Q&A with The Accidental Superpower‘s Author Peter Zeihan, Part 2: Russia, Germany and the Refugee Crisis in Europe by Gavekal Capital
We recently had the pleasure of a visit by Peter Zeihan, author of The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder. The article below is part 2 in a3-part series on our discussion. In part 1, Peter described a growing US retreat from the strategic system put in place after World War II that allowed US allies to thrive under a US security umbrella and the impact of this retreat on globalization, the shale revolution and commodities. In part 2 below, Peter discusses recent events in Europe, specifically what’s next for Russia and Germany in the coming era of disorder and the refugee crisis.
GavekalCapital (GC): Let’s move on to Europe. What’s happening in Russia?
Peter Zeihan: In a world where the United States retracts from the global stage, I would expect to see regional powers increase their influence on their neighbors. This will most likely lead to regional powers butting into one another as several countries vie for greater influence. Russia is in a tricky situation. Their demographic trends are bad but they still view themselves as a regional power. And from a military standpoint, they probably have the second strongest military in the world. Lastly, unlike a country like South Korea which could go nuclear over a long weekend, Russia already has nuclear weapons so they need to be taken seriously. Outside of demographics, the main problem that Russia faces is that they have an entirely indefensible border. Currently, Russia’s border on the Southern and Western front is about 7,000 miles that spans the Caucuses to the Arctic Circle. Russia already doesn’t have enough troops to defend its border, and given the negative demographic trends, they will have fewer available troops in the future. Therefore, Russia needs to shorten its border. I could see them getting the border down to a manageable 1,000 miles with just a few moves on the chessboard. They need to move westward and take three main cities: Riga, Latvia; the eastern half of Warsaw, Poland; and Bucharest, Romania.
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GC: What would you except NATO’s response to be if Russia gets aggressive in redesigning its borders?
Peter Zeihan: Ultimately, that is the unanswerable question but I believe that Russia could proceed in a way such that NATO and other European Union countries don’t appreciate the full scale nature of the advance until it is too late. We have seen recently that Russia can move quickly into a country, whether officially or in the case of Ukraine unofficially, under the guise of protecting native Russians or those with Russian heritage from the former Soviet Union. This happened in 2008, when Russia invaded Georgia, and it has more recently happened with Russia invading Crimea and vast swaths of Eastern Ukraine. In both of these cases, the international response has been one of handwringing and the occasional economic sanction. However, NATO never felt that they needed to go to war over these instances. I believe this will be the reaction to Russia’s further moves into Ukraine, the Caucuses and Moldova.
When Russia makes these strategic moves, NATO will be up in arms but not so outraged that it will want to go to war. NATO finally will feel compelled to get involved when Russia invades the Baltic region. However, I expect Belarus and the Baltic states to be taken quickly, possibly over a weekend, and NATO will not have a chance to defend the Baltic states initially. I don’t believe that this last strategic move will occur in the next two years, however. Russia must decrease the size of its border over the next four years, so this all may happen sooner than most people would expect.
GC: Do you expect the US to get involved?
Peter Zeihan: The US may get involved in terms of supplies and rhetoric but I would be surprised to see many, if any, US boots on the ground. It would be surprising if the US were to get involved at all before Russia moves in to the Baltic region. It is an incredibly hard sell in America to engage with an enemy that for all intents and purposes is dying and desperate, that has a several thousand mile wide border and is still nuclear armed. By the time this all goes down, the US will be energy independent, out of the Middle East and feeling great about its NAFTA neighbors. The US will not be looking to pick a fight 4,000 miles from Washington, DC.
GC: Speaking of NATO and the United States, do you think NATO would continue on if the United States dropped out, either officially or unofficially?
Peter Zeihan: That is a great question and something that doesn’t get talked about enough. The US doesn’t bring it up with its NATO allies, and Europe doesn’t want to talk about it, or even think about it, with the US. Overall, I’m a large supporter of NATO and have always believed that the US should be first among equals. However, without the US, I see only a slim chance that Europe could salvage NATO. Given the lack of coordination we have seen among European countries during the financial crisis and now the refugee crisis, I am hard pressed to believe that Europeans could get along well enough to keep NATO alive. However, a common enemy –Russia –at their doorstep could inspire them.
GC: Thank you for bringing up the heartbreaking refugee crisis. What are your thoughts on the current situation?
Peter Zeihan: The refugee crisis is terribly sad, and unfortunately I think we will see many more events such as this occur in the near future. In the title of my book, I specifically use the word “disorder” because we have had an artificial amount of order in the world since WWII. As I have said, when the US installed the Bretton Woods system, it had the effect of creating a level of order in the world that has rarely, if ever, happened before. As the US retreats from this system, the level of disorder in the world should increase, and the symptoms of that disorder –such as a failed states and the human toll that is the consequence of these events –will be seen regularly. In fact, I wouldn’t be surprised to see several more Middle Eastern countries break up. So the world may soon face an Iraqi, Jordan or Lebanese refugee crisis as well. Or potentially all three at the same time. In this specific case, we have seen the number of people leaving Syria increase by a factor of 10 over the past six months, and there probably are another 10-13 million more people who will ultimately be forced to flee. At the beginning, it seemed that Germany had taken the humanitarian lead in this crisis. However, this was when they were looking at 80,000 refugees not 800,000. Now Germany has closed its borders and people have pooled up on the EU periphery.
Eventually, I would expect the entire EU border to be closed. I don’t expect the US to take on a bigger role either, because the US has an entire ocean between us and the refugees, meaning refugees can’t simply walk to our border and get in. The US will make the right PR move and fly over and pick up 10,000 refugees here or there and resettle them in the US. This will be enough to make everyone feel a little better about the situation, but not enough to get the US fully entangled or to help the Syrian refugees in any meaningful way.
GC: Speaking of Germany, what is its role in the coming era of disorder?
Peter Zeihan: By far, Germany is the chief protagonist in trying to keep the EU together for as long as possible. It has built its economy in the post-WWII era on trade, and so it’s imperative for Germany’s economic model to have easy access to foreign markets. Fifty to sixty percent of Germany’s GDP comes from exports with roughly half of those exports going to EU countries and about half going to the rest of the world. Germany is desperate to keep the EU together, not just for economic reasons, but for military and political reasons as well. The Germans know what happens the day after the EU falls apart. They remain the most powerful country in Europe, but have to worry about military competition for the first time in 70 years. They know they have poorly naturally defended borders, and since they are the most powerful country in the region, with a long history of conquering their neighbors, the other EU countries will want to form a coalition against them to act as a counterweight in the region, with France taking the pole position in the anti-German coalition. This is a battle that Germany will eventually lose because in 15 years, there will be more French than Germans. The French would love to return to their historically prominent role on the continent, and so they are happy to let Germany slowly fade as international markets dry up. Also, France is nuclear so they can hold their own in any military standoff. Ultimately, one way or another, I see a substantial reduction in the German standard of living on deck. Whether it’s from a demographic implosion, mass immigration of refuges, war with Russia, a breakdown of the EU, or a breakdown of international trade, Germany’s standard of living will decline. Germany’s only hope is to continue to have an EU network where military competition is off the table. This will allow them to keep trading with their neighbors without forcing countries to be their export market by conquering them as they have usually done in the past.