“James Bond’s” Predictions for 2014…and Beyond

I first met Joe in Mongolia last year. He is one of the most fascinating men I’ve had the pleasure of meeting. A spook from the cold war with stories that would not be out of place in any spy novel. Truth truly is stranger than fiction.

This is not the first time I’ve written about our favourite curmudgeon. Joe was previously introduced in a post discussing elderly care here. He was Formerly COO and CFO, Executive Vice President and Member of the Board of the Atlantic Council of the United States in Washington, DC. He was also the U.S. Representative of the Atlantic Institute for International Affairs in Paris, France.

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He has written professionally on economic development and international security affairs. On the lighter side, he is co-author of GAMBIT with Antoinette Falquier, a novel of international intrigue, nuclear hijinks and improbable espionage. I have read the book and have to say that it should be made into a movie. It has all the ingredients that are required for a fantastic, action packed screenplay, but I digress.

Joe recently sent me his projections for 2014. Given his incredibly diverse background and involvement in geopolitics, combined with the very real fact that he’s already doubled my time on this ball of dirt and amassed more insights and experience than I can hope to acquire in my lifetime, I always find his views interesting. He kindly agreed to share them with our readers.

11/20/13

The Early Line on 2014

by: Joseph Harned

It is said that making predictions is often a risky business, particularly when they’re about the future. The “early line” is what book makers call the very first predictions by odd makers about a given outcome. Early lines are the riskiest predictions of all. Sheer folly. Pure chutzpah. All hat, no cattle. With that in mind, and tongue firmly in cheek, here are my early lines for 2014 – in no particular order of importance.

  • Mid-term U.S. election results will see the Democrats retaining control of the Senate and re-taking control of the House despite the lowest voter turn-out in decades. Pundits decide this resulted from the Tea Party overplaying its hand, the “sane Right’s” inability to provide an attractive alternative to the “insane Right”, and the traditional ability of the left to organize reluctant voters to vote early and often.
  • In Europe, the French government’s steadfast determination to refuse to f*#k its poor with austerity programs just to appease its right wing and German overseers actually begins to pay off, as the French economy rebounds while the German economy falters and its oh-so-determined society faces self-doubt. Some Euro-meisters are heard to mutter that “a little inflation may even be a good thing”.
  • The price of gold breaks below $1100 per ounce, as even the most fervent gold bugs are forced to admit that 1) the gold market price is manipulated, and 2) not by me. [We spend a fortune to find and mine the stuff, only to hoard and bury it again. At least with oil, between finding and “mining” it, and eventually sequestering by burying the CO2 it produces, we at least get some working productivity out of it.]
  • For the first time, India is beginning to realize its extraordinary potential by making progress in taming the high inflation that has crushed economic growth until now. The rising economic tide has muted fractious internecine political struggles, secular battles and religious antipathies enough to permit the population to see light down the tunnel together. Possibilities unlimited.
  • Energy-dependent Mideast governments are rapidly losing their leverage as the U.S. becomes the largest oil producer in the world, and fracking enables old and marginal fields to become productive.
  • As a corollary to an increasingly marginal Middle East, the Shi’a versus Wahhabi, Iran versus Saudi proxy struggles become rapidly marginal. Now it’s just sand they are fighting over. So be it. Let them at it.
  • Which leaves Israel. For the first time since 1920, the U.S. Has the leverage to arrange a two-state sit-down-and-shut-up peace accord with Israel, and between Israel and Palestine and Jordan. And no one, no one, wants it more than American Jews, who are sick and tired of being arm-twisted and guilt-driven by Israel into indefensible positions of backing colonialist Israeli policies.
  • China succeeds on two fronts simultaneously: first, in shifting with alacrity from a developing-nation exporting economy to a newly industrializing nation consumer-spending economy; and second; from highly pollution per-capita developing nation to a moderate pollution per-capita more responsible nation. The ability to accomplish both steps in tandem provides China with increased political and even moral leverage in Africa as well as Asia.
  • Japan, on the other hand, weakens its short term 2013 growth spurt by enacting consumption taxes meant to pay for the increasing costs of caring for an inverted pyramid of aging population cohort depending upon decreasing working population cohort. [The Japanese should, of course, adopt the Israeli system of training the mobile aged to care for immobile aged.]
  • Africa truly begins to come into its own, led by Botswana, which proves to foster better political leadership and less corruption than its southern neighbor. As China and now India do well, resource-rich, newly capitalized and trained Africa will prosper.
  • Mexico, undergoing real structural and political reform, will take advantage of a recovering U.S. economy, and begin a decade of unprecedented growth.
  • Downside risks include the knowns, the unknowns, the imponderables (that which we don’t know we don’t know), and a new category that has cost us more lives and dollars already than anyone predicted: climate change. As a layman, reading voraciously, with a lifetime of contacts and access, the best I can make of it all at this date is: By 2030 – in 16 years or so – we will have serious crop failures in sub-Saharan Africa and Southeast Asia which will result in massive starvation and political upheaval. If you have a five-year-old today, his or her likely military or alternative healthcare service will be connected to this crisis. By 2050 the U.S. will have lost 15% of its habitable near-shore cityscapes and housing, and crop failures will be affecting the U.S. Heartland. If you have a child – any age – this will be its future.
  • Our old friend and cricket Naresh correctly pointed out that I failed to mention the increasing danger of a conflict between China and Japan. So, Here’s a PS for Naresh:Ever since Chiang Kai -Shek escaped across the Straits, whenever the Communist regime has needed a unifying cry to attempt to (ever so briefly) unify the 56 diverse ethnic groups speaking 292 different languages of China, they have called for reuniting Taiwan with the Mainland.  No issue historically has had the same emotional, patriotic, political fervor, though the population being so disparate that fervor is always short-lived and cannot be counted on often.With the economic integration of Taiwan and the mainland, the cross-fertilization of investments and integration of technology, that arrow is  no longer in the political quiver. It is being replaced by a handful of less effective arrows regarding contested islands in the Pacific.  Each island has a 200-mile exclusive economic zone extending from its coastline, encompassing vast undersea areas of potential oil, gas and mineral resources.  This fight over contested islands’ historical jurisdictions is being picked in particular with Japan, as the Chinese have long memories of Japan’s tortuous occupation in World War 2, which can be exploited politically by China’s Communist leadership.  Look for Sino-Japan relations to heat up in 2014.To give you some perspective on the importance of the economic issue, while it is said that the U.S. doubled it’s size and potentially its wealth with the Louisiana Purchase under President Thomas Jefferson in 1803 at a cost of 50 million FFrs, in fact the U.S. more than doubled its size and potentially its wealth under Ronald Reagan in 1983 with his creation of the Exclusive  Economic Zones extending from 3 miles to 200 miles from our shores — all our shores, the mainland, Alaska,  Hawaii, all islands, protectorates — some 3.4 million square nautical miles of ocean  — under the 1982 United Nations Convention on the Law of the Sea.  And for a Reagan’esque no money down!

Some very interesting and hopefully contentious food for thought!

– Chris

 “American exceptionalism is a reaction to the inability of people to understand global complexity or important issues like American energy dependency. Therefore, they search for simplistic sources of comfort and clarity. And the people that they are now selecting to be, so to speak, the spokespersons of their anxieties are, in most cases, stunningly ignorant.” Zbigniew Brzezinski

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