Dr John Hulsman is a former Washington DC insider now based in England, where he runs a leading political risk consulting firm concentrating on game-changing foreign and macro-economic policy issues that will determine the fate of the challenging new era of multiple great powers that we live in for business, investors and governments alike.
John has partnered up with us here at Chartwell in order to publish a concise, edgy, blessedly to the point and highly useful weekly independent geopolitical intelligence briefing. Given his truly global analytical reach, the articles will range far afield, tackling the international topics and questions it is necessary to master in order to see how the ‘big pieces fit together’, and how today’s geopolitical issues are at the heart of the world as we know it. This week we had the privilege of speaking to him, and raising some of those big questions.
What are your thoughts on the current relationship between Russia and the U.S? Are we looking at what the former UK ambassador to Moscow, Sir Tony Brenton, has called ‘the most dangerous relationship since the cold war’?
No we’re not it’s being overhyped, hysterically. Let’s get some things straight about Russia: Russia is an aging gas station with nuclear weapons, it’s not the Soviet Union. Russia’s economy is the size of Italy or if you want to think about it in terms of the U.S, it’s the size of the state of Texas. Russia has a one-crop economy, it’s utterly dependent on the spot price of oil and natural gas, which it has no control over. It has huge rule of law problems with corruption obviously, it has a massive demographic problem with alcoholism and men dying young from all subsequent problems that come from that. Russia is a busted flush, that makes it dangerous, but it doesn’t make it the most dangerous thing in the world, this is laughably overhyped. Compared to the rise of China, the rise of India, the rise of the rest of the emerging markets Russia is backwater, it’s a declining regional power, still a regional power certainly but herein lies the paradox: Russia is far weaker than the Soviet Union, far less important, but dangerous for those reasons; declining powers, on their last gasp of being taken seriously often strike out and become revolutionary powers, rather than working with the global status quo they try to upend it because it isn’t working for them. Russia will cling on desperately to its ‘sphere of influence’ as Putin would see it, places like Ukraine, Moldova but everything Russia is doing is to prove it can remain a great power. Russia is like France after WW2, it’s a humiliated, and declining power trying to prove it’s relevant. Therein lies the reality, therein lies the danger, but let’s not for a second confuse this with the cold war.
In a recent interview with Reuters, the Chinese Vice Commerce Minister Qian Keming tackled Trump’s allegations and stated that the North Korea nuclear issue and China – U.S trade ‘are not related, and should not be discussed together’. What are your thoughts on that comment?
Well of course he would say that, he doesn’t want them to be related, but they are. Trump is allowed to make any linkage that he likes in the relationship, and if he wants to decide that he is willing to talk about economics and trade in return for their help on North Korea, he has every right to do that.
What North Korea has pointed out is that China is not yet grown up enough to be a great power. There is a deal to be cut here, the Chinese control 90% of trade with North Korea, they are the only force in the outside world with any leverage and that includes over the energy sector, it would get VERY COLD, very fast in North Korea if the Chinese wanted it to. At this moment in time the Chinese are balancing realities: one reality is that they don’t want North Korea to have intercontinental ballistic missiles and destabilize East Asia; on the other hand they don’t want a refugee crisis and North Korea imploding with the risk of American troops up on the border with China. This causes them more than a little embarrassment, so the Chinese are pretending to help the United States while not doing much of anything. Despite what they have lead the world to believe, trade between China and North Korea increased over the second quarter, because in the end they would much rather have North Korea, a crazy mad dog, that’s THEIR crazy mad dog than not have it. The problem is that this really is a slow-moving Cuban missile crisis; the North Koreans now according to the D.I.A are about a year away from achieving the capability to have New York within their range. Now if they were a rational nuclear power meaning ‘they don’t want to die’, this may be different, but with North Korea we just don’t know. This is not a rational individual, I mean he shot his uncle with an artillery canon. I simply don’t think that the US, just as Kennedy didn’t accept Cuba, will accept that North Korea has intercontinental ballistic missiles. The Chinese pretending that there is no linkage and no control frankly doesn’t pass the laugh test. The Chinese are a great power whether they like it or not, it’s time to like it.
There seems to be little hope for any amity between India and Pakistan, how has this undermined regional cooperation?
Again I think the interesting thing is the stalking horses behind this and I think they’ve changed.
During the cold war the Russians were the power behind India but as I previously said Russia is no more than an impoverished gas station that is no longer of interest. The Indians and the Russians will still do military trade, but less so when they have access to superior American military technology and here lies the change: Pakistan was an American client, India was a Soviet client and that’s now out the window, which is a good sign of the world changing. Now Pakistan, because of the Chinese version of the ‘Marshall plan’ for Asia, is more and more pro-Beijing; India on the other hand is the greatest economic success story out there, it’s the only emerging market with really favourable demographics, it recently adopted a goods and services tax that saw it become a single market, and with growth rates of 7 to 8 per cent the obvious play by India and the U.S is to get closer together. India wants the U.S because it makes perfect sense to balance out China, and the U.S wants India because it’s democratic, it’s booming, it’s a single market, it’s an obvious military partner and so this is a relationship that is just naturally coming together.
No one really wants anything to do with Pakistan, it’s a ‘stop and shop’ in terms of nuclear weapons, it’s barely holding together, it’s corrupt, it’s quite radicalised… America is happy to be rid of it and India is a much better partner to have than Pakistan. I guess this is why I am so intensely worried about Asia, because of the simple reason that almost all the growth is there and almost all of the political risk is there. It makes it by far the most interesting, the most dangerous, and the most hopeful region at the same time, Asia is where the action is at.
John’s first geopolitical intelligence briefing, “Killing the goose that laid the golden egg: Why North Korea is the single most important crisis in the world” will be released August 28th in partnership with Chartwell Speakers. For enquiries please contact +44 207 293 0864 or visit our website.