Category Archives: Americas

Can the U.S. and Saudi Arabia Defeat Iran?

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Journal of Political Risk, Vol. 7, No. 6, June 2019 

President Donald Trump is photographed walking with Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, along the West Colonnade of the White House.

President Donald Trump walks with Saudi Arabia’s Deputy Crown Prince, Mohammed bin Salman, along the West Colonnade of the White House, Tuesday, March 14, 2017. Source: Official White House Photo, by Shealah Craighead.

William R. Hawkins
International Economics and National Security Consultant

There is concern that President Donald Trump’s last minute decision to call off airstrikes against Iran signals weakness in the White House. The Commander in Chief stated, “We were cocked & loaded to retaliate last night on 3 different sights [sic] when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it, not….proportionate to shooting down an unmanned drone.” This explanation will feed critics the next time there is an American strike anywhere, for any reason, that kills enemy troops.

President Trump’s explanation did not address why Iran is shooting at drones (the one downed was not the first targeted). Drones are used to survey Iranian attempts to attack oil tankers, a major threat with the strategic goal of pressuring the international community to lift the sanctions on the sale of Iranian oil which are crippling the Iranian economy. The attack on shipping also threatens the lives of crews. By taking the one drone out of context, its loss seemed too minor to justify retaliation. This was a mistake in analysis that fostered a mistake in principle. Continue reading →

Trade Wars, Sanctions and Business Appeasement

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Journal of Political Risk, Vol. 7, No. 6, June 2019 

Chinese President Xi Jinping is photographed in the center, addresses a U.S.-China business roundtable, comprised of U.S. and Chinese CEOs on September 23, 2015, in Seattle, Washington.

Chinese President Xi Jinping, center, addresses a U.S.-China business roundtable, comprised of U.S. and Chinese CEOs on September 23, 2015, in Seattle, Washington. The Paulson Institute, in partnership with the China Council for the Promotion of International Trade, co-hosted the event. Source: Governor Jay & First Lady Trudi Inslee via Flickr.

William R. Hawkins
International Economics and National Security Consultant

In his book Appeasing Bankers, Jonathan Kirshner, the Stephen and Barbara Friedman Professor of International Political Economy at Cornell, argues that “Bankers dread war. More precisely, financial communities within states favor cautious national security strategies and are acutely averse to war and to policies that risk war.” He finds this to be a “universal” trait (at least within capitalist societies) evident throughout modern history. This should be kept in mind when watching the large swings in the stock market in response to reports about the progress, or lack of, in U.S.-China trade talks, Iranian threats and turmoil at the Mexican border. While Kirshner focuses on “stability” with an emphasis on inflation and debt accumulation, he notes the “breathtaking financial globalization” that took place in the post-Cold War period. This has made markets even more sensitive to the dynamics of a contentious international system. Fortunately, the stock market rapidly recovers from panics generated by headlines thanks to the fundamental strength of the U.S. economy.

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Turkish Breakup with the U.S. and NATO: The Illogical Logics

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Journal of Political Risk, Vol. 7, No. 5, May 2019 

The photograph pictures three soldiers holding a red, yellow and green flag rolled around a wooden pole.

During the ceremony, Brig. Gen. Clarke assumed command of the 82nd from Maj. Gen. John W. Nicholson who is slated to take command of Allied Land Command, NATO, Izmir, Turkey. Source: U.S. Army via Flickr.

Dr. Jahara Matisek
U.S. Air Force Academy

Dr. Buddhika Jayamaha
U.S. Air Force Academy

Abstract: With decades of debate about Turkey leaving NATO, the Turkish purchase (and delivery) of a Russian air defense system may be crossing the Rubicon. The Syrian Civil War, combined with how the U.S. and NATO decided to back Kurdish proxies in the fight against the Islamic State, has fed into the domestic logic of survival for Turkish political elites. With President Erdoğan and his revisionist political party ruling over Turkey the last decade, they appear to have finally refashioned the Turkish state by purging secularists from the government and military since the coup hoax of 2016. This new consolidation of political power has created a Turkish state with values incompatible with the West and strategies irreconcilable with NATO. However, these efforts by Erdoğan are undermining the long-term economic viability of the Turkish state, as established norms concerning the rule of law and property rights deteriorate, risking Turkey’s status as a reliable and stable ally in the region. We make these judgements on Turkey provoking its own expulsion from NATO based on interviews and fieldwork in Kurdistan and Turkey.

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Why Chaos Is Here To Stay

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Journal of Political Risk, Vol. 7, No. 5, May 2019

The close-up photograph shows at least 15 traffic lights all in a group.

A confusing traffic light system with multiple signal heads. Source: Paola Kizette Cimenti via Flickr.

Laurent Chamontin
Consultant, Writer, and Teacher in the Geopolitics Field

The 2010s are characterized by an exceptional amount of political volatility (e.g., Brexit, and Donald Trump’s election). This volatility resulted from an unprecedented level of complexity, whether at the level of individuals, nations, or the world, generating outbursts of populism, loss of long-term orientation, dysfunctional newspeak, and decay of international institutions. To overcome this challenge, democracies must rethink their education policies and promote a redesign of multilateral institutions to better coexist with the nation state.

If the purpose of politics is to provide mankind with the consideration of perspectives for the purpose of organization, then indeed we are experiencing a world-scale political crisis. Any nostalgia for supposedly more stable eras put aside, political volatility has increased to a level unprecedented since the collapse of the Soviet Union. Continue reading →

US-China Trade War: Time is on the Side of the US

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Journal of Political Risk, Vol. 7, No. 5, May 2019

Ho-fung Hung
Johns Hopkins University

The US-China trade war has unfolded for nearly a year now. After some false hope of a quick deal, China’s backpedaling in May from earlier promises to stop requiring a technology transfer from US firms in China, and to do more to protect intellectual property, obliterated such hope. Trump’s reaction of raising new tariffs on Chinese goods, followed by China’s retaliation in kind, led to an escalation.

Bipartisan Support of Trade War with China

This escalation of the trade war, interestingly, has not unleashed criticism of President Trump in the US. Sources from the US negotiation team and those from its Chinese counterparts both verified China’s last-minute withdrawal of earlier commitments. There is little doubt that Beijing rather than Trump is to be blamed for this re-escalation. Trump’s strong response to the Chinese backpedaling instead got rare bipartisan support. Congress Democrats are on the same side with the President, judging by Senate Minority Leader Chuck Schumer tweet, “Hang tough on China, President @realDonaldTrump. Don’t back down. Strength is the only way to win with China.”[1]

A line graph shows three upward trends, labelled "Forex reserve", "Stock of external debt" and "FDI net inflow"

Figure 1. China’s External Financial Position. (Source: World Bank)

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