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How Myanmar Liberates Asia, by Robert D. Kaplan - 2 views

www.stratfor.com/...liberates-asia-robert-d-kaplan myanmar asia
shared by anonymous on 21 Mar 12 - Cached
  • Geographically, Myanmar dominates the Bay of Bengal. It is where the spheres of influence of China and India overlap. Myanmar is also abundant in oil, natural gas, coal, zinc, copper, precious stones, timber and hydropower, with some uranium deposits as well. The prize of the Indo-Pacific region, Myanmar has been locked up by dictatorship for decades, even as the Chinese have been slowly stripping it of natural resources.
  • Think of Myanmar as another Afghanistan in terms of its potential to change a region: a key, geo-strategic puzzle piece ravaged by war and ineffective government that, if only normalized, would unroll trade routes in all directions.
  • if Myanmar continues on its path of reform by opening links to the United States and neighboring countries, rather than remaining a natural resource tract to be exploited by China, Myanmar will develop into an energy and natural resource hub in its own right, uniting the Indian subcontinent, China and Southeast Asia all into one fluid, organic continuum.
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  • The salient fact here is that by liberating Myanmar, India's hitherto landlocked northeast, lying on the far side of Bangladesh, will also be opened up to the outside.
  • But while the future beckons with opportunities, the present is still not assured. The political transition in Myanmar has only begun, and much can still go wrong. The problem, as it was in Yugoslavia and Iraq, is regional and ethnic divides.
  • Myanmar is a vast kingdom organized around the central Irrawaddy River Valley. The ethnic Burman word for this valley is Myanmar, hence the official name of the country. But a third of the population is not ethnic Burman, even as regionally based minorities in friable borderlands account for seven of Myanmar's 14 states. The hill areas around the Irrawaddy Valley are populated by Chin, Kachin, Shan, Karen and Karenni peoples, who also have their own armies and irregular forces, which have been battling the Burman-controlled national army since the early Cold War period.
  • Worse, these minority-populated hill regions are ethnically divided from within.
  • Myanmar, it is true, is becoming less repressive and more open to the outside world. But that in and of itself does not make for a viable institutionalized state. In sum, for Myanmar to succeed, even with civilians in control, the military will have to play a significant role for years to come, because it is mainly officers who know how to run things. But given its immense natural resources and sizable population of 48 million, if Myanmar can build pan-ethnic institutions in coming decades it could come close to being a midlevel power in its own right -- something that would not necessarily harm Indian and Chinese interests, and, by the way, would unleash trade throughout Asia and the Indian Ocean world.
  • anonymous on 21 Mar 12
     
    Myanmar's ongoing liberalization and its normalization of relations with the outside world have the possibility of profoundly affecting geopolitics in Asia -- and all for the better.
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StratFor Annual Forecast 2013 - 0 views

www.stratfor.com/...annual-forecast-2013
shared by anonymous on 18 Jan 13 - Cached
  • Generational shifts take time to play out and often begin with a period of denial as the forces of the international system struggle to preserve the old order. In 2013, that state of denial will persist in many areas. But we are more than four years into this cyclical transformation, and change is becoming more palpable and much harder to deny with every passing month.
  • In Europe, short-term remedies that are so far preserving the integrity of the European Union are also papering over the deep, structural ailments of the bloc.
  • China is not so much in denial of its current predicament as it is constrained in its ability to cope with a dramatic shift from high export-oriented growth to more sustainable development of its interior.
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  • The emerging economies of the post-China world will take time to develop, but 2013 will be an important year in determining which are best positioned to fill the growing void left by China.
  • Change will be primarily violent in nature -- and thus harder to miss -- in the Middle East.
  • The United States is also not immune to change. In this generational shift, and all the tumult that comes with it, Washington will be forced to learn the value of restraint in balance-of-power politics, preferring to lean on regional partners and encourage strategic competition as a way of preserving its own power.
  • The Arab world is moving uncomfortably between two eras. The post-World War II era, in which Arab dictatorships and monarchies supplanted colonial rule, is now roughly blending with -- or in some cases outright colliding with -- a fractured landscape of long-repressed Islamist forces.
  • This dynamic will be particularly visible in the northern Levant region this year as Syria and Lebanon continue coming apart. From Stratfor's perspective, the regime in Syria has already fallen and is giving way to a familiar state of warlordism, where militias and clan interests reign supreme. There is no longer a political entity capable of wielding control over the entirety of Syrian territory, nor will there be for some time.
  • once Syrian President Bashar al Assad is removed from power, whether through a negotiated deal or by force, the Sunni forces will fragment along ideological, ethnic and geographic lines, with Salafist-jihadist forces battling against a more politically minded Muslim Brotherhood and secular Sunnis.
  • As their grip over Aleppo slips, Alawite forces will try to hold Damascus while preparing a mass retreat to their coastal enclave. The battle for Damascus could extend beyond the scope of this forecast.
  • The potential use of chemical weapons by Alawite forces in a state of desperation could accelerate the unraveling of the region; a U.S.-led coalition would have to assemble in haste to contain the chemical weapons threat.
  • To be clear, the United States is not looking for a pretext to intervene militarily in Syria. On the contrary, the United States will make every effort possible to avoid another military campaign in the Islamic world this year.
  • A military conflict between the United States and Iran remains unlikely in 2013.
  • The growing disparity in the U.S. and Iranian negotiating positions will largely relegate Iran to the role of regional spoiler. So long as Iran can create pain for its regional adversaries, it can slow its own descent.
  • Iraq remains Iran's primary regional imperative, however. The momentum building among Sunni forces in Syria will eventually spill into Iraq and challenge Shiite dominance.
  • Iran's presidential elections in June will reveal the declining relevancy of the clerical elite and the populist faction embodied by outgoing President Mahmoud Ahmadinejad. This creates a political void for the Revolutionary Guard to fill. The Supreme Leader Ayatollah Ali Khamenei will try to check the Corps' growing influence by bolstering rival military and security agencies and backing a less controversial and more politically malleable ally from the pragmatic conservative camp for the presidency.
  • In Egypt, the military will adapt to an emerging Islamist political order. The military will remain the ultimate arbiter of the state and will rely on a number of factors -- including a fragmented judiciary, the military's economic leverage, a divided Islamist political landscape and the military's foreign relationships -- to check the Muslim Brotherhood.
  • Egypt's consuming political transition will leave opportunities for flare-ups in the Sinai Peninsula and in Gaza, but we do not expect a significant breach between Israel and Egypt this year.
  • Jordan, the oft-overlooked casualty of the Arab Spring, will continue to destabilize quietly and slowly in 2013
  • Israel and Turkey are both greatly affected by the shifting political dynamics of the Arab world, but both have little means to influence the change. The two former allies will continue exploring ways to restore a quiet working relationship under these new regional stresses, but a public restoration of diplomatic ties is less likely.
  • Israel will struggle internally over how to adapt to a new regional framework in which the reliability of old working partners is called into question.
  • Turkey sees an opportunity in the rise of Islamist forces in the Arab world but Ankara's limited influences restrain its actions beyond Turkish borders.
  • A more aggressive Saudi role in Syria will aggravate the civil war and create competition with other regional stakeholders, including Turkey, Qatar and Jordan.
  • In 2012, the European Union took numerous steps to mitigate the financial impact of its ongoing crisis.
  •  These actions, which helped to keep the eurozone afloat in 2012, will remain effective in 2013, making it very likely that the eurozone will survive another year. But these tools do not solve three fundamental aspects of the European crisis. 
  • First, the European crisis is fundamentally a crisis of competitiveness.
  • Second, the crisis has a political aspect. The European Union is not a federation but a collection of nation-states bound together by international treaties.
  • Third, the European crisis is threatening the social stability in some countries, especially in the eurozone's periphery.
  • In 2013, the two largest economies of the eurozone (Germany and France) will face low growth or even stagnation. This will have negative effects across Europe.
  • In 2013, the crisis will keep damaging economic conditions in the eurozone periphery. Greece, Spain, Portugal and Italy will see their economies shrink and unemployment rates rise. In all these countries, the social unrest will grow and the year will be marked by permanent protests and strikes. 
  • The conspicuous divide between the ruling elite and the populations of the periphery will be a key element in 2013, and some governments could fall. But even if opposition parties take power, they will face the same constraints as the governments that preceded them. In other words, a change in politicians will not bring a substantial change in policies regarding the European Union.
  • The only country in the eurozone periphery that has scheduled elections is Italy (in February). If the next Italian government fails to achieve political stability and apply economic reforms, the increased market pressure on Italy will make Rome more likely to require financial assistance from Brussels.
  • Because of the fundamental contradictions in the national interests and foreign policy strategies of the EU member states, the European crisis will continue generating political and economic divisions in the Continent in 2013.
  • Outside the eurozone, the United Kingdom will seek to protect its sovereignty and renegotiate its status within the European Union. But London will not leave the European Union in 2013.
  • Domestic Issues After the political tumult of 2012, Russia will face another year of anti-Kremlin protests, tensions among various political factions and ethnic groups, crackdowns and government reshuffles. Overall, the political tensions will remain manageable and will not pose a serious challenge to Moscow's control.
  • Russia has made significant progress recently in re-establishing influence in its former Soviet periphery.
  • Russia's relationship with Ukraine could be its most important connection in the former Soviet Union in 2013. Russia has been pursuing integration with Ukraine, primarily by taking over its natural gas transit infrastructure and calling on Kiev to join the Customs Union.
  • Georgia will be Russia's main concern in the Caucasus in 2013. With the political emergence of billionaire tycoon Bidzina Ivanishvili and his Georgian Dream movement, Russia's position in the country strengthened at the expense of the anti-Russian camp of Georgian President Mikhail Saakashvili.
  • In the past year, Russia has changed its tactics toward Europe to preserve its presence and leverage for the future. Russia's primary link to Europe is the Europeans' dependence on Russia's large energy supplies, which Moscow knows will be threatened when more non-Russian supplies become available.
  • In 2012, Russia began shifting away from its aggressive stance on energy -- particularly its high prices -- to strike long-term deals that will maintain Russia's market share with its primary strategic customers, such as Germany, Italy and Turkey. Russia will continue this strategy in 2013 as it continues to build new infrastructure to directly link its supplies to Europe.
  • The United States and Russia will continue sparring over trade matters, negotiations for a new nuclear arms treaty and Russia's role in Iran and Syria. Stratfor does not expect major changes from Washington or Moscow that would break the gridlock in negotiations on these issues.
  • The low-level violence and instability that occurred throughout Central Asia in 2012 will continue in 2013.
  • Three things will shape events in East Asia in 2013: Beijing's struggle to maintain social and political stability amid lower economic growth rates; China's accelerating military modernization and increasingly aggressive moves to secure its territorial and economic interests in the region; and varied efforts by other regional players, including the United States, to adapt to China's changes. 
  • In 2013, the Chinese economy will continue the gradual, painful process of moving away from high export-driven growth and toward a model that is more sustainable in the long run.
  • But barring another global financial meltdown on the scale of 2008-2009, China's coastal manufacturing economy will not collapse outright. The decline will be gradual.
  • The ongoing, gradual eclipse of coastal China as a hub of global manufacturing over the next several years will lead to higher unemployment and social dislocation as more of China's 250 million-strong migrant labor force returns inland in search of work. 
  • Shadow banking is by no means new in China. But it has grown significantly in the past few years from the geographically isolated informal loan markets of coastal cities to a complex network of semi-legal entities that provides between 12 and 30 trillion yuan (between $1.9 trillion and $4.8 trillion) in credit -- at interest rates of 20-36 percent -- to thousands of struggling small businesses nationwide.
  • The Party's growing sense of insecurity -- both internally and with regard to the social consequences of China's economic transition -- likely will be reflected in continued censorship of online social platforms like Weibo, crackdowns on religious or other groups perceived as threatening, and the Chinese military's growing assertiveness over China's interests in the South and East China seas and Southeast Asia.
  • The decline of low-end coastal manufacturing in China will present enormous opportunities for Southeast Asian countries like Indonesia, Vietnam, the Philippines and potentially Myanmar -- all of whom will continue to push strongly for foreign investment not only into natural resources and raw materials industries but also into developing better urban, transport, power generation and materials processing infrastructure.
  • Meanwhile, Vietnam and the Philippines -- China's most vocal opponents in Southeast Asia -- will continue to push for greater integration among members of the Association of Southeast Asian Nations and for U.S. business and military engagement in the region.
  • The Coming U.S. Withdrawal from Afghanistan Ahead of the 2014 drawdown of U.S. troops from Afghanistan, efforts will intensify to negotiate a settlement that gives the Taliban a place in a new government.
  • The negotiations will face numerous obstacles this year. There will be an upsurge in violence -- both in terms of officially sanctioned attacks designed to gain advantage on the negotiating table and spoiler attacks by Taliban elements allied with al Qaeda on both sides of the Afghan-Pakistani border.
  • Washington's intention to reduce its presence in the region will spur regional actors to fill the void. Pakistan will increase its interactions with Russia, Central Asia and Iran to prepare for a post-U.S. Afghanistan.
  • India will also turn its attention eastward, where the United States is quietly trying to forge a coalition of regional partners to keep a check on China in the Indo-Pacific basin. Myanmar in particular will be an active battleground for influence this year.
  • Preparing for a Post-Chavez Venezuela After a year of successful campaigning for re-election, Venezuelan President Hugo Chavez is in questionable health. Although the ultimate outcome of December's medical treatment for the ailing leader is unpredictable, Chavez's decision to name Vice President Nicolas Maduro as a political successor at the end of 2012 indicates that there is significant concern for his ability to remain in power.
  • Although it remains possible that Chavez will stay in power through the year, for Maduro to capitalize on Chavez's recent political gains, elections may need to be called sooner rather than later, regardless of Chavez's immediate health status.
  • Throughout 2013, Colombia will continue the incremental process of negotiating an end to the conflict with the Revolutionary Armed Forces of Colombia, known by its Spanish acronym FARC.
  • This will be a year of significant transition for Mexico. Policy issues that were bottled up by intra-party competition in the waning years of the National Action Party's administration have begun coming to the fore and will dominate 2013. These include socio-political issues like education, tax and pension reform.
  • The most important issue facing Mexico in 2013 will be energy policy.
  • anonymous on 18 Jan 13
     
    "At the beginning of 2012, we argued that the international system is undergoing a generational transformation -- the kind that occurs every 20 years or so. The cycle we are now in started in 2008-2009, when global financial contagion exposed the underlying weaknesses of Europe and eventually cracked China's export-oriented economic model. The Middle East then began to deviate from its post-World War II paradigm with an attempted resurgence by Iran, the regional rise of Islamists and the decline of age-old autocratic regimes in the Arab world."
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China's String of Pearls? - 0 views

www.stratfor.com/...chinas-string-pearls
shared by anonymous on 13 Feb 13 - Cached
  • China's ostensible willingness to suddenly take the next step in Gwadar comes while the United States is in the process of pulling out of Afghanistan. Were Afghanistan to even partially stabilize following the withdrawal of U.S. troops, it would conceivably open up supply routes connecting Gwadar to Central Asia, and ultimately to China. This would ease China's so-called "Malacca dilemma," in which China is too dependent on the Strait of Malacca (and the nearby Lombok and Makassar straits) for the importation of hydrocarbons from the Middle East.
  • This array of Indian Ocean ports has been dubbed China's "string of pearls." Those skeptical of the concept have said that China has little desire or capacity to build naval bases in these places. But the string of pearls was never properly meant to imply naval bases per se. It is a far subtler concept, as I fully elaborated upon in my 2010 book, Monsoon: The Indian Ocean and the Future of American Power. In my reporting trips to Gwadar, Hambantota and other Indian Ocean ports where the Chinese have been active, I described a possible commercial, political, strategic and lastly military venture, the constituent elements of which cannot be disaggregated. To be sure, we live in a post-modern world of eroding distinctions: a world where coast guards sometimes act more aggressively than navies, where sea power is civilian as well as military, where access denial can be as relevant as the ability to engage in fleet-on-fleet battle and where the placement of warships is vital less for sea battles than for diplomatic ones.
  • China realizes the use of these ports will always be dependent upon good political and economic relations with the host country, which is why China has been active on all economic and political fronts in helping Pakistan, Myanmar, Sri Lanka, Bangladesh and so on. Indeed, China may be Pakistan's most reliable political ally. Beijing also helped the Sri Lankan regime win a civil war against ethnic Tamil rebels. And China competes with India over aid to Bangladesh.
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  • China's commercial and strategic expansion into the Indian Ocean faces several hurdles -- sheer distance, local security problems, etc. But the most important hurdle is the internal stability of China itself. China's economy, already in trouble, could dramatically deteriorate to the point where China's one-party state, and the domestic cohesion it offers, might become undone. Were China to face serious and sustained unrest, its activities abroad would be compromised.
  • anonymous on 13 Feb 13
     
    "The New York Times recently reported that China apparently has agreed to take over the operations of a $200 million port it built for Pakistan in Gwadar, on the Indian Ocean close to the Iranian border and close to the entrance to the Persian Gulf. We'll see if this actually happens. If it does, it will be geopolitically significant."
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China's Geopolitical Fallout - 0 views

www.stratfor.com/...chinas-geopolitical-fallout
shared by anonymous on 24 Jul 13 - No Cached
  • China's leaders will likely survive this trial. But what if they don't? What if China faces a severe socio-economic crisis and attendant political one of an unforeseen magnitude? What would be the second-order geopolitical effects? If Syria explodes, it does so regionally. If China explodes, it does so globally.
  • Such a crisis could lead to an upsurge in nationalism, an emotion that can be easily dialed upwards by Communist party leaders as a means of clinging to power.
  • China's defense budget has already increased eight-fold since 2001, and might continue to do so under a more nationalist-style regime (even amid slowing growth), enabling China to further implement an anti-access area-denial strategy in the East and South China seas, emphasizing submarine, ballistic missile, and cyber warfare capabilities.
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  • The aim would not be to go to war with the U.S. Navy and Air Force (quite the opposite, in fact), but to establish a force ratio more favorable to the continued, perceived growth of Chinese maritime power. But none of this would alter the current state of play in the Indian and Western Pacific oceans -- defined by a slowly diminishing unipolar American air and naval environment.
  • But what if the opposite occurred? What if an economic and political crisis ignited a downward trend in Chinese military procurements, or at least a less steep growth curve?
  • This is also quite possible: to assuage public anger at poverty and lack of jobs, China's leaders might, for political reasons, ask the military to make sacrifices of its own. After all, a Chinese Spring might be all about demanding more freedom and not about nationalism. Over time, this could affect the foundations of the Eurasian maritime order, albeit to a lesser extent than the collapse of the Berlin Wall shook the foundations of the European continental order.
  • Stalled Chinese defense budgets would reinvigorate a Pax Americana from the Sea of Japan to the Persian Gulf, despite the debacles of the Iraq and Afghanistan wars, and despite the U.S. military budget crunch.
  • Remember that Japan occupied Korea from 1910 to 1945, and the hostility between Japan and Korea is thus much greater than the hostility between Korea and China.
  • With more than 1,500 ballistic missiles aimed at Taiwan from the mainland and 270 commercial flights per week between the two Chinas, U.S. military aid to Taipei is designed to defend Taiwan against a sudden Chinese attack, but not necessarily to postpone an inevitable unification of sorts.
  • India, like Vietnam and Taiwan, gains most from a profound economic and political crisis inside China. Suddenly China would be more vulnerable to ethnic unrest on the Tibetan plateau abutting the Indian subcontinent.
  • This would not necessarily alleviate the Chinese threat on India's northern borderlands (given the possibility of heightened ethnic unrest inside an economically weakened China), but it would give India greater diplomatic leverage in its bilateral relations with Nepal, Bangladesh, Sri Lanka, and Myanmar, all of which have been venues for the quiet great game India has been playing with China.
  • If India were among the biggest winners in the event of severe Chinese internal turmoil, Pakistan would be the biggest loser. China has been Pakistan's greatest and surest patron in recent decades, and has given Pakistan stores of infrastructure aid -- highways in the north and a port in the south -- without lectures about human rights and terrorism, or threats about withdrawing aid.
  • Such a bleak scenario for China overall would leave the United States and its allies -- both de facto like India and Vietnam, and de jure like Japan and Australia -- in a commanding position around Eurasia's navigable southern rimland.
  • But such a scenario is unlikely, even if the Chinese economy significantly slows and domestic unrest follows. More likely will be a tumultuous period of consolidation and readjustment within China, with China's strategic and military planners able to weather the storm with adjustments of their own for the long term.
  • But there is a larger point: geopolitics, while ostensibly about the geographically-constrained interactions of states, rests also on the internal conditions of states themselves, in which the actions of individuals are crucial and so much hangs on a thread.
  • While both the United States and China face epochal budgetary and economic crises -- which in both countries bleed over into the political realm -- the crisis in China is far more profound than in the United States. After all, the system of governance in Washington simply enjoys so much more legitimacy than the one in Beijing, with the American public institutionally better equipped to vent its frustrations than the Chinese one. Such internal realities will remain the overriding geopolitical facts in Asia.
  • anonymous on 24 Jul 13
     
    "The biggest question in international affairs has nothing to do with Syria or Iran going nuclear. It is has to do with the state of the Chinese economy, and the ability of China's one-party system to navigate through an economic slowdown to a different growth model."
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The PC16: Identifying China's Successors | Stratfor - 0 views

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shared by anonymous on 30 Jul 13 - No Cached
  • China will have to behave differently from the way it does now, and thus other countries are poised to take its place.
  • Since the Industrial Revolution, there have always been countries where comparative advantage in international trade has been rooted in low wages and a large work force. If these countries can capitalize on their advantages, they can transform themselves dramatically. These transformations, in turn, reorganize global power structures.
  • When it is not in the throes of war, trade reshapes the international order. After World War II, Germany and Japan climbed out of their wreckage by using their skilled, low-wage labor to not only rebuild their economy but to become great exporting powers.
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  • It's not just their work; it's their way of life. As workers move to factories, the social fabric is torn apart. But that rending of life opens the door for a mobile workforce able to take advantage of new opportunities. Traditional life disappears; in its place stand the efficiencies of capitalism.
  • As the process matures, low wages rise -- producing simple products for the world market is not as profitable as producing more sophisticated products -- and the rate of growth slows down in favor of more predictable profits from more complex goods and services. All nations undergo this process, and China is no exception. This is always a dangerous time for a country. Japan handled it well. China has more complex challenges.
  • Low-wage countries seize the opportunity and climb upon the escalator of the international system, and with them come the political and business elite and the poor, for whom even the brutality of early industrialism is a relief.
  • In looking at this historically, two markers showed themselves. One is a historical first step: garment and footwear manufacturing, a highly competitive area that demands low wages but provides work opportunities that the population, particularly women, understand in principle. A second marker is mobile phone assembly, which requires a work force that can master relatively simple operations. Price matters greatly in this ruthlessly competitive market.
  • We were not looking for the kind of large-scale movements that would be noticed globally, but the first movements that appear to be successful. Where a handful of companies are successful, others will follow, so long as there is labor, some order and transportation.
  • Some things are not necessary or expected. The rule of law, understood in Anglo-Saxon terms of the written law, isn't there at this stage. Things are managed through custom and relationships with the elite. Partnerships are established. Frequently there is political uncertainty, and violence may have recently occurred. These are places that are at the beginning of their development cycle, and they may not develop successfully. Investors here are risk takers -- otherwise they wouldn't be here.
  • The Cultural Revolution had ended a few years before. It was a national upheaval of violence with few precedents. Mao Zedong died in 1976, and there had been an intense power struggle, with Deng Xiaoping consolidating power in 1977. China was politically unstable, had no clear legal system, sporadic violence and everything else that would make it appear economically hopeless. In fact, Egbert F. Dernberger and David Fasenfest of the University of Michigan wrote a paper for the Joint Economic Committee of Congress titled "China's Post-Mao Economic Future." In this paper, the authors state: "In the next seven years as a whole, the rate of industrial investment and production, more than the total of the last 28 years, imply a level of imports and industrial labor force such that the exports, transportation facilities, social overhead capital, energy and middle-level technical personnel requirements would exceed any realistic assessment of Chinese capabilities."
  • I don't mean to criticize the authors. This was the reasonable, conventional wisdom at the time. It assumed that the creation of infrastructure and a managerial class was the foundation of economic growth. In fact in China, it was the result of economic growth. The same can be said for rule of law, civil society, transparency and the other social infrastructure that emerges out of the social, financial and managerial chaos that a low-wage economy almost always manifests.
  • Low-wage societies develop these characteristics possibly out of the capital formation that low-wage exports generates. The virtues of advanced industrial society and the advantages of pre-industrial society don't coincide.
  • There is no single country that can replace China. Its size is staggering. That means that its successors will not be one country but several countries, most at roughly the same stage of development.
  • The point to emphasize is that identifying the PC16 is not a forecast. It is a list of countries in which we see significant movement of stage industries, particularly garment and footwear manufacturing and mobile phone assembly.
  • we have excluded countries growing because of energy and mineral extraction. These countries follow different paths of development. The PC16 are strictly successors to China as low wage, underdeveloped countries with opportunities to grow their manufacturing sectors dramatically.
  • When you look at map, much of this new activity is focused in the Indian Ocean Basin. The most interesting pattern is in the eastern edge of Sub-Saharan Africa: Tanzania, Kenya, Uganda and Ethiopia. Sri Lanka, Indonesia, Myanmar and Bangladesh are directly on the Indian Ocean.
  • A special word needs to be included on Mexico. The area north of Mexico City and south of the U.S. borderlands has been developing intensely in recent years. We normally would not include Mexico but the area in central-southern Mexico is large, populous and still relatively underdeveloped.
  • It is in this area, which includes the states of Campeche, Veracruz, Chiapas and Yucatan, where we see the type of low-end development that fits our criteria. Mexico's ability to develop its low-wage regions does not face the multitude of challenges China faces in doing the same with its interior.
  • All of this has to be placed in context. This is not the only growth process underway. It is most unlikely that all of these countries will succeed. They are not yet ready, with some exceptions, for advanced financial markets or quantitative modeling. They are entering into a process that has been underway in the world since the late 1700s: globalism and industrialism combined.
  • It can be an agonizing process and many have tried to stop it. They have failed not because of their respective ruling classes, which would have the most to lose. It doesn't take place because of multinational corporations. They come in later. It takes place because of profit-driven jobbers who know how to live with instability and corruption. It also takes place because of potential workers looking to escape their lives for what to them seems like a magnificent opportunity but for us seems unthinkable.
  • The parabola of economic development dictates that what has not yet risen will rise and eventually fall. The process unleashed in the Industrial Revolution does not seem to be stoppable. In our view, this is the next turning of the wheel.
  • anonymous on 30 Jul 13
     
    "China has become a metaphor. It represents a certain phase of economic development, which is driven by low wages, foreign appetite for investment and a chaotic and disorderly development, magnificent in scale but deeply flawed in many ways. Its magnificence spawned the flaws, and the flaws helped create the magnificence."
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