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Not only the Chinese economy but also the Latin American economies are in the doldrums. Much of Africa is suffering and military coups are overthrowing democratic governments in many countries. Some of these coups have popular support. Even Asian economies, with the exception of India, Vietnam and a handful of others, are no longer growing that fast. Switzerland, with a highly developed financial industry, has been deeply invested in developing economies across the world. For now, the only thing this small country can do is batten down the hatches, continue to diversify and hope for more favorable conditions in the future.

Swiss observers are worried, too, about the state of their own continent. Democratic norms are weakening in Europe. In the Netherlands, the nationalist, anti-Muslim politician Geert Wilders took the lion’s share of votes in the November 2023 elections. In Germany, the far-right Alternative for Germany is on the rise. And Georgia Meloni, the far-right prime minister of Italy, hails from a party with post-fascist roots. The chatter in Austria, Switzerland’s neighbor to the east, is that the populist Freedom Party is looking strong. Austrians go to the polls in June. In Slovakia, Robert Fico has begun his assault on democratic institutions, attempting to bring the mechanisms of the state under his party’s control. In Hungary, Viktor Orbán has already accomplished this feat, turning Hungary into an illiberal democracy.

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The world may not quite be coming apart at the seams, but Switzerland must proceed cautiously if it does not want to become isolated in its own neighborhood.

How Switzerland is getting on in a dangerous world

The Swiss, of course, don’t have to worry about being invaded like the Ukrainians or the Taiwanese. Switzerland is armed to its teeth, and this mountainous country is a natural fortress — dotted with bunkers for good measure. But even the Swiss cannot live in the world alone. The country has deepened its relations with the EU and even with NATO. In the past, Switzerland failed to find a solution to engaging with the EU that balanced integration with Swiss independence. But recent global unrest has driven Bern and Brussels closer together.

Switzerland has participated in European sanctions against Russia because Swiss neutrality does not necessarily exclude participating in international sanctions. Switzerland’s neutrality policy took current legal shape in 1993 after the end of the Cold War and allows for sanctions. The real novelty in Switzerland’s foreign policy is that it has begun to cooperate with like-minded nations in security. In 2023, Swiss defense minister Viola Amherd achieved a historic first by participating in a meeting of NATO’s decision-making body, the North Atlantic Council. Switzerland may not be abandoning neutrality, but it is certainly moving much closer to Europe and the US than ever before.

Still, Switzerland is not turning its back on Russia or other non-Western-aligned powers. Switzerland prides itself on being a place where officials and experts from deeply opposed nations can meet and work together. The country is, for example, one of the last places in the world where US and Russian policymakers can still discuss nuclear weapons. Arctic powers, including the US, Canada and Russia, meet and speak here. In an increasingly divided and suspicious world, neutral Switzerland’s importance is increasing.

Switzerland is not immune to the unrest

Many look upon neutral and prosperous Switzerland as an island of stability. In many ways, it is so indeed. Swiss democracy has been resilient and moderate. It is a federal, semi-direct democracy that gives its voters a real voice in how their local, regional and national governments are run. The application of this principle of subsidiarity is a rarity and makes Switzerland unique.

Yet many Swiss citizens feel that the system is not being run in their interest. They see Switzerland’s many advantages being used to enrich a small elite, rather than the common people. Prices are running high and few own houses or can buy them. Many are resentful and are turning to populism. The Swiss People’s Party has grown stronger and poses a threat to Switzerland’s liberal democratic status quo.

Switzerland must navigate the territory carefully. As it copes with the modern world, this idyllic mountain country must avoid compromising its traditions of neutrality and Swiss citizens’ personal freedoms. The relatively new Swiss law, Measures for Protection against Terrorism, has many worried that the government may begin compromising the rights to privacy or free expression. Yet, for now, Switzerland seems to have crafted a legal solution that adequately balances security with these values.

In an uncertain world, Switzerland must strive to draw on the best of its political heritage, trudge forward and stay the course in hope of better days ahead.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” Switzerland occupies a unique place in the international system. It has pursued a policy of neutrality for centuries, and has not been involved in a war since 1815, when the Napoleonic Wars that raged across Europe came to an end. But Switzerland is not isolated. It is deeply engaged in the world…” post_summery=”Great power competition, proxy wars and instability characterize today’s international system. At the same time, rising far-right populism characterizes the politics of much of Europe. In the midst of all this chaos, traditionally neutral and liberal Switzerland is doing its best to stay afloat.” post-date=”Jan 19, 2024″ post-title=”FO° Talks: Making Sense of the World Through a Swiss Lens” slug-data=”fo-talks-making-sense-of-the-world-through-a-swiss-lens”>

63,374.08%. More than 60% of Venezuelans live on the “Maduro Diet,” a colloquial term for the disastrous level of poverty caused by Maduro’s policies. Riots in 2014 and a mass exodus of citizens demonstrate Venezuelans’ frustration with the Maduro government.

María Corina Machado has emerged as the winner of the recent primaries to emerge as Maduro’s challenger. She is charismatic, energetic and a real challenge to the Venezuelan caudillo. After years of suffering, Venezuelans desire change and, in a free and fair election, Machado is likely to trounce Maduro.

Therefore, the repressive Maduro regime has banned Machado and her party from running in the elections. In October 2023, hopes for a relatively fair election were reignited. The government and the opposition held talks in Barbados. They signed a pact to hold fair elections, which would lead to the easing of sanctions that have put the Maduro government under increasing pressure in recent years. The strongman was cynical while signing the pact because the opposition was in disarray at the time. Since then, Machado has unified the opposition and Maduro’s star has waned considerably.

Worryingly for Maduro, almost 2.5 million Venezuelan citizens voted in the opposition primaries despite significant obstacles from the government. Machado won with a whopping 93.5% of the votes. In contrast, note that, as per many opinion polls, Maduro’s popularity has sunk to a measly 9%. Naturally, Machado now poses a real threat to Maduro’s reign. She is a leader with popular support at a time when voters crave a radical change in government. With Machado’s relentless rise, Maduro feels insecure. It is a cliché that patriotism is the last refuge of a scoundrel and Maduro is proving to be no exception. His threats of military intervention in the Essequibo region are a last-ditch effort to boost his flagging popularity and regain control in Venezuela.

Nostalgia for oil diplomacy prompts Maduro to play with fire

Venezuela’s claim for Essequibo goes back a long way. The 1899 Paris Tribunal granted Guyana (then a part of the British Empire) control over the Essequibo territory. It wasn’t until Guyana became independent in 1966 that it signed the Geneva Agreement with Venezuela. As per this agreement, the two countries were to resolve the dispute over Essequibo peacefully. Now that Guyana has struck oil, Venezuela wants to acquire the oil-rich territory.

Maduro’s referendum on December 3, 2023 aimed to whip up patriotic frenzy in Venezuela for the reconquest of Essequibo. He hopes that possession of Essequibo will bring back the golden age of his mentor and predecessor Hugo Chávez. In the heyday of Chávez, bumper oil prices gave Venezuela the cash to emerge as one of the leading nations in Latin America.

Today, Venezuela lacks the money, expertise and managerial talent to refine, produce and export oil. Even if Maduro’s troops conquered Essequibo, Venezuela would not be able to exploit the oil. Hence, Maduro’s referendum is largely symbolic and hurts, not helps, Venezuela.

Venezuela has now recognized the Guyanese within the Essequibo region as Venezuelans who can get their own identity cards. In international law, Guyana is an independent and sovereign nation. Venezuelan military invasion of Essequibo would violate Guyana’s territorial integrity and sovereignty. 

Oil companies from many countries are drilling Guyanese oil. If Venezuela lays claim to Essequibo, these companies face vast losses and their home countries lose access to our age’s liquid gold. The US, China and other nations could intervene. Latin American neighbors do not want war on their continent. Reportedly, Brazil has been mobilizing its military to intervene. Venezuela is clearly playing with fire and could get badly burnt.

[Cheyenne Torres wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” Venezuela is suffering from multiple crises. Continued mismanagement of the economy has diminished the popularity and power of President Nicolás Maduro. In a desperate move to regain control, Maduro is claiming the oil-rich territory of Essequibo from neighboring Guyana. Venezuela held a…” post_summery=”María Corina Machado is challenging Venezuelan President Nicolás Maduro in the upcoming elections. Maduro is a true Latin American caudillo whose power flows from the barrel of a gun. In a bid to boost his popularity, this strongman has claimed Venezuelan ownership over the oil-rich Essequibo territory in neighboring Guyana. His antics are aimed for a domestic audience and unlikely to lead to war.” post-date=”Jan 18, 2024″ post-title=”FO° Talks: Make Sense of the Crazy Venezuelan Crisis” slug-data=”fo-talks-make-sense-of-the-crazy-venezuelan-crisis”>

What does this mean for the rest of the world?

Spain can be an anomalous country. It is a truism that every nation is different. But it bears repeating. Many observers have sought to draw comparisons between Spain’s political turmoil and that of Argentina, a former Spanish colony. In Argentina, far-right libertarian candidate Javier Milei won the presidential election despite being a political outsider. It’s easy to project these anxieties onto Spain, which also has a far-right populist movement, Vox. Yet the two cases could not be more different in terms of the mechanics.

In Argentina, like in the United States, individual presidential candidates contend for popular support. The winner takes all, since the president, who is directly elected, governs. Milei barely had a party at all. He won on his personal popularity and unique platform. Spain’s situation is much more typically European. The prime minister governs as the representative of a coalition in parliament. Each party’s political platform is firmly established. Here, the parties are jockeying for position by making deals with other parties, rather than competing in a contest of candidates. So we can read very little into superficial similarities between the two Spanish-speaking nations; what happens in Buenos Aires is by no means what will happen in Madrid.

With regard to Spain’s foreign relations, very little is likely to change. Sánchez is pro-US and pro-NATO. With regard to Spain’s relationship with the EU, he will continue to maintain the status quo. The EU is not an issue on which the Socialists and Popular Party differ. Instead of involving itself in the disputes that plague Europe’s eastern flank, Spain is more interested in expanding its influence in North Africa. So, while the developments within Spain have been dramatic, the rest of the world is largely insulated from them.

For now, things will be quiet. What is coming in the future, as Spain’s political ecosystem continues to evolve, is anyone’s guess.

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” On July 23, 2023, Spain went to the polls. Prime Minister Pedro Sánchez’s Socialists had been declining in popularity, and the conservative Popular Party seemed set to win in a landslide. But Sánchez surprised them by calling an early election. The Popular Party was caught unprepared. After…” post_summery=”Despite winning fewer seats in parliament than the rival Popular Party, Spanish Prime Minister Pedro Sánchez’s Socialists have successfully formed a government. Sánchez did so by promising amnesty to Catalan nationalists who held an independence vote in 2017 that Spanish courts have deemed illegal. Despite such political opportunism, Sánchez’s motley coalition government seems to be here to stay.” post-date=”Jan 06, 2024″ post-title=”FO° Talks: Spain’s Sánchez Shows How to Make Victory Out of Defeat” slug-data=”fo-talks-spains-sanchez-shows-how-to-make-victory-out-of-defeat”>

Why is the Red Sea route so important?

The Red Sea connects the Mediterranean, via the Suez Canal, with the Indian Ocean, via the Bab-el-Mandeb Strait. It is the shortest sea route between Asia and Europe. Because of this, it carries a massive amount of global trade, including as much as 30% of container shipping. About seven million barrels of oil pass through the sea every day. The Red Sea also contains Israeli and Jordanian ports on its other branch, the Gulf of Aqaba. Any shipping trying to reach Europe or Israel from Asia must pass through the Bab-el-Mandeb and therefore close to Houthi-controlled territory.

The only other way to transit between Asia and Europe is to sail down all the way around Africa and past the Cape of Good Hope. This adds thousands of miles of extra travel. A modern cargo ship might make the trip from East Asia to Europe in two weeks. The Cape route can take an entire month, adding huge amounts of extra cost in terms of fuel, insurance and payroll.

This means higher prices for end consumers. Since not only finished goods but basic inputs like oil and gas go through the Red Sea, this means that the prices of everything will go up. Costlier fuel means costlier transport and manufacture. Inflation will increase, interest rates will rise and economic growth will slow.

The US relies less on international trade and does not need the Red Sea route to reach either Asia or Europe. So, the US will be the least affected. Europe, South Asia and East Asia will feel the most pain. So too will the oil-exporting countries of the Persian Gulf, such as Saudi Arabia, Kuwait and Iraq, since much of the oil that leaves their ports must pass through the Suez to reach key markets.

Who’s backing the Houthis?

This relatively small militant group in southern Arabia is causing disproportionately large damage. The reason they can do so is simple. Iran backs them. The Houthis are not making ballistic missiles on their own but getting these missiles from Iran.

Iran, like the Houthis, follows the Shia version of Islam. For the past nine years, the Houthis have been engaged in a civil war for control of Yemen with their mostly Sunni rivals to the east. Saudi Arabia, a Sunni nation, leads a coalition that opposes Yemen in the war. Iran has a vested interest in not letting a fellow Shia power fall to their religious rivals. But it’s not just religion that makes Iran act. By supporting the Houthis, Iran is keeping its regional rival, Saudi Arabia, occupied with a chronic military threat to its south.

The Iranians have already done their damage. The war has become an endless quagmire for Saudi Arabia. At least 400,000 people have died so far. The Saudis are now trying to back out and have negotiated an unofficial truce. They were unable to dislodge the Houthis despite the indiscriminate bombing of Yemen, for which they received international condemnation. The failure is due in no small part to mismanagement, corruption and incompetence in the Saudi officer corps. The Saudis even used mercenaries, at one point fielding 12,000 Sudanese troops in Yemen. Yet, Saudi-backed forces made precious little progress.

One might wonder how Iran is able to support an ally on the other side of Arabia. Between Iran and Yemen stand Saudi Arabia, several other Sunni kingdoms, Oman and the part of Yemen controlled by Houthis’ rivals. Yet Iranians are masters at avoiding sanctions, and they know how to create supply routes, which their enemies cannot interdict. With some exceptions, Iran has been able to ship weapons to Yemen by sea without being intercepted by Western or Arab warships.

Iranians have also been able to train the Houthis to jury-rig simpler weapons, including drones, from locally available supplies. But ballistic missiles are too complicated to build in this way and are doubtlessly being shipped from Iran. Iranians are not only shipping these missiles but also most certainly training the Houthis to operate such high-tech machinery.

The Iranian factor explains why the Houthis are attacking shipping lanes. This gives Iran the chance to put pressure on the West and claim leadership in the Muslim world, which is enraged about the massive Israeli attack on Gaza. Note that the Iranians might not be planning each individual Houthi attack, but they are certainly encouraging the Houthis and most likely providing them with intelligence. It’s not just gallant Islamic solidarity with Gaza that motivates the Houthis. Their assault is part of a much larger effort by Iran and all of its proxy groups throughout the Middle East to put pressure on Israel and its largest backer, the US. Iran hopes to dislodge the Great Satan from the Islamic world and to extend its own influence.

The West tried to fight Iran using economic sanctions to stop its sponsorship of terrorism and nuclear weapons programs. Now Iran is showing that it, too, can hit the West in their pockets by interfering with global trade.

What will be the economic and political impact of the attacks?

And hit them it has. Shipping and oil giants such as Hapag-Lloyd, Maersk and BP are halting operations in the Red Sea. Using futures contracts, many consumers are still purchasing oil at pre-conflict prices. But those contracts will eventually expire, and costs will then rise significantly.

In response to the Houthi attacks, the US formed a coalition of ten nations, including the UK, France, Italy, Spain and the Netherlands, to police the shipping lanes. Bahrain is the sole Arab country publicly acknowledging membership. Other Arab powers, though, are engaging in an unofficial manner due to the political sensitivities of the Gaza conflict. Saudi Arabia is facing disruptions in its Red Sea ports. Yet it must tread carefully, lest it be seen as siding with the infidel against Islamic interests in Palestine.

The political and economic ramifications extend far beyond the Middle East. The Suez, after all, was initially created to link Europe and Asia, specifically Britain and India. China relies heavily on exporting manufactured goods to Europe via the Suez route. Yet, even though it maintains a naval base near the Bab-el-Mandeb in Djibouti, it is not participating in the US-led coalition. Should things get worse, China may perhaps join the coalition, as may other powers like Germany or Japan.

The conflict may extend still further. The Houthis have shown themselves to be a much greater threat than previously thought. They threaten Saudi Arabia and Israel with their ballistic missiles. If Iran provides them some of their longest-range missiles, the Houthis could threaten NATO members like Greece, Turkey and even Italy. It may not be long before the Western alliance decides it would be better off bombing Houthi missile sites and command centers rather than continue to bear the assault. If that happened, Iranian warships could become targets too, sparking a regional war.

Iran would do well to tell its allies to back down. No one — not the Saudis, nor the Chinese, nor the Americans, nor the Iranians themselves — wants a regional war. Yet the Iranians may decide that pursuing their interests is worth it despite the risk. For their part, the Houthis have no reason to back off. They are proving themselves as a credible military force that can do real damage. If and when a shooting war breaks out, the Houthis and their Iranian backers will have to reassess their options. There is no telling now whether they would back down or dig in.

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” The Houthis, a Zaydi Shia militant group based in northern Yemen, have been in the headlines for weeks. Since the outbreak of the Israel–Gaza war, the Houthis have used drones, missiles and boats to attack ships in the Red Sea. They target vessels that they believe to be doing business with…” post_summery=”The Houthis, an Iranian-backed Yemeni militant group, have been attacking cargo vessels in the Red Sea, which is a critical waterway for global trade. Houthi attacks aim to hurt Israel but hurt Europe and Asia as well. The US has put together a coalition to protect this trade route, yet Iran is not deterred. A regional war could break out between the West and Iran and its proxies.” post-date=”Jan 04, 2024″ post-title=”FO° Talks: Daring Houthi Assaults in the Red Sea Threaten World Trade” slug-data=”fo-talks-daring-houthi-assaults-in-the-red-sea-threaten-world-trade”>

What does this mean for the rest of us?

If China goes down, it’ll take a lot of other economies along with it. Too many economies import from the Middle Kingdom and too many export to it. Even without a crash, China’s current deflation will cause damage. It is bad news for Germany and France who will suffer from lower Chinese demand.

Unlike the UK, which makes a lot of money through financial services, Germany is a manufacturing-based economy. The country’s second-largest company is Siemens, which makes machines for manufacturers. As the workshop of the world, China buys a lot of these machines. Fair Observer’s Editor-in-Chief Atul Singh learned this first-hand when he first visited China in 2005. He found Chinese hotels to be full of Germans selling their wares to factory owners.

In a nutshell, Germany is dependent on the Chinese market. When China sneezes, Germany catches a cold.It is for this reason German Chancellor Olaf Scholz flew all the way to Beijing and returned without even spending the night thanks to Xi’s ridiculously rigid zero-COVID policy. This trip made plain what everyone knew: German prosperity is highly dependent on Chinese demand.

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The French depend on China too. They sell luxury goods to China’s growing bourgeoisie. Young Chinese have embraced both Christianity and Christian Dior with equal fervor. With the Chinese feeling less wealthy, Christian Dior will not be able to sell them as many perfumes and bags as before. Luxury goods are the first consumption item to be axed in a recession.

Unlike Europe, the US relies less on exports and makes goods mostly for domestic demand. Still some companies will feel the pinch. A slowing Chinese economy means Boeing will sell fewer planes in China.

To respond to falling demand, China might respond with another stimulus. This time, it may not work as well. A slowdown might lead to China dumping even more goods on the global market at rock-bottom prices. Don’t be surprised to see other nations raise anti-dumping duties in response.

The slowdown is causing a cash crunch for China. Now, Beijing will curb spending on its Belt and Road Initiative and other ambitious projects from Latin America to Africa to Asia. These economies will feel the pain as Chinese capital dries up even as exports to China go down as well.

For now, China is continuing its astounding development into a great power despite all of its problems. But it is now more brittle both as an economy and as a political system. The CCP has neither democratic nor ideological legitimacy. The CCP’s claim to legitimacy rests on its ability to deliver growth. With the economy slowing, the Xi-led CCP increasingly relies on nationalism to command blind obedience. This has made China aggressive on its borders and the adjoining seas. Beijing has exacerbated historical grudges with Taiwan, Japan, India and the nations of Southeast Asia. The CCP has also stepped up military parades, a common tactic of fascists and communists. Only the North Koreans rival the Chinese in their love of tank-filled parades and goose-stepping soldiers.

So, China will be both defensive and aggressive at the same time for the foreseeable future. The risk of conflict is now greater everywhere. All it takes is one radicalized young officer with an itchy trigger finger to  start a war in the Himalayas. After all, the Chinese, remember that Indian troops under Lord Elgin’s command destroyed the Old Summer Palace in Beijing.

Nationalism is the last refuge of the scoundrel. As it rears its ugly head in East Asia, there is little in the way of good news to end this piece. The future looks bleak.

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” The Middle Kingdom is in serious economic trouble. Deflation is setting in. In November, China clocked a 0.5% year-on-year decrease in consumer prices. This was the greatest drop in three years, including the height of the COVID-19 pandemic. Producer prices, the prices at which factories sell…” post_summery=”China is not recovering from the zero-COVID Policy. Instead, deflation is worsening. President Xi Jinping’s mismanagement is adding to the woes of the world’s second-largest economy. With a flagging economy and a shrinking population, China could become more aggressive as its power starts to wane.” post-date=”Jan 03, 2024″ post-title=”FO° Exclusive: China’s Worsening Deflation Now Spells Big Trouble” slug-data=”fo-exclusive-chinas-worsening-deflation-now-spells-big-trouble”>

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In the Houthis, Iran has a strategically placed ally. The Houthis are highly motivated and armed to the teeth with missiles and drones. Furthermore, their location in southwest Arabia puts them within spitting distance of the Bab-el-Mandeb. This 16-mile-wide chokepoint is the only way to get from the Red Sea to the Indian Ocean. A quarter of the world’s trade passes through this route. Even though Egypt is stable and the Suez Canal is safe and operational, it does not matter. There is no use passing through Suez unless one can get through the Bab-el-Mandeb on the other side.

Now that the Red Sea route has become too dangerous, at least 121 container ships have decided to take the long way between Europe and Asia. This involves traveling all the way around the Cape of Good Hope in South Africa, adding weeks of extra travel time, raising insurance premiums, fuel costs and payroll expenses.

Cutting off the Red Sea is like putting the global economy into cardiac arrest. It is the coronary artery through which high-tech goods from Europe, oil from the Middle East and Southeast Asia and manufactured goods from India and China pass. Without the Red Sea route open for business, everything becomes more expensive.

The coming multipolar world

But why all the hassle? 

Surely the Houthis are not just interested in making people pay more at the pump. The Houthis claim they are trying to cut off Israeli shipping and put pressure on the Jewish state to stop the fighting in Gaza. They argue that they are engaged in a humanitarian effort. This kind of message plays well with the Arab street but there is more going on.

In truth, the Houthis are not acting alone. Iran-backed militant groups across the Middle East have been stepping up attacks on Israel and the US. Militants in Lebanon, Syria and Iraq have launched over 100 missile strikes at US troops across the region. This is a coordinated attempt to push the American superpower out of the region. Iran is trying to make things complicated and painful for the US. Iran wants the US to either get mired in another insoluble scenario like Iraq or accelerate American departure from the Middle East.

Even further, Tehran is clearly seeking to refocus attention on the Palestinian plight in order to keep Iran strategically influential and relevant. The general trend of the last years, from the Abraham Accords to recent Saudi–Israeli normalization talks, has been Arab–Israeli rapprochement. Rapprochement comes at the cost of Palestine and sidelines Iran. By setting itself up as the champion of Palestine, Iran is making a bid for hegemony in the Muslim world.

Iran has been playing its position well. Indeed, Tehran seems to be doing as well without the late General Qasem Solemaini. In 2020, the US killed Soleimani via air strike. The dashing leader of Iran’s Quds Force was the brains behind many of Iran’s military and influence operations. Yet even without its hero, Iranians know what they are doing. They are sophisticated practitioners of realpolitik, and no one should ever underestimate what they are capable of achieving. 

Iran stole the spotlight from the US last year by signing a China-backed rapprochement deal with Saudi Arabia. Yet its rivalry with its Sunni Arab neighbor remains. Currently, Iran is pulling on all levers to wrest influence away from Saudi Arabia. The Iranian strategy seems to be working. The October 7 attack on Israel by Iranian ally Hamas dashed hopes of a Saudi–Israeli deal. And now Iran has set itself up as the sword of Islam, supporting every militant group that is opposing the Zionists and their Crusader allies.

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But let us zoom out even farther. Iran is not the only power seeking to carve out its sphere of influence safe from American power. Greater powers, namely Russia and China, are doing the same. This is a shift in international relations as profound as the end of the Cold War — only, unlike the end of the Cold War, we understand much less what the world will look like at the end of it.

China, Russia and Iran seek to directly overthrow, challenge and replace the American system. The US calls it an assault on the normative, rules-based order. The revisionist powers call it an assault on the imperialist, American order. Critics have a point. The normative system is, after all, the American one. The US created the International Monetary Fund and the World Bank. The US Navy patrols the world’s oceans and enforces the “law of the sea.” The United Nations is in New York, countless international organizations are in Washington, and the CIA keeps tabs on foreign diplomats operating on US soil.

However, critics forget one vital point. The normative system works, but it only works so long as smaller powers agree that they are better off in this system than in any other one. By and large, the US has striven to keep this true. The US has the ability to be just as ruthless as any other nation when it comes to what Washington sees as vital national interest. However, the US almost always begrudgingly accepts international rules even when they are against its not-so-vital national interests. The one glaring exception was the US Treasury’s behavior during the 1997 Asian Financial Crisis. Then, it openly pursued narrowly nationalistic goals, allowing the Asian economies to crash in order to keep the US economy safe. Note that, even at the time, key American policymakers like Nobel laureate Joseph Stiglitz fought American policy.

Despite benign aspects of the normative order, the revisionist powers are not happy. They foresee a world in which human rights are an internal affair, borders are a regional affair and the US does not get involved to “solve” other people’s problems. They champion pluralism against the unitarianism of America’s ideals. What that would look like in practice, no one can say.

India must be recognized as a great power

As China, Russia and Iran assert themselves, something else has gone almost unnoticed: the rise of India. Such has been the rapidity of the country’s rise that even Indian media have yet to fully grasp how their country is now a great power in its own right.

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Indians, of course, are better aware than anyone that their economic, military and political might is growing. The world’s largest democracy is a confident and young nation. Naturally, India’s geopolitical aspirations are rising in concert with its power. Yet there is a disconnect between this self-image and India’s foreign policy in practice. In many ways, India still behaves more like the ex-colony it was than the power it has become.

The current Red Sea crisis has made this all the more visible. No one is more affected than India by a closing of the Suez route. After all, the British constructed the Suez in order to ferry troops and goods to India, the crown jewel of the British Empire. To this day, a large proportion of Indian trade goes through the Suez Canal.

Yet, India seems unwilling to commit itself to Western efforts to enforce the law of the sea. The US has created an international coalition of 12 nations to patrol the Red Sea route. The US can’t control the area on its own. It has a mere six ships patrolling the Red Sea, which comprises 174,000 square miles (450,000 square kilometers) of open water. That’s a lot of space for Houthi boats to hide in. To be successful, the US will need regional helpers. Yet India (and Saudi Arabia) are conspicuously absent.

India’s response is in line with its historic practice. India seeks to benefit from the international free trade system while decrying the American hegemon’s attempts to enforce this system. Some might say Indians like sausage but hate to see how it’s made. Given India’s history, it was reasonable for the country to do so. After independence in 1947, India has been an anti-colonial power, a historic friend of the Soviet Union, and it never wanted to be part of any cartel to control the world. But things have changed since the Cold War.

Now, India’s chief strategic threat is China. Russia is not the powerful friend it used to be, and India is at odds with Iran over Israel. India’s interests all point towards working more closely with the West. While US-Indian interests have slowly converged, India’s practices continue to lag behind its interests.

Yet India has just given a hint that things may change. On December 23, a drone (the Pentagon claims it was Iranian while India suspects Pakistan) attacked a tanker carrying oil from Saudi Arabia to the port of Mangaluru. The incident happened just 200 miles (360 kilometers) off the coast of Gujarat, the home state of Prime Minister Narendra Modi. In response, India has deployed three destroyers. The Indian deployment is not to the Red Sea but to the Arabian Sea, which lies to the west of the country. Still, this is a big development. India may be beginning to participate in US-led policing of the shipping route, even if it does not wish to do so formally.

China, Russia and Iran are embracing sphere-of-influence politics. Now, India must make a choice. Will it try to stay the course and keep out of the fray, or will it ally itself with the US and push back against revisionist powers? Over the past two decades, India has been integrating economically and politically with the West. Is it time to deepen this integration?

What is certain is that we are living at a time of grave risk. If the Houthis continue to shape the course of events, their actions will have consequences far beyond the Middle East. International trade could be under threat by nationalist powers from the Black Sea to the South China Sea.

[Anton Schauble wrote the first draft of this piece.]

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” The Houthis, a Zaydi Shia militant group based in northern Yemen, have been in the headlines for weeks. Since the outbreak of the Israel–Gaza war, the Houthis have used drones, missiles and boats to attack ships in the Red Sea. They target vessels that they believe to be doing business with…” post_summery=”Iran-backed Houthi militants have fired upon cargo ships in the Red Sea, threatening to disrupt the Red Sea route that carries a quarter of the world’s trade. The Houthi action is part of Iran’s assault on American hegemony in the Middle East and on global trade. It remains to be seen how the US, its allies and major powers like India will respond.” post-date=”Dec 29, 2023″ post-title=”FO° Exclusive: Houthis Cause Chaos in the Red Sea” slug-data=”fo-exclusive-houthis-cause-chaos-in-the-red-sea”>

hellfire in October. For some, he is a warmonger. But the Nobel committee judged him worthy of the Peace Prize. For some, he was a diplomatic virtuoso of unsurpassed talent. For others, he was an overrated negotiator and a short-sighted strategist who ended up creating the US’ current China headache.

In a way, this was inevitable. No one stays at the top of US policymaking for as long as Kissenger did without making legions of enemies and friends. No American leaders, save perhaps George Washington and Abraham Lincoln, are universally loved. And even Washington and Lincoln had bitter critics in their own days.

Grappo considers Kissinger to have been one of the top five US secretaries of state since World War II, alongside George Mashall, Dean Acheson, George Shultz and James Baker. But as a foreign policy strategist, rather than a secretary of state, Kissinger belongs to a still more elite group together with his contemporaries Brent Scowcroft and Zbigniew Brzezinski.

What really sets Kissinger apart is his prolific literary output. He wrote over a dozen books and scores more articles. Add to these his countless public speaking engagements. The imposing corpus, both by its breadth and its quality, ought to silence doubts about his intellect. You may call Kissinger unwise, but you cannot plausibly call him stupid.

Kissinger in Vietnam

So, what did Kissinger do to warrant so much hate and so much admiration?

Above all, Kissinger’s critics condemn him for the 1970–1973 US bombing of Cambodia, dubbed Operation Freedom Deal. Nixon was frustrated that North Vietnam was using Cambodia as a route to ferry men and supplies into the South. So, Kissinger relayed the order to stage “a massive bombing campaign in Cambodia. Anything that flies on anything that moves.” In doing so, he ignored the fact that the bombing would kill tens or possibly hundreds of thousands of civilians. What he could not have predicted, however, was that the destabilizing effect of the assault would eventually result in the Khmer Rouge takeover of the country. Their genocidal leader Pol Pot would go on to kill millions.

Alongside Operation Freedom Deal, Kissinger’s critics also cite Operation Linebacker II, or the “Christmas bombings.” In December 1972, US and North Vietnamese diplomats were negotiating an end to hostilities at the Paris Peace Accords. Nixon and Kissinger wanted to put pressure on the North Vietnamese delegation. From December 18–29, the US dropped 20,000 tons of ordnance on North Vietnam, killing 1,624 civilians. The attack had no military benefit. It did not achieve the desired political effect, either.

Other observers, however, praise Kissinger’s perspicacity. They argue that he was instrumental in recognizing that the American position in Vietnam has become untenable. Kissinger, therefore, was the prime mover behind America’s decision to sue for peace. He negotiated the American withdrawal and laid the groundwork for the necessary “decent interval” between withdrawal and the South’s collapse. For his role in the negotiations, Kissinger won the 1973 Nobel Peace Prize alongside North Vietnamese diplomat Lê Đức Thọ. Thọ refused the prize, but Kissinger accepted it, although he donated the proceeds to charity. For many, Kissinger’s winning the prize seemed like a bitter joke.

The US–China rapprochement

The true high point of Kissinger’s career was not in Vietnam but in China. The 1970s were the height of the Cold War. The US was straining every sinew to combat the Communist alliance led by the Soviet Union. Mao Zedong’s China was formally a Communist state, but it had extremely tense relations with its northern neighbor. Soviet and Chinese troops even fired on each other at the border. So, Nixon, a shrewd foreign policy strategist, saw the opportunity to split the Communists apart by wooing China to the American side.

At first, Kissinger was opposed to the idea. But on Nixon’s orders, Kissinger secretly traveled to China in 1971. He caught the willing ear of Chinese Premier Zhou Enlai. Convinced that the relationship could work, Kissinger enthusiastically pursued US–China friendship. He enticed China with arms sales and membership in various multilateral organizations. This paved the way for Nixon himself to visit China in 1972.

Kissinger was so exuberant about the relationship that he even remarked that China was the US’ best friend after the United Kingdom. He may well have been too accommodating to Beijing. Under Kissinger’s leadership, the United States recognized the People’s Republic as the legitimate government of all China, including, in principle, Taiwan. This was the beginning of the present-day ambiguity over Taiwan that has become such a headache for the US.

Still, the deal was a success for the US. Until 1972, the Soviet Union had been unwilling to work with the US diplomatically. But US–China rapprochement put enough pressure on the Soviet Union that they agreed to parley. Kissinger negotiated the Anti-Ballistic Missile Treaty (1972) and the first Strategic Arms Limitation Treaty (1973). A second Strategic Arms Limitation Treaty came soon after (1979). These three revolutionary arms treaties set off the opening of relations between the Americans and Soviets. Kissinger and Nixon had achieved the beginning of the end of the Cold War.

Another of Kissinger’s achievements in arms de-escalation is almost forgotten. In 1969, Kissinger persuaded Nixon to unilaterally suspend the US’ biological weapons program. Nixon’s Statement on Chemical and Biological Defense Policies and Programs was unprecedented. When it became clear that Nixon had left biologically produced toxins (as opposed to the biological agents themselves) out of the ban, it was Kissinger who persuaded him to add them as well.

Kissinger’s moral failures in Pakistan and East Timor

The US wanted India to be part of its network of alliances against the Soviet Union. They saw India, a democracy, as a natural ally. But the Indians rebuffed American overtures. So, seeking an ally in South Asia, the US turned to the next best option: Pakistan.

The Pakistanis were all too enthusiastic about working with the Americans. Anxious about potential Indian aggression, they sought to build strategic depth and entered every alliance they could. Ishtiaq Ahmed, a political scientist and Fair Observer contributor, called Pakistan the “Garrison State.” In 1955, they were a founding member of the Southeast Asia Treaty Organization (SEATO), America’s Asian version of NATO.

Pakistan was eager to make friends with any rivals of India and the Soviet Union. It therefore also developed a relationship with China. In fact, it was Pakistan that facilitated Kissinger’s secret entry into China in 1971.

Pakistan was Kissinger’s worst failing. The alliance blew up in America’s face when Pakistan’s 1971 civil war in Bangladesh broke out. In an April 1971 telegram, Archer Blood, the US consul in Dhaka, warned Washington that Pakistan was committing genocide against its Bengali citizens. Blood and 20 of his colleagues strongly condemned the US position on Pakistan. Kissinger decided to ignore the message, calling Blood a “bleeding heart” softie. The US backed its ally with arms supplies. The fighting only stopped when India intervened and secured Bengali independence.

Nixon recalled Blood and punished him with an ignominious desk job. But in the end, Blood was right. Pakistan killed 300,000 to perhaps 3,000,000 Bengali civilians. For his courageous stance, Blood is now honored both in Bangladesh and in the State Department.

While Kissinger tried to deflect criticism, he could not hide the fact that the incident was a moral and strategic failure. The US had sided against democracy and human rights. It had also earned the resentment of newly independent Bangladesh and pushed India even farther away. That bad blood would endure for decades. To this day, Dhaka still views the US with distrust.

A similar story played out in East Timor. East Timor was a Portuguese colony that shared the island of Timor with Indonesia. In 1975, East Timor was navigating potential independence from Portugal. In December, not wanting an independent nation on its border, Indonesia invaded its tiny neighbor.

Indonesia was a US ally and notified the US prior to its action. Kissinger reportedly assured Indonesia that the United States would not intervene. In fact, the US continued to aid Indonesia and provided 90% of the weapons Indonesia used during the invasion. It turned a blind eye to the atrocities as Indonesia killed at least 100,000 East Timorese.

Kissinger’s triumph in the Middle East

If Kissinger is hated in South Asia, he is more admired in the Middle East. After the 1973 Yom Kippur War, Kissinger put his mighty abilities of negotiation and persuasion to use.

Yom Kippur, the Day of Atonement, is the holiest day on the Jewish calendar. On that day, Jews fast and abstain from work. But on the Yom Kippur of 1973, Israel’s neighbors Egypt and Syria launched a surprise attack. The assault did serious damage to the underprepared Israeli Defense Forces (IDF) and shook the Israeli psyche. Israelis thought that the IDF was invincible after it had won the 1967 Arab–Israeli war in just six days. 1973 was a rude awakening. If it had not been for Egyptian and Syrian blunders that gave Israel a much-needed advantage, the results could have been far more dire.

Eventually, the IDF managed to turn the tide. The US came to its ally’s aid and airlifted huge amounts of equipment to Israel with breathtaking speed. The Soviets had neither the will nor the ability to supply Egypt to match. General Ariel Sharon took the fight into Egypt and crossed the Suez Canal. This action cut off and encircled Egypt’s Third Army and trapped elite Egyptian units in Port Said. It also put Sharon within spitting distance of Cairo.

At this point, Kissinger flew to Moscow. His mission was to prevent the Soviet Union from entering the war on Egypt’s side. Kissinger convinced the Soviet leaders that Nixon was crazy enough to send US troops to fight Soviet troops in the Middle East, risking nuclear war between the two superpowers. The Soviets balked.

Kissinger then met with Israeli leaders. He sternly warned them not to advance the Egyptian capital. He kept the fact that the Soviets had already decided not to intervene secret from them. So, not wanting to risk Soviet entry into the war, the Israelis begrudgingly agreed to halt the advance. By the end of October, they were engaging in peace talks with the Egyptians.

Kissinger also spoke with Egyptian President Anwar Sadat. He persuaded Sadat that the Soviets were poor allies, pointing out how much aid the US had given to Israel compared to the Soviet Union’s paltry support of Egypt. Already diffident about the Soviets, Sadat agreed. He listened to Kissinger’s siren song and began to reorient his country towards Washington.

So, the smooth-talking Kissinger had played all sides and brokered a solution favorable to US interests. Kissinger had subtracted the most populous Arab nation from the socialist alliance. Without Egypt, further the other Arab states could never hope to launch an effective invasion of Israel.

By acting alone to broker the truce, Kissinger had also completely shut Britain and France. So, with his perhaps dishonest but undeniably masterful Machiavellian tactics, Kissinger had achieved nothing less than establishing the US as the sole hegemonic power in the Middle East.

Kissinger undermines democracy in Chile

In the 1970s, socialism was spreading like wildfire in Latin America, all the way from El Salvador to Chile. In September 1970, the socialist Salvador Allende won Chile’s presidential election. The possibility of Chile aligning with Cuba and the Soviet Union nearly sent US leaders apoplectic.

So, on Kissinger’s direction, the CIA attempted to organize a coup d’état to overthrow Allende. The CIA plot failed, but the US got what it wanted anyway. The right-wing Augusto Pinochet, commander-in-chief of the Chilean armed forces, seized power. A despondent Allende committed suicide by gunshot on September 11, 1973.

Pinochet led fellow anti-communist leaders in Argentina, Bolivia, Brazil, Paraguay and Uruguay to carry out Operation Condor, a systematic campaign of repression that killed tens of thousands of suspected leftists from 1975 to 1983. The US refused to criticize the operation, and in some cases even provided intelligence on targeted individuals.

The whole affair exposed the shortcomings of Kissinger’s realpolitik. The United States had once again sided against democracy and human rights.

For Kissinger, foreign policy was all about managing the balance of power in a way that protected American interests. This led him to ignore moral and psychological factors like the strength of nationalism or the power of resentment. When Kissinger intervened against the will of a people, his policies either failed or were successful only in the short term.

He allowed America to play the role of the villain and alienated nations from Chile to Bangladesh, Vietnam and East Timor. It gave ammunition to Soviet propaganda efforts. For their part, the Soviets did not underestimate the moral side of international relations. They presented themselves as anti-colonial crusaders and won hearts and minds among leaders in Latin America, Africa and Asia.

Despite his failings, Kissinger was a genius. He was extremely skilled at what he did, both as secretary of state and national security adviser. But, like many virtuosos, he overestimated what his skill could accomplish. By over-using American hard power, Kissinger undermined US interests in many places.
Kissinger is both the standard to emulate and the example to avoid for any leaders. Whether admiringly or not, people will be writing about him for the next 100 years. They will be reading him for a long time, too. For the beginner, Grappo recommends Kissinger’s classic volume Diplomacy. In it, Kissinger looks at a number of epochs in world history through the lens of realpolitik. The art of diplomacy is ever-present in human affairs. Kissinger’s insight into how it works, in so many vastly different times and places, is invaluable.

The views expressed in this article/video are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

” post-content-short=” On November 29, 2023, Henry Kissinger died at the age of 100. Perhaps no other name in US diplomacy is as recognizable as his. The high point of his long career was his tenure as secretary of state and national security advisor under US Presidents Richard Nixon and Gerald Ford. He was a towering…” post_summery=”Henry Kissinger died this year at the age of 100. As both a diplomat and a national security adviser, he was monumental. For some, he was a virtuoso negotiator and a peacemaker. For others, he was a warmonger, even a war criminal. FO°’s Gary Grappo explains how there are elements of truth to both of these perspectives.” post-date=”Dec 24, 2023″ post-title=”FO° Talks: Peacemaker, Warmonger, Genius: The Titanic Legacy of Henry Kissinger” slug-data=”fo-talks-peacemaker-warmonger-genius-the-titanic-legacy-of-henry-kissinger”>