained heavily committed to a region
stretching from Iraq to Pakistan, with main force committed to Iraq and
Afghanistan, and the possibility of commitments to Pakistan (and
above all to Iran) on the table. U.S. ground forces were stretched to the
limit, and U.S. airpower, naval and land-based forces had to stand by for the
possibility of an air campaign in Iran — regardless of whether the U.S. planned
an attack, since the credibility of a bluff depended on the availability of
The situation in this region actually was improving, but the United States
had to remain committed there. It was therefore no accident that the Russians
invaded Georgia on Aug. 8 following a Georgian attack on South Ossetia.
Forgetting the details of who did what to whom, the United States had created a
massive window of opportunity for the Russians: For the foreseeable future, the
United States had no significant forces to spare to deploy elsewhere in the
world, nor the ability to sustain them in extended combat. Moreover, the United
States was relying on Russian cooperation both against Iran and potentially in
Afghanistan, where Moscow’s influence with some factions remains substantial.
The United States needed the Russians and couldn’t block the Russians.
Therefore, the Russians inevitably chose this moment to strike.
On Sunday, Russian Prime Minister Dmitri Medvedev in effect ran
up the Jolly Roger. Whatever the United States thought it was dealing with
in Russia, Medvedev made the Russian position very clear. He stated Russian
foreign policy in five succinct points, which we can think of as the Medvedev
Doctrine (and which we see fit to quote here):
- First, Russia recognizes the primacy of the fundamental
principles of international law, which define the relations between
civilized peoples. We will build our relations with other countries within
the framework of these principles and this concept of international law.
- Second, the world should be multipolar. A single-pole
world is unacceptable. Domination is something we cannot allow. We cannot
accept a world order in which one country makes all the decisions, even as
serious and influential a country as the United States of America. Such a
world is unstable and threatened by conflict.
- Third, Russia does not want confrontation with any
other country. Russia has no intention of isolating itself. We will
develop friendly relations with Europe, the United States, and other
countries, as much as is possible.
- Fourth, protecting the lives and dignity of our
citizens, wherever they may be, is an unquestionable priority for our
country. Our foreign policy decisions will be based on this need. We will
also protect the interests of our business community abroad. It should be
clear to all that we will respond to any aggressive acts committed against
- Finally, fifth, as is the case of other countries,
there are regions in which Russia has privileged interests. These regions
are home to countries with which we share special historical relations and
are bound together as friends and good neighbors. We will pay particular
attention to our work in these regions and build friendly ties with these
countries, our close neighbors.
Medvedev concluded, “These are the principles I will follow in carrying out
our foreign policy. As for the future, it depends not only on us but also on our
friends and partners in the international community. They have a choice.”
The second point in this doctrine states that Russia does not accept the
primacy of the United States in the international system. According to the
third point, while Russia wants good relations with the United States and
Europe, this depends on their behavior toward Russia and not just on Russia’s
behavior. The fourth point states that Russia will protect the interests of
Russians wherever they are — even if they live in the Baltic states or in
Georgia, for example. This provides a doctrinal basis for intervention in such
countries if Russia finds it necessary.
The fifth point is the critical one: “As is the case of other countries,
there are regions in which Russia has privileged interests.” In other words,
the Russians have special interests in the former Soviet Union and in friendly
relations with these states. Intrusions by others into these regions that
undermine pro-Russian regimes will be regarded as a threat to Russia’s “special
Thus, the Georgian
conflict was not an isolated event — rather, Medvedev is saying that Russia
is engaged in a general redefinition of the regional and global system.
Locally, it would not be correct to say that Russia is trying to resurrect the
Soviet Union or the Russian empire. It would be correct to say that Russia
is creating a new structure of relations in the geography of its predecessors,
with a new institutional structure with Moscow at its center. Globally, the
Russians want to use this new regional power — and substantial Russian nuclear
assets — to be part of a global system in which the United States loses its
These are ambitious goals, to say the least. But the Russians believe that
the United States is off balance in the Islamic world and that there is an
opportunity here, if they move quickly, to create a new reality before the
United States is ready to respond. Europe
has neither the military weight nor the will to actively resist Russia.
Moreover, the Europeans are heavily dependent on Russian natural gas supplies
over the coming years, and Russia can survive without selling it to them far
better than the Europeans can survive without buying it. The Europeans are not
a substantial factor in the equation, nor are they likely to become
This leaves the United States in an extremely difficult strategic position.
The United States opposed the Soviet Union after 1945 not only for ideological
reasons but also for geopolitical ones. If the Soviet Union had broken out of
its encirclement and dominated all of Europe, the total economic power at its
disposal, coupled with its population, would have allowed the Soviets to
construct a navy that could challenge U.S. maritime hegemony and put the
continental United States in jeopardy. It was U.S. policy during World Wars I
and II and the Cold War to act militarily to prevent any power from dominating
the Eurasian landmass. For the United States, this was the most important task
throughout the 20th century.
The U.S.-jihadist war was waged in a strategic framework that assumed that
the question of hegemony over Eurasia was closed. Germany’s defeat in World War
II and the Soviet Union’s defeat in the Cold War meant that there was no
claimant to Eurasia, and the United States was free to focus on what appeared
to be the current priority — the defeat of radical Islamism. It appeared that
the main threat to this strategy was the patience of the American public, not
an attempt to resurrect a major Eurasian power.
The United States now faces a massive strategic dilemma, and it has limited
military options against the Russians. It could choose a naval
option, in which it would block the four Russian maritime outlets, the Sea
of Japan and the Black,
Baltic and Barents seas. The United States has ample military force with which
to do this and could potentially do so without allied cooperation, which it
would lack. It is extremely unlikely that the NATO council would unanimously
support a blockade of Russia, which would be an act of war.
But while a blockade like this would certainly hurt the Russians, Russia is
ultimately a land power. It is also capable of shipping and importing through
third parties, meaning it could potentially acquire and ship key goods through
European or Turkish ports (or Iranian ports, for that matter). The blockade
option is thus more attractive on first glance than on deeper analysis.
More important, any overt U.S. action against Russia would result in
counteractions. During the Cold War, the Soviets attacked American global
interest not by sending Soviet troops, but by supporting regimes and factions
with weapons and economic aid. Vietnam was the classic example: The Russians tied
down 500,000 U.S. troops without placing major Russian forces at risk.
Throughout the world, the Soviets implemented programs of subversion and aid to
friendly regimes, forcing the United States either to accept pro-Soviet
regimes, as with Cuba, or fight them at disproportionate cost.
In the present situation, the Russian response would strike at the heart of
American strategy in the Islamic world. In the long run, the Russians have
little interest in strengthening the Islamic world — but for the moment, they
have substantial interest in maintaining American imbalance and sapping U.S.
forces. The Russians have a long history of supporting Middle Eastern regimes
with weapons shipments, and it is no accident that the first world leader they
met with after invading Georgia was Syrian
President Bashar al Assad. This was a clear signal that if the U.S.
responded aggressively to Russia’s actions in Georgia, Moscow would ship a
range of weapons to Syria — and far worse, to Iran. Indeed, Russia could
conceivably send weapons to factions in Iraq that do not support the current
regime, as well as to groups like Hezbollah. Moscow also could encourage the
Iranians to withdraw their support for the Iraqi government and plunge Iraq
back into conflict. Finally, Russia could ship weapons to the Taliban and work
to further destabilize Pakistan.
At the moment, the United States faces the strategic problem that the
Russians have options while the United States does not. Not only does the U.S.
commitment of ground forces in the Islamic world leave the United States
without strategic reserve, but the political arrangements under which these
troops operate make them highly vulnerable to Russian manipulation — with few
satisfactory U.S. counters.
The U.S. government is trying to think through how it can maintain its
commitment in the Islamic world and resist the Russian reassertion of hegemony
in the former Soviet Union. If the United States could very rapidly win its
wars in the region, this would be possible. But the Russians are in a position
to prolong these wars, and even without such agitation, the American ability to
close off the conflicts is severely limited. The United States could massively
increase the size of its army and make deployments into the Baltics, Ukraine
and Central Asia to thwart Russian plans, but it would take years to build up
these forces and the active cooperation of Europe to deploy them. Logistically,
European support would be essential — but the Europeans in general, and the
Germans in particular, have no appetite for this war. Expanding the U.S. Army
is necessary, but it does not affect the current strategic reality.
This logistical issue might be manageable, but the real heart of this
problem is not merely the deployment of U.S. forces in the Islamic world — it
is the Russians’ ability to use weapons sales and covert means to deteriorate
conditions dramatically. With active Russian hostility added to the current
reality, the strategic situation in the Islamic world could rapidly spin out of
The United States is therefore trapped by its commitment to the Islamic
world. It does not have sufficient forces to block Russian hegemony in the
former Soviet Union, and if it tries to block the Russians with naval or air
forces, it faces a dangerous riposte from the Russians in the Islamic world. If
it does nothing, it creates a strategic threat that potentially towers over the
threat in the Islamic world.
The United States now has to make a fundamental strategic decision. If it
remains committed to its current strategy, it cannot respond to the Russians.
If it does not respond to the Russians for five or 10 years, the world will
look very much like it did from 1945 to 1992. There will be another Cold War at
the very least, with a peer power much poorer than the United States but prepared
to devote huge amounts of money to national defense.
There are four broad U.S. options:
- Attempt to make a settlement
with Iran that would guarantee the neutral stability of Iraq and
permit the rapid withdrawal of U.S. forces there. Iran is the key here.
The Iranians might also mistrust a re-emergent Russia, and while Tehran
might be tempted to work with the Russians against the Americans, Iran
might consider an arrangement with the United States — particularly if the
United States refocuses its attentions elsewhere. On the upside, this
would free the U.S. from Iraq. On the downside, the Iranians might not
want —or honor — such a deal.
- Enter into negotiations with the Russians, granting
them the sphere of influence they want in the former Soviet Union in
return for guarantees not to project Russian power into Europe proper. The
Russians will be busy consolidating their position for years, giving the U.S.
time to re-energize NATO. On the upside, this would free the United
States to continue its war in the Islamic world. On the downside, it would
create a framework for the re-emergence of a powerful Russian empire that
would be as difficult to contain as the Soviet Union.
- Refuse to engage the Russians and leave
the problem to the Europeans. On the upside, this would allow the
United States to continue war in the Islamic world and force the Europeans
to act. On the downside, the Europeans are too divided, dependent on
Russia and dispirited to resist the Russians. This strategy could speed up
- Rapidly disengage from Iraq, leaving a residual force
there and in Afghanistan. The upside is that this creates
a reserve force to reinforce the Baltics and Ukraine that might
restrain Russia in the former Soviet Union. The downside is that it would
create chaos in the Islamic world, threatening regimes that have sided
with the United States and potentially reviving effective intercontinental
terrorism. The trade-off is between a hegemonic threat from Eurasia and
instability and a terror threat from the Islamic world.
We are pointing to very stark strategic choices. Continuing the war in the
Islamic world has a much higher cost now than it did when it began, and Russia
potentially poses a far greater threat to the United States than the Islamic
world does. What might have been a rational policy in 2001 or 2003 has now
turned into a very dangerous enterprise, because a hostile major power now has
the option of making the U.S. position in the Middle East enormously more
If a U.S.
settlement with Iran is impossible, and a diplomatic solution with the
Russians that would keep them from taking a hegemonic position in the former
Soviet Union cannot be reached, then the United States must consider rapidly
abandoning its wars in Iraq and Afghanistan and redeploying its forces to block
Russian expansion. The threat posed by the Soviet Union during the Cold War was
far graver than the threat posed now by the fragmented Islamic world. In the
end, the nations there will cancel each other out, and militant organizations
will be something the United States simply has to deal with. This is not an
ideal solution by any means, but the clock appears to have run out on the
American war in the Islamic world.
We do not expect the United States to take this option. It is difficult to
abandon a conflict that has gone on this long when it is not yet crystal clear
that the Russians will actually be a threat later. (It is far easier for an
analyst to make such suggestions than it is for a president to act on them.)
Instead, the United States will attempt to bridge the Russian situation with
gestures and half measures.
Nevertheless, American national strategy is in crisis. The United States has
insufficient power to cope with two threats and must choose between the two.
Continuing the current strategy means choosing to deal with the Islamic threat
rather than the Russian one, and that is reasonable only if the Islamic threat
represents a greater danger to American interests than the Russian threat does.
It is difficult to see how the chaos of the Islamic world will cohere to form a
global threat. But it is not difficult to imagine a Russia guided by the
Medvedev Doctrine rapidly becoming a global threat and a direct danger to
We expect no immediate change in American strategic deployments — and we
expect this to be regretted later. However, given U.S. Vice President Dick
Cheney’s trip to the Caucasus region, now would be the time to see some
movement in U.S. foreign policy. If Cheney isn’t going to be talking to the
Russians, he needs to be talking to the Iranians. Otherwise, he will be writing
checks in the region that the U.S. is in no position to cash.