Editor’s note: This is the first installment in a series of special reports that Dr. Friedman will write over the next few weeks as he travels to Turkey, Moldova, Romania, Ukraine and Poland. In this series, he will share his observations of the geopolitical imperatives in each country and conclude with reflections on his journey as a whole and options for the United States.
By George Friedman
I try to keep my writing impersonal. My ideas are my own, of course, but I prefer to keep myself out of it for three reasons. First, I’m far less interesting than my writings are. Second, the world is also far more interesting than my writings and me, and pretending otherwise is narcissism. Finally, while I founded STRATFOR, I am today only part of it. My thoughts derive from my discussions and arguments with the STRATFOR team. Putting my name on articles seems like a mild form of plagiarism. When I do put my name on my articles (as Scott Stewart, Fred Burton and others sometimes do) it’s because our marketing people tell us that we need to “put a face” on the company. I’m hard pressed to understand why anyone would want to see my face, or why showing it is good business, but I’ve learned never to argue with marketing.
I’ve said all of this to prepare you for a series of articles that will be personal in a sense, as they will be built around what I will be doing. My wife (who plans and organizes these trips with precision) and I are going to visit several countries over the next few weeks. My reasons for visiting them are geopolitical. These countries all find themselves sharing a geopolitical dilemma. Each country is fascinating in its own right, but geopolitics is what draws me to them now. I think it might be of some value to our readers if I shared my thoughts on these countries as I visit them. Geopolitics should be impersonal, yet the way we encounter the world is always personal. Andre Malraux once said that we all leave our countries in very national ways. A Korean visiting Paris sees it differently than an American. The personal is the eccentric core of geopolitics.
There are those who travel to sample wine and others who travel to experience art and others to enjoy the climate. I travel to sample the political fault lines in the world, and I have done this all my life. This is an odd preference, but there might be some others who share it. Traveling geopolitically is not complex, but it does take some thought. I thought you might find my description of geopolitical travel interesting. It’s how I think this series should start.
The geopolitical is about the intersection of geography and politics. It assumes that the political life of humans is shaped by the place in which they live and that the political patterns are frequently recurring because of the persistence of nations and the permanence of geography. I begin my travels by always re-reading histories and novels from the region. I avoid anything produced by a think tank, preferring old poems and legends. When I travel to a place, when I look at the geography and speak to the people, I find that there is a constant recurrence of history. In many places, a few centuries ago is like yesterday. Reading literature can be the best preparation for a discussion of a county’s budget deficit. Every place and every conversation is embedded in the centuries and the rivers and mountains that shaped the people who shape the centuries.
When the Soviet Union collapsed in 1991 and withdrew to the borders of old Muscovy, there were those who said that this was the end of the Russian empire. Nations and empires are living things until they die. While they live they grow to the limits set by other nations. They don’t grow like this because they are evil. They do this because they are composed of humans who always want to be more secure, more prosperous and more respected. It is inconceivable to me that Russia, alive and unrestrained, would not seek to return to what it once was. The frontiers of Czarist Russia and the Soviet Union had reasons for being where they were, and in my mind, Russia would inevitably seek to return to its borders. This has nothing to do with leaders or policies. There is no New World Order, only the old one replaying itself in infinitely varying detail, like a kaleidoscope.
Our trip now is to countries within and near the Black Sea basin, so the geopolitical “theme” of the trip (yes, my trips have geopolitical themes, which my children find odd for some reason) is the Russian re-emergence as viewed by its western and southwestern neighbors: Turkey, Romania, Moldova, Poland and Ukraine. I was born in Hungary and have been there many times, so I don’t need to go there this time, and I know Slovakia well. My goal is to understand how these other countries see and wish the present to be. It’s not that I believe that their visions and hopes will shape the future — the world is not that accommodating — but because I want to see the degree to which my sense of what will happen and their sense of what will happen diverge.
This is the political theme of the trip, but when I look at these countries geographically, there are several other organizing themes as well. Turkey, Romania, Ukraine and in a way Moldova are all partly organized around the Black Sea and interact with each other based on that. It’s a sea of endless history. I am also visiting some of the countries in the Carpathian Mountains, a barrier that has divided the Russian empire from Europe for centuries, and which the Russians breached in World War II, partly defining the Cold War. Romania, Ukraine, Moldova and even southern Poland cannot be understood without understanding the role the Carpathians play in uniting them and dividing them. Finally, I am visiting part of the North European Plain, which stretches from France into Russia. It is the path Napoleon and Hitler took into Russia, and the path Russia took on its way to Berlin. Sitting on that plain is Poland, a country whose existence depends on the balance of power between other countries on the plain, a plain that provides few natural defenses to Poland and that has made Poland a victim many times over. I want to understand whether this time will be different and to find out whether the Poles realize that in order for things to be different the Poles themselves must be different, since the plain is not going to stop being flat.
Part of traveling geopolitically is the simple experience of a place. The luxury of a hotel room facing the Bosporus, and me with a drink in hand and the time to watch the endless line of ships passing through the narrow straits, teaches me more about Alexander’s conquests, Britain’s invasion of Gallipoli or Truman’s obsession with Turkey than all the books I’ve read and maps I’ve pored over. Walking a mountain path in the Carpathians in November, where bandits move about today as they did centuries ago, teaches me why this region will never be completely tamed or easily captured. A drive through the Polish countryside near Warsaw will remind me why Napoleon, Hitler and Stalin took the path they did, and why Poland thinks the way it does.
The idea of seeing geographical reality is not confined to this trip. I recall visiting Lake Itasca in Minnesota, where the Mississippi River begins, following it to St. Louis, where the Missouri flows into it, and then going down to New Orleans, where the goods are transferred between river barges and ocean-going vessels. Nothing taught me more about American power and history than taking that trip and watching the vast traffic in grain and steel move up and down the river. It taught me why Andrew Jackson fought at New Orleans and why he wanted Texas to rebel against Mexico. It explained to me why Mark Twain, in many ways, understood America more deeply than anyone.
In visiting countries of the Black Sea basin, I am fortunate that a number of political leaders and members of the media are willing to meet with me. Although not something new, this access still startles me. When I was younger, far less savory people wanted to make my acquaintance. A cup of coffee and serious conversation in a warm office with influential people is still for me a rite of passage.
These visits have their own dangers, different from older dangers in younger days. Political leaders think in terms of policies and options. Geopolitics teaches us to think in terms of constraints and limits. According to geopolitics, political leaders are trapped by impersonal forces and have few options in the long run. Yet, in meeting with men and women who have achieved power in their country, the temptation is to be caught up in their belief in what they are going to do. There is a danger of being caught up in their passion and confidence. There is also the danger of being so dogmatic about geopolitics that ignoring their vision blinds me to possibilities that I haven’t thought of or that can’t simply be explained geopolitically. Obviously, I want to hear what they have to say, and this trip presents a rare and precious opportunity. But these meetings always test my ability to maintain my balance.
I should add that I make it a practice to report neither whom I meet with nor what they say. I learn much more this way and can convey a better sense of what is going on. The direct quote can be the most misleading thing in the world. People ask me about STRATFOR’s sources. I find that we can be more effective in the long run by not revealing those sources. Announcing conversations with the great is another path to narcissism. Revealing conversations with the less than great can endanger them. Most important, a conversation that is private is more human and satisfying than a conversation that will be revealed to many people. Far better to absorb what I learn and let it inform my own writing than to replicate what reporters will do far better than I can. I am not looking for the pithy quote, but for the complex insight that never quite reduces itself to a sentence or two.
There is another part of geopolitical travel that is perhaps the most valuable: walking the streets of a city. Geopolitics affect every level of society, shaping life and culture. Walking the streets, if you know what to look for, can tell you a great deal. Don’t go to where the monuments and museums are, and don’t go to where the wealthy live. They are the least interesting and the most globally homogenized. They are personally cushioned against the world. The poor and middle class are not. If a Montblanc store is next to a Gucci shop, you are in the wrong place.
Go to the places where the people you will never hear of live. Find a school and see the children leave at the end of the day. You want the schools where there is pushing and shoving and where older brothers come to walk their sisters home. You are now where you should be. Look at their shoes. Are they old or new? Are they local or from the global market? Are they careful with them as if they were precious or casual with them as they kick a ball around? Watch children play after school and you can feel the mood and tempo of a neighborhood.
Find a food store. Look at the food being offered, particularly fruits and vegetables. Are they fresh-looking? What is the selection? Look at the price and calculate it against what you know about earnings. Then watch a woman (yes, it is usually a woman) shopping for groceries. Does she avoid the higher priced items and buy the cheapest? Does she stop to look at the price, returning a can or box after looking, or does she simply place it in her basket or cart without looking at the price? When she pays for the food, is she carefully reaching into an envelope in her pocketbook where she stores her money, or does she casually pull out some bills? Watch five women shopping for food in the late afternoon and you will know how things are there.
Go past the apartments people live in. Smell them. The unhealthy odor of decay or sewage tells you about what they must endure in their lives. Are there banks in the neighborhood? If not, there isn’t enough business there to build one. The people are living paycheck to paycheck. In the cafes where men meet, are they older men, retired? Or are they young men? Are the cafes crowded with men in their forties drinking tea or coffee, going nowhere? Are they laughing and talking or sitting quietly as if they have nothing left to say? Official figures on unemployment can be off a number of ways. But when large numbers of 40-year-old men have nothing to do, then the black economy — the one that pays no taxes and isn’t counted by the government but is always there and important — isn’t pulling the train. Are the police working in pairs or alone? What kind of weapons do they carry? Are they everywhere, nowhere or have just the right presence? There are endless things you can learn if you watch.
All of this should be done unobtrusively. Take along clothes that are a bit shabby. Buy a pair of shoes there, scuff them up and wear them. Don’t speak. The people can smell foreigners and will change their behavior when they sense them. Blend in and absorb. At the end of a few days you will understand the effects of the world on these people.
On this I have a surreal story to tell. My wife and I were in Istanbul a few months ago. I was the guest of the mayor of Istanbul, and his office had arranged a lecture I was to give. After many meetings, we found ourselves with free time and went out to walk the city. We love these times. The privacy of a crowded street is a delight. As we walked along we suddenly stopped. There, on a large billboard, was my face staring down at us. We also discovered posters advertising my lecture. We slunk back to our hotel. Fortunately, I am still sufficiently obscure that no one will remember me, so this time we will try our walk again.
There are three things the geopolitical traveler must do. He must go to places and force himself to see the geography that shapes everything. He must meet with what leaders he can find who will talk to him in all parts of society, listening and talking but reserving a part of his mind for the impersonal reality of the world. Finally, he must walk the streets. He won’t have time to meet the schoolteachers, bank tellers, government employees and auto repairmen who are the substance of a society. Nor will they be comfortable talking to a foreigner. But geopolitics teaches that you should ignore what people say and watch what they do.
Geopolitics is everywhere. Look at the patterns of an American election and you will see it at work. I would like, at some point, to have the leisure to study the geopolitics of the United States in detail. But geopolitics is most useful in understanding conflict, and therefore the geopolitical traveler will be drawn to places where tensions are high. That’s a pity, but life places the important above the interesting.
In future pieces, I will be writing about the region I am visiting in a way more familiar to our readers. The next one will be about the region as a whole. The series will replace my weekly geopolitical analyses for several weeks, but I hope you will find it of value. By all means, let us know what you think. We do read all of your emails, even if there isn’t time to answer them. So what you say can help shape this series as well as our work in general.
Market Update, with news on the companies Intel (NASDAQ:INTC), Cisco Systems (NASDAQ:CSCO), Morgan Stanley (NYSE:MS)
We start the day with some tech news; Intel (NASDAQ:INTC) has announced they will be raising their dividends by 15%. That calculates out to approximately $0.18 per share for the quarter, up from $0.1575 per share. The big chip company’s stock has gained 0.35 points on the news. Overall, the corporation is on track to have one of their most profitable years ever. This comes in the heels of Cisco Systems (NASDAQ:CSCO) disappointing sales forecast for the quarter. The San Francisco-based computer equipment provider said that forecasted revenue for 4Q will be only 3-5% over last years. The value of shares in the company has declined over 1% so far today.
In international news, the G-20 conference in Seoul is wrapping up today. It’s being reported that many of the represented countries have refused to support the US agenda of pressuring China into letting their Yuan rise in relation to the dollar. The Chinese currency is set at an unnaturally low level and is pegged there against the US dollar, so that the Asian giant can keep their exported goods price low for the American consumer. The US considers this a major part of why their trade deficit is so deeply negative, which costs the American economy jobs. There’s speculation of a brewing trade war between the two economies, and independent pressure from the US could come in the form of tariffs.
There are also concerns amongst investors that China is planning to increase their inflation rate in an effort to slow their countries economic growth. Inflation in China is now 3%, the government’s target for the year. This speculation on further interest rate increases in Asia has hurt US commodity prices: Gold is down $15.40, while Oil is down $2.08 (a 1.1% and 2.37% decrease, respectively).
The major US indexes are also down today. The Dow Jones Industrial Average has lost 78.90 points, a 0.7% decrease. The S&P 500 has declined 12.20, representing a 1.01% fall. The NASDAQ is also down, shedding 27.98 points (a 1.10% decrease). Meanwhile, the two major Asian stock indexes, the Hang Seng and Nikkei, from have lost 1.9% and 1.4% so far today.
In some positive economic news, University of Michigan released November’s consumer sentiment index today today. Once again, the index was up, reaching 69.3 this month. This also beat expectations, as the index was projected to only show a 69. The index measures consumer confidence on a 100 scale, with 50 being an average-positive feeling.
Finally for the day, Morgan Stanley (NYSE:MS) is down over 2% at the time of writing. That represents a 0.54 point decline, which is based on backlash which comes after the broker announced it would be spinning off it’s quantitative trading strategy unit. The new, independent unit would be headed by current-director Peter Muller. The move is in response to the Dodd-Frank Act, which limits prosperity trading of certain Wall Street firms.
That’s all for the day, have a great weekend!